EXHIBIT 10.1.3

 

 

GUARANTEE AND COLLATERAL AGREEMENT

made by

CALPINE CORPORATION

and certain of its Subsidiaries

in favor of

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Collateral Agent

Dated as of January 31, 2008

 

 

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Table of Contents

 

     Page SECTION 1. Defined Terms    2             1.1 Definitions    2
            1.2 Other Definitional Provisions    6 SECTION 2. Guarantee    6
            2.1 Guarantee    6             2.2 Right of Contribution    7
            2.3 No Subrogation    8             2.4 Amendments, etc. with
respect to the Guaranteed Obligations    8             2.5 Guarantee Absolute
and Unconditional    8             2.6 Reinstatement    9             2.7
Payments    9 SECTION 3. Grant of Security Interest    10 SECTION 4.
Representations and Warranties    11             4.1 Title; No Other Liens    11
            4.2 Perfected First Priority Liens    11             4.3
Jurisdiction of Organization; Chief Executive Office    12             4.4 Farm
Products    12             4.5 Investment Property    12             4.6
Receivables    13             4.7 Intellectual Property    13             4.8
Commercial Tort Claims    13 SECTION 5. Covenants    14             5.1 Delivery
of Instruments, Certificated Securities and Chattel Paper    14             5.2
Maintenance of Insurance    14             5.3 Maintenance of Perfected Security
Interest; Further Documentation    14             5.4 Changes in Name, etc    15
            5.5 Notices    15             5.6 Investment Property    15
            5.7 Intellectual Property    16             5.8 Commercial Tort
Claims    17 SECTION 6. Remedial Provisions    18             6.1 Certain
Matters Relating to Receivables    18             6.2 Communications with
Obligors; Grantors Remain Liable    18             6.3 Pledged Stock    19
            6.4 Proceeds to be Turned Over To Collateral Agent    20
            6.5 Application of Proceeds    20             6.6 Code and Other
Remedies    21             6.7 Registration Rights    22

 

(i)

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Table of Contents

(continued)

 

     Page             6.8 Subordination    22             6.9 Deficiency    22
            6.10 Intercreditor Agreement    22 SECTION 7. The Collateral Agent
   22             7.1 Collateral Agent’s Appointment as Attorney-in-Fact, etc   
22             7.2 Duty of Collateral Agent    24             7.3 Execution of
Financing Statements    25             7.4 Authority of Collateral Agent    25
            7.5 Intercreditor Agreement    25 SECTION 8. Miscellaneous    25
            8.1 Amendments in Writing    25             8.2 Notices    25
            8.3 No Waiver by Course of Conduct; Cumulative Remedies    25
            8.4 Enforcement Expenses; Indemnification    26             8.5
Successors and Assigns    26             8.6 Set-Off    26             8.7
Counterparts    27             8.8 Severability    28             8.9 Section
Headings    28             8.10 Integration    28             8.11 GOVERNING LAW
   28             8.12 Submission To Jurisdiction; Waivers    28
            8.13 Acknowledgements    29             8.14 Additional Grantors;
Release of Guarantors; Releases of Collateral;    30             8.15 WAIVER OF
JURY TRIAL    31

SCHEDULES

 

Schedule 1        —        Notice Address Schedule 2        —         Investment
Property Schedule 3        —        Perfection Matters Schedule
4        —        Jurisdictions of Organizational and Chief Executive Offices
Schedule 5        —        Intellectual Property

 

(ii)

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GUARANTEE AND COLLATERAL AGREEMENT

GUARANTEE AND COLLATERAL AGREEMENT, dated as of January 31, 2008, made by each
of the signatories hereto (together with any other entity that may become a
party hereto as provided herein, the “Guarantors”), in favor of GOLDMAN SACHS
CREDIT PARTNERS L.P. (“GSCP”), as Collateral Agent (in such capacity, the
“Collateral Agent”) for (i) the banks and other financial institutions or
entities (the “Lenders”) from time to time party to the Credit Agreement, dated
as of January 31, 2008 (as amended, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among CALPINE CORPORATION, (the “Borrower”),
the Lenders, General Electric Capital Corporation (including its successors, “GE
Capital”), as Sub-Agent for the Revolving Lenders thereunder (in such capacity
and including any successors, the “Sub-Agent”), Credit Suisse, GSCP, Deutsche
Bank Securities Inc. and Morgan Stanley Senior Funding, Inc., as
co-documentation agents (collectively, the “Documentation Agents”) and as
co-syndication agents (collectively, the “Syndication Agents”), and GSCP, as the
administrative agent (in such capacity, the “Administrative Agent”) and
Collateral Agent, (ii) the banks and other financial institutions or entities
(the “Bridge Loan Lenders”) from time to time party to the Bridge Loan
Agreement, dated as of January 31, 2008 (as amended, supplemented or otherwise
modified from time to time, the “Bridge Loan Agreement”), among the Borrower,
the Bridge Loan Lenders and GSCP, as administrative agent (in such capacity, the
“Bridge Loan Agent”) and Collateral Agent, and (iii) each other holder from time
to time of First Lien Obligations other than those described in preceding
clauses (i) and (ii) above.

WITNESSETH:

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;

WHEREAS, pursuant to the Bridge Loan Agreement, the Bridge Loan Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;

WHEREAS, the Borrower is a member of an affiliated group of companies that
includes each other Grantor;

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement and
the Bridge Loan Agreement will be used in part to enable the Borrower to make
valuable transfers to one or more of the other Grantors in connection with the
operation of their respective businesses;

WHEREAS, the Borrower and the other Grantors are engaged in related businesses,
and each Grantor will derive substantial direct and indirect benefit from the
making of the extensions of credit under the Credit Agreement and the Bridge
Loan Agreement;

WHEREAS, it is a condition precedent to the obligation of the Lenders to make
their respective extensions of credit to the Borrower under the Credit
Agreement, and to the obligation of the Bridge Loan Lenders to make their
respective extensions of credit to the Borrower under the Bridge Loan Agreement,
that the Grantors shall have executed and delivered this Agreement to the
Collateral Agent for the ratable benefit of the Secured Parties; and

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WHEREAS, the Grantors would also like to induce other creditors to make
available from time to time First Lien Debt (other than as described above)
subject to the terms of the Intercreditor Agreement.

NOW, THEREFORE, in consideration of the premises and to induce the Collateral
Agent and the Lenders to enter into the Credit Agreement, to induce the Lenders
to make their respective extensions of credit to the Borrower under the Credit
Agreement, to induce the Collateral Agent and the Bridge Loan Lenders to enter
into the Bridge Loan Agreement, to induce the Bridge Loan Lenders to make their
respective extensions of credit to the Borrower under the Bridge Loan Agreement,
and to induce other First Lien Secured Parties to extend additional First Lien
Debt to the various Grantors, each Grantor hereby agrees with the Collateral
Agent, for the ratable benefit of the Secured Parties, as follows:

Defined Terms

Definitions. i) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement, and the following terms are used herein as defined in the New York
UCC: Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims,
Contract, Documents, Equipment, Farm Products, Fixture, General Intangibles,
Goods, Instruments, Inventory, Letter-of-Credit Rights and Supporting
Obligations.

The following terms shall have the following meanings:

“Agreement”: this Guarantee and Collateral Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.

“Borrower Obligations”: the collective reference to (i) the unpaid principal of
and interest on the Loans and Letter of Credit Outstandings and all other
obligations and liabilities of the Borrower (including, without limitation,
interest accruing at the then applicable rate provided in the Credit Agreement
after the maturity of the Loans and Letter of Credit Outstandings and interest
accruing at the then applicable rate provided in the Credit Agreement after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
to the Administrative Agent, the Sub-Agent, the Collateral Agent or any Lender
(or, in the case of any Specified Swap Agreement and Specified Cash Management
Agreements, any Affiliate of any Lender), whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit Agreement, this
Agreement, the other Loan Documents, any Letter of Credit, or any other document
made, delivered or given in connection with any of the foregoing, in each case
whether on account of principal, interest, premiums (if any), reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Collateral Agent or to
the Lenders that are required to be paid by the Borrower pursuant to the terms
of any of the

 

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foregoing agreements), (ii) the unpaid principal of and interest on the Bridge
Loans and all other obligations and liabilities of the Borrower (including,
without limitation, interest accruing at the then applicable interest rate
provided in the Bridge Loan Agreement after the maturity of the Bridge Loans and
interest accruing at the then applicable rate provided in the Bridge Loan
Agreement after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to the Bridge Loan Agent, the Collateral Agent or any Bridge
Loan Lender, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Bridge Loan Agreement, this Agreement, the other
Bridge Loan Documents or any other document made, delivered or given in
connection with any of the foregoing, in each case whether on account of
principal, premiums (if any), interest, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Collateral Agent or to the Bridge Loan Lenders that are required to be
paid by the Borrower pursuant to the terms of any of the foregoing agreements)
and (iii) all other First Lien Obligations of the Borrower at any time incurred
or outstanding.

“Bridge Loan Document”: all “Loan Documents” under, and as defined in the Bridge
Loan Agreement.

“Collateral”: as defined in Section 3.

“Collateral Account”: any collateral account established by the Collateral Agent
as provided in Section 6.1 or Section 6.4.

“Copyrights”: (i) all copyrights arising under the laws of the United States,
any other country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished (including, without
limitation, those listed in Schedule 5), all registrations and recordings
thereof, and all applications in connection therewith, including, without
limitation, all registrations, recordings and applications in the United States
Copyright Office, and (ii) the right to obtain all renewals thereof.

“Copyright Licenses”: any written agreement naming any Grantor as licensor or
licensee (including, without limitation, those listed in Schedule 5), granting
any right under any Copyright, including, without limitation, the grant of
rights to manufacture, distribute, exploit and sell materials derived from any
Copyright.

“Default”: any “Default” under, and as defined in, any then effective First Lien
Document.

“Deposit Account”: as defined in the Uniform Commercial Code of any applicable
jurisdiction and, in any event, including, without limitation, any demand, time,
savings, passbook or like account maintained with a depositary institution.

“Event of Default”: any “Event of Default” (i) under, and as defined in, the
Credit Agreement (or under any other “Credit Agreement” under, and as defined
in, the Intercreditor Agreement) and/or the Bridge Loan Agreement (or under any
other “Bridge Loan Agreement” under, and as defined in, the Intercreditor
Agreement), as applicable or (ii) at such time as the Credit Agreement and the
Bridge Loan Agreement are no longer effective, under, and as defined in, any
then effective First Lien Document.

 

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“First Lien Debt”: as defined in the Intercreditor Agreement.

“First Lien Documents”: as defined in the Intercreditor Agreement.

“First Lien Obligations”: as defined in the Intercreditor Agreement.

“First Lien Secured Party”: as defined in the Intercreditor Agreement.

“Foreign Subsidiary”: any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.

“Foreign Subsidiary Voting Stock”: the voting Capital Stock of any Foreign
Subsidiary.

“Guaranteed Obligations”: in (A) the case of the Borrower, all Other Loan Party
Obligations of each Non-Borrower Guarantor and (B) the case of any Non-Borrower
Guarantor, all Borrower Obligations and all Other Loan Party Obligations of each
other Guarantor.

“Guarantors”: as defined in the preamble hereto.

“Grantors”: the collective reference to each Guarantor identified as a Grantor
on Annex I to the signature page hereto, together with any other entity that may
become a party hereto (and is identified as a Grantor) as provided herein.

“Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including, without
limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent
Licenses, the Trademarks and the Trademark Licenses, and any transferable rights
to sue at law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.

“Intercompany Note”: any promissory note evidencing loans made by any Grantor to
the Borrower or any of its Subsidiaries.

“Intercreditor Agreement”: the Collateral Agency and Intercreditor Agreement,
dated as of January 31, 2008, as same may be amended, supplemented or otherwise
modified from time to time.

“Investment Property”: the collective reference to (i) all “investment property”
as such term is defined in Section 9-102(a)(49) of the New York UCC (other than
any Foreign Subsidiary Voting Stock excluded from the definition of “Pledged
Stock”) and (ii) whether or not constituting “investment property” as so
defined, all Pledged Notes and all Pledged Stock.

“Issuers”: the collective reference to each issuer of any Investment Property.

 

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“New York UCC”: the Uniform Commercial Code as from time to time in effect in
the State of New York.

“Non-Borrower Guarantor”: each Guarantor other than the Borrower.

“Obligations”: (i) in the case of the Borrower, the Borrower Obligations, and
(ii) in the case of each Non-Borrower Guarantor, its Other Loan Party
Obligations.

“Officer’s Certificate”: a certificate of a Responsible Officer of the Borrower.

“Other Loan Party Obligations”: with respect to any Non-Borrower Guarantor, all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, pursuant to
Section 2 hereof) or the Credit Agreement, any other Loan Document, the Bridge
Loan Agreement or any other Bridge Loan Document, or any other First Lien
Document to which such Guarantor is a party, in each case whether on account of
guarantee obligations, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent, the Bridge Loan Agent, the Collateral
Agent or other relevant First Lien Secured Party, or to the Lenders, the Bridge
Loan Lenders or other First Lien Secured Parties that are required to be paid by
such Guarantor pursuant to the terms of this Agreement, the Credit Agreement,
any other Loan Document, any Bridge Loan Document or any other First Lien
Documents) and all other First Lien Obligations of such Guarantor.

“Patents”: (i) all letters patent of the United States, any other country or any
political subdivision thereof, all reissues and extensions thereof and all
goodwill associated therewith, including, without limitation, any of the
foregoing referred to in Schedule 5, (ii) all applications for letters patent of
the United States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any of the
foregoing referred to in Schedule 5, and (iii) all rights to obtain any reissues
or extensions of the foregoing.

“Patent License”: all agreements, whether written or oral, providing for the
grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 5.

“Pledged Notes”: all promissory notes listed on Schedule 2, all Intercompany
Notes at any time issued to any Grantor and all other promissory notes in
principal amounts in excess of $500,000 issued to or held by any Grantor (other
than promissory notes issued in connection with extensions of trade credit by
any Grantor in the ordinary course of business).

“Pledged Stock”: the shares of Capital Stock listed on Schedule 2, together with
any other shares, stock certificates, options, interests or rights of any nature
whatsoever in respect of the Capital Stock of any Person that may be issued or
granted to, or held by, any Grantor while this Agreement is in effect; provided
that in no event shall more than 65% of the total outstanding Foreign Subsidiary
Voting Stock of any Foreign Subsidiary be required to be pledged hereunder.

 

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“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of
the New York UCC and, in any event, shall include, without limitation, all
dividends or other income from the Investment Property, collections thereon or
distributions or payments with respect thereto.

“Receivable”: any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including, without
limitation, any Account).

“Responsible Officer”: the chief executive officer, president, any executive
vice president or financial officer of the Borrower.

“Secured Debt Termination Date”: as defined in the Intercreditor Agreement.

“Secured Parties”: the collective reference to the Collateral Agent, and all
other First Lien Secured Parties.

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

“Trademarks”: (i) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos
and other source or business identifiers, and all goodwill associated therewith,
all registrations and recordings thereof, and all applications in connection
therewith (other than “intent to use” applications), whether in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related thereto,
including, without limitation, any of the foregoing referred to in Schedule 5,
and (ii) the right to obtain all renewals thereof.

“Trademark License”: any agreement, whether written or oral, providing for the
grant by or to any Grantor of any right to use any Trademark, including, without
limitation, any of the foregoing referred to in Schedule 5.

Other Definitional Provisions. i) The words “hereof,” “herein”, “hereto” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.

The meanings given to terms defined herein shall be equally applicable to both
the singular and plural forms of such terms.

Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.

Guarantee

Guarantee. i) Each of the Guarantors hereby, jointly and severally, absolutely,
unconditionally and irrevocably, guarantees to the Collateral Agent, for the
ratable benefit of the

 

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Secured Parties and their respective successors, indorsees, transferees and
assigns, as a primary obligor and not merely as surety, the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of all Guaranteed Obligations.

Without limiting the generality of paragraph 95 of the Confirmation Order,
anything herein, or in any other First Lien Document to the contrary
notwithstanding, the maximum liability of each Non-Borrower Guarantor hereunder
shall be limited to such amount as will, after giving effect to such maximum
liability and all other liabilities (contingent or otherwise) of such Guarantor
that are relevant under applicable Federal or state bankruptcy or insolvency
laws, fraudulent conveyance or transfer laws, or similar such laws, result in
the obligations of such Guarantor hereunder not constituting a fraudulent
transfer or conveyance under applicable Federal or state laws (after giving
effect to all rights of subrogation, contribution or reimbursement, subject to
Sections 2.3 and 8.12(i)).

Each Non-Borrower Guarantor agrees that the Guaranteed Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Collateral Agent or any Secured Party
hereunder.

The guarantee contained in this Section 2 shall remain in full force and effect
until the Secured Debt Termination Date with respect to the First Lien Debt
shall have occurred, notwithstanding that from time to time during the term of
the Credit Agreement the Borrower may be free from any Borrower Obligations.

No payment made by the Borrower, any of the Non-Borrower Guarantors, any other
guarantor or any other Person or received or collected by the Collateral Agent
or any Secured Party from the Borrower, any of the Non-Borrower Guarantors, any
other guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Guaranteed Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Guaranteed Obligations or any payment
received or collected from such Guarantor in respect of the Guaranteed
Obligations), remain liable for the Guaranteed Obligations up to the maximum
liability of such Guarantor hereunder until the Secured Debt Termination Date
with respect to the First Lien Debt shall have occurred.

Right of Contribution. Each Non-Borrower Guarantor hereby agrees that to the
extent that a Non-Borrower Guarantor shall have paid more than its proportionate
share of any payment made hereunder, such Non-Borrower Guarantor shall be
entitled to seek and receive contribution from and against any other
Non-Borrower Guarantor hereunder which has not paid its proportionate share of
such payment. Each Non-Borrower Guarantor’s right of contribution shall be
subject to the terms and conditions of Section 2.3. The provisions of this
Section 2.2 shall in no respect limit the obligations and liabilities of any
Guarantor to the Collateral Agent and the Secured Parties, and each Guarantor
shall remain liable to the Collateral Agent and the Secured Parties for the full
amount guaranteed by such Guarantor hereunder.

 

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No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or
any set-off or application of funds of any Guarantor by the Collateral Agent or
any Secured Party, no Guarantor shall be entitled to seek or enforce its right
to be subrogated to any of the rights of the Collateral Agent or any Secured
Party against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Collateral Agent or any Secured Party
for the payment of the Guaranteed Obligations, nor shall any Guarantor seek or
be entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Collateral Agent and the Secured Parties by the
Borrower on account of the Borrower Obligations are paid in full and the Secured
Debt Termination Date with respect to the First Lien Debt shall have occurred.
If any amount shall be paid to any Guarantor on account of such subrogation
rights at any time when all of the Borrower Obligations shall not have been paid
in full or such payment is otherwise prohibited pursuant to the immediately
preceding sentence, such amount shall be held by such Guarantor in trust for the
Collateral Agent and the Secured Parties, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Collateral Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Collateral Agent, if required), to be applied
against the Borrower Obligations, whether matured or unmatured, in such order as
the Collateral Agent may determine.

Amendments, etc. with respect to the Guaranteed Obligations. Each Guarantor
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Guaranteed Obligations made by
the Collateral Agent or any other Secured Party may be rescinded by the
Collateral Agent or such Secured Party and any of the Guaranteed Obligations may
be continued, and the Guaranteed Obligations, or the liability of any other
Person upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Collateral Agent or any
Secured Party, and the First Lien Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Collateral Agent (or the relevant
Secured Parties, as the case may be) may deem advisable from time to time, and
any collateral security, guarantee or right of offset at any time held by the
Collateral Agent or any Secured Party for the payment of the Guaranteed
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Collateral Agent nor any Lender nor any Secured Party shall have any obligation
to protect, secure, perfect or insure any Lien at any time held by it as
security for the Guaranteed Obligations or for the guarantee contained in this
Section 2 or any property subject thereto.

Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice
of the creation, renewal, extension or accrual of any of the Guaranteed
Obligations and notice of or proof of reliance by the Collateral Agent or any
other Secured Party upon the guarantee contained in this Section 2 or acceptance
of the guarantee contained in this Section 2; the Guaranteed Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between the Borrower and
any of the Guarantors, on the one hand, and the Collateral Agent and the Secured
Parties, on the other hand, likewise shall

 

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be conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Non-Borrower Guarantors with respect to the
Guaranteed Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of any First Lien Documents, any of the Guaranteed Obligations or
any other collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Collateral Agent or
any other Secured Party, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by the Borrower or any other Person against the Collateral Agent or any
other Secured Party, or (c) any other circumstance whatsoever (with or without
notice to or knowledge of the Borrower, such Guarantor or any other Guarantor)
which constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower or any other obligor for the Guaranteed Obligations,
or of such Guarantor under the guarantee contained in this Section 2, in
bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the
Collateral Agent or any other Secured Party may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Borrower, any other Guarantor or any other
Person or against any collateral security or guarantee for the Guaranteed
Obligations or any right of offset with respect thereto, and any failure by the
Collateral Agent or any other Secured Party to make any such demand, to pursue
such other rights or remedies or to collect any payments from the Borrower, any
other Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
the Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Collateral Agent or any other Secured Party against any Guarantor. For the
purposes hereof “demand” shall include the commencement and continuance of any
legal proceedings.

Reinstatement. Without limiting the generality of paragraph 95 of the
Confirmation Order, the guarantee contained in this Section 2 shall continue to
be effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned by the Collateral Agent or any other Secured
Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Non-Borrower Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Non-Borrower Guarantor or
any substantial part of its property, or otherwise, all as though such payments
had not been made.

Payments. Each Guarantor hereby jointly and severally guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the Funding Office.

 

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Grant of Security Interest

Each Grantor hereby assigns and transfers to the Collateral Agent, and hereby
grants to the Collateral Agent, for the ratable benefit of the Secured Parties,
a security interest in, all of the following property now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest (collectively, the
“Collateral”), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor’s Obligations:

all Accounts;

all Chattel Paper;

all Contracts;

all Deposit Accounts and cash;

all Documents;

all Equipment;

all Fixtures;

all General Intangibles;

all Instruments;

all Intellectual Property;

all Inventory;

all Goods;

all Investment Property;

all Letter-of-Credit Rights;

all Commercial Tort Claims described in Section 5.8 hereof;

all books and records pertaining to the Collateral; and

to the extent not otherwise included, all Proceeds, Supporting Obligations and
products of any and all of the foregoing and all collateral security and
guarantees given by any Person with respect to any of the foregoing;

provided, however, that notwithstanding any of the other provisions set forth in
this Section 3, this Agreement shall not constitute a grant of a security
interest in (i) any property to the extent that such grant of a security
interest is prohibited by any Requirements of Law of a

 

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Governmental Authority, requires a consent not obtained of any Governmental
Authority pursuant to such Requirement of Law or is prohibited by, or
constitutes a breach or default under or results in the termination of or
requires any consent not obtained under, any contract, license, agreement,
instrument or other document evidencing or giving rise to such property or, in
the case of any Investment Property, Pledged Stock or Pledged Note, any
applicable shareholder or similar agreement, except to the extent that such
Requirement of Law or the term in such contract, license, agreement, instrument
or other document or shareholder or similar agreement providing for such
prohibition, breach, default or termination or requiring such consent is
ineffective under applicable law; or (ii) any voting Capital Stock of any
Foreign Subsidiary (or Domestic Subsidiary of the type described in clause
(d) of the definition of Excluded Subsidiary) constituting more than 65% of the
outstanding voting Capital Stock thereof; or (iii) any Capital Stock of any
Project Subsidiary whose Capital Stock is pledged to secure Limited Recourse
Debt so long as such Limited Recourse Debt remains outstanding, in each case so
long as the respective Lien and Indebtedness described in this clause (iii) is
permitted pursuant to the Credit Agreement and the Bridge Loan Agreement, and
does not violate the provisions of any other First Lien Document.

Representations and Warranties

To induce the Collateral Agent and the Lenders to enter into the Credit
Agreement, to induce the Lenders to make their respective extensions of credit
to the Borrower under the Credit Agreement, to induce the Collateral Agent and
the Bridge Loan Lenders to enter into the Bridge Loan Agreement, to induce the
Bridge Loan Lenders to make their respective extensions of credit to the
Borrower under the Bridge Loan Agreement, and to induce other Secured Parties to
extend First Lien Obligations, each Grantor hereby represents and warrants to
the Collateral Agent and each Secured Party that:

Title; No Other Liens. Except for the security interest granted to the
Collateral Agent for the ratable benefit of the Secured Parties pursuant to this
Agreement and the other Liens permitted to exist on the Collateral under each
then outstanding First Lien Document (including the Liens granted to secure any
Junior Lien Indebtedness), such Grantor owns, or has rights in, each item of the
Collateral free and clear of any and all Liens or claims of others. No effective
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as have
been filed in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, pursuant to this Agreement or as are permitted by the Credit
Agreement. For the avoidance of doubt, it is understood and agreed that any
Grantor may, as part of its business, grant licenses to third parties to use
Intellectual Property owned or developed by a Grantor. For purposes of this
Agreement and the other First Lien Documents, such licensing activity shall not
constitute a “Lien” on such Intellectual Property. Each of the Collateral Agent
and each Secured Party understand that any such licenses may be exclusive to the
applicable licensees, and such exclusivity provisions may limit the ability of
the Collateral Agent to utilize, sell, lease or transfer the related
Intellectual Property or otherwise realize value from such Intellectual Property
pursuant hereto.

Perfected First Priority Liens. The security interests granted pursuant to this
Agreement (a) upon completion of the filings and other actions specified on
Schedule 3 (which, in the case of all filings and other documents referred to on
said Schedule, have been delivered to

 

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the Collateral Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Collateral for which such filings and
actions are effective to perfect such security interests in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, as collateral
security for such Grantor’s Obligations, enforceable in accordance with the
terms hereof against all creditors of such Grantor and any Persons purporting to
purchase any Collateral from such Grantor, except such Persons who are good
faith purchasers to the extent set forth in the New York UCC and (b) are prior
to all other Liens on the Collateral in existence on the date hereof except for
unrecorded Liens permitted by the Credit Agreement and the Bridge Loan Agreement
which have priority over the Liens on the Collateral by operation of law or as
otherwise permitted to have priority over the Liens on the Collateral under
Section 6.2 of the Credit Agreement and Section 6.2 of the Bridge Loan
Agreement.

Jurisdiction of Organization; Chief Executive Office. On the date hereof, such
Grantor’s jurisdiction of organization, identification number from the
jurisdiction of organization (if any), and the location of such Grantor’s chief
executive office or sole place of business, as the case may be, are specified on
Schedule 4. Such Grantor has furnished to the Collateral Agent a certified
charter, certificate of incorporation or other organization document and
long-form good standing certificate as of a date which is recent to the date
hereof.

Farm Products. None of the Collateral constitutes, or is the Proceeds of, Farm
Products.

Investment Property. i) The shares of Pledged Stock pledged by such Grantor
hereunder constitute all the issued and outstanding shares of all classes of the
Capital Stock of each Issuer owned by such Grantor or, in the case of Foreign
Subsidiary Voting Stock, if less, 65% of the outstanding Foreign Subsidiary
Voting Stock of each relevant Issuer.

All the shares of the Pledged Stock issued by an Issuer which is a Subsidiary of
such Grantor have been duly and validly issued and are, if such shares are
shares of stock in a domestic corporation, fully paid and nonassessable.

Each of the Pledged Notes issued by an Issuer which is a Subsidiary of such
Grantor constitutes the legal, valid and binding obligation of the obligor with
respect thereto, enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.

Such Grantor is the owner of, and has good title to, the Investment Property
pledged by it hereunder, free of any and all Liens or options in favor of, or
claims of, any other Person, except the security interest created by this
Agreement or as otherwise permitted under Section 6.2 of the Credit Agreement
and Section 6.2 of the Bridge Loan Agreement.

 

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Receivables. i) No amount in excess of $500,000 payable to such Grantor under or
in connection with any Receivable is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Collateral Agent.

The amounts represented by such Grantor to the Lenders from time to time as
owing to such Grantor in respect of the Receivables will at such times be
accurate in all material respects.

Intellectual Property. i) Schedule 5 lists all Intellectual Property owned by
such Grantor in its own name on the date hereof and which is registered with the
United States Copyright Office or the United States Patent and Trademark Office
or any similar office or agency in any other country or any political
subdivision thereof.

On the date hereof, all material scheduled Intellectual Property owned, used or
held by such Grantor is valid, subsisting, unexpired and in full force and
effect, has not been abandoned and does not infringe the intellectual property
rights of any other Person.

No holding, decision or judgment has been rendered by any Governmental Authority
which would limit, cancel or question the validity of, or such Grantor’s rights
in, any Intellectual Property owned, used or held by such Grantor in any respect
that could reasonably be expected to have a Material Adverse Effect.

No action or proceeding is pending, or, to the knowledge of such Grantor,
threatened, on the date hereof (i) seeking to limit, cancel or question the
validity of any Intellectual Property owned, used or held by such Grantor or
such Grantor’s ownership interest therein, or (ii) which, if adversely
determined, would could reasonably be expected to have a Material Adverse
Effect.

Commercial Tort Claims. ii) On the date hereof, except to the extent listed in
Section 3.1 above, no Grantor has rights in any Commercial Tort Claim with a
reasonably expected value in excess of $1,000,000.

Upon the filing of a financing statement specifically describing any Commercial
Tort Claim referred to in Section 5.8 hereof against such Grantor in the
jurisdiction specified in Schedule 3 hereto, the security interest granted in
such Commercial Tort Claim will constitute a valid perfected security interest
in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, as collateral security for such Grantor’s Obligations, enforceable in
accordance with the terms hereof against all creditors of such Grantor and any
Persons purporting to purchase such Collateral from Grantor except such Persons
who are good faith purchasers to the extent set forth in the New York UCC, which
security interest shall be prior to all other Liens on such Collateral except
for unrecorded Liens permitted by the Credit Agreement which have priority over
the Liens on such Collateral by operation of law or as otherwise permitted to
have priority over the Liens on the Collateral under the relevant provisions of
the then effective First Lien Documents.

 

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Covenants

Each Grantor covenants and agrees with the Collateral Agent and the Secured
Parties that, from and after the date of this Agreement and until the Secured
Debt Termination Date with respect to the First Lien Debt:

Delivery of Instruments, Certificated Securities and Chattel Paper. If any
amount in excess of $500,000 payable to a Grantor under or in connection with
any of the Collateral shall be or become evidenced by any Instrument,
Certificated Security or Chattel Paper, such Instrument, Certificated Security
or Chattel Paper shall be immediately delivered to the Collateral Agent, duly
indorsed in a manner satisfactory to the Collateral Agent, to be held as
Collateral pursuant to this Agreement.

Maintenance of Insurance. i) Such Grantor will maintain, with financially sound
and reputable companies, insurance policies insuring such Grantor and the
Collateral Agent against liability for personal injury and property damage
relating to Inventory and Equipment, such policies to be in such form and
amounts and having such coverage as may be reasonably satisfactory to the
Collateral Agent.

All such insurance shall (i) name the Collateral Agent as an additional insured
party or loss payee and (ii) be reasonably satisfactory in all other respects to
the Collateral Agent.

The Borrower shall deliver to the Collateral Agent a report of a reputable
insurance broker with respect to such insurance substantially concurrently with
each delivery of the Borrower’s audited annual financial statements and such
supplemental reports with respect thereto as the Collateral Agent may from time
to time reasonably request.

Maintenance of Perfected Security Interest; Further Documentation. i) Such
Grantor shall maintain the security interest created by this Agreement as a
perfected security interest having at least the priority described in
Section 4.2 and shall defend such security interest against the claims and
demands of all Persons whomsoever, subject to the rights of such Grantor under
the First Lien Documents to dispose of the Collateral.

Such Grantor will furnish to the Collateral Agent and the Lenders from time to
time statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection therewith as the
Collateral Agent may reasonably request, all in reasonable detail.

At any time and from time to time, upon the written request of the Collateral
Agent, and at the sole expense of such Grantor, such Grantor will promptly and
duly execute and deliver, and have recorded, such further instruments and
documents and take such further actions as the Collateral Agent may reasonably
request for the purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, (i) filing any financing or continuation statements under the
Uniform Commercial Code (or other similar laws) in effect in any jurisdiction
with respect to the security interests created hereby and (ii) in the case of

 

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Investment Property, Deposit Accounts, Letter-of-Credit Rights and any other
relevant Collateral, taking any actions necessary to enable the Collateral Agent
to obtain “control” (within the meaning of the applicable Uniform Commercial
Code) with respect thereto.

Changes in Name, etc. Such Grantor will not, except upon 15 days’ prior written
notice to the Collateral Agent and delivery to the Collateral Agent of all
additional financing statements and other executed documents reasonably
requested by the Collateral Agent to maintain the validity, perfection and
priority of the security interests provided for herein, (i) change its
jurisdiction of organization or the location of its chief executive office or
sole place of business from that referred to in Section 4.3 or (ii) change its
name.

Notices. Such Grantor will advise the Collateral Agent, the Lenders and the
Bridge Loan Lenders promptly, in reasonable detail, of:

any Lien (other than security interests created hereby or Liens permitted under
the First Lien Documents) on any of the Collateral which would adversely affect
the ability of the Collateral Agent to exercise any of its remedies hereunder;
and

of the occurrence of any other event which could reasonably be expected to have
a material adverse effect on the aggregate value of the Collateral or on the
security interests created hereby.

Investment Property. i) If such Grantor shall become entitled to receive or
shall receive any certificate (including, without limitation, any certificate
representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock (constituting Collateral hereunder) of any Issuer, whether in addition to,
in substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Collateral Agent and the Secured Parties, hold the same
in trust for the Collateral Agent and the Secured Parties and deliver the same
forthwith to the Collateral Agent in the exact form received, duly indorsed by
such Grantor to the Collateral Agent, if required, together with an undated
stock power covering such certificate duly executed in blank by such Grantor and
with, if the Collateral Agent so requests, signature guaranteed, to be held by
the Collateral Agent, subject to the terms hereof, as additional collateral
security for the Obligations. Any sums paid upon or in respect of the Investment
Property constituting Collateral hereunder upon the liquidation or dissolution
of any Issuer shall be paid over to the Collateral Agent to be held by it
hereunder as additional collateral security for the Obligations, and in case any
distribution of capital shall be made on or in respect of such Investment
Property or any property shall be distributed upon or with respect to such
Investment Property pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected security interest in
favor of the Collateral Agent, be delivered to the Collateral Agent to be held
by it hereunder as additional collateral security for the Obligations. If any
sums of money or property so paid or distributed in respect of such Investment
Property shall be received by such Grantor, such Grantor shall, until such money
or property is paid or delivered to the Collateral Agent, hold such money or
property in trust for the Collateral Agent and the Secured Parties, segregated
from other funds of such Grantor, as additional collateral security for the
Obligations.

 

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Without the prior written consent of the Collateral Agent or except as permitted
under the Credit Agreement, such Grantor will not (i) vote to enable, or take
any other action to permit, any Issuer to issue any Capital Stock of any nature
or to issue any other securities convertible into or granting the right to
purchase or exchange for any Capital Stock of any nature of any Issuer, unless
all such Capital Stock is pledged by such Grantor to the Collateral Agent, for
the ratable benefit of the Secured Parties, to the extent such pledge is
required under this Agreement or any other First Lien Document, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Investment Property or Proceeds thereof constituting Collateral
hereunder (except pursuant to a transaction that is permitted by the then
effective First Lien Documents), (iii) create, incur or permit to exist any Lien
or option in favor of, or any claim of any Person with respect to, any of the
Investment Property or Proceeds thereof constituting Collateral hereunder, or
any interest therein, except for the security interests created by this
Agreement or (iv) enter into any agreement or undertaking restricting the right
or ability of such Grantor or the Collateral Agent to sell, assign or transfer
any of the Investment Property or Proceeds thereof.

In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it
will be bound by the terms of this Agreement relating to the Investment Property
issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Collateral Agent promptly in writing
of the occurrence of any of the events described in Section 5.6(a) with respect
to the Investment Property issued by it and (iii) the terms of Sections 6.3(c)
and 6.7 shall apply to it, mutatis mutandis, with respect to all actions that
may be required of it pursuant to Section 6.3(c) or 6.7 with respect to the
Investment Property issued by it.

Intellectual Property. i) Except in such Grantor’s reasonable business judgment,
each Grantor will not knowingly do any act or knowingly omit to do any act
whereby any material Trademark constituting Collateral hereunder may become
invalidated or impaired in any way.

Except in such Grantor’s reasonable business judgment, each Grantor will not
knowingly do any act, or knowingly omit to do any act, that could reasonably be
expected cause any material Patent owned, used or held by such Grantor to become
forfeited, abandoned or dedicated to the public.

Except in such Grantor’s reasonable business judgment, each Grantor will not
knowingly do any act or knowingly omit to do any act whereby any material
portion of the Copyrights owned, used or held by such Grantor may become
invalidated or otherwise impaired nor knowingly do any act whereby any material
portion of the Copyrights owned, used or held by such Grantor may fall into the
public domain.

 

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Such Grantor will not do any act that knowingly uses any material Intellectual
Property owned by such Grantor to infringe the intellectual property rights of
any other Person.

Such Grantor will notify the Collateral Agent promptly if it knows, or has
reason to know, that any application or registration relating to any material
Intellectual Property owned by such Grantor has become forfeited, abandoned or
dedicated to the public, or of any adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
the United States Copyright Office or any court or tribunal in any country)
regarding such Grantor’s ownership of, or the validity of, any material
Intellectual Property constituting Collateral hereunder or such Grantor’s right
to register the same or to own and maintain the same.

Whenever such Grantor, either by itself or through any agent, employee, licensee
or designee, shall file an application for the registration of any material
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Collateral Agent within five Business Days after the last day of
the fiscal quarter in which such filing occurs. Upon request of the Collateral
Agent, such Grantor shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Collateral Agent may
request to evidence the Collateral Agent’s and the Secured Parties’ security
interest in such Copyright, Patent or Trademark and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby.

Except in such Grantor’s reasonable business judgment, each Grantor will take
all reasonable and necessary steps, including, without limitation, in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of the
material Intellectual Property constituting Collateral hereunder, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.

In the event that any material Intellectual Property constituting Collateral
hereunder is infringed, misappropriated or diluted by a third party, such
Grantor shall take such actions as such Grantor shall reasonably deem
appropriate under the circumstances to protect such Intellectual Property
including, without limitation, in such Grantor’s reasonable business judgment,
suing for infringement, misappropriation or dilution, to seek injunctive relief
and seeking to recover any and all damages for such infringement,
misappropriation or dilution.

Commercial Tort Claims. If such Grantor shall obtain an interest in any
Commercial Tort Claim with a reasonably expected value in excess of $1,000,000,
such Grantor shall within (45) days of obtaining such interest advise the
Collateral Agent thereof and, if requested by the Collateral Agent in writing,
within 30 days after such request sign and deliver documentation acceptable to
the Collateral Agent granting a security interest under the terms and provisions
of this Agreement in and to such Commercial Tort Claim.

 

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Remedial Provisions

Certain Matters Relating to Receivables. i) The Collateral Agent shall have the
right at reasonable times and with reasonable notice to make test verifications
of the Receivables constituting Collateral hereunder in any manner and through
any medium that it reasonably considers advisable, and each Grantor shall
furnish all such assistance and information as the Collateral Agent may
reasonably require in connection with such test verifications. At any time (but
no more frequently than once per fiscal year (unless an Event of Default shall
have occurred and be continuing, in which case there shall be no limits), upon
the Collateral Agent’s request and at the expense of the relevant Grantor, such
Grantor shall use commercially reasonable efforts to cause independent public
accountants or others satisfactory to the Collateral Agent to furnish to the
Collateral Agent reports showing reconciliations, aging and test verifications
of, and trial balances for, the Receivables constituting Collateral hereunder.

The Collateral Agent hereby authorizes each Grantor to collect such Grantor’s
Receivables, subject to the Collateral Agent’s direction and control, and the
Collateral Agent may curtail or terminate said authority at any time after the
occurrence and during the continuance of an Event of Default. If required by the
Collateral Agent at any time after the occurrence and during the continuance of
an Event of Default, any payments of Receivables, when collected by any Grantor,
(i) shall be forthwith (and, in any event, within three Business Days) deposited
by such Grantor in the exact form received, duly indorsed by such Grantor to the
Collateral Agent if required, in a Collateral Account maintained under the sole
dominion and control of the Collateral Agent, subject to withdrawal by the
Collateral Agent for the account of the Secured Parties only as provided in
Section 6.5, and (ii) until so turned over, shall be held by such Grantor in
trust for the Collateral Agent and the Secured Parties, segregated from other
funds of such Grantor. Each such deposit of Proceeds of Receivables shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit.

At the Collateral Agent’s request after the occurrence and during the
continuance of an Event of Default, each Grantor shall deliver to the Collateral
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Receivables constituting
Collateral hereunder, including, without limitation, all original orders,
invoices and shipping receipts.

Communications with Obligors; Grantors Remain Liable. i) The Collateral Agent in
its own name or in the name of others may at any time after the occurrence and
during the continuance of an Event of Default communicate with obligors under
the Receivables constituting Collateral hereunder and parties to the Contracts
constituting Collateral hereunder to verify with them to the Collateral Agent’s
satisfaction the existence, amount and terms of any such Receivables or
Contracts.

Upon the request of the Collateral Agent at any time after the occurrence and
during the continuance of an Event of Default, each Grantor shall notify
obligors on

 

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the Receivables constituting Collateral hereunder and parties to the Contracts
constituting Collateral hereunder that such Receivables and the Contracts have
been assigned to the Collateral Agent for the ratable benefit of the Secured
Parties and that payments in respect thereof shall be made directly to the
Collateral Agent.

Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Receivables and Contracts to observe and perform all
the conditions and obligations to be observed and performed by it thereunder,
all in accordance with the terms of any agreement giving rise thereto. Neither
the Collateral Agent nor any Secured Party shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) or
Contract by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any Secured Party of any payment relating thereto, nor shall
the Collateral Agent or any Secured Party be obligated in any manner to perform
any of the obligations of any Grantor under or pursuant to any Receivable (or
any agreement giving rise thereto) or Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.

Pledged Stock. i) Unless an Event of Default shall have occurred and be
continuing and the Collateral Agent shall have given written notice to the
relevant Grantor of the Collateral Agent’s intent to exercise its corresponding
rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive
all cash dividends paid in respect of the Pledged Stock and all payments made in
respect of the Pledged Notes, in each case paid in the normal course of business
of the relevant Issuer and consistent with past practice, to the extent
permitted in the Credit Agreement, and to exercise all voting and corporate or
other organizational rights with respect to the Investment Property; provided
that no vote shall be cast or corporate or other organizational right exercised
or other action taken which, in the Collateral Agent’s reasonable judgment,
would materially impair the Collateral or which would be inconsistent with or
result in any violation of any provision of the Credit Agreement, the Bridge
Loan Agreement, this Agreement or any other First Lien Document.

If an Event of Default shall occur and be continuing and the Collateral Agent
shall give written notice of its intent to exercise such rights to the relevant
Grantor or Grantors, (i) the Collateral Agent shall have the right to receive
any and all cash dividends, payments or other Proceeds paid in respect of the
Investment Property constituting Collateral hereunder and make application
thereof to the Obligations in such order as the Collateral Agent may determine,
and (ii) any or all of the Investment Property shall be registered in the name
of the Collateral Agent or its nominee, and the Collateral Agent or its nominee
may thereafter exercise (x) all voting, corporate and other rights pertaining to
such Investment Property at any meeting of shareholders of the relevant Issuer
or Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Investment Property as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the
Investment Property constituting Collateral hereunder upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the

 

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corporate or other organizational structure of any Issuer, or upon the exercise
by any Grantor or the Collateral Agent of any right, privilege or option
pertaining to such Investment Property, and in connection therewith, the right
to deposit and deliver any and all of such Investment Property with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Collateral Agent may determine), all without
liability except to account for property actually received by it, but the
Collateral Agent shall have no duty to any Grantor to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing.

Each Grantor hereby authorizes and instructs each Issuer of any Investment
Property pledged by such Grantor hereunder to (i) comply with any instruction
received by it from the Collateral Agent in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Collateral Agent.

Proceeds to be Turned Over To Collateral Agent. In addition to the rights of the
Collateral Agent and the Secured Parties specified in Section 6.1 with respect
to payments of Receivables, if an Event of Default shall occur and be
continuing, all Proceeds received by any Grantor consisting of cash, checks and
other near-cash items shall be held by such Grantor in trust for the Collateral
Agent and the Secured Parties, segregated from other funds of such Grantor, and
shall, forthwith upon receipt by such Grantor, be turned over to the Collateral
Agent in the exact form received by such Grantor (duly indorsed by such Grantor
to the Collateral Agent, if required). All Proceeds constituting Collateral
hereunder received by the Collateral Agent hereunder shall be held by the
Collateral Agent in a Collateral Account maintained under its sole dominion and
control. All Proceeds constituting Collateral hereunder while held by the
Collateral Agent in a Collateral Account (or by such Grantor in trust for the
Collateral Agent and the Secured Parties) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.5.

Application of Proceeds. At such intervals as may be agreed upon by the Borrower
and the Collateral Agent, or, if an Event of Default shall have occurred and be
continuing, at any time at the Collateral Agent’s election, the Collateral Agent
may apply all or any part of Proceeds constituting Collateral, whether or not
held in any Collateral Account, and any proceeds of the guarantee set forth in
Section 2, in payment of the Obligations in the following order:

First, to pay incurred and unpaid fees and expenses of the Collateral Agent
under the First Lien Documents;

Second, to the Collateral Agent, for application by it towards payment of
amounts then due and owing and remaining unpaid in respect of the Obligations,
pro rata among the Secured Parties according to the amounts of the Obligations
then due and owing and remaining unpaid to the Secured Parties;

 

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Third, to the Collateral Agent, for application by it towards prepayment of the
Obligations, pro rata among the Secured Parties according to the amounts of the
Obligations then held by the Secured Parties; and

Fourth, any balance remaining after the Secured Debt Termination Date with
respect to the First Lien Debt shall be paid over to the Borrower or to
whomsoever may be lawfully entitled to receive the same;

provided that in the event of any inconsistency between the terms of the
Intercreditor Agreement and this Section 6.5, the term of the Intercreditor
Agreement shall govern.

Code and Other Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent, on behalf of the Secured Parties, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the New York UCC
or any other applicable law. Without limiting the generality of the foregoing,
the Collateral Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may, subject to the requirements of applicable law, in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Collateral Agent or any Secured Party or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Collateral Agent or any Secured Party shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Grantor,
which right or equity is hereby waived and released. Each Grantor further
agrees, at the Collateral Agent’s request, to assemble the Collateral and make
it available to the Collateral Agent at places which the Collateral Agent shall
reasonably select, whether at such Grantor’s premises or elsewhere. The
Collateral Agent shall apply the net proceeds of any action taken by it pursuant
to this Section 6.6, after deducting all reasonable costs and expenses of every
kind incurred in connection therewith or incidental to the care or safekeeping
of any of the Collateral or in any way relating to the Collateral or the rights
of the Collateral Agent and the Secured Parties hereunder, including, without
limitation, reasonable attorneys’ fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as the Collateral Agent may
elect, and only after such application and after the payment by the Collateral
Agent of any other amount required by any provision of law, including, without
limitation, Section 9-615(a)(3) of the New York UCC, need the Collateral Agent
account for the surplus, if any, to any Grantor. To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Collateral Agent or any Secured Party arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition.

 

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Registration Rights. i) Each Grantor recognizes that the Collateral Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.

Each Grantor agrees to use its commercially reasonable efforts to do or cause to
be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Collateral Agent and the
Secured Parties, that the Collateral Agent and the Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 6.7 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred.

Subordination. Each Grantor hereby agrees that, upon the occurrence and during
the continuance of an Event of Default, unless otherwise agreed by the
Collateral Agent, all Indebtedness owing by it to any Subsidiary of the Borrower
shall be fully subordinated to the indefeasible payment in full in cash of such
Grantor’s Obligations.

Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the
Collateral Agent or any Secured Party to collect such deficiency.

Intercreditor Agreement. Notwithstanding anything to the contrary in this
Section 6 or Section 7.1, the Intercreditor Agreement shall govern the exercise
of rights and the enforcement of remedies hereunder by the Collateral Agent and
the Secured Parties. In the event of any conflict between the terms of this
Section 6 and the Intercreditor Agreement, the Intercreditor Agreement shall
govern.

The Collateral Agent

Collateral Agent’s Appointment as Attorney-in-Fact, etc. i) Each Grantor hereby
irrevocably constitutes and appoints the Collateral Agent and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power

 

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and authority in the place and stead of such Grantor and in the name of such
Grantor or in its own name, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement. At any time when an Event of Default has occurred
and is continuing and without limiting the generality of the foregoing, each
Grantor hereby gives the Collateral Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any or all of the
following:

in the name of such Grantor or its own name, or otherwise, take possession of
and indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Receivable or Contract or
with respect to any other Collateral and file any claim or take any other action
or proceeding in any court of law or equity or otherwise deemed appropriate by
the Collateral Agent for the purpose of collecting any and all such moneys due
under any Receivable or Contract or with respect to any other Collateral
whenever payable;

in the case of any Intellectual Property, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the
Collateral Agent may reasonably request to evidence the Collateral Agent’s and
the Secured Parties’ security interest in such Intellectual Property and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby;

pay or discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this
Agreement and pay all or any part of the premiums therefor and the costs
thereof;

execute, in connection with any sale provided for in Section 6.6 or 6.7, any
indorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and

(1) direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the
Collateral Agent or as the Collateral Agent shall direct; (2) ask or demand for,
collect, and receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising out of
any Collateral; (3) sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (4) commence and prosecute any suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect of
any Collateral; (5) defend any suit, action or proceeding brought against such
Grantor with respect to any Collateral; (6) settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Collateral Agent may deem appropriate; (7) assign
any Copyright, Patent or Trademark (along with the goodwill of the business to
which any such Copyright, Patent or Trademark pertains), throughout the world
for such term or terms, on such conditions, and in such manner, as the
Collateral Agent shall in its sole discretion determine; and (8) generally,
sell, transfer, pledge and make any

 

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agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Collateral Agent were the absolute owner thereof
for all purposes, and do, at the Collateral Agent’s option and such Grantor’s
expense, at any time, or from time to time, all acts and things which the
Collateral Agent deems necessary to protect, preserve or realize upon the
Collateral and the Collateral Agent’s and the Secured Parties’ security
interests therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.

Notwithstanding anything to the contrary in this Section 7.1(a), the Collateral
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Section 7.1(a) unless an Event of Default shall have
occurred and be continuing.

If any Grantor fails to perform or comply with any of its agreements contained
herein, the Collateral Agent, at its option, but without any obligation so to
do, may perform or comply, or otherwise cause performance or compliance, with
such agreement.

The reasonable expenses of the Collateral Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the highest rate per annum at which
interest would then be payable on any category of past due Base Rate Loans under
the Credit Agreement, from the date of payment by the Collateral Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Collateral Agent on demand.

Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. All powers, authorizations and agencies contained
in this Agreement are coupled with an interest and are irrevocable until this
Agreement is terminated and the security interests created hereby are released.

Duty of Collateral Agent. To the full extent permitted by applicable law, the
Collateral Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the New York UCC or otherwise, shall be to deal with it in the same manner as
the Collateral Agent deals with similar property for its own account. Neither
the Collateral Agent, any Secured Party nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof, except as provided
herein. The powers conferred on the Collateral Agent and the Secured Parties
hereunder are solely to protect the Collateral Agent’s and the Secured Parties’
interests in the Collateral and shall not impose any duty upon the Collateral
Agent or any Secured Party to exercise any such powers. The Collateral Agent and
the Secured Parties shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of
their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.

 

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Execution of Financing Statements. Pursuant to any applicable law, each Grantor
authorizes the Collateral Agent to file or record financing statements and other
filing or recording documents or instruments with respect to the Collateral
without the signature of such Grantor in such form and in such offices as the
Collateral Agent determines appropriate to perfect the security interests of the
Collateral Agent under this Agreement. Each Grantor authorizes the Collateral
Agent to use the collateral description “all personal property” in any such
financing statements. Each Grantor hereby ratifies and authorizes the filing by
the Collateral Agent of any financing statement with respect to the Collateral
made prior to the date hereof.

Authority of Collateral Agent. Each Grantor acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect to
any action taken by the Collateral Agent or the exercise or non-exercise by the
Collateral Agent of any option, voting right, request, judgment or other right
or remedy provided for herein or resulting or arising out of this Agreement
shall, as between the Collateral Agent and the Secured Parties, be governed by
the Intercreditor Agreement and/or relevant First Lien Documents, and by such
other agreements with respect thereto as may exist from time to time among any
of them, but, as between the Collateral Agent and the Grantors, the Collateral
Agent shall be conclusively presumed to be acting as agent for the Secured
Parties with full and valid authority so to act or refrain from acting, and no
Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.

Intercreditor Agreement. Each party hereto (and each Secured Party) acknowledges
and agrees that the Collateral Agent may act in accordance with, and shall be
required to take certain actions as required by, the terms of the Intercreditor
Agreement. Each of the parties hereto (and each Secured Party) acknowledges and
agrees that any such actions shall be permitted, and further agrees that in the
event of a conflict between the provisions of this Agreement and the
Intercreditor Agreement, the relevant provisions of the Intercreditor Agreement
shall control. The parties hereto (and each Secured Party) also acknowledge and
agree that the Collateral Agent shall have the benefit of the provisions
contained in the Intercreditor Agreement (including Article V thereof).

Miscellaneous

Amendments in Writing. None of the terms or provisions of this Agreement may be
waived, amended, supplemented or otherwise modified except in accordance with
Section 9.1 of the Credit Agreement and Section 8.1 of the Intercreditor
Agreement.

Notices. All notices, requests and demands to or upon the Collateral Agent or
any Grantor hereunder shall be effected in the manner provided for in
Section 8.6 of the Intercreditor Agreement.

No Waiver by Course of Conduct; Cumulative Remedies. Neither the Collateral
Agent nor any Secured Party shall by any act (except by a written instrument
pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Default
or Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Collateral Agent or any Secured Party

 

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any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Collateral Agent, any Lender or any
Bridge Loan Lender of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Collateral Agent or
such Secured Party would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.

Enforcement Expenses; Indemnification. i) Each Guarantor agrees to pay or
reimburse each Secured Party and the Collateral Agent for all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other First Lien Documents to which such Guarantor is a
party, including, without limitation, the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to each Secured
Party and of counsel to the Collateral Agent.

Each Guarantor agrees to pay, and to save the Collateral Agent and the Secured
Parties harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes which
may be payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Agreement.

Each Guarantor agrees to pay, and to save the Collateral Agent and the Secured
Parties harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Borrower
would be required to do so pursuant to Section 9.5 of the Credit Agreement,
Section 9.5 of the Bridge Loan Agreement or the relevant provisions of any other
First Lien Document.

The agreements in this Section 8.4 shall survive repayment of the Obligations
and all other amounts payable under the First Lien Documents.

Successors and Assigns. This Agreement shall be binding upon the successors and
assigns of each Grantor and shall inure to the benefit of the Collateral Agent
and the Secured Parties and their successors and assigns; provided that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Collateral Agent.

Set-Off; Limitation on Individual Actions. (a) In addition to any rights and
remedies of the Secured Parties provided by law, each Secured Party shall have
the right, without notice to any Grantor, any such notice being expressly waived
by each Grantor to the extent permitted by applicable law, upon any Obligations
becoming due and payable by any Grantor (whether at the stated maturity, by
acceleration or otherwise), to apply to the payment of such Obligations, by
setoff or otherwise, any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any

 

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currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Secured Party, any
affiliate thereof or any of their respective branches or agencies to or for the
credit or the account of such Grantor. Each Secured Party agrees promptly to
notify in writing the relevant Grantor and the Collateral Agent after any such
application made by such Secured Party, provided that the failure to give such
notice shall not affect the validity of such application.

(b) NOTWITHSTANDING THE FOREGOING SUBSECTION (a) OR ANY CONTRARY PROVISION
CONTAINED IN ANY FIRST LIEN DOCUMENT, AT ANY TIME THAT ANY OBLIGATION SHALL BE
SECURED BY ANY INTEREST IN ANY REAL PROPERTY LOCATED IN CALIFORNIA, NO SECURED
PARTY (OTHER THAN THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT OR THE BRIDGE
LOAN AGENT) SHALL EXERCISE ANY REMEDIES AGAINST ANY LOAN PARTY OR ANY PROPERTY
THEREOF, INCLUDING WITHOUT LIMITATION, A RIGHT OF SETOFF, LIEN OR COUNTERCLAIM
OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY PROCEEDING TO
ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY SECURITY DOCUMENT OR ANY FIRST
LIEN DOCUMENT (ALTHOUGH A SECURED PARTY CAN ACCELERATE THE MATURITY OF ANY FIRST
LIEN DEBT IN ACCORDANCE WITH THE TERMS OF THE RESPECTIVE FIRST LIEN DOCUMENT)
UNLESS IT IS TAKEN PURSUANT TO AN “ACT OF REQUIRED DEBT HOLDERS” (AS DEFINED IN
THE INTERCREDITOR AGREEMENT) OR APPROVED IN WRITING BY THE COLLATERAL AGENT;
PROVIDED THAT IF REPUTABLE OUTSIDE CALIFORNIA COUNSEL TO SUCH SECURED PARTY
PROVIDES ITS WRITTEN LEGAL OPINION (WITHOUT ANY MATERIAL QUALIFICATION OR
EXCEPTION) TO THE EFFECT THAT SUCH SETOFF OR ACTION OR PROCEEDING WOULD NOT
(PURSUANT TO APPLICABLE CALIFORNIA STATE LAW, INCLUDING, WITHOUT LIMITATION,
SECTIONS 580a, 580b, 580d AND 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR
SECTION 2924 OF THE CALIFORNIA CIVIL CODE, IF APPLICABLE) ADVERSELY AFFECT OR
IMPAIR THE VALIDITY, PRIORITY OR ENFORCEABILITY OF THE LIENS GRANTED TO THE
COLLATERAL AGENT PURSUANT TO THE SECURITY DOCUMENTS OR THE ENFORCEABILITY OF THE
OBLIGATIONS UNDER THE OTHER FIRST LIEN DOCUMENTS, THEN SUCH ACTION MAY BE TAKEN
OR COMMENCED SO LONG AS THE RESPECTIVE SECURED PARTY PROVIDES AT LEAST FIVE
BUSINESS DAYS’ ADVANCE WRITTEN NOTICE THEREOF TO THE COLLATERAL AGENT (TOGETHER
WITH A COPY OF THE RESPECTIVE OPINION OF CALIFORNIA COUNSEL). ANY ATTEMPTED
EXERCISE BY ANY SECURED PARTY OF ANY SUCH RIGHT IN CONTRAVENTION OF THE
FOREGOING PROVISIONS SHALL BE NULL AND VOID. THIS SUBSECTION (b) SHALL BE SOLELY
FOR THE BENEFIT OF EACH OF THE SECURED PARTIES AND THE COLLATERAL AGENT, AND MAY
BE AMENDED BY AN “ACT OF REQUIRED DEBT HOLDERS”.

Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including by electronic
transmission or telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

 

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Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

Integration. This Agreement, the Intercreditor Agreement and the other First
Lien Documents represent the entire agreement of the Grantors, the Collateral
Agent and the Secured Parties with respect to the subject matter hereof and
thereof, and there are no promises, undertakings, representations or warranties
by the Collateral Agent or any Secured Party relative to subject matter hereof
and thereof not expressly set forth or referred to herein, in the Intercreditor
Agreement or in the other First Lien Documents.

GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:

submits for itself and its property in any legal action or proceeding relating
to this Agreement, the Intercreditor Agreement and the other First Lien
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;

consents that any such action or proceeding may be brought in such courts and
waives any objection that it may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding was
brought in an inconvenient court and agrees not to plead or claim the same;

agrees that service of process in any such action or proceeding may be effected
by mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such Grantor at its address referred
to in Section 8.2 or at such other address of which the Collateral Agent shall
have been notified pursuant thereto;

agrees that nothing herein shall affect the right to effect service of process
in any other manner permitted by law or shall limit the right to sue in any
other jurisdiction;

 

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waives, to the maximum extent not prohibited by law, any right it may have to
claim or recover in any legal action or proceeding referred to in this Section
any special, exemplary, punitive or consequential damages;

acknowledges and affirms that it understands that to the extent the Obligations
are secured by real property located in the State of California, such Grantor
shall be liable for the full amount of the liability hereunder notwithstanding
foreclosure on such real property by trustee sale or any other reason impairing
such Grantor’s or any Secured Parties’ right to proceed against the Borrower or
any other Grantor;

waives (to the fullest extent permitted by applicable law) all rights and
defenses under Section 580a, 580b, 580d and 726 of the California Code of Civil
Procedure;

waives (to the fullest extent permitted by applicable law), without limiting the
generality of the foregoing or any other provision hereof, all rights and
defenses which might otherwise be available to such Grantor under Sections 2809,
2810, 2815, 2819, 2821, 2839, 2845, 2848, 2849, 2850, 2899 and 3433 of the
California Civil Code; and

waives, until the Obligations have been paid in full in cash, its rights of
subrogation and reimbursement and any other rights and defenses, in each case
available to such Grantor by reason of Sections 2787 to 2855, inclusive, of the
California Civil Code because the Obligations are secured by real property,
including, without limitation, (1) any defenses such Grantor may have to the
guarantee provided under this Agreement by reason of an election of remedies by
the Secured Parties and (2) any rights or defenses such Grantor may have by
reason of protection afforded to the Borrower or any other Grantor pursuant to
the antideficiency or other laws of California limiting or discharging the
Borrower’s or such Grantor’s indebtedness, including, without limitation,
Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure. In
furtherance of such provisions, each Grantor hereby waives all rights and
defenses arising out of an election of remedies by the Secured Parties, even
though that election of remedies, such as a nonjudicial foreclosure, destroys
such Grantor’s rights of subrogation and reimbursement against the Borrower or
any other Grantor by the operation of Section 580d of the California Code of
Civil Procedure or otherwise.

Acknowledgements. Each Grantor hereby acknowledges that:

it has been advised by counsel in the negotiation, execution and delivery of
this Agreement, the Intercreditor Agreement and the other First Lien Documents
to which it is a party;

neither the Collateral Agent nor any Secured Party has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement, the Intercreditor Agreement or any other First Lien Documents,
and the relationship between the Grantors, on the one hand, and the Collateral
Agent and the Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

 

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no joint venture is created hereby, by the Intercreditor Agreement or the other
First Lien Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Secured Parties or among the Grantors and the
Secured Parties.

Additional Grantors; Release of Guarantors; Releases of Collateral;. (a) Each
Subsidiary of the Borrower that is required to become a party to this Agreement
pursuant to the relevant provision of any First Lien Documents shall become a
Grantor (and a Guarantor) for all purposes of this Agreement upon execution and
delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1
hereto.

(b) Non-Borrower Guarantors shall be released from this Agreement to the extent
provided below, in each case at the request and expense of the Borrower:

(i) A Non-Borrower Guarantor shall be released from its obligations hereunder in
the event that all the Capital Stock of such Non-Borrower Guarantor shall be
sold, transferred or otherwise disposed of (in each case to a Person other than
the Borrower or a Subsidiary) in a transaction permitted by all then effective
First Lien Documents; provided that the Borrower shall have delivered to the
Collateral Agent, at least three Business Days prior to the date of the proposed
release, a written request for release identifying the relevant Non-Borrower
Guarantor and the terms of the sale or other disposition in reasonable detail,
including the price thereof and any expenses in connection therewith, together
with a certification by the Borrower stating that such transaction is in
compliance with all then effective First Lien Documents.

(ii) A Non-Borrower Guarantor shall be released from its obligations hereunder
in the event that (1) same is subsequently designated as a “Designated Project
Subsidiary” under, and as defined in, the Existing Credit Agreement as
originally in effect (including the related relevant provisions), as such
provisions may be amended, modified, replaced or supplemented from time to time,
but in the case of any amendment, modification, replacement or supplement to the
terms originally applicable in the Existing Credit Agreement, the respective
designation and release of the respective Non-Borrower Subsidiary as a Guarantor
hereunder shall not violate the terms of any other First Lien Documents then in
effect and (2) the Borrower has delivered an Officer’s Certificate to the
Collateral Agent stating that the release is permitted pursuant to this clause
(ii) and providing in reasonable detail the supporting calculations in
determining that the respective Non-Borrower Guarantor may be designated as a
Designated Project Subsidiary.

(iii) One or more Non-Borrower Guarantors may be released from their obligations
hereunder at any time if (1) consent to release of such Non-Borrower Guarantors
has been given by the requisite percentage or number of holders of each Series
of First Lien Debt (used hereinafter as defined in the Intercreditor Agreement)
at the time outstanding as provided for in the applicable First Lien Documents,
(2) each First Lien Representative (as defined in the Intercreditor Agreement)
for each Series of First Lien Debt (which shall be identified in the Officer’s
Certificate described in clause (3)) shall have notified the

 

30

--------------------------------------------------------------------------------

Collateral Agent that the consent for its respective Series of First Lien Debt
(as defined in the Intercreditor Agreement) has been obtained and (3) the
Borrower has delivered an Officer’s Certificate to the Collateral Agent
certifying as to the consents of the holders of each Series of First Lien Debt
that are necessary for such release and that any such necessary consents have
been obtained.

(iv) In connection with any release of any Non-Borrower Guarantor pursuant to
this Section 8.14, the Collateral Agent shall execute and deliver to the
Borrower, at the Borrower’s expense, all documents that the Borrower shall
reasonably request to evidence such release. Any execution and delivery of
documents pursuant to this Section 8.14 shall be without recourse to or warranty
by the Collateral Agent.

Releases of Collateral shall be effected in accordance with the relevant
provisions of Section 4.1 of the Intercreditor Agreement

WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE
INTERCREDITOR AGREEMENT OR ANY OTHER FIRST LIEN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.

[remainder of page intentionally left blank]

 

31

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.

 

CALPINE CORPORATION. By:  

/s/ Charles B. Clark, Jr.

Name:   Charles B. Clark, Jr. Title:   Senior Vice President

THE GUARANTORS SET FORTH ON

ANNEX I TO THIS SIGNATURE PAGE:

By:  

/s/ Charles B. Clark, Jr.

Name:   Charles B. Clark, Jr. Title:   Chief Financial Officer

--------------------------------------------------------------------------------

ANNEX I to

Guarantee and Collateral Agreement

 

GUARANTORS

   IDENTIFIED AS
GRANTOR

Anacapa Land Company, LLC

   ü

Anderson Springs Energy Company

   ü

Androscoggin Energy, Inc.

   ü

Antelope Energy Center, LLC

   ü

Auburndale Peaker Energy Center, LLC

   ü

Aviation Funding Corp.

   ü

Baytown Energy Center, LP

   ü

Baytown Power GP, LLC

   ü

Baytown Power, LP

   ü

Bellingham Cogen, Inc.

   ü

Bethpage Fuel Management Inc.

   ü

Blue Heron Energy Center, LLC

   ü

CalGen Equipment Finance Company, LLC

   ü

CalGen Equipment Finance Holdings, LLC

   ü

CalGen Expansion Company, LLC

   ü

CalGen Finance Corp.

   ü

CalGen Project Equipment Finance Company One, LLC

   ü

CalGen Project Equipment Finance Company Three, LLC

   ü

CalGen Project Equipment Finance Company Two, LLC

   ü

Calpine Acadia Holdings, LLC

   ü

Calpine Administrative Services Company, Inc.

   ü

Calpine Auburndale Holdings, LLC

   ü

Calpine Baytown Energy Center GP, LLC

   ü

Calpine Baytown Energy Center LP, LLC

   ü

Calpine c*Power, Inc.

   ü

Calpine CalGen Holdings, Inc.

   ü

Calpine California Development Company, LLC

   ü

Calpine California Energy Finance, LLC

   ü

Calpine California Holdings, Inc.

   ü

Calpine Calistoga Holdings, LLC

   ü

Calpine CCFC Holdings, Inc.

   ü

Calpine Central Texas GP, Inc.

   ü

--------------------------------------------------------------------------------

GUARANTORS

   IDENTIFIED AS
GRANTOR

Calpine Central, Inc.

   ü

Calpine Central, L.P.

   ü

Calpine Central-Texas, Inc.

   ü

Calpine Channel Energy Center GP, LLC

   ü

Calpine Channel Energy Center LP, LLC

   ü

Calpine Clear Lake Energy GP, LLC

   ü

Calpine Clear Lake Energy, LP

   ü

Calpine Cogeneration Corporation

   ü

Calpine Construction Management Company, Inc.

   ü

Calpine Corporation

   ü

Calpine Corpus Christi Energy GP, LLC

   ü

Calpine Corpus Christi Energy, LP

   ü

Calpine Decatur Pipeline, Inc.

   ü

Calpine Decatur Pipeline, L.P.

   ü

Calpine Deer Park, LLC

   ü

Calpine Dighton, Inc.

   ü

Calpine East Fuels, Inc.

   ü

Calpine Eastern Corporation

   ü

Calpine Edinburg, Inc.

   ü

Calpine Energy Management, L.P.

   No

Calpine Energy Services Holdings, Inc.

   ü

Calpine Energy Services, L.P.

   No

Calpine Freestone Energy GP, LLC

   ü

Calpine Freestone Energy, LP

   ü

Calpine Freestone, LLC

   ü

Calpine Fuels Corporation

   ü

Calpine Gas Holdings LLC

   ü

Calpine Generating Company, LLC

   ü

Calpine Geysers Company, L.P.

   ü

Calpine Gilroy 1, Inc.

   ü

Calpine Gilroy 2, Inc.

   ü

Calpine Global Services Company, Inc.

   ü

Calpine Gordonsville GP Holdings, LLC

   ü

 

2

--------------------------------------------------------------------------------

GUARANTORS

   IDENTIFIED AS
GRANTOR

Calpine Gordonsville LP Holdings, LLC

   ü

Calpine Gordonsville, LLC

   ü

Calpine Hidalgo Design, L.P.

   ü

Calpine Hidalgo Energy Center, L.P.

   ü

Calpine Hidalgo Holdings, Inc.

   ü

Calpine Hidalgo Power GP, LLC

   ü

Calpine Hidalgo Power, LP

   ü

Calpine Hidalgo, Inc.

   ü

Calpine Jupiter, LLC

   ü

Calpine Kennedy Airport, Inc.

   ü

Calpine Kennedy Operators, Inc.

   ü

Calpine KIA, Inc.

   ü

Calpine King City, Inc.

   ü

Calpine King City, LLC

   ü

Calpine Leasing Inc.

   ü

Calpine Long Island, Inc.

   ü

Calpine Lost Pines Operations, Inc.

   ü

Calpine Magic Valley Pipeline, Inc.

   ü

Calpine Merchant Services Company, Inc.

   No

Calpine MVP, Inc.

   ü

Calpine NCTP GP, LLC

   ü

Calpine NCTP, LP

   ü

Calpine Newark, LLC

   ü

Calpine Northbrook Corporation of Maine, Inc.

   ü

Calpine Northbrook Holdings Corporation

   ü

Calpine Northbrook Investors, LLC

   ü

Calpine Northbrook Project Holdings, LLC

   ü

Calpine Northbrook Southcoast Investors, LLC

   ü

Calpine NTC, LP

   ü

Calpine Oneta Power I, LLC

   ü

Calpine Oneta Power II LLC

   ü

Calpine Oneta Power, L.P.

   ü

Calpine Operating Services Company, Inc.

   ü

 

3

--------------------------------------------------------------------------------

GUARANTORS

   IDENTIFIED AS
GRANTOR

Calpine Operations Management Company, Inc.

   ü

Calpine Parlin, LLC

   ü

Calpine Power Company

   ü

Calpine Power Equipment LP

   ü

Calpine Power Management, Inc.

   No

Calpine Power Management, LP

   No

Calpine Power Services, Inc.

   ü

Calpine Power, Inc.

   ü

Calpine PowerAmerica, Inc.

   No

Calpine PowerAmerica, LP

   No

Calpine PowerAmerica-CA, LLC

   No

Calpine PowerAmerica-CT, LLC

   No

Calpine PowerAmerica-MA, LLC

   No

Calpine PowerAmerica-ME, LLC

   No

Calpine PowerAmerica-NH, LLC

   No

Calpine PowerAmerica-NY, LLC

   No

Calpine PowerAmerica-OR, LLC

   No

Calpine PowerAmerica-PA, LLC

   No

Calpine PowerAmerica-RI, LLC

   No

Calpine Producer Services, L.P.

   No

Calpine Project Holdings, Inc.

   ü

Calpine Pryor, Inc.

   ü

Calpine Rumford I, Inc.

   ü

Calpine Rumford, Inc.

   ü

Calpine Russell City, LLC

   ü

Calpine Schuylkill, Inc.

   ü

Calpine Sonoran Pipeline LLC

   ü

Calpine Stony Brook Operators, Inc.

   ü

Calpine Stony Brook, Inc.

   ü

Calpine Sumas, Inc.

   ü

Calpine TCCL Holdings, Inc.

   ü

Calpine Texas Pipeline GP, Inc.

   ü

Calpine Texas Pipeline LP, Inc.

   ü

Calpine Texas Pipeline, L.P.

   ü

 

4

--------------------------------------------------------------------------------

GUARANTORS

   IDENTIFIED AS
GRANTOR

Calpine Tiverton I, Inc.

   ü

Calpine Tiverton, Inc.

   ü

Calpine University Power, Inc.

   ü

Calpine Vapor, Inc.

   ü

Carville Energy LLC

   ü

CCFC Development Company, LLC

   ü

CCFC Equipment Finance Company, LLC

   ü

CCFC Project Equipment Finance Company One, LLC

   ü

CES GP, LLC

   No

CES Marketing IX, LLC

   No

CES Marketing V, L.P.

   No

CES Marketing X, LLC

   No

CGC Dighton, LLC

   ü

Channel Energy Center, LP

   ü

Channel Power GP, LLC

   ü

Channel Power, LP

   ü

Clear Lake Cogeneration Limited Partnership

   ü

Columbia Energy LLC

   ü

Corpus Christi Cogeneration LP

   ü

CPN 3rd Turbine, Inc.

   ü

CPN Acadia, Inc.

   ü

CPN Cascade, Inc.

   ü

CPN Clear Lake, Inc.

   ü

CPN Decatur Pipeline, Inc.

   ü

CPN East Fuels, LLC

   ü

CPN Energy Services GP, Inc.

   No

CPN Energy Services LP, Inc.

   No

CPN Freestone, LLC

   ü

CPN Funding, Inc.

   ü

CPN Morris, Inc.

   ü

CPN Oxford, Inc.

   ü

CPN Pipeline Company

   ü

CPN Pleasant Hill Operating, LLC

   ü

CPN Pleasant Hill, LLC

   ü

 

5

--------------------------------------------------------------------------------

GUARANTORS

   IDENTIFIED AS
GRANTOR

CPN Pryor Funding Corporation

   ü

CPN Telephone Flat, Inc.

   ü

Decatur Energy Center, LLC

   ü

Delta Energy Center, LLC

   ü

Dighton Power Associates Limited Partnership

   ü

East Altamont Energy Center, LLC

   ü

Fond du Lac Energy Center, LLC

   ü

Fontana Energy Center, LLC

   ü

Freestone Power Generation, LP

   ü

GEC Bethpage Inc.

   ü

Geothermal Energy Partners, LTD.

   ü

Geysers Power Company II, LLC

   ü

Geysers Power Company, LLC

   ü

Geysers Power I Company

   ü

Hillabee Energy Center, LLC

   ü

Idlewild Fuel Management Corp.

   ü

JMC Bethpage, Inc.

   ü

Lone Oak Energy Center, LLC

   ü

Los Esteros Critical Energy Facility, LLC

   ü

Los Medanos Energy Center LLC

   ü

Magic Valley Gas Pipeline GP, LLC

   ü

Magic Valley Gas Pipeline, LP

   ü

Magic Valley Pipeline, L.P.

   ü

MEP Pleasant Hill, LLC

   ü

Moapa Energy Center, LLC

   ü

Mobile Energy LLC

   ü

Modoc Power, Inc.

   ü

Morgan Energy Center, LLC

   ü

NewSouth Energy LLC

   ü

Northwest Cogeneration, Inc.

   ü

NRG Parlin Inc.

   ü

NTC Five, Inc.

   ü

NTC GP, LLC

   ü

 

6

--------------------------------------------------------------------------------

GUARANTORS

   IDENTIFIED AS
GRANTOR

Nueces Bay Energy LLC

   ü

Pastoria Energy Center, LLC

   ü

Pastoria Energy Facility, L.L.C.

   ü

Pine Bluff Energy, LLC

   ü

RockGen Energy LLC

   ü

Rumford Power Associates Limited Partnership

   ü

San Joaquin Valley Energy Center, LLC

   ü

Santa Rosa Energy Center, LLC

   ü

Silverado Geothermal Resources, Inc.

   ü

Skipanon Natural Gas, LLC

   ü

Stony Brook Cogeneration, Inc.

   ü

Stony Brook Fuel Management Corp.

   ü

Sutter Dryers, Inc.

   ü

Texas City Cogeneration, L.P.

   ü

Texas Cogeneration Company

   ü

Texas Cogeneration Five, Inc.

   ü

Texas Cogeneration One Company

   ü

Thermal Power Company

   ü

Thomassen Turbine Systems America, Inc.

   ü

Tiverton Power Associates Limited Partnership

   ü

Wawayanda Energy Center, LLC

   ü

Westbrook, L.L.C.

   ü

Whatcom Cogeneration Partners, L.P.

   ü

Zion Energy LLC

   ü

 

7

--------------------------------------------------------------------------------

Accepted and Agreed to:

GOLDMAN SACHS CREDIT PARTNERS

L.P., as Collateral Agent

By:  

/s/ Bruce H. Mendelsohn

Name:   Bruce H. Mendelsohn Title:   Authorized Signatory

--------------------------------------------------------------------------------

Schedule 1

NOTICE ADDRESSES FOR ALL THE GUARANTORS

Calpine Corporation

50 West San Fernando Street

San Jose, CA 95113

Attention: Chief Financial Officer

Telecopier No.: 408-995-0505

with copies (which shall not constitute notice) to:

50 West San Fernando Street

San Jose, CA 95113

Attention: General Counsel

Telecopier No.: 408-995-0505

Kirkland & Ellis LLP

Citigroup Center

153 East 53rd Street

New York, NY 10022

Attention: Rick Cieri, Esq. and Yongjin Im, Esq.

Telecopier No.: 212-446-4900

--------------------------------------------------------------------------------

Schedule 2

DESCRIPTION OF INVESTMENT PROPERTY

Pledged Stock

 

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

Anderson Springs Energy Company   CGC Dighton, LLC  

LLC Membership

Interest

  100%   100% / 100%   1 Anderson Springs Energy Company   Thermal Power Company
  Common Stock   4,787,586   100% / 100%   6 Aviation Funding Corp   KIAC
Partners   Partnership Interest   50%   50% / 50%  

No Certificate

Issued

[n]

Baytown Power GP, LLC   Baytown Power, LP  

Limited Partnership

Interest

  1%   1% / 1%  

1

[y]

Baytown Power, LP   Baytown Energy Center, LP   Limited Partnership Interest  
99%   99% / 99%  

3

[y]

Bellingham Cogen, Inc.   Whatcom Cogeneration Partners, L.P.   Limited
Partnership Interest   25%   25% / 25%  

No Certificate

Issued

[n]

CalGen Equipment Finance Company, LLC   CalGen Project Equipment Finance Company
One, LLC   LLC Membership Interest   100%   100% / 100%  

2

[y]

CalGen Equipment

Finance Company, LLC

  CalGen Project Equipment Finance Company Two, LLC   LLC Membership Interest  
100%   100% / 100%  

1

[y]

CalGen Equipment

Finance Company, LLC

  CalGen Project Equipment Finance Company Three, LLC   LLC Membership Interest
  100%   100% / 100%  

1

[y]

CalGen Equipment

Finance Holdings, LLC

  CalGen Equipment Finance Company, LLC   LLC Membership Interest   100%  
100% / 100%  

1

[y]

CalGen Expansion Company, LLC   CalGen Equipment Finance Holdings, LLC   LLC
Membership Interest   100%   100% / 100%  

2

[y]

CalGen Expansion Company, LLC   Calpine Baytown Energy Center GP, LLC   LLC
Membership Interest   100%   100% / 100%  

1

[y]

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

CalGen Expansion Company, LLC   Calpine Baytown Energy Center LP, LLC  
LLC Membership Interest   100%   100% / 100%  

2

[y]

CalGen Expansion Company, LLC   Calpine Channel Energy Center GP, LLC   LLC
Membership Interest   100%   100% / 100%  

2

[y]

CalGen Expansion Company, LLC  

Calpine Channel

Energy Center LP, LLC

  LLC Membership Interest   100%   100% / 100%  

2

[y]

CalGen Expansion Company, LLC   Calpine Freestone, LLC   LLC Membership Interest
  100%   100% / 100%  

1

[y]

CalGen Expansion Company, LLC   Calpine Northbrook Southcoast Investors, LLC  
LLC Membership Interest   100%   100% / 100%  

1

[y]

CalGen Expansion Company, LLC   Calpine Oneta Power I, LLC   LLC Membership
Interest   100%   100% / 100%  

2

[y]

CalGen Expansion Company, LLC  

Calpine Oneta Power II,

LLC

  LLC Membership Interest   100%   100% / 100%  

2

[y]

CalGen Expansion Company, LLC   Carville Energy LLC   LLC Membership Interest  
100%   100% / 100%  

2

[y]

CalGen Expansion Company, LLC   Columbia Energy LLC   LLC Membership Interest  
100%   100% / 100%  

1

[y]

CalGen Expansion Company, LLC   CPN Freestone, LLC   LLC Membership Interest  
100%   100% / 100%  

1

[y]

CalGen Expansion Company, LLC   Decatur Energy Center, LLC   LLC Membership
Interest   100%   100% / 100%  

2

[y]

CalGen Expansion Company, LLC   Delta Energy Center, LLC   LLC Membership
Interest   100%   100% / 100%  

5

[y]

CalGen Expansion Company, LLC   Los Medanos Energy Center LLC   LLC Membership
Interest   100%   100% / 100%  

2

[y]

CalGen Expansion Company, LLC   Morgan Energy Center, LLC   LLC Membership
Interest   100%   100% / 100%  

2

[y]

CalGen Expansion Company, LLC  

Nueces Bay Energy

LLC

  LLC Membership Interest   100%   100% / 100%  

1

[y]

CalGen Expansion Company, LLC   Zion Energy LLC   LLC Membership Interest   100%
  100% / 100%  

1

[y]

Calpine Acadia Holdings, LLC   Acadia Power Partners, LLC   LLC Membership
Interest   50%   50% / 50%  

No Certificate

Issued

[n]

Calpine Administrative Services Company, Inc.   Calpine c*Power, Inc.   Common
Stock   1,000   100% / 100%   2

 

2

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

Calpine Auburndale Holdings, LLC   Auburndale Peaker Energy Center, LLC   LLC
Membership Interest   100%   100% / 100%  

3

y

Calpine Baytown Energy Center GP, LLC   Baytown Energy Center, LP   Limited
Partnership Interest   1%   1% / 1%  

2

[y]

Calpine Baytown Energy Center LP, LLC   Baytown Power GP, LLC   LLC Membership
Interest   100%   100% / 100%  

1

[y]

Calpine Baytown Energy Center LP, LLC   Baytown Power, LP   Limited Partnership
Interest   99%   99% / 99%  

2

[y]

Calpine CalGen Holdings, Inc.   Calpine Generating Company, LLC   LLC Membership
Interest   100%   100% / 100%1  

12

[y]

Calpine California Energy Finance, LLC   Calpine California Development Company,
LLC   LLC Membership Interest   100%   100% / 100%  

1

[y]

Calpine California Holdings, Inc.   Calpine Peaker Holdings, LLC   LLC
Membership Interest   50.6%   50.6% / 50.6%  

No Certificate

Issued

[n]

Calpine Calistoga Holdings, LLC   Silverado Geothermal Resources, Inc.   Common
Stock   1,000   100% / 100%   3 Calpine CCFC Holdings, Inc.   CCFC Preferred
Holdings, LLC   LLC Membership Interest   100%   100% / 100%  

1

[y]

Calpine Central Texas GP, Inc.   Calpine Central, L.P.   Limited Partnership
Interest   1%   1% / 1%  

No Certificate

Issued

[n]

Calpine Central, Inc.   Calpine Central Texas GP, Inc.   Common Stock   1,000  
100% / 100%   1 Calpine Central, Inc.   Calpine Central-Texas, Inc.   Common
Stock   1,000   100% / 100%  

No Certificate

Issued

Calpine Central, Inc.   Calpine Hidalgo Holdings, Inc.   Common Stock   1,000  
100% / 100%   1 Calpine Central, Inc.   Calpine Lost Pines Operations, Inc.  
Common Stock   1,000   100% / 100%   1 Calpine Central, Inc.   Calpine TCCL
Holdings, Inc.   Common Stock   1,000   100% / 100%   1

 

1

Subject to prior pledge to Wilmington Trust Company, as Collateral Agent, under
the Membership Interest Pledge Agreement, dated March 23, 2004, between Calpine
CalGen Holdings, Inc., Calpine Generating Company, LLC and Wilmington Trust
Company.

2

Physical certificates will not be delivered at the Closing Date as these are
have been previously pledged.

 

3

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

Calpine Central, L.P.   CPN Pleasant Hill, LLC   LLC Membership Interest   100%
  100% / 100%  

No Certificate

Issued

[n]

Calpine Central-Texas,

Inc.

  Calpine Central, L.P.   Limited Partnership Interest   99%   99% / 99%  

No Certificate

Issued

[n]

Calpine Channel Energy Center GP, LLC   Channel Energy Center, LP   Limited
Partnership Interest   1%   1% / 1%  

1

[y]

Calpine Channel Energy Center LP, LLC   Channel Power GP, LLC   LLC Membership
Interest   100%   100% / 100%  

1

[y]

Calpine Channel Energy Center LP, LLC   Channel Power, LP   Limited Partnership
Interest   99%   99% / 99%  

2

[y]

Calpine Clear Lake Energy GP, LLC   Calpine Clear Lake Energy, LP   Limited
Partnership Interest   1%   1% / 1%  

No Certificate

Issued

[n]

Calpine Clear Lake Energy, LP   Clear Lake Cogeneration Limited Partnership  
Limited Partnership Interest   98%   98% / 98%  

No Certificate

Issued

[n]

Calpine Cogeneration Corporation   Calpine Philadelphia, Inc.   Common Stock  
1,000   100% / 100%   1 Calpine Cogeneration Corporation   Calpine Pryor, Inc.  
Common Stock   100   100% / 100%   3 Calpine Cogeneration Corporation   Calpine
Schuylkill, Inc.   Common Stock   100   50% / 50%   3 Calpine Cogeneration
Corporation   CPN Funding, Inc.   Common Stock   1,000   100% / 100%   1 Calpine
Cogeneration Corporation   Philadelphia Biogas Supply, Inc.   Common Stock  
1,000   100% / 100%   3 Calpine Corporation   Androscoggin Energy, Inc.   Common
Stock   1,000   100% / 100%1   52 Calpine Corporation   Calpine Administrative
Services Company, Inc.   Common Stock   1,000   100% / 100%3   21

 

1

Subject to prior pledge to The Bank of New York, as Collateral Trustee, under
the Second Amendment Pledge Agreement, dated July 16, 2003, including all
attachments and amendments thereto.

2

Physical certificates will not be delivered on the Closing Date as these are
have been previously pledged.

3

Subject to prior pledge to The Bank of New York, as Collateral Trustee, under
the Second Amendment Pledge Agreement, dated July 16, 2003, including all
attachments and amendments thereto.

 

4

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

Calpine Corporation   Calpine Energy Services Holdings, Inc.   Common Stock  
100   100% / 100%2   23 Calpine Corporation   Calpine Fuels Corporation   Common
Stock   1,000   100% / 100%4   15 Calpine Corporation   Calpine Gas Holdings LLC
  LLC Membership Interest   100%   100% / 100%  

2

[y]

Calpine Corporation   Calpine Greenleaf Holdings, Inc.   Common Stock   1,000  
100% / 100%   1 Calpine Corporation   Calpine International Holdings, Inc.  
Common Stock   1,000   100% / 100%6   27 Calpine Corporation   Calpine Monterey
Cogeneration, Inc.   Common Stock   1,000   100% / 100%8   N/A9 Calpine
Corporation   Calpine Northbrook Corporation of Maine, Inc.   Common Stock  
1,000   100% / 100%10   111 Calpine Corporation   Calpine Operations Management
Company, Inc.   Common Stock   1,000   100% / 100%1213   214 Calpine Corporation
  Calpine Power Company   Common Stock   1,000   100% / 100%1   12

 

1

Physical certificates will not be delivered on the Closing Date as these are
have been previously pledged.

2

Subject to prior pledge to The Bank of New York, as Collateral Trustee, under
the Second Amendment Pledge Agreement, dated July 16, 2003, including all
attachments and amendments thereto.

3

Physical certificates will not be delivered on the Closing Date as these are
have been previously pledged.

4

Subject to prior pledge to The Bank of New York, as Collateral Trustee, under
the Second Amendment Pledge Agreement, dated July 16, 2003, including all
attachments and amendments thereto.

5

Physical certificates will not be delivered on the Closing Date as these are
have been previously pledged.

6

Subject to prior pledge to The Bank of New York, as Collateral Trustee, under
the Second Amendment Pledge Agreement, dated July 16, 2003, including all
attachments and amendments thereto.

7

Physical certificates will not be delivered on the Closing Date as these are
have been previously pledged.

8

Subject to prior pledge to State Street Bank and Trust Company of California,
N.A. under the Stock Pledge Agreement, dated June 22, 1995.

9

Physical certificates will not be delivered on the Closing Date as these are
have been previously pledged.

10

Subject to prior pledge to The Bank of New York, as Collateral Trustee, under
the Second Amendment Pledge Agreement, dated July 16, 2003 including all
attachments and amendments thereto.

11

Physical certificates will not be delivered on the Closing Date as these are
have been previously pledged.

12

Subject to prior pledge to The Bank of New York, as Collateral Trustee, under
the Second Amendment Pledge Agreement, dated July 16, 2003, including all
attachments and amendments thereto.

13

Subject to prior pledge to The Bank of New York, as Collateral Trustee, under
the Second Amendment Pledge Agreement, dated July 16, 2003, including all
attachments and amendments thereto.

14

Physical certificates will not be delivered on the Closing Date as these are
have been previously pledged.

 

5

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

Calpine Corpus Christi Energy GP, LLC   Calpine Corpus Christi Energy, LP  
Limited Partnership Interest   1%   1% / 1%  

1

[y]

Calpine Corpus Christi Energy, LP   Corpus Christi Cogeneration LP   Limited
Partnership Interest   99%   99% / 99%  

3

[y]

Calpine Decatur Pipeline, Inc.   Calpine Decatur Pipeline, L.P.   Limited
Partnership Interest   1%   1% / 1%  

No Certificate

Issued

[n]

Calpine East Fuels, Inc.   CPN East Fuels, LLC   LLC Membership Interest   100%
  100% / 100%  

No Certificate

Issued

[n]

Calpine Eastern Corporation   Aviation Funding Corp.   Common Stock   42  
100% / 100%   3 Calpine Eastern Corporation   Bethpage Fuel Management Inc.  
Common Stock   10   100% / 100%   2 Calpine Eastern Corporation   Calpine Power,
Inc.   Common Stock   1,000   100% / 100%   3 Calpine Eastern Corporation   CPN
3rd Turbine, Inc.   Common Stock   1,000   100% / 100%   1 Calpine Eastern
Corporation   CPN Bethpage 3rd Turbine, Inc.   Common Stock   1,000  
100% / 100%   1 Calpine Eastern Corporation   GEC Bethpage Inc.   Common Stock  
100   100% / 100%   1 Calpine Eastern Corporation   Idlewild Fuel Management
Corp.   Common Stock   100   100% / 100%   2 Calpine Eastern Corporation   JMC
Bethpage, Inc.   Common Stock   10   100% / 100%   2 Calpine Eastern Corporation
  Stony Brook Cogeneration, Inc.   Common Stock   100   100% / 100%   1 Calpine
Eastern Corporation   Stony Brook Fuel Management Corp.   Common Stock   100  
100% / 100%   1 Calpine Eastern Corporation   TBG Cogen Partners   Partnership
Interest   45%   45% / 45%  

No Certificate

Issued

[n]

Calpine Edinburgh, Inc.   Calpine Hidalgo Power GP, LLC   LLC Membership
Interest   100%   100% / 100%  

1

[y]

 

1

Subject to prior pledge to The Bank of New York, as Collateral Trustee, under
the Second Amendment Pledge Agreement, dated July 16, 2003, including all
attachments and amendments thereto.

2

Physical certificates will not be delivered on the Closing Date as these are
have been previously pledged.

 

6

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

Calpine Edinburgh, Inc.   Calpine Hidalgo Design, L.P.   Limited Partnership
Interest   99%   99% / 99%  

No Certificate

Issued

[n]

Calpine Edinburgh, Inc.   Calpine Hidalgo Power, LP   Limited Partnership
Interest   99%   99% / 99%  

No Certificate

Issued

[n]

Calpine Energy Services Holdings, Inc.   Calpine Power Management, Inc.   Common
Stock   1,000   100% / 100%   1 Calpine Energy Services Holdings, Inc.   Calpine
PowerAmerica, Inc.   Common Stock   1,000   100% / 100%   2 Calpine Energy
Services Holdings, Inc.   CPN Energy Services GP, Inc.   Common Stock   1,000  
100% / 100%   4 Calpine Energy Services Holdings, Inc.   CPN Energy Services LP,
Inc.   Common Stock   1,000   100% / 100%   1 Calpine Freestone Energy GP, LLC  
Calpine Freestone Energy, LP   Limited Partnership Interest   1%   1% / 1%  

1

[y]

Calpine Freestone Energy, LP   Calpine Power Equipment LP   Limited Partnership
Interest   99%   99% / 99%  

3

[y]

Calpine Freestone Energy, LP   Freestone Power Generation LP   Limited
Partnership Interest   99%   99% / 99%  

4

[y]

Calpine Freestone, LLC   Calpine Power Equipment LP   Limited Partnership
Interest   1%   1% / 1%  

1

[y]

Calpine Freestone, LLC   Freestone Power Generation LP   Limited Partnership
Interest   1%   1% / 1%  

3

[y]

Calpine Fuels Corporation   Calpine Decatur Pipeline, Inc.   Common Stock  
1,000   100% / 100%   1 Calpine Fuels Corporation   Calpine Magic Valley
Pipeline, Inc.   Common Stock   1,000   100% / 100%   1 Calpine Fuels
Corporation   Calpine MVP, Inc.   Common Stock   1,000   100% / 100%   4 Calpine
Fuels Corporation   Calpine Sonoran Pipeline LLC   LLC Membership Interest  
100%   100% / 100%  

2

[y]

Calpine Fuels Corporation   Calpine Texas Pipeline GP, Inc.   Common Stock  
1,000   100% / 100%   1 Calpine Fuels Corporation   Calpine Texas Pipeline LP,
Inc.   Common Stock   1,000   100% / 100%   1 Calpine Fuels Corporation   CPN
Decatur Pipeline, Inc.   Common Stock   1,000   100% / 100%   1

 

7

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

Calpine Fuels Corporation   CPN Pipeline Company   Common Stock   1,000  
100% / 100%   2 Calpine Generating Company, LLC   CalGen Expansion Company, LLC
  LLC Membership Interest   100%   100% / 100%*1  

1**2

[y]

Calpine Generating Company   CalGen Finance Corp.   Common Stock   1,000  
100% / 100%   2 Calpine Generating Company   Geothermal Energy Partners, Ltd.  
Limited Partnership Interest   54%   54% / 54%  

No Certificate

Issued

[n]

Calpine Gilroy 1, Inc.   Calpine Gilroy Cogen, L.P.   Limited Partnership
Interest   1%   1% / 1%  

No Certificate

Issued

[n]

Calpine Gilroy 2, Inc.   Calpine Gilroy Cogen, L.P.   Limited Partnership
Interest   99%   99% / 99%  

No Certificate

Issued

[n]

Calpine Gordonsville, LLC   Gordonsville Energy, L.P.   Limited Partnership
Interest   50%   50% / 50%  

No Certificate

Issued

[n]

Calpine Hidalgo Holdings, Inc.   Calpine Edinburg, Inc.   Common Stock   1,000  
100% / 100%   1 Calpine Hidalgo Holdings, Inc.   Calpine Hidalgo, Inc.   Common
Stock   1,000   100% / 100%   1 Calpine Hidalgo Power GP, LLC   Calpine Hidalgo
Power, LP   Limited Partnership Interest   1%   1% / 1%  

No Certificate

Issued

[n]

Calpine Hidalgo Power, LP   Calpine Hidalgo Energy Center, L.P.   Limited
Partnership Interest   99%   99% / 99%  

No Certificate

Issued

[n]

Calpine Hidalgo, Inc.   Calpine Hidalgo Design, L.P.   Limited Partnership
Interest   1%   1% / 1%  

No Certificate

Issued

[n]

 

1

Subject to prior pledge to Wilmington Trust Company under the Membership
Interest Pledge Agreement, dated March 23, 2004, by and among Calpine Generating
Company, LLC, CalGen Expansion Company and Wilmington Trust Company.

2

Physical certificates will not be delivered on the Closing Date as these are
have been previously pledged.

 

8

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

Calpine Hidalgo, Inc.   Calpine Hidalgo Energy Center, L.P.   Limited
Partnership Interest   1%   1% / 1%  

No Certificate

Issued

[n]

Calpine Kennedy Airport, Inc.   Calpine Kennedy Operators, Inc.   Common Stock  
10   100% / 100%   3 Calpine King City, Inc.   Calpine King City, LLC   LLC
Membership Interest   100%   100% / 100%   2 Calpine King City, LLC   King City
Holdings, LLC   LLC Membership Interest   100%   100% / 100%  

No Certificate

Issued

[n]

Calpine KIA, Inc.   KIAC Partners   Partnership Interest   50%   50% / 50%  

No Certificate

Issued

[n]

Calpine Long Island, Inc.   Calpine Kennedy Airport, Inc.   Common Stock   10  
100% / 100%   2 Calpine Long Island, Inc.   Calpine University Power, Inc.  
Common Stock   10   100% / 100%   2 Calpine Magic Valley Pipeline, Inc.   Magic
Valley Pipeline, L.P.   Limited Partnership Interest   1%   1% / 1%  

No Certificate

Issued

[n]

Calpine MVP, Inc.   Magic Valley Gas Pipeline GP, LLC   LLC Membership Interest
  100%   100% / 100%  

1

[y]

Calpine MVP, Inc.   Magic Valley Gas Pipeline, LP   Limited Partnership Interest
  99%   99% / 99%  

2

[y]

Calpine NCTP GP, LLC   Calpine NCTP, LP   LLC Membership Interest   1%   1% / 1%
 

No Certificate

Issued

[n]

Calpine NCTP, LP   Calpine Texas Pipeline, L.P.   Limited Partnership Interest  
99%   99% / 99%  

2

[y]

Calpine Northbrook Investors, LLC   Pine Bluff Energy, LLC   LLC Membership
Interest   100%   100% / 100%  

1

[y]

Calpine Northbrook Project Holdings, LLC   RockGen Energy LLC   LLC Membership
Interest   100%   100% / 100%  

1—25%

2—25%

3—25%

4—25%

[y]

 

9

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

Calpine Northbrook Southcoast Investors, LLC   Calpine Corpus Christi Energy GP,
LLC   LLC Membership Interest   100%   100% / 100%  

1

[y]

Calpine Northbrook Southcoast Investors, LLC   Calpine Corpus Christi Energy, LP
  Limited Partnership Interest   99%   99% / 99%  

2

[y]

Calpine Oneta Power I, LLC   Calpine Oneta Power, L.P.   Limited Partnership
Interest   1%   1% / 1%  

3

[y]

Calpine Oneta Power II, LLC   Calpine Oneta Power, L.P.   Limited Partnership
Interest   99%   99% / 99%  

4

[y]

Calpine Operations Management Company, Inc.   Calpine Construction Management
Company, Inc.   Common Stock   1,000   100% / 100%   1 Calpine Operations
Management Company, Inc.   Calpine Global Services Company, Inc.   Common Stock
  1,000   100% / 100%   3 Calpine Operations Management Company, Inc.   Calpine
Operating Services Company, Inc.   Common Stock   1,000   100% / 100%   1
Calpine Operations Management Company, Inc.   Calpine Power Services, Inc.  
Common Stock   1,000   100% / 100%   1 Calpine Operations Management Company,
Inc.   Thomassen Turbine Systems America, Inc.   Common Stock   1,000  
100% / 100%   1 Calpine Power Company   Anacapa Land Company, LLC   LLC
Membership Interest   100%   100% / 100%  

No Certificate

Issued

[n]

Calpine Power Company   Anderson Springs Energy Company   Common Stock   1,000  
100% / 100%   2 Calpine Power Company   Bellingham Cogen, Inc.   Common Stock  
1,000   100% / 100%   3 Calpine Power Company   Calpine Agnews, Inc.   Common
Stock   3,000   100% / 100%   8 Calpine Power Company   Calpine Auburndale
Holdings, LLC   LLC Membership Interest   100%   100% / 100%  

2

[y]

Calpine Power Company   Calpine CalGen Holdings, Inc.   Common Stock   1,000  
100% / 100%   3 Calpine Power Company   Calpine California Energy Finance, LLC  
LLC Membership Interest   100%   100% / 100%  

2

[y]

Calpine Power Company   Calpine Calistoga Holdings, LLC   LLC Membership
Interest   100%   100% / 100%  

2

[n]

 

10

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

Calpine Power Company   Calpine CCFC Holdings, Inc.   Common Stock   1,000  
100% / 100%   1 Calpine Power Company   Calpine Central, Inc.   Common Stock  
1,000   100% / 100%   2 Calpine Power Company   Calpine Cogeneration Corporation
  Common Stock   5,000   100% / 100%   4 Calpine Power Company   Calpine Deer
Park Partner, LLC   LLC Membership Interest   100%   100% / 100%  

1

[y]

Calpine Power Company   Calpine Deer Park, LLC   LLC Membership Interest   100%
  100% / 100%  

1

[y]

Calpine Power Company   Calpine Development Holdings, Inc.   Common Stock  
1,000   100% / 100%   1 Calpine Power Company   Calpine Dighton, Inc.   Common
Stock   1,000   100% / 100%   2 Calpine Power Company   Calpine DP LLC   LLC
Membership Interest   100%   100% / 100%  

1

[y]

Calpine Power Company   Calpine East Fuels, Inc.   Common Stock   1,000  
100% / 100%   1 Calpine Power Company   Calpine Eastern Corporation   Common
Stock   1,000   100% / 100%   2 Calpine Power Company   Calpine Gordonsville,
LLC   LLC Membership Interest   100%   100% / 100%  

2

[y]

Calpine Power Company   Calpine King City, Inc.   Common Stock   1,000  
100% / 100%   1 Calpine Power Company   Calpine Leasing Inc.   Common Stock  
1,000   100% / 100%   1 Calpine Power Company   Calpine Northbrook Holdings
Corporation   Common Stock   1,000   100% / 100%   1 Calpine Power Company  
Calpine Pittsburg, LLC   LLC Membership Interest   100%   100% / 100%  

2

[y]

Calpine Power Company   Calpine Project Holdings, Inc.   Common Stock   1,000  
100% / 100%   1 Calpine Power Company   Calpine Rumford I, Inc.   Common Stock  
1,000   100% / 100%   2 Calpine Power Company   Calpine Rumford, Inc.   Common
Stock   200   100% / 100%  

3 (100 shares)

4 (100 shares)

Calpine Power Company   Calpine Sumas, Inc.   Common Stock   1,000   100% / 100%
  2 Calpine Power Company   Calpine Tiverton I, Inc.   Common Stock   100  
100% / 100%   2 Calpine Power Company   Calpine Tiverton, Inc.   Common Stock  
100   100% / 100%   2 Calpine Power Company   Calpine Vapor, Inc.   Common Stock
  1,000   100% / 100%   2 Calpine Power Company   CPN Cascade, Inc.   Common
Stock   1,000   100% / 100%   4 Calpine Power Company   CPN Telephone Flat, Inc.
  Common Stock   1,000   100% / 100%   3

 

11

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

Calpine Power Company   Los Esteros Critical Energy Facility, LLC   LLC
Membership Interest   100%   100% / 100%  

2

[y]

Calpine Power Company   Modoc Power, Inc.   Common Stock   1,000   100% / 100%  
2 Calpine Power Company   Mount Hoffman Geothermal Company, L.P.   Limited
Partnership Interest   99%   99% / 99%  

No Certificate

Issued

[n]

Calpine Power Company   NewSouth Energy LLC   LLC Membership Interest   100%  
100% / 100%  

2

[y]

Calpine Power Company   Northwest Cogeneration, Inc.   Common Stock   1,000  
100% / 100%   3 Calpine Power Company   Sutter Dryers, Inc.   Common Stock  
1,000   100% / 100%   2 Calpine Power, Inc.   Calpine KIA, Inc.   Common Stock  
1,000   100% / 100%   6 Calpine Power, Inc.   Calpine Long Island, Inc.   Common
Stock   1,000   100% / 100%   3 Calpine Project Holdings, Inc.   Mobile Energy
LLC   LLC Membership Interest   100%   100% / 100%  

4

y

Calpine Pryor, Inc.   CPN Pryor Funding Corporation   Common Stock   1,000  
100% / 100%   4 Calpine Rumford I, Inc.   Rumford Power Associates Limited
Partnership   Limited Partnership Interest   98%   98% / 98%  

No Certificate

Issued

[n]

Calpine Rumford, Inc   Rumford Power Associates Limited Partnership   Limited
Partnership Interest   2%   2% / 2%  

No Certificate

Issued

[n]

Calpine Russell City, LLC   Russell City Energy Company, LLC   LLC Membership
Interest   650   65% / 65%   3 Calpine Stony Brook, Inc.   Nissequogue Cogen
Partners   Partnership Interest   50%   50% / 50%  

No Certificate

Issued

[n]

Calpine Sumas, Inc.   Whatcom Cogeneration Partners, L.P.   Limited Partnership
Interest   25%   25% / 25%  

No Certificate

Issued

[n]

Calpine TCCL Holdings, Inc.   Texas Cogeneration Company   Common Stock   1,000
  100% / 100%   1 Calpine Texas Pipeline GP, Inc.   Calpine Texas Pipeline, L.P.
  Limited Partnership Interest   1%   1% / 1%  

1

[y]

 

12

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

Calpine Texas Pipeline LP, Inc.   Calpine NCTP, LP   Limited Partnership
Interest   99%   99% / 99%  

No Certificate

Issued

[n]

Calpine Texas Pipeline LP, Inc.   Calpine NCTP GP, LLC   LLC Membership Interest
  100%   100% / 100%   1 Calpine Tiverton I, Inc.   Tiverton Power Associates
Limited Partnership   Limited Partnership Interest   98%   98% / 98%  

No Certificate

Issued

[n]

Calpine Tiverton, Inc.   Tiverton Power Associates Limited Partnership   Limited
Partnership Interest   2%   2% / 2%  

No Certificate

Issued

[n]

Calpine University Power, Inc.   Calpine Stony Brook Operators, Inc.   Common
Stock   10   100% / 100%   3 Calpine University Power, Inc.   Calpine Stony
Brook, Inc.   Common Stock   10   100% / 100%   3 CCFC Development Company, LLC
  Lone Oak Energy Center, LLC   LLC Membership Interest   100%   100% / 100%  

1

[y]

CCFC Equipment Finance Company, LLC   CCFC Project Equipment Finance Company
One, LLC   LLC Membership Interest   100%   100% / 100%  

1

[y]

CGC Dighton, LLC   Dighton Power Associates Limited Partnership   Limited
Partnership Interest   1%   1% / 1%  

No Certificate

Issued

[n]

Channel Power GP, LLC   Channel Power, LP   Limited Partnership Interest   1%  
1% / 1%  

1

[y]

Channel Power, LP   Channel Energy Center, LP   Limited Partnership Interest  
99%   99% / 99%  

2

[y]

CPN Acadia, Inc.   Calpine Acadia Holdings, LLC   LLC Membership Interest   100%
  100% / 100%  

1

[y]

CPN Clear Lake, Inc.   Clear Lake Cogeneration Limited Partnership   Limited
Partnership Interest   2%   2% / 2%  

No Certificate

Issued

[n]

CPN Decatur Pipeline, Inc.   Calpine Decatur Pipeline, L.P.   Limited
Partnership Interest   99%   99% / 99%  

No Certificate

Issued

[n]

CPN Freestone, LLC   Calpine Freestone Energy GP, LLC   LLC Membership Interest
  100%   100% / 100%  

1

[y]

 

13

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

CPN Freestone, LLC   Calpine Freestone Energy, LP   Limited Partnership Interest
  99%   99% / 99%  

2

[y]

CPN Funding, Inc   CPN Morris, Inc.   Common Stock   1,000   100% / 100%   2 CPN
Pleasant Hill, LLC   CPN Pleasant Hill Operating, LLC   LLC Membership Interest
  100%   100% / 100%  

No Certificate

Issued

[n]

CPN Pleasant Hill, LLC   MEP Pleasant Hill, LLC   LLC Membership Interest   100%
  100% / 100%  

1

[y]

GEC Bethpage Inc.   TBG Cogen Partners   Partnership Interest   45%   45% / 45%
 

No Certificate

Issued

[n]

Geysers Power Company II, LLC   Geysers Power Company, LLC   LLC Membership
Interest   34.85697%   34.85697% / 34.85697%  

2

[y]

Geysers Power I Company   Geysers Power Company, LLC   LLC Membership Interest  
65.14303%   65.14303% / 65.14303%  

1

[y]

JMC Bethpage, Inc.   TBG Cogen Partners   Partnership Interest   10%   10% / 10%
 

No Certificate

Issued

[n]

Magic Valley Gas Pipeline GP, LLC   Magic Valley Gas Pipeline, LP   Limited
Partnership Interest   1%   1% / 1%  

1

[y]

Magic Valley Gas Pipeline, LP   Magic Valley Pipeline, L.P.   Limited
Partnership Interest   99%   99% / 99%  

No Certificate

Issued

[n]

Modoc Power, Inc.   Calpine Siskiyou Geothermal Partners, L.P.   Limited
Partnership Interest   44.34%   44.34% / 44.34%  

No Certificate

Issued

[n]

Modoc Power, Inc.   Mount Hoffman Geothermal Company, L.P.   Limited Partnership
Interest   1%   1% / 1%  

No Certificate

Issued

[n]

Northwest Cogeneration, Inc.   Whatcom Cogeneration Partners, L.P.   Limited
Partnership Interest   50%   50% / 50%  

No Certificate

Issued

[n]

NTC Five, Inc.   Calpine NTC, LP   Limited Partnership Interest   99%   99% /
99%  

2

[y]

NTC Five, Inc.   NTC GP, LLC   LLC Membership Interest   100%   100% / 100%  

1

[y]

 

14

--------------------------------------------------------------------------------

Grantor:

 

Issuer

 

Type of Interest

 

Number of Shares

or Units Held

 

Percentage Owned of
Issued & Outstanding
Interests/Percentage
Pledged

 

Certificate Number(s)

[Article 8 Y/N]

NTC GP, LLC   Calpine NTC, LP   Limited Partnership Interest   1%   1% / 1%  

1

[y]

Nueces Bay Energy LLC   Corpus Christi Cogeneration LP   Limited Partnership
Interest   1%   1% / 1%  

2

[y]

Stony Brook Cogeneration, Inc.   Nissequogue Cogen Partners   Partnership
Interest   50%   50% / 50%  

No Certificate

Issued

[n]

Texas Cogeneration Company   Calpine Clear Lake Energy GP, LLC   LLC Membership
Interest   100%   100% / 100%  

1

[y]

Texas Cogeneration Company   Calpine Clear Lake Energy, LP   Limited Partnership
Interest   99%   99% / 99%  

No Certificate

Issued

[n]

Texas Cogeneration Company   CPN Clear Lake, Inc.   Common Stock   1,000  
100% / 100%   1 Texas Cogeneration Company   NTC Five, Inc.   Common Stock  
1,000   100% / 100%   1 Texas Cogeneration Company   Texas Cogeneration Five,
Inc.   Common Stock   1,000   100% / 100%   1 Texas Cogeneration Company   Texas
Cogeneration One Company   Common Stock   1,000   100% / 100%   1 Texas
Cogeneration One Company   Texas City Cogeneration, L.P.   Limited Partnership
Interest   0.10%   0.10% / 0.10%  

No Certificate

Issued

[n]

Thermal Power Company   Geysers Power Company II, LLC   LLC Membership Interest
  100%   100% / 100%  

1

[n]

Thermal Power Company   Geysers Power I Company   Common Stock   100  
100% / 100%   2

 

15

--------------------------------------------------------------------------------

Schedule 3

PERFECTION MATTERS

Uniform Commercial Code Filings

To duly file the appropriate UCC financing statements with the respective filing
offices as set forth on Schedule 3.18(a) of the Credit Agreement, which is
incorporated herein by reference.

Patent and Trademark Filings

To file and record of a grant of security interest in United States Trademarks
in the United States Patent and Trademark Office and to pay all filing and
recordation fees associated therewith.

Actions with respect to Pledged Stock

To deliver the possession of the relevant certificates representing the Pledged
Stock, the Master Promissory Note and the corresponding endorsement to the
Collateral Agent.

--------------------------------------------------------------------------------

Schedule 4

LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE

1. The relevant jurisdiction of organization and chief executive office of each
Grantor that is set forth on Schedule 3.6 of the Credit Agreement and
incorporated herein by reference.

2. As to Calpine Corporation, the jurisdiction of organization is the State of
Delaware, and the addresses for its chief executive offices are listed below:

— 50 W. San Fernando Street, San Jose, CA 95113

— 717 Texas Avenue, Suite 1000, Houston, Texas 77002

--------------------------------------------------------------------------------

Schedule 5

INTELLECTUAL PROPERTY

 

Trademark

 

Jurisdiction

 

Application Number and
Application Date

 

Registration Number and
Registration Date

 

Owner

C and Design

LOGO [g19164img001.jpg]

  Canada  

1107005

19-Jun-2001

 

615304

20-Jul-2004

  Calpine Corporation

C and Design

LOGO [g19164img001.jpg]

  Canada  

1107002

19-Jun-2001

 

608168

21-Apr-2004

  Calpine Corporation

C and Design

LOGO [g19164img001.jpg]

  European Community  

002379311

17-Sep-2001

 

002379311

02-May-2003

  Calpine Corporation

C and Design

LOGO [g19164img001.jpg]

  Mexico  

525716

19-Dec-2001

 

738363

19-Mar-2002

  Calpine Corporation

C and Design

LOGO [g19164img001.jpg]

  Mexico  

525714

19-Dec-2001

 

737411

28-Feb-2002

  Calpine Corporation

C and Design

LOGO [g19164img001.jpg]

  Mexico  

525712

19-Dec-2001

 

767957

11-Nov-2002

  Calpine Corporation

C and Design

LOGO [g19164img001.jpg]

  Mexico  

525711

19-Dec-2001

 

826858

29-Mar-2004

  Calpine Corporation

--------------------------------------------------------------------------------

C and Design

LOGO [g19164img001.jpg]

  Mexico  

525713

19-Dec-2001

 

739096

25-Mar-2002

  Calpine Corporation

C and Design

LOGO [g19164img001.jpg]

  United States of America  

76/195598

18-Jan-2001

 

2781097

11-Nov-2003

  Calpine Corporation CALPINE   Canada  

1107004

19-Jun-2001

 

614674

12-Jul-2004

  Calpine Corporation CALPINE   Canada  

1107003

19-Jun-2001

 

588644

02-Sep-2003

  Calpine Corporation CALPINE   European Community  

002379360

17-Sep-2001

 

002379360

24-Apr-2003

  Calpine Corporation CALPINE   Mexico  

525708

19-Dec-2001

 

800055

22-Jul-2003

  Calpine Corporation CALPINE   Mexico  

525715

19-Dec-2001

 

744732

30-Apr-2002

  Calpine Corporation CALPINE   Mexico  

525707

19-Dec-2001

 

744731

30-Apr-2002

  Calpine Corporation CALPINE   Mexico  

525709

19-Dec-2001

 

737409

28-Feb-2002

  Calpine Corporation CALPINE   Mexico  

525710

19-Dec-2001

 

737410

28-Feb-2002

  Calpine Corporation CALPINE   United States of America  

76/195597

18-Jan-2001

 

2751748

19-Aug-2003

  Calpine Corporation REPOWERING AMERICA   United States of America  

76/195596

18-Jan-2001

 

3098433

30-May-2006

  Calpine Corporation