LOAN AGREEMENT BETWEEN POTOMAC ELECTRIC POWER COMPANY, as Borrower and WACHOVIA BANK, NATIONAL ASSOCIATION, as Lender Dated as of May 1, 2008
BETWEEN
as
Borrower
and
WACHOVIA
BANK, NATIONAL ASSOCIATION,
as
Lender
Dated as
of May 1, 2008
TABLE
OF CONTENTS
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Page
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ARTICLE
I
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DEFINITIONS
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1
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1.1
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Definitions
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1
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1.2
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Interpretation
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8
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1.3
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Accounting
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8
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ARTICLE
II
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THE
LOAN
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9
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2.1
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Commitment
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9
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2.2
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Required
Payments; Termination
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9
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2.3
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Ratable
Loans
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9
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2.4
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Type
of Loan
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9
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2.5
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Intentionally
Omitted
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9
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2.6
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Minimum
Amount of Each Loan
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9
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2.7
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Prepayments
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9
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2.8
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Method
of Selecting Types and Interest Periods for the Loan
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9
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2.9
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Conversion
and Continuation of the Outstanding Loan
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10
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2.10
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Changes
in Interest Rate, etc.
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10
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2.11
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Rates
Applicable After Default
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11
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2.12
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Method
of Payment
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11
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2.13
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Evidence
of Indebtedness
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11
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2.14
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Telephonic
Notices
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11
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2.15
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Interest
Payment Dates; Interest and Fee Basis
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11
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ARTICLE
III
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YIELD
PROTECTION; TAXES
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12
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3.1
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Yield
Protection
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12
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3.2
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Changes
in Capital Adequacy Regulations
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12
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3.3
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Availability
of Type of Loan
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13
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-i-
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TABLE
OF CONTENTS
(continued)
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Page
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3.4
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Funding
Indemnification
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13
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3.5
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Taxes
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13
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3.6
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Mitigation
of Circumstances; Lender Statements; Survival of Indemnity
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14
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3.7
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[Intentionally
Omitted]
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15
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ARTICLE
IV
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CONDITIONS
PRECEDENT
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15
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4.1
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Conditions
Precedent to Closing and Borrowing
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15
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ARTICLE
V
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REPRESENTATIONS
AND WARRANTIES
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16
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5.1
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Existence
and Standing
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16
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5.2
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Authorization
and Validity
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16
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5.3
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No
Conflict; Government Consent
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16
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5.4
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Financial
Statements
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16
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5.5
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No
Material Adverse Change
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16
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5.6
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Taxes
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17
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5.7
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Litigation
and Contingent Obligations
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17
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5.8
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Significant
Subsidiaries
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17
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5.9
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ERISA
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17
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5.10
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Accuracy
of Information
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17
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5.11
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Regulation
U
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17
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5.12
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Material
Agreements
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17
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5.13
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Compliance
With Laws
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17
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5.14
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Plan
Assets; Prohibited Transactions
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17
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5.15
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Environmental
Matters
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18
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5.16
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Investment
Company Act
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18
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5.17
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[Intentionally
Omitted]
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18
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-ii-
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TABLE
OF CONTENTS
(continued)
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Page
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5.18
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Insurance
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18
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5.19
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No
Default
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18
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5.20
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Ownership
of Properties
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18
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5.21
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OFAC
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18
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ARTICLE
VI
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COVENANTS
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18
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6.1
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Financial
Reporting
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19
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6.2
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Use
of Proceeds
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20
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6.3
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Notice
of Default
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20
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6.4
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Conduct
of Business
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20
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6.5
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Taxes
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20
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6.6
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Insurance
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21
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6.7
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Compliance
with Laws
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21
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6.8
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Maintenance
of Properties
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21
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6.9
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Inspection
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21
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6.10
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Merger
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21
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6.11
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Sales
of Assets
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21
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6.12
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Liens
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22
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6.13
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Leverage
Ratio
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23
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ARTICLE
VII
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DEFAULTS
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24
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7.1
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Representation
or Warranty
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24
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7.2
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Nonpayment
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24
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7.3
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Certain
Covenant Breaches
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24
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7.4
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Other
Breaches
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24
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7.5
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Cross
Default
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24
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-iii-
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TABLE
OF CONTENTS
(continued)
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Page
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7.6
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Voluntary
Bankruptcy, etc.
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24
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7.7
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Involuntary
Bankruptcy, etc.
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25
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7.8
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Seizure
of Property, etc.
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25
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7.9
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Judgments
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25
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7.10
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ERISA
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25
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7.11
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Unenforceability
of Loan Documents
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25
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7.12
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Change
in Control
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25
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ARTICLE
VIII
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ACCELERATION,
WAIVERS, AMENDMENTS AND REMEDIES
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26
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8.1
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Acceleration
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26
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8.2
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Amendments
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26
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8.3
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Preservation
of Rights
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26
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ARTICLE
IX
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GENERAL
PROVISIONS
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26
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9.1
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Survival
of Representations
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26
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9.2
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Governmental
Regulation
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27
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9.3
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Headings
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27
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9.4
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Entire
Agreement
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27
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9.5
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Several
Obligations; Benefits of this Agreement
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27
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9.6
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Expenses;
Indemnification
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27
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9.7
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[Intentionally
Omitted]
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27
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9.8
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[Intentionally
Omitted]
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27
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9.9
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Severability
of Provisions
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27
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9.10
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Nonliability
of Lender
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28
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9.11
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Limited
Disclosure
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28
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9.12
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Nonreliance
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28
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-iv-
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TABLE
OF CONTENTS
(continued)
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Page
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9.13
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[Intentionally
Omitted]
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28
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9.14
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U.S.
Patriot Act Notification
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28
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ARTICLE
X
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[Intentionally
Omitted]
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29
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ARTICLE
XI
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SETOFF
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29
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ARTICLE
XII
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BENEFIT
OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
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29
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12.1
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Successors
and Assigns
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29
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12.2
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Participations
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30
|
12.3
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Assignments
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30
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12.4
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Dissemination
of Information
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31
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12.5
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[Intentionally
Omitted]
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31
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12.6
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Tax
Treatment
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31
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ARTICLE
XIII
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NOTICES
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31
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ARTICLE
XIV
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COUNTERPARTS
|
31
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ARTICLE
XV
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CHOICE
OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
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32
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15.1
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CHOICE
OF LAW
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32
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15.2
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CONSENT
TO JURISDICTION
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32
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15.3
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WAIVER
OF JURY TRIAL
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32
|
-v-
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EXHIBITS
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EXHIBIT
A
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COMPLIANCE
CERTIFICATE
|
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EXHIBIT
B
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ASSIGNMENT
AGREEMENT
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EXHIBIT
C
|
NOTE
|
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EXHIBIT
D-1
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FORM
OF OPINION OF IN-HOUSE COUNSEL OF BORROWER
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EXHIBIT
D-2
|
FORM
OF OPINION OF XXXXXXXXX & XXXXXXX LLP
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SCHEDULES
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SCHEDULE
1
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LIENS
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-vi-
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This LOAN
AGREEMENT, dated as of May 1, 2008, is between Potomac Electric Power Company
(“Borrower”)
and Wachovia Bank, National Association.
The
parties hereto agree as follows:
ARTICLE
I
“Affiliate”
of any Person means any other Person directly or indirectly controlling,
controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or
otherwise.
“Agreement”
means this Loan Agreement as amended, restated, supplemented or otherwise
modified from time to time.
“Agreement
Accounting Principles” means generally accepted accounting principles as
in effect from time to time, applied, with respect to Borrower, in a manner
consistent with that used in preparing Borrower’s financial statements referred
to in Section
5.4.
“Alternate
Base Rate” means, for any day, a rate of interest per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of the Federal Funds
Effective Rate for such day plus 0.5%,
provided that with respect to any day during the period commencing on
March 31, 2009 and ending on the Maturity Date, the Alternate Base Rate shall be
equal to the sum of the Federal Funds Effective Rate for such day plus
0.5%.
“Applicable
Margin” means, with respect to Eurodollar Loans to Borrower at any time,
the rate of 0.6% per annum.
“Approvals”
is defined in Section
5.3.
“Assignment
Agreement” means an agreement substantially in the form of Exhibit
B.
“Authorized
Officer” means, with respect to Borrower, the President, any Vice
President, the Chief Financial Officer, the Treasurer or any Assistant Treasurer
of Borrower, acting singly.
“Borrower”
is defined in the preamble.
“Business
Day” means (i) with respect to any borrowing, payment or rate selection
of, or any notice with respect to, Eurodollar Loans, a day (other than a
Saturday or Sunday) on which banks generally are open in Charlotte, North
Carolina and New York, New York for the conduct of substantially all of their
commercial lending activities, interbank wire transfers can be made on the
Fedwire system and
dealings
in United States dollars are carried on in the London interbank market and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Charlotte, North Carolina and New York, New York for the
conduct of substantially all of their commercial lending activities and
interbank wire transfers can be made on the Fedwire system.
“Capitalized
Lease” of a Person means any lease of Property by such Person as lessee
which would be capitalized on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.
“Capitalized
Lease Obligations” of a Person means the amount of the obligations of
such Person under Capitalized Leases which would be shown as a liability on a
balance sheet of such Person prepared in accordance with Agreement Accounting
Principles.
“Change in
Control” means an event or series of events by which (a) any Person, or
two or more Persons acting in concert, acquire beneficial ownership (within the
meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934) of
30% or more (by number of votes) of the outstanding shares of Voting Stock of
PHI; or (b) individuals who on the Closing Date were directors of PHI (the
“Approved
Directors”) shall cease for any reason to constitute a majority of the
board of directors of PHI; provided
that any individual becoming a member of such board of directors subsequent to
such date whose election or nomination for election by PHI’s shareholders was
approved by a majority of the Approved Directors shall be deemed to be an
Approved Director, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
solicitation of proxies or consents for the election or removal of one or more
directors by any Person, or two or more Persons acting in concert, other than a
solicitation for the election of one or more directors by or on behalf of the
board of directors.
“Closing
Date” means the date on which all conditions precedent to the making of
the Loan have been satisfied.
“Code”
means the Internal Revenue Code of 1986.
“Commitment”
means the obligation of Lender to make the Loan in an aggregate amount not
exceeding $25,000,000.
“Contingent
Obligation” of a Person means any agreement, undertaking or arrangement
by which such Person assumes, guarantees, endorses, contingently agrees to
purchase or provide funds for the payment of, or otherwise becomes or is
contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including any comfort letter, operating agreement, take or pay
contract, application for a letter of credit or the obligations of any such
Person as general partner of a partnership with respect to the liabilities of
such partnership; provided
that Contingent Obligations shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount
of any Contingent Obligation shall be deemed equal to the stated or determinable
amount of the primary obligation of such other Person or, if such amount is not
stated or is indeterminable, the maximum reasonably anticipated liability of
such Person in respect thereof.
“Controlled
Group” means all members of a controlled group of corporations or other
business entities and all trades or businesses (whether or not incorporated)
under common control which, together with Borrower or any of its Subsidiaries,
are treated as a single employer under Section 414 of the
Code.
2
“Conversion/Continuation
Notice” is defined in Section
2.9.
“Default”
means an event described in Article
VII.
“Environmental
Laws” means any and all federal, state, local and foreign statutes, laws,
judicial decisions, regulations, ordinances, rules, judgments, orders, decrees,
plans, injunctions, permits, concessions, grants, franchises, licenses,
agreements and other governmental restrictions relating to (i) the protection of
the environment, (ii) the effect of the environment on human health, (iii)
emissions, discharges or releases of pollutants, contaminants, hazardous
substances or wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
“ERISA”
means the Employee Retirement Income Security Act of 1974.
“Eurodollar
Base Rate” means, with respect to a Eurodollar Loan for the relevant
Interest Period, the applicable British Bankers’ Association Interest Settlement
Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period, and having a maturity equal to such Interest Period, provided
that (i) if Reuters Screen FRBD is not available to the Lender for any reason,
the applicable Eurodollar Base Rate for the relevant Interest Period shall
instead be the applicable British Bankers’ Association Interest Settlement Rate
for deposits in U.S. dollars as reported by any other generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period, and (ii) if no such British Bankers’ Association Interest
Settlement Rate is available to the Lender, the applicable Eurodollar Base Rate
for the relevant Interest Period shall instead be the rate determined by the
Lender to be the rate at which the Lender or one of its Affiliate banks offers
to place deposits in U.S. dollars with first-class banks in the London interbank
market at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period, in the approximate amount of the Lender’s
relevant Eurodollar Loan and having a maturity equal to such Interest
Period.
“Eurodollar
Loan” means any portion of the Loan which, except as otherwise provided
in Section
2.11, bears interest at the applicable Eurodollar
Rate.
“Eurodollar
Rate” means, with respect to a Eurodollar Loan for the relevant Interest
Period, the sum of (i) the quotient of (a) the Eurodollar Base Rate applicable
to such Interest Period, divided by (b) one minus the Reserve Requirement
(expressed as a decimal) applicable to such Interest Period, plus (ii) the
Applicable Margin.
“Excluded
Taxes” means, in the case of the Lender, taxes imposed on its overall net
income, and franchise taxes imposed on it, by (i) the jurisdiction under the
laws of which the Lender is incorporated or organized or (ii) the jurisdiction
in which the Lender’s principal executive office is located.
“Federal
Funds Effective Rate” means, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 11:00 a.m. on such
day on such transactions received by the Lender from three Federal funds brokers
of recognized standing selected by the Lender in its sole
discretion.
3
“Floating
Rate Loan” means any portion of the Loan which, except as otherwise
provided in Section
2.11, bears interest at the Alternate Base Rate.
“FRB”
means the Board of Governors of the Federal Reserve System and any successor
thereto.
“Hybrid
Securities” means any trust preferred securities, or deferrable interest
subordinated debt with a maturity of at least 20 years, which provides for the
optional or mandatory deferral of interest or distributions, issued by Borrower,
or any business trusts, limited liability companies, limited partnerships or
similar entities (i) substantially all of the common equity, general partner or
similar interest of which are owned (either directly or indirectly through one
or more wholly owned Subsidiaries) at all times by Borrower or any of its
Subsidiaries, (ii) that have been formed for the purpose of issuing hybrid
securities or deferrable interest subordinated debt, and (iii) substantially all
the assets of which consist of (A) subordinated debt of Borrower or a Subsidiary
of Borrower, and (B) payments made from time to time on the subordinated
debt.
“Indebtedness”
of a Person means, without duplication, such Person’s (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price
of Property or services (other than accounts payable arising in the ordinary
course of such Person’s business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, bonds, debentures,
acceptances or similar instruments, (v) obligations of such Person to
purchase accounts, securities or other Property arising out of or in connection
with the sale of the same or substantially similar accounts, securities or
Property, (vi) Capitalized Lease Obligations, (vii) net liabilities under
interest rate swap, exchange or cap agreements, obligations or other liabilities
with respect to accounts or notes, (viii) obligations under any Synthetic Lease
which, if such Synthetic Lease were accounted for as a Capitalized Lease, would
appear on a balance sheet of such Person, (ix) unpaid reimbursement obligations
in respect of letters of credit issued for the account of such Person and
(x) Contingent Obligations in respect of Indebtedness of the types
described above.
“Interest
Period” means, with respect to a Eurodollar Loan, a period of one, two,
three or six months commencing on a Business Day selected by the Borrower
pursuant to this Agreement, provided
that with respect to any period during the period commencing on March 31, 2009
and ending on the Maturity Date, Borrower may select a period of one or two
weeks commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Interest Period shall end on the day which
corresponds numerically to such date one, two, three or six months thereafter,
provided
that if there is no such numerically corresponding day in such next, second,
third or sixth succeeding month, such Interest Period shall end on the last
Business Day of such next, second, third or sixth succeeding
month. If an Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next succeeding
Business Day, provided
that if said next succeeding Business Day falls in a new calendar month, such
Interest Period shall end on the immediately preceding Business
Day. No Interest Period shall end after the Maturity Date and any
Interest Period which would, but for this clause, end after the Maturity Date
shall instead end on the Maturity Date subject to the payment of all
break-funding and other losses, costs and expenses incurred as a result
thereof.
“Lender”
means Wachovia Bank, National Association, any financial institution that
becomes a Purchaser pursuant to Section
12.3.1 and their respective successors and assigns.
“Lien”
means any lien (statutory or other), mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including the interest of a vendor or lessor under any conditional
sale,
4
Capitalized
Lease or other title retention agreement, but excluding the interest of a lessor
under any operating lease).
“Loan”
means the loan made by Lender pursuant to Article
II (or any conversion or continuation thereof).
“Loan
Documents” means this Agreement and the Note, each as amended, restated,
supplemented or otherwise modified from time to time.
“Material
Adverse Effect” means a material adverse effect on (i) the business,
Property, financial condition or results of operations of Borrower and its
Subsidiaries taken as a whole, (ii) the ability of Borrower to perform its
obligations under the Loan Documents or (iii) the validity or enforceability of
any of the Loan Documents or the rights or remedies of the Lender against
Borrower thereunder.
“Material
Indebtedness” is defined in Section
7.5.
“Maturity
Date” means April 30, 2009 or such earlier date on which the Obligations
of Borrower become due and payable pursuant to Section
8.1.
“Multiemployer
Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which Borrower or any other member of the
Controlled Group is a party to which more than one employer is obligated to make
contributions.
“Net
Worth” means, with respect to Borrower at any time, the sum, without
duplication, at such time of (a) Borrower’s stockholders’ equity plus (b) all
Preferred Stock of Borrower (excluding any Preferred Stock which is mandatorily
redeemable on or prior to the scheduled Maturity Date).
“Nonrecourse
Indebtedness” means, with respect to Borrower, Indebtedness of Borrower
or any Subsidiary of Borrower secured by a Lien on the Property of Borrower or
such Subsidiary, as the case may be, the sole recourse for the payment of which
is such Property and where neither Borrower nor any of its Subsidiaries is
liable for any deficiency after the application of the proceeds of such
Property.
“Non-U.S.
Lender” is defined in Section
3.5(iv).
“Note”
means any promissory note substantially in the form of Exhibit
C issued at the request of a Lender pursuant to Section
2.13.
“Obligations”
means, with respect to Borrower, all unpaid principal of the Loan to Borrower,
all accrued and unpaid interest on such Loan, all accrued and unpaid fees
payable by Borrower and all expenses, reimbursements, indemnities and other
obligations payable by Borrower to the Lender or any other Indemnified Party
arising under any Loan Document.
“OFAC”
means the U.S. Department of the Treasury’s Office of Foreign Assets
Control.
“Other
Taxes” is defined in Section
3.5(ii).
“Outstanding
Loan” means the aggregate outstanding principal amount of the
Loan.
“Participants”
is defined in Section
12.2.1.
“Payment
Date” means the last Business Day of each of March, June, September and
December.
5
“PBGC”
means the Pension Benefit Guaranty Corporation, or any successor
thereto.
“Pepco”
means Potomac Electric Power Company.
“Permitted
Pepco Liens” means (i) the Lien of the Mortgage and Deed of Trust, dated
July 1, 1936, from Borrower to The Bank of New York (successor to The Xxxxx
National Bank of Washington, D.C.), as trustee, and (ii) the Lien created by the
$152,000,000 sale/leaseback on November 30, 1994 of Borrower’s control
center.
“Person”
means any natural person, corporation, firm, joint venture, partnership, limited
liability company, association, enterprise, trust or other entity or
organization, or any government or political subdivision or any agency,
department or instrumentality thereof.
“PHI”
means Pepco Holdings, Inc.
“Plan”
means an employee pension benefit plan which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code as to
which Borrower or any other member of the Controlled Group may have any
liability.
“Preferred
Stock” means, with respect to any Person, equity interests issued by such
Person that are entitled to a preference or priority over any other equity
interests issued by such Person upon any distribution of such Person’s property
and assets, whether by dividend or upon liquidation.
“Prime
Rate” means a rate per annum equal to the prime rate of interest publicly
announced by Wachovia Bank, National Association or by its parent, Wachovia
Corporation, from time to time, changing when and as such prime rate
changes. The Prime Rate is an index or base rate and shall not
necessarily be the lowest or best rate charged to its customers or other
banks.
“Property”
of a Person means any and all property, whether real, personal, tangible,
intangible, or mixed, of such Person, or other assets owned, leased or operated
by such Person.
“Public
Reports” means Borrower’s (a) annual report on Form 10-K for the year
ended December 31, 2007 and (b) current report on From 8-K filed with the
SEC on March 28, 2008.
“Purchasers”
is defined in Section
12.3.1.
“Reportable
Event” means a reportable event, as defined in Section 4043 of ERISA,
with respect to a Plan, excluding, however, such events as to which the PBGC has
by regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event, provided
that a failure to meet the minimum funding standard of Section 412 of the Code
and of Section 302 of ERISA shall be a Reportable Event regardless of the
issuance of any such waiver of the notice requirement in accordance with either
Section 4043(a) of ERISA or Section 412(d) of the Code.
“Required
Lenders” means Lenders in the aggregate holding more than 50% of the
Outstanding Loan.
“Reserve
Requirement” means, with respect to an Interest Period, the maximum
aggregate reserve requirement (including all basic, supplemental, marginal and
other reserves) which is imposed under Regulation D of the FRB on Eurocurrency
liabilities.
“SEC”
means the Securities and Exchange Commission.
6
“Securitization
Transaction” means any sale, assignment or other transfer by Borrower or
a Subsidiary thereof of accounts receivable or other payment obligations owing
to Borrower or such Subsidiary or any interest in any of the foregoing, together
in each case with any collections and other proceeds thereof, any collection or
deposit accounts related thereto, and any collateral, guaranties or other
property or claims in favor of Borrower or such Subsidiary supporting or
securing payment by the obligor thereon of, or otherwise related to, any such
receivables.
“Significant
Subsidiary” means a “significant subsidiary” (as defined in Regulation
S-X of the SEC as in effect on the date of this Agreement) of
Borrower.
“Single
Employer Plan” means, with respect to Borrower, a Plan maintained by
Borrower or any member of the Controlled Group for employees of Borrower or any
member of the Controlled Group.
“Subsidiary”
of a Person means (i) any corporation more than 50% of the outstanding
securities having ordinary voting power of which shall at the time be owned or
controlled, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any
partnership, limited liability company, association, business trust, joint
venture or similar business organization more than 50% of the ownership
interests having ordinary voting power of which shall at the time be so owned or
controlled.
“Substantial
Portion” means, at any time with respect to the Property of any Person,
Property which represents more than 10% of the consolidated assets of such
Person and its Subsidiaries as shown in the consolidated financial statements of
such Person and its Subsidiaries as at the last day of the preceding fiscal year
of such Person.
“Synthetic
Lease” means (a) a so-called synthetic, off-balance sheet or tax
retention lease or (b) any other agreement pursuant to which a Person obtains
the use or possession of property and which creates obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as indebtedness of such Person
(without regard to accounting treatment).
“Taxes”
means any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and any and all liabilities with respect to the
foregoing which arise from or relate to any payment made hereunder or under any
Note, but excluding
Excluded Taxes and Other Taxes.
“Total
Capitalization” means, with respect to Borrower at any time, the sum of
the Total Indebtedness of Borrower plus the Net Worth of Borrower, each
calculated at such time.
“Total
Indebtedness” means, at any time, all Indebtedness of Borrower and its
Subsidiaries at such time determined on a consolidated basis in accordance with
Agreement Accounting Principles, excluding,
to the extent otherwise included in Indebtedness of Borrower or any of its
Subsidiaries, any other Nonrecourse Indebtedness of Borrower and its
Subsidiaries to the extent that the aggregate amount of such Nonrecourse
Indebtedness does not exceed $200,000,000.
“Transferee”
is defined in Section
12.4.
“Type”
means, with respect to any portion of the Loan, its nature as a Floating Rate
Loan or a Eurodollar Loan.
“Unmatured
Default” means an event which but for the lapse of time or the giving of
notice, or both, would constitute a Default.
7
“Voting
Stock” means, with respect to any Person, voting stock of any class or
kind ordinarily having the power to vote for the election of directors, managers
or other voting members of the governing body of such
Person.
(a) The
meanings of defined terms are equally applicable to the singular and plural
forms of such terms.
(b) Article,
Section,
Schedule
and Exhibit
references are to this Agreement unless otherwise specified.
(c) The
term “including” is not limiting and means “including without
limitation.”
(d) In
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including”; the words “to” and “until”
each mean “to but excluding”, and the word “through” means “to and
including.”
(e) Unless
otherwise expressly provided herein, (i) references to agreements (including
this Agreement) and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but only to the extent
such amendments and other modifications are not prohibited by the terms of this
Agreement, and (ii) references to any statute or regulation are to be construed
as including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such statute or
regulation.
(f) Unless
otherwise expressly provided herein, references herein shall be references to
Eastern time (daylight or standard as applicable).
(b) If
at any time any change in Agreement Accounting Principles would affect the
computation of any financial ratio or requirement set forth herein with respect
to Borrower and either Borrower or the Lender shall so request, the Lender and
Borrower shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in Agreement
Accounting Principles (subject to the approval of the Required Lenders); provided
that, until so amended, (i) such ratio or requirement shall continue to be
computed in accordance with Agreement Accounting Principles as in effect prior
to such change and (ii) Borrower shall provide to the Lender financial
statements and other documents required under this Agreement setting forth a
reconciliation between calculations of such ratio or requirement made before and
after giving effect to such change in Agreement Accounting
Principles.
ARTICLE
II
8
the
Commitment. Borrower may from time to time prepay all or a portion of
the Loan pursuant to Section
2.7. Borrower shall not have the right to reborrow any portion
of the Loan after a prepayment. To the extent the amount of the Loan
is less than the Commitment, Lender shall have no obligation to make any further
advances or loans pursuant to this Agreement.
2.5 [Intentionally
Omitted].
(a) Borrower
may from time to time prepay, without penalty or premium, all portions of the
Outstanding Loan which is a Floating Rate Loan in the amount of $5,000,000 or a
higher integral multiple of $1,000,000, upon one Business Day’s prior notice to
the Lender. Borrower may from time to time prepay, all portions of
the Outstanding Loan which is a Eurodollar Loan in the amount of $5,000,000 or a
higher integral multiple of $1,000,000, upon three Business Days’ prior notice
to the Lender.
(b) Any
prepayment of any portion of the Outstanding Loan that is a Eurodollar Loan
shall be without premium or penalty but shall be subject to the payment of any
funding indemnification amounts covered by Section
3.4.
|
(i)
|
the
Type of Loan selected for all or any portion of the Loan and the aggregate
amount of each Type of Loan, and
|
(ii)
|
in
the case of any portion of the Loan which is a Eurodollar Loan, the
Interest Period applicable thereto.
|
On the
Closing Date, the Lender shall make available the Loan in funds immediately
available in Charlotte, North Carolina to Borrower at its address specified
pursuant to Article
XIII.
9
until
such Loan or portion thereof is converted into a Eurodollar Loan pursuant to
this Section
2.9 or is repaid in accordance with Section
2.7. The Loan (or any portion thereof), if bearing interest at
the Eurodollar Rate, shall continue as a Eurodollar Loan until the end of the
then applicable Interest Period therefor, at which time such Loan or portion
thereof shall be automatically converted into a Floating Rate Loan unless (x)
such portion of the Loan while it is a Eurodollar Loan is or was repaid in
accordance with Section
2.7 or (y) the Borrower shall have given the Lender a
Conversion/Continuation Notice requesting that, at the end of such Interest
Period, such Loan or portion thereof continue as a Eurodollar Loan for a
subsequent Interest Period. Subject to the terms of Section
2.6 Borrower may elect from time to time to convert all or any part of
the Loan from a Floating Rate Loan into a Eurodollar Loan. Borrower
shall give the Lender irrevocable notice (a “Conversion/Continuation
Notice”) of each conversion of the Loan or any portion thereof from a
Floating Rate Loan into a Eurodollar Loan or continuation of the Loan or any
portion thereof as a Eurodollar Loan not later than 11:00 a.m. at least three
Business Days prior to the date of the requested conversion or continuation,
specifying:
|
(i)
|
the
requested date, which shall be a Business Day, of such conversion or
continuation,
|
(ii)
|
the
aggregate amount and Type of the Loan which is to be converted or
continued, and
|
|
(iii)
|
the
amount of the Loan which is to be converted into or continued as a
Eurodollar Loan and the duration of the Interest Period applicable
thereto.
|
10
(b) The
entries maintained in the accounts maintained pursuant to clause
(a) above shall be prima facie evidence of the existence and amounts of
the Obligations therein recorded; provided
that the failure of the Lender to maintain such accounts or any error therein
shall not in any manner affect the obligation of the Borrower to repay the
Obligations of Borrower in accordance with their terms.
(c) If
requested by the Lender, the Loan to Borrower shall be evidenced by a Note in
the form annexed hereto as Exhibit
C. Thereafter, the Loan evidenced by such Note and interest
thereon shall at all times (including after any assignment pursuant to Section
12.3) be represented by one or more Notes payable to the order of the
payee named therein or any assignee pursuant to Section
12.3.
11
ARTICLE
III
|
(i)
|
subjects
the Lender to any Taxes or changes the basis of taxation of payments
(other than with respect to Excluded Taxes) to the Lender in respect of
any Eurodollar Loan, or
|
(ii)
|
imposes
or increases or deems applicable any reserve, assessment, insurance
charge, special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, the Lender (other than
reserves and assessments taken into account in determining the interest
rate applicable to any Eurodollar Loan), or
|
|
(iii)
|
imposes
any other condition the result of which is to increase the cost to the
Lender of making, funding or maintaining any Eurodollar Loan or reduces
any amount receivable by the Lender in connection with any Eurodollar
Loan, or requires the Lender to make any payment calculated by reference
to the amount of any Eurodollar Loan held or interest received by it, in
each case by an amount deemed material by the Lender, and the result of
any of the foregoing is to increase the cost to the Lender of making or
maintaining any Eurodollar Loan or to reduce the return received by the
Lender in connection with any Eurodollar Loan, then, within 15 days of
demand by the Lender, Borrower shall pay Lender such additional amount or
amounts as will compensate Lender for such increased cost or reduction in
amount received.
|
12
interest
rate applicable to any portion of the Loan which is a Eurodollar Loan does not
accurately reflect the cost of making or maintaining a Eurodollar Loan, then the
Lender may suspend the availability of a Eurodollar Loan and require any
affected portion of the Loan to be repaid or converted to a Floating Rate Loan,
subject to the payment of any funding indemnification amounts required by Section
3.4.
(i) All
payments by the Borrower to or for the account of Lender hereunder or under any
Note shall be made free and clear of and without deduction for any and all
Taxes. If Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to Lender (a) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
3.5), Lender receives an amount equal to the sum it would have received
had no such deductions been made, (b) Borrower shall make such deductions,
(c) Borrower shall pay the full amount deducted to the relevant authority
in accordance with applicable law and (d) Borrower shall furnish to the Lender
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
(ii) In
addition, Borrower hereby agrees to pay any present or future stamp or
documentary taxes and any other excise or property taxes, charges or similar
levies which arise from any payment made by it hereunder or under any Note or
from its execution or delivery of, or otherwise attributable to Borrower in
connection with, this Agreement or any Note (“Other
Taxes”).
(iii) Borrower
hereby agrees to indemnify Lender for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed on amounts payable under this Section
3.5) paid by Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. Payments due
under this indemnification shall be made within 30 days of the date Lender makes
demand therefor pursuant to Section
3.6.
(iv) If,
at any time, Lender is not incorporated under the laws of the United States of
America or a state thereof (a “Non-U.S.
Lender”), such Non-U.S. Lender agrees that it will, not less than ten
Business Days after the date that it becomes a Purchaser pursuant to Section
12.3.1, (i) deliver to Borrower two duly completed copies of United
States Internal Revenue Service Form W-8BEN or W-8ECI certifying in either case
that the Non-U.S. Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes, and
(ii) deliver to Borrower a United States Internal Revenue Form W-8BEN or W-9, as
the case may be, and certify that it is entitled to an exemption from United
States backup withholding tax. Each Non-U.S. Lender further
undertakes to deliver to Borrower (x) renewals or additional copies of such form
(or any successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the
most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by Borrower. All forms or
amendments described in the preceding sentence shall certify that the Non-U.S.
Lender is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an
event (including any change in treaty, law or regulation) has occurred prior to
the date on which any such delivery would otherwise be required which renders
all such forms inapplicable or which would prevent
13
the
Non-U.S. Lender from duly completing and delivering any such form or amendment
with respect to it and the Non-U.S. Lender advises Borrower that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.
(v) For
any period during which a Non-U.S. Lender has failed to provide Borrower with an
appropriate form pursuant to clause
(iv) above (unless such failure is due to a change in treaty, law or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, occurring subsequent to the date on which a form
originally was required to be provided), Borrower shall not be required to
increase any amount payable to such Non-U.S. Lender pursuant to Section
3.5(i)(a) or to otherwise indemnify such Non-U.S. Lender under this Section
3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause
(iv) above, Borrower shall take such steps as such Non-U.S.
Lender shall reasonably request to assist such Non-U.S. Lender to recover such
Taxes.
(vi) If
Lender is entitled to an exemption from or reduction of withholding tax with
respect to payments under this Agreement or any Note pursuant to the law of any
relevant jurisdiction or any treaty, such Lender shall deliver to the Borrower,
at the time or times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate.
14
ARTICLE
IV
|
(i)
|
Copies
of the articles or certificate of incorporation of Borrower, together with
all amendments thereto, certified by the Secretary or an Assistant
Secretary of Borrower, and certificates of good standing, certified by the
appropriate governmental officer in the jurisdiction of incorporation of
Borrower.
|
(ii)
|
Copies,
certified by the Secretary or Assistant Secretary of Borrower, of
Borrower’s bylaws and of resolutions of its Board of Directors authorizing
the execution, delivery and performance of the Loan
Documents.
|
|
(iii)
|
An
incumbency certificate from Borrower, executed by the Secretary or
Assistant Secretary of Borrower, which shall identify by name and title
and bear the signatures of the officers of Borrower authorized to sign the
Loan Documents, upon which certificate the Lender shall be entitled to
rely until informed of any change in writing by Borrower.
|
|
(iv)
|
A
certificate, signed by an Authorized Officer of Borrower, stating that on
the Closing Date no Default or Unmatured Default has occurred and is
continuing with respect to Borrower.
|
|
(v)
|
A
written opinion of internal counsel to Borrower, substantially in the form
of Exhibit
D-1.
|
|
(vi)
|
A
written opinion of Xxxxxxxxx & Xxxxxxx LLP, special New York counsel
to the Borrower, substantially in the form of Exhibit D-2.
|
|
(vii)
|
Any
Notes requested by Lender pursuant to Section 2.13 payable to
the order of Lender.
|
|
(viii)
|
Copies
of all governmental approvals, if any, necessary for Borrower to enter
into the Loan Documents to which it is a party and to obtain the Loan
hereunder.
|
|
(ix)
|
Such
other documents and other items as Lender or its counsel may reasonably
request;
|
and (c)
after giving effect to the Loan, the Borrower will not exceed its borrowing
authority as allowed by the Approvals.
ARTICLE
V
Borrower
represents and warrants to the Lender that:
15
16
and
reserves on the books of Borrower and its Subsidiaries in respect of any taxes
or other governmental charges are adequate.
17
remedial
action is needed to respond to a release of any toxic or hazardous waste or
substance into the environment, which noncompliance or remedial action could
reasonably be expected to have a Material Adverse Effect.
ARTICLE
VI
During
the term of this Agreement, unless the Lender shall otherwise consent in
writing:
|
(i)
|
Within
100 days after the close of its fiscal year, an audit report, which shall
be without a “going concern” or similar qualification or exception and
without any qualification as to the scope of the audit, issued by
independent certified public accountants of
recognized
|
18
national
standing and reasonably acceptable to the Lender, prepared in accordance
with Agreement Accounting Principles on a consolidated and consolidating
basis (consolidating statements need not be certified by such accountants)
for itself and its Subsidiaries, including balance sheets as of the end of
such period, related profit and loss and reconciliation of surplus
statements, and a statement of cash flows, accompanied by (a) any
management letter prepared by said accountants, and (b) a certificate of
said accountants that, in the course of their examination necessary for
their certification of the foregoing, they have obtained no knowledge of
any Default or Unmatured Default with respect to Borrower, or if, in the
opinion of such accountants, any such Default or Unmatured Default shall
exist, stating the nature and status thereof; provided that if Borrower
is then a “registrant” within the meaning of Rule 1-01 of Regulation S-X
of the SEC and required to file a report on Form 10-K with the SEC, a copy
of Borrower’s annual report on Form 10-K (excluding the exhibits thereto,
unless such exhibits are requested under clause (viii) of this
Section) or any successor form and a manually executed copy of the
accompanying report of Borrower’s independent public accountant, as filed
with the SEC, shall satisfy the requirements of this clause (i);
|
||
(ii)
|
Within
60 days after the close of the first three quarterly periods of each of
its fiscal years, for itself and its Subsidiaries, either (i) consolidated
and consolidating unaudited balance sheets as at the close of each such
period and consolidated and consolidating profit and loss and
reconciliation of surplus statements and a statement of cash flows for the
period from the beginning of such fiscal year to the end of such quarter,
all certified by its chief financial officer or (ii) if Borrower is then a
“registrant” within the meaning of Rule 1-01 of Regulation S-X of the SEC
and required to file a report on Form 10-Q with the SEC, a copy of
Borrower’s report on Form 10-Q for such quarterly period, excluding the
exhibits thereto, unless such exhibits are requested under clause (viii) of this
Section.
|
|
(iii)
|
Together
with the financial statements (or reports) required under Sections 6.1(i) and (ii), a compliance
certificate in substantially the form of Exhibit A signed by an
Authorized Officer of Borrower showing the calculations necessary to
determine Borrower’s compliance with Section 6.13 of this
Agreement and stating that, to the knowledge of such officer, no Default
or Unmatured Default with respect to Borrower exists, or if any such
Default or Unmatured Default exists, stating the nature and status
thereof.
|
|
(iv)
|
As
soon as possible and in any event within 30 days after receipt by
Borrower, a copy of (a) any notice or claim to the effect that Borrower or
any of its Subsidiaries is or may be liable to any Person as a result of
the release by Borrower, any of its Subsidiaries, or any other Person of
any toxic or hazardous waste or substance into the environment, and (b)
any notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by Borrower or any of
its Subsidiaries, which, in either case, could be reasonably expected to
have a Material Adverse Effect.
|
|
(v)
|
Promptly
upon Borrower’s furnishing thereof to its shareholders generally, copies
of all financial statements, reports and proxy statements so
furnished.
|
|
(vi)
|
Promptly
upon the filing thereof, copies of all registration statements and annual,
quarterly, monthly or other regular reports which Borrower or any of its
Subsidiaries files with the SEC.
|
19
(vii)
|
As
soon as Borrower obtains knowledge of an actual Change in Control or
publicly disclosed prospective Change in Control, written notice of same,
including the anticipated or actual date of and all other publicly
disclosed material terms and conditions surrounding such proposed or
actual Change in Control.
|
|
(viii)
|
Such
other information (including nonfinancial information) as Lender may from
time to time reasonably request.
|
Documents
required to be delivered pursuant to clause
(i), (ii),
(v)
or (vi)
above may be delivered electronically and, if so delivered, shall be deemed to
have been delivered on the date (i) on which the Borrower posts such documents,
or provides a link thereto, on a website on the internet at a website address
previously specified to the Lender; or (ii) on which such documents are posted
on the Borrower’s behalf on IntraLinks or another relevant website, if any, to
which Lender has access; provided
that (1) upon request of the Lender, the Borrower shall deliver paper copies of
such documents to the Lender (until a written request to cease delivering paper
copies is given by the Lender) and (2) the Borrower shall notify (which may be
by facsimile or electronic mail) the Lender of the posting of any
documents.
20
|
(i)
|
Any
Subsidiary of Borrower may sell, transfer or assign any of its assets to
Borrower or another Subsidiary of Borrower.
|
(ii)
|
The
sale, assignment or other transfer of accounts receivable or other rights
to payment pursuant to any Securitization Transaction.
|
|
(iii)
|
Borrower
and its Subsidiaries may sell or otherwise dispose of assets so long as
the aggregate book value of all assets sold or otherwise disposed of in
any fiscal year of Borrower (other than assets sold or otherwise disposed
of in the ordinary course of business or pursuant to clauses (i) and (ii) above) does not exceed
a Substantial Portion of the Property of
Borrower.
|
|
(i)
|
Liens
for taxes, assessments or governmental charges or levies on its
Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good
faith and by appropriate proceedings and for which
adequate
|
21
reserves
in accordance with Agreement Accounting Principles shall have been set
aside on its books.
|
||
(ii)
|
Liens
imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and
other similar liens arising in the ordinary course of business which
secure payment of obligations not more than 90 days past due or which are
being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its books.
|
|
(iii)
|
Liens
arising out of pledges or deposits under worker’s compensation laws,
unemployment insurance, old age pensions, or other social security or
retirement benefits, or similar legislation.
|
|
(iv)
|
Utility
easements, building restrictions, zoning laws or ordinances and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do
not in any material way affect the marketability of the same or interfere
with the use thereof in the business of Borrower and its Significant
Subsidiaries.
|
|
(v)
|
Liens
existing on the date hereof and described in Schedule 1 (including
liens on after-acquired property arising under agreements described in
Schedule 1 as such
agreements are in effect on the date hereof).
|
|
(vi)
|
Judgment
Liens which secure payment of legal obligations that would not constitute
a Default with respect to Borrower under Article VII.
|
|
(vii)
|
Liens
on Property acquired by Borrower or a Significant Subsidiary thereof after
the date hereof, existing on such Property at the time of acquisition
thereof (and not created in anticipation thereof), provided that in any such
case no such Lien shall extend to or cover any other Property of Borrower
or such Significant Subsidiary, as the case may be.
|
|
(viii)
|
Deposits
and/or similar arrangements to secure the performance of bids, fuel
procurement contracts or other trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business by Borrower or any of its Significant
Subsidiaries.
|
|
(ix)
|
Liens
on assets of Borrower and its Significant Subsidiaries arising out of
obligations or duties to any municipality or public authority with respect
to any franchise, grant, license, permit or certificate.
|
|
(x)
|
Rights
reserved to or vested in any municipality or public authority to control
or regulate any property or asset of Borrower or any of its Significant
Subsidiaries or to use such property or asset in a manner which does not
materially impair the use of such property or asset for the purposes for
which it is held by Borrower or such Significant Subsidiary.
|
|
(xi)
|
Irregularities
in or deficiencies of title to any Property which do not materially affect
the use of such property by Borrower or any of its Significant
Subsidiaries in the normal course of its
business.
|
22
(xii)
|
Liens
securing Indebtedness of Borrower and its Subsidiaries incurred to finance
the acquisition of fixed or capital assets, provided that (i) such
Liens shall be created substantially simultaneously with the acquisition
of such fixed or capital assets, (ii) such Liens do not at any time
encumber any property other than the property financed by such
Indebtedness, (iii) the principal amount of Indebtedness secured thereby
is not increased and (iv) the principal amount of Indebtedness secured by
any such Lien shall at no time exceed 100% of the original purchase price
of such property at the time it was acquired.
|
|
(xiii)
|
Any
Lien on any property or asset of any corporation or other entity existing
at the time such corporation or entity is acquired, merged or consolidated
or amalgamated with or into Borrower or any Significant Subsidiary thereof
and not created in contemplation of such event.
|
|
(xiv)
|
Liens
arising out of the refinancing, extension, renewal or refunding of any
Indebtedness secured by any Lien permitted by Section 6.12(v), (vii), (xii) or (xiii), provided that such
Indebtedness is not increased and is not secured by any additional
assets.
|
|
(xv)
|
Rights
of lessees arising under leases entered into by Borrower or any of its
Significant Subsidiaries as lessor, in the ordinary course of
business.
|
|
(xvi)
|
Permitted
Pepco Liens.
|
|
(xvii)
|
Purchase
money mortgages or other purchase money liens or conditional sale,
lease-purchase or other title retention agreements upon or in respect of
property acquired or leased for use in the ordinary course of its business
by Borrower or any of its Significant Subsidiaries.
|
|
(xviii)
|
Liens,
in addition to those permitted by clauses (i) through (xvii), granted by
Borrower and its Subsidiaries to secure Nonrecourse Indebtedness incurred
after the date hereof, provided that the
aggregate amount of all Indebtedness secured by such Liens shall not at
any time exceed $200,000,000.
|
|
(xix) | Other Liens, in addition to those permitted by clauses (i) through (xviii), securing Indebtedness or arising in connection with Securitization Transactions, provided that the sum (without duplication) of all such Indebtedness, plus the aggregate investment or claim held at any time by all purchasers, assignees or other transferees of (or of interests in) receivables and other rights to payment in all Securitization Transactions shall not at any time exceed $300,000,000 for Borrower and its Significant Subsidiaries. |
23
ARTICLE
VII
The
occurrence of any one or more of the following events shall constitute a Default
with respect to the Borrower:
7.2 Nonpayment. Nonpayment
by Borrower of the principal of the Loan when due; or nonpayment by Borrower of
any interest on the Loan or other obligation payable by Borrower under any of
the Loan Documents to which it is a party, within five days after the same
becomes due.
24
25
ARTICLE
VIII
If,
within 30 days after acceleration of the maturity of the Obligations of Borrower
as a result of any Default (other than any Default as described in Section
7.6 or 7.7)
with respect to Borrower and before any judgment or decree for the payment of
the Obligations due shall have been obtained or entered, the Required Lenders
(in their sole discretion) may, by notice to Borrower, rescind and annul such
acceleration.
|
(i)
|
Extend
the final maturity of the Loan or forgive all or any portion of the
principal amount thereof, or reduce the rate or extend the time of payment
of interest thereon.
|
(ii)
|
Reduce
the percentage specified in the definition of Required
Lenders
.
|
|
(iii)
|
Permit
Borrower to assign its rights under this Agreement.
|
|
(iv)
|
Amend
this Section
8.2.
|
ARTICLE
IX
26
(i) Borrower
shall not be responsible to reimburse the Lender for any costs, internal charges
and out of pocket expenses (including expenses of and fees for attorneys for the
Lender who also are employees of the Lender) paid or incurred by the Lender in
connection with the preparation, negotiation, execution, delivery, and review of
the Loan Documents; provided,
however,
that Borrower shall reimburse the Lender for the reasonable expenses of a single
outside counsel for the Lender in connection with the preparation, negotiation,
execution, delivery and review of the Loan Documents executed on the Closing
Date in an amount not to exceed $10,000. Borrower agrees to reimburse
the Lender for (A) all reasonable costs, internal charges and out of pocket
expenses (including reasonable expenses of and fees for attorneys for the
Lender, which attorneys may be employees of the Lender) paid or incurred by the
Lender in connection with any amendment or modification of the Loan Documents,
and the collection and enforcement of the Obligations of Borrower under the Loan
Documents (including in any “work-out” or restructuring of the Obligations of
Borrower resulting from the occurrence of a Default with respect to Borrower)
and (B) any civil penalty or fine assessed by OFAC against, and all reasonable
costs and expenses (including reasonable counsel fees and disbursements)
incurred in connection with defense thereof, by the Lender as a result of
conduct by Borrower that violates a sanction enforced by
OFAC.
(ii) Borrower
agrees to indemnify the Lender, its affiliates, and each of the directors,
officers and employees of the foregoing Persons (collectively, the “Indemnified
Parties”) against all losses, claims, damages, penalties, judgments,
liabilities and reasonable expenses (including all reasonable expenses of
litigation or preparation therefor whether or not any Indemnified Party is a
party thereto) which any of them may pay or incur arising out of or relating to
this Agreement, the other Loan Documents, the transactions contemplated hereby
or the direct or indirect application or proposed application of the proceeds of
the Loan hereunder except to the extent that they are determined in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the Indemnified Party seeking
indemnification. The obligations of the Borrower under this Section
9.6 shall survive the termination of this Agreement.
9.7 [Intentionally
Omitted].
27
enforceability,
or validity of that provision in any other jurisdiction, and to this end the
provisions of all Loan Documents are declared to be severable.
(i) Lender
shall not disclose to any Person any Specified Information (as defined below)
except to its, and its Affiliates’, officers, employees, agents, accountants,
legal counsel, advisors and other representatives who have a need to know such
Specified Information in connection with this Agreement or the transactions
contemplated hereby. “Specified Information” means information that
Borrower has furnished or in the future furnishes to the Lender in confidence,
but does not include any such information that (a) is published in a
source or otherwise becomes generally available to the public (other than
through the actions of the Lender or any of its Affiliates, officers, employees,
agents, accountants, legal counsel, advisors and other representatives in
violation of this Agreement) or that is or becomes available to the Lender from
a source other than Borrower, (b) without duplication with clause (a) above, is
otherwise a matter of general public knowledge, (c) is required to be disclosed
by law, regulation, or judicial order (including pursuant to the Code), (d) is
requested by any regulatory body with jurisdiction over the Lender, (e) is
disclosed to legal counsel, accountants and other professional advisors to the
Lender, in connection with the exercise of any right or remedy hereunder or
under any Note or any suit or other litigation or proceeding relating to this
Agreement or any Note or to a rating agency if required by such agency in
connection with a rating relating to the Loan, (f) is disclosed to
assignees, participants or potential assignees or
participants who agree to be bound by the provisions of this Section 9.11 or (g)
is disclosed to any actual or prospective counterparty (or its advisors) to any
swap or derivative transaction relating to Borrower and its obligations who
agrees to be bound by the provisions of this Section 9.11.
(ii) The
provisions of this Section 9.11 supersede any confidentiality obligations of
Lender relating to this Agreement or the transactions contemplated hereby under
any agreement between Borrower and the Lender.
9.13 [Intentionally
Omitted].
28
IMPORTANT
INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government
fight the funding of terrorism and money laundering activities, Federal law
requires all financial institutions to obtain, verify and record information
that identifies each person or entity that opens an account, including any
deposit account, treasury management account, loan, other extension of credit or
other financial services product. What this means for the
Borrower: When the Borrower opens an account, if the Borrower is an
individual, the Lender will ask for the Borrower’s name, residential
address, tax identification number, date of birth and other information that
will allow the Lender to identify the Borrower, and, if the Borrower
is not an individual, the Lender will ask for the Borrower’s name,
tax identification number, business address and other information that will
allow the Lender to identify the
Borrower. The Lender may also ask, if the Borrower is an
individual, to see the Borrower’s driver’s license or other identifying
documents, and, if the Borrower is not an individual, to see the Borrower’s
legal organizational documents or other identifying
documents.
ARTICLE
X
[INTENTIONALLY
OMITTED]
ARTICLE
XI
In
addition to, and without limitation of, any rights of the Lender under
applicable law, if Borrower becomes insolvent, however evidenced, or any Default
occurs with respect to Borrower, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by Lender or any
Affiliate of Lender to or for the credit or account of Borrower may
be offset and applied toward the payment of the Obligations of Borrower owing to
Lender, whether or not the Obligations, or any part thereof, shall then be
due.
ARTICLE
XII
29
30
at any
time a Lender and that thereafter ceases to be a Lender pursuant to the terms of
this Section
12.3.2 shall continue to be entitled to the benefit of those provisions
of this Agreement that, pursuant to the terms hereof, survive the
termination hereof. Upon the consummation of any assignment to a
Purchaser pursuant to this Section
12.3.2, the Lender and the Borrower shall, if the Purchaser desires that
its Loans be evidenced by Notes, make appropriate arrangements so that new Notes
or, as appropriate, replacement Notes are issued to the Lender and new Notes or,
as appropriate, replacement Notes, are issued to such Purchaser.
ARTICLE
XIII
Except
as otherwise permitted by Section
2.14, all notices, requests and other communications to any party
hereunder shall be in writing (including facsimile transmission or electronic
mail or posting on a website) and shall, subject to the last paragraph of Section
6.1, be given to such party at its address, facsimile number or
electronic mail address set forth on the signature pages hereof or such other
address, facsimile number or electronic mail address as it may hereafter specify
for such purpose by notice to the other parties hereto. Subject to
the last paragraph of Section
6.1, each such notice, request or other communication shall be effective
(i) if given by facsimile transmission, when transmitted to the facsimile number
specified pursuant to this Section and confirmation of receipt is received, (ii)
if given by mail, three Business Days after such communication is deposited in
the mails with first class postage prepaid, addressed as aforesaid, or (iii) if
given by any other means, when delivered (or, in the case of electronic mail,
received) at the address specified pursuant to this Section; provided
that notices to the Lender under Article
II shall not be effective until received.
ARTICLE
XIV
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower and the
Lender. Delivery of any executed signature page hereof or of any
amendment, waiver or consent to this Agreement by facsimile or electronic
transmission shall be as effective as delivery of a manually executed
counterpart thereof.
31
ARTICLE
XV
15.1 CHOICE OF
LAW. THE LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING SECTION 5.1401.7 OF THE GENERAL OBLIGATIONS LAW,
BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF) OF THE
STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
15.2 CONSENT
TO JURISDICTION. BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT, AND
BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF
THE LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY BORROWER AGAINST THE
LENDER OR ANY AFFILIATE OF THE LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW
YORK.
[Signatures
Follow]
32
IN WITNESS
WHEREOF, the Borrower and the Lender have executed this Agreement as of
the date first above written.
By:
|
/s/ X.
X.Xxxxxxxx
Xxxxxxx
X. Xxxxxxxx
Vice
President and Treasurer
|
|
000
Xxxxx Xxxxxx XX
Xxxxx
Xxxxx
Xxxxxxxxxx,
X.X. 00000
Attention:
Xxxxxxx X. Xxxxxxxx
Tel.:
000-000-0000
Fax:
000-000-0000
E-Mail:
xxxxxxxxxx@xxxxx.xxx
|
||
WACHOVIA
BANK, NATIONAL ASSOCIATION
|
||
By:
|
/s/ Xxxxxxx
Xxxxxxxx
Name: Xxxxxxx
Xxxxxxxx
Title: Director
|
|
One
Wachovia Center, 15th Floor
000
Xxxxx Xxxxxxx Xxxxxx, XX 5562
Xxxxxxxxx,
XX 00000
Attention:
Xxxxxxx Xxxxxxxx
Tel.:
000-000-0000
Fax:
000-000-0000
E-Mail:
xxxxxxx.xxxxxxxx@xxxxxxxx.xxx
|
33
EXHIBIT
A
COMPLIANCE
CERTIFICATE
To: Wachovia
Bank, National Association
This
Compliance Certificate is furnished pursuant to the Loan Agreement dated as of
May 1, 2008 (as amended, restated or otherwise modified from time to time,
the “Loan
Agreement”), between Potomac Electric Power Company, as Borrower, and
Wachovia Bank, National Association, as Lender. Unless otherwise
defined herein, capitalized terms used in this Compliance Certificate have the
respective meanings ascribed thereto in the Loan Agreement.
THE
UNDERSIGNED HEREBY CERTIFIES THAT:
1. I
am the duly elected _________of Borrower.
2. I
have reviewed the terms of the Loan Agreement and I have made, or have caused to
be made under my supervision, a detailed review of the transactions and
conditions of Borrower and its Subsidiaries during the accounting period covered
by the attached financial statements.
3. The
examinations described in paragraph
2 did not disclose, and I have no knowledge of, the existence of any
condition or event which constitutes a Default or Unmatured Default during or at
the end of the accounting period covered by the attached financial statements or
as of the date of this Compliance Certificate, except as set forth
below:
|
[Describe
any exceptions by listing, in detail, the nature of the condition or
event, the period during which it has existed and the action taken or
proposed to be taken with respect to each such condition or
event.]
|
|
4. Schedule
1 attached hereto sets forth true and accurate computations of certain
covenant ratios in the Loan Agreement.
The
foregoing certifications, together with the computations set forth in Schedule
1 hereto and the financial statements delivered with this Compliance
Certificate in support hereof, are made and delivered this ________,
200_.
SCHEDULE
1 TO COMPLIANCE CERTIFICATE
Compliance
as of ____, 200_ with
provisions
of Section 6.13 of
the Loan
Agreement
[INSERT
FORMULA FOR CALCULATION]
EXHIBIT
B
ASSIGNMENT
AGREEMENT
This
Assignment Agreement (this “Assignment
Agreement”) between _____________ _____________ (the “Assignor”)
and __________________________ (the “Assignee”)
is dated as of ____________, 20__. The parties hereto agree as
follows:
1. PRELIMINARY
STATEMENT. The Assignor is a party to a certain Loan Agreement
(as amended, restated or otherwise modified from time to time, the “Loan
Agreement”) described in Item 1 of Schedule
1 attached hereto (“Schedule
1”). Unless otherwise defined herein, capitalized terms used
herein shall have the respective meanings ascribed thereto in the Loan
Agreement.
2. ASSIGNMENT
AND ASSUMPTION. 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 Loan
Agreement and the other Loan Documents in the amount specified in Item 2 of
Schedule
1 of all outstanding rights and obligations under the Loan Agreement and
the other Loan Documents. The amount of the rights and obligations of
the Assignee and the Assignor, after giving effect to this Assignment Agreement,
is set forth in Item 3 of Schedule
1.
3. EFFECTIVE
DATE. The effective date of this Assignment Agreement (the
“Effective
Date”) shall be the later of the date specified in Item 4 of Schedule
1 or two Business Days (or such shorter period agreed to by the Borrower)
after this Assignment Agreement, together with any consents required under the
Loan Agreement, are delivered to the Borrower. In no event will the
Effective Date occur if the payments required to be made by the Assignee to the
Assignor on the Effective Date are not made on the proposed Effective
Date.
4. PAYMENT
OBLIGATIONS. In consideration for the sale and assignment
hereunder, the Assignee shall pay the Assignor, on the Effective Date, the
amount agreed to by the Assignor and the Assignee. The Assignee shall
be entitled to receive all payments of principal and interest which become due
and payable on and after the Effective Date with respect to the interest
assigned hereby. The Assignee will promptly remit to the Assignor any
interest received from the Borrower which relates to the portion of the Loan
assigned to the Assignee hereunder for periods prior to the Effective
Date. In the event that either party hereto receives any payment to
which the other party hereto is entitled under this Assignment Agreement, then
the party receiving such amount shall promptly remit such amount to the other
party hereto.
of any
adverse claim created by the Assignor and (iii) the execution and delivery of
this Assignment Agreement by the Assignor is duly authorized. The
parties hereto agree that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the
Assignor nor any of its officers, directors, employees, agents or attorneys
shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Loan Document,
(ii) any representation, warranty or statement made in or in connection with any
Loan Document, (iii) the financial condition or creditworthiness of any
Borrower, (iv) the performance of or compliance with any term or provision
of any Loan Document, (v) inspecting any of the property, books or records
of Borrower or (vi) any mistake, error of judgment, or action taken or omitted
to be taken in connection with the Loan Documents.
10. COUNTERPARTS:
DELIVERY BY FACSIMILE. This Assignment Agreement may be
executed in counterparts. Transmission by facsimile of an executed
counterpart of this Assignment Agreement shall be deemed to constitute due and
sufficient delivery of such counterpart and such facsimile shall be deemed to be
an original counterpart of this Assignment Agreement.
SCHEDULE
1
to
Assignment Agreement
1.
|
Description
and Date of Loan Agreement:
Loan
Agreement, dated as of May 1, 2008, between Potomac Electric Power
Company, as Borrower, and Wachovia Bank, National Association, as
Lender.
|
|
2.
|
Amount
of the Loan purchased under Assignment Agreement
|
$______________
|
3.
|
Assignor’s
Loan Amount after giving
effect
to Assignment Agreement
|
$______________
|
4.
|
Proposed
Effective Date:
|
_______________
|
Accepted
and Agreed:
|
|
[NAME
OF ASSIGNOR]
|
[NAME
OF ASSIGNEE]
|
By: _______________________________
Title: ______________________________
|
By: _______________________________
Title: ______________________________
|
ACCEPTED
AND CONSENTED TO BY1:
|
|
|
|
By: _______________________________
Print
Name: ________________________
Title: _____________________________
|
|
Attachment
to SCHEDULE 1 to ASSIGNMENT AGREEMENT
INFORMATION
SHEET
Attach
Assignor’s Information Sheet, which must
include
notice addresses for the Assignor and the Assignee
(Sample
form shown below)
ASSIGNOR
INFORMATION
Loan
Contact:
Name: _______________________________
|
Telephone
No.: ______________________
|
Fax
No.: _____________________________
|
Payment
Information:
Name
& ABA # of Destination
Bank: ______________________________________________
Account
Name & Number for Wire
Transfer: ________________________________________
Other
Instructions: _____________________________________________________________
Name: _______________________________
|
Telephone
No.: ______________________
|
Fax
No.: _____________________________
|
ASSIGNEE
INFORMATION
Loan
Contact:
Name: _______________________________
|
Telephone
No.: ______________________
|
Fax
No.: _____________________________
|
Operations
Contacts:
Booking
Installation:
Name:
Telephone
No.:
Fax
No.:
Payment
Information:
Name
& ABA # of Destination
Bank: ______________________________________________
Account
Name & Number for Wire
Transfer: ________________________________________
Other
Instructions: _____________________________________________________________
Address
for Notices for Assignee:
EXHIBIT
C
NOTE
$___________________
[Date]
Potomac
Electric Power Company (the “Borrower”)
promises to pay to ___________________ (the “Lender”)
the sum of ______________________ and 00/100 DOLLARS ($________________) (the
“Loan”) made by the Lender to the Borrower pursuant to the Loan Agreement (as
defined below), at the office of Lender at _______________________________,
together with interest on the unpaid principal amount hereof at the rates and on
the dates set forth in the Loan Agreement. The Borrower shall pay the
principal of and accrued and unpaid interest on the Loan in full on the Maturity
Date.
This Note
is issued pursuant to, and is entitled to the benefits of, the Loan Agreement
dated as of May 1, 2008 (as amended or otherwise modified from time to time, the
“Loan
Agreement”), between the Borrower and the Lender, to which Loan Agreement
reference is hereby made for a statement of the terms and conditions governing
this Note, including the terms and conditions under which this Note may be
prepaid or its maturity date accelerated. Capitalized terms used
herein and not otherwise defined herein are used with the meanings attributed to
them in the Loan Agreement.
All
payments hereunder shall be made in lawful money of the United States of America
and in immediately available funds.
THIS NOTE
SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING SECTION
5.1401.7 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF) OF THE STATE OF NEW YORK, BUT GIVING EFFECT
TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
|
|
By: _______________________________
Print
Name: ________________________
Title: ______________________________
|
EXHIBIT
D-1
FORM OF
OPINION OF IN-HOUSE COUNSEL OF BORROWER
May 1,
2008
Wachovia
Bank, National Association
One
Wachovia Center, 15th Floor
000 Xxxxx
Xxxxxxx Xxxxxx, XX 5562
Xxxxxxxxx,
XX 00000
Ladies
and Gentlemen:
I am
General Counsel of Potomac Electric Power Company, a District of Columbia and
Virginia corporation (“Pepco”), and have represented Pepco in connection with
the negotiation, execution and delivery of the Loan Agreement, dated the date
hereof, between Wachovia Bank, National Association (the “Lender”) and Pepco
(the “Loan Agreement”). This opinion is being delivered to you in
accordance with Section 4.1(b)(v) of the Loan Agreement. Capitalized
terms not defined herein have the respective meanings set forth in the Loan
Agreement.
In
connection with rendering the opinions set forth herein, I, or my
representatives, have reviewed an executed copy of the Loan Agreement and the
Note issued by Pepco on the date hereof (the “Note”). I or my
representatives also have examined or caused to be examined originals, or copies
that have been certified or otherwise identified to my or their satisfaction as
being true copies, of such other instruments, certificates and other documents
or records as I or they have deemed necessary or appropriate to enable me to
render the opinions set forth below. In such review and examination,
I or my representatives have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me or them as originals, and the
conformity to original documents of all documents submitted to me or them as
copies.
Based
upon the foregoing, and subject to the reservations and exceptions set forth
herein, I am of the opinion that:
1. Pepco
is a corporation duly incorporated, validly existing and in good standing under
the laws of the District of Columbia and under the laws of the Commonwealth of
Virginia, and has the corporate power and authority to own and operate its
property and assets, to carry on its business as currently conducted, to execute
and deliver the Loan Agreement and the Note, and to consummate the transactions
contemplated thereby.
2. The
execution and delivery of the Loan Agreement and the Note and the performance by
Pepco of its obligations thereunder have been duly authorized by all necessary
corporate action on the part of Pepco, and Pepco has duly executed and delivered
the Loan Agreement and the Note.
3. Neither
the execution or delivery of the Loan Agreement and the Note by Pepco, nor the
performance by Pepco of its obligations thereunder, does or will (i) violate any
of the provisions of the articles of incorporation or bylaws of Pepco, (ii)
violate any laws, rules or regulations of the
Wachovia
Bank, National Association
May 1,
2008
Page
2
District
of Columbia or the Public Utility Holding Company Act of 2005, and the rules and
regulations of the Federal Energy Regulatory Commission thereunder, (iii)
conflict with, violate or constitute a breach of (A) the provisions of any
indenture or other material contract, agreement or other instrument to which
Pepco is a party or by which it or its Property is bound, or (B) any judgment,
injunction, material permit, order or decree of any government, governmental
instrumentality, arbitrator or court applicable to Pepco, or (iv) result in or
require the creation or imposition of any Lien on the Property of Pepco under
any indenture or other material contract, agreement or other instrument to which
Pepco is a party or by which it or its Property is bound.
4. No
consent, approval, authorization or other action by or filing with any
governmental agency or instrumentality is required on the part of Pepco for the
execution and delivery of the Loan Agreement or the Note or the consummation of
the transactions contemplated thereby, except those already obtained or
made.
5. Except
as disclosed in the Public Reports, there is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to the best of my
knowledge, threatened against Pepco or any of its Subsidiaries which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
My
opinion in paragraph 3(ii) above is limited to laws and regulations explicitly
referenced herein and those normally applicable to transactions of the type
contemplated by the Loan Agreement and does not extend to other laws or
regulations relating to, or to licenses, permits, approvals and filings
necessary for, the conduct of Pepco’s business, including any environmental laws
or regulations.
* * *
I am a
member of the Bar of the District of Columbia, and I express no opinion herein
as to any law other than the laws of the District of Columbia, the Virginia
Stock Corporation Act, and, to the extent expressly referred to herein, the
federal law of the United States. The opinions contained herein are
rendered solely to the Lender in connection with the transactions contemplated
by the Loan Agreement and may not be relied on by the Lender for any other
purpose or by any other Person for any purpose. The opinions
expressed in this letter are limited to the matters set forth herein, and no
opinion should be inferred beyond those opinions expressly stated. I
assume no obligation to advise you of any facts that come to my attention, or
any changes in law, subsequent to the date hereof.
Very
truly yours,
Xxxx X.
Xxxx
EXHIBIT
D-2
FORM OF OPINION OF XXXXXXXXX & XXXXXXX
LLP
May 1, 2008
Wachovia
Bank, National Association
One
Wachovia Center, 15th Floor
000 Xxxxx
Xxxxxxx Xxxxxx, XX 5562
Xxxxxxxxx,
XX 00000
Ladies
and Gentlemen:
We have
acted as special New York counsel to Potomac Electric Power Company, a District
of Columbia and Virginia corporation (the “Borrower”), in connection with the
entry by the Borrower into the Loan Agreement, dated as of the date hereof,
between Wachovia Bank, National Association (the “Lender”) and the Borrower (the
“Loan Agreement”). This letter is being delivered to you in
accordance with Section 4.1(b)(vi) of the Loan Agreement. Unless
otherwise defined herein, capitalized terms used herein have the respective
meanings provided in the Loan Agreement.
We have
reviewed the Loan Agreement, the Note issued by the Borrower on the date hereof
(the “Note”), and such corporate records, certificates and other documents, and
such questions of law, as we have deemed necessary or appropriate for the
purposes of rendering this opinion.
We have
assumed that all signatures are genuine, that all documents submitted to us as
originals are authentic and that all copies of documents submitted to us conform
to the originals. We have assumed that the Borrower is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdictions of its incorporation and has all requisite power, authority and
legal right to execute, deliver and perform its obligations under the Loan
Agreement and the Note. We also have assumed that the Borrower has
duly authorized, executed and delivered the Loan Agreement and the
Note. We have assumed further that the Lender has duly authorized,
executed and delivered the Loan Agreement and that the Loan Agreement is the
valid and binding obligation of the Lender, enforceable against the Lender in
accordance with its terms.
We have
made no investigation for the purpose of verifying the assumptions set forth
herein.
Based
upon the foregoing, and subject to the qualifications set forth below, we are of
the opinion that, insofar as the laws of the State of New York are
concerned:
1. The
Loan Agreement constitutes the valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors’ rights
and to general equity principles.
May 1,
2008
Page
2
2. The
Note constitutes the valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles.
3. Neither
the execution or delivery of the Loan Agreement or the Note by the Borrower, nor
the performance by the Borrower of its obligations thereunder in accordance with
the terms thereof, does or will conflict with, violate or constitute a breach
of, any laws, or any rules or regulations known to us, of the State of New
York.
The
foregoing opinion is subject to the following limitations and
qualifications:
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(a) We
express no opinion as to:
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(i) waivers
of defenses, subrogation and related rights, rights to trial by jury,
rights to object to venue, or other rights or benefits bestowed by
operation of law;
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(ii) releases
or waivers of unmatured claims or rights;
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(iii) indemnification,
contribution, or exculpation, to the extent they purport to indemnify any
party against, or release or limit any party’s liability for, its own
breach or failure to comply with statutory obligations, or to the extent
such provisions are contrary to public policy;
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(iv) provisions
for liquidated damages and penalties or penalty interest;
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(v) provisions
purporting to require a prevailing party in a dispute to pay attorneys’
fees and expenses, or other costs, to a non-prevailing party;
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(vi) provisions
requiring amendments and waivers to be in writing;
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(vii) provisions
making notices effective even if not actually received;
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(viii) provisions
purporting to make a party’s determination conclusive;
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(ix) provisions
purporting to govern post-judgment interest; or
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(x) exclusive
jurisdiction or venue provisions.
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(b) We
express no opinion as to any right of setoff, bankers lien or counterclaim or
right to the application of property in the possession or control of the
Lender.
(c) We
express no opinion as to any legal requirements or restrictions applicable to
the Lender.
(d) Our
opinion in paragraph 3 above is limited to laws and regulations normally
applicable to transactions of the type contemplated by the Loan Agreement and
does not extend to laws or
Wachovia
Bank, National Association
May 1,
2008
Page
3
regulations
relating to, or to licenses, permits, approvals and filings necessary for, the
conduct of the Borrower’s business, including any environmental laws or
regulations.
We are
members of the bar of the District of Columbia and the State of New
York. We do not express any opinion herein on any laws other than the
law of the State of New York.
This
opinion is given solely for your benefit and may not be disclosed to any other
person (except to bank examiners and other governmental officials having
regulatory authority over the Lender or as otherwise required by applicable law,
regulation or legal process) without our written consent. This
opinion may not be relied upon by any other person without our written
consent.
Very truly yours,
SCHEDULE
1
LIENS
|
||||
Incurred By
|
Owed To
|
Property
Encumbered
|
Maturity
|
Amount of
Indebtedness
|
Potomac
Electric Power Company
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CitiCapital
(BLC)
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Vehicles,
Office
Equip.,
Computers
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Master
Agreement
|
$8,996,308.30*
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*The
amount of this lien fluctuates with the amount of accounts receivable
created by this program. The amount listed is as of December
31, 2007.
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