Exhibit 10.2
AMENDMENT NO. 1 – CREDIT AGREEMENT (AYE/AESC)
AMENDMENT NO. 1, dated as of
September 11, 2007 (this “ Amendment ”),
in respect of the Credit Agreement (the “ Credit
Agreement ”), dated as of May 22, 2006, among
Allegheny Energy, Inc. and Allegheny Energy Supply Company, LLC
(the “ Borrowers ”), the Initial Lenders
and the Initial Issuing Bank named therein, and Citicorp North
America, Inc., as Administrative Agent. Capitalized terms not
otherwise defined herein shall have the same meanings as set forth
in the Credit Agreement.
PRELIMINARY STATEMENTS
(1) AYE
has established two wholly-owned Subsidiaries, Trans-Allegheny
Interstate Line Company, a Maryland and Virginia corporation
(“ TrAILCo ”), and Allegheny Energy
Transmission, LLC, a Delaware limited liability company (“
AET ”), to develop, construct, own, operate and
maintain an approximately 210 mile 500-kV transmission line from a
new substation in western Pennsylvania to a point of
interconnection with Dominion Virginia Power east of Middletown,
Virginia.
(2) AYE
has established Subsidiaries, including AET, AET PATH Company, LLC
and Potomac-Appalachian Transmission Highline, LLC, to develop,
construct, own, operate and maintain, currently expected to be as
part of a joint venture with American Electric Power Company, Inc.
(“ AEP ”), an approximately 290 mile
transmission line, which is currently proposed to include an
approximately 244 mile 765 kV transmission line to run from
AEP’s existing Amos substation to Allegheny Power’s
Bedington substation and an approximately 46 mile twin circuit 500
kV transmission line between the Bedington station and a new
substation at Kemptown, Maryland.
SECTION
1. Amendment.
Subject
to the satisfaction of the conditions precedent set forth in
Section 2, the Required Lenders and the Borrowers hereby agree
as follows:
(a) To insert the following
definitions in the appropriate alphabetical order in
Section 1.01 of the Credit Agreement:
“AEP”
means American Electric Power Company, Inc. a New York
corporation.
“ AET ”
means Allegheny Energy Transmission, LLC, a Delaware limited
liability company and a direct wholly-owned Subsidiary of
AYE.
“ AYE Equity Contribution
Agreement ” means the capital contribution agreement
to be entered into by AYE in connection with the TrAILCo
Project.
“Consolidated Net
Income” means, for any period, the net income or loss
before cumulative effect in change of accounting principles of AYE
and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP; provided that there shall be
excluded (a) the income of any
Amendment No. 1
AYE Credit Agreement
Subsidiary of
the AYE to the extent that the declaration or payment of dividends
or similar distributions by such Subsidiary of that income is not,
as a result of any Subsidiary Debt Default, at the time permitted
by operation of the terms of the agreement or other documents
governing the Debt under which such Subsidiary Debt Default shall
have occurred; provided that such income of such Subsidiary
shall only be so excluded for that portion of such period during
which the condition described in this clause (a) shall so
exist; (b) the income or loss of any Person accrued prior to
the date it becomes a Subsidiary or is merged or Consolidated with
AYE or any Subsidiary on the date such Person’s Assets are
acquired by AYE or any Subsidiary; (c) the income or loss of
any Person (other than a Subsidiary) in which any other Person
(other than AYE or a wholly owned Subsidiary of AYE) has an
interest, except to the extent of the amount of dividends or other
distributions actually paid to AYE or a wholly owned Subsidiary by
such Person during such period; (d) any gain or loss in excess
of $1,000,000 attributable to any individual sale of an Asset, or
series of related sales of Assets, out of the ordinary course of
business; and (e) any gains or losses attributable to interest
rate Hedge Agreements which are not included as interest expense in
accordance with GAAP.
“PATH
Companies” means (a) PATH Regulated Companies
and (b) PATH Non-Regulated Companies.
“PATH Non-Regulated
Companies” means any direct or indirect Subsidiary of
AYE (including AET and AET PATH Company, LLC) established to
undertake the development, construction, operation, maintenance and
finance of the PATH Project or the ownership of any Subsidiary or
any entity established to undertake the development, construction,
operation, maintenance or finance of the PATH Project and which is
not a PATH Regulated Company.
“PATH Regulated
Companies” means any direct or indirect Subsidiary of
AYE, or a Joint Venture, established to undertake the development,
construction, operation, maintenance and finance of the PATH
Project (including Potomac-Appalachian Transmission Highline, LLC)
and which (a) directly owns the PATH Project and (b) is
subject to regulatory supervision by a federal or state
Governmental Authority with respect to incurrence of
indebtedness.
“PATH
Project” means development, construction, ownership,
operation and maintenance, currently expected to be as part of a
joint venture with AEP, of an approximately 290 mile transmission
line, which is currently proposed to include an approximately 244
mile 765 kV transmission line to run from AEP’s existing Amos
substation to Allegheny Power’s Bedington substation and an
approximately 46 miles of twin circuit 500 kV transmission line
between the Bedington station and a new substation at Kemptown,
Maryland (provided that such route may be changed or modified), and
including transformers, substations, radial lines, and other
equipment and facilities, and the other related electric
transmission projects.
Amendment No. 1
AYE Credit Agreement
2
“ Subsidiary Debt
Default ” means, with respect to any Subsidiary of
AYE, the failure of such Subsidiary to pay any principal or
interest or other amounts due in respect of Debt, when and as the
same shall become due and payable, or the occurrence of any other
event or condition that results in any Debt of such Subsidiary
becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, lapse of time or
both) the holder or holders of such Debt or any trustee or agent on
its or their behalf to cause such Debt to become due, or to require
the prepayment, repurchase, redemption or defeasance thereof, prior
to its scheduled maturity.
“TrAILCo”
means Trans-Allegheny Interstate Line Company, a Maryland and
Virginia corporation, and a direct wholly-owned subsidiary of
AET.
“TrAILCo
Companies ” means (a) TrAILCo Regulated
Companies and TrAILCo Non-Regulated Companies.
“TrAILCo Non-Regulated
Companies” means any direct or indirect Subsidiary of
AYE (including AET) established to undertake the development,
construction, operation, maintenance and finance of the TrAILCo
Project or the ownership of any Subsidiary established to undertake
the development, construction, operation, maintenance or finance of
the TrAILCo Project and which is not a TrAILCo Regulated
Company.
“TrAILCo Regulated
Companies” means any direct or indirect Subsidiary of
AYE (including TrAILCo) established to undertake the development,
construction, operation, maintenance or finance of the TrAILCo
Project and which (a) directly owns the TrAILCo Project and
(b) is subject to regulatory supervision by a federal or state
Governmental Authority with respect to incurrence of
indebtedness.
“TrAILCo
Project” means development, construction, ownership,
operation and maintenance of an approximately 210 mile 500-kV
transmission line from a new substation in western Pennsylvania to
a point of interconnection with Dominion Virginia Power east of
Middletown, Virginia (provided that such route may be changed or
modified) (including transformers, substations, radial lines, and
other equipment and facilities) and the other related electric
transmission projects.
(b) To amend the definition of
“AYE Funds Flow” in Section 1.01 of the Credit
Agreement by inserting the text that appears below as bolded and
underlined and deleting the text that appears below as struck
through:
“ AYE Funds Flow
” means, for any period, the sum for the related period of
(a) cash dividends received by AYE from the Regulated Subsidiaries,
TrAILCo Non-Regulated Companies, PATH Non-Regulated
Companies and AESC, less (b) any cash equity
contributions made by AYE to any Subsidiaries ,
less (c) any cash equity contributions or
intercompany loans by AYE to any
Amendment No. 1
AYE Credit Agreement
3
PATH Company which is a Joint
Venture , plus ( c d
) Net Cash Proceeds received by AYE from the sale or issuance of
any Equity Interests, plus ( d
e ) AYE’s interest income, less (
e f ) Capital Expenditures of AYE,
less ( f g ) operating
expenses of AYE, excluding AYE Interest Expense and income tax
expense, plus ( g h
)Litigation Proceeds received by AYE, plus (
h i ) AYE Sales Proceeds.
(c) To amend the definition of
“Regulated Subsidiaries” in Section 1.01 of the
Credit Agreement by inserting “TrAILCo Regulated Companies,
PATH Regulated Companies,” immediately following
“collectively,” in line 1.
(d) To amend Section 2.06(b) of
the Credit Agreement by inserting &ldq
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