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provided, that the Applicable Margins set forth above shall be increased, for each Applicable Rating Level for each Borrower, upon the occurrence and during the continuance of any Event of Default with respect to such Borrower by 2.00% per annum; and provided further that, upon exercise of the Term-Out, the Applicable Margins set forth above shall be increased, for Applicable Rating Levels one through five by an additional 0.125% and for Applicable Rating Level six by an additional 0.250%.

 

Any change in the Applicable Margin resulting from a change in the Applicable Rating Level for any Borrower shall become effective upon the date of announcement of any change in the Moody’s Rating or the S&P Rating for such Borrower that results in such change in the Applicable Rating Level.

 

“Applicable Rating Level” at any time and for any Borrower shall be determined in accordance with the then-applicable S&P Rating and the then-applicable Moody’s Rating for such Borrower as follows:

The Applicable Rating Level for any Borrower and for any day shall be determined based upon the higher of the S&P Rating and the Moody’s Rating for such Borrower in effect on such day.  If the S&P Rating and the Moody’s Rating are not the same (i.e., a “split rating”), the higher of such ratings shall control, unless (i) the ratings differ by more than one level, in which case the rating one level below the higher of the two ratings shall control, or (ii) either rating is below BBB- or Baa3 (as applicable), in which case the lower of the two ratings shall control.

(a) Each Borrowing (other than with respect to Swingline Advances) shall be in an amount not less than $10,000,000 (or, if less, the lesser of the Available Commitments and the Borrower Sublimit of the relevant Borrower at such time) or an integral multiple of $1,000,000 in excess thereof and shall consist of Advances (other than Swingline Advances) of the same Type made on the same day by the Lenders ratably according to their respective Commitment Percentages.  Each Borrowing (other than with respect to Swingline Advances) shall be made on notice, given not later than 11:00 A.M. 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 not later than 9:30 A.M. on the date of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the applicable Borrower to the Administrative Agent, which shall give to each Lender prompt notice thereof by telecopier or telex.  Each such notice of a Borrowing (a “Notice of Borrowing”) shall be by telephone, confirmed immediately in writing, or telecopier or telex in substantially the form of Exhibit A hereto, specifying therein the requested (i) Borrowing Date for such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in the case of a Borrowing consisting of Eurodollar Rate Advances, the initial Interest Period for each such Advance.  Each Lender shall, before 12:00 noon on the applicable Borrowing Date, make available for the account of its Applicable Lending Office to the Administrative Agent at the Agent’s Account, in same day funds, such Lender’s ratable portion of the Borrowing to be made on such Borrowing Date.  After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will promptly make such funds available to the applicable Borrower in such manner as the applicable Borrower shall have specified in the applicable Notice of Borrowing and as shall be reasonably acceptable to the Administrative Agent.

 

(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 $10,000,000 or if the obligation of the Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to Section 2.10(c), 2.10(f) or 2.14, and (ii) there shall be not more than 20 Borrowings at any one time outstanding.

 

(c) Each Notice of Borrowing shall be irrevocable and binding on the applicable Borrower.  In the case of any Borrowing that the related Notice of Borrowing specifies is to comprise Eurodollar Rate Advances, the applicable Borrower shall indemnify each 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, without limitation, 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) Unless the Administrative Agent shall have received notice by telegram, telex or telecopier from a Lender prior to any Borrowing Date or, in the case of a Base Rate Advance, prior to the time of Borrowing, that such Lender will not make available to the Administrative Agent such Lender’s Advance as part of the Borrowing to be made on such Borrowing Date, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on such Borrowing Date in accordance with subsection (a) of this Section 2.02, and the Administrative Agent may (but it shall not be required to), in reliance upon such assumption, make available to the applicable Borrower on such date a corresponding amount.  If and to the extent that such Lender shall not have so made such Advance available to the Administrative Agent, such Lender and the applicable Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount, together with interest thereon, for each day from the date such amount is made available to such Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of such Borrower, the interest rate applicable at the time to Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate.  If such Lender shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Lender’s Advance as part of such Borrowing for purposes of this Agreement.

 

(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. Swingline Advances.

 

(a) Subject to the terms and conditions set forth herein, the Swingline Bank agrees to make Swingline Advances to AEP from time to time on any Business Day during the period from the date hereof until the Revolving Termination Date, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Advances exceeding $35,000,000 or (ii) the Outstanding Credits exceeding the Commitments; provided that the Swingline Bank shall not be required to make a Swingline Advance to refinance an outstanding Swingline Advance.  Within the limits as hereinabove and hereinafter provided, AEP may request Swingline Advances hereunder, and repay or prepay Swingline Advances pursuant to Section 2.12 and utilize the resulting increase in the Available Commitments for further Swingline Advances in accordance with the terms hereof.  Each Swingline Advance shall be a Base Rate Advance and shall be in an amount that is an integral multiple of $500,000 and not less than $1,000,000.

 

(b)           To request a Swingline Advance, AEP shall notify the Swingline Bank of such request by telephone (confirmed by telecopy, with a copy to the Administrative Agent), not later than 1:00 p.m., New York City time, on the day of a proposed Swingline Advance.  Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Advance.  The Swingline Bank shall make each Swingline Advance available to AEP by means of a credit to the general deposit account of AEP with the Swingline Bank by 3:00 p.m., New York City time, on the requested date of such Swingline Advance.

 

(c)           The Swingline Bank may by written notice given to the Administrative Agent not later than 12:00 p.m., New York City time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Advances outstanding.  Such notice shall specify the aggregate amount of Swingline Advances in which the Lenders will participate.  Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lender's Commitment Percentage of such Swingline Advance or Advances.  Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Bank, such Lender’s Commitment Percentage of such Swingline Advance or Advances.  Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Advances pursuant to this subsection is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Lender shall comply with its obligation under this subsection by wire transfer of immediately available funds, in the same manner as provided in Section 2.02(a) with respect to Advances made by such Lender (and Section 2.02 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Bank the amounts so received by it from the Lenders.  The Administrative Agent shall notify AEP of any participations in any Swingline Advance acquired pursuant to this subsection, and thereafter payments in respect of such Swingline Advance shall be made to the Administrative Agent and not to the Swingline Bank.  Any amounts received by the Swingline Bank from AEP (or other party on behalf of AEP) in respect of a Swingline Advance after receipt by the Swingline Bank of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this subsection (to the extent of each applicable Lender’s participation) and to the Swingline Bank to the extent of its retained interest; provided that any such payment so remitted shall be repaid to the Swingline Bank or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to AEP for any reason.  The purchase of participations in a Swingline Advance pursuant to this subsection shall not relieve AEP of any default in the payment thereof.

 

(a) Each of JPMCB and RBS has agreed to act as an LC Issuing Bank and, in such capacity, each has agreed to issue Letters of Credit having an aggregate face amount not greater than $175,000,000 for each such LC Issuing Bank.  AEP may also from time to time appoint one or more other Lenders (with the consent of any such Lender, which consent may be withheld in the sole discretion of each Lender) to act, either directly or through an Affiliate of such Lender, as an LC Issuing Bank hereunder.  Any such appointment and the terms thereof shall be evidenced in a separate written agreement executed by AEP and the relevant LC Issuing Bank, a copy of which agreement shall be delivered by AEP to the Administrative Agent.  The Administrative Agent shall give prompt notice of any such appointment to the other Lenders.  Upon such appointment, if and for so long as such Lender shall have any obligation to issue any Letters of Credit hereunder or any Letter of Credit issued by such Lender shall remain outstanding, such Lender shall be deemed to be, and shall have all the rights and obligations of, an “LC Issuing Bank” under this Agreement.

 

(b) Subject to the terms and conditions hereof, each Letter of Credit shall be issued (or the stated maturity thereof extended or terms thereof modified or amended) on not less than two Business Days’ prior notice thereof by delivery of (i) a Request for Issuance to the Administrative Agent (which shall promptly distribute copies thereof to the Lenders) and the relevant LC Issuing Bank and (ii) the relevant LC Issuing Bank’s standard form of Letter of Credit application to such LC Issuing Bank for the account of the applicable Borrower or any of its Subsidiaries; provided that such Borrower shall be the account party for the purposes of this Agreement and shall have the reimbursement obligations with respect thereto.  Each Letter of Credit shall be issued in a form acceptable to the LC Issuing Bank.  Each Request for Issuance shall specify (i) the identity of the relevant LC Issuing Bank, (ii) the date (which shall be a Business Day) of issuance of such Letter of Credit (or the date of effectiveness of such extension, modification or amendment) and the stated expiry date thereof (which shall be not more than one year after the date of issuance, provided, that if the expiry date of such Letter of Credit is later than the Revolving Termination Date, the applicable Borrower will (x) five Business Days prior to the Revolving Termination Date if such Borrower’s Applicable Rating Level is 5 or above and (y) 15 days prior to the Revolving Termination Date if such Borrower’s Applicable Rating Level is 6, deposit in an account designated with the Administrative Agent (the “LC Collateral Account”), in the name of the Administrative Agent and for the benefit of the Lenders and LC Issuing Banks, in same day funds, an amount equal to 103% of the aggregate undrawn stated amount of such Letter of Credit), (iii) the proposed stated amount of such Letter of Credit (which amount shall not (A) be less than $100,000 and (B) be subject to any automatic increase provisions), (iv) the name and address of the beneficiary of such Letter of Credit and (v) a statement of drawing conditions applicable to such Letter of Credit.  Notwithstanding any Borrower’s deposit of funds into the LC Collateral Account pursuant to Section 2.04(b)(ii), such Borrower’s reimbursement obligations with respect to such Letter of Credit shall remain in effect until such Letter of Credit is no longer outstanding.  Each Request for Issuance shall be irrevocable unless modified or rescinded by the applicable Borrower not less than two Business Days prior to the proposed date of issuance (or effectiveness) specified therein.  On the proposed date of issuance (or effectiveness) specified in such Request for Issuance, and upon fulfillment of the applicable conditions precedent and the other requirements set forth herein, the applicable LC Issuing Bank shall issue (or extend, amend or modify) such Letter of Credit and provide notice and a copy thereof to the Administrative Agent, which shall promptly furnish copies thereof to the Lenders; provided that the LC Issuing Bank shall not issue or amend any Letter of Credit if such LC Issuing Bank has received notice from the Administrative Agent that the applicable conditions precedent have not been satisfied.

 

(c) No Letter of Credit shall be requested or issued hereunder if, after the issuance thereof, the Outstanding Credits would exceed the aggregate Commitments.

 

(d) Each Borrower hereby agrees to pay to the Administrative Agent for the account of each LC Issuing Bank and, if they shall have purchased participations in the reimbursement obligations of any Borrower pursuant to subsection (e) below, the participating Lenders, on demand made by such LC Issuing Bank to such Borrower, on and after each date on which such LC Issuing Bank shall pay any amount under any Letter of Credit issued by such LC Issuing Bank, a sum equal to the amount so paid plus interest on such amount from the date so paid by such LC Issuing Bank until repayment to such LC Issuing Bank in full at a fluctuating interest rate per annum equal to the interest rate applicable to Base Rate Advances plus, if any amount paid by such LC Issuing Bank under a Letter of Credit is not reimbursed by such Borrower on the next succeeding Business Day after such demand, 2%.

 

(e) If any LC Issuing Bank shall not have been reimbursed in full for any payment made by such LC Issuing Bank under a Letter of Credit issued by such LC Issuing Bank on the date of such payment, such LC Issuing Bank shall give the Administrative Agent and each Lender prompt notice thereof (an “LC Payment Notice”) no later than 12:00 noon on the Business Day immediately succeeding the date of such payment by such LC Issuing Bank.  Each Lender severally agrees to purchase a participation in the reimbursement obligation of the applicable Borrower to such LC Issuing Bank by paying to the Administrative Agent for the account of such LC Issuing Bank an amount equal to such Lender’s Commitment Percentage of such unreimbursed amount paid by such LC Issuing Bank, plus interest on such amount at a rate per annum equal to the Federal Funds Rate from the date of the payment by such LC Issuing Bank to the date of payment to such LC Issuing Bank by such Lender.  Each such payment by a Lender shall be made not later than 3:00 P.M. on the later to occur of (i) the Business Day immediately following the date of such payment by such LC Issuing Bank and (ii) the Business Day on which such Lender shall have received an LC Payment Notice from such LC Issuing Bank.  Each Lender’s obligation to make each such payment to the Administrative Agent for the account of such LC Issuing Bank shall be several and shall not be affected by the occurrence or continuance of a Default or the failure of any other Lender to make any payment under this Section 2.04(e).  Each Lender further agrees that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

 

(f) The failure of any Lender to make any payment to the Administrative Agent for the account of any LC Issuing Bank in accordance with subsection (e) above shall not relieve any other Lender of its obligation to make payment, but no Lender shall be responsible for the failure of any other Lender.  If any Lender (a “non-performing Lender”) shall fail to make any payment to the Administrative Agent for the account of any LC Issuing Bank in accordance with subsection (e) above, then, for so long as such failure shall continue, such LC Issuing Bank shall be deemed, for purposes of Sections 6.01 and 8.01 hereof, to be a Lender owed a Borrowing in an amount equal to the outstanding principal amount due and payable by such non-performing Lender to the Administrative Agent for the account of such LC Issuing Bank pursuant to subsection (e) above.  Any non-performing Lender and the applicable Borrower (without waiving any claim against such Lender for such Lender’s failure to purchase a participation in the reimbursement obligations of such Borrower under subsection (e) above) severally agree to pay to the Administrative Agent for the account of such LC Issuing Bank forthwith on demand such amount, together with interest thereon for each day from the date such Lender would have purchased its participation had it complied with the requirements of subsection (e) above until the date such amount is paid to the Administrative Agent at (i) in the case of such Borrower, the interest rate applicable at the time to Base Rate Advances plus, if any amount paid by such LC Issuing Bank under a Letter of Credit is not reimbursed by such Borrower in accordance with Section 2.04(d), and (ii) in the case of such Lender, the Federal Funds Rate.

 

(g) The payment obligations of each Lender under Section 2.04(e) and of the Borrowers under this Agreement in respect of any payment under any Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, the following circumstances:

 

(i) any lack of validity or enforceability of this Agreement or any other agreement or instrument relating thereto or to such Letter of Credit;

 

(ii) any amendment or waiver of, or any consent to departure from, the terms of this Agreement or such Letter of Credit;

 

(iii) the existence of any claim, set-off, defense or other right that any Borrower may have at any time against any beneficiary, or any transferee, of such Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), any LC Issuing Bank, or any other Person, whether in connection with this Agreement, the transactions contemplated hereby, thereby or by such Letter of Credit, or any unrelated transaction;

 

(iv) any statement or any 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;

 

(v) payment in good faith by any LC Issuing Bank under the Letter of Credit issued by such LC Issuing Bank against presentation of a draft or certificate that does not comply with the terms of such Letter of Credit;

 

(vi) the use that may be made of any Letter of Credit by, or any act or omission of, the beneficiary of any Letter of Credit (or any Person for which the beneficiary may be acting); or

 

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

 

Without limiting the foregoing, the obligations with respect to Letters of Credit of each Lender shall be reinstated, to the extent that funds deposited in the Cash Collateral Account by any Borrower pursuant to Section 2.04(b), the application thereof or reimbursement in respect thereof, is required to be returned to such Borrower by the LC Issuing Bank after the Revolving Termination Date.

(h) Without limiting any other provision of this Section 2.04, for purposes of this Section 2.04 any LC Issuing Bank may rely upon any oral, telephonic, telegraphic, facsimile, electronic, written or other communication believed in good faith to have been authorized by the applicable Borrower, whether or not given or signed by an authorized Person of such Borrower.

 

(i) Each Borrower assumes all risks of the acts and omissions of any beneficiary or transferee of any Letter of Credit.  Neither any LC Issuing Bank, the Lenders nor any of their respective officers, directors, employees, agents or Affiliates shall be liable or responsible for  (i) the use that may be made of such Letter of Credit or any acts or omissions of any beneficiary or transferee thereof in connection therewith; (ii) 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; (iii) payment by any LC Issuing Bank against presentation of documents that do not comply with the terms of such Letter of Credit, including failure of any documents to bear any reference or adequate reference to such Letter of Credit; or (iv) any other circumstances whatsoever in making or failing to make payment under such Letter of Credit, except that the applicable Borrower and each Lender shall have the right to bring suit against each LC Issuing Bank, and each LC Issuing Bank shall be liable to such Borrower and any Lender, to the extent of any direct, as opposed to consequential, damages suffered by such Borrower or such Lender that such Borrower or such Lender proves were caused by such LC Issuing Bank’s willful misconduct or gross negligence, including, in the case of such Borrower, such LC Issuing Bank’s willful failure to make timely payment under such Letter of Credit following the presentation to it by the beneficiary thereof of a draft and accompanying certificate(s) that strictly comply with the terms and conditions of such Letter of Credit.  In furtherance and not in limitation of the foregoing, each LC Issuing Bank may accept sight drafts and accompanying certificates presented under the Letter of Credit issued by such LC Issuing Bank that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and payment against such documents shall not constitute willful misconduct or gross negligence by such LC Issuing Bank. Notwithstanding the foregoing, no Lender shall be obligated to indemnify any Borrower for damages caused by any LC Issuing Bank’s willful misconduct or gross negligence.

 

SECTION 2.05. Fees.

 

(a) AEP agrees to pay to the Administrative Agent for the account of each Lender a commitment fee on such Lender’s Commitment Percentage of the Available Commitments from the date hereof in the case of each Initial Lender and from the effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender until the Revolving Termination Date, payable quarterly in arrears on the last day of each March, June, September and December, commencing June 30, 2008, and ending on the Revolving Termination Date; provided that, solely for purposes of calculating the Outstanding Credits of such Lender in order to determine such Lender’s Available Commitment under this Section 2.05(a), the aggregate principal amount of Swingline Advances then outstanding (other than Swingline Advances in which such Lender has a participation) shall be deemed to be zero.  The commitment fee for any period will be equal to the Commitment Fee Rate in effect from time to time during such period, times the Commitments minus the aggregate principal amount of Advances outstanding during such period.

 

(b) AEP shall pay to the Administrative Agent for the account of the Administrative Agent such fees as may from time to time be agreed between the AEP and the Administrative Agent.

 

(c) Each Borrower shall pay to the Administrative Agent for the account of each Lender a fee (the “LC Fee”) on the average daily aggregate principal amount of each such Lender’s Commitment Percentage of the LC Outstandings with respect to such Borrower from the date hereof until the later to occur of the Revolving Termination Date and the date on which no Letters of Credit are outstanding, payable on the last day of each March, June, September and December (commencing on June 30, 2008), and on such later date, at a rate equal at all times to the Applicable Margin in effect from time to time for Eurodollar Rate Advances.

 

(d) Each Borrower shall pay to each LC Issuing Bank such fees for the issuance and maintenance of Letters of Credit issued by such LC Issuing Bank and for drawings thereunder as may be separately agreed between such Borrower and such LC Issuing Bank.

 

SECTION 2.06. Termination or Reduction of the Commitments.

 

(a) AEP shall have the right, upon at least three Business Days’ notice to the Administrative Agent, to terminate in whole or reduce ratably in part the Available Commitments, provided that (i) each partial reduction shall be in the aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii) no such termination or reduction shall be made that would reduce the aggregate Commitments to an amount less than the Outstanding Credits on the date of such termination or reduction.

 

(b)  In the event the Term-Out has not been exercised pursuant to Section 2.18, the Commitments shall automatically terminate on the Revolving Termination Date.  In addition, on each day on and after the effective date of the Term-Out on which the aggregate Commitments shall exceed the aggregate principal amount of the Advances then outstanding, the Commitments shall automatically and permanently reduce by an amount equal to such excess.

 

(c) Once terminated, a Commitment, or any portion thereof, may not be reinstated.

 

SECTION 2.07. Repayment of Advances.

 

(a) Each Borrower shall repay to the Administrative Agent for the account of each Lender on the Revolving Termination Date or, in the event the Term-Out has been exercised pursuant to Section 2.18, the Term Loan Maturity Date, with respect to such Lender the aggregate principal amount of the Advances (other than Swingline Advances) made by such Lender to such Borrower then outstanding.  AEP will repay to the Swingline Bank the then unpaid principal amount of each Swingline Advance on the earliest of the Revolving Termination Date, the fifth Business Day after such Swingline Advance is made and any date on which a Borrowing (other than with respect to a Swingline Advance) is made.

 

(b) If at any time (i) the aggregate principal amount of Advances outstanding exceeds the aggregate Commitments, the Borrowers shall pay or prepay so much of the Borrowings as shall be necessary in order that the principal amount of Advances outstanding will not exceed the Commitments.

 

SECTION 2.08. Evidence of Indebtedness.

 

(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness to such Lender resulting from each Advance made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

 

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

 

(c) The entries made in the accounts maintained pursuant to subsections (a) and (b) of this Section 2.08 shall, to the extent permitted by Applicable Law, be prima facie evidence of the existence and amounts of the obligations therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of any Borrower to repay the Advances and interest thereon in accordance with their terms.

 

(d) Any Lender may request that any Advances made by it be evidenced by one or more promissory notes.  In such event, each Borrower shall prepare, execute and deliver to such Lender one or more promissory notes payable to the order of such Lender (or, if requested by such Lender, to such Lender and its assignees) and in a form approved by the Administrative Agent.  Thereafter, the Advances evidenced by such promissory notes and interest thereon shall at all times (including after assignment pursuant to Section 8.07) be represented by one or more promissory notes in such form payable to the order of the payee named therein.

 

SECTION 2.09. Interest on Advances.

 

Each Borrower shall pay interest on the unpaid principal amount of each Advance made to such Borrower from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:

 

(a) Base Rate Advances.  During such periods as such Advance is a Base Rate Advance or a Swingline Advance, a rate per annum equal at all times to the sum of (x) the Base Rate plus (y) the Applicable Margin for Base Rate Advances in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December during such periods and on the date such Base Rate Advance shall be Converted or paid in full.  

 

(b) 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 (x) the Eurodollar Rate for such Interest Period for such Advance plus (y) the Applicable Margin for Eurodollar Rate Advances in effect from time to time, 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 each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.  

 

(c) Additional Interest on Eurodollar Rate Advances.  Each Borrower shall pay to each Lender, so long as such Lender shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each Eurodollar Rate Advance of such Lender made to such Borrower, from the date of such Advance until such principal amount is paid in full, at an interest rate per annum equal at all times to the remainder obtained by subtracting (i) the Eurodollar Rate for the Interest Period for such Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period, payable on each date on which interest is payable on such Advance.  Such additional interest shall be determined by such Lender and notified to such Borrower through the Administrative Agent.

 

SECTION 2.10. Interest Rate Determination.

 

(a) To the extent required hereunder, each Reference Bank agrees to furnish to the Administrative Agent timely information for the purpose of determining each Eurodollar Rate.  If fewer than two Reference Banks furnish such timely information to the Administrative Agent for the purpose of determining any such rate, the Administrative Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Bank.

 

(b) The Administrative Agent shall give prompt notice to the applicable Borrower and the Lenders of the applicable interest rate determined by the Administrative Agent for purposes of Section 2.09(a) or (b), and, if applicable, the applicable rate, if any, furnished by each Reference Bank for the purpose of determining the applicable interest rate under Section 2.09(b).

 

(c) If, with respect to any Eurodollar Rate Advances, (i) 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 Required Lenders of making, funding or maintaining their respective Eurodollar Rate Advances for such Interest Period, or (ii) the Reference Banks notify the Administrative Agent that adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Eurodollar Rate, the Administrative Agent shall forthwith so notify the Borrowers and the Lenders, whereupon (A) each Eurodollar Rate Advance will 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 until the Administrative Agent shall notify the Borrowers and the Lenders that the circumstances causing such suspension no longer exist.

 

(d) If the applicable Borrower shall fail to select the duration of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of “Interest Period” in Section 1.01, the Administrative Agent will forthwith so notify such Borrower and the Lenders and such Advances will automatically, on the last day of the then existing Interest Period therefor, Convert into Base Rate Advances.

 

(e) 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 $10,000,000, such Advances shall automatically Convert into Base Rate Advances.

 

(f) Upon the occurrence and during the continuance of any Event of 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 Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended.

 

SECTION 2.11. Optional Conversion of Advances.

 

Each Borrower may on any Business Day, upon notice given to the Administrative Agent not later than 12:00 noon on the third Business Day prior to the date of the proposed Conversion and subject to the provisions of Sections 2.10 and 2.14, Convert all or any part of Advances made to such Borrower of one Type comprising the same Borrowing into Advances of the other Type or of the same Type but having a new Interest Period; 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) and no Conversion of any Advances shall result in more separate Borrowings than permitted under Section 2.02(b).  Each such notice of a Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the Advances to be Converted, and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for each such Advance.  Each notice of Conversion shall be irrevocable and binding on the applicable Borrower.  This Section shall not apply to Swingline Borrowings, which may not be Converted.

 

SECTION 2.12. Optional Prepayments of Advances.

 

Each Borrower may, upon notice not later than 11:00 A.M. (i) at least two Business Days’ prior to the date of prepayment, in the case of Eurodollar Rate Advances and (ii) on the date of prepayment, in the case of Base Rate Advances and Swingline Advances, to the Administrative Agent (and, in the case of a Swingline Advance, the Swingline Bank) stating the proposed date and aggregate principal amount of the prepayment, and, if such notice is given, such Borrower shall prepay the outstanding principal amount of the Advances made to such Borrower comprising part of the same Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided, however, that (x) 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 (y) in the event of any such prepayment of a Eurodollar Rate Advance, the applicable Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant to Section 8.04(c).

 

SECTION 2.13. Increased Costs.

 

(a) If, due to any Regulatory Change, there shall be any increase in the cost to any Lender of agreeing to make or making, funding or maintaining any Extension of Credit (excluding for purposes of this Section 2.13 any such increased costs resulting from (i) Taxes or Other Taxes (as to which Section 2.16 shall govern) and (ii) 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 is organized or has its Applicable Lending Office or any political subdivision thereof), then AEP shall from time to time, promptly upon demand by such Lender (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost.  Each Lender will promptly notify AEP of any determination made by it referred to above, but the failure to give such notice shall not affect such Lender’s right to compensation, provided, however, that AEP shall not be required to pay such additional amounts in respect of any Regulatory Change for any period ending prior to the date that is 180 days prior to the giving of the notice of the determination of such additional amounts (unless such period shall have commenced after the date that such Lender notified AEP that additional amounts were payable as a result of such Regulatory Change); except, if such Regulatory Change shall have been imposed retroactively, for the period from the effective date of such Regulatory Change to the date that is 180 days after the first date on which such Lender reasonably should have had knowledge of such Regulatory Change.

 

(b) If any Lender determines that any Regulatory Change affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and that the amount of such capital is increased by or based upon the existence of such Lender’s commitment to make Extensions of Credit hereunder and other commitments of this type, then, upon demand by such Lender (with a copy of such demand to the Administrative Agent), AEP shall pay to the Administrative Agent for the account of such Lender, promptly upon demand from time to time and as specified by such Lender, additional amounts sufficient to compensate such Lender or such corporation in the light of such circumstances, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender’s commitment to make Extensions of Credit hereunder; provided, however, that AEP shall not be required to pay such additional amounts in respect of any Regulatory Change for any period ending prior to the date that is 180 days prior to the making of such Lender’s initial request for such additional amounts (unless such period shall have commenced after the date that such Lender notified AEP that additional amounts were payable as a result of such Regulatory Change); except, if such Regulatory Change shall have been imposed retroactively, for the period from the effective date of such Regulatory Change to the date that is 180 days after the first date on which such Lender reasonably should have had knowledge of such Regulatory Change.

 

(c) In making the determinations contemplated by Sections 2.13(a) and (b), each Lender may make such estimates, assumptions, allocations and the like that such Lender in good faith determines to be appropriate, and such Lender’s selection thereof in accordance with this Section 2.13(c), and the determinations made by such Lender on the basis thereof, shall be final, binding and conclusive upon AEP, except, in the case of such determinations, for manifest errors in computation or transmission.  Each Lender shall furnish to AEP upon request a certificate explaining the basis for any amounts claimed by it under Section 2.13(a) or (b), provided, that no Lender shall be required to disclose in any such certificate any confidential information relating to such Lender or any Person controlling such Lender.

 

SECTION 2.14. Illegality.

 

If due to any Regulatory Change it shall become unlawful or impossible for any Lender (or its Eurodollar Lending Office) to make, maintain or fund its Eurodollar Rate Advances, and such Lender shall so notify the Administrative Agent, the Administrative Agent shall forthwith give notice thereof to the other Lenders and the Borrowers, whereupon, until such Lender notifies the Borrowers and the Administrative Agent that the circumstances giving rise to such suspension no longer exist, the obligation of such Lender to make Eurodollar Rate Advances, or to Convert outstanding Advances into Eurodollar Rate Advances, shall be suspended.  Before giving any notice to the Administrative Agent pursuant to this Section 2.14, such Lender shall use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions applicable to such Lender) to designate a different Eurodollar Lending Office if such designation would avoid the need for giving such notice and would not, in the judgment of such Lender, be otherwise disadvantageous to such Lender.  If such notice is given, each Eurodollar Rate Advance of such Lender then outstanding shall be converted to a Base Rate Advance either (i) on the last day of the then current Interest Period applicable to such Eurodollar Rate Advance if such Lender may lawfully continue to maintain and fund such Advance to such day or (ii) immediately if such Lender shall determine that it may not lawfully continue to maintain and fund such Advance to such day.

 

SECTION 2.15. Payments and Computations.

 

(a) Each Borrower shall make each payment to be made by it hereunder not later than 1:00 P.M. on the day when due in Dollars to the Administrative Agent at the Agent’s Account (except payments to be made directly to the Swingline Bank as expressly provided herein) in same day funds without condition or deduction for any counterclaim, defense, recoupment or setoff.  The Administrative Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or interest or commitment fees ratably (other than amounts payable pursuant to Section 2.09(c), 2.13, 2.16 or 8.04(c)) to the Lenders for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement.  In the event that such payment is required to be returned to such Borrower for any reason, each Lender will return to the Administrative Agent any portion thereof previously distributed to such Lender.  Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 8.07(c), from and after the effective date specified in such Assignment and Acceptance, the Administrative Agent shall make all payments hereunder in respect of the interest assigned thereby to the Lender 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, if and to the extent payment owed to such Lender is not made by such Borrower when due hereunder, after any applicable grace period, to charge from time to time against any or all of such Borrower’s accounts with such Lender any amount so due.

 

(c) All computations of interest based on the rate referred to in clause (i) of the definition of the “Base Rate” contained in Section 1.01 shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Eurodollar Rate or the Federal Funds Rate and of commitment fees and LC 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, commitment fees or LC Fees are payable.  Each determination by the Administrative Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

(d) Whenever any payment hereunder 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 fees, as the case may be; provided, however, 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 any Borrower prior to the date on which any payment is due from such Borrower to a Lender 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 Lender on such due date an amount equal to the amount then due such Lender.  If and to the extent that such Borrower shall not have so made such payment in full to the Administrative Agent, each Lender shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent, at the Federal Funds Rate.

 

SECTION 2.16. Taxes.

 

(a) Any and all payments by each Borrower hereunder shall be made, in accordance with Section 2.15, free and clear of and without deduction for any and all present or future Taxes, excluding, in the case of each Lender and the Administrative Agent, Bank Taxes.  If any Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable by such Borrower hereunder to any Lender or the Administrative Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.16) such Lender 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, (ii) such Borrower shall make such deductions and (iii) such Borrower shall, to the fullest extent permitted by Applicable Law, 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 or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made by such Borrower hereunder or from the execution, delivery or registration of, performing under, or otherwise with respect to, this Agreement (hereinafter referred to as “Other Taxes”).

 

(c) Each Borrower shall indemnify each Lender and the Administrative Agent for and hold it harmless against the full amount of Taxes or Other Taxes attributable to such Borrower (including, without limitation, taxes of any kind imposed by any jurisdiction on amounts payable by such Borrower under this Section 2.16), but excluding Bank Taxes, imposed on or paid by such Lender or the Administrative Agent (as the case may be) and any liability (including penalties, interest and expenses that do not arise from such Lender’s failure timely to give notice thereof or request payment pursuant to this Section 2.16) arising therefrom or with respect thereto.  This indemnification shall be made within 30 days from the date such Lender or the Administrative Agent (as the case may be) makes written demand therefor.

 

(d) Within 30 days after the date of any payment by any 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.  In the case of any payment hereunder by or on behalf of such Borrower through an account or branch outside the United States or by or on behalf of such 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 reasonably acceptable to the Administrative Agent stating that such payment is exempt from Taxes.  For purposes of this subsection (d) and subsection (e), the terms “United States” and “United States person” shall have the meanings specified in Section 7701 of the Internal Revenue Code.

 

(e) Each Lender organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Lender and on the date of the Assignment and Acceptance pursuant to which it becomes a Lender in the case of each other Lender, and from time to time thereafter as requested in writing by AEP (but only so long as such Lender remains lawfully able to do so), shall provide each of the Administrative Agent and AEP with two original Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Lender is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement.  If the form provided by a Lender at the time such Lender first becomes a party to this Agreement indicates 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 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 form; provided, however, that, if at the date of the Assignment and Acceptance pursuant to which a Lender assignee becomes a party to this Agreement, the Lender assignor was entitled to payments under subsection (a) 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 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 on the date hereof by Internal Revenue Service Form W-8BEN or W-8ECI, that the Lender reasonably considers to be confidential, the Lender shall give notice thereof to AEP and shall not be obligated to include in such form or document such confidential information.

 

(f) For any period with respect to which a Lender has failed to provide AEP with the appropriate form described in Section 2.16(e) (other than if such failure is due to a change in law occurring subsequent to 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 shall not be entitled to indemnification under Section 2.16(a) or (c) with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should a Lender become subject to Taxes because of its failure to deliver a form required hereunder, the relevant Borrower shall take such steps as the Lender shall reasonably request to assist the Lender to recover such Taxes.

 

The obligation of each Lender, the Swingline Bank and each LC Issuing Bank, as applicable, to make the initial Extension of Credit to be made by it hereunder shall become effective on and as of the first date on which the following conditions precedent have been satisfied:

 

(a) The Administrative Agent shall have received on or before such date the following, each dated such day, in form and substance reasonably satisfactory to the Administrative Agent in sufficient copies for each Lender:

 

(i) Certified copies of the resolutions of the board of directors of each Borrower approving this Agreement, and of all documents evidencing other necessary corporate action and Governmental Approvals, if any, with respect to this Agreement (other than any documents evidencing Governmental Approvals described in Section 3.03).

 

(ii) A certificate of the Secretary or Assistant Secretary of each Borrower certifying the names and true signatures of the officers of such Borrower authorized to sign this Agreement, any Letter of Credit application and the other documents to be delivered by such Borrower hereunder.

 

(iii) A favorable opinion of counsel for the Borrowers (which may be an attorney of American Electric Power Service Corporation), substantially in the form of Exhibit D hereto and as to such other matters as any Lender through the Administrative Agent may reasonably request.

 

(iv) A favorable opinion of King & Spalding LLP, counsel for the Administrative Agent, in the form of Exhibit E hereto.

 

(b) On such date, the following statements shall be true and the Administrative Agent shall have received for the account of each Lender a certificate signed by a duly authorized officer of each Borrower, dated such date, stating that:

 

(i)           The representations and warranties of all Borrowers contained in Section 4.01 (other than the representation and warranty in Section 4.01(e) and the representation and warranty set forth in the last sentence of Section 4.01(f)) are true and correct in all material respects on and as of such date, as though made on and as of such date, and

(ii)           No event has occurred and is continuing that constitutes a Default.

(c) AEP shall have paid all accrued fees and expenses of the Administrative Agent, the Co-Lead Arrangers and the Lenders (including the accrued fees and expenses of counsel to the Administrative Agent to the extent then due and payable).

 

(d) The Administrative Agent shall have received counterparts of this Agreement, executed and delivered by the Borrowers.

 

(e) The Administrative Agent shall have received such other approvals, opinions or documents as any Lender or any LC Issuing Bank through the Administrative Agent may reasonably request.

 

SECTION 3.02. Conditions Precedent to each Extension of Credit.

 

The obligation of each Lender, the Swingline Bank and each LC Issuing Bank, as applicable, to make each Extension of Credit to be made by it hereunder (other than in connection with any Borrowing that would not increase the aggregate principal amount of Advances outstanding immediately prior to the making of such Borrowing) shall be subject to the satisfaction of the conditions precedent set forth in Section 3.01 and on the date of such Borrowing:

 

(a) The following statements shall be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by the applicable Borrower of the proceeds of any such Extension of Credit shall constitute a representation and warranty by such Borrower that on the date of such Extension of Credit such statements are true):

 

(i) The representations and warranties of such Borrower contained in Section 4.01 (other than the representation and warranty in Section 4.01(e) and the representation and warranty set forth in the last sentence of Section 4.01(f)) are true and correct in all material respects on and as of the date of such Extension of Credit, before and after giving effect to such Extension of Credit and to the application of the proceeds therefrom, as though made on and as of such date, and

 

(ii) No event has occurred and is continuing with respect to such Borrower, or would result from such Extension of Credit or from the application of the proceeds therefrom, that constitutes a Default.

 

(b) The Administrative Agent shall have received such other approvals, opinions or documents as any Lender or LC Issuing Bank through the Administrative Agent may reasonably request.

 

SECTION 3.03. Additional Conditions Precedent to Initial Extensions of Credit to CSPC and OPC.

 

The obligation of each Lender, the Swingline Bank and each LC Issuing Bank, as applicable, to make the initial Extension of Credit to be made by it hereunder to either CSPC or OPC shall be subject to the satisfaction of the conditions precedent set forth in Section 3.01 and the further condition precedent that on or prior to the date of such Extension of Credit the Administrative Agent shall have received (i) a certificate of the Secretary or an Assistant Secretary of such Borrower certifying that attached thereto are true and correct copies of all necessary Governmental Approvals, if any, with respect to such Borrower and this Agreement and (ii) a favorable opinion of counsel for such Borrower (which may be an attorney of American Electric Power Service Corporation), as to such matters related to such Governmental Approvals as the Administrative Agent and any Lender through the Administrative Agent may reasonably request.

 

 

 

(a) Such Borrower is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated or otherwise organized, and each Significant Subsidiary of such Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated or otherwise organized.

 

(b) The execution, delivery and performance by such Borrower of this Agreement, and the consummation of the transactions contemplated hereby, are within such Borrower’s corporate powers, have been duly authorized by all necessary action, and do not contravene (i) such Borrower’s certificate of incorporation or by-laws, (ii) law binding or affecting such Borrower or (iii) any contractual restriction binding on or affecting such Borrower or any of its properties.

 

(c) This Agreement has been duly executed and delivered by such Borrower.  This Agreement is the legal, valid and binding obligation of such Borrower enforceable against such Borrower in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights in general, and except as the availability of the remedy of specific performance is subject to general principles of equity (regardless of whether such remedy is sought in a proceeding in equity or at law) and subject to requirements of reasonableness, good faith and fair dealing.

 

(d) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for the due execution, delivery and performance by such Borrower of this Agreement, except for such Governmental Approvals that may be required to be obtained by such Borrower in connection with any Extension of Credit to or for the account of such Borrower, each of which Governmental Approvals will have been obtained and will be in full force and effect on or prior to the date of any Extension of Credit to or for the account of such Borrower.

 

(e) There is no pending or threatened action, suit, investigation, litigation or proceeding, including, without limitation, any Environmental Action, affecting such Borrower or any of its Significant Subsidiaries before any court, governmental agency or arbitrator that is reasonably likely to have a Material Adverse Effect, except as disclosed in the Disclosure Documents.

 

(f) The consolidated balance sheet of each Borrower and its Consolidated Subsidiaries as at December 31, 2007, and the related consolidated statements of income and cash flows of such Borrower and its Consolidated Subsidiaries for the fiscal year then ended, accompanied by an opinion of Deloitte & Touche LLP, an independent registered public accounting firm, copies of each of which have been furnished to each Lender, fairly present the consolidated financial condition of such Borrower and its Consolidated Subsidiaries as at such date and the consolidated results of the operations of such Borrower and its Consolidated Subsidiaries for the period ended on such date, all in accordance with generally accepted accounting principles consistently applied.  Since December 31, 2007, there has been no Material Adverse Change with respect to such Borrower.

 

(g) No written statement, information, report, financial statement, exhibit or schedule furnished by or on behalf of such Borrower to the Administrative Agent, any Lender or any LC Issuing Bank in connection with the syndication or negotiation of this Agreement or included herein or delivered pursuant hereto contained, contains, or will contain any material misstatement of fact or intentionally omitted, omits, or will omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were, are, or will be made, not misleading.

 

(h) Except as disclosed in the Disclosure Documents, such Borrower and each Significant Subsidiary of such Borrower is in material compliance with all laws (including ERISA and Environmental Laws) rules, regulations and orders of any governmental authority applicable to it.

 

(i) No accumulated funding deficiency (as defined in Section 302 of ERISA and Section 412 of the Internal Revenue Code) that could reasonably be expected to have a Material Adverse Effect, whether or not waived, exists with respect to any Plan.  Such Borrower has not incurred, and does not presently expect to incur, any withdrawal liability under Title IV of ERISA with respect to any Multiemployer Plan that could reasonably be expected to have a Material Adverse Effect.  Such Borrower and each of its ERISA Affiliates have complied in all material respects with ERISA and the Internal Revenue Code.  Such Borrower and each of its Subsidiaries have complied in all material respects with foreign law applicable to its Foreign Plans, if any.  As used herein, the term “Plan” shall mean an “employee pension benefit plan” (as defined in Section 3 of ERISA) which is and has been established or maintained, or to which contributions are or have been made or should be made according to the terms of the plan by any Borrower or any of its ERISA Affiliates.  The term “Multiemployer Plan” shall mean any Plan which is a “multiemployer plan” (as such term is defined in Section 4001(a)(3) of ERISA).  The term “Foreign Plan” shall mean any pension, profit-sharing, deferred compensation, or other employee benefit plan, program or arrangement maintained by any entity subsidiary which, under applicable local foreign law, is required to be funded through a trust or other funding vehicle.

 

(j) Such Borrower and its Subsidiaries have filed or caused to be filed all material Federal, state and local tax returns that are required to be filed by them, and have paid or caused to be paid all material taxes shown to be due and payable on such returns or on any assessments received by them (to the extent that such taxes and assessments have become due and payable) other than those taxes contested in good faith and for which adequate reserves have been established in accordance with GAAP.

 

(k) Such Borrower is not engaged in the business of extending credit for the purpose of buying or carrying Margin Stock, and no proceeds of any Advance will be used to buy or carry any Margin Stock or to extend credit to others for the purpose of buying or carrying any Margin Stock.  Not more than 25% of the assets of such Borrower subject to the restrictions of Section 5.02(a), (c) or (d) constitutes Margin Stock.

 

(l) Neither such Borrower nor any Significant Subsidiary of such Borrower is an “investment company,” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.  Neither the making of any Extension of Credit, the application of the proceeds or repayment thereof by such Borrower nor the consummation of the other transactions contemplated hereby will violate any provision of such Act or any rule, regulation or order of the SEC thereunder.

 

(m) All Significant Subsidiaries of such Borrower as of the date hereof are listed on Schedule 4.01(m) hereto.

 

(a) Preservation of Existence, Etc.  Preserve and maintain, and cause each Significant Subsidiary of such Borrower to preserve and maintain, its corporate, partnership or limited liability company (as the case may be) existence and all material rights (charter and statutory) and franchises; provided, however, that each Borrower and any Significant Subsidiary of such Borrower may consummate any merger or consolidation permitted under Section 5.02(a); and provided further that neither such Borrower nor any Significant Subsidiary of such Borrower shall be required to preserve any right or franchise if (i) the board of directors of such Borrower or such Significant Subsidiary, as the case may be, shall determine that the preservation thereof is no longer desirable in the conduct of the business of such Borrower or such Significant Subsidiary, as the case may be, and that the loss thereof is not disadvantageous in any material respect to such Borrower or such Significant Subsidiary, as the case may be, or to the Lenders; (ii) required in connection with or pursuant to any Restructuring Law; or (iii) required in connection with the RTO Transaction; and provided further, that no Significant Subsidiary of any Borrower shall be required to preserve and maintain its corporate existence if (x) the loss thereof is not disadvantageous in any material respect to such Borrower or to the Lenders or (y) required in connection with or pursuant to any Restructuring Law or (z) required in connection with the RTO Transaction.

 

(b) Compliance with Laws, Etc.  Comply, and cause each Significant Subsidiary of such Borrower to comply, in all material respects, with Applicable Law, with such compliance to include, without limitation, compliance with ERISA and Environmental Laws.

 

(c) Performance and Compliance with Other Agreements.  Perform and comply, and cause each Significant Subsidiary of such Borrower to perform and comply, with the provisions of each indenture, credit agreement, contract or other agreement by which it is bound, the non-performance or non-compliance with which would result in a Material Adverse Change.

 

(d) Inspection Rights.  At any reasonable time and from time to time, permit the Administrative Agent, any LC Issuing Bank or any Lender or any agents or representatives thereof to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, such Borrower and any Significant Subsidiary of such Borrower and to discuss the affairs, finances and accounts of such Borrower and any Significant Subsidiary of such Borrower with any of their officers or directors and with their independent certified public accountants.

 

(e) Maintenance of Properties, Etc.  Maintain and preserve, and cause each Significant Subsidiary of such Borrower to maintain and preserve, all of its properties that are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted and except as required in connection with or pursuant to any Restructuring Law or in connection with RTO Transaction.

 

(f) Maintenance of Insurance.  Maintain, and cause each Significant Subsidiary of such Borrower 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; provided, however, that each Borrower and each Significant Subsidiary of such Borrower may self-insure to the same extent as other companies engaged in similar businesses and owning similar properties and to the extent consistent with prudent business practice.

 

(g) Payment of Taxes, Etc.  Pay and discharge, and cause each of its 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, might by law become a Lien upon its property; provided, however, that neither any Borrower nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which adequate reserves are being maintained in accordance with GAAP, unless and until any Lien resulting therefrom attaches to its property and becomes enforceable against its other creditors.

 

(h) Keeping of Books.  Keep, and cause each Significant Subsidiary of such Borrower to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of such Borrower and each such Significant Subsidiary in accordance with GAAP.

 

(i) Reporting Requirements.  Furnish to the Lenders:

 

(i) 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 of such Borrower, a copy of the consolidated balance sheet of such Borrower and its Subsidiaries as of the end of such quarter and consolidated statements of income and cash flows of such Borrower and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, duly certified (subject to year-end audit adjustments) by the chief financial officer, chief accounting officer, treasurer or assistant treasurer of such Borrower as having been prepared in accordance with generally accepted accounting principles and a certificate of the chief financial officer, chief accounting officer, treasurer or assistant treasurer of such Borrower as to compliance with the terms of this Agreement and setting forth in reasonable detail the calculations necessary to demonstrate compliance with Section 5.03, provided that in the event of any change in GAAP used in the preparation of such financial statements, such Borrower shall also provide, if necessary for the determination of compliance with Section 5.03, a statement of reconciliation conforming such financial statements to GAAP in effect on the date hereof;

 

(ii) as soon as available and in any event within 120 days after the end of each fiscal year of such Borrower, a copy of the annual audit report for such year for such Borrower and its Subsidiaries, containing a consolidated balance sheet of such Borrower and its Subsidiaries as of the end of such fiscal year and consolidated statements of income and cash flows of such Borrower and its Subsidiaries for such fiscal year, in each case accompanied by an opinion by Deloitte & Touche LLP or other independent registered public accounting firm acceptable to the Required Lenders, and consolidating statements of income and cash flows of such Borrower and its Subsidiaries for such fiscal year, and a certificate of the chief financial officer, chief accounting officer, treasurer or assistant treasurer of such Borrower as to compliance with the terms of this Agreement and setting forth in reasonable detail the calculations necessary to demonstrate compliance with Section 5.03, provided that in the event of any change in GAAP used in the preparation of such financial statements, such Borrower shall also provide, if necessary for the determination of compliance with Section 5.03, a statement of reconciliation conforming such financial statements to GAAP in effect on the date hereof;

 

(iii) as soon as possible and in any event within five days after the chief financial officer or treasurer of such Borrower obtains knowledge of the occurrence of each Default relating to such Borrower continuing on the date of such statement, a statement of the chief financial officer or treasurer of such Borrower setting forth details of such Default and the action that such Borrower has taken and proposes to take with respect thereto;

 

(iv) promptly after the sending or filing thereof, copies of all Reports on Form 8-K that such Borrower or any Significant Subsidiary of such Borrower files with the Securities and Exchange Commission or any national securities exchange; provided that information required to be delivered pursuant to this clause (iv) shall be deemed to have been delivered if such information shall be available on the website of the Securities and Exchange Commission at http://www.sec.gov or any successor website;

 

(v) promptly after the commencement thereof, notice of all actions and proceedings before any court, governmental agency or arbitrator affecting such Borrower or any Significant Subsidiary of such Borrower of the type described in Section 4.01(e);

 

(vi) such other information respecting such Borrower or any of its Subsidiaries as any Lender through the Administrative Agent may from time to time reasonably request.

 

The financial reports required to be delivered by each Borrower under paragraphs (i) and (ii)  alone shall be delivered in the form of such Borrower’s Quarterly Report on Form 10-Q or Annual Report on Form 10-K, in each case, for the applicable fiscal period, if such Borrower is required pursuant to applicable law to file, or does file, such reports with the SEC.

SECTION 5.02. Negative Covenants.

 

So long as any Advance or any other amount payable hereunder shall remain unpaid, any Letter of Credit shall remain outstanding or any Lender shall have any Commitment hereunder, each Borrower (except to the extent the following is limited to a certain Borrower) agrees that it will not:

 

(a) Mergers, Etc.  Merge or consolidate with or into any Person, or permit any Significant Subsidiary of such Borrower to do so, except that (i) any Subsidiary of such Borrower may merge or consolidate with or into any other Subsidiary of such Borrower, (ii) any Subsidiary of such Borrower may merge into such Borrower, (iii) any Significant Subsidiary of such Borrower may merge with or into any other Person so long as such Significant Subsidiary continues to be a Significant Subsidiary of such Borrower and (iv) such Borrower may merge with any other Person so long as the successor entity (if other than such Borrower) assumes, in form reasonably satisfactory to the Administrative Agent, all of the obligations of such Borrower under this Agreement and has long-term senior unsecured debt ratings issued (and confirmed after giving effect to such merger) by S&P or Moody’s of at least BBB- and Baa3, respectively (or if no such ratings have been issued, commercial paper ratings issued (and confirmed after giving effect to such merger) by S&P and Moody’s of at least A-3 and P-3, respectively), provided, in each case, that no Default with respect to such Borrower shall have occurred and be continuing at the time of such proposed transaction or would result therefrom.

 

(b) Stock of Significant Subsidiaries.  Sell, lease, transfer or otherwise dispose of, other than in connection with an RTO Transaction or any Restructuring Law, equity interests in any Significant Subsidiary of such Borrower (other than AEP Resources, Inc.) if such Significant Subsidiary would cease to be a Subsidiary of such Borrower as a result of such sale, lease, transfer or disposition.

 

(c) Sales, Etc. of Assets.  Sell, lease, transfer or otherwise dispose of, or permit any Significant Subsidiary of such Borrower (other than, in the case of AEP, AEP Resources, Inc., AEP Energy Services, Inc. or CSW Energy, Inc.) to sell, lease, transfer or otherwise dispose of, any assets, or grant any option or other right to purchase, lease or otherwise acquire any assets, except (i) sales in the ordinary course of its business, (ii) sales, leases, transfers or dispositions of assets to any Person that is not a wholly-owned Subsidiary of such Borrower that in the aggregate do not exceed 20% of the Consolidated Tangible Net Assets of such Borrower and its Subsidiaries, whether in one transaction or a series of transactions, (iii) other sales, leases, transfers and dispositions made in connection with an RTO Transaction or pursuant to the requirements of any Restructuring Law or to a wholly owned Subsidiary of such Borrower, or (iv) sales of pollution control assets to a state or local government or any political subdivision or agency thereof in connection with any transaction with such Person pursuant to which such Person sells or otherwise transfers such pollution control assets back to such Borrower or a Subsidiary under an installment sale or similar agreement, in each case in connection with the issuance of pollution control or similar bonds.

 

(d) Liens, Etc.  Create or suffer to exist, or permit any Significant Subsidiary of such Borrower to create or suffer to exist, any Lien on or with respect to any of its properties, including, without limitation, on or with respect to equity interests in any Subsidiary of such Borrower, whether now owned or hereafter acquired, or assign, or permit any Significant Subsidiary of such Borrower to assign, any right to receive income (other than in connection with Stranded Cost Recovery Bonds and the sale of accounts receivable by the Borrowers), other than (i) Permitted Liens, (ii) the Liens existing on the date hereof, and (iii) the replacement, extension or renewal of any Lien permitted by clause (ii) above upon or in the same property theretofore subject thereto or the replacement, extension or renewal (without increase in the amount or change in any direct or contingent obligor) of the Debt secured thereby.

 

(e) Restrictive Agreements.  Enter into, or permit any Significant Subsidiary of such Borrower to enter into (except in connection with or pursuant to any Restructuring Law), any agreement after the date hereof, or amend, supplement or otherwise modify any agreement existing on the date hereof, that imposes any restriction on the ability of any Significant Subsidiary of such Borrower to make payments, directly or indirectly, to its shareholders by way of dividends, advances, repayment of loans or intercompany charges, expenses and accruals or other returns on investments that is more restrictive than any such restriction applicable to such Significant Subsidiary on the date hereof.

 

(f) ERISA.  (i) Terminate or withdraw, or permit any of its ERISA Affiliates to terminate or withdraw, any Plan with respect to which such Borrower or any of its ERISA Affiliates may have any liability by reason of such termination or withdrawal, if such termination or withdrawal could have a Material Adverse Effect, (ii) incur a full or partial withdrawal, or permit any ERISA Affiliate to incur a full or partial withdrawal, from any Multiemployer Plan with respect to which such Borrower or any of its ERISA Affiliates may have any liability by reason of such withdrawal, if such withdrawal could have a Material Adverse Effect, (iii) otherwise fail, or permit any of its ERISA Affiliates to fail, to comply in all material respects with ERISA or the related provisions of the Internal Revenue Code, if such noncompliances, singly or in the aggregate, could have a Material Adverse Effect, or (iv) fail, or permit any of its Subsidiaries to fail, to comply with Applicable Law with respect to any Foreign Plan if such noncompliances, singly or in the aggregate, could have a Material Adverse Effect.

 

(g) Use of Proceeds.  Use the proceeds of any Extension of Credit to buy or carry Margin Stock.

 

SECTION 5.03. Financial Covenant.

 

So long as any Advance shall remain unpaid, any Letter of Credit shall remain outstanding or any Lender shall have any Commitment hereunder, each Borrower will maintain a ratio of Consolidated Debt to Consolidated Capital, as of the last day of each March, June, September and December, of not greater than 0.675 to 1.00.

 

 

 

If any of the following events (“Events of Default”) shall occur and be continuing with respect to a Borrower:

 

(a) Such Borrower shall fail to pay (i) any principal of any Advance when the same becomes due and payable, (ii) any amount payable to any LC Issuing Bank in reimbursement of any drawing under a Letter of Credit within three days after the same becomes due and payable or (iii) such Borrower shall fail to pay any interest on any Advance or make any other payment of fees or other amounts payable under this Agreement within five days after the same becomes due and payable; or

 

(b) Any representation or warranty made by such Borrower herein or by such Borrower (or any of its officers) in connection with this Agreement shall prove to have been incorrect in any material respect when made; or

 

(c) (i) Such Borrower shall fail to perform or observe any term, covenant or agreement contained in Section 5.01(a), 5.01(i)(iii) or 5.02 (other than Section 5.02(f)), or (ii) such Borrower shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or any other Loan Document if such failure shall remain unremedied for 30 days after written notice thereof shall have been given to such Borrower by the Administrative Agent or any Lender; or

 

(d) Any event shall occur or condition shall exist under any agreement or instrument relating to Debt of such Borrower (but excluding Debt outstanding hereunder) or any Significant Subsidiary of such Borrower outstanding in a principal or notional amount of at least $50,000,000 in the aggregate if the effect of such event or condition is to accelerate or require early termination of the maturity or tenor of such Debt, or any such Debt shall be declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), terminated, purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity or the original tenor thereof; or

 

(e) Such Borrower or any Significant Subsidiary of such Borrower shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against such Borrower or any Significant Subsidiary of such Borrower 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, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or such Borrower or any Significant Subsidiary of such Borrower shall take any corporate action to authorize any of the actions set forth above in this subsection (e); or

 

(f) (i) Any entity, person (within the meaning of Section 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) that as of the date hereof was beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of less than 30% of AEP’s Voting Stock shall acquire a beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Exchange Act), directly or indirectly, of Voting Stock of AEP (or other securities convertible into such Voting Stock) representing 30% or more of the combined voting power of all Voting Stock of AEP (which shall constitute an Event of Default for all Borrowers); (ii) during any period of up to 24 consecutive months, commencing after the date hereof, individuals who at the beginning of such 24-month period were directors of AEP shall cease for any reason to constitute a majority of the board of directors of AEP, provided that any person becoming a director subsequent to the date hereof, whose election, or nomination for election by AEP’s shareholders, was approved by a vote of at least a majority of the directors of the board of directors of AEP as comprised as of the date hereof (other than the election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of AEP) shall be, for purposes of this provision, considered as though such person were a member of the board as of the date hereof (which shall constitute an Event of Default for all Borrowers); or (iii) AEP shall fail to own directly or indirectly 100% of the common equity of any other Borrower (which shall constitute an Event of Default for such Borrower); or

 

(g) Any judgment or order for the payment of money in excess of $50,000,000 in the case of any Borrower or any Significant Subsidiary of such Borrower to the extent not paid or insured shall be rendered against such Borrower or any Significant Subsidiary of such Borrower and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

 

(h) Any ERISA Event shall have occurred and the liability of any Borrower and its ERISA Affiliates related to such ERISA Event exceeds $50,000,000;

 

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 such Borrower, declare the obligation of each Lender to make Extensions of Credit to such Borrower to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, by notice to such Borrower, declare the outstanding Borrowings of such Borrower, all interest thereon and all other amounts payable under this Agreement by such Borrower to be forthwith due and payable, whereupon the outstanding Borrowings of such Borrower, all such interest and all such amounts shall become and be forthwith due and payable by such Borrower, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by such Borrower; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to any Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender to make Extensions of Credit to such Borrower shall automatically be terminated and (B) the outstanding Borrowings to such Borrower, 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 such Borrower.

 

SECTION 6.02. Actions in Respect of the Letters of Credit upon Default.

 

(a) Each Borrower hereby agrees that any notice that is required to be delivered to it hereunder shall be delivered to AEP as set forth in this Section 8.02.  All notices and other communications provided for hereunder shall be in writing (including telecopier, telegraphic or telex communication) and mailed, telecopied, telegraphed, telexed or delivered, if to AEP at its address at 1 Riverside Plaza, Columbus, Ohio 43215, Attention: Treasurer (telecopy: (614) 716-2807; telephone: (614) 716-2885), with a copy to the General Counsel (telecopy: (614) 716-1687; telephone: (614) 716-2929); if to any Initial Lender, at its Domestic Lending Office specified opposite its name on Schedule I hereto; if to any other Lender (including the Swingline Bank), at its Domestic Lending Office specified in the Assignment and Acceptance pursuant to which it became a Lender; if to the Administrative Agent, at its address at 1111 Fannin Street, 10th Floor, Houston, Texas 77002, Attention: Regina Harmon, Loan & Agency Services (telecopy: (713) 427-6307; telephone: (713) 750-2355); if to any LC Issuing Bank, at such address as shall be designated by such LC Issuing Bank and notified to the Lenders pursuant to Section 2.04; or, as to AEP or the Administrative Agent, at such other address as shall be designated by such party 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 AEP and the Administrative Agent.  All such notices and communications shall be effective when received, if received during the recipient’s normal business hours, at the appropriate address or number to the attention of the appropriate individual or department, except that notices and communications to the Administrative Agent pursuant to Article II, III or 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 of any Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of a manually executed counterpart thereof.

 

(b) The Borrowers and the Lenders hereby agree that the Administrative Agent may make any information required to be delivered under Section 5.01(i)(i), (ii), (iv) and (v) (the “Communications”) available to the Lenders by posting the Communications on Intralinks or a substantially similar electronic transmission systems (the “Platform”).  The Borrowers and the Lenders hereby acknowledge that the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution.

 

(c) 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.

 

(a) AEP agrees to pay promptly upon demand all reasonable out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery, administration, modification and amendment of this Agreement and the other documents to be delivered hereunder, including, without limitation, (i) all due diligence, syndication (including printing, distribution and bank meetings), transportation, computer, duplication, appraisal, consultant, and audit expenses and (ii) the reasonable fees and expenses of counsel for the Administrative Agent with respect thereto and with respect to advising the Administrative Agent as to its rights and responsibilities under this Agreement.  AEP further agrees to pay promptly upon demand all costs and expenses of the Administrative Agent and the Lenders, if any (including, without limitation, counsel fees and expenses), in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement and the other documents to be delivered hereunder, including, without limitation, reasonable fees and expenses of counsel for the Administrative Agent and the Lenders in connection with the enforcement of rights under this Section 8.04(a).

 

(b) AEP agrees to indemnify and hold harmless each Lender, the Administrative Agent, the Swingline Bank, the LC Issuing Banks and each of their respective Affiliates and their officers, directors, controlling persons, employees, agents and advisors (each, an “Indemnified Party”) from and against any and all claims, damages, losses and liabilities, joint or several, to which any such Indemnified Party may become subject, in each case arising out of or in connection with or relating to (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) (i) this Agreement, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Extensions of Credit or (ii) the actual or alleged presence of Hazardous Materials on any property of any Borrower or any of its Subsidiaries or any Environmental Action relating in any way to any Borrower or any of its Subsidiaries, and to reimburse any Indemnified Party for any and all reasonable expenses (including, without limitation, reasonable fees and expenses of counsel) as they are incurred in connection with the investigation of or preparation for or defense of any pending or threatened claim or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party and whether or not such claim, action or proceeding is initiated or brought by or on behalf of such Borrower or any of its Affiliates and whether or not any of the transactions contemplated hereby are consummated or this Agreement is terminated, except to the extent such claim, damage, loss, liability or expense is found in a judgment by a court of competent jurisdiction to have resulted 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, shareholders or creditors or an Indemnified Party or any other Person or any Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated.  Each Borrower agrees not to assert any claim against the Administrative Agent, any Lender, any of their respective Affiliates, or any of their respective directors, officers, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to this Agreement, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Extensions of Credit.

 

(c) 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 other than on the last day of the Interest Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.07, 2.10(e), 2.13 or 2.15, acceleration of the maturity of the outstanding Borrowings pursuant to Section 6.01 or for any other reason (in the case of any such payment or Conversion), such Borrower shall, promptly upon demand by such Lender (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses that it may reasonably incur as a result of such payment or Conversion, including, without limitation, any loss (other than loss of Applicable Margin), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain such Advance.

 

(d) Without prejudice to the survival of any other agreement of the Borrowers hereunder, the respective agreements and obligations of the Borrowers contained in Sections 2.14, 2.17 and 8.04 shall survive the payment in full of principal, interest and all other amounts payable hereunder.

 

(e) Each Borrower agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to such Borrower or its respective security holders or creditors related to or arising out of or in connection with this Agreement, the Extensions of Credit or the use or proposed use of the proceeds thereof, any of the transactions contemplated by any of the foregoing or in the loan documentation and the performance by an Indemnified Party by any of the foregoing except to the extent that any loss, claim, damage, liability or expense is found in a judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct.

 

(f) In the event that an Indemnified Party is requested or required to appear as a witness in any action brought by or on behalf of or against any Borrower or any of its Affiliates in which such Indemnified Party is not named as a defendant, such Borrower agrees to reimburse such Indemnified Party for all reasonable expenses incurred by it in connection with such Indemnified Party’s appearing and preparing to appear as such a witness, including, without limitation, the fees and disbursements of its legal counsel.

 

(a) Each Lender may, with the written consent (unless such assignment is to a Lender, a wholly owned Affiliate of such Lender or a wholly owned Affiliate of the assigning Lender, in which case no such consent, and only notice to the Administrative Agent and AEP shall be required) of the Administrative Agent, AEP (unless a Default shall have occurred and be continuing), the Swingline Bank and each LC Issuing Bank (in each case, with each consent not to be unreasonably withheld), assign to one or more Persons all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment and the Advances owing to it); provided, however, that (i) each such assignment shall be of a constant, and not a varying, percentage of all rights and obligations under this Agreement, (ii) except in the case of an assignment to a Person that, immediately prior to such assignment, was a Lender or an assignment of all of a Lender’s rights and obligations under this Agreement, the amount of the Commitment of the assigning Lender being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof, (iii) each such assignment shall be to an Eligible Assignee, 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 a processing and recordation fee of $3,500 (to be paid by the assigning Lender or, in the case of an assignment pursuant to Section 8.07(i), AEP).  Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, (x) 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 hereunder and (y) the Lender 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 and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto).

 

(b) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows:  (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such assigning Lender 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 this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.01 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 or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (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 this Agreement as are delegated to the Administrative Agent by the terms hereof, 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 are required to be performed by it as a Lender.

 

(c) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, the Administrative Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit C hereto, accept such Assignment and Acceptance, record the information contained therein in the Register and forward a copy thereof to the Borrowers.

 

(d) 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 Lenders and, the Commitment of, and principal amount of the Advances owing to, each Lender by each Borrower from time to time (the “Register”).  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and each Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by each Borrower, the Administrative Agent or any Lender at any reasonable time and from time to time upon reasonable prior notice.

 

(e) Each Lender may sell participations to one or more banks or other entities (other than the Borrowers or any of their Affiliates) in or to all or a portion of its rights and/or obligations under this Agreement (including, without limitation, all or a portion of its Commitment and the Advances) without the consent of AEP, the Administrative Agent or any Lender; provided, however, that (i) such Lender’s obligations under this Agreement (including, without limitation, its Commitment hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) each Borrower, the Administrative Agent, the Swingline Bank, the LC Issuing Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and (iv) no Lender shall be entitled to receive any greater amount pursuant to Section 2.13 or 2.16 than such Lender would have been entitled to receive had such Lender not sold such participation.  No Lender may grant to any holder of a participation in the rights and obligations of such Lender hereunder the right to require such Lender to take or omit to take any action under this Agreement, except that such Lender may grant to any such holder the right to require such holder’s consent to (i) reduce the principal of or interest on the outstanding Borrowings or the fees or other amounts payable to such Lender hereunder, (ii) postpone any date fixed for any payment of principal of or interest on the outstanding Borrowings or the fees payable to such Lender hereunder or (iii) permit any Borrower to assign any of its obligations under this Agreement to any other Person.  Each holder of a participation in any rights and obligations under this Agreement, if and to the extent the applicable participation agreement so provides, shall, with respect to such participation, be entitled to all of the rights of a Lender as fully as though it were a Lender under Sections 2.09(c), 2.13, 2.16 8.01, 8.04(b) and 8.04(c) (subject to any conditions imposed on each Lender hereunder with respect thereto, including delivery of the forms and certificates required under Section 2.16(e)); provided, however, that no holder of a participation shall be entitled to any amounts that would otherwise be payable to it with respect to its participation under Section 2.13(a) or 2.16 unless (x) such amounts are payable in respect of a Regulatory Change enacted after the date the applicable participation agreement was executed or (y) such amounts would have been payable to the Lender that granted such participation if such participation had not been granted.  Each Lender selling or granting a participation shall indemnify each Borrower and the Administrative Agent for any liabilities for Taxes that such Borrower or the Administrative Agent, as the case may be, might incur as a result of such Lender’s failure to withhold and pay any Taxes applicable to payments by such Lender to its participant in respect of such participation.

 

(f) Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle (an “SPV”) of such Granting Lender identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrowers, the option to provide to any Borrower all or any part of any Advance that such Granting Lender would otherwise be obligated to make to such Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any such SPV to make any Advance, (ii) if such SPV elects not to exercise such option or otherwise fails to provide all or any part of such Advance, the Granting Lender shall be obligated to make such Advance pursuant to the terms hereof and (iii) no SPV or Granting Lender shall be entitled to receive any greater amount pursuant to Section 2.09(c), 2.13 or 2.16 than the Granting Lender would have been entitled to receive had the Granting Lender not otherwise granted such SPV the option to provide any Advance to such Borrower.  The making of an Advance by an SPV hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Advance were made by such Granting Lender.  Each party hereto hereby agrees that no SPV shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would otherwise be liable so long as, and to the extent that, the related Granting Lender provides such indemnity or makes such payment.  In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPV, it will not institute against or join any other Person in instituting against such SPV any bankruptcy, reorganization, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof.  Notwithstanding the foregoing, the Granting Lender unconditionally agrees to indemnify each Borrower, the Administrative Agent and each Lender against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be incurred by or asserted against such Borrower, the Administrative Agent or such Lender, as the case may be, in any way relating to or arising as a consequence of any such forbearance or delay in the initiation of any such proceeding against its SPV.  Each party hereto hereby acknowledges and agrees that no SPV shall have the rights of a Lender hereunder, such rights being retained by the applicable Granting Lender.  Accordingly, and without limiting the foregoing, each party hereby further acknowledges and agrees that no SPV shall have any voting rights hereunder and that the voting rights attributable to any Advance made by an SPV shall be exercised only by the relevant Granting Lender and that each Granting Lender shall serve as the administrative agent and attorney-in-fact for its SPV and shall on behalf of its SPV receive any and all payments made for the benefit of such SPV and take all actions hereunder to the extent, if any, such SPV shall have any rights hereunder.  In addition, notwithstanding anything to the contrary contained in this Agreement any SPV may (i) with notice to, but without the prior written consent of any other party hereto, assign all or a portion of its interest in any Advances to the Granting Lender and (ii) in accordance with Section 8.08, disclose on a confidential basis any Confidential Information relating to its Advances to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPV.  This Section may not be amended without the prior written consent of each Granting Lender, all or any part of whose Advance is being funded by an SPV at the time of such amendment.

 

(g) Any Lender may, in connection with any assignment, designation, participation or grant to an SPV or proposed assignment, designation, participation or grant to an SPV pursuant to this Section 8.07, disclose to the assignee, designee or participant or proposed assignee, designee or participant, any information relating to any Borrower furnished to such Lender by or on behalf of such Borrower; provided that, prior to any such disclosure, the assignee, designee or participant or proposed assignee, designee or participant shall agree to preserve the confidentiality of any Confidential Information relating to any Borrower received by it from such Lender.

 

(h) Notwithstanding any other provision set forth in this Agreement, any Lender may at any time create a security interest in all or any portion of its rights under this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System.

 

(i) In the event that any Lender, or any participant of such Lender pursuant to Section 8.07(e), shall have delivered a notice or certificate pursuant to Section 2.14, or any Borrower shall be required to make additional payments to any Lender under Section 2.09(c), 2.13 or 2.16, AEP shall have the right, at its own expense, upon notice to such Lender, to require such Lender to transfer and assign without recourse (in accordance with and subject to the restrictions contained in this Section 8.07) all such Lender’s interests, rights and obligations under this Agreement to another Eligible Assignee identified by AEP and approved by the Administrative Agent, the Swingline Bank and each LC Issuing Bank (which approval shall not be unreasonably withheld), which financial institution shall assume such obligations of such Lender for consideration equal to the outstanding principal amount of such Lender’s Advances, and if satisfactory arrangements are made for the payment to such Lender of interest and fees accrued hereunder to the date of such transfer and all other amounts payable hereunder to such Lender on or prior to the date of such transfer; provided that (i) no Default shall have occurred and be continuing, (ii) no such assignment shall conflict with any law, rule or regulation or order of any governmental authority and (iii) the relevant Borrower shall have paid to the assignor in immediately available funds on or prior to the date of such assignment all amounts accrued for the account of such Lender or owed to it under Section 2.09(c), 2.13 or 2.16.

 

SECTION 8.08. Confidentiality.

 

Neither the Administrative Agent nor any Lender shall disclose any Confidential Information to any other Person without the consent of AEP, other than (i) to the Administrative Agent’s or such Lender’s Affiliates and their officers, directors, employees, agents and advisors, to the Administrative Agent or a Lender and, as contemplated by Section 8.07, to actual or prospective assignees and participants, and then only on a confidential basis, (ii) as required by any law, rule or regulation or judicial process, (iii) to any rating agency when required by it, or to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement in connection with a grant to an SPV under Section 8.07(f), provided, that, prior to any such disclosure, such rating agency, commercial paper dealer or provider shall undertake to preserve the confidentiality of any Confidential Information received by it from such Lender, (iv) as requested or required by any state, federal or foreign authority or examiner regulating banks, banking or other financial institutions and (v) to direct or indirect counterparties in connection with swaps or derivatives, and then only on a confidential basis.

 

SECTION 8.09. Governing Law.

 

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

 

SECTION 8.10. Severability.

 

In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired hereby.

 

SECTION 8.11. 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 a manually executed counterpart of this Agreement.

 

SECTION 8.12. Jurisdiction, Etc.

 

(a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York, New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, 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 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 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 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 8.13. Waiver of Jury Trial.

 

Each of the Borrowers, the Administrative Agent, each LC Issuing Bank and each Lender hereby 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 this Agreement or the actions of the Administrative Agent, any LC Issuing Bank, the Swingline Bank, the Borrowers or any Lender in the negotiation, administration, performance or enforcement thereof.

 

SECTION 8.14. USA Patriot Act.

 

Each Lender and LC Issuing Bank hereby notifies the Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law as of October 26, 2001)) (as amended, restated, modified or otherwise supplemented from time to time, the “Act”), it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of each Borrower and other information that will allow such Lender or LC Issuing Bank, as the case may be, to identify such Borrower in accordance with the Act.

 

SECTION 8.15.  No Fiduciary Duty. 

 

Each of the Administrative Agent, each Lender, the Swingline Bank, the LC Issuing Banks and each of their respective Affiliates and their officers, directors, controlling persons, employees, agents and advisors (collectively, solely for purposes of this Section 8.15, the “Lenders”) may have economic interests that conflict with those of the Borrowers.  The Borrowers agree that nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the Lenders and any Borrower, its stockholders or its Affiliates.  Each Borrower acknowledges and agrees that (i) the transactions contemplated by the Loan Documents are arm’s-length commercial transactions between the Lenders, on the one hand, and the Borrowers, on the other, (ii) in connection therewith and with the process leading to such transaction each of the Lenders is acting solely as a principal and not the agent or fiduciary of any Borrower, its management, stockholders, creditors or any other person, (iii) no Lender has assumed an advisory or fiduciary responsibility in favor of any Borrower with respect to the transactions contemplated hereby or the process leading thereto (irrespective of whether any Lender or any of its Affiliates has advised or is currently advising any Borrower on other matters) or any other obligation to any Borrower except the obligations expressly set forth in the Loan Documents and (iv) each Borrower has consulted its own legal and financial advisors to the extent it deemed appropriate.  Each Borrower further acknowledges and agrees that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto.  Each Borrower agrees that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to any Borrower, in connection with such transaction or the process leading thereto.

 

 

Reference is made to the Credit Agreement, dated as of April 4, 2008 (the “Credit Agreement”, the terms defined therein being used herein as therein defined), among the Borrowers named therein, the Lenders named therein, the LC Issuing Banks named therein and JPMorgan Chase Bank, N.A., as Administrative Agent for said Lenders and LC Issuing Banks.

 

The “Assignor” and the “Assignee” referred to on Schedule I hereto agree as follows:

 

1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, an interest in and to the Assignor’s rights and obligations under the Credit Agreement as of the date hereof equal to the percentage interest specified on Schedule 1 hereto of all outstanding rights and obligations under the Credit Agreement.  After giving effect to such sale and assignment, the Assignee’s Commitment and the amount of the Advances owing to the Assignee will be as set forth on Schedule 1 hereto.

 

2. The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other instrument or document furnished pursuant thereto; and (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrowers or the performance or observance by the Borrowers of any of its obligations under the Credit Agreement or any other instrument or document furnished pursuant thereto.

 

3. The Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Section 4.01(f) thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Administrative Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement as are delegated to the Administrative Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; (v) agrees that it will perform in accordance with their terms all of the obligations that by the terms of the Credit Agreement are required to be performed by it as a Lender; and (vi) attaches any U.S. Internal Revenue Service forms required under Section 2.16 of the Credit Agreement.

 

4. Following the execution of this Assignment and Acceptance, it[, and the fee set forth in Section 8.07(a) of the Credit Agreement,]1 will be delivered to the Administrative Agent for acceptance and recording by the Administrative Agent.  The effective date for this Assignment and Acceptance (the “Effective Date”) shall be the date of acceptance hereof by the Administrative Agent, unless otherwise specified on Schedule 1 hereto.

 

5. Upon such acceptance and recording by the Administrative Agent, as of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement.

 

6. Upon such acceptance and recording by the Administrative Agent, from and after the Effective Date, the Administrative Agent shall make all payments under the Credit Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and commitment fees with respect thereto) to the Assignee.  The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Effective Date directly between themselves.

 

7. This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York.

 

8. This Assignment and Acceptance 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 Schedule 1 to this Assignment and Acceptance by telecopier shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance.

 

IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to this Assignment and Acceptance to be executed by their officers thereunto duly authorized as of the date specified thereon.

 

Accepted and Approved this

 

Based upon the foregoing, and subject to the qualifications set forth below, we are of the opinion that:

 

(i)           The Credit Agreement is the legal, valid and binding obligation of the Borrowers enforceable against the Borrowers in accordance with its terms.

 

(ii)           While we have not independently considered the matters covered by the Opinion to the extent necessary to enable us to express the conclusions stated therein, the Opinion and the other documents referred to in item (2) above are substantially responsive to the corresponding requirements set forth in Section 3.01 of the Credit Agreement pursuant to which the same have been delivered.

 

Our opinions are subject to the following qualifications:

 

(a) Our opinion in paragraph (i) above is subject to the effect of any applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar law affecting creditors’ rights generally.

 

(b) Our opinion in paragraph (i) above is subject to the effect of general principles of equity, including (without limitation) concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether considered in a proceeding in equity or at law).  Such principles of equity are of general obligation, and, in applying such principles, a court, among other things, might not allow a contracting party to exercise remedies in respect of a default deemed immaterial, or might decline to order an obligor to perform covenants.

 

(c) We note further that, in addition to the application of equitable principles described above, courts have imposed an obligation on contracting parties to act reasonably and in good faith in the exercise of their contractual rights and remedies, and may also apply public policy considerations in limiting the right of parties seeking to obtain indemnification under circumstances where the conduct of such parties in the circumstances in question is determined to have constituted negligence.

 

(d) We express no opinion herein as to (i) Section 8.05 of the Credit Agreement, (ii) the enforceability of provisions purporting to grant to a party conclusive rights of determination, (iii) the availability of specific performance or other equitable remedies, (iv) the enforceability of rights to indemnity under Federal or state securities laws and (v) the enforceability of waivers by parties of their respective rights and remedies under law.

 

(e) Our opinions expressed above are limited to the law of the State of New York, and we do not express any opinion herein concerning any other law.  Without limiting the generality of the foregoing, we express no opinion as to the effect of the law of any jurisdiction other than the State of New York wherein any Lender may be located or wherein enforcement of the Credit Agreement may be sought that limits the rates of interest legally chargeable or collectible.

 

The foregoing opinion is solely for your benefit and may not be relied upon by any other Person other than any Person that may become a Lender under the Credit Agreement after the date hereof.