Exhibit 10.1
EXECUTION VERSION
 
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
dated as of June 30, 2010
among
NRG ENERGY, INC.,
as Borrower,
THE LENDERS PARTY HERETO,
CITIGROUP GLOBAL MARKETS INC., RBS SECURITIES INC., DEUTSCHE BANK SECURITIES
INC. and BANC OF AMERICA SECURITIES LLC,
as Revolving Joint Book Runners and Revolving Joint Lead Arrangers,
CITIGROUP GLOBAL MARKETS INC., J.P. MORGAN SECURITIES INC., BNP PARIBAS
SECURITIES CORP., CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK and
MORGAN STANLEY SENIOR FUNDING, INC.,
as Extended Maturity Term Loan Joint Book Runners and Extended Maturity Term
Loan Joint Lead
Arrangers,
CITIGROUP GLOBAL MARKETS INC., RBS SECURITIES INC., DEUTSCHE BANK SECURITIES
INC. AND CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
as Extended Maturity CLD Joint Book Runners and Extended Maturity CLD Joint Lead
Arrangers,
CITICORP NORTH AMERICA INC.,
as Administrative Agent and Collateral Agent,
RBS SECURITIES INC. and DEUTSCHE BANK SECURITIES INC.,
as Revolving Co-Syndication Agents and Extended Maturity CLD Co-Syndication
Agents,
JPMORGAN CHASE BANK, N.A. and BNP PARIBAS,
as Extended Maturity Term Loan Co-Syndication Agents,
BANK OF AMERICA, N.A.,
as Revolving Documentation Agent,
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK and MORGAN STANLEY SENIOR
FUNDING, INC.,
as Extended Maturity Term Loan Co-Documentation Agents
and
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
as Extended Maturity CLD Documentation Agent
 

 

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

 

TABLE OF CONTENTS

              Page  
ARTICLE I.
Definitions
 
       
SECTION 1.01. Defined Terms
    5  
SECTION 1.02. Terms Generally
    68  
SECTION 1.03. Classification of Loans and Borrowings
    69  
SECTION 1.04. Pro Forma Calculations
    69  
SECTION 1.05. Exchange Rates
    69  
 
       
ARTICLE II.
The Credits
 
       
SECTION 2.01. Commitments
    70  
SECTION 2.02. Loans
    70  
SECTION 2.03. Borrowing Procedure
    72  
SECTION 2.04. Repayment of Loans; Evidence of Debt
    73  
SECTION 2.05. Fees
    74  
SECTION 2.06. Interest on Loans
    75  
SECTION 2.07. Default Interest
    75  
SECTION 2.08. Alternate Rate of Interest
    75  
SECTION 2.09. Termination and Reduction of Commitments; Reduction and Conversion
of Credit-Linked Deposits
    76  
SECTION 2.10. Conversion and Continuation of Borrowings
    77  
SECTION 2.11. Repayment of Term B Loans and Credit-Linked Deposits
    78  
SECTION 2.12. Prepayment
    80  
SECTION 2.13. Mandatory Prepayments
    81  
SECTION 2.14. Reserve Requirements; Change in Circumstances
    86  
SECTION 2.15. Change in Legality
    87  
SECTION 2.16. Indemnity
    88  
SECTION 2.17. Pro Rata Treatment
    88  
SECTION 2.18. Sharing of Setoffs
    88  
SECTION 2.19. Payments
    89  
SECTION 2.20. Taxes
    89  
SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty to
Mitigate
    91  
SECTION 2.22. Swingline Loans
    92  
SECTION 2.23. Letters of Credit
    94  
SECTION 2.24. Funded L/C Collateral Accounts
    98  
SECTION 2.25. Incremental Facilities
    99  
SECTION 2.26. Incremental Refinancing Facilities
    101  
SECTION 2.27. Defaulting Lenders
    102  

 

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

 

              Page  
ARTICLE III.
Representations and Warranties
 
       
SECTION 3.01. Organization; Powers
    103  
SECTION 3.02. Authorization; No Conflicts
    104  
SECTION 3.03. Enforceability
    104  
SECTION 3.04. Governmental Approvals
    104  
SECTION 3.05. [Reserved]
    104  
SECTION 3.06. No Material Adverse Change
    104  
SECTION 3.07. Title to Properties; Possession Under Leases
    104  
SECTION 3.08. Subsidiaries
    105  
SECTION 3.09. Litigation; Compliance with Laws
    105  
SECTION 3.10. Agreements
    106  
SECTION 3.11. Federal Reserve Regulations
    106  
SECTION 3.12. Investment Company Act
    106  
SECTION 3.13. Use of Proceeds
    106  
SECTION 3.14. Tax Returns
    107  
SECTION 3.15. No Material Misstatements
    107  
SECTION 3.16. Employee Benefit Plans
    107  
SECTION 3.17. Environmental Matters
    107  
SECTION 3.18. Insurance
    108  
SECTION 3.19. Security Documents
    108  
SECTION 3.20. Location of Real Property
    110  
SECTION 3.21. Labor Matters
    110  
SECTION 3.22. Intellectual Property
    110  
SECTION 3.23. Energy Regulation
    110  
SECTION 3.24. Solvency
    111  
SECTION 3.25. Liabilities and Obligations of Funded L/C SPV
    112  
 
       
ARTICLE IV.
Conditions of Lending
 
       
SECTION 4.01. All Credit Events
    112  
SECTION 4.02. Conditions Precedent to Third Restatement Date
    113  
 
       
ARTICLE V.
Affirmative Covenants
 
       
SECTION 5.01. Corporate Existence
    115  
SECTION 5.02. Insurance
    115  
SECTION 5.03. Taxes
    116  
SECTION 5.04. Financial Statements, Reports, etc
    116  
SECTION 5.05. Litigation and Other Notices
    118  
SECTION 5.06. Information Regarding Collateral
    118  
SECTION 5.07. Maintaining Records; Access to Properties and Inspections;
Environmental Assessments
    119  
SECTION 5.08. Use of Proceeds
    120  
SECTION 5.09. Additional Collateral, etc.
    120  

ii

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

 

              Page  
SECTION 5.10. Further Assurances
    122  
SECTION 5.11. Ownership of Funded L/C SPV
    123  
 
       
ARTICLE VI.
Negative Covenants
 
       
SECTION 6.01. Indebtedness and Preferred Stock
    123  
SECTION 6.02. Liens
    129  
SECTION 6.03. Limitation on Sale and Leaseback Transactions
    129  
SECTION 6.04. Mergers, Consolidations and Sales of Assets
    129  
SECTION 6.05. Limitation on Investments
    130  
SECTION 6.06. Limitation on Dividends
    133  
SECTION 6.07. Limitations on Debt Payments; Restrictive Agreements
    134  
SECTION 6.08. Transactions with Affiliates
    138  
SECTION 6.09. Business Activities; Limitations on Funded L/C SPV
    140  
SECTION 6.10. Other Indebtedness and Agreements
    140  
SECTION 6.11. Designation of Restricted and Unrestricted Subsidiaries and
Excluded Subsidiaries
    141  
SECTION 6.12. Capital Expenditures
    141  
SECTION 6.13. Consolidated Interest Coverage Ratio
    142  
SECTION 6.14. Consolidated Leverage Ratio
    142  
SECTION 6.15. Fiscal Year
    142  
 
       
ARTICLE VII.
Events of Default
 
       
ARTICLE VIII.
The Agents and the Arrangers
 
       
ARTICLE IX.
Miscellaneous
 
       
SECTION 9.01. Notices
    148  
SECTION 9.02. Survival of Agreement
    150  
SECTION 9.03. Binding Effect
    151  
SECTION 9.04. Successors and Assigns
    151  
SECTION 9.05. Expenses; Indemnity
    154  
SECTION 9.06. Right of Setoff
    156  
SECTION 9.07. Applicable Law
    156  
SECTION 9.08. Waivers; Amendment; Replacement of Non-Consenting Lenders
    156  
SECTION 9.09. Interest Rate Limitation
    158  
SECTION 9.10. Entire Agreement
    158  
SECTION 9.11. WAIVER OF JURY TRIAL
    158  
SECTION 9.12. Severability
    159  
SECTION 9.13. Counterparts
    159  
SECTION 9.14. Headings
    159  
SECTION 9.15. Jurisdiction; Consent to Service of Process
    159  

iii

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

 

              Page  
SECTION 9.16. Confidentiality
    160  
SECTION 9.17. Delivery of Lender Addenda
    160  
SECTION 9.18. [Reserved]
    160  
SECTION 9.19. Mortgage Modifications
    161  
SECTION 9.20. Certain Undertakings with Respect to Securitization Vehicles
    161  
SECTION 9.21. Effect of Amendment and Restatement of the Second Restated Credit
Agreement
    162  
SECTION 9.22. Permitted Amendments
    163  
SECTION 9.23. Undertaking Regarding Bankruptcy or Similar Proceeding against
Funded L/C SPV
    164  

      Exhibits and Schedules
 
   
Exhibit A
  Form of Administrative Questionnaire
Exhibit B
  Form of Affiliate Subordination Agreement
Exhibit C
  Form of Assignment and Acceptance
Exhibit D
  Form of Borrowing Request
Exhibit E
  Form of Joinder Agreement
Exhibit F
  Form of Mortgage
Exhibit G
  Form of Revolving Note
Exhibit H-1
  Form of Original Maturity Term Note
Exhibit H-2
  Form of Extended Maturity Term Note
Exhibit H-3
  Form of Original Maturity Credit-Linked Deposit Note
Exhibit H-4
  Form of Extended Maturity Credit-Linked Deposit Note
Exhibit I
  Form of Prepayment Notice
Exhibit J
  Form of Non-Bank Certificate
 
   
 
   
Schedule 1.01(a)
  Excluded Foreign Subsidiaries
Schedule 1.01(b)
  Excluded Project Subsidiaries
Schedule 1.01(c)
  Existing Commodity Hedging Agreements
Schedule 1.01(e)
  Existing Non-Recourse Indebtedness
Schedule 1.01(f)
  Mortgaged Properties
Schedule 1.01(g)
  Subsidiary Guarantors
Schedule 3.07
  Properties
Schedule 3.08
  Subsidiaries
Schedule 3.09
  Litigation
Schedule 3.17
  Environmental Matters
Schedule 3.18
  Insurance
Schedule 3.19(a)
  UCC Filing Offices
Schedule 3.19(c)
  Mortgage Filing Offices
Schedule 3.20
  Owned and Leased Real Property
Schedule 3.23(b)
  Rate Proceedings
Schedule 3.23(d)
  FERC Matters
Schedule 3.23(g)
  Regulatory Status
Schedule 5.09(b)
  Title Insurance and Survey Requirements
Schedule 6.01
  Existing Indebtedness
Schedule 6.02
  Existing Liens

iv

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

 

     THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 30, 2010,
among NRG ENERGY, INC., a Delaware corporation (the “Borrower”), the LENDERS
from time to time party hereto, CITICORP NORTH AMERICA INC. (“CNA”), as
administrative agent (in such capacity and together with its successors, the
“Administrative Agent”) and collateral agent (in such capacity and together with
its successors, the “Collateral Agent”), and DEUTSCHE BANK AG, NEW YORK BRANCH
and BANK OF AMERICA, N.A. as Issuing Banks, with CITIGROUP GLOBAL MARKETS INC.,
RBS SECURITIES INC., DEUTSCHE BANK SECURITIES INC. and BANC OF AMERICA
SECURITIES LLC, as joint book runners and joint lead arrangers in respect of the
Revolving Loans (in such capacities, collectively, the “Revolving Arrangers”),
CITIGROUP GLOBAL MARKETS INC., J.P. MORGAN SECURITIES INC., BNP PARIBAS
SECURITIES CORP., CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK and MORGAN
STANLEY SENIOR FUNDING, INC., as joint book runners and joint lead arrangers in
respect of the Extended Maturity Term Loans (in such capacities, collectively,
the “Extended Maturity Term Loan Arrangers”), CITIGROUP GLOBAL MARKETS INC., RBS
SECURITIES INC., DEUTSCHE BANK SECURITIES INC. AND CREDIT SUISSE AG, CAYMAN
ISLANDS BRANCH, as joint book runners and joint lead arrangers in respect of the
Extended Maturity Credit-Linked Deposits (in such capacities, the “Extended
Maturity CLD Arrangers” and, together with the Revolving Arrangers and the
Extended Maturity Term Loan Arrangers, collectively, the “Arrangers”), RBS
SECURITIES INC. and DEUTSCHE BANK SECURITIES INC., as co-syndication agents for
the Revolving Loans (in such capacities, collectively, the “Revolving
Co-Syndication Agents”) and as co-syndication agents for the Extended Maturity
Credit-Linked Deposits (in such capacities, collectively, the “Extended Maturity
CLD Co-Syndication Agents”), JPMORGAN CHASE BANK, N.A. and BNP PARIBAS, as
co-syndication agents for the Extended Maturity Term Loans (in such capacities,
collectively, the “Extended Maturity Term Loan Co-Syndication Agents” and,
together with the Revolving Co-Syndication Agents and the Extended Maturity CLD
Co-Syndication Agents, the “Syndication Agents”), BANK OF AMERICA, N.A., as
documentation agent in respect of the Revolving Loans (in such capacity, the
“Revolving Documentation Agent”), CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK
and MORGAN STANLEY SENIOR FUNDING, INC., as co-documentation agents in respect
of the Extended Maturity Term Loans (in such capacities, collectively, the
“Extended Maturity Term Loan Co-Documentation Agents”), and CREDIT SUISSE AG,
CAYMAN ISLANDS BRANCH, as documentation agent in respect of the Extended
Maturity Credit-Linked Deposits (in such capacity, the “Extended Maturity CLD
Documentation Agent” and, together with the Revolving Documentation Agent and
the Extended Maturity Term Loan Co-Documentation Agents, the “Documentation
Agents”).
     A. On the Closing Date, the Borrower, Morgan Stanley Senior Funding, Inc.,
as administrative agent (the “Existing Administrative Agent”) and certain of the
Lenders entered into the Existing Credit Agreement pursuant to which certain of
the Lenders agreed to extend credit to the Borrower on a revolving credit basis
and/or to make term loans and/or credit-linked deposits to the Borrower.
     B. Pursuant to the terms and conditions of the Purchase Agreement, on the
Closing Date the Borrower purchased (a) 82% of the outstanding Equity Interests
of NRG Texas LLC, formerly known as Texas Genco LLC (the “Target” or “Texas
Genco”), directly from certain sellers named therein (the “Sellers”) and (b) all
of the issued outstanding shares of certain corporations affiliated with the
Sellers that held the remaining 18% of the outstanding Equity Interests of the
Target (the “Acquisition”). As consideration for such purchase, the Borrower
paid consideration in cash and preferred and/or common stock of the Borrower
(subject to adjustment in accordance with the Purchase Agreement) in connection
with the Acquisition (the “Acquisition Consideration”).

1

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

 

     C. On the Closing Date all loans outstanding under the Borrower’s credit
agreement, dated as of December 24, 2004, as amended on August 5, 2005 and
December 27, 2005, among the Borrower, NRG Power Marketing, the lenders party
thereto, Credit Suisse (formerly known as Credit Suisse First Boston), as
administrative agent, joint lead bookrunner, joint lead arranger and
co-documentation agent, and Goldman Sachs Credit Partners L.P., as syndication
agent, joint lead bookrunner, joint lead arranger and co-documentation agent
(the “2005 Credit Agreement”) were assigned in their entirety to the Lenders
under the Existing Credit Agreement, and the Commitments (as defined in the 2005
Credit Agreement) of such assigning Lenders were assigned to the Lenders under
the Existing Credit Agreement, and thereafter continued as and deemed to be a
portion of the Commitments under (and as defined in) the Existing Credit
Agreement. It is understood that the terms and conditions of the 2005 Credit
Agreement were superseded by the terms and conditions of the Existing Credit
Agreement; provided that terms of the 2005 Credit Agreement that were to
expressly survive termination of such agreement pursuant to the terms thereof
continued (and continue) to be effective. The Borrower requested the Lenders to
continue to extend credit under the Existing Credit Agreement in the form of
(a) Term Loans (as defined therein) re-evidenced on the Closing Date in an
aggregate principal amount of $3,575,000,000, (b) Credit-Linked Deposits (as
defined therein) re-evidenced on the Closing Date in an aggregate principal
amount of $1,000,000,000 and (c) Revolving Loans, Revolving Letters of Credit
and Swingline Loans (each as defined therein) re-evidenced, made or issued at
any time and from time to time on or after the Closing Date and prior to the
Revolving Credit Maturity Date (as defined therein) in an aggregate principal
amount at any time outstanding not to exceed $1,000,000,000 (subject to the
limitations set forth therein).
     D. The proceeds of the Term Loans (as defined in the Existing Credit
Agreement) and the Credit-Linked Deposits (as defined in the Existing Credit
Agreement) re-evidenced or made on the Closing Date were used to (a) repay or
return, as applicable, all amounts due or outstanding under the 2005 Credit
Agreement on the Closing Date to those assigning Lenders who thereafter were not
Lenders on the Closing Date, (b) fund the cash portion of the Acquisition
Consideration, (c) fund the related refinancing of (i) the Target’s credit
agreement, dated as of December 14, 2004, as amended on January 29, 2006, among
the Target, the lenders party thereto, Goldman Sachs Credit Partners L.P., as
administrative agent, joint lead arranger and joint bookrunner, Morgan Stanley
Senior Funding, Inc., as syndication agent, joint lead arranger and joint
bookrunner, Deutsche Bank AG, Cayman Islands Branch, as co-documentation agent
and joint bookrunner, Citicorp USA, Inc., as co-documentation agent and joint
bookrunner and Deutsche Bank Securities Inc., as joint lead arranger for the
Special Letter of Credit Facility (the “Existing Texas Genco Credit Agreement”),
(ii) the Target’s funded L/C credit agreement, dated as of June 24, 2005, among
the Target, the lenders party thereto, Goldman Sachs Credit Partners L.P., as
administrative agent, syndication agent, lead arranger and bookrunner, Sumitomo
Mitsui Banking Corporation, as letter of credit issuer, and Commerzbank AG New
York and Grand Cayman Branches and Union Bank of California, N.A., as
co-documentation agents (the “Existing LC Credit Agreement”), (iii) the
Borrower’s 8% second priority senior secured notes due 2013 (the “Existing NRG
Notes”) and (iv) the Target’s 6.875% senior unsecured notes due 2014 (the
“Existing Texas Genco Notes”) and (d) pay related fees, costs and expenses.
Revolving Letters of Credit (as defined in the Existing Credit Agreement) issued
on the Closing Date were used to replace certain existing Letters of Credit (as
defined in the Existing Credit Agreement) and the proceeds of any Revolving
Loans (as defined in the Existing Credit Agreement) made on the Closing Date
were used for other general corporate purposes on the Closing Date (but not,
directly or indirectly, to fund the Acquisition). After the Closing Date,
Revolving Loans (as defined in the Existing Credit Agreement) were available,
and Revolving Letters of Credit and Funded Letters of Credit (each as defined in
the Existing Credit Agreement) were able to be issued, for the ongoing working
capital requirements of the Borrower and for

2

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

 

general corporate purposes, including acquisitions not prohibited under the
Existing Credit Agreement.
     E. On November 21, 2006 (the “First Restatement Date”), the Borrower, the
Existing Administrative Agent and certain of the Lenders, among others, amended
and restated the Existing Credit Agreement (such amended and restated agreement,
the “First Restated Credit Agreement”), such that, among other things, certain
Lenders (as defined in the First Restated Credit Agreement) agreed to make
Additional Credit-Linked Deposits (as defined in the First Restated Credit
Agreement) on the First Restatement Date in an aggregate amount of $500,000,000.
On the First Restatement Date, the aggregate amount of Credit-Linked Deposits
(as defined in the First Restated Credit Agreement) was $1,500,000,000.
     F. On June 8, 2007 (the “Second Restatement Date”), the Borrower, the
Administrative Agent (as successor to the Existing Administrative Agent) and
certain of the Lenders, among others, amended and restated the First Restated
Credit Agreement (such amended and restated agreement, the “Second Restated
Credit Agreement”) in its entirety to continue to extend credit under the Second
Restated Credit Agreement in the form of: (i) Term Loans (as defined in the
Second Restated Credit Agreement) continued and re-evidenced on the Second
Restatement Date in an aggregate principal amount equal to $3,139,250,000,
(ii) Credit-Linked Deposits (as defined in the Second Restated Credit Agreement)
continued and re-evidenced on the Second Restatement Date in an aggregate
principal amount equal to $1,300,000,000 and (iii) Revolving Loans (as defined
in the Second Restated Credit Agreement) and Revolving Letters of Credit (as
defined in the Second Restated Credit Agreement) (not to be funded or
re-evidenced on the Second Restatement Date) in amounts as requested by the
Borrower from time to time not to exceed an aggregate principal amount of
$1,000,000,000; and to make certain other changes as more fully set forth in the
Second Restated Credit Agreement.
     G. The Borrower desires that certain of the Lenders and the other parties
hereto agree to amend and restate the Second Restated Credit Agreement in its
entirety to continue to extend credit under this Agreement in the form of:
(i) Term B Loans, which will consist of a Class of Extended Maturity Term Loans
and a Class of Original Maturity Term Loans, (ii) Credit-Linked Deposits,
continued as Term Loans deemed to be made to the Borrower on the Third
Restatement Date in an aggregate principal amount equal to $1,300,000,000, which
will consist of a Class of Extended Maturity Credit-Linked Deposits and a Class
of Original Maturity Credit-Linked Deposits and (iii) the replacement of the
revolving credit facility, including the letter of credit facility and swingline
loan facility thereunder with a revolving credit facility, including the letter
of credit facility and swingline loan facility hereunder, in each case, on the
terms and conditions set forth herein; and to make certain other changes as more
fully set forth herein.
     H. The Required Lenders have, on or prior to the Third Restatement Date,
authorized and directed the Administrative Agent to execute this Agreement.
     I. The Term Lenders party hereto have agreed to continue Term B Loans
hereunder in an amount up to their respective Term Loans (as defined in the
Second Restated Credit Agreement) in accordance with Section 2.01 on the Third
Restatement Date. The Funded L/C Lenders party hereto have agreed to continue
their Credit-Linked Deposits (as defined in the Second Restated Credit
Agreement), and to convert them into Term Loans made to the Borrower hereunder,
in an amount up to their respective Credit-Linked Deposits (as defined in the
Second Restated Credit Agreement) in the form of Credit-Linked Deposits
hereunder in accordance with Section 2.01 on the Third Restatement Date.

3

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

 

     J. It is understood and agreed that immediately prior to the Third
Restatement Date the Borrower and its Subsidiaries had no right, title or
interest in or to the Credit-Linked Deposits (as defined in the Second Restated
Credit Agreement) and the Credit-Linked Deposit Account (as defined in the
Second Restated Credit Agreement) and all cash, Cash Equivalents, other
securities or investments substantially comparable to Cash Equivalents and other
funds and investments held therein and the proceeds thereof are not Collateral
under and as defined in the Second Restated Credit Agreement. Upon the
conversion of the Credit-Linked Deposits (as defined in the Second Restated
Credit Agreement) into Term Loans made hereunder and designated as Credit-Linked
Deposits under and as defined in this Agreement as of the Third Restatement
Date, the Borrower shall contribute 100% of the cash proceeds of such
Credit-Linked Deposits on the Third Restatement Date to the Funded L/C SPV in
exchange for the common Equity Interests of the Funded L/C SPV (the “Funded L/C
SPV Equity Contribution”) and the Funded L/C SPV will, in turn, deposit such
cash proceeds in the Funded L/C Collateral Accounts for the purpose of cash
collateralizing the Funded L/C SPV’s obligations to one or more LC Issuers
pursuant to and in accordance with the terms and provisions of Cash
Collateralized Letter of Credit Facilities. The obligations of the Borrower with
respect to Funded Letters of Credit under and as defined in the Second Restated
Credit Agreement that were outstanding immediately prior to the Third
Restatement Date shall, upon the Third Restatement Date and without any further
action on the part of any Person, be automatically assigned to the Funded L/C
SPV in their entirety and shall, as of the Third Restatement Date, constitute
obligations solely of the Funded L/C SPV pursuant to and in accordance with the
terms and provisions of one or more Cash Collateralized Letter of Credit
Facilities (other than obligations of (A) the Borrower with respect to the
Funded L/C SPV Guarantee and (B) the Borrower and the Subsidiary Guarantors with
respect to any reimbursement agreement of the Borrower and/or any Subsidiary
Guarantor in favor of the Funded L/C SPV with respect to any amounts drawn on
letters of credit issued for the benefit of the Borrower or any of its
Subsidiaries under Cash Collateralized Letter of Credit Facilities). Prior to
the Third Restatement Date, the Borrower had agreed to pay to the Issuing Bank
under the Second Restated Credit Agreement Funded Issuing Bank Fees (as defined
in the Second Restated Credit Agreement) and to each Funded L/C Lender a Funded
L/C Participation Fee (as defined in the Second Restated Credit Agreement), in
each case, in accordance with Section 2.05(d) of the Second Restated Credit
Agreement, and the Deposit Bank (or the Borrower, as applicable) had agreed to
pay to each Funded L/C Lender a fee and specified return in accordance with
Section 2.24(b) of the Second Restated Credit Agreement, and all such accrued
and unpaid Funded Issuing Bank Fees, Funded L/C Participation Fees, fees and
return outstanding on the Third Restatement Date, if any, shall be paid by the
Borrower (or, as applicable, the Deposit Bank) to the Issuing Bank under the
Second Restated Credit Agreement or each Funded L/C Lender, as applicable, on
the Third Restatement Date and, upon such payment, the Funded L/C Commitment (as
defined in the Second Restated Credit Agreement) shall be terminated in
accordance with the terms of the Second Restated Credit Agreement.
     K. It is the intent of the parties hereto that this Agreement not
constitute a novation of the obligations and liabilities of the parties under
the Second Restated Credit Agreement (other than with respect to the obligations
of the Borrower with respect to Funded Letters of Credit under and as defined in
the Second Restated Credit Agreement that were outstanding immediately prior to
the Third Restatement Date as described above, which, as of the Third
Restatement Date, constitute obligations of the Funded L/C SPV pursuant to and
in accordance with one or more Cash Collateralized Letter of Credit Facilities)
and that this Agreement amend and restate in its entirety the Second Restated
Credit Agreement.
     L. Accordingly, in consideration of the mutual agreements contained herein
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, the parties hereto agree that this Agreement shall,
upon satisfaction (or waiver in

4

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

 

accordance with Section 9.08) of the conditions set forth in Section 4.02, be
amended and restated to read in its entirety as follows:
ARTICLE I.
Definitions
     SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:
     “2005 Credit Agreement” shall have the meaning assigned to such term in the
recitals.
     “ABR”, when used in reference to any Loan or Borrowing, shall refer to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
     “Acceptable Financial Counterparty” shall mean any Person who, at the time
the applicable Eligible Commodity Hedging Agreement is entered into, (a) in the
ordinary course enters into financial derivative (including commodity hedge,
swap, future or option) or commodity transactions (including power
purchase/tolling agreements) and (b)(i) has a corporate rating of A- or higher
by S&P and a corporate family rating of A3 or higher by Moody’s (or an
equivalent rating by another nationally recognized statistical rating
organization of similar standing if either of such rating agencies is not then
in the business of providing such ratings), or (ii) whose obligations are
supported by collateral, guarantees or letters of credit in a manner consistent
with the then prevailing industry practice for similarly situated Persons from
Persons that have the ratings described in clause (i) above.
     “Acceptable Power Counterparty” shall mean (a) Reliant Energy Inc., Energy
Future Holdings Corp. and each of their respective Affiliates and (b) any Person
who, at the time the applicable Eligible Commodity Hedging Agreement is entered
into, (i) in the ordinary course purchases or sells power and (ii)(A) has a
corporate rating of BBB- or higher by S&P and a corporate family rating of Baa3
or higher by Moody’s (or an equivalent rating by another nationally recognized
statistical rating organization of similar standing if either of such ratings
agencies is not then in the business of providing such ratings), or (B) whose
obligations are supported by collateral, guarantees or letters of credit in a
manner consistent with the then prevailing industry practice for similarly
situated Persons from Persons that have the ratings described in clause
(A) above.
     “Accepting Lenders” shall have the meaning provided in Section 9.22.
     “Account” shall have the meaning assigned to such term in the UCC.
     “Acquisition” shall have the meaning assigned to such term in the recitals.
     “Acquisition Consideration” shall have the meaning assigned to such term in
the recitals.
     “Acquisition Documentation” shall mean, collectively, the Purchase
Agreement and all schedules, exhibits, annexes and amendments thereto and all
side letters and agreements affecting the terms thereof or entered into in
connection therewith.
     “Acquisition Transactions” shall mean, collectively, (a) the Acquisition,
including the payment of the Acquisition Consideration, (b) the related
assignment of the loans and

5

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

 

commitments outstanding under the 2005 Credit Agreement, the related refinancing
of the Existing Texas Genco Credit Agreement, the Existing LC Credit Agreement,
the Existing Texas Genco Notes and the Existing NRG Notes and the funding of the
Texas Genco Refinancing Escrow Account (as defined in the Second Restated Credit
Agreement) and (c) the payment of fees, costs and expenses incurred in
connection with the foregoing.
     “Additional Non-Recourse Indebtedness” shall mean secured or unsecured
Indebtedness of a Subsidiary (other than the Funded L/C SPV) that is not a Loan
Party; provided that
     (a) except as provided below, such Indebtedness is without recourse to the
Borrower or any other Restricted Subsidiary or to any property or assets of the
Borrower or any other Restricted Subsidiary (other than, in each such case,
another Restricted Subsidiary (x) which is the direct parent or a direct or
indirect Subsidiary of the Subsidiary that directly incurred or issued such
Indebtedness (the “Issuing Subsidiary”) (except if the Issuing Subsidiary has
incurred or issued such Indebtedness in the form of a Guarantee) or (y) that is
a Restricted Subsidiary that itself has Non-Recourse Indebtedness (except if
such Restricted Subsidiary has incurred or issued such Indebtedness in the form
of a Guarantee) or is the direct parent or a direct or indirect Subsidiary of an
Issuing Subsidiary that itself has Non-Recourse Indebtedness (except if such
Non-Recourse Indebtedness of such Issuing Subsidiary is in the form of a
Guarantee)); provided, that a Restricted Subsidiary that is the parent of an
Excluded Project Subsidiary and owns no assets other than the Equity Interests
in such Excluded Project Subsidiary, Equity Interests in other Excluded
Subsidiaries and any de minimis assets may incur Additional Non-Recourse
Indebtedness that is guaranteed by such Excluded Project Subsidiaries and such
Excluded Project Subsidiaries may incur Additional Non-Recourse Indebtedness in
the form of a Guarantee of such Restricted Subsidiary’s Additional Non-Recourse
Indebtedness;
     (b) neither the Borrower nor any other Restricted Subsidiary (other than
another Restricted Subsidiary (x) which is the direct parent or a direct or
indirect Subsidiary of the Issuing Subsidiary (except if the Issuing Subsidiary
has incurred or issued such Indebtedness in the form of a Guarantee) or (y) that
is a Restricted Subsidiary that itself has Non-Recourse Indebtedness (except if
such Restricted Subsidiary incurred or issued such Indebtedness in the form of a
Guarantee) or is the direct parent or a direct or indirect Subsidiary of an
Issuing Subsidiary that itself has Non-Recourse Indebtedness (except if such
Non-Recourse Indebtedness of such Issuing Subsidiary is in the form of a
Guarantee)) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness) or is directly or
indirectly liable as a guarantor or otherwise in respect of such Indebtedness or
in respect of the business or operations of the applicable Subsidiary that is
the obligor on such Indebtedness or any of its subsidiaries (other than (i) any
such credit support or liability consisting of reimbursement obligations in
respect of Letters of Credit issued under, and subject to the terms of,
Section 2.23 to support obligations of such applicable Subsidiary, (ii) any
Investments in such applicable Subsidiary made in accordance with Section 6.05,
(iii) any of those items expressly provided for in subclauses (u) through
(z) following clause (e) below, (iv) any such credit support or liability
consisting of customary indemnity, reimbursement and other similar obligations
(including pursuant to commitment letters, fee letters and other similar
agreements) incurred in connection with an Investment permitted and made under
Section 6.05, including pursuant to a Permitted Acquisition and (v) customary
group insurance or umbrella insurance policy arrangements); provided, that a
Restricted Subsidiary that is the parent of an Excluded Project Subsidiary and
owns no assets other than the Equity Interests in such Excluded Project
Subsidiary, Equity

6

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

 

Interests in other Excluded Subsidiaries and any de minimis assets may incur
Additional Non-Recourse Indebtedness that is guaranteed by such Excluded Project
Subsidiaries and such Excluded Project Subsidiaries may incur Additional
Non-Recourse Indebtedness in the form of a Guarantee of such Restricted
Subsidiary’s Additional Non-Recourse Indebtedness;
     (c) no default with respect to such Indebtedness (including any rights that
the holders of such Indebtedness may have to take enforcement action against a
Subsidiary that is not a Loan Party) would permit upon notice, lapse of time or
both any holder of any other Indebtedness of the Borrower or any other Loan
Party (other than (A) Indebtedness incurred pursuant to Section 6.01(a), (b) or
(c) and any Permitted Refinancing Indebtedness incurred to refund, refinance,
replace, defease or discharge any Indebtedness incurred pursuant to
Section 6.01(b) or (c), (B) with respect to Obligations under any Specified
Hedging Agreement or (C) under any Guarantee by the Borrower or any Subsidiary
of such Indebtedness that is incurred pursuant to Section 6.01(d), 6.01(h),
6.01(o) or 6.01(p)) to declare a default on such other Indebtedness or cause the
payment of the Indebtedness to be accelerated or payable prior to its stated
maturity;
     (d) the Liens securing such Indebtedness shall exist only on (i) the
property and assets of any Subsidiary that is not a Loan Party (it being
understood and agreed that a Lien granted by such Subsidiary on an undivided
interest owned by such Subsidiary shall not be considered a Lien on assets of
any other Person for the purposes of this definition), and (ii) the Equity
Interests in any Subsidiary that is not a Loan Party (and shall not apply to any
other property or assets of the Borrower or any other Subsidiary that is a Loan
Party); and
     (e) the lenders of such Indebtedness have been notified or have otherwise
agreed in writing that they will not have any recourse under the agreements
relating the relevant Additional Non-Recourse Indebtedness to the stock or
assets of the Borrower or any other Loan Party,
     except, in the case of each of clauses (a), (b), (c) and (d) for the
following (each of which is deemed to be non-recourse for purposes of this
definition): (u) pledges by the Borrower or any Subsidiary of the Equity
Interests of any Excluded Subsidiary that are directly owned by the Borrower or
any Subsidiary in favor of the agent or lenders in respect of such Excluded
Subsidiary’s Additional Non-Recourse Indebtedness, (v) obligations to pay or
guarantees by the Borrower or any other Subsidiary in respect of a development
fee, management fee, success fee, royalty or other similar obligation owed to a
seller or developer (or any affiliate thereof) of a Facility in connection with
the contribution or acquisition of such Facility (or of a Subsidiary holding
such Facility or development rights to such Facility) or development rights to
such Facility to the extent such obligations or guarantees are treated as an
Investment under (and are permitted by) Section 6.05(l), and/or any obligations,
credit support or guarantees by the Borrower or any other Subsidiary that are
treated as an Investment under (and are permitted by) Section 6.05(e), 6.05(g),
6.05(h), 6.05(l), 6.05(m), 6.05(p) or 6.05(s); (w) other than with respect to
clause (c) except as set forth therein, Guarantees by the Borrower or any other
Subsidiary of such Indebtedness that are incurred pursuant to Section 6.01(p),
(x) agreements of the Borrower or any other Subsidiary to provide, or guarantees
or other credit support (including letters of credit) by the Borrower or any
Subsidiary of any agreement of another Subsidiary to provide, corporate,
management, administrative, technical, energy management or marketing,
engineering, procurement, construction, operation and/or maintenance services to
such Subsidiary, including in respect of the sale

7

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

 

or acquisition of power, emissions credits, fuel, oil, gas or other supply of
energy, (y) Guarantees of the Borrower or any other Subsidiary with respect to
debt service reserves established with respect to such Subsidiary to the extent
that such Guarantee shall result in the immediate payment of funds, pursuant to
dividends or otherwise, in the amount of such Guarantee to the Borrower or such
other Subsidiary and (z) contingent obligations of the Borrower or any other
Subsidiary to make capital contributions to such Subsidiary, in the case of each
of clauses (u) through (z), which are otherwise permitted hereunder.
     “Adjusted LIBO Rate” shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum equal to the product of
(a) the LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.
     “Administrative Agent” shall have the meaning assigned to such term in the
preamble.
     “Administrative Agent Fees” shall have the meaning assigned to such term in
Section 2.05(b).
     “Administrative Questionnaire” shall mean an Administrative Questionnaire
substantially in the form of Exhibit A, or such other similar form as may be
supplied from time to time by the Administrative Agent.
     “Affiliate” of any specified Person shall mean any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control,”
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms “controlling,” “controlled by” and “under common control
with” have correlative meanings.
     “Affiliate Subordination Agreement” shall mean an Affiliate Subordination
Agreement in the form of Exhibit B pursuant to which intercompany obligations
and advances owed by any Loan Party to a Person that is not a Loan Party are
required to be subordinated to the Guaranteed Obligations hereunder pursuant to
Section 6.01(f).
     “Affiliate Transaction” shall have the meaning assigned to such term in
Section 6.08.
     “Agents” shall have the meaning assigned to such term in Article VIII.
     “Aggregate Revolving Credit Exposure” shall mean the aggregate amount of
the Lenders’ Revolving Credit Exposures.
     “Agreement” shall mean this Third Amended and Restated Credit Agreement, as
amended and restated on the Third Restatement Date and as the same may
thereafter from time to time be further amended, restated, supplemented or
otherwise modified and in effect from time to time.
     “Alternate Base Rate” shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to
a change in the Prime Rate or the Federal Funds Effective Rate

8

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

 

shall be effective as of the opening of business on the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
     “Applicable Laws” shall mean, as to any Person, any law, rule, regulation,
ordinance or treaty, or any determination, ruling or other directive by or from
a court, arbitrator or other Governmental Authority, including ERCOT, in each
case applicable to or binding on such Person or any of its property or assets or
to which such Person or any of its property or assets is subject.
     “Applicable Margin” shall mean, for any day, for each Type and Class of
Loan, the rate per annum set forth under the relevant column heading below based
upon the Consolidated Senior Leverage Ratio as of the relevant date of
determination:

9

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

 

                                                              Extended          
Original                 Extended   Maturity   Original   Maturity              
  Maturity   ABR   Maturity   ABR                 Eurodollar   Term   Eurodollar
  Term                 Term   Loans   Term   Loans           ABR Consolidated  
Loans and   and   Loans and   and           Revolving Senior   Credit-   Credit-
  Credit-   Credit-   Eurodollar   Loans and Leverage   Linked   Linked   Linked
  Linked   Revolving   Swingline Ratio   Deposits   Deposits   Deposits  
Deposits   Loans   Loans
Category 1
                                               
Greater than 3.50 to 1.00
    3.25 %     2.25 %     1.75 %     0.75 %     3.25 %     2.25 %
 
                                               
Category 2
                                               
Greater than 3.00 to 1.00 but less than or equal to 3.50 to 1.00
    3.25 %     2.25 %     1.50 %     0.50 %     3.00 %     2.00 %
 
                                               
Category 3
                                               
Less than or equal to 3.00 to 1.00
    3.25 %     2.25 %     1.50 %     0.50 %     3.00 %     2.00 %

     Each change in the Applicable Margin resulting from a change in the
Consolidated Senior Leverage Ratio shall be effective with respect to all
Commitments, Loans and Letters of Credit outstanding on or after the date of
delivery to the Administrative Agent of the financial statements and
certificates required by Section 5.04(a) or (b) and Section 5.04(c),
respectively, indicating such change until the date immediately preceding the
next date of delivery of such financial statements and certificates indicating
another such change. In addition, at any time during which the Borrower has
failed to deliver the financial statements and certificates required by
Section 5.04(a) or (b) and Section 5.04(c), respectively, the Consolidated
Senior Leverage Ratio shall be deemed to be in Category 1 for purposes of
determining the Applicable Margin. Notwithstanding any of the foregoing, the
Applicable Margin that is applicable for each Type of Loan at any time shall be
increased by an additional 0.25% per annum for any period on or after the First
Restatement Date during which the Borrower’s corporate family rating from
Moody’s shall not be at least Ba3 or the Borrower’s corporate rating from S&P
shall not be at least B+ (a “Downgrade Event”); provided that such additional
0.25% per annum increase to the Applicable Margin shall cease to apply for any
period during which a Downgrade Event shall cease to exist.
     “Approved Electronic Communications” shall mean each Communication that any
Loan Party is obligated to, or otherwise chooses to, provide to the
Administrative Agent pursuant to any Loan Document or the transactions
contemplated therein, including any financial statement, financial and other
report, notice, request, certificate and other information material; provided,
however, that, solely with respect to delivery of any such Communication by any
Loan Party to

10

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

 

the Administrative Agent and without limiting or otherwise affecting either the
Administrative Agent’s right to effect delivery of such Communication by posting
such Communication to the Approved Electronic Platform or the protections
afforded hereby to the Administrative Agent in connection with any such posting,
“Approved Electronic Communication” shall exclude (i) any Borrowing Request,
Letter of Credit notice (other than as expressly set forth in Section 2.23(b)),
Swingline Loan notice, notice of conversion or continuation, and any other
notice, demand, communication, information, document and other material relating
to a request for a new, or a conversion of an existing, Borrowing, (ii) any
notice pursuant to Sections 2.12 and 2.13 and any other notice relating to the
payment of any principal or other amount due under any Loan Document prior to
the scheduled date therefor, (iii) all notices of any Default or Event of
Default and (iv) any notice, demand, communication, information, document and
other material required to be delivered to satisfy any of the conditions set
forth in Article IV or any other condition to any Borrowing or other extension
of credit hereunder or any condition precedent to the effectiveness of this
Agreement.
     “Approved Electronic Platform” shall have the meaning assigned to such term
in Section 9.01(d).
     “Arrangers” shall have the meaning assigned to such term in the preamble.
     “Asset Sale” shall mean the direct or indirect (a) sale, lease (other than
an operating lease), sale and leaseback, lease and leaseback, assignment (other
than a collateral assignment), conveyance, transfer or other disposition (by way
of merger, consolidation, casualty, condemnation, operation of law or otherwise
(other than pursuant to an event that may result in a Recovery Event)) by the
Borrower or any Restricted Subsidiary to any Person other than, in the case of
assets not constituting Core Collateral, the Borrower or any Subsidiary
Guarantor of (1) any Equity Interests of any of the Subsidiaries (other than
directors’ qualifying shares or investments by foreign nationals required by
Applicable Laws) or (2) any other assets of the Borrower or any Restricted
Subsidiary, including Equity Interests of any Person that is not the Borrower or
a Subsidiary or (b) issuance of Equity Interests in any of the Restricted
Subsidiaries to any Person other than the Borrower or any Subsidiary Guarantor;
provided that (i) any asset sale or series of related asset sales described in
clause (a) or (b) above of assets not constituting Core Collateral and having a
value not in excess of $100,000,000 shall be deemed not to be an “Asset Sale”
for purposes of this Agreement; and (ii) each of the following transactions
shall be deemed not to be an “Asset Sale” for purposes of this Agreement:
(A) the sale, transfer, contribution or other disposition by the Borrower or any
Restricted Subsidiary of (x) damaged, worn-out, obsolete assets and scrap and
(y) cash or Cash Equivalents, (B) the sale by the Borrower or any Restricted
Subsidiary of power, capacity, energy, ancillary services, and other products or
services, or the sale of any other inventory or contracts related to any of the
foregoing (in each case, whether in physical, financial or any other form),
(C) the sale, lease, conveyance or other disposition for value by the Borrower
or any Restricted Subsidiary of fuel or emission credits in the ordinary course
of business, (D) the sale, transfer or other disposition of any assets (other
than any such assets which are Collateral) in connection with a foreclosure,
transfer or deed in lieu of foreclosure or other remedial action, (E) the sale,
transfer, contribution or other disposition by any Restricted Subsidiary that is
not a Loan Party of any of its assets (other than any such assets constituting
Collateral) or the issuance of Equity Interests by any Subsidiary (that is not a
Loan Party) of such Restricted Subsidiary, in each case to any other Subsidiary
that is not a Loan Party, (F) the licensing of intellectual property, (G) the
sale or discount, in each case without recourse, of accounts receivable arising
in the ordinary course of business, but only in connection with the compromise
or collection thereof, (H) the sale, transfer or other disposition of spare
parts and spare parts inventory to any other Restricted Subsidiary in the
ordinary course of business so long as such spare parts and spare parts
inventory are required in the ordinary course

11

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

 

operation of the transferee’s business or operations at the time of such
disposition, (I) the sale, transfer, contribution, assignment, conveyance or
other disposition of any assets by the Borrower or any Restricted Subsidiary to
an Excluded Subsidiary or Minority Investment, in each case, to the extent such
sale, transfer or other disposition also constitutes an Investment in such
Excluded Subsidiary or Minority Investment, as applicable, that is permitted by
(and made in accordance with) clause (g), (h), (l), (m) or (p) of Section 6.05
and (J) any sale, transfer, contribution, assignment, conveyance or other
disposition that is permitted by (and made in accordance with) Section 6.05(u).
     “Assignment and Acceptance” shall mean an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any Person whose consent
is required by Section 9.04), substantially in the form of Exhibit C or such
other similar form as shall be approved by the Administrative Agent.
     “Attributable Debt” in respect of a sale and leaseback transaction shall
mean, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such sale and leaseback transaction, including any period for which such
lease has been extended or may, at the option of the lessor, be extended. Such
present value shall be calculated using a discount rate equal to the rate of
interest implicit in such transaction, determined in accordance with GAAP;
provided, however, that if such sale and leaseback transaction results in a
Capital Lease Obligation, the amount of Indebtedness represented thereby will be
determined in accordance with the definition of “Capital Lease Obligation”, and
shall not be deemed to be Attributable Debt.
     “Available Amount” shall mean, on any date (the “Reference Date”), an
amount equal at such time to (a) the sum of, without duplication:
          (i) $500,000,000 in the aggregate;
          (ii) for each ECF Period for which the Borrower shall have provided
its calculation of Excess Cash Flow pursuant to Section 5.04(c) and prior to the
Reference Date, beginning with the fiscal year ending December 31, 2010, an
amount equal to the sum of the amounts calculated for each such ECF Period which
is equal to (A) the Excess Cash Flow for such ECF Period minus (B) an amount
equal to the Required Prepayment Percentage for such ECF Period multiplied by
such Excess Cash Flow for such ECF Period; provided that for purposes of this
clause (ii) Excess Cash Flow for any fiscal year or, solely in the event that
the Borrower shall exercise its option under (and in accordance with)
Section 2.13(d) to calculate Excess Cash Flow (and make the required repayment
and prepayment offer) for any fiscal period other than a fiscal year, such
applicable ECF Period may not be less than zero;
          (iii) the amount of any capital contributions received in cash or the
net cash proceeds of other equity issuances made by the Borrower (other than any
Cure Amount or any amount used to make Dividends pursuant to Section 6.06(a))
during the period from and including the Business Day immediately following the
Third Restatement Date through and including the Reference Date;
          (iv) the aggregate amount of all cash dividends and other cash
distributions received by the Borrower or any Subsidiary Guarantor from any
Minority Investment, Excluded Subsidiary (other than the Funded L/C SPV) or
Unrestricted Subsidiary after the Third Restatement Date and on or prior to the
Reference Date (other than the portion of any such dividends and other
distributions that is used by the Borrower or any Subsidiary Guarantor to pay
taxes);

12

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

 

          (v) the aggregate amount of all cash repayments of principal and
interest received by the Borrower or any Subsidiary Guarantor from any Minority
Investment, Excluded Subsidiary (other than the Funded L/C SPV) or Unrestricted
Subsidiary after the Third Restatement Date and on or prior to the Reference
Date in respect of loans made by the Borrower or any Subsidiary Guarantor to
such Minority Investment, Excluded Subsidiary (other than the Funded L/C SPV) or
Unrestricted Subsidiary;
          (vi) the aggregate amount of all Net Asset Sale Proceeds received by
the Borrower or any Subsidiary Guarantor in connection with the sale, transfer
or other disposition of its ownership interest in any Minority Investment,
Excluded Subsidiary (other than the Funded L/C SPV) or Unrestricted Subsidiary
after the Third Restatement Date and on or prior to the Reference Date;
          (vii) the amount of any non-cash capital contributions made to the
Borrower (or to any Subsidiary Guarantor, if made by a Person other than the
Borrower, any Subsidiary of the Borrower or Affiliate of the Borrower in which
the Borrower or any Subsidiary of the Borrower shall directly or indirectly hold
any Equity Interests and, in each case, not made in connection with the sale or
other transfer of any Equity Interests of such Subsidiary Guarantor) or the net
non-cash proceeds of equity issuances made by the Borrower in connection with a
transaction pursuant to which the Borrower or any Subsidiary Guarantor shall
acquire assets that were not assets of the Borrower or any Subsidiary Guarantor
as of the Third Restatement Date and occurring during the period from and
including the Business Day immediately following the Third Restatement Date
through and including the Reference Date, in each case, valued at the Fair
Market Value of the applicable assets at the time received (calculated net of
any consideration that is provided by the Borrower or any Subsidiary Guarantor
in connection with such transaction, excluding any equity of the Borrower issued
in connection therewith, which shall not be applied to such netting);
          (viii) the aggregate amount of all assets (including tax credits and,
without duplication, the benefit of any tax depreciation that had accrued prior
to the applicable distribution, but excluding any assets that were included in
the determination of Consolidated Net Income of the Borrower at any time on or
prior to the Reference Date) that were not assets of the Borrower or any
Subsidiary Guarantor as of the Third Restatement Date and are either
(A) received by the Borrower or any Subsidiary Guarantor from any Minority
Investment, Excluded Subsidiary (other than the Funded L/C SPV) or Unrestricted
Subsidiary or (B) owned by an Excluded Subsidiary or Unrestricted Subsidiary
that is designated by the Borrower as a Subsidiary Guarantor in accordance with
the terms and provisions hereof and the shall comply with the applicable
provisions of Section 5.09 to the extent required thereby, in each case, after
the Third Restatement Date and on or prior to the Reference Date, and, in each
case, valued at the Fair Market Value of the applicable assets at the time
received or at the time of any such designation, as applicable (calculated net
of any consideration that is provided by the Borrower or any Subsidiary
Guarantor in connection with such transaction); and
          (ix) the aggregate amount of the Available Amount immediately prior to
the Third Restatement Date as calculated under and pursuant to the definition
thereof in the Second Restated Credit Agreement,
     minus (b) the sum of:
          (i) the aggregate amount of any Investments made by the Borrower or
any Restricted Subsidiary pursuant to Section 6.05(l)(ii)(A)(y) after the Third
Restatement Date and on or prior to the Reference Date;

13

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

 

          (ii) the aggregate amount of any Dividends made by the Borrower
pursuant to Section 6.06(c) after the Third Restatement Date and on or prior to
the Reference Date;
          (iii) the aggregate amount of prepayments, repurchases and redemptions
made by the Borrower or any Restricted Subsidiary pursuant to Section 6.07(a)(v)
after the Third Restatement Date and on or prior to the Reference Date; and
          (iv) the aggregate amount of Capital Expenditures made by the Borrower
or any Restricted Subsidiary (other than any Excluded Subsidiaries) pursuant to
clause (a) of the proviso in Section 6.12 after the Third Restatement Date and
on or prior to the Reference Date.
     “Bankruptcy Code” shall mean Title 11 of United States Code, 11 U.S.C. §§
101, et seq., as amended from time to time.
     “Bankruptcy Law” shall mean the Bankruptcy Code or any similar federal or
state or other law for the relief of debtors.
     “Beneficial Owner” shall have the meaning assigned to such term in
Rule 13d-3 and Rule 13d-5 under the Exchange Act. The terms “Beneficially Owns”
and “Beneficially Owned” have a corresponding meaning.
     “Benefit Plan” shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Tax Code or Section 302 of ERISA, and which is maintained,
sponsored or contributed to by the Borrower or any ERISA Affiliate or with
respect to which the Borrower otherwise has any liability.
     “Board” shall mean the Board of Governors of the Federal Reserve System of
the United States of America.
     “Board of Directors” shall mean (a) with respect to a corporation, the
board of directors of the corporation or any committee thereof duly authorized
to act on behalf of such board; (b) with respect to a partnership, the Board of
Directors of the general partner of the partnership; (c) with respect to a
limited liability company, the managing member or members or any controlling
committee of managing members thereof; and (d) with respect to any other Person,
the board or committee of such Person serving a similar function.
     “Borrower” shall have the meaning assigned to such term in the preamble.
     “Borrowing” shall mean (a) Loans of the same Class and Type made, converted
or continued on the same date and, in the case of Eurodollar Loans, as to which
a single Interest Period is in effect, or (b) a Swingline Loan.
     “Borrowing Request” shall mean a request by the Borrower in accordance with
the terms of Section 2.03 and substantially in the form of Exhibit D.
     “Breakage Event” shall have the meaning assigned to such term in
Section 2.16.
     “Business Day” shall mean any day other than a Saturday, Sunday or day on
which commercial banks in New York City are authorized or required by law to
close; provided, however, that when used in connection with a Eurodollar Loan
(including with respect to all notices and determinations in connection
therewith and any payments of principal, interest or

14

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

 

other amounts thereon), the term “Business Day” shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London interbank
market.
     “Capital Expenditures” shall mean, for any period, with respect to any
Person, (a) the additions to property, plant and equipment and other capital
expenditures of such Person and its consolidated subsidiaries that are (or
should be) set forth in a consolidated statement of cash flows of such Person
for such period prepared in accordance with GAAP and (b) Capital Lease
Obligations incurred by such Person and its consolidated subsidiaries during
such period to the extent paid in cash; provided, however, that Capital
Expenditures shall not include (i) Environmental Capital Expenditures (other
than for purposes of Section 6.05(l)(ii)(B), for which purpose they will count
as Capital Expenditures), (ii) Necessary Capital Expenditures (other than for
purposes of Section 6.05(l)(ii)(B), for which purpose they will count as Capital
Expenditures), (iii) expenditures made to restore, rebuild or replace property
following any damage, loss, destruction or condemnation of such property, to the
extent such expenditure is made or financed with proceeds received or to be
received from a Recovery Event, (iv) expenditures constituting reinvestment
proceeds from the sale or other disposition of assets (including Asset Sales)
otherwise permitted herein, (v) expenditures made to acquire an Investment
permitted under Section 6.05, including pursuant to a Permitted Acquisition (it
being understood and agreed, however, that an acquisition of assets (other than
an acquisition of assets comprising a division or a line of business or an
acquisition of an Excluded Subsidiary or all or substantially all of the assets
of a Person by an Excluded Subsidiary) that would otherwise constitute Capital
Expenditures pursuant to the definition hereof shall not be excluded by this
clause (v)), (vi) expenditures made to the extent reimbursed by a Person other
than the Loan Parties and their Subsidiaries or (vii) expenditures constituting
capitalized interest.
     “Capital Lease Obligation” shall mean, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP, and the Stated Maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be prepaid by the lessee without payment of a penalty.
     “Capital Stock” shall mean (a) in the case of a corporation, corporate
stock; (b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock; (c) in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or membership interests; and
(d) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person, but excluding from all of the foregoing any debt securities
convertible into Capital Stock, whether or not such debt securities include any
right of participation with Capital Stock.
     “Carry Forward Amount” shall have the meaning assigned to such term in
Section 6.12.
     “Cash Collateralized Letter of Credit Facilities” shall mean one or more
cash collateralized letter of credit facilities provided by one or more LC
Issuers to the Funded L/C SPV.
     “Cash Equivalents” shall mean
     (a) United States dollars, Euros, Australian dollars, Swiss Francs,
Japanese Yen and any other currency of countries members of the Organization for
Economic Co-operation and Development or, in the case of any Foreign Subsidiary,
any currencies (including Australian dollars and Brazilian Reais) held by it
from time to time;

15

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

 

     (b) (i) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality of the United
States government (provided that the full faith and credit of the United States
is pledged in support of those securities) and (ii) debt obligations issued by
the Government National Mortgage Association, Farm Credit System, Federal Home
Loan Banks, Federal Home Loan Mortgage Corporation, Financing Corporation and
Resolution Funding Corporation, in each case, having maturities of not more than
12 months from the date of acquisition;
     (c) certificates of deposit and eurodollar time deposits with maturities of
six months or less from the date of acquisition, bankers’ acceptances with
maturities not exceeding 12 months and overnight bank deposits, in each case,
with any domestic commercial bank having capital and surplus in excess of
$500,000,000 and whose long-term debt, or whose parent company’s long-term debt,
has a rating of A2 or higher from Moody’s and A or higher from S&P or, if
Moody’s and S&P do not rate the relevant bank, an equivalent rating issued by an
equivalent non-U.S. rating agency, if any;
     (d) repurchase obligations with a term of not more than thirty days for
underlying securities of the types described in clauses (b) and (c) above
entered into with any financial institution meeting the qualifications specified
in clause (c) above;
     (e) commercial paper having one of the two highest ratings obtainable from
Moody’s or S&P and in each case maturing within 12 months after the date of
acquisition;
     (f) readily marketable direct obligations issued or guaranteed by any state
of the United States or any political subdivision thereof (including
municipalities), in either case having one of the two highest rating categories
obtainable from any of Moody’s, S&P or Fitch;
     (g) auction rate securities having one of the two highest ratings
obtainable from any of Moody’s, S&P or Fitch and in each case maturing within
12 months after the date of acquisition;
     (h) money market funds that invest primarily in securities described in
clauses (a) through (g) of this definition; and
     (i) other short-term investments utilized by Foreign Subsidiaries in
accordance with normal investment practices for cash management in investments
of a type analogous to the foregoing.
     “CGMI” shall mean Citigroup Global Markets Inc., as syndication agent under
the Existing Credit Agreement.
     “Change in Law” shall mean (a) the adoption of any law, rule or regulation
after the Closing Date, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
Closing Date or (c) compliance by any Lender or any Issuing Bank (or, for
purposes of Section 2.14, by any lending office of such Lender or by such
Lender’s or Issuing Bank’s holding company, if any) with any request, guideline
or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the Closing Date.

16

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

 

     “Change of Control” shall mean the occurrence of any of the following:
(a) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Borrower and its Subsidiaries taken as a whole to any “person” (as that term is
used in Section 13(d) of the Exchange Act, but excluding any employee benefit
plan of the Borrower or any of its Restricted Subsidiaries, and any Person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of such plan); (b) the adoption of a plan relating to the
liquidation or dissolution of the Borrower; (c) the consummation of any
transaction (including any merger or consolidation) the result of which is that
any “person” (as defined above) becomes the Beneficial Owner, directly or
indirectly, of more than 40% of the Voting Stock of the Borrower, measured by
voting power rather than number of shares; (d) the Borrower consolidates with,
or merges with or into, any Person, or any Person consolidates with, or merges
with or into, the Borrower, in any such event pursuant to a transaction in which
any of the outstanding Voting Stock of the Borrower or such other Person is
converted into or exchanged for cash, securities or other property, other than
any such transaction where the Voting Stock of the Borrower outstanding
immediately prior to such transaction is converted into or exchanged for Voting
Stock (other than Disqualified Stock) of the surviving or transferee Person
constituting a majority of the outstanding shares of such Voting Stock of such
surviving or transferee Person (immediately after giving effect to such
issuance); (e) the first day on which a majority of the members of the Board of
Directors of the Borrower are not Continuing Directors; or (f) any change of
control (or similar event, however denominated) shall occur under and as defined
in the Senior Note Documents or the documents governing any Permitted Notes
Indebtedness.
     “Charges” shall have the meaning assigned to such term in Section 9.09.
     “Class”, when used in reference to any Loan or Borrowing, shall refer to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Original Maturity Term Loans, Extended Maturity Term Loans, Original Maturity
Credit-Linked Deposits, Extended Maturity Credit-Linked Deposits, Swingline
Loans, New Revolving Loans, New Term Loans, Refinancing Revolving Loans or
Refinancing Term Loans and, when used in reference to any Commitment, shall
refer to whether such Commitment is a Revolving Credit Commitment, Term Loan
Commitment, Swingline Commitment, New Revolving Credit Commitment, New Term Loan
Commitment, Refinancing Revolving Credit Commitment or Refinancing Term Loan
Commitment. For the avoidance of doubt, the Extended Maturity Term Loans,
Original Maturity Term Loans, Extended Maturity Credit-Linked Deposits and
Original Maturity Credit-Linked Deposits each constitutes a separate Class and
any Loans or Commitments created pursuant to a Permitted Amendment shall
constitute a separate Class.
     “Class A Membership Units” shall mean the class of membership interests of
the Funded L/C SPV consisting of Class A membership interests pursuant to and in
accordance with that certain Operating Agreement of NRG LC Facility Company LLC,
dated as of June 30, 2010, among the Borrower, the Funded L/C SPV and Deutsche
Bank AG, New York Branch, as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
     “Closing Date” shall mean February 2, 2006.
     “CNA” shall have the meaning assigned to such term in the preamble.
     “Collateral” shall mean all property and assets of the Loan Parties, now
owned or hereafter acquired, other than the Excluded Assets. “Collateral” shall
include, without limitation, all Core Collateral.

17

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

 

     “Collateral Agent” shall have the meaning assigned to such term in the
preamble.
     “Collateral Trust Agreement” shall mean the Amended and Restated Collateral
Trust Agreement, dated as of the Third Restatement Date, executed and delivered
by the Borrower, each Subsidiary Guarantor and the Collateral Trustee, as the
same may be amended, restated, supplemented or otherwise modified from time to
time in accordance with the terms thereof.
     “Collateral Trust Joinder” shall have the meaning assigned to such term in
the Collateral Trust Agreement.
     “Collateral Trustee” shall mean Deutsche Bank Trust Company Americas,
acting as collateral trustee under the Collateral Trust Agreement, or its
successors appointed in accordance with the terms thereof.
     “Commitment” shall mean, with respect to any Lender and as of any date of
determination, such Lender’s Revolving Credit Commitment, Term Loan Commitment
or Swingline Commitment as of such date.
     “Commitment Fee” shall have the meaning assigned to such term in
Section 2.05(a).
     “Commitment Fee Rate” shall mean a rate per annum equal to 0.625%;
provided, however, that if and for so long as the Consolidated Senior Leverage
Ratio of the Borrower for any Test Period for which the financial statements and
certificates required by Section 5.04(a) or (b) and Section 5.04(c),
respectively, have been delivered to the Administrative Agent shall be less than
or equal to 3.50 to 1.00, such rate shall be reduced to a rate per annum equal
to 0.50%.
     “Commodity Contract” shall have the meaning assigned to such term in the
UCC.
     “Commodity Hedging Agreements” shall mean the Existing Commodity Hedging
Agreements and any other agreement (including each confirmation entered into
pursuant to any master agreement) providing for swaps, caps, collars, puts,
calls, floors, futures, options, spots, forwards, power purchase or sale
agreements, fuel purchase or sale agreements, emissions credit purchase or sales
agreements, power transmission agreements, fuel transportation agreements, fuel
storage agreements, netting agreements, commercial or trading agreements,
weather derivatives agreements, each with respect to, or involving the purchase,
transmission, distribution, sale, lease or hedge of, any energy, generation
capacity or fuel, or any other energy or weather related commodity, service or
risk, price or price indices for any such commodities, services or risks or any
other similar derivative agreements, any renewable energy credits, carbon
emission credits and any other “cap and trade” related credits, assets or
attributes with an economic value and any other similar agreements, entered into
by the Borrower or any Restricted Subsidiary, in each case under this
definition, in the ordinary course of business, or otherwise consistent with
Prudent Industry Practice in order to manage fluctuations in the price or
availability to the Borrower or any Restricted Subsidiary of any commodity
and/or manage the risk of adverse or unexpected weather conditions.
     “Commodity Hedging Obligations” shall mean, with respect to any specified
Person, the obligations of such Person under a Commodity Hedging Agreement.
     “Communications” shall mean each notice, demand, communication,
information, document and other material provided for hereunder or under any
other Loan Document or otherwise transmitted between the parties hereto relating
this Agreement, the other Loan Documents, any Loan Party or its Affiliates, or
the transactions contemplated by this Agreement

18

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

 

or the other Loan Documents including, without limitation, all Approved
Electronic Communications.
     “Concurrent Cash Distributions” shall have the meaning assigned to such
term in the definition of “Investments.”
     “Consolidated EBITDA” shall mean, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus,
without duplication
     (a) an amount equal to any extraordinary loss (including any loss on the
extinguishment or conversion of Indebtedness) plus any net loss realized by such
Person or any of its Restricted Subsidiaries in connection with an Asset Sale
(without giving effect of the threshold provided in the definition thereof), to
the extent such losses were deducted in computing such Consolidated Net Income;
plus
     (b) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus
     (c) to the extent deducted in computing such Consolidated Net Income,
(i) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including, without
limitation, amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations (other than, for the avoidance of doubt, any Capital Lease
Obligations arising as a result of the recharacterization of operating leases as
capital leases due to changes in the accounting treatment of such operating
leases under GAAP and excluded from the definition of “Indebtedness” as a result
of such recharacterization on a consolidated basis and determined in accordance
with GAAP), imputed interest with respect to Attributable Debt, and net of the
effect of all payments made or received pursuant to Hedging Obligations in
respect of interest rates; plus (ii) the consolidated interest of such Person
and its Restricted Subsidiaries that was capitalized during such period; plus
(iii) any interest accruing on Indebtedness of another Person that is guaranteed
by such Person or one of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries, whether or not such
Guarantee or Lien is called upon; plus (iv) the product of (A) all dividends,
whether paid or accrued and whether or not in cash, on any series of preferred
stock of such Person or any of its Restricted Subsidiaries, other than dividends
on Equity Interests payable in Equity Interests of the Borrower (other than
Disqualified Stock) or to the Borrower or a Restricted Subsidiary of the
Borrower, times (B) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state and
local statutory tax rate of such Person, expressed as a decimal, in each case,
on a consolidated basis and in accordance with GAAP; minus (v) interest income
for such period; plus
     (d) any expenses or charges related to any equity offering, Investment,
acquisition, disposition, recapitalization or Indebtedness permitted to be
incurred under this Agreement including a refinancing thereof (whether or not
successful) (including any transaction occurring on the Third Restatement Date),
including such fees, expenses or charges related to the Acquisition
Transactions, the offering of the Senior Notes, and, in each case, deducted in
computing such Consolidated Net Income; plus

19

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

 

     (e) any professional and underwriting fees related to any equity offering,
Investment, acquisition, recapitalization or Indebtedness permitted to be
incurred under this Agreement and, in each case, deducted in such period in
computing Consolidated Net Income; plus
     (f) the amount of any minority interest expense deducted in calculating
Consolidated Net Income (less the amount of any cash dividends paid to the
holders of such minority interests); plus
     (g) any non cash gain or loss attributable to Mark-to-Market Adjustments in
connection with Hedging Obligations; plus
     (h) without duplication, any writeoffs, writedowns or other non-cash
charges reducing Consolidated Net Income for such period, excluding any such
charge that represents an accrual or reserve for a cash expenditure for a future
period; plus
     (i) all items classified as extraordinary, unusual or nonrecurring non-cash
losses or charges (including severance, relocation and other restructuring
costs), and related tax effects according to GAAP to the extent such non-cash
charges or losses were deducted in computing such Consolidated Net Income; plus
     (j) depreciation, depletion, amortization (including amortization of
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash charges and expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or reserve for
cash expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its Restricted Subsidiaries
for such period to the extent that such depreciation, depletion, amortization
and other non-cash expenses were deducted in computing such Consolidated Net
Income; minus
     (k) non-cash items increasing such Consolidated Net Income for such period,
other than the accrual of revenue in the ordinary course of business; in each
case, on a consolidated basis and determined in accordance with GAAP (including
any increase in amortization or depreciation or other non-cash charges resulting
from the application of purchase accounting in relation to the Acquisition
Transactions or any acquisition that is consummated after the Closing Date);
     provided, however, that Consolidated EBITDA of the Borrower will exclude
the Consolidated EBITDA attributable to Excluded Subsidiaries and Unrestricted
Subsidiaries unless (and solely to the extent) actually distributed in cash to
the Borrower or any Subsidiary Guarantor; provided further that for purposes of
calculating Consolidated EBITDA for any period for purposes of the covenants set
forth in Sections 6.13 and 6.14 or for purposes of calculating the Consolidated
Interest Coverage Ratio, Consolidated First Lien Senior Secured Leverage Ratio,
Consolidated Leverage Ratio or Consolidated Senior Leverage Ratio for any other
purpose hereunder, in each case, as of any date of delivery to the
Administrative Agent of the financial statements and certificates required by
Section 5.04(a) or 5.04(b) and Section 5.04(c), respectively, and the applicable
period then ended (A) the Consolidated EBITDA of any Person (provided that such
Person shall become a Restricted Subsidiary as a result of such acquisition) or
line of business acquired by the Borrower or any Subsidiary Guarantor during
such period for which the aggregate consideration paid by the Borrower or any
Subsidiary Guarantor shall be equal to or greater than $25,000,000 shall be
included on a pro forma basis for such period (assuming the consummation of such
acquisition and the incurrence or assumption of any

20

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

 

Indebtedness in connection therewith occurred as of the first day of such
period) and (B) the Consolidated EBITDA of any Person or line of business sold
or otherwise disposed of by the Borrower or any Subsidiary Guarantor in
accordance with this Agreement during such period for which the aggregate
consideration received by the Borrower or any Subsidiary Guarantor shall be
equal to or greater than $25,000,000 shall be excluded for such period (assuming
the consummation of such sale or other disposition and the repayment of any
Indebtedness in connection therewith occurred as of the first day of such
period).
     “Consolidated First Lien Senior Secured Leverage Ratio” shall mean, on any
date, the ratio of (a) First Lien Senior Secured Debt on such date to
(b) Consolidated EBITDA of the Borrower for the period of four consecutive
fiscal quarters most recently ended on or prior to such date.
     “Consolidated Interest Coverage Ratio” shall mean, on any date, the ratio
of (a) Consolidated EBITDA of the Borrower for the period of four consecutive
fiscal quarters most recently ended on or prior to such date to (b) Consolidated
Interest Expense for the period of four consecutive fiscal quarters most
recently ended on or prior to such date.
     “Consolidated Interest Expense” shall mean, for any period, (a) the cash
interest expense (including imputed cash interest expense in respect of Capital
Lease Obligations and Synthetic Lease Obligations) of the Borrower and the
Restricted Subsidiaries for such period (including all commissions, discounts
and other fees and charges owed by the Borrower and the Restricted Subsidiaries
with respect to letters of credit and bankers’ acceptance financing), net of
interest income, in each case determined on a consolidated basis in accordance
with GAAP, minus (b) to the extent included in such consolidated cash interest
expense for such period, amounts attributable to the amortization of financing
costs and non-cash amounts attributable to the amortization of debt discounts
and other debt issuance costs, fees and expenses; provided, however, that
Consolidated Interest Expense of the Borrower will exclude (i) cash interest
expense (including all commissions, discounts and other fees and charges owed by
such applicable Excluded Subsidiaries with respect to letters of credit and
bankers’ acceptance financing) (and interest income) attributable to
Non-Recourse Indebtedness and all other cash interest expense of Excluded
Subsidiaries and, in the case of the Funded L/C SPV, cash interest expense
(including all commissions, discounts and other fees and charges owed by the
Funded L/C SPV with respect to letters of credit and bankers’ acceptance
financing) (and interest income) attributable to Cash Collateralized Letter of
Credit Facilities and (ii) cash interest expense (and interest income)
attributable to the Credit-Linked Deposits (including any refinancing thereof
permitted hereunder) and the Funded L/C Collateral Accounts (it being understood
that in the event that the aggregate amount on deposit at any time in the Funded
L/C Collateral Accounts shall be less than the principal amount of the
Credit-Linked Deposits (or any refinancing thereof permitted hereunder), for
purposes of determining the amount of cash interest expense attributable to the
Credit-Linked Deposits (or such refinancing) during such time for purposes of
this definition, the amount of the Credit-Linked Deposits (or such refinancing)
shall be deemed to be such lesser amount). For purposes of the foregoing,
interest expense shall be determined after giving effect to any net payments
made or received by the Borrower or any Restricted Subsidiary with respect to
Interest Rate/Currency Hedging Agreements relating to interest rate hedging
activities (other than any such Interest Rate/Currency Hedging Agreements in
respect of Non-Recourse Indebtedness of Excluded Subsidiaries).
     “Consolidated Leverage Ratio” shall mean, on any date, the ratio of
(a) Total Debt on such date to (b) Consolidated EBITDA of the Borrower for the
period of four consecutive fiscal quarters most recently ended on or prior to
such date.

21

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

 

     “Consolidated Net Income” shall mean, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that
     (a) the Net Income of any Person that is not a Restricted Subsidiary or
that is accounted for by the equity method of accounting will be included only
to the extent of the amount of dividends or similar distributions (including
pursuant to other intercompany payments but excluding Concurrent Cash
Distributions) paid in cash to the specified Person or a Restricted Subsidiary
of the specified Person;
     (b) the Net Income of any Restricted Subsidiary will be excluded to the
extent that the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders;
     (c) the cumulative effect of a change in accounting principles will be
excluded;
     (d) any net after-tax non-recurring or unusual gains, losses (less all fees
and expenses relating thereto) or other charges or revenue or expenses
(including relating to severance, relocation, one-time compensation charges and
the Acquisition Transactions) shall be excluded;
     (e) any non-cash compensation expense recorded from grants of stock
appreciation or similar rights, stock options, restricted stock or other rights
to officers, directors or employees shall be excluded, whether under Financial
Accounting Standards Board Statement No. 123R, “Accounting for Stock-Based
Compensation” or otherwise;
     (f) any net after-tax income (loss) from disposed or discontinued
operations and any net after-tax gains or losses on disposal of disposed or
discontinued operations shall be excluded;
     (g) any gains or losses (less all fees and expenses relating thereto)
attributable to asset dispositions shall be excluded;
     (h) any impairment charge or asset write-off pursuant to Financial
Accounting Statement No. 142 and No. 144 or any successor pronouncement shall be
excluded;
     (i) any accruals or reserves or other charges related to the Transactions
and incurred on or before January 1, 2007 shall be excluded; and
     (j) notwithstanding clause (a) above, in determining the Consolidated Net
Income of the Borrower, the Net Income of any Unrestricted Subsidiary or
Excluded Subsidiary will be excluded, unless (and solely to the extent)
distributed to the Borrower or one of the Subsidiary Guarantors.

22

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

 

     “Consolidated Senior Leverage Ratio” shall mean, on any date, the ratio of
(a) Senior Debt on such date to (b) Consolidated EBITDA of the Borrower for the
period of four consecutive fiscal quarters most recently ended on or prior to
such date.
     “Consolidated Working Capital” shall mean, at any date, the excess of
(a) the sum of all amounts (other than cash, cash equivalents and bank
overdrafts) that would, in conformity with GAAP, be set forth opposite the
caption “total current assets” (or any like caption) on a consolidated balance
sheet of the Borrower and the Subsidiary Guarantors at such date over (b) the
sum of all amounts that would, in conformity with GAAP, be set forth opposite
the caption “total current liabilities” (or any like caption) on a consolidated
balance sheet of the Borrower and the Subsidiary Guarantors on such date, but
excluding (i) the current portion of any long-term Indebtedness, (ii) without
duplication of clause (i) above, all Indebtedness consisting of Loans and
Revolving L/C Exposure to the extent otherwise included therein and (iii) the
current portion of deferred income taxes; provided, that, for the avoidance of
doubt, Consolidated Working Capital will exclude all cash, Cash Equivalents and
other securities or investments substantially comparable to Cash Equivalents
pledged or deposited to or by the Borrower or any Subsidiary Guarantor during
such period as collateral from a contract counterparty or from the Borrower or
any Subsidiary Guarantor as collateral in favor of a contract counterparty.
     “Continuing Directors” shall mean, as of any date of determination, any
member of the Board of Directors of the Borrower who (a) was a member of such
Board of Directors on the Closing Date; or (b) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election.
     “Control Agreement” shall mean each Control Agreement to be executed and
delivered by each Loan Party and the other parties thereto, as required by the
applicable Loan Documents as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof.
     “Core Collateral” shall mean all Equity Interests in, and property and
assets of, any Core Collateral Subsidiary, in each case whether now owned or
hereafter acquired; provided, however, that in the case of NRG Texas Power LLC
and NRG South Texas LP only the following property and assets of such
Subsidiaries shall be considered Core Collateral hereunder: (a) NRG Texas Power
LLC Project Interest in the Parish and Limestone Facilities, (b) NRG South Texas
LP’s 44% Project Interest in the South Texas Project Facility and (c) in each
case any assets related primarily to any of the Facilities described in clause
(a) or (b); and provided, further, however, that (i) all Equity Interests or
property or assets excluded from the Core Collateral immediately prior to the
Third Restatement Date under and pursuant to this proviso to this definition as
it existed in the Second Restated Credit Agreement shall continue not to be
considered Core Collateral under this Agreement for any purpose hereunder and
(ii) at any time and from time to time on or after the Third Restatement Date,
the Borrower may deliver to the Administrative Agent an officer’s certificate
designating Core Collateral (in addition to that described in clause (i)) having
an aggregate Fair Market Value not in excess of $750,000,000 in the aggregate,
valued at the Fair Market Value of such Core Collateral at the time such
designation is made, as no longer being Core Collateral, and thereafter, such
Equity Interests or property or assets shall no longer be considered Core
Collateral for any purpose hereunder (the Equity Interests, property and assets
excluded pursuant to clauses (i) and (ii) collectively, the “Excluded Core
Collateral”).
     “Core Collateral Subsidiary” shall mean each of NRG Texas Power LLC, NRG
South Texas LP and NRG Power Marketing.

23

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

 

     “Counterparty Account” shall mean any Deposit Account, Securities Account
or Commodities Account (and all cash, Cash Equivalents and other securities or
investments substantially comparable to Cash Equivalents therein) pledged to or
deposited with the Borrower or any Restricted Subsidiary as cash collateral
posted or deposited by a contract counterparty (including a counterparty in
respect of Commodity Hedging Obligations) to or for the benefit of the Borrower
or any Restricted Subsidiary, in each case, only for so long as such account
(and amounts therein) represents a security interest (including as a result of
an escrow arrangement) in favor (and not an ownership interest in the amounts
therein) of the Borrower or the applicable Restricted Subsidiary.
     “Credit Agreement Refinanced Debt” shall have the meaning assigned to such
term in Section 6.01(y).
     “Credit Event” shall have the meaning assigned to such term in
Section 4.01.
     “Credit-Linked Deposit” shall mean the term loans deemed to be made by each
Funded L/C Lender to the Borrower on the Third Restatement Date pursuant to
Section 2.01(c).
     “Credit-Linked Deposit Maturity Date” shall mean (i) in the case of the
Extended Maturity Credit-Linked Deposits, the Extended Maturity Credit-Linked
Deposit Maturity Date and (ii) in the case of the Original Maturity
Credit-Linked Deposits, the Original Maturity Credit-Linked Deposit Maturity
Date, in each case, as it may be extended pursuant to and in accordance with
this Agreement.
     “Cure Amount” shall have the meaning provided in Article VII.
     “Cure Right” shall have the meaning provided in Article VII.
     “Default” shall mean any event or condition which upon notice, lapse of
time (pursuant to Article VII) or both would constitute an Event of Default.
     “Defaulting Lender” shall mean, at any time, any Lender that, at such time,
has (a) failed to (i) pay any amount required to be paid by such Lender to any
Issuing Bank under this Agreement (beyond any applicable cure period), (ii) fund
any portion of its Loans (unless such Lender notifies the Administrative Agent
in writing that such failure is the result of such Lender’s good faith
determination that a condition precedent to funding (specifically identified
and, if available to such Lender, supported by reasonable background information
provided by such Lender) has not been satisfied), its participations in Letters
of Credit or Swingline Loans or (iii) pay over to the Administrative Agent, the
Issuing Bank, the Swingline Lender or any other Lender any other amount required
to be paid by it hereunder, (b) notified the Borrower, the Administrative Agent,
the Issuing Bank, the Swingline Lender or any other Lender, in writing, or has
made a public statement, to the effect that it does not intend or expect to
comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent to funding a Loan
cannot be satisfied) or generally under other agreements in which it commits to
extend credit, (c) failed, within three Business Days after request by the
Administrative Agent, any Issuing Bank or the Swingline Lender, acting in good
faith, to provide a certification in writing from an authorized officer of such
Lender that it will comply with its obligations to fund prospective Loans and
participations in then outstanding Letters of Credit, provided, that such Lender
shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt
by the Administrative Agent, such Issuing Bank or the Swingline Lender of such
certification in form

24

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

 

and substance satisfactory to it and the Administrative Agent or (d) taken any
action or become the subject of any action or proceeding of a type described in
clause (g) or (h) of Article VII.
     “Deposit Account” shall have the meaning assigned to such term in the UCC.
     “Deposit Bank” shall have the meaning assigned to such term in the Second
Restated Credit Agreement.
     “Designated Country” shall mean Australia, Austria, Belgium, Canada,
Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the
Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the
United Kingdom, the United States, any other country that shall at any time
after the Closing Date become a member state of the European Union and any other
country that is a member of the Organization for Economic Co-operation and
Development.
     “Designated Non-Recourse Indebtedness” shall mean the Non-Recourse
Indebtedness and any Hedging Obligations of NRG Peaker Finance Co. LLC, as
amended from time to time (provided that such amendments do not result in the
incurrence of additional Indebtedness for borrowed money (on account of
principal) in excess of the principal amounts of such Indebtedness outstanding
as of the Closing Date and are otherwise in compliance with the terms hereof).
     “Disqualified Stock” shall mean any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the Latest Maturity Date of all Classes of Loans or
Commitments. Notwithstanding the preceding sentence, any Capital Stock that
would constitute Disqualified Stock solely because the holders of the Capital
Stock have the right to require the Borrower to repurchase such Capital Stock
upon the occurrence of a change of control or an asset sale will not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Borrower
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 6.06 hereof. The
amount of Disqualified Stock deemed to be outstanding at any time for purposes
of this Agreement will be the maximum amount that the Borrower and its
Restricted Subsidiaries may become obligated to pay upon the maturity of, or
pursuant to any mandatory redemption provisions of, such Disqualified Stock,
exclusive of accrued dividends.
     “Dividends” shall have the meaning provided in Section 6.06.
     “dollars” or “$” shall mean lawful money of the United States of America,
except when expressly used in reference to the lawful money of another country.
     “Domestic Subsidiaries” shall mean all Subsidiaries incorporated, formed or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
     “Downgrade Event” shall have the meaning assigned to such term in the
definition of “Applicable Margin”.
     “Easement” shall have the meaning assigned to such term in Section 3.07.

25

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

 

     “ECF Period” shall mean (a) in the event that the Borrower shall exercise
its option under (and in accordance with) Section 2.13(d) to calculate Excess
Cash Flow (and make the required prepayment and prepayment offer) for any fiscal
period other than a fiscal year, (i) each such fiscal period and (ii) each
fiscal period during the applicable fiscal year that is not a fiscal period
described in the preceding clause (i) and (b) in the event that the Borrower
shall not exercise such option during any fiscal year, a fiscal year. For
purposes of this definition, “fiscal period” shall mean a period of one or more
consecutive fiscal quarters.
     “Eligible Commodity Hedging Agreement” shall mean any Commodity Hedging
Agreement entered into by any Loan Party with an Eligible Commodity Hedging
Counterparty from time to time in order to manage fluctuations in the price or
availability to the Borrower or any Restricted Subsidiary of any commodity,
which, individually or together with other Commodity Hedging Agreements (other
than Commodity Hedging Agreements that are either unsecured, are supported by
letters of credit or Guarantees (but not secured by all or substantially all of
the assets of any Loan Party) or constitute Parity Lien Obligations) entered
into or being entered into with such counterparty or its affiliates, is
structured such that the net mark-to-market credit exposure of (a) the
counterparties to such Commodity Hedging Agreements (taken as a whole) to
(b) the Borrower or any other Loan Party, is positively correlated with the
price of the relevant commodity or positively correlated with changes in the
relevant spark spread.
     “Eligible Commodity Hedging Counterparty” shall mean a counterparty to an
Eligible Commodity Hedging Agreement that, at the time the relevant Eligible
Commodity Hedging Agreement is entered into, is either an Acceptable Power
Counterparty or an Acceptable Financial Counterparty.
     “Eligible Commodity Hedging Obligations” shall mean, with respect to any
specified Person, the obligations of such Person under an Eligible Commodity
Hedging Agreement.
     “Environmental CapEx Debt” shall mean Indebtedness of the Borrower or its
Restricted Subsidiaries incurred for the purpose of financing Environmental
Capital Expenditures.
     “Environmental Capital Expenditures” shall mean capital expenditures to the
extent deemed reasonably necessary, as determined by the Borrower or its
Restricted Subsidiaries, as applicable, in good faith and pursuant to prudent
judgment, to comply with applicable Environmental Laws.
     “Environmental Laws” shall mean all former, current and future Federal,
state, local and foreign laws (including common law), treaties, regulations,
rules, ordinances and codes, and legally binding decrees, judgments, directives
and orders (including consent orders), in each case, relating to protection of
the environment, natural resources, occupational health and safety or the
presence, Release of, or exposure to, hazardous materials, substances or wastes,
or the generation, manufacture, processing, distribution, use, treatment,
storage, disposal, transport, recycling or handling of, or the arrangement for
such activities with respect to, hazardous materials, substances or wastes.
     “Environmental Liability” shall mean all liabilities, obligations, damages,
losses, claims, actions, suits, judgments, orders, fines, penalties, fees,
expenses and costs (including administrative oversight costs, natural resource
damages and remediation costs), whether contingent or otherwise, arising out of
or relating to (a) non-compliance with any Environmental Law, (b) the
generation, manufacture, processing, distribution, recycling, use, handling,
transportation, storage, treatment or disposal of, or the arrangement of such
activities with respect to, any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the Release of any

26

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

 

Hazardous Materials at or from any location or (e) any contract or agreement
pursuant to which liability is assumed, imposed or covered by an indemnity with
respect to any of the foregoing.
     “Equally and Ratably” shall have the meaning assigned to such term in the
Collateral Trust Agreement.
     “Equity Interests” shall mean Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding, except for purposes of the
definitions of “Additional Non-Recourse Indebtedness”, “Existing Non-Recourse
Indebtedness” and “Net Cash Proceeds”, any debt security that is convertible
into, or exchangeable for, Capital Stock).
     “Equity Securities” shall mean (a) the 20,855,057 shares of common stock,
par value $0.01 per share, of the Borrower and (b) the Mandatory Convertible
Preferred Stock, in each case issued on the Closing Date to fund a portion of
the Acquisition Consideration.
     “ERCOT” shall mean the Electric Reliability Council of Texas or any other
entity succeeding thereto.
     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
     “ERISA Affiliate” shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Tax Code, or solely for purposes of
Section 302 of ERISA and Section 412 of the Tax Code, is treated as a single
employer under Section 414 of the Tax Code.
     “ERISA Event” shall mean (a) any “reportable event”, as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Benefit Plan (other than an event for which the 30-day notice period is waived);
(b) the existence with respect to any Benefit Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Tax Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of the Tax Code
or Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Benefit Plan; (d) the incurrence by the Borrower or
any ERISA Affiliate of any liability under Title IV of ERISA with respect to the
termination of any Benefit Plan or the withdrawal or partial withdrawal of the
Borrower or any ERISA Affiliate from any Benefit Plan or Multiemployer Plan; (e)
the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Benefit
Plan or to appoint a trustee to administer any Benefit Plan; (f) the adoption of
any amendment to a Benefit Plan that would require the provision of security
pursuant to Section 401(a)(29) of the Tax Code or Section 307 of ERISA; or
(g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.
     “Eurodollar”, when used in reference to any Loan or Borrowing, shall refer
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
     “Event of Default” shall have the meaning assigned to such term in
Article VII.

27

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

 

     “Excess Cash Flow” shall mean, for any period, an amount equal to the
excess of (a) the sum, without duplication, of:
     (i) Consolidated Net Income of the Borrower for such period;
     (ii) an amount equal to the amount of all non-cash charges to the extent
deducted in arriving at such Consolidated Net Income;
     (iii) decreases in Consolidated Working Capital for such period;
     (iv) an amount equal to the aggregate net non-cash loss on the sale, lease,
transfer or other disposition of assets by the Borrower and the Subsidiary
Guarantors during such period (other than sales in the ordinary course of
business) to the extent deducted in arriving at such Consolidated Net Income;
     (v) to the extent not included in the determination of Consolidated Net
Income, any termination payments or similar payments received by the Borrower or
any Subsidiary Guarantor during such period in connection with the termination,
partial termination or other reduction of any Commodity Hedging Agreement; and
     (vi) any cash, Cash Equivalent or other security or investment
substantially comparable to Cash Equivalents that is returned to the Borrower
and the Subsidiary Guarantors during such period that was, immediately prior to
such return, pledged or deposited as collateral to a contract counterparty,
issuer of surety bonds or issuer of letters of credit by the Borrower or any of
the Subsidiary Guarantors, in each case to secure obligations with respect to
(A) contracts for commercial and trading activities and contracts (including
physical delivery, option (whether cash or financial), exchange, swap and
futures contracts) for the purchase, transmission, transportation, distribution,
sale, lease or hedge of any fuel-related or power-related commodity or service
or (B) Commodity Hedging Agreements,
     over (b) the sum, without duplication, of:
     (i) an amount equal to the amount of all non-cash credits included in
arriving at such Consolidated Net Income;
     (ii) the aggregate amount actually paid by the Borrower and the Subsidiary
Guarantors in cash during such period on account of Capital Expenditures (to the
extent financed with cash flow internally generated within such period by the
Borrower and the Subsidiary Guarantors), and including Necessary Capital
Expenditures and Environmental Capital Expenditures;
     (iii) the aggregate amount of all prepayments of Revolving Loans and
Swingline Loans made during such period to the extent accompanying reductions of
the Total Revolving Credit Commitment except to the extent financed with the
proceeds of other Indebtedness of the Borrower or the Subsidiary Guarantors;
     (iv) the aggregate amount of all principal payments of Indebtedness of the
Borrower or the Subsidiary Guarantors (including any Term Loans and the
principal component of payments in respect of Capital Lease Obligations, but
excluding Revolving Loans, Swingline Loans, voluntary prepayments of Term B
Loans pursuant to Section 2.12 and mandatory prepayments of Term Loans pursuant
to Section 2.13) made

28

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

 

during such period (other than in respect of any revolving credit facility to
the extent there is not an equivalent permanent reduction in commitments
thereunder) except to the extent financed with the proceeds of other
Indebtedness of the Borrower or the Subsidiary Guarantors;
     (v) an amount equal to the aggregate net non-cash gain on the sale, lease,
transfer or other disposition of assets by the Borrower and the Subsidiary
Guarantors
     during such period (other than sales in the ordinary course of business) to
the extent included in arriving at such Consolidated Net Income;
     (vi) increases in Consolidated Working Capital for such period;
     (vii) payments by the Borrower and the Subsidiary Guarantors during such
period in respect of long-term liabilities of the Borrower and the Subsidiary
Guarantors other than Indebtedness;
     (viii) the amount of Investments made during such period pursuant to
Section 6.05 to the extent that such Investments were financed with cash flow
internally generated within such period by the Borrower and the Subsidiary
Guarantors;
     (ix) the aggregate amount of expenditures actually made by the Borrower and
the Subsidiary Guarantors in cash during such period (including expenditures for
the payment of financing fees) to the extent that such expenditures are not
expensed during such period;
     (x) the aggregate amount of any premium, make-whole or penalty payments
actually paid in cash by the Borrower and the Subsidiary Guarantors during such
period that are required to be made in connection with any prepayment of
Indebtedness and that are accounted for as extraordinary items;
     (xi) to the extent not included in the determination of Consolidated Net
Income, any termination payments or similar payments made by the Borrower or any
Subsidiary Guarantor during such period in connection with the termination,
partial termination or other reduction of any Commodity Hedging Agreement (but
in any case for purposes of calculating Excess Cash Flow for the fiscal year
ending on December 31, 2006, excluding any such payments made in connection with
the Transactions described in clause (b)(iv) of the definition of
“Transactions”);
     (xii) to the extent not included in the determination of Consolidated Net
Income, the aggregate amount of pension plan contributions required by law and
actually made in cash by the Borrower or any Subsidiary Guarantor during such
period in connection with the Texas Genco Retirement Plan;
     (xiii) to the extent not included in the determination of Consolidated Net
Income, the aggregate amount of expenditures actually made by the Borrower and
the Subsidiary Guarantors relating to the acquisition of nuclear fuel;
     (xiv) to the extent not included in the determination of Consolidated Net
Income, any fees, costs and expenses incurred in connection with the
transactions occurring on the Third Restatement Date; and

29

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

 

     (xv) any cash, Cash Equivalents and other securities or investments
substantially comparable to Cash Equivalents pledged or deposited by the
Borrower and the Subsidiary Guarantors during such period as collateral to a
contract counterparty, issuer of surety bonds or issuer of letters of credit, in
each case to secure obligations with respect to (A) contracts for commercial and
trading activities and contracts (including physical delivery, option (whether
cash or financial), exchange, swap and futures contracts) for the purchase,
transmission, transportation, distribution, sale, lease or hedge of any
fuel-related or power-related commodity or service or (B) Commodity Hedging
Agreements.
     “Excess Credit-Linked Deposits” shall mean, with respect to any Lender, the
unused commitment, if any, of such Lender to make Credit-Linked Deposits
hereunder.
     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
     “Excluded Assets” shall mean
     (i) any lease, license, contract, property right or agreement to which any
Loan Party is a party or any of such Loan Party’s rights or interests thereunder
if and only for so long as the grant of a security interest therein under the
Security Documents shall constitute or result in a breach, termination or
default or invalidity under any such lease, license, contract, property right or
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any
relevant jurisdiction or any other applicable law or principles of equity);
provided, that such lease, license, contract, property right or agreement shall
be an Excluded Asset only to the extent and for so long as the consequences
specified above shall exist and shall cease to be an Excluded Asset and shall
become subject to the security interest granted under the Security Documents,
immediately and automatically, at such time as such consequences shall no longer
exist;
     (ii) any interests in real property owned or leased by any Loan Party only
for so long as such interest represents an Excluded Perfection Asset;
     (iii) any Equity Interests in, and any assets of, any Excluded Project
Subsidiary and any voting Equity Interests in excess of 66% (or, in the case of
NRGenerating International BV, 65%) of the total outstanding voting Equity
Interests in any Excluded Foreign Subsidiary; provided that, notwithstanding
anything herein to the contrary, the Equity Interests in the Funded L/C SPV that
are owned directly or indirectly by the Borrower shall not be Excluded Assets;
     (iv) any Deposit Account, Securities Account or Commodities Account (and
all cash, Cash Equivalents and other securities or investments substantially
comparable to Cash Equivalents and Commodity Contracts held therein) if and only
for so long as such Deposit Account, Securities Account or Commodities Account
is subject to a Lien permitted under clause (r) of the definition of “Permitted
Liens”; provided that, for the avoidance of doubt and notwithstanding anything
in the Loan Documents to the contrary, the Funded L/C Collateral Accounts and
all cash, Cash Equivalents, other securities or investments substantially
comparable to Cash Equivalents and other funds and investments held therein and
the proceeds thereof shall be Excluded Assets for all purposes under the Loan
Documents;

30

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

 

     (v) the Equity Interests in, and all properties and assets of, NRG Energy
Insurance Ltd. (Cayman Islands);
     (vi) the Equity Interests in, and all properties and assets of, NRG
International Holdings (No. 2) GmbH (only for so long as such entity shall own
only de minimis assets);
     (vii) the Equity Interests in, and all properties and assets of, NRG Latin
America Inc.;
     (viii) any Equity Interest of a Person or Project Interest held by any Loan
Party if and for so long as the pledge thereof under the Security Documents
shall constitute or result in a breach, termination or default under any joint
venture, stockholder, membership, limited liability company, partnership,
owners, participation, shared facility or other similar agreement between such
Loan Party and one or more other holders of Equity Interests of such Person or
Project Interest (other than any such other holder who is the Borrower or a
Subsidiary thereof); provided that such Equity Interest shall be an Excluded
Asset only to the extent and for so long as the consequences specified above
shall exist and shall cease to be an Excluded Asset and shall become subject to
the security interest granted under the Security Documents, immediately and
automatically, at such time as such consequences shall no longer exist;
     (ix) any Counterparty Account, and any cash, Cash Equivalents and/or other
securities or investments substantially comparable to Cash Equivalents, and
other funds and investments held therein and the proceeds thereof, received from
a contract counterparty (including a counterparty in respect of Commodity
Hedging Obligations) (collectively, the “Counterparty Cash”) but only to the
extent that any agreements governing the underlying transactions with a contract
counterparty (including a counterparty in respect of Commodity Hedging
Obligations) pursuant to which any such Counterparty Cash was received provide
that the pledging of, or other granting of any Lien in, the relevant
Counterparty Cash as collateral for the Obligations of the Borrower or a
Subsidiary Guarantor under the Loan Documents shall constitute or result in a
breach, termination, default or invalidity under any such agreement, provided,
however, that such Counterparty Cash shall be an Excluded Asset only to the
extent and for so long as the consequences specified above shall exist, and
shall cease to be an Excluded Asset and shall become subject to the security
interest granted under the Security Documents, immediately and automatically, at
such time as such consequences shall no longer exist; and provided, further,
that any Lien the Borrower or any Subsidiary Guarantor may have in any such
Counterparty Cash shall not be deemed to be an Excluded Asset under this clause
(ix) and such Lien shall follow and be treated as part of the underlying
agreement (including any Commodity Hedging Obligations) which agreement
(including any Commodity Hedging Obligations) shall (to the extent applicable)
be subject to the terms and conditions of clause (i) of this definition;
     (x) any Account of NRG Power Marketing solely to the extent that (A) such
Account relates to the sale by NRG Power Marketing of power or capacity that was
purchased by NRG Power Marketing from an Excluded Project Subsidiary and (B) the
grant of a security interest in such Account under the Security Documents shall
constitute or result in a breach, termination or default under any agreement or
instrument governing the applicable Existing Non-Recourse Indebtedness of such
Subsidiary (as such agreement or instrument was in effect on the Closing Date);

31

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

 

     (xi) the working capital account of Camas Power Boiler Inc.;
     (xii) all properties and assets of the Borrower or any of its Restricted
Subsidiaries (other than Equity Interests) secured by Indebtedness permitted by
Section 6.01(d) or, at the election of the Borrower pursuant to an officer’s
certificate delivered to the Administrative Agent and the Collateral Trustee,
Indebtedness permitted under Section 6.01(z) that is secured as described in
clause (vi)(x) of such Section, in each case, so long as the granting of a Lien
in favor of the Secured Parties would constitute or result in a breach,
termination or default under any agreement or instrument governing such
applicable Indebtedness permitted by Section 6.01(d) or Section 6.01(z), as the
case may be, and such properties or assets shall cease to be Excluded Assets
once such prohibition ceases to exist and shall immediately and automatically
become subject to the security interest granted under the Security Documents;
     (xiii) any other property and assets (other than any such properties or
assets constituting Core Collateral) designated as Excluded Assets to the
Administrative Agent in writing by the Borrower which shall not have, when taken
together with all other property and assets that constitute Excluded Assets at
the relevant time of determination by virtue of the operation of this clause
(xiii), a Fair Market Value determined as of the date of such designation as an
Excluded Asset exceeding $750,000,000 in the aggregate (the “General Excluded
Assets Basket”) (it being understood, however, that for the avoidance of doubt,
in respect of any Excluded Asset designated as such prior to such date of
determination, the Fair Market Value of such previously designated Excluded
Assets shall be the same as the Fair Market Value initially assigned to such
assets) (and, to the extent that the Fair Market Value thereof shall exceed
$750,000,000 in the aggregate, such property or assets shall cease to be an
Excluded Asset to the extent of such excess Fair Market Value and shall become
subject to the security interest granted under the Security Documents,
immediately and automatically, at such time as such amount is exceeded); for the
avoidance of doubt, at any time the Borrower elects to have an Excluded Asset
become part of the Collateral and cease to be an Excluded Asset, or at any time
an Excluded Asset becomes an asset of an Unrestricted Subsidiary, an Excluded
Project Subsidiary or an Excluded Foreign Subsidiary, or is sold or otherwise
disposed of to a third party that is not a Subsidiary of the Borrower in
accordance with the terms hereof, the Fair Market Value (as determined as of the
date of such designation as an Excluded Asset) of any such asset shall not be
taken into account for purposes of determining compliance with the General
Excluded Assets Basket and an amount equal to the Fair Market Value of such
asset (as determined as of the date of such designation as an Excluded Asset)
will become available under the General Excluded Assets Basket for use by the
Borrower pursuant to this clause (xiii);
     (xiv) [reserved];
     (xv) any Intellectual Property (as defined in the Guarantee and Collateral
Agreement) if and to the extent a grant of a security interest therein will
result in the loss, abandonment or termination of any material right, title or
interest in or to such Intellectual Property (including United States
intent-to-use trademark or service mark applications); provided, however, that
such Intellectual Property shall be an Excluded Asset only to the extent and for
so long as the consequences specified above shall exist and shall cease to be an
Excluded Asset and shall become subject to the security interest granted under
the Security Documents, immediately and automatically, at such time as such
consequences shall no longer exist;

32

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

 

     (xvi) [reserved];
     (xvii) upon the sale of such assets to a Securitization Vehicle in
accordance with the provisions of this Agreement, the South Central
Securitization Assets and, in the event that the pledge of any Seller’s Retained
Interest in respect of any such Securitization Vehicle shall be prohibited by
the governing documentation with respect to the applicable South Central
Securitization (after the Borrower or the applicable Restricted Subsidiary shall
have used its commercially reasonable efforts to avoid such prohibition in such
governing documentation), such Seller’s Retained Interest; and
     (xviii) (A) the Equity Interests owned by the Borrower or any of its
Restricted Subsidiaries in and all properties and assets of each of the
following Subsidiaries: (1) NRG Harrisburg Cooling LLC and (2) Camas Power
Boiler Limited Partnership and (B)(1) the leasehold interest of Middletown Power
LLC to GenConn Middletown LLC and (2) the leasehold interest of Devon Power LLC
to GenConn Devon LLC.
     “Excluded Core Collateral” shall have the meaning assigned to such term in
the definition of “Core Collateral.”
     “Excluded Foreign Subsidiaries” shall mean, at any time, any Foreign
Subsidiary that is a Restricted Subsidiary and that is (or is treated as) for
United States federal income tax purposes either (a) a corporation or (b) a
pass-through entity owned directly or indirectly by another Foreign Subsidiary
that is (or is treated as) a corporation; provided that none of the Subsidiaries
constituting or owning Core Collateral may at any time be an Excluded Foreign
Subsidiary. The Excluded Foreign Subsidiaries on the Third Restatement Date are
set forth on Schedule 1.01(a).
     “Excluded Perfection Assets” shall mean any property or assets that (i) do
not have a Fair Market Value at any time exceeding $50,000,000 (or, if such
property or asset is a Deposit Account or Securities Account, $10,000,000)
individually or $100,000,000 in the aggregate in which a security interest
cannot be perfected by the filing of a financing statement under the UCC of the
relevant jurisdiction or, in the case of Equity Interests, either the filing of
a financing statement under the UCC of the relevant jurisdiction or the
possession of certificates representing such Equity Interests, (ii) constitute
leasehold interests of the Borrower or any of its Restricted Subsidiaries in
real property (other than any real property constituting a Facility) or (iii)
constitute any Deposit Account that is a “zero-balance” account (as long as
(x) the balance in such “zero balance” account does not exceed at any time the
applicable threshold described in clause (i) above for a period of 24
consecutive hours or more and (y) all amounts in such “zero-balance” account
shall either be swept on a daily basis into another Deposit Account that does
not constitute an Excluded Perfection Asset or used for third party payments in
the ordinary course of business). To the extent that the Fair Market Value of
any such property or asset exceeds $50,000,000 (or, if such property or asset is
a Deposit Account or Securities Account, $10,000,000) individually, such
property or asset shall cease to be an Excluded Perfection Asset and, to the
extent that the Fair Market Value of such property or assets shall exceed
$100,000,000 in the aggregate at any time, such property or assets shall cease
to be Excluded Perfection Assets to the extent of such excess Fair Market Value.
     “Excluded Project Subsidiaries” shall mean, at any time, any Restricted
Subsidiary that (a) is an obligor (or, in the case of a Restricted Subsidiary of
an Excluded Project Subsidiary that is such an obligor and is in a business that
is related to the business of such Excluded Project Subsidiary that is such an
obligor, is otherwise bound, or its property is subject to one or more covenants
and other terms of any Non-Recourse Indebtedness outstanding at such time,
regardless of whether such Restricted Subsidiary is a party to the agreement
evidencing the Non-

33

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

 

Recourse Indebtedness (unless otherwise expressly elected by the Borrower in its
sole discretion with respect to any such Subsidiaries)) with respect to any
Non-Recourse Indebtedness outstanding at such time, in each case if and for so
long as the grant of a security interest in the property or assets of such
Subsidiary, or the guarantee by such Subsidiary of the Obligations, or the
pledge of the Equity Interests of such Subsidiary, in each case in favor of the
Collateral Trustee, for the benefit of the Secured Parties, shall constitute or
result in a breach, termination or default under the agreement or instrument
governing the applicable Non-Recourse Indebtedness; provided that such
Subsidiary shall be an Excluded Project Subsidiary only to the extent that and
for so long as the requirements and consequences above shall exist; or (b) is
not an obligor with respect to any such Non-Recourse Indebtedness as described
in clause (a), but is designated by the Borrower as an Excluded Project
Subsidiary under and in accordance with this Agreement; and provided further
that (i) none of the Subsidiaries constituting or owning Core Collateral may at
any time be an Excluded Project Subsidiary and (ii) the aggregate Fair Market
Value of all outstanding Investments owned by the Borrower and its Restricted
Subsidiaries in any such Restricted Subsidiary designated as an Excluded Project
Subsidiary will be deemed to be an Investment made as of the time of the
designation and, except with respect to Investments constituting Specified
Facilities and Investments that were made pursuant to and in accordance with
Section 6.05(e), 6.05(g) or 6.05(m), will reduce the amount available for
Investments under Section 6.05(h) (if applicable), 6.05(l) or 6.05(p). The
Excluded Project Subsidiaries on the Third Restatement Date are set forth on
Schedule 1.01(b).
     “Excluded Subsidiary” shall mean (i) an Excluded Foreign Subsidiary,
(ii) an Excluded Project Subsidiary, (iii) any other Subsidiary all of whose
assets constitute Excluded Assets pursuant to clause (xiii) of the definition of
Excluded Assets and (iv) the Funded L/C SPV. For the avoidance of doubt, it is
understood and agreed that all assets of an Excluded Subsidiary acquired after
the designation as such pursuant to sub-clause (iii) above, and for as long as
such designation remains effective, shall be Excluded Assets.
     “Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Banks and any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured in whole or in part by) each such
Person’s net income by the United States of America (or any political
subdivision thereof), or as a result of a present or former connection between
such recipient and the jurisdiction imposing such tax (or any political
subdivision thereof), other than any such connection arising solely from such
recipient having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document, (b) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 2.21(a)), any United States withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender’s failure to comply with Section 2.20(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Borrower with respect to such withholding
tax pursuant to Section 2.20(a) or 2.20(b) (it being understood and agreed, for
the avoidance of doubt, that any withholding tax imposed on a Foreign Lender as
a result of a Change in Law occurring after the time such Foreign Lender became
a party to this Agreement shall not be an Excluded Tax) and (c) any United
States federal withholding tax that would not have been imposed but for a
failure by such recipient (or any financial institution through which any
payment is made to such recipient) to comply with the applicable requirements of
Sections 1471 through 1474 of the Code or any Treasury Regulation promulgated
thereunder or published administrative guidance implementing such Sections (in
each case effective as of the Third Restatement Date).

34

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

 

     “Exempt Subsidiaries” shall mean, collectively, NRG Ilion LP LLC, NRG Ilion
Limited Partnership, Meriden Gas Turbine LLC, LSP-Nelson Energy LLC, NRG Nelson
Turbines LLC, NRG Jackson Valley Energy I, Inc., NRG McClain LLC, NRG Audrain
Holding LLC, NRG Audrain Generating LLC, NRG Peaker Finance Company LLC, Bayou
Cove Peaking Power, LLC, Big Cajun I Peaking Power LLC, NRG Rockford LLC, NRG
Rockford II LLC, NRG Rockford Equipment II LLC, NRG Sterlington Power LLC and
NRG Rockford Acquisition LLC, and shall not, in any event, include any Core
Collateral Subsidiary.
     “Existing Administrative Agent” shall have the meaning assigned to such
term in the recitals.
     “Existing Commodity Hedging Agreements” shall mean (i) the Master Power
Purchase and Sale Agreement and Cover Sheet dated as of July 21, 2004, the
Confirmation thereunder dated as of July 21, 2004 and the Confirmation
thereunder dated as of November 30, 2004, each between J. Aron & Company and NRG
Texas Power LLC (as successor by merger), and any additional confirmations
thereunder, as the same may be amended, supplemented, replaced or otherwise
modified from time to time in accordance with the terms hereof and thereof and
(ii) any other master agreement listed on Schedule 1.01(c), and any
confirmations thereunder, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof and thereof.
     “Existing Credit Agreement” shall mean the Credit Agreement, dated as of
the Closing Date, among the Borrower, Morgan Stanley Senior Funding, Inc. and
Citigroup Global Markets Inc., as joint lead book runners, joint lead arrangers
and co-documentation agents, Morgan Stanley Senior Funding, Inc., as
administrative agent, Morgan Stanley & Co. Incorporated, as collateral agent,
and Citigroup Global Markets, Inc., as syndication agent, as amended or modified
and in effect immediately prior to the First Restatement Date.
     “Existing Indebtedness” shall mean Indebtedness of the Borrower and its
Subsidiaries (other than Indebtedness under the Senior Note Documents) in
existence on the Closing Date and set forth on Schedule 6.01, until such amounts
are repaid, or are refunded, refinanced, replaced, defeased or discharged
pursuant to Section 6.01(e) hereof.
     “Existing LC Credit Agreement” shall have the meaning assigned to such term
in the recitals.
     “Existing Non-Recourse Indebtedness” shall mean secured or unsecured
Indebtedness for borrowed money outstanding as of the Closing Date of a
Subsidiary that is not a Loan Party existing as of the Closing Date and any
Permitted Refinancing Indebtedness in respect of such Indebtedness; provided
that, except as set forth on Schedule 1.01(e),
     (a) such Indebtedness is without recourse to the Borrower or any other
Restricted Subsidiary or to any property or assets of the Borrower or any other
Restricted Subsidiary (other than, in each such case, another Restricted
Subsidiary (x) which is the direct parent or a direct or indirect Subsidiary of
the Subsidiary that incurred or issued such Indebtedness (other than such
Indebtedness constituting a Guarantee) or (y) that is a Subsidiary that itself
has Non-Recourse Indebtedness (other than such Indebtedness constituting a
Guarantee) or is the direct parent or a direct or indirect Subsidiary of a
Subsidiary that itself has Non-Recourse Indebtedness (other than such
Indebtedness constituting a Guarantee)),

35

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

 

     (b) neither the Borrower nor any other Restricted Subsidiary (other than
another Restricted Subsidiary (x) which is the direct parent or a direct or
indirect Subsidiary of the Subsidiary that incurred or issued such Indebtedness
(other than such Indebtedness constituting a Guarantee) or (y) that is a
Subsidiary that itself has Non-Recourse Indebtedness (other than such
Indebtedness constituting a Guarantee) or is the direct parent or a direct or
indirect Subsidiary of a Subsidiary that itself has Non-Recourse Indebtedness
(other than such Indebtedness constituting a Guarantee) provides credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness) or is directly or indirectly liable as a guarantor or
otherwise in respect of such Indebtedness or in respect of the business or
operations of the applicable Subsidiary that is the obligor on such Indebtedness
or any of its subsidiaries (other than (i) any such credit support or liability
consisting of reimbursement obligations in respect of Letters of Credit issued
under, and subject to the terms of, Section 2.23 to support obligations of such
applicable subsidiary and (ii) any Investments in such applicable subsidiary
made in accordance with Section 6.05),
     (c) no default with respect to such Indebtedness (including any rights that
the holders of such Indebtedness may have to take enforcement action against a
Subsidiary that is not a Loan Party) would permit upon notice, lapse of time or
both any holder of any other Indebtedness of the Borrower or any other Loan
Party (other than Indebtedness incurred pursuant to Section 6.01(a), (b), (c) or
(k)) to declare a default on such other Indebtedness or cause the payment of the
Indebtedness to be accelerated or payable prior to its stated maturity and
     (d) the Liens securing such Indebtedness shall exist only on (i) the
property and assets of any Subsidiary that is not a Loan Party and (ii) the
Equity Interests in any Subsidiary that is not a Loan Party (and shall not apply
to any other property or assets of the Borrower or any other Subsidiary that is
a Loan Party), except, in the case of each of clauses (a) and (b) for the
following (each of which is deemed to be non-recourse for purposes of this
definition): (w) Guarantees by the Borrower or any other Subsidiary of such
Indebtedness that are incurred pursuant to Section 6.01(p), (x) agreements of
the Borrower or any other Subsidiary to provide corporate or management services
or operation and maintenance services to such Subsidiary, including in respect
of the acquisition of fuel, oil, gas or other supply of energy, (y) Guarantees
of the Borrower or any other Subsidiary with respect to debt service reserves
established with respect to such Subsidiary to the extent that such Guarantee
shall result in the immediate payment of funds, pursuant to dividends or
otherwise, in the amount of such Guarantee to the Borrower or such other
Subsidiary and (z) contingent obligations of the Borrower or any other
Subsidiary to make capital contributions to such Subsidiary, in the case of each
of clauses (x), (y) and (z), which are otherwise permitted hereunder.
     “Existing NRG Notes” shall have the meaning assigned to such term in the
recitals.
     “Existing Texas Genco Credit Agreement” shall have the meaning assigned to
such term in the recitals.
     “Existing Texas Genco Notes” shall have the meaning assigned to such term
in the recitals.
     “Extended Maturity Credit-Linked Deposit” shall mean Credit-Linked Deposits
that the applicable Lender has designated as Extended Maturity Credit-Linked
Deposits on its signature page to the Third Amendment Agreement. The aggregate
amount of all Extended Maturity

36

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

 

Credit-Linked Deposits on the Third Restatement Date is $800,000,000 (provided
that such amount may be increased or decreased by the Borrower and the
Administrative Agent to give effect to conforming or other technical issues
related to the consent process for this Agreement).
     “Extended Maturity Credit-Linked Deposit Maturity Date” shall mean
August 31, 2015, as it may be extended pursuant to and in accordance with this
Agreement.
     “Extended Maturity Repayment Date” shall have the meaning assigned to such
term in Section 2.11.
     “Extended Maturity Term Loan Maturity Date” shall mean August 31, 2015, as
it may be extended pursuant to and in accordance with this Agreement.
     “Extended Maturity Term Loans” shall mean Term B Loans that the applicable
Lender has designated as Extended Maturity Term Loans on its signature page to
the Third Amendment Agreement. The aggregate amount of all Extended Maturity
Term Loans on the Third Restatement Date is $1,000,000,000 (provided that such
amount may be increased or decreased by the Borrower and the Administrative
Agent to give effect to conforming or other technical issues related to the
consent process for this Agreement).
     “Facility” shall mean a power or energy related facility.
     “Fair Market Value” shall mean the value that would be paid by a willing
buyer to an unaffiliated willing seller in a transaction not involving distress
of either party, determined in good faith by (i) the Board of Directors of the
Borrower (or any committee thereof expressly authorized by the Board of
Directors) with respect to assets and Investments having a Fair Market Value of
$200,000,000 or more and (ii) the Chief Financial Officer of the Borrower with
respect to assets and Investments having a Fair Market Value less than
$200,000,000.
     “Federal Funds Effective Rate” shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for the day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
     “Fees” shall mean the Commitment Fees, the Administrative Agent’s Fees, the
L/C Participation Fees, the Issuing Bank Fees and any fees payable pursuant to
Section 2.12(d).
     “FERC” shall mean the Federal Energy Regulatory Commission or its
successor.
     “Financial Officer” of any Person shall mean any of the chief executive
officer, chief financial officer or treasurer (or if no individual shall have
such designation, the Person charged by the Board of Directors of such Person
(or a committee thereof) with such powers and duties as are customarily bestowed
upon the individual with such designation) or the audit or finance committee of
the Board of Directors of such Person.
     “First Amendment Agreement” shall mean the Amendment Agreement dated as of
November 21, 2006, among the Borrower, the Administrative Agent (as defined
under the First Restated Credit Agreement), the Collateral Agent (as defined
under the First Restated Credit Agreement), the Collateral Trustee (as defined
under the First Restated Credit Agreement) and

37

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

 

the Texas Genco Collateral Trustee (as defined under the First Restated Credit
Agreement) and the Lenders (as defined under the First Restated Credit
Agreement) party thereto.
     “First Lien Senior Secured Debt” shall mean all Senior Debt (other than
Parity Lien Debt) that is secured by a Lien on any assets of the Borrower or any
Subsidiary Guarantor.
     “First Restated Credit Agreement” shall have the meaning assigned to such
term in the recitals.
     “First Restatement Date” shall have the meaning assigned to such term in
the recitals.
     “First Restatement Reaffirmation Agreement” shall mean the Reaffirmation
Agreement, dated as of the First Restatement Date, executed and delivered by the
Borrower, each Subsidiary Guarantor (as defined in the First Restated Credit
Agreement), the Administrative Agent (as defined in the First Restated Credit
Agreement), the Collateral Trustee (as defined under the First Restated Credit
Agreement) and the Texas Genco Collateral Trustee (as defined in the First
Restated Credit Agreement).
     “Fitch” shall mean Fitch Ratings, Ltd. or any successor entity.
     “Foreign Lender” shall mean any Lender that is organized under the laws of
a jurisdiction other than that in which the Borrower is incorporated or
organized. For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.
     “Foreign Net Asset Sale Proceeds” shall have the meaning assigned to such
term in the definition of “Net Cash Proceeds”.
     “Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic
Subsidiary.
     “Foreign Subsidiary Holding Company” shall mean any Domestic Subsidiary
that is a direct parent of one or more Foreign Subsidiaries and holds, directly
or indirectly, no other assets other than Equity Interests of Foreign
Subsidiaries and other de minimis assets related thereto.
     “FPA” shall mean the Federal Power Act and the rules and regulations
promulgated thereunder, as amended from time to time.
     “Funded L/C Collateral Accounts” shall mean, collectively, one or more
operating, certificates of deposits, securities accounts and/or investment
accounts of, and established by, one or more LC Issuers (at the request of the
Funded L/C SPV), which shall be blocked accounts in the name of the Funded L/C
SPV and subject to the control of such applicable LC Issuer, in each case that
shall cash collateralize obligations in respect of Cash Collateralized Letter of
Credit Facilities.
     “Funded L/C Exposure” shall mean have the meaning assigned to such term in
the Second Restated Credit Agreement. It is understood and agreed for all
purposes hereunder that the Funded L/C Exposure as of the Third Restatement Date
shall be equal to zero and that no Lender shall have or hold any interest in the
Funded L/C Exposure as of the Third Restatement Date.
     “Funded L/C Lender” shall mean a Lender holding a Credit-Linked Deposit.

38

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

 

     “Funded L/C SPV” shall mean NRG LC Facility Company LLC, a Delaware limited
liability company and a Subsidiary of the Borrower whose Equity Interests, other
than any preferred interests owned by any LC Issuer or other Persons on behalf
of, or at the request of, any LC Issuer in connection with Cash Collateralized
Letter of Credit Facilities, are owned directly or indirectly by the Borrower.
     “Funded L/C SPV Equity Contribution” shall have the meaning assigned to
such term in the recitals.
     “Funded L/C SPV Guarantee” shall mean, in respect of any Cash
Collateralized Letter of Credit Facility, the unsecured limited recourse
Guarantee by the Borrower of the obligations of the Funded L/C SPV thereunder,
which Guarantee shall be limited at all times to an aggregate amount not to
exceed 15% of the aggregate amount of such Cash Collateralized Letter of Credit
Facility.
     “GAAP” shall mean generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
     “General Excluded Assets Basket” shall have the meaning assigned to such
term in the definition of Excluded Assets.
     “Governmental Authority” shall mean the government of the United States of
America or any other nation, any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of government or any
governmental or non-governmental authority regulating the generation and/or
transmission of energy, including ERCOT.
     “Granting Lender” shall have the meaning assigned to such term in
Section 9.04(i).
     “Guarantee” shall mean a guarantee, other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner, including by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof, of all or any
part of any Indebtedness (whether arising by virtue of partnership arrangements,
or by agreements to keep-well, to purchase assets, goods, securities or
services, to take or pay or to maintain financial statement conditions or
otherwise); provided that standard contractual indemnities which do not relate
to Indebtedness shall not be considered a Guarantee.
     “Guarantee and Collateral Agreement” shall mean the Guarantee and
Collateral Agreement, dated as of the Closing Date executed and delivered by the
Borrower and each Subsidiary Guarantor, as amended by the Amendment to Guarantee
and Collateral Agreement, dated as of April 28, 2006, and the Amendment to
Guarantee and Collateral Agreement, dated as of the Third Restatement Date, and
as may be further amended, restated, supplemented or otherwise modified from
time to time in accordance with the terms thereof.
     “Guaranteed Obligations” shall mean the Credit Agreement Borrower
Obligations and the Guarantor Obligations in respect thereof, in each case as
such terms are defined in the Guarantee and Collateral Agreement.

39

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

 

     “Hazardous Materials” shall mean (a) any petroleum products or byproducts,
coal ash, coal combustion by-products or waste, boiler slag, scrubber residue,
flue desulfurization material, radon gas, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, radioactive materials, radioactive waste
or radioactive byproducts, chlorofluorocarbons and all other ozone-depleting
substances and (b) any chemical, material, substance or waste that is
prohibited, limited or regulated by or pursuant to any Environmental Law.
     “Hedging Obligations” shall mean, with respect to any specified Person, the
obligations of such Person under (a) interest rate swap agreements (whether from
fixed to floating or from floating to fixed), interest rate cap agreements and
interest rate collar agreements, (b) other agreements or arrangements designed
to manage interest rates or interest rate risk, (c) other agreements or
arrangements designed to protect such Person against fluctuations in currency
exchange rates and (d) agreements (including each confirmation entered into
pursuant to any master agreement) providing for swaps, caps, collars, puts,
calls, floors, futures, options, spots, forwards, power purchase or sale
agreements, fuel purchase or sale agreements, emissions credit purchase or sales
agreements, power transmission agreements, fuel transportation agreements, fuel
storage agreements, netting agreements, commercial or trading agreements, each
with respect to, or involving the purchase, transmission, distribution, sale,
lease or hedge of, any energy, generation capacity or fuel, or any other energy
related commodity or service, price or price indices for any such commodities or
services or any other similar derivative agreements, and any other similar
agreements, in each case under clauses (a), (b), (c) and (d), entered into by
such Person, including Commodity Hedging Obligations, Eligible Commodity Hedging
Obligations and Interest Rate/Currency Hedging Obligations.
     “Increased Amount Date” shall have the meaning provided in Section 2.25(a).
     “incur” shall have the meaning assigned to such term in Section 6.01.
     “Indebtedness” shall mean, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables
except as provided in clause (e) below), whether or not contingent (a) in
respect of borrowed money; (b) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof); (c) in respect of banker’s acceptances; (d) representing Capital Lease
Obligations (other than any Capital Lease Obligations arising as a result of the
recharacterization of operating leases as capital leases due to changes in the
accounting treatment of such operating leases under GAAP) or Attributable Debt
in respect of sale and leaseback transactions; (e) representing the balance
deferred and unpaid of the purchase price of any property (including trade
payables) or services due more than six months after such property is acquired
or such services are completed; or (f) representing Hedging Obligations, if and
to the extent any of the preceding items (other than letters of credit,
Attributable Debt and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term “Indebtedness” includes all Indebtedness of others secured by
a Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
Guarantee by the specified Person of any Indebtedness of any other Person. The
amount of any Indebtedness outstanding as of any date will be (a) the accreted
value of the Indebtedness, in the case of any Indebtedness issued with original
issue discount; (b) the principal amount of the Indebtedness, in the case of any
other Indebtedness; and (c) in respect of Indebtedness of another Person secured
by a Lien on the assets of the specified Person, the lesser of (i) the Fair
Market Value of such asset at the date of determination, and (ii) the amount of
the Indebtedness of the other Person.
     “Indemnified Taxes” shall mean Taxes other than Excluded Taxes and Other
Taxes.

40

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

 

     “Indemnitee” shall have the meaning assigned to such term in
Section 9.05(b).
     “Information” shall have the meaning assigned to such term in Section 9.16.
     “Intellectual Property Collateral” shall have the meaning assigned to such
term in the Guarantee and Collateral Agreement.
     “Intellectual Property Security Agreement” shall mean all Intellectual
Property Security Agreements executed and delivered by the Loan Parties, each
substantially in the applicable form required by the Guarantee and Collateral
Agreement, as the same may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms hereof and thereof.
     “Interest Payment Date” shall mean (a) with respect to any ABR Loan (other
than a Swingline Loan), the last Business Day of each March, June, September and
December (beginning with March 31, 2006), (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months’ duration, each day that would have been an
Interest Payment Date had successive Interest Periods of three months’ duration
been applicable to such Borrowing, and (c) with respect to any Swingline Loan,
the day that such Loan is required to be repaid.
     “Interest Period” shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending seven days thereafter
or on the numerically corresponding day in the calendar month that is 1, 2, 3 or
6 months thereafter (or 9 or 12 months thereafter if, at the time of the
relevant Borrowing, an interest period of such duration is available to all
Lenders participating therein), as the Borrower may elect; provided, however,
that (i) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day
and (ii) any Interest Period (other than an Interest Period of seven days) that
commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month
of such Interest Period. Interest shall accrue from and including the first day
of an Interest Period to but excluding the last day of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.
     “Interest Rate/Currency Hedging Agreement” shall mean any agreement of the
type described in clauses (a), (b) or (c) of the definition of “Interest
Rate/Currency Hedging Obligations”.
     “Interest Rate/Currency Hedging Obligations” shall mean, with respect to
any specified Person, the obligations of such Person under (a) interest rate
swap agreements (whether from fixed to floating or from floating to fixed),
interest rate cap agreements and interest rate collar agreements, (b) other
agreements or arrangements designed to manage interest rates or interest rate
risk and (c) other agreements or arrangements designed to protect such Person
against fluctuations in currency exchange rates, in each case under clauses (a),
(b) and (c), entered into by such Person in the ordinary course of business and
not for speculative purposes.

41

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

 

     “Investments” shall mean, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including Guarantees or other obligations), advances or
capital contributions, purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. If the Borrower or any Subsidiary sells or otherwise
disposes of any Equity Interests of any direct or indirect Subsidiary such that,
after giving effect to any such sale or disposition, such Person is no longer a
Subsidiary, the Borrower will be deemed to have made an Investment on the date
of any such sale or disposition equal to the Fair Market Value of the Borrower’s
Investments in such Subsidiary that were not sold or disposed of. The
acquisition by the Borrower, or by any Subsidiary, of a Person that holds an
Investment in a third Person will be deemed to be an Investment by the Borrower
or such Subsidiary in such third Person in an amount equal to the Fair Market
Value of the Investments held by the acquired Person in such third Person.
Except as otherwise provided in this Agreement, the amount of an Investment will
be determined at the time the Investment is made and without giving effect to
subsequent changes in value.
     Notwithstanding anything to the contrary herein, in the case of any
Investment made by the Borrower or a Restricted Subsidiary in a Person
substantially concurrently with a cash distribution by such Person to the
Borrower or a Restricted Subsidiary (a “Concurrent Cash Distribution”), then:
     (a) the Concurrent Cash Distribution shall be deemed to be Net Cash
Proceeds received in connection with an Asset Sale and applied as described in
Section 2.13; and
     (b) the amount of such Investment shall be deemed to be the Fair Market
Value of the Investment, less the amount of the Concurrent Cash Distribution.
     “Issuing Bank” shall mean, as the context may require, (a) Deutsche Bank
AG, New York Branch and Bank of America, N.A. and/or any of their respective
affiliates, each in its capacity as the issuer of Letters of Credit issued by it
hereunder and (b) any other Lender that may become an Issuing Bank pursuant to
Section 2.23(i) or 2.23(k), with respect to Letters of Credit issued by such
Lender. Unless otherwise specified, in respect of any Letters of Credit,
“Issuing Bank” shall refer to the applicable Issuing Bank which has issued such
Letter of Credit. Each Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term “Issuing Bank” shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.
     “Issuing Bank Fees” shall have the meaning assigned to such term in
Section 2.05(c).
     “Issuing Subsidiary” shall have the meaning assigned to such term in the
definition of “Additional Non-Recourse Indebtedness.”
     “Joinder Agreement” shall mean an agreement substantially in the form of
Exhibit E.
     “L/C Commitment” shall mean the commitment of each Issuing Bank to issue
Letters of Credit pursuant to Section 2.23.
     “L/C Disbursement” shall mean a payment or disbursement made by the Issuing
Bank pursuant to a Letter of Credit.
     “L/C Fee Payment Date” shall have the meaning assigned to such term in
Section 2.05(c).

42

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

 

     “L/C Participation Fee” shall have the meaning assigned to such term in
Section 2.05(c).
     “Latest Maturity Date” shall mean, at any date of determination, the latest
maturity date applicable to any Class of Loans or Commitments with respect to
such Class of Loans or Commitments at such time, including, for the avoidance of
doubt, the latest maturity date of any Refinancing Term Loan, Refinancing Term
Commitment, Refinancing Revolving Loan or Refinancing Revolving Commitment, in
each case as extended from time to time in accordance with this Agreement.
     “LC Issuer” shall mean any bank or other financial institution from time to
time party to a Cash Collateralized Letter of Credit Facility in its capacity as
an issuer of letters of credit thereunder.
     “Lender Addendum” shall have the meaning assigned to such term in the
Second Restated Credit Agreement.
     “Lenders” shall mean (a) any Lender under and as defined in the Second
Restated Credit Agreement immediately prior to the Third Restatement Date who
continues to be a Lender under this Agreement, (b) the Persons that deliver a
Lender Addendum or become a party hereto pursuant to a Joinder Agreement and
(c) any Person that has become a party hereto pursuant to an Assignment and
Acceptance (other than in each case any such Person that has ceased to be a
party hereto pursuant to an Assignment and Acceptance). Unless the context
otherwise requires, the term “Lenders” shall include the Swingline Lender.
     “Letter of Credit” shall mean, at any time, any letter of credit issued
pursuant to and in accordance with the terms and provisions of Section 2.23.
     “LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m., London time, on the date that is two Business Days
prior to the commencement of such Interest Period by reference to the British
Bankers’ Association Interest Settlement Rates for deposits in dollars (as set
forth by the Bloomberg Information Service or any successor thereto or any other
service selected by the Administrative Agent which has been nominated by the
British Bankers’ Association as an authorized information vendor for the purpose
of displaying such rates) for a period equal to such Interest Period; provided
that, to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the “LIBO Rate” shall be the interest
rate per annum determined by the Administrative Agent to be the average of the
rates per annum at which deposits in dollars are offered for such relevant
Interest Period to major banks in the London interbank market in London, England
by the Administrative Agent at approximately 11:00 a.m. (London time) on the
date that is two Business Days prior to the beginning of such Interest Period.
     “Lien” shall mean, with respect to any asset (a) any mortgage, deed of
trust, deed to secure debt, lien (statutory or otherwise), pledge,
hypothecation, encumbrance, collateral assignment, charge or security interest
in, on or of such asset; (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset; and (c) in the case of Equity Interests or
debt securities, any purchase option, call or similar right of a third party
with respect to such Equity Interests or debt securities. For the avoidance of
doubt, “Lien” shall not be deemed to include licenses of intellectual property.

43

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

 

     “Loan Documents” shall mean this Agreement, any promissory note delivered
pursuant to Section 2.04(e), the Security Documents, the Affiliate Subordination
Agreement, the First Amendment Agreement, the Second Amendment Agreement, the
Third Amendment Agreement and each Joinder Agreement.
     “Loan Parties” shall mean the Borrower and each Subsidiary Guarantor.
     “Loans” shall mean the Revolving Loans, the Term B Loans, the Swingline
Loans, the New Revolving Loans, the New Term Loans, the Refinancing Revolving
Loans, the Refinancing Term Loans and the Credit-Linked Deposits.
     “Majority Revolving Credit Lenders” shall mean, at any time, Revolving
Credit Lenders having Revolving Loans (excluding Swingline Loans), Revolving L/C
Exposure, Swingline Exposure and unused Revolving Credit Commitments
representing at least a majority of the sum of all Revolving Loans outstanding
(excluding Swingline Loans), Revolving L/C Exposure, Swingline Exposure and
unused Revolving Credit Commitments at such time.
     “Mandatory Convertible Preferred Stock” shall mean the 2,000,000 shares of
5.750% mandatory convertible preferred stock, liquidation value $250 per share,
of the Borrower issued on the Closing Date to fund a portion of the Acquisition
Consideration.
     “Margin Stock” shall have the meaning assigned to such term in
Regulation U.
     “Mark-to-Market Adjustments” shall mean (a) any non-cash loss attributable
to the mark-to-market movement in the valuation of Hedging Obligations (to the
extent the cash impact resulting from such loss has not been realized) or other
derivative instruments pursuant to Financial Accounting Standards Board
Statement No. 133, “Accounting for Derivative Instruments and Hedging
Activities;” plus (b) any loss relating to amounts paid in cash prior to the
stated settlement date of any Hedging Obligation that has been reflected in
Consolidated Net Income in the current period; plus (c) any gain relating to
Hedging Obligations associated with transactions recorded in the current period
that has been reflected in Consolidated Net Income in prior periods and excluded
from Consolidated EBITDA pursuant to clauses (e) and (f) below; minus (d) any
non-cash gain attributable to the mark-to-market movement in the valuation of
Hedging Obligations (to the extent the cash impact resulting from such gain has
not been realized) or other derivative instruments pursuant to Financial
Accounting Standards Board Statement No. 133, “Accounting for Derivative
Instruments and Hedging Activities;” minus (e) any gain relating to amounts
received in cash prior to the stated settlement date of any Hedging Obligation
that has been reflected in Consolidated Net Income in the current period; minus
(f) any loss relating to Hedging Obligations associated with transactions
recorded in the current period that has been reflected in Consolidated Net
Income in prior periods and excluded from Consolidated EBITDA pursuant to
clauses (b) and (c) above.
     “Material Adverse Effect” shall mean a material adverse change in or
material adverse effect on (a) the condition (financial or otherwise), results
of operations, assets or liabilities of the Borrower and the Subsidiaries, taken
as a whole, or (b) the validity or enforceability of any Loan Document, which if
such Loan Document is a Security Document, relates to Collateral having an
aggregate Fair Market Value of $100,000,000 or more in the aggregate, or the
material rights and remedies of the Arrangers, the Administrative Agent, the
Collateral Agent, the Issuing Bank, the Collateral Trustee or the Secured
Parties thereunder.
     “Material Indebtedness” shall mean Indebtedness for money borrowed (other
than the Loans and Letters of Credit) and Hedging Obligations of any one or more
of the Borrower or any

44

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

 

of the Subsidiaries in an aggregate principal amount or mark-to-market
adjustment value exceeding $150,000,000.
     “Maximum Rate” shall have the meaning assigned to such term in
Section 9.09.
     “Minority Investment” shall mean any Person (other than a Subsidiary) in
which the Borrower or any Restricted Subsidiary owns Capital Stock.
     “Moody’s” shall mean Moody’s Investors Service, Inc. or any successor
entity.
     “Mortgaged Properties” shall mean on the Third Restatement Date, each
parcel of real property and the improvements located thereon and appurtenants
thereto owned or leased by a Loan Party and specified on Schedule 1.01(f), and
shall include each other parcel of real property and improvements located
thereon with respect to which a Mortgage is granted pursuant to Section 5.09 or
5.10; provided, however, that any Mortgaged Property that becomes an Excluded
Asset, or the rights in which are held by any Person that ceases to be a
Subsidiary Guarantor pursuant to Section 6.11 hereof or as otherwise provided in
the Loan Documents, shall cease to be a Mortgaged Property for all purposes
under the Loan Documents and the Collateral Agent and the Collateral Trustee
shall take such actions as are reasonably requested by any Loan Party at such
Loan Party’s expense to terminate the Liens and security interests created by
the Loan Documents in such Mortgaged Property.
     “Mortgages” shall mean the mortgages, deeds of trust, leasehold mortgages,
assignments of leases and rents, modifications, amendments and restatements of
the foregoing and other security documents granting a Lien on any Mortgaged
Property to secure the Guaranteed Obligations, each in the form of Exhibit F
with such changes as are reasonably satisfactory to the Borrower (which shall be
evidenced by the signature thereof by the applicable Loan Party), the Collateral
Agent and the Collateral Trustee, in each case, as the same may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof.
     “Multiemployer Plan” shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
     “Necessary CapEx Debt” shall mean Indebtedness of the Borrower or its
Restricted Subsidiaries incurred for the purpose of financing Necessary Capital
Expenditures.
     “Necessary Capital Expenditures” shall mean capital expenditures (other
than Environmental Capital Expenditures) that are required by Applicable Law or
are undertaken for health and safety reasons. The term “Necessary Capital
Expenditures” does not include any capital expenditure undertaken primarily to
increase the efficiency of, expand or re-power any power generation facility.
     “Net Asset Sale Proceeds” shall have the meaning assigned to such term in
the definition of “Net Cash Proceeds”.
     “Net Cash Proceeds” shall mean
     (a) with respect to any Asset Sale or Recovery Event, the proceeds thereof
in the form of cash as and when received (including any such cash proceeds
subsequently received (as and when received) in respect of noncash consideration
initially received), net of (i) all expenses related to such Asset Sale or
Recovery Event (including legal, accounting and investment banking fees,
broker’s fees and sales commissions, relocation

45

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

 

fees and expenses paid or reasonably estimated by the Borrower to be payable,
and taxes paid or payable by the Borrower and the Restricted Subsidiaries in
connection therewith, and the Borrower’s good faith estimate of any other taxes
to be paid or payable in connection with such Asset Sale or Recovery Event,
after taking into account any available tax credits or deductions and any tax
sharing arrangements, and any out-of-pocket costs of remediation, repair or
closure required to be incurred by the Borrower and the Restricted Subsidiaries
by the applicable Governmental Authority in connection with such Recovery
Event), (ii) amounts remitted in an escrow or provided as a reserve, in
accordance with GAAP or the corresponding transaction agreements or otherwise
reasonably estimated to be payable to third parties and attributable to such
Asset Sale, against any liabilities under any indemnification obligations or
purchase price adjustment or otherwise associated with such asset or Asset Sale,
including pension and post-employment benefit liabilities and liabilities
related to Environmental Laws or against any other indemnification obligations
related to such transaction (provided that, to the extent and at the time any
such amounts are released from such reserve or escrow to the benefit of the
Borrower or any Restricted Subsidiary, such amounts shall constitute Net Cash
Proceeds if otherwise described as such in this definition) and (iii) the
principal amount, premium or penalty, if any, interest and other amounts on any
Indebtedness (other than any such Indebtedness hereunder or under any Permitted
Notes that are secured or assumed by the purchaser of such asset or any
Affiliate thereof) which is secured by the asset transferred, taken or sold in
such Asset Sale or Recovery Event and which is required to be repaid with such
proceeds (such proceeds with respect to any Asset Sale, “Net Asset Sale
Proceeds”);
     provided, however, that if the asset transferred, taken or sold in such
Asset Sale or Recovery Event did not constitute Core Collateral, (1) up to
$300,000,000 in the aggregate of Net Asset Sale Proceeds received from one or
more Asset Sales of Equity Interests in, or property or assets of, any Foreign
Subsidiary or any Foreign Subsidiary Holding Company (any proceeds with respect
to any such Asset Sale, “Foreign Net Asset Sale Proceeds”) and (2) up to
$50,000,000 of Net Asset Sale Proceeds (other than any Foreign Net Asset Sale
Proceeds) received in each fiscal year of the Borrower, in each case shall not
be deemed Net Cash Proceeds that are subject to mandatory prepayment pursuant to
Section 2.13(b) or otherwise, even if the terms of the following proviso are not
complied with in respect of any such Net Asset Sale Proceeds;
     provided, further, that if (v) the asset transferred, taken or sold in such
Asset Sale or Recovery Event did not constitute Core Collateral, (w) the
Borrower or any Restricted Subsidiary reinvests an amount equal to such proceeds
in an acquisition of a Person or line of business in accordance with the terms
of this Agreement or productive assets of a kind then used or usable in the
business of the Borrower and the Restricted Subsidiaries within 365 days of
receipt of such proceeds (such period, the “Reinvestment Period”) (provided that
(i) in the event approval of any Governmental Authority is required to be
procured in connection with the reinvestment of such proceeds, the Reinvestment
Period shall be extended for an additional period not to exceed 180 days as
necessary to obtain such approval and (ii) in the event the Borrower or any
Restricted Subsidiary enters into a legally binding commitment to reinvest such
proceeds within such 365-day period, the Reinvestment Period shall be extended
for an additional period not to exceed 365 days), (x) no Event of Default has
occurred and is continuing at the time of the application of such proceeds (both
immediately before and immediately after giving effect to such application),
(y) such proceeds (1) resulting from the sale of the Equity Interests in any
Person that is incorporated, formed or organized under the laws of the United
States of America, any State thereof or the District of Columbia (other than a
Foreign Subsidiary

46

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

 

Holding Company) (a “U.S. Person”) or any other assets located in the United
States are only used to make an acquisition of a Person that will, following the
consummation of such acquisition, be a Domestic Subsidiary or an acquisition of
other assets that are located in the United States or (2) resulting from the
sale of the Equity Interests in any Person other than a U.S. Person are only
used to make an acquisition of a Person that is incorporated, formed or
organized under the laws of a Designated Country or an acquisition of other
assets that are located in a Designated Country and (z) such proceeds resulting
from the sale of any Equity Interests in any Subsidiary Guarantor or any other
assets that constitute Collateral are only used to make an acquisition of a
Person that will, following the consummation of such acquisition, be a
Subsidiary Guarantor or an acquisition of other assets that will constitute
Collateral, then such proceeds shall not be deemed Net Cash Proceeds that are
subject to the mandatory prepayment provisions of Section 2.13(b) except to the
extent not so used at the end of the Reinvestment Period, at which time such
proceeds shall be deemed Net Cash Proceeds that are subject to the mandatory
prepayment provisions of Section 2.13(b);
     provided further, however, that if (A) the asset transferred, taken or sold
in such Asset Sale or Recovery Event did not constitute Core Collateral, (B)
such proceeds result from an Asset Sale or Recovery Event to the extent
involving assets, rights or other property of a Restricted Subsidiary that is
not a Loan Party, (C) the terms of any Indebtedness of such Restricted
Subsidiary require that an amount equal to the amount of such proceeds be
applied to repay such Indebtedness, (D) the Borrower uses an amount equal to the
amount of such proceeds to repay such Indebtedness of such Restricted Subsidiary
solely to the extent required thereby and, if such repaid Indebtedness is
revolving credit Indebtedness, to correspondingly reduce commitments with
respect thereto, within 365 days of receipt of such proceeds and (E) no Event of
Default has occurred and is continuing at the time of the application of an
amount equal to such proceeds, then such amount of proceeds shall not be deemed
Net Cash Proceeds that are subject to the mandatory prepayment provisions of
Section 2.13(b) except to the extent not so used at the end of such 365-day
period, at which time an amount equal to such proceeds shall be deemed Net Cash
Proceeds that are subject to the mandatory prepayment provisions of
Section 2.13(b). In addition, notwithstanding the foregoing, if the assets
transferred, taken or sold in any such Asset Sale did not constitute Core
Collateral and such Net Asset Sale Proceeds result from one or more Asset Sales
of Equity Interests of an Excluded Project Subsidiary that does not own
(directly or indirectly through its ownership interest in any other Excluded
Project Subsidiary) a Facility (other than the Facility that is being developed,
constructed or acquired with such Net Asset Sale Proceeds), then such Net Asset
Sale Proceeds shall be deemed not to be Net Cash Proceeds that are subject to
the mandatory prepayment provisions of Section 2.13(b) to the extent that such
Net Asset Sale Proceeds are used to finance the development, repowering,
construction or acquisition of such Excluded Project Subsidiary’s Facility; and
     (b) with respect to any issuance or incurrence of Indebtedness, the cash
proceeds thereof, net of any and all taxes and fees, commissions, costs and
other expenses incurred by the Borrower and the Restricted Subsidiaries in
connection therewith; provided that, in the case of the issuance or incurrence
of Indebtedness under Section 6.01(m), the cash proceeds thereof shall only
constitute “Net Cash Proceeds” to the extent distributed by the applicable
Excluded Project Subsidiary to the Borrower or any other Subsidiary; provided
further, that if (x) such Indebtedness is Non-Recourse Indebtedness, the Net
Cash Proceeds of which are distributed by the applicable Excluded Project
Subsidiary to the Borrower or any other Subsidiary that is a Loan Party, (y) the

47

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

 

Borrower or such Subsidiary reinvests such distribution in an acquisition of a
Person or line of business in accordance with the terms of this Agreement or
productive assets of a kind then used or usable in the business of the Borrower
and the Restricted Subsidiaries within the Reinvestment Period (provided that in
the event approval of any Governmental Authority is required to be procured in
connection with the reinvestment of such distribution, the Reinvestment Period
shall be extended for an additional period (not to exceed 180 days) as necessary
to obtain such approval), (z) no Event of Default has occurred and is continuing
at the time of the application of such distribution (both before and after
giving effect to such application), then such distribution shall not be deemed
Net Cash Proceeds that are subject to the mandatory prepayment provisions of
Section 2.13(c) except to the extent not so used at the end of the Reinvestment
Period, at which time such distribution shall be deemed Net Cash Proceeds that
are subject to the mandatory prepayment provisions of Section 2.13(c).
     “Net Income” shall mean, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends or accretion, excluding,
however, (a) any gain or loss, together with any related provision for taxes on
such gain or loss, realized in connection with (i) any Asset Sale (without
giving effect to the threshold provided for in the definition thereof) or
(ii) the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries; and (b) any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain (but
not loss).
     “New Loan Commitments” shall have the meaning assigned to such term in
Section 2.25(a).
     “New Revolving Credit Commitments” shall have the meaning assigned to such
term in Section 2.25(a).
     “New Revolving Credit Lender” shall have the meaning assigned to such term
in Section 2.25(b).
     “New Revolving Loans” shall have the meaning assigned to such term in
Section 2.25(b).
     “New Term Loan Commitments” shall have the meaning assigned to such term in
Section 2.25(a).
     “New Term Loan Lender” shall have the meaning assigned to such term in
Section 2.25(c).
     “New Term Loan Maturity Date” shall mean the date on which a New Term Loan
matures.
     “New Term Loans” shall have the meaning assigned to such term in
Section 2.25(c).
     “Non-Consenting Lender” shall have the meaning assigned to such term in
Section 9.08(c).
     “Non-Recourse Indebtedness” shall mean (a) Existing Non-Recourse
Indebtedness of any Subsidiary existing as of the Closing Date and
(b) Additional Non-Recourse Indebtedness of any Subsidiary that is not a Loan
Party.

48

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

 

     “NRG Power Marketing” shall mean NRG Power Marketing Inc., a Delaware
corporation that is a wholly owned Subsidiary.
     “NYPSC” shall have the meaning assigned to such term in Section 3.23(f).
     “NYPSC Subject Company” shall have the meaning assigned to such term in
Section 3.23(f).
     “Obligations” shall have the meaning assigned to such term in the
Collateral Trust Agreement.
     “Original Maturity Credit-Linked Deposit” shall mean all Credit-Linked
Deposits (other than Extended Maturity Credit-Linked Deposits and any Class of
Credit-Linked Deposits created pursuant to a Permitted Amendment). The aggregate
amount of Original Maturity Credit-Linked Deposits on the Third Restatement Date
is $500,000,000.
     “Original Maturity Credit-Linked Deposit Maturity Date” shall mean
February 1, 2013, as it may be extended pursuant to and in accordance with this
Agreement.
     “Original Maturity Repayment Date” shall have the meaning assigned to such
term in Section 2.11.
     “Original Maturity Term Loan Maturity Date” shall mean February 1, 2013, as
it may be extended pursuant to and in accordance with this Agreement.
     “Original Maturity Term Loans” shall mean all Term B Loans (other than
Extended Maturity Term Loans, any New Term Loans, any Refinancing Term Loans and
any Class of Term Loans created pursuant to a Permitted Amendment). The
aggregate amount of all Original Maturity Term Loans on the Third Restatement
Date is $976,069,187.60.
     “Other Taxes” shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
(including interest, fines, penalties and additions to tax) arising from any
payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
     “Parity Debt Representative” shall have the meaning assigned to such term
in the NRG Collateral Trust Agreement.
     “Parity Lien Debt” shall mean (a) the Existing Commodity Hedging
Agreements; (b) any other Indebtedness consisting of Commodity Hedging
Obligations that is permitted to be incurred under Section 6.01 and secured by a
second priority Lien permitted under Section 6.02; and (c) any secured
Indebtedness that is permitted to be incurred under Section 6.01(p) or
Section 6.01(y) and secured by a second priority Lien permitted under
Section 6.02; provided, in the case of Indebtedness referred to in clauses
(b) and (c), that (i) such Indebtedness is governed by an agreement that
includes a Sharing Confirmation and (ii) all requirements set forth in the
Collateral Trust Agreement as to the confirmation, grant or perfection of the
Liens granted to the Collateral Trustee, for the benefit of the applicable
secured parties, to secure such Indebtedness or Obligations in respect thereof
are satisfied (and the satisfaction of such requirements and the other
provisions of this clause (ii) shall be conclusively established, for purposes
of entitling the holders of such Indebtedness to share Equally and Ratably with
the other holders of Parity Lien Debt in the benefits and proceeds of the
Collateral Trustee’s Liens on the Collateral, if the

49

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

 

Borrower delivers to the Collateral Trustee an officers’ certificate stating
that such requirements and other provisions have been satisfied and that such
Indebtedness is Parity Lien Debt).
     “Parity Lien Obligations” shall mean Parity Lien Debt and all other
Obligations in respect thereof.
     “PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
     “Perfection Certificate” shall mean, collectively, the Pre-Closing UCC
Diligence Certificates dated as of the Third Restatement Date, executed and
delivered by the Borrower and each Subsidiary Guarantor, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
     “Permitted Acquisition” shall mean any acquisition, by merger or otherwise,
by the Borrower or any of the Restricted Subsidiaries of assets or Capital Stock
after the Closing Date, so long as, (a) such acquisition and all transactions
related thereto shall be consummated in accordance with all Applicable Laws;
(b) such acquisition shall result in the issuer of such Capital Stock becoming a
Restricted Subsidiary that is not an Excluded Subsidiary and, to the extent
required by Section 5.09, a Subsidiary Guarantor; (c) such acquisition shall
result in the Collateral Trustee, for the benefit of the Secured Parties, being
granted a security interest in any Capital Stock and/or any assets so acquired
to the extent required by Sections 5.09 and/or 5.10; (d) after giving effect to
such acquisition, no Default or Event of Default shall have occurred and be
continuing; and (e) the Borrower shall be in compliance, on a pro forma basis
after giving effect to such acquisition (including any Indebtedness assumed or
permitted to exist or incurred pursuant to Sections 6.01(q) and 6.01(r),
respectively), with the covenants set forth in Sections 6.13 and 6.14, as such
covenants are recomputed as of the last day of the most recently ended fiscal
quarter for which financial statements are required to be delivered pursuant to
Section 5.04(a) or 5.04(b) under such Sections 6.13 and 6.14 as if such
acquisition had occurred on the first day of the applicable Test Period.
     “Permitted Amendment Discount” shall have the meaning assigned to such term
in Section 9.22(a).
     “Permitted Amendment Loans and/or Commitments” shall have the meaning
assigned to such term in Section 9.22(a).
     “Permitted Amendment Yield Differential” shall have the meaning assigned to
such term in Section 9.22(a).
     “Permitted Amendments” shall mean one or more amendments providing for an
extension of the final maturity date of any Loan and/or any Commitment of the
Accepting Lenders (provided, that such extensions may not result in having more
than eight different final maturity dates under this Agreement without the prior
written consent of the Administrative Agent (such consent not to be unreasonably
withheld, conditioned or delayed)) and, in connection therewith and subject to
the limitations set forth in Section 9.22, any change in the Applicable Margin
and other pricing with respect to the applicable Loans and/or Commitments of the
Accepting Lenders and the payment of any fees (including prepayment premiums or
fees) to the Accepting Lenders (such changes and/or payments to be in the form
of cash, equity interest or other property as agreed by the Borrower and the
Accepting Lenders to the extent not prohibited by this Agreement). For the
avoidance of doubt, it is understood that the Transactions consummated on the
Third Restatement Date are not Permitted Amendments.

50

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

 

     “Permitted Asset Swap” shall mean any transfer of Equity Interests or
properties or other assets (other than any such Equity Interests, properties or
other assets constituting Core Collateral) by the Borrower or any of the
Restricted Subsidiaries in which at least 75% of the consideration received by
the transferor or any of its Affiliates (provided that such Affiliate shall be
(x) a Restricted Subsidiary and (y) if the applicable transferor is a Loan
Party, a Loan Party) consists of Equity Interests or properties or other assets
(other than cash or Cash Equivalents) useful in the Permitted Business; provided
that the aggregate Fair Market Value of the Equity Interests or property or
other assets being transferred by the Borrower or such Restricted Subsidiary is
not greater than the aggregate Fair Market Value of the Equity Interests or
properties or other assets received by the Borrower or such Restricted
Subsidiary in such transfer.
     “Permitted Business” shall mean the business of holding, acquiring,
constructing, managing, developing, improving, maintaining, leasing, owning and
operating Facilities, together with any related assets or facilities, and any
other business conducted by the Borrower and its Restricted Subsidiaries on the
Closing Date, as well as any other activities reasonably related, ancillary,
incidental or complementary to any of the foregoing activities (including
acquiring and holding reserves), including investing in Facilities.
     “Permitted Cure Security” shall mean an equity security of the Borrower
having no mandatory redemption, repurchase or similar requirements prior to
91 days after the Latest Maturity Date of all Classes of Loans or Commitments,
and upon which all dividends or distributions (if any) shall be payable solely
in additional shares of such equity security.
     “Permitted Environmental Control Lease” shall mean a lease and leaseback or
sale and leaseback transaction undertaken in connection with the issuance of
pollution or waste control systems bonds the proceeds of which shall be used by
the Borrower or a Restricted Subsidiary to finance the purchase, construction
and/or installation of emissions control equipment for the assets so leased and
leased-back (or sold and leased-back, as applicable) in which such assets are
leased or sold to any Governmental Authority issuing such bonds (or its
designee) by the Borrower or such Restricted Subsidiary and simultaneously
leased-back to the Borrower or such Restricted Subsidiary (as the case may be);
provided that (a) any pre-existing Liens on such assets shall not be
extinguished as a result of such lease and leaseback (or sale and leaseback, as
applicable) transaction, (b) the Governmental Authority issuing such bonds (or
its designee) shall take an interest in the relevant property, subject to such
pre-existing Liens, and (c) the terms and conditions of such transaction and all
related transactions shall be reasonably satisfactory to the Administrative
Agent.
     “Permitted Liens” shall mean
     (a) Liens held by the Collateral Trustee on assets of the Borrower or any
Subsidiary Guarantor securing (i) Guaranteed Obligations of the Borrower or such
Subsidiary Guarantor relating to Indebtedness and Letters of Credit under this
Agreement or relating to obligations under any Specified Hedging Agreements and
(ii) secured obligations of the Borrower or such Subsidiary Guarantor relating
to Revolver Refinancing Indebtedness permitted by Section 6.01(a);
     (b) second priority Liens held by the Collateral Trustee Equally and
Ratably securing Parity Lien Debt and other Parity Lien Obligations;
     (c) Liens on (i) Equity Interests (or intercompany Indebtedness
subordinated on terms customarily associated with shareholder loans provided by
the Borrower and/or any Restricted Subsidiary to any Excluded Subsidiary (other
than the Funded L/C SPV)

51

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

 

in lieu of equity) in connection with Investments permitted by Section 6.05
and/or on assets of Excluded Subsidiaries (other than the Funded L/C SPV)
securing Indebtedness and other obligations of Excluded Subsidiaries (other than
the Funded L/C SPV) that were not prohibited by the terms of this Agreement to
be incurred and (ii) assets of the Funded L/C SPV (including, for the avoidance
of doubt, the Funded L/C Collateral Accounts and all cash, Cash Equivalents,
other securities or investments substantially comparable to Cash Equivalents and
other funds and investments held in the Funded L/C Collateral Accounts and the
proceeds thereof) securing Indebtedness and other obligations of the Funded L/C
SPV in respect of Cash Collateralized Letter of Credit Facilities that were not
prohibited by the terms of this Agreement to be incurred;
     (d) Liens (i) in favor of the Borrower or any of the Subsidiary Guarantors,
(ii) incurred by Excluded Project Subsidiaries in favor of any other Excluded
Project Subsidiary and (iii) incurred by Excluded Foreign Subsidiaries in favor
of any other Excluded Foreign Subsidiary;
     (e) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature incurred
in the ordinary course of business;
     (f) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by Section 6.01(d) hereof covering only the assets acquired with or
financed by such Indebtedness;
     (g) Liens existing on the Closing Date and set forth on Schedule 6.02;
     (h) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded; provided that any
reserve or other provision as is required in conformity with GAAP has been made
therefor;
     (i) Liens imposed by law (other than those described in clause (h) above),
such as carriers’, warehousemen’s, landlords’ and mechanics’ Liens;
     (j) survey exceptions, easements or reservations of, or rights of others
for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone
lines and other similar purposes, or zoning or other restrictions as to the use
of real property that were not incurred in connection with Indebtedness and that
do not in the aggregate materially adversely affect the value of said properties
or materially impair their use in the operation of the business of such Person;
     (k) Liens to secure any Permitted Refinancing Indebtedness permitted to be
incurred under this Agreement; provided, however, that such Lien shall be
limited to all or part of the same property and assets that secured or, under
the written agreements pursuant to which the original Lien arose, could secure
the original Lien (plus improvements and accessions to such property or proceeds
or distributions thereof);
     (l) Liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of
social security;

52

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

 

     (m) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty requirements of the Borrower or
any of its Restricted Subsidiaries, including rights of offset and set-off;
     (n) leases or subleases granted to others that do not materially interfere
with the ordinary course of business of the Borrower and its Restricted
Subsidiaries, taken as a whole;
     (o) inchoate statutory Liens arising under ERISA incurred in the ordinary
course of business;
     (p) Liens existing on the assets of any Person that becomes a Restricted
Subsidiary, or existing on assets acquired, pursuant to a Permitted Acquisition
to the extent the Liens on such assets secure Indebtedness permitted by
Section 6.01(q); provided that such Liens attach at all times only to the same
assets that such Liens attached to, and secure only the same Indebtedness that
such Liens secured, immediately prior to such Permitted Acquisition;
     (q) (i) Liens placed upon the Capital Stock of any Restricted Subsidiary
acquired pursuant to a Permitted Acquisition to secure Indebtedness of the
Borrower or any other Restricted Subsidiary incurred pursuant to Section 6.01(r)
in connection with such Permitted Acquisition and (ii) Liens placed upon the
assets of such Restricted Subsidiary to secure a guarantee by such Restricted
Subsidiary of any such Indebtedness of the Borrower or any other Restricted
Subsidiary;
     (r) Liens on cash, Cash Equivalents and other securities or investments
substantially comparable to Cash Equivalents and other funds and investments
(and proceeds thereof) (A) deposited by the Borrower or any of the Restricted
Subsidiaries in margin accounts with or on behalf of futures contract brokers or
paid over to other counterparties, (B) pledged or deposited as collateral to a
contract counterparty or issuer of surety bonds or issuer of letters of credit
by the Borrower or any of the Restricted Subsidiaries, in each case to secure
obligations with respect to (1) contracts for commercial and trading activities
in the ordinary course of business and contracts (including physical delivery,
option (whether cash or financial), exchange, swap and futures contracts) for
the purchase, transmission, transportation, distribution, sale, lease or hedge
of any fuel-related, power-related or weather-related commodity, service or risk
or (2) Commodity Hedging Agreements;
     (s) Liens arising from UCC financing statements filed on a precautionary
basis in respect of operating leases intended by the parties to be true leases
(other than any such leases entered into in violation of this Agreement);
     (t) Liens on assets and Equity Interests of a Subsidiary that is an
Excluded Subsidiary as of the Closing Date;
     (u) Liens granted in favor of Xcel Energy, Inc. pursuant to the Xcel
Indemnification Agreements as in effect on the Closing Date on the Collateral
(as defined in the Xcel Indemnification Agreements) held by Xcel Energy, Inc.
thereunder;
     (v) first priority Liens held by the Collateral Trustee (and subject to the
terms of the Collateral Trust Agreement) existing immediately prior to the Third
Restatement Date that secure Indebtedness incurred prior to the Third
Restatement Date

53

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

 

pursuant to Section 6.01(p) of the Second Restated Credit Agreement and
additional first priority Liens held by the Collateral Trustee (and subject to
the terms of the Collateral Trust Agreement) to secure Indebtedness incurred
pursuant to (i) Section 6.01(p) that, together with (A) any New Loan Commitments
incurred under Section 2.25 and (B) any Parity Lien Debt incurred under
Section 6.01(p) and secured by a Lien permitted under clause (b) of this
definition, does not exceed at any one time outstanding the greater of (1)
$750,000,000 and (2) an amount equal to the Consolidated EBITDA of the Borrower
for the period of four consecutive fiscal quarters most recently ended on or
prior to the date on which such Indebtedness is incurred multiplied by 25%,
(ii) Section 6.01(y) or (iii) Section 6.01(z) (to the extent the applicable
Indebtedness is secured as described in clause (vi)(y) of such Section);
     (w) Liens on cash deposits and other funds maintained with a depositary or
intermediary institution, in each case arising in the ordinary course of
business by virtue of any statutory or common law provision relating to banker’s
liens, including Section 4-210 of the UCC, and/or arising from customary
contractual fee provisions, the reimbursement of funds advanced by a depositary
or intermediary institution (and/or its Affiliates) on account of investments
made or securities purchased, indemnity, returned check and other similar
provisions;
     (x) any restrictions on any Equity Interest or Project Interest of a Person
providing for a breach, termination or default under any owners, participation,
shared facility, joint venture, stockholder, membership, limited liability
company or partnership agreement between such Person and one or more other
holders of Equity Interests or Project Interests of such Person, if a security
interest or other Lien is created on such Equity Interest or Project Interest as
a result thereof and other similar Liens and restrictions described in
Section 6.07(b)(ix) and 6.07(c)(I);
     (y) any Liens on Excluded Assets described in clause (xiii) of the
definition thereof;
     (z) Liens to secure Environmental CapEx Debt or Necessary CapEx Debt
permitted by Section 6.01(v) that encumber only the assets purchased, installed
or otherwise acquired with the proceeds of such Environmental CapEx Debt or
Necessary CapEx Debt;
     (aa) Liens on assets or securities granted or deemed to arise in connection
with and solely as a result of the execution, delivery or performance of
contracts to purchase or sell such assets or securities if such purchase or sale
is otherwise permitted hereunder;
     (bb) Liens on assets of the Borrower or any Restricted Subsidiary with
respect to obligations (other than in respect of Indebtedness) that do not
exceed $100,000,000 at any one time outstanding;
     (cc) Liens securing the obligations under the Existing Texas Genco Credit
Agreement; provided that such Liens are released and UCC-3 financing statements
and such other appropriate termination statements are filed in the appropriate
offices on or prior to the fifth day following the Closing Date;
     (dd) Liens in favor of any Securitization Vehicle or its assignee or agent
(including any lenders to such Securitization Vehicle) on South Central
Securitization

54

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

 

Assets transferred or purported to be transferred to such Securitization Vehicle
in connection with a South Central Securitization permitted by Section 6.04;
     (ee) those Liens or other exceptions to title, in either case on or in
respect of any facility of the Borrower or any Subsidiary, arising as a result
of any shared facility agreement entered into with respect to such facility,
except to the extent that any such Liens or exceptions, individually or in the
aggregate, materially adversely affect the value of the relevant property or
materially impair the use of the relevant property in the operation of the
business of the Borrower or such Subsidiary; and
     (ff) Liens securing Eligible Commodity Hedging Agreements that are pari
passu with the Liens securing the Priority Lien Obligations (as defined in the
Collateral Trust Agreement) hereunder so long as any counterparty thereto joins
the Collateral Trust Agreements pursuant to the terms thereof or in a manner
reasonably satisfactory to the Administrative Agent and such Lien is granted in
compliance with the terms and provisions of the Collateral Trust Agreements,
including Section 3.8(c) of the Collateral Trust Agreement.
     “Permitted Notes” shall mean one or more series of notes or bonds of the
Borrower issued after the Third Restatement Date pursuant to one or more
indentures that may be unsecured or secured by first priority or second priority
Liens on all or a portion of the Collateral as described herein.
     “Permitted Notes Indebtedness” shall have the meaning assigned to such term
in Section 6.01(y).
     “Permitted Refinancing Indebtedness” shall mean any Indebtedness of the
Borrower or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to refund, refinance, replace, defease or
discharge, other Indebtedness of the Borrower or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); provided that (a) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness extended, refinanced, renewed,
replaced, defeased or refunded (plus all accrued and unpaid interest on such
Indebtedness and the amount of all expenses and premiums incurred in connection
therewith); (b) such Permitted Refinancing Indebtedness has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded (provided that amortization payments of up to 1% per annum shall be
excluded for purposes of calculating the Weighted Average Life to Maturity of
any such Permitted Refinancing Indebtedness); (c) if the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded is subordinated in
right of payment to the Guaranteed Obligations hereunder, such Permitted
Refinancing Indebtedness is subordinated in right of payment to the Guaranteed
Obligations hereunder on terms at least as favorable to the Lenders as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (d) such Indebtedness is
incurred either by the Borrower (and may be guaranteed by any Subsidiary
Guarantor to the extent permitted by Section 6.01(i)) or by the Restricted
Subsidiary who is the obligor on the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and (e)(i) if the Stated Maturity of
the Indebtedness being refinanced is earlier than the Latest Maturity Date of
all Classes of Loans or Commitments, the Permitted Refinancing Indebtedness has
a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being
refinanced or (ii) if the Stated Maturity of the Indebtedness being refinanced
is later than the Latest Maturity Date of all

55

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

 

Classes of Loans or Commitments, the Permitted Refinancing Indebtedness has a
Stated Maturity at least 91 days later than the Latest Maturity Date of all
Classes of Loans or Commitments.
     “Permitted Tax Lease” shall mean a lease and leaseback or sale and
leaseback transaction undertaken by the Borrower or a Restricted Subsidiary in
connection with a PILOT Agreement, which will yield tax savings to the Borrower
or such Restricted Subsidiary during the term of the Term Loans; provided that
(a) no Indebtedness for borrowed money shall be incurred in connection with such
transaction, (b) any pre-existing Liens on the property subject to the
transaction shall not be extinguished as a result of such lease and leaseback
(or sale and leaseback, as applicable) transaction, (c) the Governmental
Authority party to such lease and leaseback or sale and leaseback transactions
(or its designee) shall take an interest in the relevant property subject to
such pre-existing Liens, and (d) the terms and conditions of such transaction
and all related transactions shall be reasonably satisfactory to the
Administrative Agent.
     “Person” shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
     “PILOT Agreement” shall mean a payment-in-lieu of tax agreement entered
into between the Borrower or a Restricted Subsidiary and a Governmental
Authority.
     “Pledged Equity Interests” shall have the meaning assigned to such term in
the Guarantee and Collateral Agreement.
     “Pledged Securities” shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.
     “Preferred Stock” shall mean (i) the 4% Convertible Perpetual Preferred
Stock, par value $0.01 per share, of the Borrower, (ii) the 3.625% Convertible
Perpetual Preferred Stock, par value $0.01 per share, of the Borrower and
(iii) the Mandatory Convertible Preferred Stock, in each case issued on or prior
to the Closing Date.
     “Prime Rate” shall mean the rate of interest per annum publicly announced
from time to time by The Wall Street Journal as the “base rate on corporate
loans posted by at least 75% of the nation’s 30 largest banks” (or, if The Wall
Street Journal ceases quoting a base rate of the type described, the highest per
annum rate of interest published by the Federal Reserve Board in Federal Reserve
statistical release H.15 (519) entitled “Selected Interest Rates” as the Bank
prime loan rate or its equivalent); each change in the Prime Rate shall be
effective as of the opening of business on the date such change is publicly
announced as being effective. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually available.
     “Pro Rata Percentage” of any Revolving Credit Lender at any time shall mean
the percentage of the Total Revolving Credit Commitment represented by such
Lender’s Revolving Credit Commitment. In the event the Revolving Credit
Commitments shall have expired or been terminated, the Pro Rata Percentages of
any Revolving Credit Lender shall be determined on the basis of the Revolving
Credit Commitments most recently in effect prior thereto.
     “Project Interest” shall mean any undivided interest in a Facility.
     “Prudent Industry Practice” shall mean those practices and methods as are
commonly used or adopted by Persons in the Permitted Business in the United
States in connection with the

56

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

 

conduct of the business of such industry, in each case as such practices or
methods may evolve from time to time, consistent with all Requirements of Law.
     “PUCT” shall mean the Public Utility Commission of Texas.
     “PUHCA” shall mean the Public Utility Holding Company Act of 2005 and the
rules and regulations promulgated thereunder, effective February 8, 2006.
     “Purchase Agreement” shall mean the acquisition agreement dated as of
September 30, 2005, among the Target, the Borrower and the direct and indirect
owners of the Target party thereto.
     “PURPA” shall mean the Public Utility Regulatory Policies Act of 1978 and
the rules and regulations promulgated thereunder, as amended from time to time.
     “QF” shall mean a “qualifying facility” under PURPA.
     “Qualified Counterparty” shall mean, with respect to any Specified Hedging
Agreement, any counterparty thereto.
     “Rate” shall have the meaning set forth in the definition of Type.
     “Recovery Event” shall mean the receipt of cash proceeds with respect to
any settlement of or payment in respect of (a) any property or casualty
insurance claim or (b) any taking under power of eminent domain or by
condemnation or similar proceeding of or relating to any property or asset of
the Borrower or any Restricted Subsidiary; provided that any such recovery event
or series of related recovery events having a value not in excess of $50,000,000
shall not be deemed to be a “Recovery Event” for purposes of Section 2.13(b).
     “Reference Date” shall have the meaning set forth in the definition of
Available Amount.
     “Refinancing Amount Date” shall have the meaning assigned to such term in
Section 2.26(a).
     “Refinancing Loan Commitments” shall have the meaning assigned to such term
in Section 2.26(a).
     “Refinancing Revolving Credit Commitments” shall have the meaning assigned
to such term in Section 2.26(a).
     “Refinancing Revolving Credit Lender” shall have the meaning assigned to
such term in Section 2.26(e).
     “Refinancing Revolving Loans” shall have the meaning assigned to such term
in Section 2.26(e).
     “Refinancing Series” shall have the meaning provided in Section 2.26(a).
     “Refinancing Term Loan” shall have the meaning assigned to such term in
Section 2.26(c).
     “Refinancing Term Loan Commitments” shall have the meaning assigned to such
term in Section 2.26(a).

57

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

 

     “Refinancing Term Loan Lender” shall have the meaning assigned to such term
in Section 2.26(c).
     “Refinancing Term Loan Maturity Date” shall mean the date on which a
Refinancing Term Loan matures.
     “Register” shall have the meaning assigned to such term in Section 9.04(d).
     “Regulation T” shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
     “Regulation U” shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
     “Regulation X” shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
     “Reinvestment Period” shall have the meaning assigned to such term in the
definition of “Net Cash Proceeds”.
     “Related Fund” shall mean, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is advised
or managed by such Lender, an Affiliate of such Lender, the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
     “Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the respective directors, officers, trustees, employees,
agents and advisors of such Person and such Person’s Affiliates.
     “Release” shall mean any release, spill, emission, leaking, pumping,
injection, pouring, emptying, deposit, disposal, discharge, dispersal, dumping,
escaping, leaching or migration into or through the environment or within or
upon any building, structure, facility or fixture.
     “Repayment Date” shall mean (i) in the case of Extended Maturity Term
Loans, the Extended Maturity Repayment Date and (ii) in the case of Original
Maturity Term Loans, the Original Maturity Repayment Date.
     “Requested Prepayment Amount” shall have the meaning assigned to such term
in Section 2.13(f).
     “Requested Term Loan Prepayment Amount” shall have the meaning assigned to
such term in Section 2.13(e).
     “Required Lenders” shall mean, at any time, Lenders having Loans (excluding
Swingline Loans), Revolving L/C Exposure, Funded L/C Exposure, Swingline
Exposure, unused Revolving Credit Commitments, unused Term Loan Commitments,
Excess Credit-Linked Deposits and, if applicable, unused New Revolving Credit
Commitments and unused New Term Loan Commitments representing at least a
majority of the sum of all Loans outstanding (excluding Swingline Loans),
Revolving L/C Exposure, Funded L/C Exposure, Swingline Exposure, unused
Revolving Credit Commitments, unused Term Loan Commitments, Excess Credit-Linked
Deposits, and, if applicable, unused New Revolving Credit Commitments and unused
New Term Loan Commitments at such time.

58

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

 

     “Required Prepayment Percentage” shall mean (a) in the case of any Asset
Sale or Recovery Event, 100%; (b) in the case of any issuance or other
incurrence of Indebtedness (except for Indebtedness permitted to be issued or
incurred pursuant to Section 6.01 (other than pursuant to Section 6.01(m),
6.01(s), 6.01(y) and, to the extent required by the terms thereof, 6.01(z) and
other than as contemplated by Section 2.26)), 100%, and, with respect to any
issuance or other incurrence of Indebtedness pursuant to Section 6.01(s), 100%
or if on the date of the applicable prepayment the Consolidated Leverage Ratio
(determined on a pro forma basis taking into account the incurrence of such
Indebtedness and any related prepayment of Indebtedness with the proceeds
thereof) is less than or equal to 4.25 to 1.00, 75%; and (c) in the case of any
Excess Cash Flow, 75% or, if on the date of the applicable prepayment, the
Consolidated Leverage Ratio is less than or equal to 4.25 to 1.00 but greater
than 3.00 to 1.00, 50%, or, if on the date of the applicable prepayment, the
Consolidated Leverage Ratio is less than or equal to 3.00 to 1.00 but greater
than 2.50 to 1.00, 25%, or, if on the date of the applicable prepayment, the
Consolidated Leverage Ratio is less than or equal to 2.50 to 1.00, 0%.
     “Restricted Subsidiary” of a specified Person shall mean, with respect to
such Person, any subsidiary of that Person that is not an Unrestricted
Subsidiary. Unless otherwise indicated, any reference to a “Restricted
Subsidiary” shall be deemed to be a reference to a Restricted Subsidiary of the
Borrower. On the Closing Date, all the Subsidiaries of the Borrower are
Restricted Subsidiaries of the Borrower.
     “Retained Prepayment Amount” shall mean, on any date, an amount equal at
such time to (a) the sum of (1) on and after the Borrower shall have provided
its calculation of the Excess Cash Flow for the fiscal year ending December 31,
2006 pursuant to Section 5.04(c), an amount equal to such Excess Cash Flow for
such fiscal year multiplied by 75% and (2) without duplication of the amount
described in clause (1), all amounts that are offered to Lenders and retained by
the Borrower after all mandatory prepayments, returns, reductions and cash
collateralizations are made pursuant to Section 2.13(e) and 2.13(f) after the
Closing Date and on or prior to such date (other than any amounts that are
offered to Lenders and retained by the Borrower in connection with any required
prepayment offer made under Section 2.13(d) with respect to any fiscal period
that does not end on the last day of any fiscal year) minus (b) the sum of
(i) the aggregate amount of any Investments made by the Borrower or any
Restricted Subsidiary pursuant to Section 6.05(h) after the Closing Date and on
or prior to such date, (ii) the aggregate amount of any Dividends made by the
Borrower or any Restricted Subsidiary pursuant to Section 6.06(d)(iii) after the
Closing Date and on or prior to such date, (iii) the aggregate amount of any
prepayments, repurchases and redemptions made by the Borrower or any Restricted
Subsidiary pursuant to Section 6.07(a)(vii) after the Closing Date and on or
prior such date and (iv) the aggregate amount of any Capital Expenditures made
by the Borrower or any Restricted Subsidiary (other than any Excluded
Subsidiaries) pursuant to clause (b) of the proviso to Section 6.12 after the
Closing Date and on or prior such date.
     “Revolver Refinancing Indebtedness” shall mean Indebtedness issued or
incurred under a new revolving credit facility (a “New Revolver”) that
refinances, refunds, extends, renews or replaces the Revolving Credit
Commitments hereunder; provided that (a) the available commitments under such
New Revolver shall not exceed $1,000,000,000, (b) the Borrower shall be the only
borrower under such New Revolver and the Subsidiary Guarantors shall be the only
guarantors, if any, with respect thereto, (c) unless such New Revolver shall be
incurred within six months of the latest Revolving Credit Maturity Date at such
time, such New Revolver contains covenants and events of default which, taken as
a whole, are determined in good faith by a Financial Officer of the Borrower to
be the same in all material respects as (or less restrictive than) the covenants
and events of default contained herein, (d) the Indebtedness under such New
Revolver, if secured, is secured only by Liens on the Collateral granted in
favor of the Collateral

59

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

 

Trustee that are subject to the terms of the Collateral Trust Agreement, (e) if
such New Revolver is secured, the administrative agent in respect of such New
Revolver executes and delivers a Collateral Trust Joinder as required by the
Collateral Trust Agreement and (f) if such New Revolver is secured, the secured
parties with respect to such New Revolver agree in writing for the enforceable
benefit of all Secured Parties hereunder that such secured parties are bound by
the provisions set forth in the Collateral Trust Agreement relating to the order
of application of proceeds from the enforcement of Liens upon the Collateral to
the same extent that the Secured Parties are bound by such provisions as of the
Closing Date.
     “Revolving Credit Borrowing” shall mean a Borrowing comprised of Revolving
Loans.
     “Revolving Credit Commitment” shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans (and to acquire
participations in Letters of Credit and Swingline Loans) hereunder as set forth
on the Lender Addendum delivered by such Lender, or in the Assignment and
Acceptance or Joinder Agreement pursuant to which such Lender assumed its
Revolving Credit Commitment, as applicable, as the same may be (a) reduced from
time to time pursuant to Section 2.09 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender in accordance with
Section 9.04.
     “Revolving Credit Exposure” shall mean, with respect to any Lender at any
time, the aggregate principal amount at such time of all outstanding Revolving
Loans of such Lender, plus the aggregate amount at such time of such Lender’s
Revolving L/C Exposure, plus the aggregate amount at such time of such Lender’s
Swingline Exposure.
     “Revolving Credit Lender” shall mean a Lender with a Revolving Credit
Commitment or an outstanding Revolving Loan.
     “Revolving Credit Maturity Date” shall mean (i) with respect to any
Revolving Credit Commitments and Revolving Loans, August 31, 2015, (ii) with
respect to any Revolver Refinancing Indebtedness, the maturity date thereof,
(iii) with respect to any New Revolving Credit Commitments and New Revolving
Loans, the maturity date thereof set forth in the applicable Joinder Agreement
and (iv) with respect to any Refinancing Revolving Credit Commitments and
Refinancing Revolving Loans, the maturity date thereof set forth in the
applicable Joinder Agreement, in each case, as it may be extended pursuant to
and in accordance with this Agreement.
     “Revolving L/C Exposure” shall mean, at any time, the sum of (a) the
aggregate undrawn amount of all Letters of Credit at such time and (b) the
aggregate amount of all L/C Disbursements that have not been reimbursed at such
time. The Revolving L/C Exposure of any Revolving Credit Lender at any time
shall equal its Pro Rata Percentage of the aggregate Revolving L/C Exposure at
such time.
     “Revolving Loans” shall mean (i) the revolving loans made by the Lenders to
the Borrower pursuant to clause (b) of Section 2.01, (ii) any New Revolving
Loans and (iii) any Refinancing Revolving Loans.
     “S&P” shall mean Standard & Poor’s Ratings Group, Inc. or any successor
entity.
     “Sale of Collateral” shall mean any Asset Sale involving a sale or other
disposition of Collateral.

60

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

 

     “Sale of Core Collateral” shall mean any Asset Sale involving a sale or
other disposition of Core Collateral.
     “Second Amendment Agreement” shall mean the Amendment Agreement, dated as
of June 8, 2007, among the Borrower, the Administrative Agent (as defined under
the Second Restated Credit Agreement), the Deposit Bank (as defined under the
Second Restated Credit Agreement), the Collateral Trustee (as defined under the
Second Restated Credit Agreement), the Texas Genco Collateral Trustee (as
defined in the Second Restated Credit Agreement) and the Lenders (as defined
under the Second Restated Credit Agreement) party thereto.
     “Second Restated Credit Agreement” shall have the meaning assigned to such
term in the recitals.
     “Second Restatement Date” shall have the meaning assigned to such term in
the recitals.
     “Second Restatement Fee Letter” shall mean that certain amended and
restated fee letter, dated as of June 7, 2007, among the Borrower, Credit
Suisse, CS Securities and Citigroup Global Markets Inc., as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
     “Second Restatement Reaffirmation Agreement” shall mean the Reaffirmation
Agreement, dated as of the Second Restatement Date, executed and delivered by
the Borrower, each Subsidiary Guarantor (as defined in the Second Restated
Credit Agreement), the Administrative Agent (as defined under the Second
Restated Credit Agreement), the Collateral Trustee (as defined under the Second
Restated Credit Agreement) and the Texas Genco Collateral Trustee (as defined in
the Second Restated Credit Agreement).
     “Secured Parties” shall mean the Administrative Agent, the Collateral
Agent, the Syndication Agents, the Documentation Agents, the Lenders, the
Issuing Banks and, with respect to any Specified Hedging Agreement, any
Qualified Counterparty that has agreed to be bound by the provisions of
Article VIII hereof and Section 7.2 of the Guarantee and Collateral Agreement as
if it were a party hereto or thereto; provided that no Qualified Counterparty
shall have any rights in connection with the management or release of any
Collateral or the obligations of any Subsidiary Guarantor under the Guarantee
and Collateral Agreement or the Collateral Trust Agreement. For the avoidance of
doubt, it is acknowledged that each LC Issuer in respect of any Cash
Collateralized Letter of Credit Facilities shall not be a Secured Party.
     “Securities Account” shall have the meaning assigned to such term in the
UCC.
     “Securitization Vehicle” shall mean a Person that is a direct wholly owned
Subsidiary of the Borrower or of any Restricted Subsidiary (a) formed for the
purpose of effecting a South Central Securitization, (b) to which the Borrower
and/or any Restricted Subsidiary transfers South Central Securitization Assets
and (c) which, in connection therewith, issues Third Party Securities; provided
that (i) such Securitization Vehicle shall engage in no business other than the
purchase of South Central Securitization Assets pursuant to the South Central
Securitization permitted by Section 6.04, the issuance of Third Party Securities
or other funding of such South Central Securitization and any activities
reasonably related thereto and (ii) such Securitization Vehicle shall be an
Unrestricted Subsidiary under this Agreement and an “Unrestricted Subsidiary”
under each Senior Note Document.
     “Security Documents” shall mean the Guarantee and Collateral Agreement, the
Mortgages, the Control Agreements, the Intellectual Property Security
Agreements, the Collateral

61

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

 

Trust Agreement, the First Restatement Reaffirmation Agreement, the Second
Restatement Reaffirmation Agreement, the Third Restatement Reaffirmation
Agreement and each of the other security agreements, pledges, mortgages,
assignments (collateral or otherwise), consents and other instruments and
documents executed and delivered pursuant to any of the foregoing or pursuant to
Section 5.09 or 5.10.
     “Sellers’ Retained Interests” means the debt and/or equity interests
(including any intercompany notes) held by the Borrower or any Restricted
Subsidiary in a Securitization Vehicle to which South Central Securitization
Assets have been transferred in a South Central Securitization permitted by
Section 6.04, including any such debt or equity received as consideration for,
or as a portion of, the purchase price for the South Central Securitization
Assets transferred, and any other instrument through which the Borrower or any
Restricted Subsidiary has rights to or receives distributions in respect of any
residual or excess interest in the South Central Securitization Assets.
     “Sellers” shall have the meaning assigned to such term in the recitals.
     “Senior Debt” shall mean all Total Debt that is not subordinated in right
of payment to the obligations under this Agreement.
     “Senior Note Documents” shall mean the indenture under which the Senior
Notes are issued and all other instruments, agreements and other documents
evidencing or governing the Senior Notes or providing for any Guarantee or other
right in respect thereof, in each case as the same may be amended or
supplemented from time to time in accordance with the terms hereof and thereof.
     “Senior Notes” shall mean each of (i) the Borrower’s 7.375% Senior Notes
due 2016, (ii) the Borrower’s 7.250% Senior Notes due 2014 and (iii) the
Borrower’s 7.375% Senior Notes due 2017, in each case including any notes issued
by the Borrower in full exchange for, and as contemplated by, such Senior Notes
with substantially identical terms as such Senior Notes in an aggregate amount
not to exceed as of the Closing Date and until the First Restatement Date,
$3,600,000,000 and as of the First Restatement Date and thereafter,
$4,700,000,000.
     “Series” shall have the meaning provided in Section 2.25(a).
     “Sharing Confirmation” shall have the meaning assigned to such term in the
Collateral Trust Agreement.
     “Significant Subsidiary” shall mean any Subsidiary that would be a
“significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the Closing Date and shall in any event include the Core Collateral
Subsidiaries.
     “South Central Securitization” shall mean any transaction or series of
transactions entered into by the Borrower or any Restricted Subsidiary pursuant
to which the Borrower or such Restricted Subsidiary, as the case may be, sells,
conveys, assigns, grants an interest in or otherwise transfers, from time to
time, to one or more Securitization Vehicles the South Central Securitization
Assets (and/or grants a security interest in such South Central Securitization
Assets transferred or purported to be transferred to such Securitization
Vehicle), and which Securitization Vehicle finances the acquisition of such
South Central Securitization Assets (i) with proceeds from the issuance of Third
Party Securities, (ii) with the issuance to the Borrower or such Restricted
Subsidiary of Sellers’ Retained Interests or an increase in such

62

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

 

Seller’s Retained Interests or (iii) with proceeds from the sale or collection
of South Central Securitization Assets.
     “South Central Securitization Assets” shall mean any accounts receivable
originated or expected to be originated by (and owed to) the Borrower or any
Restricted Subsidiary (in each case whether now existing or arising or acquired
in the future) arising from the installation of pollution control equipment for
the removal or reduction of mercury, SO2, NOx and/or other pollutants in the
Borrower’s Big Cajun facilities in Louisiana and any ancillary assets (including
contract rights) which are of the type customarily conveyed with, or in respect
of which security interests are customarily granted in connection with, such
accounts receivable in a securitization transaction and which are sold,
transferred or otherwise conveyed by the Borrower or a Restricted Subsidiary to
a Securitization Vehicle.
     “SPC” shall have the meaning assigned to such term in Section 9.04(i).
     “Specified Facility” means each of the following Facilities, or any part
thereof and/or any other assets set forth below: (a) the Facilities held on the
Closing Date by Vienna Power LLC, Meriden Gas Turbine LLC, Norwalk Power LLC,
Connecticut Jet Power LLC (excluding the assets located at the Cos Cob site),
Devon Power LLC, Montville Power LLC (including the Capital Stock of the
entities owning such Facilities provided that such entities do not hold material
assets other than the Facilities held on the Closing Date); (b) the following
Facilities, or any part thereof: P.H. Robinson, H.O. Clarke, Unit 3 at Cedar
Bayou, Unit 2 at T.H. Wharton and Greens Bayou; (c) the Capital Stock of the
following Subsidiaries of the Borrower if such Subsidiary holds no assets other
than the Capital Stock of a Foreign Subsidiary of Borrower: NRG Latin America,
Inc., NRG International LLC, NRG Insurance Ltd. (Cayman Islands), NRG Asia
Pacific, Ltd., NRG International II Inc. and NRG International III Inc.; and
(d) the Equity Interests issued by, and any assets (including any Facilities),
of Long Beach Generation LLC and Middletown Power LLC.
     “Specified Hedging Agreement” shall mean any Interest Rate/Currency Hedging
Agreement entered into by the Borrower or any Subsidiary Guarantor and any
Qualified Counterparty.
     “Sponsor Preferred Stock” shall mean the shares of the Borrower’s preferred
stock issued pursuant to the terms of the Purchase Agreement.
     “Stated Maturity” shall mean, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness as of the Closing Date, and will not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
     “Statutory Reserves” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch, Affiliate
or other fronting office making or holding a Loan) is subject for eurocurrency
funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of
the Board). Eurodollar Loans shall be deemed to constitute eurocurrency funding
and to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D or any comparable regulation.

63

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

 

Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
     “subsidiary” shall mean, with respect to any Person (herein referred to as
the “parent”), any corporation, partnership, limited liability company,
association or other entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or more than 50% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.
     “Subsidiary” shall mean any subsidiary (direct or indirect) of the
Borrower.
     “Subsidiary Guarantor” shall mean on the Third Restatement Date, each
Restricted Subsidiary specified on Schedule 1.01(g) and, at any time thereafter,
shall include (a) all Core Collateral Subsidiaries and (b) each other Restricted
Subsidiary that is not an Excluded Subsidiary; provided that if at any time any
Subsidiary Guarantor is designated as an Unrestricted Subsidiary or Excluded
Subsidiary pursuant to and in accordance with Section 6.11, thereafter, such
Person shall not be deemed a Subsidiary Guarantor. For the avoidance of doubt,
the Funded L/C SPV shall not be a Subsidiary Guarantor for all purposes under
this Agreement and the other Loan Documents.
     “Supermajority Lenders” shall mean, at any time, Lenders having Loans
(excluding Swingline Loans), Revolving L/C Exposure, Funded L/C Exposure,
Swingline Exposure, unused Revolving Credit Commitments, unused Term Loan
Commitments, Excess Credit-Linked Deposits, and, if applicable, unused New
Revolving Credit Commitments and unused New Term Loan Commitments, representing
at least two-thirds of the sum of all Loans outstanding (excluding Swingline
Loans), Revolving L/C Exposure, Funded L/C Exposure, Swingline Exposure, unused
Revolving Credit Commitments, unused Term Loan Commitments, Excess Credit-Linked
Deposits, unused New Revolving Credit Commitments and unused New Term Loan
Commitments at such time.
     “Swingline Commitment” shall mean the commitment of the Swingline Lender to
make loans pursuant to Section 2.22, as the same may be reduced from time to
time pursuant to Section 2.09.
     “Swingline Exposure” shall mean, at any time, the aggregate principal
amount at such time of all outstanding Swingline Loans. The Swingline Exposure
of any Revolving Credit Lender at any time shall equal its Pro Rata Percentage
of the aggregate Swingline Exposure at such time.
     “Swingline Lender” shall mean CNA or any other Revolving Credit Lender that
becomes the Administrative Agent pursuant to and in accordance with this
Agreement or agrees, with the approval of the Administrative Agent and the
Borrower, to act as the Swingline Lender hereunder, in each case, in its
capacity as lender of Swingline Loans hereunder.
     “Swingline Loan” shall mean any loan made by the Swingline Lender pursuant
to Section 2.22.
     “Syndication Agents” shall have the meaning assigned to such term in the
preamble.
     “Synthetic Lease Obligations” shall mean all monetary obligations of a
Person under (a) a so-called synthetic, off-balance sheet or tax retention lease
or (b) an agreement for the use or

64

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

 

possession of any property (whether real, personal or mixed) creating
obligations which do not appear on the balance sheet of such Person, but which,
upon the insolvency or bankruptcy of such Person, would be characterized as
Indebtedness of such Person (without regard to accounting treatment).
     “Target” shall have the meaning assigned to such term in the recitals.
     “Tax Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time.
     “Tax-Exempt Bonds” shall mean any bonds or other securities issued by a
Governmental Authority (including any quasi-governmental agencies) for the
direct or indirect benefit of the Borrower or any Subsidiary Guarantor or, if
permitted by Applicable Law, by the Borrower or any Subsidiary Guarantor, the
payment of interest on which is exempt from applicable federal, state and/or
local taxes.
     “Taxes” shall mean any and all present or future taxes, levies, imposts,
duties, deductions, charges, liabilities or withholdings (including interest,
fines, penalties or additions to tax) imposed by any Governmental Authority.
     “Term Borrowing” shall mean a Borrowing comprised of a Class of Term Loans.
     “Term B Loans” shall mean (a) the term loans made by the Lenders to the
Borrower pursuant to Section 2.01(a), (b) any New Term Loans and (c) any
Refinancing Term Loans.
     “Term Lender” shall mean a Lender with a Term Loan Commitment or an
outstanding Term B Loan.
     “Term Loan Commitment” shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make Term B Loans hereunder as set forth
on the Lender Addendum delivered by such Lender or in the Assignment and
Acceptance or Joinder Agreement pursuant to which such Lender assumed its Term
Loan Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04.
     “Term Loan Maturity Date” shall mean (i) in the case of the Extended
Maturity Term Loans, the Extended Maturity Term Loan Maturity Date and (ii) in
the case of the Original Maturity Term Loans, the Original Maturity Term Loan
Maturity Date, in each case, as it may be extended pursuant to and in accordance
with this Agreement.
     “Term Loans” shall mean (a) any Term B Loans and (b) any Credit-Linked
Deposit.
     “Test Period” shall mean, for any determination under this Agreement, the
four consecutive fiscal quarters of the Borrower then last ended.
     “Texas Genco” shall have the meaning assigned to such term in the recitals.
     “Texas Genco Retirement Plan” shall mean a non-contributory defined benefit
pension plan maintained for participation by eligible Texas-based employees of
the Borrower.
     “Third Amendment Agreement” shall mean the Amendment Agreement dated as of
June 30, 2010 among the Borrower, each Subsidiary Guarantor, the Administrative
Agent, the

65

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

 

Collateral Agent, the Issuing Bank, the Swingline Lender, the Deposit Bank, the
Collateral Trustee and the Lenders party thereto.
     “Third Party Securities” shall mean, with respect to any South Central
Securitization, notes, bonds or other debt instruments, beneficial interests in
a trust, undivided ownership interests in receivables or other securities issued
for cash consideration by the relevant Securitization Vehicle to banks,
financing conduits, investors or other financing sources (other than the
Borrower or any Subsidiary except in respect of the Seller’s Retained Interest)
the proceeds of which are used to finance, in whole or in part, the purchase by
such Securitization Vehicle of South Central Securitization Assets in a South
Central Securitization. The amount of any Third Party Securities shall be deemed
to equal the aggregate principal, stated or invested amount of such Third Party
Securities which are outstanding at such time.
     “Third Restatement Date” shall mean the date this Agreement became
effective pursuant to the Third Amendment Agreement.
     “Third Restatement Reaffirmation Agreement” shall mean the Reaffirmation
Agreement, dated as of the Third Restatement Date, executed and delivered by the
Borrower, each Subsidiary Guarantor, the Administrative Agent and the Collateral
Trustee in form and substance reasonably acceptable to the Administrative Agent.
     “Total Credit-Linked Deposit” shall mean, at any time, the sum of all
Credit-Linked Deposits at such time. The amount of the Total Credit-Linked
Deposit on the Third Restatement Date is $1,300,000,000.
     “Total Debt” shall mean, at any time, the aggregate amount of Indebtedness
of the Borrower and the Restricted Subsidiaries outstanding at such time, in the
amount that would be reflected on a balance sheet prepared at such time on a
consolidated basis in accordance with GAAP; provided, however, that (a) Total
Debt will exclude all Indebtedness of Excluded Subsidiaries (but, for the
avoidance of doubt, not Guarantees of such Indebtedness by the Loan Parties),
(b) with respect to Hedging Obligations of the Borrower or any Restricted
Subsidiary, Total Debt will include only the amount of payments that any such
Person is required to make, on the date Total Debt is being determined, as a
result of an early termination or similar event in respect of outstanding
Hedging Obligations of such Person, (c) for the avoidance of doubt, the undrawn
amount of all outstanding letters of credit (including Letters of Credit) shall
not be included in Total Debt and (d) Total Debt shall not include the lesser of
the Total Credit-Linked Deposits (including any refinancing thereof permitted
hereunder) at such time and the amount of funds on deposit in the Funded L/C
Collateral Accounts at such time.
     “Total Revolving Credit Commitment” shall mean, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time. The Total
Revolving Credit Commitment on the Third Restatement Date is $875,000,000,
provided, that such amount may be increased pursuant to and in accordance with
Section 2.25.
     “Transactions” shall mean (a) as of the Closing Date, collectively, (i) the
execution, delivery and performance by the Loan Parties of the Loan Documents
and the Senior Note Documents to which they are a party, (ii) the borrowings
hereunder, the issuance of the Senior Notes and the Equity Securities, the
issuance of Letters of Credit and the use of proceeds of each of the foregoing,
(iii) the granting of Liens pursuant to the Security Documents, (iv) the
Acquisition and the other Acquisition Transactions and (v) any other
transactions related to or entered into in connection with any of the foregoing,
(b) as of the Second Restatement Date, collectively, (i) the execution, delivery
and performance by the Loan Parties of the Second

66

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

 

Restated Credit Agreement, the Second Amendment Agreement and the Second
Restatement Reaffirmation Agreement, (ii) the re-evidencing and/or continuing of
the Term Loans by the Continuing Term Lenders (each as defined in the Second
Restated Credit Agreement) and the Credit-Linked Deposits by the Continuing
Funded L/C Lenders (each as defined in the Second Restated Credit Agreement) in
accordance with Section 2.01 of the Second Restated Credit Agreement and
(iii) any other transaction, document or agreement related to or entered into in
connection with any of the foregoing and (c) as of the Third Restatement Date,
collectively, (i) the execution, delivery and performance by the Loan Parties of
this Agreement, the Third Amendment Agreement, the Third Restatement
Reaffirmation Agreement and the Collateral Trust Agreement, (ii) the conversion
of the Credit-Linked Deposits by the Funded L/C Lenders into Term Loans deemed
to be made to the Borrower on the Third Restatement Date in accordance with
Section 2.01, (iii) the Funded L/C SPV Equity Contribution, (iv) the extension
of the maturity of (A) the Term B Loans of the Term Lenders agreeing to such
extension as Extended Maturity Term Loans and (B) the Credit-Linked Deposits of
the Funded L/C Lenders agreeing to such extension as Extended Maturity
Credit-Linked Deposits, (v) the replacement of the Revolving Credit Facility,
Letter of Credit Facility and Swingline Loan Facility each as defined in and
under the Second Restated Credit Agreement with a revolving credit facility,
letter of credit facility and swingline loan facility on the terms and
conditions set forth herein and (vi) any other transaction, document or
agreement related to or entered into in connection with any of the foregoing.
     “Type”, when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term “Rate” shall include the
Adjusted LIBO Rate and the Alternate Base Rate.
     “UCC” shall mean the Uniform Commercial Code as in effect in the State of
New York or any other applicable jurisdiction.
     “Uniform Customs” shall have the meaning assigned to such term in
Section 9.07.
     “Unrestricted Subsidiary” shall mean any Subsidiary (other than any
Subsidiary that constitutes or owns Core Collateral and other than the Funded
L/C SPV) that is designated by the Board of Directors (or any committee thereof)
of the Borrower as an Unrestricted Subsidiary pursuant to a board or committee
resolution, but only to the extent that such Subsidiary (a) is a Person with
respect to which neither the Borrower nor any of its Restricted Subsidiaries has
any direct or indirect obligation to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results except as otherwise permitted by this Agreement; and (b) has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Borrower or any of its Restricted Subsidiaries except as
otherwise permitted by this Agreement. Any designation of a Subsidiary as an
Unrestricted Subsidiary will be evidenced to the Administrative Agent by filing
with the Administrative Agent a certified copy of the board or committee
resolution giving effect to such designation and an officers’ certificate
certifying that such designation complied with the conditions set forth in
Section 6.11 and was permitted by Section 6.05. If, at any time, any
Unrestricted Subsidiary fails to meet the requirements as an Unrestricted
Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for
purposes of this Agreement and (i) any Indebtedness of such Subsidiary will be
deemed to be incurred by a Restricted Subsidiary as of such date and, if such
Indebtedness is not permitted to be incurred as of such date by Section 6.01,
the Borrower will be in default of such covenant and (ii) any assets of such
Subsidiary will be deemed to be held by a Restricted Subsidiary as of such date.
The Board of Directors (or any committee thereof) of the Borrower may at any
time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;

67

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

 

provided that such designation will be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation will only be permitted if (A) such
Indebtedness is permitted by Section 6.01, calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-quarter reference
period; and (B) no Default or Event of Default would be in existence following
such designation.
     “U.S. Person” shall have the meaning assigned to such term in the
definition of “Net Cash Proceeds.”
     “Voting Stock” of any Person as of any date shall mean the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
     “Weighted Average Life to Maturity” shall mean, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness,
by (ii) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment; by (b) the then
outstanding principal amount of such Indebtedness.
     “wholly owned subsidiary” of any specified Person shall mean a subsidiary
of such Person of which securities (except for directors’ qualifying shares or
securities held by foreign nationals as required by applicable law) or other
ownership interests representing 100% of the Equity Interests are, at the time
any determination is being made, owned, controlled or held by such Person or one
or more wholly owned subsidiaries of such Person or by such Person and one or
more wholly owned subsidiaries of such Person; a “wholly owned Subsidiary” shall
mean any wholly owned subsidiary of the Borrower.
     “Withdrawal Liability” shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
     “Xcel Indemnification Agreements” shall mean the Indemnification Agreements
each dated as of December 5, 2003, by and among Xcel Energy Inc., Northern
States Power Company and the Borrower, which was approved by the U.S. Bankruptcy
Court for the Southern District of New York on November 24, 2003, each as
amended on November 8, 2006.
     SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including”, and
words of similar import, shall not be limiting and shall be deemed to be
followed by the phrase “without limitation”. The word “will” shall be construed
to have the same meaning and effect as the word “shall”. The words “asset” and
“property” shall be construed as having the same meaning and effect and to refer
to any and all rights and interests in tangible and intangible assets and
properties of any kind whatsoever, whether real, personal or mixed, including
cash, securities, Equity Interests, accounts and contract rights. The word
“control”, when used in connection with the Collateral Trustee’s rights with
respect to, or security interest in, any Collateral, shall have the meaning
specified in the UCC with respect to that type of Collateral. The words
“herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision of this Agreement unless the context shall otherwise require. All
references herein to Articles, Sections,

68

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

 

Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Except as otherwise expressly provided herein, (a) any definition of,
or reference to, any Loan Document or any other agreement, instrument or
document in this Agreement shall mean such Loan Document or other agreement,
instrument or document as amended, restated, supplemented or otherwise modified
from time to time (subject to any restrictions on such amendments, restatements,
supplements or modifications set forth herein) and (b) all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided, however, that if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in
Article VI or any related definition to eliminate the effect of any change in
GAAP occurring after the Closing Date on the operation of such covenant (or if
the Administrative Agent notifies the Borrower that the Required Lenders wish to
amend Article VI or any related definition for such purpose), then the
Borrower’s compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Lenders.
     SECTION 1.03. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a
“Eurodollar Revolving Loan”). Borrowings also may be classified and referred to
by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).
     SECTION 1.04. Pro Forma Calculations. All pro forma calculations permitted
or required to be made by the Borrower or any Subsidiary pursuant to this
Agreement shall (a) include only (i) those adjustments that would be permitted
or required by Regulation S-X under the Securities Act of 1933, as amended, or
(ii) reductions in costs and related adjustments that have been actually
realized or are projected by the Borrower’s Chief Financial Officer in good
faith to result from reasonably identifiable and factually supportable actions
or events, but only if such reductions in costs and related adjustments are so
projected by the Borrower to be realized during the consecutive four-quarter
period commencing after the transaction giving rise to such calculation and
(b) be certified to by a Financial Officer of the Borrower as having been
prepared in good faith based upon assumptions believed by the Borrower to be
reasonable at the time made in light of circumstances at the time made.
     SECTION 1.05. Exchange Rates. For purposes of determining compliance under
Article VI with respect to any amount in a foreign currency, the U.S.
dollar-equivalent amount thereof will be calculated based on the relevant
currency exchange rate in effect at the time of such incurrence. The maximum
amount of Indebtedness, Liens, Investments and other basket amounts that the
Borrower and its Subsidiaries may incur under Article VI shall not be deemed to
be exceeded, with respect to any outstanding Indebtedness, Liens, Investments
and other basket amounts, solely as a result of fluctuations in the exchange
rate of currencies, if as of the initial date of calculation the Borrower
determined that each such maximum amount had not been exceeded. When calculating
capacity for the incurrence of additional Indebtedness, Liens, Investments and
other basket amounts by the Borrower and its Subsidiaries under Article VI the
exchange rate of currencies shall be measured as of the date of calculation.

69

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

 

ARTICLE II.
The Credits
     SECTION 2.01. Commitments. Subject to the terms and conditions hereof and
relying upon the representations and warranties set forth herein,
     (a) each Term Lender agrees, severally and not jointly, that all of its
Term Loans under and as defined in the Second Restated Credit Agreement and
outstanding on the Third Restatement Date shall be continued (but not
re-evidenced) as Term B Loans hereunder, which shall be Extended Maturity Term
Loans with respect to each Term Lender that so indicated on its signature page
to the Third Amendment Agreement and which shall be Original Maturity Term Loans
with respect to all other Term Lenders;
     (b) each Revolving Credit Lender agrees, severally and not jointly, to fund
Revolving Loans to the Borrower, at any time and from time to time after the
Third Restatement Date and until the earlier of the Revolving Credit Maturity
Date with respect to the Revolving Credit Commitment of such Revolving Credit
Lender and the termination of the Revolving Credit Commitment of such Revolving
Credit Lender in accordance with the terms hereof in an aggregate principal
amount at any time outstanding that will not result in such Revolving Credit
Lender’s Revolving Credit Exposure exceeding such Revolving Credit Lender’s
Revolving Credit Commitment; and
     (c) each Funded L/C Lender agrees, severally and not jointly, that all of
its Credit-Linked Deposits under the Second Restated Credit Agreement and
outstanding on the Third Restatement Date shall be converted into and deemed to
be Term Loans made to the Borrower hereunder on the Third Restatement Date to be
contributed by the Borrower to the Funded L/C SPV pursuant to the Funded L/C SPV
Equity Contribution and to be deposited by the Funded L/C SPV in the Funded L/C
Collateral Accounts on the Third Restatement Date, and that such Credit-Linked
Deposits shall be Extended Maturity Credit-Linked Deposits with respect to each
Funded L/C Lender that so indicated on its signature page to the Third Amendment
Agreement and shall be Original Maturity Credit Linked Deposits with respect to
all other Funded L/C Lenders.
     Within the limits set forth in clause (b) above and subject to the terms,
conditions and limitations set forth herein, the Borrower may borrow, pay or
prepay and reborrow Revolving Loans. Amounts paid or prepaid in respect of Term
Loans (including Credit-Linked Deposits) may not be reborrowed.
     SECTION 2.02. Loans. (a) Each Loan (other than Swingline Loans) shall be
made as part of a Borrowing consisting of Loans of the same Class and Type made
by the Lenders ratably in accordance with their respective Commitments of the
applicable Class; provided, however, that the failure of any Lender to make any
Loan required to be made by it shall not in itself relieve any other Lender of
its obligation to lend hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to make any Loan
required to be made by such other Lender). Except for Loans deemed made pursuant
to Section 2.02(f) and subject to Section 2.22 relating to Swingline Loans, the
Loans comprising any Borrowing shall be in an aggregate principal amount that is
(i) an integral multiple of $1,000,000 and not less than $5,000,000 or
(ii) equal to the remaining available balance of the applicable Commitments.
     (b) Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request pursuant
to Section 2.03. Each Lender may at its option make any Eurodollar Loan by
causing any domestic or foreign branch or

70

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

 

Affiliate of such Lender to make such Loan; provided that any exercise of such
option shall (i) not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement, (ii) not result in increased costs
for the Borrower pursuant to Sections 2.14, 2.15, 2.16 or 2.20 and (iii) take
into account the obligations of each Lender to mitigate increased costs pursuant
to Section 2.21 hereof. Borrowings of more than one Type may be outstanding at
the same time; provided, however, that the Borrower shall not be entitled to
request any Borrowing that, if made, would result in more than 16 Eurodollar
Borrowings outstanding hereunder at any time. For purposes of the foregoing,
Borrowings having different Interest Periods, regardless of whether they
commence on the same date, shall be considered separate Borrowings. On the Third
Restatement Date, notwithstanding anything herein to the contrary, Interest
Periods with respect to the Term B Loans shall be as follows: (A) Term B Loans
shall be continued as Eurodollar Loans in an amount equal to the amount of the
Term B Loans then outstanding as Eurodollar Loans (such Term B Loans to
correspond in amount to Term B Loans of a given Interest Period), (B) Interest
Periods for the Term B Loans described in clause (A) above shall end on the same
dates as the Interest Periods applicable for the corresponding Term B Loans
described in clause (A) above and the Adjusted LIBO Rates applicable to such
Term B Loans during such Interest Periods shall be the same as those applicable
to such Term B Loans, (C) Term B Loans shall be continued as ABR Loans in an
amount equal to the amount of Term B Loans then outstanding as ABR Loans, and
(D) the Borrower will not be required to make any payments under Section 2.16 of
the Second Restated Credit Agreement or of this Agreement in connection with the
continuation of Term B Loans or the conversion of Credit-Linked Deposits into
Term Loans (and the applicable Lenders hereby expressly waive any such
requirement to make any such payments under Section 2.16).
     (c) Except with respect to Loans made pursuant to Section 2.02(f) and
subject to Section 2.22 relating to Swingline Loans, each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to such account in New York City as the
Administrative Agent may designate not later than 11:00 a.m., New York City
time, and the Administrative Agent shall promptly credit the amounts so received
to an account designated by the Borrower in the applicable Borrowing Request or,
if a Borrowing shall not occur on such date because any condition precedent
herein specified shall not have been met, return the amounts so received to the
respective Lenders.
     (d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) of this Section and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower to but excluding the date such
amount is repaid to the Administrative Agent at (i) in the case of the Borrower,
the interest rate applicable at the time to the Loans comprising such Borrowing
(in lieu of interest which would otherwise become due to such Lender pursuant to
Section 2.06) or (ii) in the case of such Lender, a rate determined by the
Administrative Agent to represent its cost of overnight or short-term funds
(which determination shall be conclusive absent clearly demonstrable error). If
such Lender shall repay to the Administrative Agent such corresponding amount,
such amount shall constitute such Lender’s Loan as part of such Borrowing for
purposes of this Agreement.

71

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

 

     (e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Revolving Credit Borrowing which is a
Eurodollar Borrowing if the Interest Period requested with respect thereto would
end after the latest Revolving Credit Maturity Date at such time.
     (f) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.23(e) with respect to a Letter of
Credit within the time specified in such Section, the Issuing Bank will promptly
notify the Administrative Agent of the L/C Disbursement and the Administrative
Agent will promptly notify each Revolving Credit Lender of such L/C Disbursement
and its Pro Rata Percentage thereof. Each Revolving Credit Lender shall pay by
wire transfer of immediately available funds to the Administrative Agent not
later than 5:00 p.m., New York City time, on such date (or, if such Revolving
Credit Lender shall have received such notice later than 3:00 p.m., New York
City time, on any day, not later than 10:00 a.m., New York City time, on the
immediately following Business Day), an amount equal to such Lender’s Pro Rata
Percentage of such L/C Disbursement (it being understood that such amount shall
be deemed to constitute an ABR Revolving Loan of such Lender and such payment
shall be deemed to have reduced the Revolving L/C Exposure), and the
Administrative Agent will promptly pay to the Issuing Bank amounts so received
by it from the Revolving Credit Lenders. The Administrative Agent will promptly
pay to the Issuing Bank any amounts received by it from the Borrower pursuant to
Section 2.23(e) prior to the time that any Revolving Credit Lender makes any
payment pursuant to this paragraph; any such amounts received by the
Administrative Agent thereafter will be promptly remitted by the Administrative
Agent to the Revolving Credit Lenders that shall have made such payments and to
the Issuing Bank, as their interests may appear. If any Revolving Credit Lender
shall not have made its Pro Rata Percentage of such L/C Disbursement available
to the Administrative Agent as provided above, such Lender and the Borrower
severally agree to pay interest on such amount, for each day from and including
the date such amount is required to be paid in accordance with this paragraph to
but excluding the date such amount is paid, to the Administrative Agent for the
account of the Issuing Bank at (i) in the case of the Borrower, a rate per annum
equal to the interest rate applicable to Revolving Loans pursuant to
Section 2.06(a) (in lieu of interest which would otherwise become due to such
Lender pursuant to Section 2.06), and (ii) in the case of such Lender, for the
first such day, the Federal Funds Effective Rate, and for each day thereafter,
the Alternate Base Rate; and provided further that under no circumstances shall
such Lender be entitled to seek indemnity from any Loan Party in respect of any
interest so accrued or paid.
     SECTION 2.03. Borrowing Procedure. In order to request a Borrowing (other
than a Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f), as to
which this Section 2.03 shall not apply), the Borrower shall notify the
Administrative Agent by telephone (promptly confirmed by fax) or shall hand
deliver or fax to the Administrative Agent a duly completed Borrowing Request
(a) in the case of a Eurodollar Borrowing, not later than 12:00 (noon), New York
City time, three Business Days before a proposed Borrowing and (b) in the case
of an ABR Borrowing, not later than 12:00 (noon), New York City time, one
Business Day before a proposed Borrowing. Each Borrowing Request shall be
irrevocable, shall be signed by or on behalf of the Borrower and shall specify
the following information: (i) whether the Borrowing then being requested is to
be a Term Borrowing or a Revolving Credit Borrowing, and whether such Borrowing
is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such
Borrowing (which shall be a Business Day); (iii) the number and location of the
account to which funds are to be disbursed; (iv) the amount of such Borrowing;
and (v) if such Borrowing is to be a Eurodollar Borrowing, the initial Interest
Period with respect thereto and the Class of Loans to which such initial
Interest Period will apply; provided, however, that, notwithstanding any
contrary specification in any Borrowing Request, each requested Borrowing shall
comply with the requirements set forth in Section 2.02. If no election as to the
Type of Borrowing is specified

72

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

 

in any such notice, then the requested Borrowing shall be an ABR Borrowing. If
no Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month’s duration. The Administrative Agent shall promptly advise
the applicable Lenders of any notice given in accordance with this Section 2.03
(and the contents thereof), and of each Lender’s portion of the requested
Borrowing.
     SECTION 2.04. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender (i) the principal amount of each Term B Loan and Credit-Linked
Deposit of such Lender made to the Borrower as provided in Section 2.11 and
(ii) the then unpaid principal amount of each Revolving Loan of such Revolving
Credit Lender made to the Borrower on the Revolving Credit Maturity Date with
respect to such Revolving Loan of such Revolving Credit Lender. The Borrower
hereby unconditionally promises to pay to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the earlier of the latest Revolving
Credit Maturity Date at such time and the first date after such Swingline Loan
is made that is the 15th day or the last day of a calendar month and is at least
three Business Days after such Swingline Loan is made.
     (b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender to the Borrower from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time under this Agreement, and shall provide copies of such
accounts to the Borrower upon its reasonable request (at the Borrower’s sole
cost and expense).
     (c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from the Borrower or any Subsidiary Guarantor and each Lender’s
share thereof, and shall provide copies of such accounts to the Borrower upon
its reasonable request (at the Borrower’s sole cost and expense).
     (d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) of this Section shall be conclusive evidence of the existence and
amounts of the obligations therein recorded absent clearly demonstrable error;
provided, however, that the failure of any Lender or the Administrative Agent to
maintain such accounts or any error therein shall not in any manner affect the
obligations of the Borrower to repay the Loans in accordance with the terms of
this Agreement.
     (e) Any Lender may request that Loans made by it hereunder be evidenced by
a promissory note. In such event, the Borrower shall execute and deliver to such
Lender a promissory note payable to such Lender and its registered assigns
(i) in the form of Exhibit G, if such promissory note relates to Revolving
Credit Borrowings, (ii) in the form of Exhibit H-1, if such promissory note
relates to Original Maturity Term Loans, (iii) in the form of Exhibit H-2, if
such promissory note relates to Extended Maturity Term Loans, (iv) in the form
of Exhibit H-3, if such promissory note relates to Original Maturity
Credit-Linked Deposits or (v) in the form of Exhibit H-4, if such promissory
note relates to Extended Maturity Credit-Linked Deposits, or, in any such case,
any other form reasonably acceptable to the Administrative Agent.
Notwithstanding any other provision of this Agreement, in the event any Lender
shall request and receive such a promissory note, the interests represented by
such note shall at all times (including

73

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

 

after any assignment of all or part of such interests pursuant to Section 9.04)
be represented by one or more promissory notes payable to the payee named
therein or its registered assigns.
     SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Lender, through
the Administrative Agent, on the last Business Day of March, June, September and
December in each year (beginning with June 30, 2010) and on each date on which
any Commitment of such Lender shall expire or be terminated as provided herein,
a commitment fee (a “Commitment Fee”) equal to the applicable Commitment Fee
Rate in effect from time to time on the average daily unused amount of the
Commitments of such Lender (other than the Swingline Commitment) during the
preceding quarter (or shorter or longer period commencing with the Third
Restatement Date or ending with the Revolving Credit Maturity Date with respect
to the Commitments of such Lender or the date on which the Commitments of such
Lender shall expire or be terminated). All Commitment Fees shall be computed on
the basis of the actual number of days elapsed in a year of 360 days. The
Commitment Fee due to each Lender shall commence to accrue on the Third
Restatement Date and shall cease to accrue on the date on which the Commitment
of such Lender shall expire or be terminated as provided herein. For purposes of
calculating Commitment Fees with respect to Revolving Credit Commitments only,
no portion of the Revolving Credit Commitments shall be deemed utilized under
Section 2.22 as a result of outstanding Swingline Loans.
     (b) The Borrower agrees to pay to the Administrative Agent, for its own
account, the fees in the amounts and at the times from time to time agreed to in
writing by the Borrower and the Administrative Agent, including pursuant to the
Second Restatement Fee Letter (the “Administrative Agent Fees”).
     (c) The Borrower agrees to pay (i) to each Revolving Credit Lender, through
the Administrative Agent, on the last Business Day of March, June, September and
December of each year (beginning with June 30, 2010) and on the date on which
the Revolving Credit Commitment of such Revolving Credit Lender shall be
terminated as provided herein (each, an “L/C Fee Payment Date”) a fee (an “L/C
Participation Fee”) calculated on such Revolving Credit Lender’s Pro Rata
Percentage of the daily aggregate Revolving L/C Exposure (excluding the portion
thereof attributable to unreimbursed L/C Disbursements which are earning interim
interest pursuant to Section 2.23(h)) during the preceding quarter (or shorter
or longer period commencing with the Third Restatement Date and ending with the
Revolving Credit Maturity Date with respect to the Revolving Credit Commitment
of such Revolving Credit Lender or the date on which all Letters of Credit have
been canceled or have expired and the Revolving Credit Commitments of all
Revolving Credit Lenders shall have been terminated) at a rate per annum equal
to the Applicable Margin used to determine the interest rate on Revolving Credit
Borrowings comprised of Eurodollar Loans pursuant to Section 2.06, and (ii) to
the Issuing Bank with respect to each outstanding Letter of Credit issued at the
request of the Borrower a fronting fee, which shall accrue at such rate as shall
be separately agreed upon between the Borrower and the Issuing Bank, on the
drawable amount of such Letter of Credit, payable quarterly in arrears on each
L/C Fee Payment Date after the issuance date of such Letter of Credit, as well
as the Issuing Bank’s customary documentary and processing charges with respect
to the issuance, amendment, renewal or extension of any Letter of Credit issued
at the request of the Borrower or processing of drawings thereunder (the fees in
this clause (ii), collectively, the “Issuing Bank Fees”). All L/C Participation
Fees and Issuing Bank Fees shall be computed on the basis of the actual number
of days elapsed in a year of 360 days.
     (d) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that the

74

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

 

Issuing Bank Fees shall be paid directly to the Issuing Bank. Once paid, none of
the Fees actually owed and due shall be refundable under any circumstances.
     SECTION 2.06. Interest on Loans. (a) Subject to the provisions of
Section 2.07, the outstanding Loans comprising each ABR Borrowing, including
each Swingline Loan, shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be, when
the Alternate Base Rate is determined by reference to the Prime Rate and over a
year of 360 days at all other times) at a rate per annum equal to the Alternate
Base Rate plus the Applicable Margin.
     (b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Margin.
     (c) Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. Subject
to Section 2.08, the applicable Alternate Base Rate or Adjusted LIBO Rate for
each Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall, absent clearly demonstrable
error, be final and conclusive and binding on all parties hereto.
     (d) Notwithstanding the foregoing, it is understood and agreed that
(i) prior to the Third Restatement Date, the Borrower had agreed to pay to the
Issuing Bank under the Second Restated Credit Agreement Funded Issuing Bank Fees
(as defined in the Second Restated Credit Agreement) and to each Funded L/C
Lender a Funded L/C Participation Fee (as defined in the Second Restated Credit
Agreement), in each case, in accordance with Section 2.05(d) of the Second
Restated Credit Agreement, and the Deposit Bank (or the Borrower, as applicable)
has agreed to pay to each Funded L/C Lender a fee and specified return in
accordance with Section 2.24(b) of the Second Restated Credit Agreement, and
(ii) all such accrued and unpaid Funded Issuing Bank Fees, Funded L/C
Participation Fees, fees and return outstanding on the Third Restatement Date,
if any, shall be paid by the Borrower (or, as applicable, the Deposit Bank) to
the Issuing Bank under the Second Restated Credit Agreement or each Funded L/C
Lender, as applicable, on the Third Restatement Date and, upon such payment, the
Funded L/C Commitment (as defined in the Second Restated Credit Agreement) shall
be terminated in accordance with the terms of the Second Restated Credit
Agreement.
     SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due and payable hereunder or under any other Loan Document, by acceleration or
otherwise, the Borrower shall on demand from time to time pay interest, to the
extent permitted by law, on such defaulted amount to but excluding the date of
actual payment (after as well as before judgment) (a) in the case of overdue
principal, at the rate otherwise applicable to such Loan pursuant to
Section 2.06 plus 2.00% per annum and (b) in all other cases, at a rate per
annum (computed on the basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be, when determined by reference to the Prime
Rate and over a year of 360 days at all other times) equal to the rate that
would be applicable to an ABR Extended Maturity Term Loan plus 2.00%.
     SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that prior to the commencement of any Interest Period for a Eurodollar
Borrowing (a) the Administrative Agent shall have determined that adequate and
reasonable means do not exist for determining the Adjusted LIBO Rate for such
Interest Period or (b) the Administrative Agent is advised by the Required
Lenders reasonably and in good faith that the Adjusted LIBO Rate for

75

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

 

such Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Loans included in such Borrowing, for
such Interest Period, then the Administrative Agent shall, as soon as
practicable thereafter, give written or fax notice of such determination to the
Borrower and the Lenders. In the event of any such notice, until the
Administrative Agent shall have advised the Borrower and the Lenders that the
circumstances giving rise to such written or fax notice no longer exist, (i) any
request by the Borrower for a Eurodollar Borrowing pursuant to Section 2.03 or
2.10 shall be deemed to be a request for an ABR Borrowing and (ii) any Interest
Period election that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective.
     SECTION 2.09. Termination and Reduction of Commitments; Reduction and
Conversion of Credit-Linked Deposits. (a) Unless previously terminated in
accordance with the terms hereof, (i) the Term Loan Commitments shall
automatically terminate at 5:00 p.m., New York City time, on the Closing Date
and (ii) the Revolving Credit Commitments, the Swingline Commitment and the L/C
Commitment shall automatically terminate on the Revolving Credit Maturity Date
with respect to such Revolving Credit Commitments (provided that,
notwithstanding anything else herein to the contrary, the Revolving Credit
Maturity Date applicable to the L/C Commitment and the Swingline Commitment
shall be the date specified in clause (i) of the definition of “Revolving Credit
Maturity Date” unless such date is extended with the written consent of, in the
case of the L/C Commitment, the Issuing Banks or, in the case of the Swingline
Commitment, the Swingline Lender). If any Letter of Credit remains outstanding
on the Revolving Credit Maturity Date with respect to the Revolving Credit
Commitments applicable to such Letter of Credit (and, at the time thereof, after
giving effect to the repayment of the applicable Revolving Loans at such time,
the Revolving Credit Exposure of the applicable Revolving Credit Lenders exceeds
the available Revolving Credit Commitments of such Revolving Credit Lenders),
the Borrower shall deposit with the Administrative Agent an amount in cash equal
to 103% of the aggregate undrawn amount of such Letter of Credit to secure the
full obligations with respect to any drawings that may occur thereunder, which
amount shall be promptly returned to the Borrower upon each such Letter of
Credit being terminated or cancelled.
     (b) Upon at least three Business Days’ prior irrevocable written or fax
notice to the Administrative Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, in each
case without premium or penalty, the Revolving Credit Commitments or the
Swingline Commitment; provided, however, that (i) each partial reduction of the
Revolving Credit Commitments or the Swingline Commitment shall be in an integral
multiple of $1,000,000 and in a minimum amount of $5,000,000 and (ii) the Total
Revolving Credit Commitment shall not be reduced to an amount that is less than
the Aggregate Revolving Credit Exposure then in effect; provided further that a
notice of termination may state that such termination is conditioned upon the
effectiveness of other credit facilities or any other event, in which case such
notice may be revoked by the Borrower (by notice to the Administrative Agent on
or prior to the specified termination date) if such condition is not satisfied.
     (c) Each reduction in the Revolving Credit Commitments or the Swingline
Commitment hereunder shall be made, at the Borrower’s option, to either (A) on a
pro rata basis all Classes of Revolving Credit Commitments outstanding on such
date or (B) the Classes of Revolving Credit Commitments outstanding on such date
in the order of the maturity date thereof, in each case, ratably among the
applicable Lenders in accordance with their Pro Rata Percentages. The Borrower
shall pay to the Administrative Agent for the account of the applicable Lenders,
on the date of each termination or reduction, the Commitment Fees on the amount
of the Commitments so terminated or reduced accrued to but excluding the date of
such termination or reduction.

76

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

 

     SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower shall
have the right at any time upon prior irrevocable notice to the Administrative
Agent (a) not later than 12:00 (noon), New York City time, one Business Day
prior to conversion, to convert any Eurodollar Borrowing of the Borrower into an
ABR Borrowing, (b) not later than 12:00 (noon), New York City time, three
Business Days prior to conversion or continuation, to convert any ABR Borrowing
of the Borrower into a Eurodollar Borrowing or to continue any Eurodollar
Borrowing of the Borrower as a Eurodollar Borrowing for an additional Interest
Period and (c) not later than 12:00 (noon), New York City time, three Business
Days prior to conversion, to convert the Interest Period with respect to any
Eurodollar Borrowing of the Borrower to another permissible Interest Period,
subject in each case to the following:
     (i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;
     (ii) if less than all the outstanding principal amount of any Borrowing
shall be converted or continued, then each resulting Borrowing shall satisfy the
limitations specified in Sections 2.02(a) and 2.02(b) regarding the principal
amount and maximum number of Borrowings of the relevant Type;
     (iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new Loan of
such Lender resulting from such conversion and reducing the Loan (or portion
thereof) of such Lender being converted by an equivalent principal amount;
accrued and unpaid interest on any Eurodollar Loan (or portion thereof) being
converted shall be paid by the Borrower at the time of conversion;
     (iv) if any Eurodollar Borrowing is converted at a time other than the end
of the Interest Period applicable thereto, the Borrower shall pay, upon demand,
any amounts due to the Lenders pursuant to Section 2.16;
     (v) any portion of a Borrowing maturing or required to be repaid in less
than one month may not be converted into or continued as a Eurodollar Borrowing;
     (vi) any portion of a Eurodollar Borrowing that cannot be converted into or
continued as a Eurodollar Borrowing by reason of the immediately preceding
clause shall be automatically converted at the end of the Interest Period in
effect for such Borrowing into an ABR Borrowing;
     (vii) no Interest Period may be selected for any Eurodollar Term Borrowing
that would end later than any applicable Repayment Date occurring on or after
the first day of such Interest Period if, after giving effect to such selection,
the aggregate outstanding amount of the sum of (A) the applicable Eurodollar
Term Borrowings with Interest Periods ending on or prior to such Repayment Date
and (B) the applicable ABR Term Borrowings would not be at least equal to the
principal amount of applicable Term Borrowings to be paid on such Repayment
Date, and no Interest Period may be selected for any Eurodollar Credit-Linked
Deposit Borrowing that would end later than the applicable Credit-Linked Deposit
Maturity Date; and
     (viii) after the occurrence and during the continuance of an Event of
Default, no outstanding Loan may be converted into, or continued as, a
Eurodollar Loan.

77

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

 

     Each notice pursuant to this Section 2.10 shall be irrevocable and shall
refer to this Agreement and specify (A) the identity and amount of the Borrowing
that the Borrower requests be converted or continued, (B) whether such Borrowing
is to be converted to or continued as a Eurodollar Borrowing or an ABR
Borrowing, (C) if such notice requests a conversion, the date of such conversion
(which shall be a Business Day) and (D) if such Borrowing is to be converted to
or continued as a Eurodollar Borrowing, the Interest Period with respect
thereto. If no Interest Period is specified in any such notice with respect to
any conversion to or continuation as a Eurodollar Borrowing, the Borrower shall
be deemed to have selected an Interest Period of one month’s duration. The
Administrative Agent shall advise the Lenders of any notice given pursuant to
this Section 2.10 and of each Lender’s portion of any converted or continued
Borrowing. If the Borrower shall not have given notice in accordance with this
Section 2.10 to continue any Borrowing into a subsequent Interest Period (and
shall not otherwise have given notice in accordance with this Section 2.10 to
convert such Borrowing), such Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof), automatically
be converted or continued into an ABR Borrowing.
     SECTION 2.11. Repayment of Term B Loans and Credit-Linked Deposits. (a)(1)
On the dates set forth below, or if any such date is not a Business Day, on the
next preceding Business Day (each such date being called an “Original Maturity
Repayment Date”), the Borrower shall pay to the Administrative Agent, for the
account of the Term Lenders holding Original Maturity Term Loans, a principal
amount of the Original Maturity Term Loans (as adjusted from time to time
pursuant to Sections 2.11(b), 2.12, 2.13(e) and 2.13(f)) in an aggregate amount
equal to the sum of the principal amount of Original Maturity Term Loans as of
the Closing Date, multiplied, in each case, by the percentage set forth below
for such date, together in each case with accrued and unpaid interest and Fees
on the amount to be paid to but excluding the date of such payment:

          Original Maturity Repayment Date   Percentage  
June 30, 2010
  0.25% (to the extent not already paid prior to the Third Restatement Date)  
September 30, 2010
    0.25 %
December 31, 2010
    0.25 %
March 31, 2011
    0.25 %
June 30, 2011
    0.25 %
September 30, 2011
    0.25 %
December 31, 2011
    0.25 %
March 31, 2012
    0.25 %
June 30, 2012
    0.25 %
September 30, 2012
    0.25 %
December 31, 2012
    0.25 %
Original Maturity Term Loan
  93.25% or Remainder  
Maturity Date
   

     (2) On the dates set forth below, or if any such date is not a Business
Day, on the next preceding Business Day (each such date being called an
“Extended Maturity Repayment Date”), the Borrower shall pay to the
Administrative Agent, for the account of the Term Lenders holding Extended
Maturity Term Loans, a principal amount of the Extended Maturity Term Loans (as
adjusted from time to time pursuant to Sections 2.11(b), 2.12, 2.13(e) and
2.13(f)) in an aggregate amount equal to the sum of the principal amount of
Extended Maturity Term Loans as of the Third Restatement Date, multiplied by the
percentage set forth below for such date,

78

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

 

together in each case with accrued and unpaid interest and Fees on the amount to
be paid to but excluding the date of such payment:

          Extended Maturity Repayment Date   Percentage  
September 30, 2010
    0.25 %
December 31, 2010
    0.25 %
March 31, 2011
    0.25 %
June 30, 2011
    0.25 %
September 30, 2011
    0.25 %
December 31, 2011
    0.25 %
March 31, 2012
    0.25 %
June 30, 2012
    0.25 %
September 30, 2012
    0.25 %
December 31, 2012
    0.25 %
March 31, 2013
    0.25 %
June 30, 2013
    0.25 %
September 30, 2013
    0.25 %
December 31, 2013
    0.25 %
March 31, 2014
    0.25 %
June 30, 2014
    0.25 %
September 30, 2014
    0.25 %
December 31, 2014
    0.25 %
March 31, 2015
    0.25 %
June 30, 2015
    0.25 %
Extended Maturity Term Loan
  95.00% or Remainder  
Maturity Date
   

     (b) In the event and on each occasion that any Term Loan Commitments shall
be reduced or shall expire or terminate other than as a result of the making of
a Term B Loan, the installments payable on each applicable Repayment Date, as
applicable, shall be reduced pro rata by an aggregate amount equal to the amount
of such reduction, expiration or termination.
     (c) To the extent not previously paid, all Original Maturity Term Loans
shall be due and payable on the Original Maturity Term Loan Maturity Date and
all Extended Maturity Term Loans shall be due and payable on the Extended
Maturity Term Loan Maturity Date, together with accrued and unpaid interest on
the principal amount to be paid to but excluding the date of payment. To the
extent not previously repaid, each Original Maturity Credit-Linked Deposit shall
be due and payable on the Original Maturity Credit-Linked Deposit Maturity Date
and each Extended Maturity Credit-Linked Deposit shall be due and payable on the
Extended Maturity Credit-Linked Deposit Maturity Date, in each case together
with accrued and unpaid interest on the principal amount due to but excluding
the date of payment.
     (1) On the dates set forth in the applicable Joinder Agreement, or if any
such date is not a Business Day, on the next preceding Business Day, the
Borrower shall pay to the Administrative Agent, for the account of the Lenders
holding New Term Loans and/or Refinancing Term Loans, a principal amount of such
New Term Loans and/or Refinancing Term Loans (in each case, as adjusted from
time to time pursuant to Sections 2.11(b), 2.12, 2.13(e) and 2.13(f)) in the
aggregate amounts set forth in the applicable Joinder Agreement, together, in
each case, with accrued and unpaid interest and Fees on the amount to be paid to
but excluding the date of such payment.

79

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

 

     (d) All repayments pursuant to this Section 2.11 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.
     SECTION 2.12. Prepayment. (a) The Borrower shall have the right at any time
and from time to time to prepay any Borrowing, in whole or in part, subject to
the provisions of paragraph (d) below, upon at least three Business Days’ prior
written or fax notice (or telephone notice promptly confirmed by written or fax
notice) in the case of Eurodollar Loans, or written or fax notice (or telephone
notice promptly confirmed by written or fax notice) at least one Business Day
prior to the date of prepayment in the case of ABR Loans, to the Administrative
Agent before 11:00 a.m., New York City time; provided, however, that each
partial prepayment shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000.
     (b) (i) Optional prepayments of Term B Loans shall be applied, at the
Borrower’s option, either (A) on a pro rata basis to all Classes of Term B Loans
in accordance with their respective aggregate principal amount or (B) to the
Classes of Term B Loans in the order of the maturity date thereof (and, within
any such Class, on a pro rata basis to the applicable Lenders); provided that
with respect to any such prepayment of any Class of Term B Loans such prepayment
shall be applied against the remaining scheduled installments of principal due
in respect of such Class as directed by the Borrower, and (ii) optional
prepayments of Credit-Linked Deposits shall be applied, at the Borrower’s
option, either (A) on a pro rata basis to all Classes of Credit-Linked Deposits
in accordance with their respective aggregate principal amounts or (B) to the
Classes of Credit-Linked Deposits in the order of the maturity date thereof
(and, within any such Class, on a pro rata basis to the applicable Lenders).
     (c) Each notice of prepayment shall be substantially in the form of
Exhibit I, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing by the amount stated therein on the date stated therein; provided that
a notice of prepayment may state that such prepayment is conditioned upon the
effectiveness of other credit facilities or any other event, in which case such
notice may be revoked by the Borrower (by notice to the Administrative Agent on
or prior to the specified prepayment date) if such condition is not satisfied.
All prepayments and failures to prepay under this Section 2.12 shall be subject
to Section 2.16. All prepayments under this Section 2.12 shall be accompanied by
accrued and unpaid interest on the principal amount to be prepaid to but
excluding the date of payment.
     (d) Any (i) amendment, amendment and restatement or other modification of
this Agreement consummated after the Third Restatement Date but on or prior to
the first anniversary of the Third Restatement Date or (ii) voluntary prepayment
of all but not less than all of the Extended Maturity Term Loans and/or Extended
Maturity Credit-Linked Deposits consummated after the Third Restatement Date but
on or prior to the first anniversary of the Third Restatement Date with the
proceeds of a substantially concurrent issuance or incurrence of new bank loans
(which voluntary prepayment shall be deemed to have occurred even if a portion
of the Extended Maturity Term Loans and/or Extended Maturity Credit-Linked
Deposits, as applicable, are replaced, converted or re-evidenced with, into or
by such new loans so long as all but not less than all of the Extended Maturity
Term Loans and/or Extended Maturity Credit-Linked Deposits, as applicable, are
so prepaid) the effect of which, in the case of either clause (i) or clause
(ii), is to decrease the Applicable Margin with respect to the Extended Maturity
Term Loans and/or Extended Maturity Credit-Linked Deposits, as applicable, shall
be accompanied by a fee payable to the Lenders holding the Extended Maturity
Term Loans and/or Extended Maturity Credit-Linked Deposits, as applicable (which
shall include any Non-Consenting Lender that is repaid in connection with any
such amendment or amendment and restatement), in an amount equal to 1.0% of the
aggregate principal amount of the Extended Maturity Term Loans and/or Extended
Maturity Credit-Linked Deposits, as applicable, then outstanding only if such
amendment,

80

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

 

prepayment, replacement, conversion or re-evidencing is not otherwise undertaken
in connection with another material transaction or series of related material
transactions.
     SECTION 2.13. Mandatory Prepayments. (a) In the event of any termination in
full of all the Revolving Credit Commitments, the Borrower shall, on the date of
such termination, repay or prepay all its outstanding Revolving Credit
Borrowings and all its outstanding Swingline Loans and replace all its
outstanding Letters of Credit and/or deposit an amount equal to the Revolving
L/C Exposure in cash in a cash collateral account established with the
Administrative Agent for the benefit of the Revolving Credit Lenders and the
Issuing Bank. If as a result of any partial reduction of the Revolving Credit
Commitments the Aggregate Revolving Credit Exposure would exceed the Total
Revolving Credit Commitment after giving effect thereto, then the Borrower
shall, on the date of such reduction, repay or prepay Revolving Credit
Borrowings or Swingline Loans (or a combination thereof) and/or cash
collateralize Letters of Credit in an amount sufficient to eliminate such
excess.
     (b) (i) Not later than the tenth Business Day following receipt of Net Cash
Proceeds from (A) the completion of any Asset Sale that is not (1) a Sale of
Core Collateral or (2) a sale, at any time and from time to time, of South
Central Securitization Assets in connection with a South Central Securitization
(and/or the receipt at any time of any servicing fee related to a South Central
Securitization), or (B) the occurrence of any Recovery Event (other than in
respect of Core Collateral), the Borrower shall offer to prepay outstanding Term
B Loans in an amount equal to the Required Prepayment Percentage multiplied by
the amount of such Net Cash Proceeds that is received, such prepayment to be
made in accordance with Section 2.13(e). Notwithstanding the foregoing, if the
amount of Net Cash Proceeds from the completion of any such Asset Sale or the
occurrence of any such Recovery Event required to be used to offer to prepay
outstanding Term B Loans pursuant to this clause (b)(i) is less than
$10,000,000, such application of such Net Cash Proceeds may be deferred until
such time as the amount of such Net Cash Proceeds plus the aggregate amount of
all Net Cash Proceeds received thereafter from the completion of any such Asset
Sale or the occurrence of any such Recovery Event required to be so applied
under this clause (b)(i) aggregates at least $10,000,000, at which time the
Borrower shall apply the aggregate amount of all such deferred Net Cash Proceeds
to prepay outstanding Term B Loans, such offer to prepay to be made in
accordance with Section 2.13(e).
     (ii) Not later than the tenth Business Day following receipt of Net Cash
Proceeds from the completion of any Sale of Core Collateral or the occurrence of
any Recovery Event in respect of Core Collateral, the Borrower shall apply an
amount equal to 100% of the Net Cash Proceeds received with respect thereto to
offer to prepay outstanding Loans, to prepay the Total Credit-Linked Deposit, to
permanently reduce Revolving Credit Commitments and to cash collateralize
outstanding Letters of Credit, such offer of prepayment, reduction and cash
collateralization to be made in accordance with Section 2.13(f). Promptly upon
the receipt of any such Net Cash Proceeds, the Borrower shall, pending such
application of such proceeds, hold such proceeds in a segregated account under
the exclusive dominion and control of the Collateral Trustee, for the benefit of
the Secured Parties, which is free from any other Liens, other than
non-consensual Permitted Liens.
     (c) In the event that the Borrower or any Restricted Subsidiary shall
receive Net Cash Proceeds from the issuance or other incurrence of Indebtedness
of the Borrower or any Restricted Subsidiary (other than Indebtedness permitted
pursuant to Section 6.01 (other than pursuant to Section 6.01(m), 6.01(s),
6.01(y) or, to the extent required by the terms thereof, 6.01(z) and other than
as contemplated in Section 2.26)), the Borrower shall, substantially
simultaneously with (and in any event not later than the tenth Business Day next
following) the

81

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

 

receipt of such Net Cash Proceeds by the Borrower or any Restricted Subsidiary,
offer to prepay outstanding Term B Loans (or, in the case of an incurrence of
Indebtedness under Section 6.01(y) or, to the extent required by the terms
thereof, 6.01(z) or as contemplated in Section 2.26, to prepay outstanding Term
B Loans and/or Credit-Linked Deposits, as applicable) in an amount equal to the
Required Prepayment Percentage multiplied by the amount of such Net Cash
Proceeds that is received, such offer to prepay to be made in accordance with
Section 2.13(e).
     (d) No later than ten days following the earlier of (i) 90 days after the
end of each fiscal year of the Borrower, commencing with the fiscal year ending
on December 31, 2007, and (ii) the date on which the financial statements with
respect to such period are delivered pursuant to Section 5.04(a) (commencing
with the fiscal year ending on December 31, 2007), the Borrower shall offer to
prepay (and prepay) outstanding Term B Loans, such offer to prepay (and
prepayment) to be made in accordance with Section 2.13(e), in an aggregate
principal amount equal to (x) the Required Prepayment Percentage of Excess Cash
Flow for the fiscal year then ended (the “Base Annual ECF Sweep Amount”) minus
(y) the aggregate amount of any voluntary prepayments of Term B Loans made
pursuant to Section 2.12 during such fiscal year. Notwithstanding the foregoing,
the Borrower shall have the option to calculate Excess Cash Flow for one or more
fiscal quarters of any fiscal year (with respect to such fiscal quarter or any
other immediately preceding fiscal quarter or fiscal quarters during such fiscal
year for which Excess Cash Flow had not previously been so calculated and the
prepayment offer in accordance with Section 2.13(d) and Section 2.13(e) below
had not previously been made); provided that in the event that the Borrower
shall exercise such option, (i) no later than ten days following the earlier of
(A) 45 days after the end of the applicable fiscal quarter and (B) the date on
which financial statements with respect to such applicable fiscal quarter are
delivered pursuant Section 5.04(b), the Borrower shall offer to prepay
outstanding Term B Loans, such offer of prepayment to be made in accordance with
Section 2.13(e), in an aggregate principal amount equal to (x) the Required
Prepayment Percentage of Excess Cash Flow for the applicable fiscal period then
ended minus (y) the aggregate amount of any voluntary prepayments of Term B
Loans made pursuant to Section 2.12 during such applicable fiscal period and
(ii) the Borrower shall continue to be required to make the offer to prepay (and
prepayment) described in the first sentence of this paragraph (d) following the
end of the applicable fiscal year in accordance with the provisions described
above (provided that the amount of Term B Loans that the Borrower shall be
required to prepay and offer to prepay with respect to the Excess Cash Flow in
respect of such fiscal year shall be governed by the proviso in the first
sentence of Section 2.13(e)). The Borrower shall provide the Administrative
Agent with written notice of any election described in the immediately preceding
sentence to calculate Excess Cash Flow (and make the required prepayment and
prepayment offer) as of the end of any fiscal quarter of any fiscal year no
later than the earlier of (i) 45 days after the end of the applicable fiscal
quarter and (ii) the date on which financial statements with respect to such
applicable fiscal period are delivered pursuant to Section 5.04(b). For purposes
of this Section 2.13(d), the term “fiscal period” shall mean a period of one or
more consecutive fiscal quarters.
     (e) Notwithstanding any provision in this Agreement to the contrary, but
subject to the right of each Term Lender to elect to decline all or any portion
of any prepayment pursuant to Section 2.13(b)(i) or 2.13(c) (except in the case
of an incurrence of Indebtedness under Section 6.01(y) or, to the extent
required by the terms thereof, 6.01(z) or as contemplated by Section 2.26) or a
portion of any prepayment pursuant to Section 2.13(d) as described below, the
amount to be prepaid on any date pursuant to Section 2.13(b)(i), 2.13(c) (except
in the case of an incurrence of Indebtedness under Section 6.01(y) or, to the
extent required by the terms thereof, 6.01(z) or as contemplated by
Section 2.26) or 2.13(d) shall be applied to the prepayment (to the extent
required to be so applied) of (1) in the case of prepayments pursuant to
Section 2.13(b)(i) on a pro rata basis to all Classes of Term B Loans in
accordance with their respective aggregate

82

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

 

principal amounts, (2) in the case of prepayments pursuant to Section 2.13(c)
(except in the case of an incurrence of Indebtedness under Section 6.01(y) or,
to the extent required by the terms thereof, 6.01(z) or as contemplated by
Section 2.26) or 2.13(d), at the Borrower’s option, either (x) on a pro rata
basis to all Classes of Term B Loans in accordance with their respective
aggregate principal amounts or (y) to the Classes of Term B Loans in the order
of the maturity date thereof (and, within any such Class, on a pro rata basis to
the applicable Lenders), and (3) in the case of prepayments pursuant to
Section 2.13(c) resulting from an incurrence of Indebtedness under Section
6.01(y) or, to the extent required by the terms thereof, 6.01(z) or as
contemplated by Section 2.26, at the Borrower’s option, either (i) on a pro rata
basis to all Classes of Term B Loans and/or Credit-Linked Deposits, as
applicable, in accordance with their respective aggregate principal amounts or
(ii) to the Classes of Term B Loans or Credit-Linked Deposits, as applicable, in
the order of the maturity date thereof (and, within any such Class, on a pro
rata basis to the applicable Lenders); provided that, notwithstanding anything
in this Agreement to the contrary, in the case of any prepayment pursuant to
Section 2.13(d) in respect of a fiscal year (as opposed to any other fiscal
period), on the date of any prepayment offer that is required to be made
pursuant to such Section in respect of a fiscal year ended, the Borrower shall
be required to prepay outstanding Term B Loans by an amount equal to, if
positive, (i)(A) 50% of the Base Annual ECF Sweep Amount for such fiscal year
minus (B) the aggregate amount of any voluntary prepayment of Term B Loans made
pursuant to Section 2.12 during such applicable fiscal year (“Mandatory ECF
Payment”) minus (ii) any amount that had been offered to, accepted by and
prepaid to the Term Lenders at any time during such fiscal year pursuant to
clause (i) of the second sentence of Section 2.13(d) (such amount set forth in
the preceding clause (ii) in respect of such fiscal year, the “Early Paid
Amount”), and no Term Lender shall have any right to decline all or any portion
of such required prepayment amount determined by such subtraction. No later than
5:00 p.m., New York City time, within the earlier of three Business Days
(A) prior to the applicable prepayment date or (B) after the Borrower has
offered prepayment of the Term B Loans hereunder, each Term Lender may provide
written notice to the Administrative Agent either (i) setting forth the maximum
amount of the aggregate amount of its Term B Loans that it wishes to have
prepaid on such date pursuant to this Section (the “Requested Term Loan
Prepayment Amount”) or (ii) declining in its entirety any prepayment on such
date pursuant to this Section. In the event that any Term Lender shall fail to
provide such written notice to the Administrative Agent within the time period
specified above, such Term Lender shall be deemed to have elected a Requested
Term Loan Prepayment Amount equal to its ratable share of such mandatory
prepayment (determined based on the percentage of the aggregate amount of all
Term B Loans represented by such Term Lender’s Term B Loans as determined
immediately prior to such prepayment and without taking into account any
Requested Term Loan Prepayment Amount of any other Lender). In the event that
the amount of any mandatory prepayment to be made pursuant to this Section shall
be equal to or exceed the aggregate amount of all Requested Term Loan Prepayment
Amounts of all Term Lenders electing (or deemed to be electing) such a prepay
ment, each Term Lender electing (or deemed to be electing) such a prepayment
shall have an amount of its Term B Loans prepaid that is equal to such Term
Lender’s Requested Term Loan Prepayment Amount. In the event that the amount of
any mandatory prepayment to be made pursuant to this Section shall be less than
the aggregate amount of all Requested Term Loan Prepayment Amounts of all Term
Lenders electing (or deemed to be electing) such a prepayment, each Term Lender
electing (or deemed to be electing) such a prepayment shall have its Term B
Loans prepaid in an amount equal to the product of (A) the amount of such
mandatory prepayment and (B) the percentage of the aggregate Requested Term Loan
Prepayment Amounts of all Term Lenders electing (or deemed to be electing) such
a prepayment represented by such Term Lender’s Requested Term Loan Prepayment
Amount. Any residual amounts after any mandatory prepayments are made pursuant
to this Section 2.13(e) shall be retained by the Borrower. Mandatory prepayments
of outstanding Term B Loans under this Agreement shall be

83

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

 

applied against the remaining scheduled installments due in respect of the Term
B Loans under Section 2.11 as directed by the Borrower.
     (f) Notwithstanding any provision in this Agreement to the contrary, but
subject to the right of each Term Lender, each Funded L/C Lender and each
Revolving Credit Lender to elect to decline all or any portion of any prepayment
pursuant to Section 2.13(b)(ii) as described below, the amount to be prepaid or
deposited as cash collateral on any date pursuant to Section 2.13(b)(ii) shall,
subject to paragraph (g) below, be applied first to the prepayment (to the
extent required to be so applied) of all Term B Loans outstanding on such date
(on a pro rata basis with respect to all Classes thereof), second (to the extent
of any residual) to the permanent prepayment of Credit-Linked Deposits
outstanding on such date (on a pro rata basis with respect to all Classes
thereof) and thereafter (to the extent of any residual) to the permanent
reduction of Revolving Credit Commitments and concurrent repayment of Revolving
Credit Borrowings, Swingline Loans and/or cash collateralization of Letters of
Credit outstanding on such date (on a pro rata basis with respect to all Classes
thereof). No later than 5:00 p.m., New York City time, three Business Days prior
to the applicable prepayment, reduction or cash collateralization date, each
Term Lender, each Funded L/C Lender and each Revolving Credit Lender may provide
written notice to the Administrative Agent either (i) setting forth the maximum
amount of the aggregate amount of its Term B Loans, Credit-Linked Deposits
and/or Revolving Credit Commitments that it wishes to have prepaid or reduced on
such date pursuant to this Section 2.13(f) (the “Requested Prepayment Amount”)
or (ii) declining in its entirety any prepayment, return, reduction or cash
collateralization on such date pursuant to this Section. In the event that any
Term Lender, Funded L/C Lender or Revolving Credit Lender shall fail to provide
such written notice to the Administrative Agent within the time period specified
above, (A) such Term Lender shall be deemed to have elected a Requested
Prepayment Amount equal to its ratable share of such mandatory prepayment
(determined based on the percentage of the aggregate amount of all Term B Loans
represented by such Term Lender’s Term B Loans as determined immediately prior
to such prepayment and without taking into account any Requested Prepayment
Amount of any other Lender), (B) such Funded L/C Lender shall be deemed to have
elected a Requested Prepayment Amount equal to its ratable share of such
mandatory prepayment (determined based on the percentage of the aggregate amount
of the Total Credit-Linked Deposit represented by such Funded L/C Lender’s
Credit-Linked Deposits as determined immediately prior to such prepayment and
without taking into account any Requested Prepayment Amount of any other Lender)
and (C) such Revolving Credit Lender shall be deemed to have elected a Requested
Prepayment Amount and corresponding reduction of its Revolving Credit Commitment
equal to its ratable share of such mandatory reduction (determined based on the
percentage of the aggregate amount of the Total Revolving Credit Commitment
represented by such Revolving Credit Lender’s Revolving Credit Commitment as
determined immediately prior to such reduction and without taking into account
any Requested Prepayment Amount of any other Lender). In the event that the
amount of any mandatory prepayment to be made pursuant to this Section shall be
less than the aggregate amount of all Requested Prepayment Amounts of all Term
Lenders electing (or deemed to be electing) such a prepayment, (x) each Term
Lender electing (or deemed to be electing) such a prepayment shall have its Term
B Loans prepaid in an amount equal to the product of (1) the amount of such
mandatory prepayment and (2) the percentage of the aggregate Requested
Prepayment Amounts of all Term Lenders electing (or deemed to be electing) such
a prepayment represented by such Term Lender’s Requested Prepayment Amount and
(y) no amount shall be prepaid in respect of the Credit-Linked Deposits or
applied to permanently reduce the Revolving Credit Commitments. In the event
that the amount of any mandatory prepayment, return, reduction or cash
collateralization to be made pursuant to this Section shall be equal to or
exceed the aggregate amount of all Requested Prepayment Amounts of all Term
Lenders electing (or deemed to be electing) such a prepayment, each Term Lender
electing (or deemed to be electing) such a prepayment shall have an amount of

84

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

 

its Term B Loans prepaid that is equal to such Term Lender’s Requested
Prepayment Amount, and any residual amount of any mandatory prepayment,
reduction or cash collateralization remaining after such application shall be
applied to prepay the Credit-Linked Deposits of the Funded L/C Lenders, as
follows: (aa) in the event that any such residual amount shall be equal to or
exceed the aggregate amount of all Requested Prepayment Amounts of all Funded
L/C Lenders electing (or deemed to be electing) such a prepayment, each Funded
L/C Lender electing (or deemed to be electing) such a prepayment shall have an
amount of its Credit-Linked Deposits prepaid that is equal to such Lender’s
Requested Prepayment Amount and any residual amount shall be applied to the
permanent reduction of Revolving Credit Commitments as set forth in the next
succeeding sentence or (bb) in the event that any such residual amount shall be
less than the aggregate amount of all Requested Prepayment Amounts of all Funded
L/C Lenders electing (or deemed to be electing) such a prepayment, each Funded
L/C Lender electing (or deemed to be electing) such a prepayment shall have its
Credit-Linked Deposits prepaid in an amount equal to the product of (X) the
amount of such residual and (Y) the percentage of the aggregate Requested
Prepayment Amounts of all Funded L/C Lenders electing (or deemed to be electing)
such a prepayment represented by such Funded L/C Lender’s Requested Prepayment
Amount. In the event that the amount of any mandatory prepayment, reduction or
cash collateralization to be made pursuant to this Section shall exceed the
aggregate amount of all Requested Prepayment Amounts of all Term Lenders and
Funded L/C Lenders electing (or deemed to be electing) such a prepayment, any
residual amount of any mandatory prepayment, reduction or cash collateralization
remaining after such application shall be applied to the permanent reduction of
Revolving Credit Commitments as follows: (i) in the event that any such residual
amount shall be equal to or exceed the aggregate amount of all Requested
Prepayment Amounts of all Revolving Credit Lenders electing (or deemed to be
electing) such a reduction, each Revolving Credit Lender electing (or deemed to
be electing) such a reduction shall have a portion of its Revolving Credit
Commitment reduced that is equal to such Revolving Credit Lender’s Requested
Prepayment Amount or (ii) in the event that any such residual amount shall be
less than the aggregate amount of all Requested Prepayment Amounts of all
Revolving Credit Lenders electing (or deemed to be electing) such a reduction,
each Revolving Credit Lender electing (or deemed to be electing) such a
reduction shall have its Revolving Credit Commitment reduced in an amount equal
to the product of (A) the amount of such residual and (B) the percentage of the
aggregate Requested Prepayment Amounts of all Revolving Credit Lenders electing
(or deemed to be electing) such a return represented by such Revolving Credit
Lender’s Requested Prepayment Amount. Any residual amounts after any mandatory
prepayments, returns, reductions or cash collateralizations are made pursuant to
this Section 2.13(f) shall be retained by the Borrower.
     (g) [Reserved].
     (h) [Reserved].
     (i) [Reserved].
     (j) [Reserved].
     (k) The Borrower shall deliver to the Administrative Agent and the Issuing
Bank, at the time of each prepayment, reduction or cash collateralization
required under this Section 2.13, (i) a certificate signed by a Financial
Officer of the Borrower setting forth in reasonable detail the calculation of
the amount of such prepayment, reduction or cash collateralization and (ii) at
least eight days prior written notice of such prepayment substantially in the
form of Exhibit I or, to the extent practicable, at least ten days prior written
notice of such reduction or cash collateralization (and the Administrative Agent
shall promptly provide the same to each Term Lender, Funded L/C

85

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

 

Lender and Revolving Credit Lender). Each notice of reduction or cash
collateralization shall specify the reduction or cash collateralization date,
the Type and Class of each Loan being prepaid and the principal amount of each
Loan (or portion thereof) to be prepaid and the amount of any reduction of
Revolving Credit Commitments. All prepayments of Borrowings or reductions of
Revolving Credit Commitments pursuant to this Section 2.13 shall be accompanied
by accrued and unpaid interest on the principal amount to be paid to but
excluding the date of payment and shall be subject to Section 2.16, but shall
otherwise be without premium or penalty.
     SECTION 2.14. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision of this Agreement, if any Change in Law
shall:
     (i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender, the Administrative Agent or the Issuing Bank, or
     (ii) impose on any Lender, the Administrative Agent or any Issuing Bank or
the London interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit (except, in each
case, any such reserve requirement which is reflected in the Adjusted LIBO
Rate),
and the result of any of the foregoing shall be to increase the cost to such
Lender or such Issuing Bank of making or maintaining any Eurodollar Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to any
Lender, the Administrative Agent or any Issuing Bank of issuing or maintaining
any Letter of Credit or purchasing or maintaining a participation therein or to
reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise) by an
amount reasonably deemed by such Lender, the Administrative Agent or such
Issuing Bank to be material, then the Borrower will pay to such Lender, the
Administrative Agent or the Issuing Bank, as the case may be, promptly upon
demand such additional amount or amounts as will compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
     (b) If any Lender, the Administrative Agent or any Issuing Bank shall have
determined that any Change in Law regarding capital adequacy has or would have
the effect of reducing the rate of return on such Lender’s, the Administrative
Agent’s or the Issuing Bank’s capital or on the capital of such Lender’s, the
Administrative Agent’s or the Issuing Bank’s holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit or Swingline Loans purchased by, such Lender or the Letters of Credit
issued by such Issuing Bank to a level below that which such Lender, the
Administrative Agent or such Issuing Bank or such Lender’s, the Administrative
Agent’s or such Issuing Bank’s holding company could have achieved but for such
Change in Law (taking into consideration such Lender’s, the Administrative
Agent’s or such Issuing Bank’s policies and the policies of such Lender’s, the
Administrative Agent’s or such Issuing Bank’s holding company with respect to
capital adequacy) by an amount reasonably deemed by such Lender, the
Administrative Agent or such Issuing Bank to be material, then from time to time
the Borrower shall pay to such Lender, the Administrative Agent or the Issuing
Bank, as the case may be, such additional amount or amounts as will compensate
such Lender, the Administrative Agent or such Issuing Bank or such Lender’s, the
Administrative Agent’s or such Issuing Bank’s holding company for any such
reduction suffered.
     (c) A certificate of a Lender, the Administrative Agent or an Issuing Bank
setting forth the amount or amounts reasonably determined by such Person to be
necessary to compensate such Lender, the Administrative Agent or such Issuing
Bank or its holding company,

86

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

 

as applicable, as specified in paragraph (a) or (b) of this Section, the
calculations and criteria applied to determine such amount or amounts, and other
documentation or information reasonably supporting the conclusions in such
certificate, shall be delivered to the Borrower and shall, absent clearly
demonstrable error, be final and conclusive and binding. The Borrower shall pay
such Lender, the Administrative Agent or the Issuing Bank, as the case may be,
the amount or amounts shown as due on any such certificate delivered by it
within 10 days after its receipt of the same.
     (d) Failure or delay on the part of any Lender, the Administrative Agent or
any Issuing Bank to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender’s, the Administrative Agent’s or the Issuing
Bank’s right to demand such compensation; provided that the Borrower shall not
be under any obligation to compensate any Lender, the Administrative Agent or
any Issuing Bank under paragraph (a) or (b) above for increased costs or
reductions with respect to any period prior to the date that is 270 days prior
to such request; provided further that the foregoing limitation shall not apply
to any increased costs or reductions arising out of the retroactive application
of any Change in Law within such 270-day period. The protection of this Section
shall be available to each Lender, the Administrative Agent and each Issuing
Bank regardless of any possible contention of the invalidity or inapplicability
of the Change in Law that shall have occurred or been imposed.
     SECTION 2.15 Change in Legality. (a) Notwithstanding any other provision of
this Agreement, if any Change in Law shall make it unlawful for any Lender to
make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower (which notice shall include documentation or information in
reasonable detail supporting the conclusions in such notice) and to the
Administrative Agent:
     (i) such Lender may declare that Eurodollar Loans will not thereafter (for
the duration of such unlawfulness) be made by such Lender hereunder (or be
continued for additional Interest Periods and ABR Loans will not thereafter (for
such duration) be converted into Eurodollar Loans), whereupon any request for a
Eurodollar Borrowing (or to convert an ABR Borrowing to a Eurodollar Borrowing
or to continue a Eurodollar Borrowing for an additional Interest Period) shall,
as to such Lender only, be deemed a request for an ABR Loan (or a request to
continue an ABR Loan as such for an additional Interest Period or to convert a
Eurodollar Loan into an ABR Loan, as the case may be), unless such declaration
shall be subsequently withdrawn; and
     (ii) such Lender may require that all outstanding Eurodollar Loans made by
it be converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such notice as
provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans. Any such conversion of a Eurodollar Loan under (i) above
shall be subject to Section 2.16.
     (b) For purposes of this Section 2.15, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the

87

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

 

Interest Period then applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt by the Borrower.
     SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender against
any loss or expense that such Lender may sustain or incur as a consequence of
(a) any event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Loan
prior to the end of the Interest Period in effect therefor, (ii) the conversion
of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar Loan, in each case other than on the last day of
the Interest Period in effect therefor or (iii) any Eurodollar Loan to be made
by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice of
such Loan shall have been given by the Borrower hereunder (any of the events
referred to in this clause (a) being called a “Breakage Event”) or (b) any
default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include, in the
case of a Lender, an amount equal to the excess, as reasonably determined by
such Lender, of (i) its cost of obtaining funds for the Eurodollar Loan that is
the subject of such Breakage Event for the period from the date of such Breakage
Event to the last day of the Interest Period in effect (or that would have been
in effect) for such Loan over (ii) the amount of interest likely to be realized
by such Lender in redeploying the funds released or not utilized by reason of
such Breakage Event for such period. A certificate of any Lender setting forth
any amount or amounts which such Lender believes it is entitled to receive
pursuant to this Section 2.16, including the calculations and criteria applied
to determine such amount or amounts, and other documentation or information
reasonably supporting the conclusions in such certificate, shall be delivered to
the Borrower and shall, absent clearly demonstrable error, be final and
conclusive and binding.
     SECTION 2.17. Pro Rata Treatment. Except as provided below in this
Section 2.17 with respect to Swingline Loans and as required under Section 2.13,
2.14, 2.15 or 2.20, each Borrowing, each payment or prepayment of principal of
any Borrowing, each payment of reimbursement obligations, each payment of
interest on the Loans, each payment of the Commitment Fees, each reduction of
the Term Loan Commitments, the Total Credit-Linked Deposit or the Revolving
Credit Commitments and each conversion of any Borrowing to or continuation of
any Borrowing as a Borrowing of any Type shall be allocated pro rata among the
Lenders in accordance with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans). For purposes of
determining the available Revolving Credit Commitments of the Lenders at any
time, each outstanding Swingline Loan shall be deemed to have utilized the
Revolving Credit Commitments of the Lenders (including those Lenders which shall
not have made Swingline Loans) pro rata in accordance with such respective
Revolving Credit Commitments. Each Lender agrees that in computing such Lender’s
portion of any Borrowing to be made hereunder, the Administrative Agent may, in
its discretion, round each Lender’s percentage of such Borrowing to the next
higher or lower whole dollar amount.
     SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker’s lien, setoff or counterclaim against
the Borrower or any other Loan Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Loan or Loans or L/C Disbursement as a result of which the unpaid principal
portion of its Loans and participations in L/C Disbursements shall be
proportionately less than the unpaid principal portion of the Loans

88

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

 

and participations in L/C Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall
promptly pay to such other Lender the purchase price for, a participation in the
Loans and Revolving L/C Exposure of such other Lender, so that the aggregate
unpaid principal amount of the Loans and Revolving L/C Exposure and
participations in Loans and Revolving L/C Exposure held by each Lender shall be
in the same proportion to the aggregate unpaid principal amount of all Loans and
Revolving L/C Exposure then outstanding as the principal amount of its Loans and
Revolving L/C Exposure prior to such exercise of banker’s lien, setoff or
counterclaim or other event was to the principal amount of all Loans and
Revolving L/C Exposure outstanding prior to such exercise of banker’s lien,
setoff or counterclaim or other event; provided, however, that if any such
purchase or purchases or adjustments shall be made pursuant to this Section 2.18
and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in a Loan or L/C Disbursement deemed to have been
so purchased may exercise any and all rights of banker’s lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower to such
Lender by reason thereof as fully as if such Lender had made a Loan directly to
the Borrower in the amount of such participation.
     SECTION 2.19. Payments. (a) The Borrower shall make each payment (including
principal of or interest on any Borrowing or any L/C Disbursement or any Fees or
other amounts) hereunder and under any other Loan Document not later than 12:00
(noon) (or such other time as otherwise required by Section 2.23(e)), New York
City time, on the date when due in immediately available dollars, without
setoff, defense or counterclaim. Each such payment (other than (i) Issuing Bank
Fees, which shall be paid directly to the Issuing Bank, (ii) principal of and
interest on Swingline Loans, which shall be paid directly to the Swingline
Lender except as otherwise provided in Section 2.22(e) and (iii) payments
pursuant to Sections 2.14, 2.16 or 2.20, which at the election of the Borrower
may be made directly to the Lender claiming the benefit of any such Sections)
shall be made to the Administrative Agent at its offices at 390 Greenwich
Street, New York, NY 10013 by wire transfer of immediately available funds (or
as otherwise agreed by the Borrower and the Administrative Agent). The
Administrative Agent shall pay to each Lender any payment received on such
Lender’s behalf promptly after the Administrative Agent’s receipt of such
payment. All payments hereunder and under each other Loan Document shall be made
in dollars.
     (b) Except as otherwise expressly provided herein, whenever any payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
     SECTION 2.20. Taxes. (a) Except as otherwise provided herein, any and all
payments by or on account of any obligation of the Borrower or any other Loan
Party hereunder or under any other Loan Document shall be made free and clear of
and without deduction or withholding for any Indemnified Taxes or Other Taxes;
provided that if the Borrower or any other Loan Party shall be required to
deduct or withhold any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions and withholdings (including deductions and withholdings
applicable to additional sums payable under this Section) the Administrative
Agent or such Lender (as the case may be) receives an amount equal to the sum it
would have received had no such deductions and withholdings been made, (ii) the
Borrower or such other Loan Party shall make (or cause to be made) such
deductions and withholdings and (iii) the Borrower or such other Loan Party
shall

89

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

 

pay (or cause to be paid) the full amount deducted or withheld to the relevant
Governmental Authority in accordance with applicable law. In addition, the
Borrower or any other Loan Party hereunder shall pay (or cause to be paid) any
Other Taxes imposed other than by deduction or withholding to the relevant
Governmental Authority in accordance with applicable law.
     (b) [Reserved].
     (c) The Borrower shall indemnify the Administrative Agent, each Issuing
Bank and each Lender, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Issuing Bank or such Lender, as the case may be, or any of their respective
Affiliates, on or with respect to any payment by or on account of any obligation
of the Borrower or any Loan Party hereunder or under any other Loan Document
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Government Authority. A certificate as to the amount of
such payment or liability shall be delivered to the Borrower by an Issuing Bank
or a Lender, or by the Administrative Agent on its behalf or on behalf of an
Issuing Bank or a Lender, promptly upon such party’s determination of an
indemnifiable event and such certificate shall be conclusive absent clearly
demonstrable error; provided that the failure to deliver such certificate shall
not affect the obligations of the Borrower under this Section 2.20(c) except to
the extent the Borrower is actually prejudiced thereby. Payment under this
Section 2.20(c) shall be made within 15 days from the date of delivery of such
certificate; provided that the Borrower shall not be obligated to make any such
payment to the Administrative Agent, the Issuing Bank or the Lender (as the case
may be) in respect of penalties, interest and other liabilities attributable to
any Indemnified Taxes or Other Taxes if and to the extent that such penalties,
interest and other liabilities are attributable to the gross negligence or
willful misconduct of the Administrative Agent, such Issuing Bank or such
Lender, in each case, as determined by a court of competent jurisdiction by
final and nonappealable judgment, or to the failure of the Administrative Agent,
an Issuing Bank or a Lender to deliver a timely certificate as to the amount of
an indemnifiable liability.
     (d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower or any other Loan Party to a Governmental Authority, and
in any event within 60 days of such payment being due, the Borrower shall
deliver to the Administrative Agent or the Issuing Bank, if applicable, the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent or
the Issuing Bank, if applicable.
     (e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the reasonable written request of the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate;
provided that such Lender is legally entitled to complete, execute and deliver
such documentation and in such Lender’s judgment such completion, execution or
delivery would not materially prejudice the legal position of such Lender.
     In addition, each Foreign Lender shall (i) furnish on or before it becomes
a party to this Agreement either (a) two accurate and complete originally
executed U.S. Internal Revenue

90

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

 

Service Form W-8BEN and/or Form W-8IMY, as applicable (or successor form) or
(b) an accurate and complete U.S. Internal Revenue Service Form W-8ECI (or
successor form), certifying, in either case, to such Foreign Lender’s legal
entitlement to an exemption or reduction from U.S. federal withholding tax with
respect to all interest payments hereunder, and (ii) provide a new Form W-8BEN
and/or Form W-8IMY, as applicable (or successor form) or Form W-8ECI (or
successor form) upon the expiration or obsolescence of any previously delivered
form to reconfirm any complete exemption from, or any entitlement to a reduction
in, U.S. federal withholding tax with respect to any interest payment hereunder;
provided that any Foreign Lender that is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Code and is relying on the so-called “portfolio
interest exemption” shall also furnish a “Non-Bank Certificate” in the form of
Exhibit J together with a Form W-8BEN (or successor form). Notwithstanding any
other provision of this paragraph, a Foreign Lender shall not be required to
deliver any form pursuant to this paragraph that such Foreign Lender is not
legally able to deliver.
     (f) Any Lender that is a United States person, as defined in
Section 7701(a)(30) of the Internal Revenue Code, and is not an exempt recipient
within the meaning of Treasury Regulations Section 1.6049-4(c) shall deliver to
the Borrower (with a copy to the Administrative Agent) two accurate and complete
original signed copies of Internal Revenue Service Form W-9, or any successor
form that such person is entitled to provide at such time in order to comply
with United States back-up withholding requirements.
     (g) For purposes of this Section 2.20, in the case of any Lender that is
treated as a partnership for U.S. federal income tax purposes, any Taxes
required to be deducted and withheld by such Lender with respect to payments
made by the Borrower under any Loan Document shall be treated as Taxes required
to be deducted by the Borrower, but only to the extent such Taxes would have
been required to be deducted and withheld by the Lender if it were treated as a
corporation for U.S. federal income tax purposes making such payments under the
Loan Documents on behalf of the Borrower and Excluded Taxes were defined by
reference to the partner (treating the partner as a Foreign Lender) to whom
payments are made.
     (h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.20 shall survive the payment in full of all amounts due
hereunder.
     SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty
to Mitigate. (a) In the event (i) any Lender or any Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or
any Issuing Bank delivers a notice described in Section 2.15, (iii) the Borrower
is required to pay any additional amount to any Lender or any Issuing Bank or
any Governmental Authority on account of any Lender or any Issuing Bank pursuant
to Section 2.20 or (iv) any Lender is a Defaulting Lender, the Borrower may, at
its sole expense and effort (including with respect to the processing and
recordation fee referred to in Section 9.04(b)), upon notice to such Lender or
such Issuing Bank and the Administrative Agent, require such Lender or such
Issuing Bank to transfer and assign, without recourse (in accordance with and
subject to the restrictions contained in Section 9.04), all of its interests,
rights and obligations under this Agreement to an assignee that shall assume
such assigned obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (x) such assignment shall not conflict
with any law, rule or regulation or order of any court or other Governmental
Authority having jurisdiction, (y) the Borrower shall have received the prior
written consent of the Administrative Agent (and, if a Revolving Credit
Commitment is being assigned, of the Issuing Banks and the Swingline Lender),
which consent shall not unreasonably be withheld or delayed, and (z) the
Borrower or such assignee shall have paid to the affected Lender or Issuing Bank
in immediately available funds an amount equal to

91

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

 

the sum of the principal of and interest accrued to the date of such payment on
the outstanding Loans or L/C Disbursements of such Lender or the Issuing Bank,
respectively, plus all Fees and other amounts accrued for the account of such
Lender or such Issuing Bank hereunder (including any amounts under Section 2.14
and Section 2.16); provided further that, if prior to any such transfer and
assignment the circumstances or event that resulted in such Lender’s or the
Issuing Bank’s claim for compensation under Section 2.14 or notice under
Section 2.15 or the amounts paid pursuant to Section 2.20, as the case may be,
cease to cause such Lender or such Issuing Bank to suffer increased costs or
reductions in amounts received or receivable or reduction in return on capital,
or cease to have the consequences specified in Section 2.15, or cease to result
in amounts being payable under Section 2.20, as the case may be (including as a
result of any action taken by such Lender or such Issuing Bank pursuant to
paragraph (b) below), or if such Lender or such Issuing Bank shall waive its
right to claim further compensation under Section 2.14 in respect of such
circumstances or event or shall withdraw its notice under Section 2.15 or shall
waive its right to further payments under Section 2.20 in respect of such
circumstances or event, as the case may be, then such Lender or such Issuing
Bank shall not thereafter be required to make any such transfer and assignment
hereunder.
     (b) If (i) any Lender or any Issuing Bank shall request compensation under
Section 2.14, (ii) any Lender or any Issuing Bank delivers a notice described in
Section 2.15 or (iii) the Borrower is required to pay any additional amount to
any Lender or any Issuing Bank or any Governmental Authority on account of any
Lender or the Issuing Bank, pursuant to Section 2.20, then such Lender or such
Issuing Bank shall use reasonable efforts (which shall not require such Lender
or such Issuing Bank to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden reasonably
deemed by it to be significant) (x) to file any certificate or document
reasonably requested in writing by the Borrower or (y) to assign its rights and
delegate and transfer its obligations hereunder to another of its offices,
branches or affiliates, if such filing or assignment would reduce or eliminate
its claims for compensation under Section 2.14 or enable it to withdraw its
notice pursuant to Section 2.15 or would reduce or eliminate amounts payable
pursuant to Section 2.20, as the case may be, in the future. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender or any
Issuing Bank in connection with any such filing or assignment, delegation and
transfer.
     SECTION 2.22. Swingline Loans. (a) Swingline Commitment. Subject to the
terms and conditions hereof and relying upon the representations and warranties
set forth herein, the Swingline Lender agrees to make loans to the Borrower, at
any time and from time to time after the Closing Date, and until the earlier of
the latest Revolving Credit Maturity Date at such time and the termination of
the Revolving Credit Commitments in accordance with the terms hereof (provided
that the agreement of the Swingline Lender to make Swingline Loans shall not
extend beyond the date specified in clause (i) of the definition of “Revolving
Credit Maturity Date” without the written consent of the Swingline Lender), in
an aggregate principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of all Swingline Loans exceeding $50,000,000
in the aggregate, (ii) the Swingline Loans exceeding the amount of available
Revolving Credit Commitments whose applicable Revolving Credit Maturity Date is
15 days after such Swingline Loan is (or is to be) made or (iii) the Aggregate
Revolving Credit Exposure, after giving effect to any Swingline Loan, exceeding
the Total Revolving Credit Commitment. Each Swingline Loan shall be in a
principal amount that is an integral multiple of $500,000. The Swingline
Commitment may be terminated or reduced from time to time as provided herein.
Within the foregoing limits, the Borrower may borrow, pay or prepay, without
premium or penalty, and reborrow Swingline Loans hereunder, subject to the
terms, conditions and limitations set forth herein.

92

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

 

     (b) Swingline Loans. The Borrower shall notify the Administrative Agent by
fax, or by telephone (confirmed by fax), not later than 10:00 a.m., New York
City time, on the day of a proposed Swingline Loan to be made to it. Such notice
shall be delivered on a Business Day, shall be irrevocable and shall refer to
this Agreement and shall specify the requested date (which shall be a Business
Day) and amount of such Swingline Loan. The Administrative Agent will promptly
advise the Swingline Lender of any notice received from the Borrower pursuant to
this paragraph (b). The Swingline Lender shall make each Swingline Loan
available to the Borrower by means of a credit to the general deposit account of
the Borrower with the Swingline Lender by no later than 3:00 p.m. on the date
such Swingline Loan is so requested.
     (c) Prepayment. The Borrower shall have the right at any time and from time
to time to prepay any Swingline Loan, in whole or in part, upon giving written
or fax notice (or telephone notice promptly confirmed by written or fax notice)
to the Swingline Lender and to the Administrative Agent before 12:00 (noon), New
York City time, on the date of prepayment at the Swingline Lender’s address for
notices specified in the Lender Addendum delivered by the Swingline Lender. All
principal payments of Swingline Loans shall be accompanied by accrued interest
on the principal amount being repaid to the date of payment.
     (d) Interest. Each Swingline Loan shall be an ABR Loan and, subject to the
provisions of Section 2.07, shall bear interest as provided in Section 2.06(a).
     (e) Participations. The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Revolving Credit Lenders to acquire participations on
such Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which Revolving
Credit Lenders will participate. The Administrative Agent will, promptly upon
receipt of such notice, give notice to each Revolving Credit Lender, specifying
in such notice such Lender’s Pro Rata Percentage of such Swingline Loan or
Loans. In furtherance of the foregoing, each Revolving Credit Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Revolving Credit Lender’s Pro Rata Percentage of such Swingline Loan or
Loans. Each Revolving Credit Lender acknowledges and agrees that its obligation
to acquire participations in Swingline Loans pursuant to this paragraph is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or an Event of
Default, and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Each Revolving Credit Lender shall comply
with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.02(c) with respect
to Loans made by such Lender (and Section 2.02(c) shall apply, mutatis mutandis,
to the payment obligations of the Lenders under this Section) and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Lenders. The Administrative Agent shall notify the
Borrower of any participations in any Swingline Loan acquired pursuant to this
paragraph and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower (or other party liable for obligations of the Borrower) of any
default in the payment thereof.

93

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

 

     SECTION 2.23. Letters of Credit. (a) General. Subject to the terms and
conditions hereof, (i) each Issuing Bank agrees to issue, upon the Borrower’s
request, a Letter of Credit in such form as may be reasonably approved from time
to time by the Issuing Bank at any time and from time to time while the
Revolving Credit Commitments remain in effect, provided that the agreement of
the Issuing Bank to issue Letters of Credit shall not extend beyond the date
specified in clause (i) of the definition of “Revolving Credit Maturity Date”
without the written consent of the Issuing Bank, (ii) as described in the Third
Amendment Agreement, all Revolving Letters of Credit under and as defined in the
Second Restated Credit Agreement that were outstanding immediately prior to the
Third Restatement Date (if any) have been deemed to be Letters of Credit issued
under this Agreement and (iii) as described in the Third Amendment Agreement,
the obligations of the Borrower with respect to all Funded Letters of Credit
under and as defined in the Second Restated Credit Agreement that were
outstanding immediately prior to the Third Restatement Date (if any) have,
without any further action on the part of any Person, automatically been
assigned to the Funded L/C SPV in their entirety and, as of the Third
Restatement Date, constitute obligations solely of the Funded L/C SPV pursuant
to and in accordance with the terms and provisions of one or more Cash
Collateralized Letter of Credit Facilities (other than obligations of (A) the
Borrower with respect to the Funded L/C SPV Guarantee and (B) the Borrower and
the Subsidiary Guarantors with respect to any reimbursement agreement of the
Borrower and/or any Subsidiary Guarantor in favor of the Funded L/C SPV with
respect to any amounts drawn on letters of credit issued for the benefit of the
Borrower or any of its Subsidiaries under Cash Collateralized Letter of Credit
Facilities), in the case of clause (i), for the Borrower’s account or for the
account of any of the Subsidiary Guarantors or for the account of any other
Subsidiary (other than the Funded L/C SPV) or any Minority Investment; provided
that if such Letter of Credit is being issued for the account of a Subsidiary
Guarantor or other Subsidiary (other than the Funded L/C SPV), the Borrower and
such Subsidiary Guarantor or such other Subsidiary (other than the Funded L/C
SPV), as the case may be, shall be co-applicants with respect to such Letter of
Credit. This Section shall not be construed to impose an obligation upon any
Issuing Bank to issue any Letter of Credit that is inconsistent with the terms
and conditions of this Agreement.
Notwithstanding the foregoing, no Issuing Bank is under any obligation to issue
any Letter of Credit if at the time of such issuance:
     (i) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms enjoin or restrain such Issuing Bank from issuing
such Letter of Credit or any requirement of law applicable to such Issuing Bank
or any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over such Issuing Bank shall prohibit,
or request that such Issuing Bank refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall impose upon
such Issuing Bank with respect to such Letter of Credit any restriction or
reserve or capital requirement (for which such Issuing Bank is not otherwise
compensated hereunder) not in effect with respect to such Issuing Bank on the
Closing Date, or any unreimbursed loss, cost or expense which was not applicable
or in effect with respect to such Issuing Bank as of the Closing Date and which
such Issuing Bank reasonably and in good faith deems material to it; or
     (ii) such Issuing Bank shall have received from the Borrower or the
Administrative Agent prior to the issuance of such Letter of Credit notice that
the issuance of such Letter of Credit is not permitted under this Agreement.
     (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
In order to request the issuance of a Letter of Credit (or to amend, renew or
extend an existing Letter

94

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

 

of Credit), the Borrower shall hand deliver or fax or electronic communication
(including through the Internet or other electronic platform) to the Issuing
Bank and the Administrative Agent (no less than three Business Days (or such
shorter period of time acceptable to the Issuing Bank) in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, the date of issuance, amendment, renewal or
extension, the date on which such Letter of Credit is to expire (which shall
comply with paragraph (c) below), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
reasonably necessary to prepare such Letter of Credit. The Issuing Bank shall
promptly (i) notify the Administrative Agent in writing of the amount and expiry
date of each Letter of Credit issued by it and (ii) provide a copy of such
Letter of Credit (and any amendments, renewals or extensions thereof) to the
Administrative Agent. A Letter of Credit shall be issued, amended, renewed or
extended only if, and upon issuance, amendment, renewal or extension of each
such Letter of Credit the Borrower shall be deemed to represent and warrant
that, after giving effect to such issuance, amendment, renewal or extension, the
Aggregate Revolving Credit Exposure shall not exceed the Total Revolving Credit
Commitment and that the other conditions expressly set forth herein are
satisfied in respect thereto. It is understood and agreed that the Revolving L/C
Exposure in respect of Letters of Credit issued by Deutsche Bank AG, New York
Branch pursuant to this Agreement shall not exceed $300,000,000 at any time
outstanding without the prior written consent of Deutsche Bank AG, New York
Branch, and Deutsche Bank AG, New York Branch shall have no obligation to issue
a Letter of Credit if the foregoing limitation would be exceeded.
     (c) Expiration Date. Each Letter of Credit shall expire at the close of
business on the earlier of (i) the date one year after the date of the issuance
of such Letter of Credit and (ii) the date that is five Business Days prior to
the latest applicable Revolving Credit Maturity Date with respect to which the
aggregate amount of Revolving Credit Commitments maturing on or after such
Revolving Credit Maturity Date shall equal or exceed the Revolving L/C Exposure
related to such Letter of Credit and all other Letters of Credit expiring on or
after the date thereof, unless such Letter of Credit expires by its terms on an
earlier date; provided, however, that a Letter of Credit may, upon the request
of the Borrower, include a provision whereby such Letter of Credit shall be
renewed automatically for additional consecutive periods of 12 months or less
(but not beyond the date that is five Business Days prior to the applicable
Revolving Credit Maturity Date described above) unless the Issuing Bank notifies
the beneficiary thereof at least 30 days (or within such longer period as
specified in such Letter of Credit) prior to the then-applicable expiration date
that such Letter of Credit will not be renewed.
     (d) Participations. By the issuance of a Letter of Credit and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Credit Lender, and each such Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender’s Pro Rata Percentage of the aggregate amount available to be
drawn under such Letter of Credit, effective upon the issuance of such Letter of
Credit. In consideration and in furtherance of the foregoing, each Revolving
Credit Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, such Lender’s Pro
Rata Percentage of each L/C Disbursement made by the Issuing Bank and not
reimbursed by the Borrower (or, if applicable, another party pursuant to its
obligations under any other Loan Document) forthwith on the date due as provided
in Section 2.02(f). Each Revolving Credit Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this paragraph in respect
of Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including the occurrence and continuance of a
Default or an Event of Default, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

95

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

 

     (e) Reimbursement. If the Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit, the Borrower shall pay or cause to be paid to the
Administrative Agent an amount equal to such L/C Disbursement not later than two
hours after the Borrower shall have received notice from the Issuing Bank that
payment of such draft will be made, or, if the Borrower shall have received such
notice later than 1:00 p.m., New York City time, on any Business Day, not later
than 12:00 (noon), New York City time, on the immediately following Business
Day.
     (f) Obligations Absolute. The Borrower’s obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
     (i) any lack of validity or enforceability of any Letter of Credit or any
Loan Document, or any term or provision therein;
     (ii) any amendment or waiver of, or any consent to departure from, all or
any of the provisions of any Letter of Credit or any Loan Document;
     (iii) the existence of any claim, setoff, defense or other right that the
Borrower, any other party guaranteeing, or otherwise obligated with, the
Borrower, any subsidiary or other Affiliate thereof or any other Person may at
any time have against the beneficiary under any Letter of Credit, the Issuing
Bank, the Administrative Agent or any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreement or transaction;
     (iv) any draft or other document presented under a Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
     (v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit; and
     (vi) any other act or omission to act or delay of any kind of the Issuing
Bank, any Lender, the Administrative Agent or any other Person or any other
event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of the Borrower’s obligations hereunder.
     Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or willful misconduct of the Issuing Bank. However, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank’s gross negligence or willful misconduct, as determined by a
court of competent jurisdiction by final and nonappealable judgment, in
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof; it is understood that the Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit

96

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

 

(i) the Issuing Bank’s exclusive reliance on the documents presented to it under
such Letter of Credit as to any and all matters set forth therein, including
reliance on the amount of any draft presented under such Letter of Credit,
whether or not the amount due to the beneficiary thereunder equals the amount of
such draft and whether or not any document presented pursuant to such Letter of
Credit proves to be insufficient in any respect, if such document on its face
appears to be in order, and whether or not any other statement or any other
document presented pursuant to such Letter of Credit proves to be forged or
invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuing Bank.
     (g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by fax, to the Administrative Agent and
the Borrower of such demand for payment and whether the Issuing Bank has made or
will make an L/C Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the applicable Revolving Credit Lenders with
respect to any such L/C Disbursement. The Administrative Agent shall promptly
give each Revolving Credit Lender notice thereof.
     (h) Interim Interest. If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, then, unless the Borrower shall reimburse such
L/C Disbursement in full on such date, the unpaid amount thereof shall bear
interest for the account of the Issuing Bank, for each day from and including
the date of such L/C Disbursement to but excluding the earlier of the date of
payment by the Borrower or the date on which interest shall commence to accrue
thereon as provided in Section 2.02(f), at the rate per annum that would apply
to such amount if such amount were an ABR Revolving Loan.
     (i) Resignation or Removal of the Issuing Bank. Any Issuing Bank may resign
at any time by giving 30 days’ prior written notice to the Administrative Agent,
the Lenders and the Borrower, and may be removed at any time by the Borrower by
notice to such Issuing Bank, the Administrative Agent and the Lenders. Upon the
acceptance of any appointment as an Issuing Bank hereunder by a Lender that
shall agree to serve as successor Issuing Bank, such successor shall succeed to
and become vested with all the interests, rights and obligations of the retiring
Issuing Bank and the retiring Issuing Bank shall be discharged from its
obligations to issue additional, extend, or increase the amount of Letters of
Credit hereunder without affecting its rights and obligations with respect to
Letters of Credit previously issued by it. At the time such removal or
resignation shall become effective, the Borrower shall pay all accrued and
unpaid fees pursuant to Section 2.05(c)(ii). The acceptance of any appointment
as an Issuing Bank hereunder by a successor Lender shall be evidenced by an
agreement entered into by such successor, in a form reasonably satisfactory to
the Borrower and the Administrative Agent, and, from and after the effective
date of such agreement, (i) such successor Lender shall have all the rights and
obligations of the previous Issuing Bank under this Agreement and the other Loan
Documents and (ii) references herein and in the other Loan Documents to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the resignation or removal of the Issuing Bank
hereunder, the retiring Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank set forth in
this Agreement and the other Loan Documents with respect to Letters of Credit
issued by it prior to such resignation or

97

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

 

removal, but shall not be required to issue additional Letters of Credit or
extend or increase the amount of Letters of Credit then outstanding.
     (j) Cash Collateralization. If any Event of Default pursuant to clauses
(b), (c), (g) or (h) of Article VII shall occur and be continuing, or the
maturity of the Loans has been accelerated and/or the Commitments have been
terminated, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, the Majority Revolving Credit Lenders) thereof and of the
amount to be deposited, deposit in an account with the Administrative Agent, for
the ratable benefit of the Lenders with Revolving L/C Exposure, an amount in
cash equal to the Revolving L/C Exposure as of such date. Such deposit shall be
held, upon the occurrence of any such Event of Default, and for so long as such
Event of Default is continuing, by the Administrative Agent as collateral for
the payment and performance of the obligations of the Borrower with respect to
Letters of Credit under this Agreement. The Administrative Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account. Other than any interest earned on the investment of such
deposits in Cash Equivalents, which investments shall be made by the
Administrative Agent in accordance with its internal policies applied to
transactions of the size and nature provided for in the Loan Documents, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Upon the occurrence and during the
continuance of an Event of Default pursuant to clauses (b), (c), (g) or (h) of
Article VII, or acceleration of the maturity of the Loans, and/or termination of
the Commitments, moneys in such account shall (i) automatically be applied by
the Administrative Agent to reimburse the Issuing Bank for L/C Disbursements for
which it has not been reimbursed, (ii) be held for the satisfaction of the
reimbursement obligations of the Borrower for the Revolving L/C Exposure at such
time and (iii) if the maturity of the Loans has been accelerated (but subject to
the consent of the Majority Revolving Credit Lenders), be applied to satisfy the
Guaranteed Obligations hereunder. If the Borrower is required to provide an
amount of cash collateral hereunder as a result of the occurrence and during the
continuance of an Event of Default pursuant to clauses (b), (c), (g) or (h) of
Article VII, or acceleration of the maturity of the Loans and/or termination of
the Commitments, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrower within three Business Days after all such Events of
Default have been cured or waived.
     (k) Additional Issuing Banks. The Borrower may, at any time and from time
to time with the consent of the Administrative Agent (which consent shall not be
unreasonably withheld) and such Lender, designate one or more additional Lenders
to act as an issuing bank under the terms of the Agreement. Any Lender
designated as an issuing bank pursuant to this paragraph shall be deemed to be
an “Issuing Bank” (in addition to being a Lender) in respect of Letters of
Credit issued or to be issued by such Lender, and, with respect to such Letters
of Credit, such term shall thereafter apply to the other Issuing Bank and such
Lender.
     SECTION 2.24 Funded L/C Collateral Accounts. (a) On the Third Restatement
Date, the Funded L/C SPV shall establish a Funded L/C Collateral Account in
respect of each Cash Collateralized Letter of Credit Facility for the purpose of
cash collateralizing the Funded L/C SPV’s obligations to one or more LC Issuers
pursuant to and in accordance with the terms and provisions of the applicable
Cash Collateralized Letter of Credit Facilities. On the Third Restatement Date,
the proceeds of the Credit-Linked Deposits received by the Funded L/C SPV from
the Borrower pursuant to the Funded L/C SPV Equity Contribution shall be
deposited in each such applicable Funded L/C Collateral Account.
     (b) Each of the Borrower, the Administrative Agent and each Funded L/C
Lender hereby acknowledges and agrees that, as of the Third Restatement Date,
each Funded L/C Lender shall be deemed to have funded its Credit-Linked Deposit
to the Borrower for application in the

98

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

 

manner contemplated by Section 2.01(c). Notwithstanding any of the foregoing to
the contrary, the Borrower (or, in the case of fees and specified return in
accordance with Section 2.24(b) of the Second Restated Credit Agreement, the
Deposit Bank or the Borrower, as applicable) shall pay to each Funded L/C Lender
holding a Credit-Linked Deposit immediately prior to the Third Restatement Date,
through the Administrative Agent, all fees accrued on such Credit-Linked Deposit
pursuant to the Second Restated Credit Agreement through the Third Restatement
Date, as more fully set forth in the Third Amendment Agreement.
     SECTION 2.25. Incremental Facilities. (a) The Borrower may, by written
notice to the Administrative Agent, elect to request (x) the establishment of
one or more new term loan commitments (the “New Term Loan Commitments”) and/or
(y) prior to the latest Revolving Credit Maturity Date at such time, an increase
to the existing Revolving Credit Commitments (any such increase, the “New
Revolving Credit Commitments” and, together with the New Term Loan Commitments,
the “New Loan Commitments”), (1) in each case to effect the incurrence of
secured Indebtedness permitted to be incurred pursuant to Section 6.01(p) in an
amount not in excess of (and not in duplication of) the amount of secured
Indebtedness permitted to be incurred pursuant to Section 6.01(p) in the
aggregate and not less than $50,000,000 individually (or such lesser amount
which shall be reasonably approved by the Administrative Agent or such lesser
amount that shall constitute the difference between the amount of secured
Indebtedness permitted to be incurred pursuant to Section 6.01(p) as of such
date and (A) the amount of secured Indebtedness incurred pursuant to
Section 6.01(p) after the Third Restatement Date and prior to such date plus
(B) all such New Loan Commitments obtained prior to such date), and integral
multiples of $5,000,000 in excess of that amount (it being understood that any
Indebtedness incurred pursuant to this Section 2.25 shall correspondingly reduce
the amount of Indebtedness permitted to be incurred pursuant to Section 6.01(p),
and vice versa) plus (2) in the case of New Revolving Credit Commitments only,
in an amount not in excess of (and not in duplication of the amount of New
Revolving Credit Commitments under clause (1), but in addition thereto)
$1,000,000,000 less the aggregate amount of Revolving Credit Commitments then
outstanding (or such lesser amount which shall be reasonably approved by the
Administrative Agent). Each such notice shall specify the date (each, an
“Increased Amount Date”) on which the Borrower proposes that the New Loan
Commitments shall be effective, which shall be a date not less than ten Business
Days after the date on which such notice is delivered to the Administrative
Agent; provided that the Borrower shall first offer the Lenders, on a pro rata
basis, the opportunity to provide all of the New Loan Commitments prior to
offering such opportunity to any other Person that is an eligible assignee
pursuant to Section 9.04(b); provided, further, that any Lender offered or
approached to provide all or a portion of the New Loan Commitments may elect or
decline, in its sole discretion, to provide a New Loan Commitment. Such New Loan
Commitments shall become effective, as of such Increased Amount Date; provided
that (i) no Default or Event of Default shall exist on such Increased Amount
Date immediately before or immediately after giving effect to such New Loan
Commitments, as applicable; (ii) both before and after giving effect to the
making of any Series of New Term Loans or New Revolving Loans, each of the
conditions set forth in Section 4.01 shall be satisfied; (iii) the Borrower and
its Subsidiaries shall be in pro forma compliance with each of the covenants set
forth in Sections 6.13 and 6.14 as of the last day of the most recently ended
fiscal quarter for which financial statements are required to be delivered
pursuant to Section 5.04(a) and 5.04(b) immediately after giving effect to such
New Loan Commitments and any Investment to be consummated in connection
therewith; (iv) the New Loan Commitments shall be effected pursuant to one or
more Joinder Agreements executed by the Borrower, the Lenders providing such New
Loan Commitments and the Administrative Agent, and each of which shall be
recorded in the Register; (v) the Borrower shall make any payments required
pursuant to Section 2.16 in connection with the New Loan Commitments, as
applicable; (vi) the Borrower shall deliver or cause to be delivered any
customary and appropriate legal opinions or other documents reasonably requested
by the

99

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

 

Administrative Agent in connection with any such transaction; and (vii) the
requirements set forth in Section 9.19 shall have been satisfied. Any New Term
Loans made on an Increased Amount Date shall be designated as a separate series
(a “Series”) of New Term Loans for all purposes of this Agreement and the other
Loan Documents.
     (b) On any Increased Amount Date on which New Revolving Credit Commitments
are effected, subject to the satisfaction of the foregoing terms and conditions,
(i) each of the Lenders with Revolving Credit Commitments shall assign to each
Lender with a New Revolving Credit Commitment (each, a “New Revolving Credit
Lender”) and each of the New Revolving Credit Lenders shall purchase from each
of the Lenders with Revolving Credit Commitments, at the principal amount
thereof (together with accrued interest), such interests in the Revolving Loans
outstanding on such Increased Amount Date as shall be necessary in order that,
after giving effect to all such assignments and purchases, such Revolving Credit
Loans will be held by existing Lenders with Revolving Credit Loans and New
Revolving Credit Lenders ratably in accordance with their Revolving Credit
Commitments after giving effect to the addition of such New Revolving Credit
Commitments to the Revolving Credit Commitments, (ii) each New Revolving Credit
Commitment shall be deemed for all purposes a Revolving Credit Commitment and
each loan made thereunder (a “New Revolving Loan”) shall be deemed, for all
purposes, a Revolving Credit Loan and (iii) each New Revolving Credit Lender
shall become a Lender with respect to its New Revolving Credit Commitment and
all matters relating thereto.
     (c) On any Increased Amount Date on which any New Term Loan Commitments of
any Series are effective, subject to the satisfaction of the foregoing terms and
conditions, (i) each Lender with a New Term Loan Commitment (each, a “New Term
Loan Lender”) of any Series shall make a loan to the Borrower (a “New Term
Loan”) in an amount equal to its New Term Loan Commitment of such Series, and
(ii) each New Term Loan Lender of any Series shall become a Lender hereunder
with respect to its New Term Loan Commitment of such Series and the New Term
Loans of such Series made by such Lender pursuant thereto.
     (d) The Administrative Agent shall notify the Lenders promptly upon receipt
of the Borrower’s notice of each Increased Amount Date and in respect thereof
(i) the Series of New Term Loan Commitments and New Term Loan Lenders of such
Series or the New Revolving Credit Commitments and New Revolving Credit Lenders,
as applicable, and (ii) in the case of each notice to any Lender with Revolving
Credit Loans, the respective interests in such Lender’s Revolving Credit Loans
subject to the assignments contemplated by clause (b) of this Section 2.25.
     (e) The terms and provisions of the New Term Loans and New Term Loan
Commitments of any Series shall be, except as otherwise set forth herein or in
the Joinder Agreement, identical to the Term B Loans; provided, however, that
(i) the New Term Loan Maturity Date for any Series shall be determined by the
Borrower and the applicable New Term Loan Lenders and shall be set forth in the
applicable Joinder Agreement; provided that (x) the Weighted Average Life to
Maturity of all New Term Loans of any Series shall be no shorter than the
Weighted Average Life to Maturity of the Class of Term B Loans having the Latest
Maturity Date of all Classes of Term B Loans and (y) the applicable New Term
Loan Maturity Date of each Series shall be no shorter than the Latest Maturity
Date of all Classes of Term B Loans and (ii) the rate of interest applicable to
the New Term Loans of each Series shall be determined by the Borrower and the
applicable New Term Loan Lenders and shall be set forth in the applicable
Joinder Agreement. The terms and provisions of the New Revolving Loans and New
Revolving Credit Commitments shall be such that they shall be identical to those
of the Revolving Credit Loans and the Revolving Credit Commitments as in effect
on the Increased Amount Date with respect to such New Revolving Loans and New
Revolving Credit Commitments.

100

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

 

     (f) Each Joinder Agreement may, without the consent of any other Lenders,
effect such amendments to this Agreement and the other Loan Documents as may be
necessary or appropriate, in the opinion of the Administrative Agent and the
Borrower, to effect the provisions of this Section 2.25.
     SECTION 2.26. Incremental Refinancing Facilities. (a) The Borrower may by
written notice to the Administrative Agent elect to request the establishment of
one or more new tranches of (i) Term Loan Commitments (the “Refinancing Term
Loan Commitments”), in an aggregate amount not less than $50,000,000
individually (or such lesser amount which shall be reasonably approved by the
Administrative Agent), and integral multiples of $5,000,000 in excess of that
amount, the proceeds of which shall be used solely to repay the Term B Loans or
Credit-Linked Deposits as required by Section 2.13(c) and (ii) Revolving Credit
Commitments (the “Refinancing Revolving Credit Commitments” and, together with
the Refinancing Term Loan Commitments, the “Refinancing Loan Commitments”), in
an aggregate amount not less than $50,000,000 individually (or such lesser
amount which shall be reasonably approved by the Administrative Agent), and
integral multiples of $5,000,000 in excess of that amount, the proceeds of which
shall be used solely to permanently replace Revolving Credit Commitments. Each
such notice shall specify the date (each, a “Refinancing Amount Date”) on which
the Borrower proposes that the Refinancing Loan Commitments shall be effective,
which shall be a date not less than ten Business Days after the date on which
such notice is delivered to the Administrative Agent. Such Refinancing Loan
Commitments shall become effective as of such Refinancing Amount Date; provided
that (i) no Default or Event of Default shall exist on such Refinancing Amount
Date immediately before or immediately after giving effect to such Refinancing
Loan Commitments, as applicable; (ii) both before and after giving effect to the
making of any Refinancing Term Loans or Refinancing Revolving Loans, each of the
conditions set forth in Section 4.01 shall be satisfied in respect of any such
Refinancing Term Loans or Refinancing Revolving Loans; (iii) the Borrower and
its Subsidiaries shall be in pro forma compliance with each of the covenants set
forth in Sections 6.13 and 6.14 as of the last day of the most recently ended
fiscal quarter for which financial statements are required to be delivered
pursuant to Section 5.04(a) and 5.04(b) immediately after giving effect to such
Refinancing Loan Commitments; (iv) the Refinancing Loan Commitments shall be
effected pursuant to one or more Joinder Agreements executed by the Borrower,
the Lenders providing such Refinancing Loan Commitments and the Administrative
Agent, and each of which shall be recorded in the Register; (v) the Borrower
shall make any payments required pursuant to Section 2.16 (which payment may be
financed with proceeds of the Refinancing Term Loans or Refinancing Revolving
Loans) and shall pay all fees and expenses due and payable to the Agents and the
Lenders in connection with the Refinancing Loan Commitments, as applicable;
(vi) the Borrower shall deliver or cause to be delivered any customary and
appropriate legal opinions or other documents reasonably requested by the
Administrative Agent in connection with any such transaction; and (vii) the
requirements set forth in Section 9.19 shall have been satisfied. Any
Refinancing Term Loans made on a Refinancing Amount Date shall be designated as
a separate series (a “Refinancing Series”) of Refinancing Term Loans for all
purposes under this Agreement and the other Loan Documents.
     (b) The terms and provisions of any Term B Loans made under the Refinancing
Term Loan Commitments shall be such that, except as otherwise set forth herein
or in the Joinder Agreement, they shall be identical to those of the existing
Term B Loans; provided, however, that (i) (x) the Weighted Average Life to
Maturity of all Refinancing Term Loans of any Refinancing Series shall be no
shorter than the Weighted Average Life to Maturity of the applicable Class of
Term B Loans or Credit-Linked Deposits being refinanced

101

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

 

and (y) the applicable Refinancing Term Loan Maturity Date of each Refinancing
Series shall be no shorter than the Latest Maturity Date of all Classes of Term
B Loans or Credit-Linked Deposits, as applicable, being refinanced and (ii) the
rate of interest applicable to the Refinancing Term Loans of each Refinancing
Series shall be determined by the Borrower and the applicable new Lenders and
shall be set forth in each applicable Joinder Agreement.
     (c) On any Refinancing Amount Date on which any Refinancing Term Loan
Commitments of any Refinancing Series are effective, subject to the satisfaction
of the foregoing terms and conditions, (i) each Lender with a Refinancing Term
Loan Commitment (each, a “Refinancing Term Loan Lender”) of any Refinancing
Series shall make a Loan to the Borrower (a “Refinancing Term Loan”) in an
amount equal to its Refinancing Term Loan Commitment of such Refinancing Series
and (ii) each Refinancing Term Loan Lender of any Refinancing Series shall
become a Lender hereunder with respect to the Refinancing Term Loan Commitment
of such Refinancing Series and the Refinancing Term Loans of such Refinancing
Series made pursuant thereto.
     (d) The terms and provisions of any Refinancing Revolving Loans and
Refinancing Revolving Credit Commitments shall be such that, except as otherwise
set forth herein or in the Joinder Agreement, they shall be identical to those
of the Revolving Loans and the Revolving Credit Commitments as in effect on the
Refinancing Amount Date with respect to such Refinancing Revolving Loans and
Refinancing Revolving Credit Commitments; provided, however, that (i) the
applicable maturity date of such Refinancing Revolving Loans shall be no shorter
than the final maturity of the Revolving Credit Commitments being refinanced and
(ii) the rate of interest applicable to such Refinancing Revolving Loans shall
be determined by the Borrower and the applicable new Lenders and shall be set
forth in each applicable Joinder Agreement.
     (e) On any Refinancing Amount Date on which any Refinancing Revolving
Credit Commitments are effective, subject to the satisfaction of the foregoing
terms and conditions, (i) each Lender with a Refinancing Revolving Credit
Commitment (each, a “Refinancing Revolving Credit Lender”) shall commit to make
Revolving Loans to the Borrower (“Refinancing Revolving Loans”) in an amount
equal to its Refinancing Revolving Credit Commitment, and (ii) each Refinancing
Revolving Credit Lender shall become a Lender hereunder with respect to the
Refinancing Revolving Credit Commitment.
     (f) Each Joinder Agreement may, without the consent of any other Lenders,
effect such amendments to this Agreement and the other Loan Documents as may be
necessary or appropriate, in the opinion of the Administrative Agent and the
Borrower, to effect the provisions of this Section 2.26.
     SECTION 2.27. Defaulting Lenders. Notwithstanding any provision of this
Agreement to the contrary, if any Revolving Credit Lender becomes a Defaulting
Lender and if any Swingline Exposure or Revolving L/C Exposure exists at the
time such Revolving Credit Lender becomes a Defaulting Lender then so long as
such Swingline Exposure or Revolving L/C Exposure exists:
     (a) all or any part of the Swingline Exposure and Revolving L/C Exposure of
such Defaulting Lender shall, for so long as such Swingline Exposure and
Revolving L/C Exposure is outstanding, be reallocated among the non-Defaulting
Revolving Credit Lenders in accordance with their respective Pro Rata
Percentages but only to the extent the sum of all non-Defaulting Revolving
Credit Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s
Swingline Exposure and Revolving L/C Exposure does not exceed the total of all
non-Defaulting Revolving Credit Lenders’ Revolving Credit Commitments;

102

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

 

     (b) if the reallocation described in clause (a) above cannot, or can only
partially, be effected, the Borrower shall, within one Business Day following
notice by the Administrative Agent (i) first, prepay such Swingline Loans and
(ii) second, cash collateralize for the benefit of the Issuing Bank only the
Borrower’s obligations corresponding to such Defaulting Lender’s Revolving L/C
Exposure (after giving effect to any partial reallocation pursuant to clause
(a) above) in accordance with the procedures set forth in Section 2.23(j) for so
long as such Revolving L/C Exposure is outstanding; and
     (c) so long as such Lender is a Defaulting Lender, the Swingline Lender
shall not be required to fund any Swingline Loan and no Issuing Bank shall be
required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure will be 100% covered by the Revolving Credit
Commitments of the non-Defaulting Lenders and/or cash collateral will be
provided by the Borrower in accordance with clauses (a) and (b) above, and
participating interests in any such newly made Swingline Loan or any newly
issued or increased Letter of Credit shall be allocated among non-Defaulting
Lenders in a manner consistent with clause (a) (and such Defaulting Lender shall
not participate therein).
     If (i) an event of the type described in clause (g) or (h) of Article VII
shall occur with respect to the parent company of any Lender after the Third
Restatement Date and for so long as such event shall continue or (ii) the
Swingline Lender or such Issuing Bank has a good faith and reasonable belief
that any Lender has defaulted in fulfilling its obligations generally under
other agreements in which it commits to extend credit, then, in the case of each
of clauses (i) and (ii), the Swingline Lender shall not be required to fund any
Swingline Loan and such Issuing Bank shall not be required to issue, amend or
increase any Letter of Credit unless the Swingline Lender or the Issuing Bank,
as the case may be, shall be satisfied that the provisions of clauses (a) and
(b) above shall defease any risk in respect of such Lender hereunder or
otherwise shall have entered into arrangements with the Borrower or such Lender,
satisfactory to the Swingline Lender or the Issuing Bank, as the case may be, to
defease any risk in respect of such Lender hereunder.
     In the event that the Administrative Agent, the Borrower, the Issuing Banks
and the Swingline Lender each agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and the Revolving L/C Exposure of the Revolving Credit
Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving
Credit Commitment and on such date such Lender shall purchase at par such of the
Loans of the other Revolving Credit Lenders (other than Swingline Loans) as the
Administrative Agent shall determine may be necessary in order for such Lender
to hold such Loans in accordance with its Pro Rata Percentage.
ARTICLE III.
Representations and Warranties
     The Borrower represents and warrants to the Arrangers, the Administrative
Agent, the Collateral Agent, each of the Issuing Banks and each of the Lenders
that:
     SECTION 3.01. Organization; Powers. The Borrower and each of the
Subsidiaries (a) is duly organized or formed, validly existing and in good
standing under the laws of the jurisdiction of its organization or formation,
(b) has all requisite power and authority, and the legal right, to own and
operate its property and assets, to lease the property it operates as lessee and
to carry on its business as now conducted and, except to the extent the failure
to do so could not reasonably be expected to result in a Material Adverse
Effect, as proposed to be conducted, (c) is qualified to do business in, and is
in good standing in, every jurisdiction where such

103

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

 

qualification is required, except where the failure so to qualify, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect and (d) has the power and authority, and the legal right, to
execute, deliver and perform its obligations under this Agreement, each of the
other Loan Documents, the Senior Note Documents, the Acquisition Documentation
and each other agreement or instrument contemplated hereby or thereby to which
it is or will be a party, including, in the case of the Borrower, to borrow
hereunder and to issue the Senior Notes under the Senior Note Documents, in the
case of each Loan Party, to grant the Liens contemplated to be granted by it
under the Security Documents and, in the case of each Subsidiary Guarantor, to
Guarantee the Guaranteed Obligations hereunder as contemplated by the Guarantee
and Collateral Agreement.
     SECTION 3.02. Authorization; No Conflicts. The Transactions (a) have been
duly authorized by all requisite corporate, partnership or limited liability
company and, if required, stockholder, partner or member action and (b) will not
(i) violate (A) any applicable provision of any material law, statute, rule or
regulation, or of the certificate or articles of incorporation or other
constitutive documents or by-laws of the Borrower or any Subsidiary, (B) any
order of any Governmental Authority or arbitrator or (C) any provision of any
indenture or any material agreement or other material instrument to which the
Borrower or any Subsidiary is a party or by which any of them or any of their
property is or may be bound, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under, or
give rise to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under any such indenture or material agreement or
other material instrument or (iii) result in the creation or imposition of any
Lien upon or with respect to any property or assets now owned or hereafter
acquired by the Borrower or any other Loan Party (other than Liens created under
the Security Documents).
     SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by each Loan Party party thereto will constitute, a
legal, valid and binding obligation of such Loan Party enforceable against such
Loan Party, in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other laws now or
hereafter in effect relating to creditors’ rights generally and (including with
respect to specific performance) subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law, and to the
discretion of the court before which any proceeding therefor may be brought.
     SECTION 3.04. Governmental Approvals. No action, consent or approval of,
registration or filing with, notice to, or any other action by, any Governmental
Authority is or will be required in connection with the Transactions, except for
(a) the filing of UCC financing statements and filings with the United States
Patent and Trademark Office and the United States Copyright Office, (b)
recordation of the Mortgages, (c) such other actions specifically described in
Section 3.19, (d) any immaterial actions, consents, approvals, registrations or
filings or (e) such as have been made or obtained and are in full force and
effect.
     SECTION 3.05. [Reserved].
     SECTION 3.06. No Material Adverse Change. At any time after the Closing
Date, no event, change or condition has occurred that has had, or could
reasonably be expected to have, a Material Adverse Effect, since the Closing
Date.
     SECTION 3.07. Title to Properties; Possession Under Leases. (a) The
Borrower and the other Loan Parties have good and marketable title to, valid
leasehold interests in, or a license

104

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

 

or other right to use, all their respective material properties and material
assets that are included in the Collateral (including all Mortgaged Property)
and including valid rights, title and interests in or rights to control or
occupy easements or rights of way used in connection with such properties and
assets (“Easements”), free and clear of all Liens or other exceptions to title
other than Permitted Liens and minor defects in title that, in the aggregate,
are not substantial in amount and do not materially detract from the value of
the property subject thereto or interfere with its ability to conduct its
business as currently conducted or to utilize such properties and assets for
their intended purposes.
     (b) Except as set forth in Schedule 3.07 or where the failure to do so
could not reasonably be expected to result in a Material Adverse Effect,
(i) each of the Loan Parties has complied with all material obligations under
all material leases to which it is a party and all such material leases are in
full force and effect and (ii) each of the Loan Parties enjoys peaceful and
undisturbed possession under all such material leases.
     (c) Except as set forth in Schedule 3.07, none of the Borrower or any of
the other Loan Parties has received any notice of, nor has any knowledge of, any
pending or contemplated condemnation proceeding affecting the Mortgaged
Properties or any sale or disposition thereof in lieu of condemnation (i) as of
the Third Restatement Date or (ii) at any time thereafter, which in the case of
clause (ii) has had, or could reasonably be expected to have, a Material Adverse
Effect.
     (d) Except as set forth on Schedule 3.07, as of the Third Restatement Date
none of the Borrower or any of the Subsidiaries is obligated under any right of
first refusal, option or other contractual right to sell, assign or otherwise
dispose of any Mortgaged Property or any interest therein.
     SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Third
Restatement Date a list of all Subsidiaries, including each Subsidiary’s exact
legal name (as reflected in such Subsidiary’s certificate or articles of
incorporation or other constitutive documents) and jurisdiction of incorporation
or formation and the percentage ownership interest of the Borrower (direct or
indirect) therein, and identifies each Subsidiary that is a Loan Party. As of
the Third Restatement Date, the shares of capital stock or other Equity
Interests so indicated on Schedule 3.08 are owned by the Borrower, directly or
indirectly, free and clear of all Liens (other than Liens created under the
Security Documents and, in the case of Equity Interests (other than Pledged
Securities), Permitted Liens, and in respect of Pledged Securities, the
Permitted Liens set forth in clause (h) of the definition thereof) and all such
shares of capital stock are fully paid, and to the extent issued by a
corporation, non-assessable.
     SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth on
Schedule 3.09, there are no actions, suits or proceedings at law or in equity or
by or before any arbitrator or Governmental Authority now pending or, to the
knowledge of the Borrower, threatened against the Borrower or any Subsidiary or
any business, property or material rights of the Borrower or any Subsidiary
(i) that, as of the Third Restatement Date, involve any Loan Document or the
Transactions or, at any time thereafter, involve any Loan Document or the
Transactions and which could reasonably be expected to be material and adverse
to the interests of the Borrower and its Subsidiaries, taken as a whole, or the
Lenders, or (ii) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.
     (b) Except as set forth on Schedule 3.09, none of the Borrower or any of
the Subsidiaries or any of their respective material properties or assets is in
violation of any law, rule

105

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

 

or regulation (including any zoning, building, ordinance, code or approval or
any building permits), or is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where such violation
or default, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect (but not including, in each case, any
Environmental Law which is the subject of Section 3.17 or any energy regulation
matter which is the subject of Section 3.23).
     (c) Permits are in effect for each Mortgaged Property as currently
constructed.
     SECTION 3.10. Agreements. None of the Borrower or any of the Subsidiaries
is in default under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
     SECTION 3.11. Federal Reserve Regulations. (a) None of the Borrower or any
of the Subsidiaries is engaged principally, or as one of its material
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.
     (b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for purchasing or carrying Margin Stock or for the purpose of
purchasing, carrying or trading in any securities under such circumstances as to
involve the Borrower in a violation of Regulation X or to involve any broker or
dealer in a violation of Regulation T. No Indebtedness being reduced or retired
out of the proceeds of any Loans or Letters of Credit was or will be incurred
for the purpose of purchasing or carrying any Margin Stock. Following the
application of the proceeds of the Loans and the Letters of Credit, Margin Stock
will not constitute more than 25% of the value of the assets of the Borrower and
the Subsidiaries. None of the transactions contemplated by this Agreement will
violate or result in the violation of any of the provisions of the Regulations
of the Board, including Regulation T, U or X. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
     SECTION 3.12. Investment Company Act. None of the Borrower or any of the
Subsidiaries is an “investment company” as defined in, and subject to
registration under, the Investment Company Act of 1940, as amended from time to
time.
     SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of the
Revolving Loans and the Swingline Loans for the ongoing working capital
requirements, the payment of fees and expenses related to the Transactions and
general corporate purposes of the Borrower and the Subsidiaries. The Borrower
will request the issuance of Letters of Credit solely for the working capital
requirements and general corporate purposes of (i) the Borrower and the
Subsidiary Guarantors or (ii) any other Subsidiary (other than the Funded L/C
SPV), including to support Commodity Hedging Obligations. The Borrower will use
the proceeds of the Credit-Linked Deposits on the Third Restatement Date to make
the Funded L/C SPV Equity Contribution to the Funded L/C SPV and the Funded L/C
SPV shall deposit such proceeds in the Funded L/C Collateral Accounts as
described herein for the purpose of cash collateralizing the Funded L/C SPV’s
obligations to one or more LC Issuers pursuant to and in accordance with the
terms and provisions of Cash Collateralized Letter of Credit Facilities.

106

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

 

     SECTION 3.14. Tax Returns. The Borrower and each of the Subsidiaries has
timely filed or timely caused to be filed all material Federal, state, local and
foreign tax returns or materials required to have been filed by it and all such
tax returns are correct and complete in all material respects. The Borrower and
each of the Subsidiaries has timely paid or caused to be timely paid all
material Taxes due and payable by it and all assessments received by it, except
Taxes that are being contested in good faith by appropriate proceedings and for
which the Borrower or such Subsidiary, as applicable, shall have set aside on
its books adequate reserves in accordance with GAAP or except where the failure
to do so could not reasonably be expected to result in a Material Adverse
Effect. The Borrower has made adequate provision in accordance with GAAP for all
Taxes accrued and not yet due and payable. Except as permitted in clause (bb) of
the definition of “Permitted Liens”, no Lien for Taxes has been filed (except
for Taxes not yet delinquent that are being contested in good faith by
appropriate proceedings), and to the knowledge of the Borrower and each of the
Subsidiaries, based on the receipt of written notice, no claim is being
asserted, with respect to any Tax. Neither the Borrower nor any of the
Subsidiaries (a) intends to treat the Loans, the Transactions or any of the
other transactions contemplated by any Loan Document or the Acquisition as being
a “reportable transaction” (within the meaning of Treasury Regulation Section
1.6011-4) or (b) is aware of any facts or events that would result in such
treatment.
     SECTION 3.15. No Material Misstatements. No written information, report,
financial statement, exhibit or schedule furnished by or on behalf of the
Borrower or any Subsidiary to the Arrangers, the Administrative Agent or any
Lender for use in connection with the Transactions or the other transactions
contemplated by the Loan Documents or in connection with the negotiation of any
Loan Document or included therein or delivered pursuant thereto contained,
contains or will contain (as of the date of its delivery to the Arrangers, the
Administrative Agent or any Lender or, as modified or supplemented, as of the
Closing Date or the Third Restatement Date) any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were, are
or will be made, not misleading; provided that to the extent any such written
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection (including pro forma financial statements)
or is information of a general economic or market nature, the Borrower
represents only that it acted in good faith and upon assumptions believed to be
reasonable at the time, it being understood that projections are subject to
significant uncertainties and contingencies, many of which are beyond the
control of the Borrower and the Subsidiaries, and that no assurance can be given
that such projections will be realized.
     SECTION 3.16. Employee Benefit Plans. Except as could not reasonably be
expected to result in a Material Adverse Effect, the Borrower and each ERISA
Affiliate is in compliance with the applicable provisions of ERISA and, in
respect of the Benefit Plans and Multiemployer Plans, the Tax Code and the
regulations and published interpretations thereunder. No ERISA Event has
occurred or is reasonably expected to occur that, when taken together with all
other such ERISA Events, could reasonably be expected to result in a Material
Adverse Effect.
     SECTION 3.17. Environmental Matters. (a) Except as set forth in
Schedule 3.17 or except with respect to any matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, none of the Borrower or any of the Subsidiaries:
          (i) has failed to comply with any Environmental Law or to take all
actions necessary to obtain, maintain, renew and comply with any permit,
license, registration or other approval required under Environmental Law;

107

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

 

          (ii) has become a party to any administrative or judicial proceeding,
or possesses knowledge of any such proceeding that has been threatened, that
could result in the termination, revocation or modification of any permit,
license, registration or other approval required under Environmental Law;
          (iii) possesses knowledge that the Borrower or any of the Subsidiaries
has become subject to any Environmental Liability on any Mortgaged Property
(A) is subject to any Lien imposed pursuant to Environmental Law or (B) contains
Hazardous Materials of a form or type or in a quantity or location that could
reasonably be expected to result in any Environmental Liability;
          (iv) has received written notice of any claim or threatened claim,
with respect to any Environmental Liability other than those which have been
fully and finally resolved and for which no obligations remain outstanding; or
          (v) possesses knowledge of any facts or circumstances that could
reasonably be expected to result in any Environmental Liability or could
reasonably be expected to materially interfere with or prevent continued
material compliance with Environmental Laws in effect as of the First
Restatement Date and the date of each Credit Event by the Borrower or the
Subsidiaries.
     (b) Since the Third Restatement Date, there has been no change in the
status of the matters disclosed on Schedule 3.17 that, individually or in the
aggregate, has resulted in, or could reasonably be expected to result in, a
Material Adverse Effect.
     The representations and warranties in this Section 3.17 are the sole
representations and warranties in any Loan Document with respect to
environmental matters, including without limitation, those relating to
Environmental Law or Hazardous Materials.
     SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and
correct description of all material insurance coverage maintained by or on
behalf of the Borrower and the Subsidiaries as of the Third Restatement Date. As
of the Third Restatement Date, such insurance is in full force and effect and
all premiums that are due and owed have been duly paid. The Borrower and the
Subsidiaries are insured by financially sound insurers (subject to the proviso
in Section 5.02) and such insurance is in such amounts and covering such risks
and liabilities (and with such deductibles, retentions and exclusions) as are
maintained by companies of a similar size operating in the same or similar
businesses.
     SECTION 3.19. Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Collateral Trustee, for the
ratable benefit of the Secured Parties, a legal, valid, binding and enforceable
security interest in the Collateral described therein and proceeds thereof
(other than money not constituting identifiable proceeds of any Collateral),
subject to applicable insolvency, bankruptcy, reorganization, moratorium,
fraudulent transfer and other laws now or hereafter in effect generally
affecting rights of creditors and (including with respect to specific
performance) principles of equity, whether considered in a proceeding in equity
or in law and to the discretion of the court before which any proceeding
therefor may be brought, and (i) in the case of the Pledged Securities, upon the
earlier of (A) when such Pledged Securities are delivered to the Collateral
Trustee and (B) when financing statements in appropriate form are filed in the
offices specified on Schedule 3.19(a), (ii) in the case of Deposit Accounts not
constituting Excluded Perfection Assets or Counterparty Accounts, by the
execution and delivery of control agreements providing for “control” as
described in Section 9-104 of the UCC, (iii) in the case of Securities Accounts
not constituting Excluded Perfection Assets or

108

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

 

Counterparty Accounts, upon the earlier of (A) the filing of financing
statements in the offices specified on Schedule 3.19(a) and (B) the execution
and delivery of control agreements providing for “control” as described in
Section 9-106 of the UCC and (iv) in the case of all other Collateral described
therein (other than Excluded Perfection Assets, Intellectual Property
Collateral, money not credited to a Deposit Account or letter of credit rights
not constituting supporting obligations), when financing statements in
appropriate form are filed in the offices specified on Schedule 3.19(a), the
Guarantee and Collateral Agreement shall constitute a fully perfected Lien on,
all right, title and interest of the Secured Parties in such Collateral and
proceeds thereof, as security for the Guaranteed Obligations hereunder, in each
case prior and superior to the rights of any other Person (except, in the case
of all Collateral other than Pledged Securities in the possession of the
Collateral Trustee, with respect to Permitted Liens, and in respect of Pledged
Securities in the possession of the Collateral Trustee, the Permitted Liens set
forth in clauses (h) and (ff) of the definition thereof).
     (b) Each Intellectual Property Security Agreement is effective to create in
favor of the Collateral Trustee, for the ratable benefit of the Secured Parties,
a legal, valid, binding and enforceable security interest in the Intellectual
Property Collateral described therein and proceeds thereof (other than money not
constituting identifiable proceeds of any Intellectual Property Collateral),
subject to applicable insolvency, bankruptcy, reorganization, moratorium,
fraudulent transfer and other laws now or hereafter in effect generally
affecting rights of creditors and (including with respect to specific
performance) principles of equity, whether considered in a proceeding in equity
or in law and to the discretion of the court before which any proceeding
therefor may be brought. When each Intellectual Property Security Agreement is
filed in the United States Patent and Trademark Office and the United States
Copyright Office, respectively, together with financing statements in
appropriate form filed in the offices specified in Schedule 3.19(a), in each
case within the time period prescribed by applicable law, such Intellectual
Property Security Agreement shall constitute a fully perfected Lien on, and
security interest in (if and to the extent perfection may be achieved by such
filings), all right, title and interest of the grantors thereunder in the
Intellectual Property Collateral, as security for the Guaranteed Obligations
hereunder, in each case prior and superior in right to any other Person (except
with respect to Permitted Liens) (it being understood that subsequent recordings
in the United States Patent and Trademark Office and the United States Copyright
Office may be necessary to perfect a Lien on registered trademarks, trademark
applications, patents, patent applications, copyright registrations and
copyright applications acquired by the grantors after the Closing Date).
     (c) Each of the Mortgages is effective to create in favor of the Collateral
Trustee, for the ratable benefit of the Secured Parties, a legal, valid,
binding, subsisting and enforceable Lien on, and security interest in all of the
Loan Parties’ right, title and interest in and to the Mortgaged Property
described therein and proceeds thereof (other than money not constituting
identifiable proceeds of any Mortgaged Property), subject to applicable
insolvency, bankruptcy, reorganization, moratorium, fraudulent transfer and
other laws now or hereafter in effect generally affecting rights of creditors
and (including with respect to specific performance) principles of equity,
whether considered in a proceeding in equity or in law, and to the discretion of
the court before which any proceeding therefor may be brought. When the
Mortgages are filed in the offices specified on Schedule 3.19(c), each such
Mortgage shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereof in such Mortgaged Property
and proceeds thereof, as security for the Guaranteed Obligations hereunder, in
each case prior and superior in right to any other Person (except Liens
expressly permitted by clauses (f), (h), (i), (j), (k) (solely to the extent
that such Lien relating to such Permitted Refinancing Indebtedness was permitted
prior to such refinancing by clause (f), (h), (i), (j), (n) or (p)), (n), (p),
(q)(ii), (ee) and (ff) of the definition of “Permitted Liens”).

109

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

 

     SECTION 3.20. Location of Real Property. Schedule 3.20 lists completely and
correctly as of the Third Restatement Date all real property owned or leased by
the Borrower and the other Loan Parties and all real property to which the
Borrower and the other Loan Parties have an interest via easement, license or
permit and, in each case, the addresses thereof, indicating for each parcel
whether it is owned or leased. As of the Third Restatement Date, the Borrower
and the other Loan Parties own in fee or have valid leasehold or easement
interests in, as the case may be, all the real property set forth on
Schedule 3.20.
     SECTION 3.21. Labor Matters. As of the Third Restatement Date, there are no
strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending
or, to the knowledge of the Borrower, threatened. The hours worked by and
payments made to employees of the Borrower and the Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Federal,
state, material local or material foreign law applicable to such matters in any
material respect. All payments due from the Borrower or any Subsidiary, or for
which any claim may be made against the Borrower or any Subsidiary, on account
of wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of the Borrower or such Subsidiary,
except as could not reasonably be expected to have a Material Adverse Effect.
The consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Borrower or any Subsidiary is
bound.
     SECTION 3.22. Intellectual Property. Except as could not reasonably be
expected to result in a Material Adverse Effect, the Borrower and each of the
Subsidiaries owns, or is licensed or otherwise has the right to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and the
Subsidiaries does not infringe upon the rights of any other Person.
     SECTION 3.23. Energy Regulation. (a) The Borrower and any Subsidiary
Guarantor that is a holding company as such term is defined in PUHCA is exempt
in accordance with 18 CFR § 366.3 from the accounting, record-retention and
reporting requirements of PUHCA.
     (b) The Borrower is not subject to regulation as a “public utility” as such
term is defined in the FPA. Each Subsidiary Guarantor that is subject to
regulation as a “public utility” as such term is defined in the FPA and that
makes sales of energy or capacity that are not pursuant to a state regulatory
authority’s implementation of PURPA has an order from the FERC, which order is
not subject to any pending challenge, investigation, complaint, or other
proceeding, except as could not reasonably be expected to result in a Material
Adverse Effect and other than generic proceedings generally applicable in the
industry, (x) authorizing such Subsidiary Guarantor to engage in wholesale sales
of electricity and, to the extent permitted under its market-based rate tariff,
other transactions at market-based rates and (y) granting such waivers and
blanket authorizations as are customarily granted to entities with market-based
rate authority, including blanket authorizations to issue securities and to
assume liabilities pursuant to Section 204 of the FPA. With respect to each
Subsidiary Guarantor described in the preceding sentence, except as could not
reasonably be expected to result in a Material Adverse Effect and except as set
forth on Schedule 3.23(b), the FERC has not imposed any rate caps, mitigation
measures, or other limits on market-based sales of power by that Subsidiary
Guarantor, other than (i) rate caps and mitigation measures generally applicable
to similarly situated marketers or generators selling electricity, ancillary
services or other services at wholesale at market-based rates in the geographic
market where such Subsidiary Guarantor conducts its business, and (ii) the
restrictions imposed on Cabrillo Power I LLC, Cabrillo Power II LLC, Devon Power
LLC, Middletown Power LLC, Montville Power LLC, Norwalk Power LLC, and
Connecticut Jet

110

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

 

Power LLC pursuant to those entities’ “reliability must run” agreements and/or
other agreements/arrangements with the independent system operators, or other
similar arrangements.
     (c) Each Subsidiary Guarantor of the Borrower participating in the
wholesale or retail power market in ERCOT has registered with the PUCT to sell
electricity at wholesale or retail market-based rates, and, except as could not
reasonably be expected to result in a Material Adverse Effect, the PUCT has not
imposed any specific rate cap or mitigation measure (other than generic
proceedings generally applicable in the industry). To its knowledge, as of the
Third Restatement Date, the rates charged by such Subsidiary Guarantor are not
subject to any pending challenge or investigation.
     (d) Except as could not reasonably be expected to result in a Material
Adverse Effect and except as set forth on Schedule 3.23(d), there are no
complaint proceedings pending with the FERC or the PUCT seeking abrogation or
modification or refunds, or otherwise investigating the rates, terms or
conditions, of a sale of power by the Borrower or its Subsidiary Guarantors.
     (e) Except as could not reasonably be expected to result in a Material
Adverse Effect, each of the Borrower and each of the Subsidiary Guarantors, as
applicable, has filed or caused to be filed with the applicable state or local
utility commission or regulatory bodies, ERCOT and the FERC all forms,
applications, notices, statements, reports and documents (including all exhibits
and amendments thereto) required to be filed by it under all Applicable Laws,
including PUHCA, the FPA and state utility laws and the respective rules
thereunder, all of which complied with the applicable requirements of the
appropriate act and rules, regulations and orders thereunder in effect on the
date each was filed.
     (f) None of the Borrower or any of the Subsidiary Guarantors is subject to
any material state laws or material regulations respecting rates or the
financial or organizational regulation of utilities, other than (i) with respect
to those Subsidiary Guarantors that are QFs, such state regulations contemplated
by 18 C.F.R. Section 292.602(c), (ii) “lightened regulation” by the New York
State Public Service Commission (the “NYPSC”) of the type described in the
NYPSC’s order issued on September 23, 2004 in Case 04-E-0884, (iii) the
assertion of jurisdiction by the State of California over maintenance and
operating standards of all generating facilities pursuant to SB 39XX and
(iv) with respect to Subsidiary Guarantors that are Texas retail electric
providers, regulations issued by the PUCT. Other than the approval of the NYPSC,
which was granted by an order issued in Case 05-E-1528 (February 10, 2006), no
approval is required to be obtained in connection with the Transactions by
Borrower or its Subsidiary Guarantors from the PUCT, the FERC, or any other
state or federal Governmental Authority with jurisdiction over the energy sales
or financing arrangements of the Borrower and its Subsidiary Guarantors.
     (g) As of the Third Restatement Date, each Facility identified as a “QF” in
Schedule 3.23(g) is a QF under PURPA and the current rules and regulations
promulgated thereunder. As of the Third Restatement Date, each person identified
as an “EWG” in Schedule 3.23(g) is an “exempt wholesale generator” within the
meaning of PUHCA and the Energy Policy Act of 2005, as amended. As of the Third
Restatement Date, each person identified as a FUCO in Schedule 3.23(g) is a
“foreign utility company” within the meaning of PUHCA. As of the Third
Restatement Date, each person identified as a “REP” in Schedule 3.23(g) is a
“retail electric provider” under the Texas Public Utility Regulatory Act and the
rules and regulations promulgated thereunder.
     SECTION 3.24. Solvency. Immediately after the consummation of the
Transactions that occurred on the Closing Date, the First Restatement Date and
the Second Restatement Date

111

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

 

and the Transactions to occur on the Third Restatement Date and immediately
following the making of each Loan (or other extension of credit hereunder) and
after giving effect to the application of the proceeds of each Loan (or other
extension of credit hereunder), (a) the fair value of the assets of the Loan
Parties, taken as a whole, at a fair valuation, taking into account the effect
of any indemnities, contribution or subrogation rights, will exceed their debts
and liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of the Loan Parties, taken as a whole, taking
into account the effect of any indemnities, contribution or subrogation rights,
will be greater than the amount that will be required to pay the probable
liability of their debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured;
(c) the Loan Parties, taken as a whole, will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) the Loan Parties, taken as a
whole, will not have unreasonably small capital with which to conduct the
business in which they are engaged as such business is now conducted and is
proposed to be conducted following the Closing Date, the First Restatement Date,
the Second Restatement Date and the Third Restatement Date.
     SECTION 3.25. Liabilities and Obligations of Funded L/C SPV. The Funded L/C
SPV has no material liability or other obligation (including Indebtedness,
Guarantees, contingent liabilities and liabilities for taxes) other than its
obligations to one or more LC Issuers pursuant to and in accordance with the
terms and provisions of Cash Collateralized Letter of Credit Facilities and
liabilities and obligations reasonably related, ancillary or incidental to any
Cash Collateralized Letter of Credit Facility.
ARTICLE IV.
Conditions of Lending
     The obligations of the Lenders to make Loans and the obligations of the
Issuing Banks to issue Letters of Credit hereunder are subject to the
satisfaction (or waiver in accordance with Section 9.08) of the following
conditions:
     SECTION 4.01. All Credit Events. On the date of each Borrowing on or after
the Closing Date, including each Borrowing of a Swingline Loan, on the date of
each issuance, amendment, extension or renewal of a Letter of Credit on or after
the Closing Date and on the Third Restatement Date (each such event being called
a “Credit Event”):
     (a) The Administrative Agent shall have received a notice of such Borrowing
as required by Section 2.03 (or such notice shall have been deemed given in
accordance with Section 2.03) or, in the case of the issuance, amendment,
extension or renewal of a Letter of Credit, the Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance,
amendment, extension or renewal of such Letter of Credit as required by
Section 2.23(b) or, in the case of the Borrowing of a Swingline Loan, the
Swingline Lender and the Administrative Agent shall have received a notice
requesting such Swingline Loan as required by Section 2.22(b).
     (b) The representations and warranties set forth in each Loan Document
shall be true and correct in all material respects on and as of the date of such
Credit Event with the same effect as though made on and as of such date, except
to the extent such representations and warranties expressly relate to an earlier
date, in which case such representations and warranties shall be true and
correct in all material respects on and as of such earlier date; provided that,
with respect to any Credit Event occurring on the Closing Date only, any breach
of any such representation or warranty shall not constitute a failure of this
condition unless it constitutes a breach of (i) a representation or

112

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

 

warranty made in the Purchase Agreement by the Target that is material to the
interests of the Lenders but only to the extent that the Borrower has the right
to terminate its obligations under the Purchase Agreement as a result of a
breach of such representation or warranty in the Purchase Agreement and (ii) a
representation or warranty of the Borrower set forth in any of Sections 3.01,
3.02, 3.03, 3.05 (solely with respect to financial statements of the Borrower
and its consolidated Subsidiaries), 3.11, 3.12, 3.15 and 3.25 hereof.
     (c) The Borrower and each other Loan Party shall be in compliance with all
the terms and provisions set forth in each Loan Document on its part to be
observed or performed, and, at the time of and immediately after such Credit
Event, no Event of Default or Default shall have occurred and be continuing;
provided that, with respect to any Credit Event occurring on the Closing Date
only, any Default or Event of Default arising from the breach of any
representation or warranty set forth in the Loan Documents shall not constitute
a failure of this condition unless it constitutes a breach of (i) a
representation or warranty made in the Purchase Agreement by the Target that is
material to the interests of the Lenders but only to the extent that the
Borrower has the right to terminate its obligations under the Purchase Agreement
as a result of a breach of such representation or warranty in the Purchase
Agreement and (ii) a representation or warranty of the Borrower set forth in any
of Sections 3.01, 3.02, 3.03, 3.05 (solely with respect to financial statements
of the Borrower and its consolidated Subsidiaries), 3.11, 3.12, 3.15 and 3.25
hereof.
     (d) After giving effect to such Credit Event, the Aggregate Revolving
Credit Exposure shall not exceed the Total Revolving Credit Commitment.
     Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrower on the date of such Credit Event as to the matters
specified in paragraphs (b), (c) and (d) of this Section 4.01.
     SECTION 4.02. Conditions Precedent to Third Restatement Date. On the Third
Restatement Date:
     (a) The Administrative Agent shall have received, on behalf of itself, the
Lenders and the Issuing Bank, a favorable written opinion of (i) Kirkland &
Ellis LLP, counsel for the Borrower and the Subsidiaries, in form and substance
reasonably satisfactory to the Administrative Agent, and (ii) each local counsel
to the Borrower and the Subsidiaries as the Administrative Agent may reasonably
request, in each case (A) dated the Third Restatement Date, (B) addressed to the
Administrative Agent, the Collateral Agent, the Issuing Banks and the Lenders
and (C) covering such corporate, security interest and related matters relating
to the Loan Documents and the Transactions as the Administrative Agent shall
reasonably request and which are customary for transactions of the type
contemplated herein.
     (b) The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation or other formation documents, including
all amendments thereto, of each Loan Party, certified as of a recent date by the
Secretary of State of the state of its organization and a certificate as to the
good standing of each Loan Party as of a recent date, from such Secretary of
State; provided that in lieu of delivering certificates or articles of
incorporation for each Loan Party, the Borrower may deliver a certificate of a
duly authorized officer certifying that there have been no amendments to those
certificates or articles of incorporation previously delivered to the
Administrative Agent in connection with the Second Restated Credit Agreement;
(ii) a certificate of the Secretary or Assistant Secretary of each Loan Party
dated the Third Restatement Date and certifying (A) that attached thereto is a
true and complete copy of the by-laws of such Loan Party as in effect on the
Third Restatement Date and at all times since a date

113

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

 

prior to the date of the resolutions described in clause (B) below; provided
that in lieu of delivering by-laws for each Loan Party, the Borrower may deliver
a certificate of a duly authorized officer certifying that there have been no
amendments to those by-laws previously delivered to the Administrative Agent in
connection with the Second Restated Credit Agreement, (B) that attached thereto
is a true and complete copy of resolutions duly adopted by the Board of
Directors of such Loan Party authorizing the execution, delivery and performance
of the Loan Documents to which such Person is a party and, in the case of the
Borrower, the borrowings hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C) that the
certificate or articles of incorporation or other formation documents of such
Loan Party have not been amended since the date of the last amendment thereto
shown on the certificate of good standing furnished pursuant to clause (i) above
and (D) as to the incumbency and specimen signature of each officer executing
any Loan Document or any other document delivered in connection herewith on
behalf of such Loan Party; (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (ii) above; and (iv) if requested,
documentation and other information required by bank regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including the USA Patriot Act (title III of Pub. L. 107-56 (signed
into law October 26, 2001)).
     (c) The Administrative Agent shall have received a certificate, dated the
Third Restatement Date and signed by a Financial Officer of the Borrower,
confirming compliance with the conditions precedent set forth in paragraphs (b),
(c) and (d) of Section 4.01.
     (d) The Administrative Agent shall have received (i) this Agreement,
executed and delivered by a duly authorized officer of the Borrower, (ii) the
Third Amendment Reaffirmation Agreement, executed and delivered by a duly
authorized officer of the Borrower and each Subsidiary Guarantor, (iii) the
Third Amendment Agreement, executed and delivered by a duly authorized officer
of the Borrower and each Subsidiary Guarantor in form and substance reasonably
satisfactory to the Administrative Agent and (iv) the Collateral Trust Agreement
executed and delivered by a duly authorized officer of the Borrower, each
Subsidiary Guarantor and the Collateral Trustee.
     (e) The Borrower shall have paid all fees and reasonable, documented
out-of-pocket costs and expenses (including reasonable legal fees and expenses
of Latham & Watkins LLP, counsel to the Administrative Agent, and one local
counsel to the Administrative Agent per relevant jurisdiction and their
technical and other non-financial advisors, title premiums, survey charges and
recording taxes and fees) and other compensation accrued and payable as of such
date to the Administrative Agent as separately agreed by the Borrower and the
Administrative Agent.
     (f) The Administrative Agent shall have received the results of a recent
Lien and judgment search in each relevant jurisdiction with respect to the
Borrower and the Subsidiary Guarantors or Subsidiaries that shall otherwise have
material assets that are included in the Collateral, and such search shall
reveal no Liens on any of the assets of the Borrower or any of such Subsidiaries
except, in the case of assets other than Pledged Securities in the possession of
the Collateral Trustee, for Permitted Liens, and in respect of Pledged
Securities in the possession of the Collateral Trustee, the Permitted Liens set
forth in clauses (h) and (ff) of the definition thereof.
     (g) The Administrative Agent shall have received a solvency certificate
from a Financial Officer of the Borrower, in form and substance reasonably
satisfactory to each Arranger, supporting the conclusions that after giving
effect to the Transactions, the Borrower

114

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

 

will not be insolvent or be rendered insolvent by the Indebtedness incurred in
connection therewith, or be left with unreasonably small capital with which to
engage in its businesses, or have incurred debts beyond its ability to pay such
debts as they mature.
     (h) The Administrative Agent shall be reasonably satisfied that the
conditions set forth in Section 4 of the Third Amendment Agreement shall have
been satisfied.
     (i) The Administrative Agent shall be reasonably satisfied that (i) the
Borrower shall have contributed the proceeds of the Credit-Linked Deposits to
the Funded L/C SPV pursuant to the Funded L/C SPV Equity Contribution, (ii) the
Borrower shall have pledged and granted, or shall have caused its Subsidiaries
to pledge and grant, a first-priority security interest in the Equity Interests
of the Funded L/C SPV owned directly or indirectly by the Borrower to the
Collateral Trustee, for the benefit of the Secured Parties, and (iii) the Funded
L/C SPV shall have entered into one or more Cash Collateralized Letter of Credit
Facilities with one or more LC Issuers in an aggregate amount equal to or in
excess of the aggregate face amount of all Funded Letters of Credit (as defined
in the Second Restated Credit Agreement) outstanding as of the Third Restatement
Date.
ARTICLE V.
Affirmative Covenants
     The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document (other than indemnification and other
contingent obligations in each case not then due and payable) shall have been
paid in full and all Letters of Credit have been canceled or have expired and
all amounts drawn thereunder have been reimbursed in full or reimbursement
thereof shall have been cash-collateralized in an amount equal to 103% of the
Revolving L/C Exposure as of such time, the Borrower will, and will cause each
of the Subsidiaries to:
     SECTION 5.01. Corporate Existence. Subject to Section 6.04 hereof, and only
with respect to the Borrower and its Restricted Subsidiaries, do or cause to be
done all things necessary to preserve and keep in full force and effect (a) its
corporate existence, and the corporate, partnership or other existence of each
of its subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Borrower or any such
subsidiary; and (b) the rights (charter and statutory), licenses and franchises
of the Borrower and its subsidiaries, except where the failure to so preserve
and keep could not reasonably be expected to result in a Material Adverse
Effect; provided, however, that neither the Borrower nor any Restricted
Subsidiary shall be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any of its subsidiaries, if
the Borrower or such Restricted Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Borrower
and its subsidiaries, taken as a whole, and that the loss thereof could not
reasonably be expected to result in a Material Adverse Effect.
     SECTION 5.02. Insurance.
     (a) Except to the extent any such insurance is not generally available in
the marketplace from commercial insurers, keep its properties that are of an
insurable character adequately insured in accordance with industry standards at
all times by financially sound insurers (provided, however, that there shall be
no breach of this Section 5.02 if any such insurer becomes financially unsound
and such Loan Party obtains reasonably promptly insurance

115

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

 

coverage from a different financially sound insurer), which, in the case of any
insurance on any Mortgaged Property, are licensed to do business in the States
where the applicable Mortgaged Property is located; maintain such other
insurance, to such extent and against such risks (and with such deductibles,
retentions and exclusions), in each case as is customary with companies of a
similar size operating in the same or similar businesses; maintain such other
insurance as may be required by law; and maintain such other insurance as
otherwise required by the Security Documents.
     (b) If any Mortgaged Property is required to be insured pursuant to the
Flood Disaster Protection Act of 1973 or the National Flood Insurance Act of
1968, and the regulations promulgated thereunder, because it is located in an
area which has been identified by the Secretary of Housing and Urban Development
as a “special flood hazard area,” provide, maintain and keep in force at all
times (subject, in each case, to the terms and conditions of Section 5.09(b))
flood insurance covering such Mortgaged Property in an amount not less than the
lesser of (i) the outstanding principal amount of Indebtedness secured by the
applicable Mortgage or (ii) the maximum amount of coverage made available with
respect to the particular type of property under the National Flood Insurance
Act of 1968, as amended by the Flood Disaster Protection Act of 1973 (or any
greater limits to the extent required by applicable law from time to time).
     SECTION 5.03. Taxes. Pay, and cause each of its Subsidiaries to pay, prior
to delinquency, all material Taxes, assessments, and governmental levies except
such as are contested in good faith and by appropriate proceedings and where the
Borrower or the relevant Subsidiary shall have set aside on its books adequate
reserves with respect thereto in accordance with GAAP and such contest operates
to suspend collection of the contested obligation, tax, assessment or charge and
enforcement of a Lien.
     SECTION 5.04. Financial Statements, Reports, etc. In the case of the
Borrower, furnish to the Administrative Agent for distribution to each Lender:
     (a) within 90 days after the end of each fiscal year, its consolidated
balance sheet and related statements of income, stockholders’ equity and cash
flows showing the financial condition as of the close of such fiscal year of the
Borrower and its consolidated Subsidiaries at such time and the results of its
operations and the operations of such Subsidiaries during such year, together
with comparative figures for the immediately preceding fiscal year (or, in the
case of the fiscal year ending December 31, 2005, the comparable period of more
than twelve months ending December 31, 2004), all audited by KPMG LLP or other
independent public accountants of recognized national standing and accompanied
by an opinion of such accountants reasonably satisfactory to the Administrative
Agent (which shall not be qualified in any material respect, except for
qualifications relating to accounting changes (with which such independent
public accountants shall concur) in response to FASB releases or other
authoritative pronouncements) to the effect that such consolidated financial
statements fairly present the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;
     (b) within 45 days after the end of each of the first three fiscal quarters
of each fiscal year, its unaudited consolidated balance sheet and related
statements of income, stockholders’ equity and cash flows showing the financial
condition as of the close of such fiscal quarter of the Borrower and its
consolidated Subsidiaries at such time and the results of its operations and the
operations of such Subsidiaries during such fiscal quarter and the then elapsed
portion of the fiscal year, and comparative figures for the same periods in the
immediately preceding fiscal year, all certified by one of its Financial
Officers to the effect that such financial statements, while not examined by
independent public accountants, reflect in the opinion of the Borrower all

116

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

 

adjustments necessary to present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis as of the end of and for such periods in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;
     (c) (i) concurrently with any delivery of financial statements under
paragraph (a) above for the year ended December 31, 2006 and each year
thereafter, a letter from the accounting firm rendering the opinion on such
statements (which letter may be limited to accounting matters and disclaim
responsibility for legal interpretations) stating whether, in connection with
their audit examination, anything has come to their attention which would cause
them to believe that any Default or Event of Default existed on the date of such
financial statements and if such a condition or event has come to their
attention and (ii) concurrently with any delivery of financial statements under
paragraph (a) or (b) above for the quarter ended June 30, 2006 and each quarter
and/or year thereafter, a certificate of a Financial Officer of the Borrower
(A) certifying that no Event of Default or Default has occurred or, if such an
Event of Default or Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto, (B) setting forth computations in reasonable detail as is reasonably
satisfactory to the Administrative Agent demonstrating compliance with the
covenants contained in Sections 6.13 and 6.14 and setting forth the Borrower’s
calculation of Excess Cash Flow, Consolidated EBITDA and Capital Expenditures
made by the Borrower and the Restricted Subsidiaries (other than any Excluded
Subsidiaries) (1) in the case of the fiscal year ending December 31, 2006 (and
together with the certificate required by paragraph (a) above), for the fiscal
year then ended and the Available Amount as at the end of such fiscal year and
(2) in the case of each ECF Period ending thereafter (and together with the
certificate required by paragraph (a) above if the applicable ECF Period is a
fiscal year, or together with the certificate required by paragraph (b) in all
other cases), for the applicable ECF Period and the Available Amount as at the
end of the applicable ECF Period (and in any event for each applicable fiscal
year ending thereafter and the Available Amount as at the end of such fiscal
year) and (C) disclosing any Asset Sale or Recovery Event (other than any Asset
Sale or Recovery Event not subject to the mandatory prepayment provisions set
forth in Section 2.13(b)(i) pursuant to the first proviso of the definition of
Net Cash Proceeds) that was consummated in the preceding fiscal quarter and
specifying the nature thereof and the use of proceeds with respect thereto;
     (d) within 30 days following the commencement of each fiscal year of the
Borrower, a detailed consolidated budget for such fiscal year (including a
projected consolidated balance sheet and related statements of projected
operations and cash flows as of the end of and for such fiscal year and setting
forth the assumptions used for purposes of preparing such budget) and, promptly
when available, any significant revisions of such budget;
     (e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Borrower or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any domestic national securities exchange, or distributed to
its shareholders generally, as the case may be;
     (f) promptly after the receipt thereof by the Borrower or any of the
Subsidiaries, a copy of any “management letter” received by any such Person from
its certified public accountants and the management’s response thereto; and
     (g) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with

117

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

 

the terms of any Loan Document, as the Administrative Agent or any Lender
(acting through the Administrative Agent) may reasonably request.
     SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative
Agent written notice of the following promptly after the Borrower obtains
knowledge thereof:
     (a) any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) taken or proposed to be taken with
respect thereto;
     (b) the filing or commencement of any action, suit or proceeding, whether
at law or in equity or by or before any arbitrator or Governmental Authority,
against the Borrower or any Subsidiary that could reasonably be expected to
result in a Material Adverse Effect;
     (c) the occurrence of any ERISA Event that could reasonably be expected to
result in a Material Adverse Effect; and
     (d) any development that has resulted in, or could reasonably be expected
to result in, a Material Adverse Effect.
     SECTION 5.06. Information Regarding Collateral. (a) Furnish, and will cause
each Loan Party to furnish, to each of the Administrative Agent, the Collateral
Agent and the Collateral Trustee prompt written notice of (i) any change (A) in
any Loan Party’s corporate name as set forth in its certificate of
incorporation, certificate of formation or other relevant organizational
documents, (B) any office or facility (other than any location within the
control of the Administrative Agent, the Collateral Agent or the Collateral
Trustee) at which material portions of Collateral owned by it are located
(including the establishment of any such new office or facility), (C) in any
Loan Party’s corporate structure or (D) in any Loan Party’s Federal Taxpayer
Identification Number; (ii) any formation or acquisition after the Closing Date
of any Subsidiary that is not an Excluded Subsidiary; (iii) any sale, transfer,
lease, issuance or other disposition (by way of merger, consolidation, operation
of law or otherwise) after the Closing Date of any Equity Interests of any
Subsidiary that is not an Excluded Subsidiary to any Person other than the
Borrower or another Subsidiary; and (iv) any Subsidiary that is an Excluded
Subsidiary as of the Closing Date or at any time thereafter ceasing to be an
Excluded Subsidiary. The Borrower agrees not to effect or permit any change
referred to in the preceding sentence unless a reasonable period has been
provided (such period to be at least 3 Business Days) for making all filings
under the UCC or otherwise and taking all other actions, in each case that are
required in order for the Collateral Trustee to continue at all times following
such change to have a valid, legal and perfected (subject to the limitations set
forth in Section 3.19) security interest in all the Collateral (other than any
Excluded Perfection Assets). The Borrower also agrees promptly to notify each of
the Administrative Agent, the Collateral Agent and the Collateral Trustee if any
material portion of the Collateral is damaged or destroyed.
     (b) In the case of the Borrower, each year, at the time of delivery of the
annual financial statements with respect to the preceding fiscal year pursuant
to Section 5.04(a), deliver to the Administrative Agent a certificate of a
Financial Officer of the Borrower setting forth (i) the information required
pursuant to Section I of the Perfection Certificate or confirming that there has
been no change in such information since the date of the Perfection Certificate
delivered on the Third Restatement Date or the date of the most recent
certificate delivered pursuant to this Section and (ii) any liquidation or
dissolution during such preceding fiscal year of any Subsidiary other than an
Excluded Subsidiary.

118

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

 

     SECTION 5.07. Maintaining Records; Access to Properties and Inspections;
Environmental Assessments. (a) Keep, and cause each Subsidiary to keep, proper
books of record and account in which full, true and correct entries in
conformity with GAAP and all applicable requirements of law are made of all
financial operations. No more than once in any fiscal year (except if an Event
of Default has occurred and is continuing) the Borrower will, and will cause
each of its subsidiaries to, permit, if requested by the Administrative Agent,
any representatives designated by the Administrative Agent or any Lender to
visit and inspect the financial records and the properties of the Borrower or
any of its Subsidiaries at reasonable times and as reasonably requested and to
make extracts from and copies of such financial records, and permit any
representatives designated by the Administrative Agent or any Lender to discuss
the affairs, finances and condition of the Borrower or any of its Subsidiaries
with the officers thereof and independent accountants therefor.
     (b) At its election, the Administrative Agent may retain, or require the
Borrower to retain, an independent engineer or environmental consultant to
conduct an environmental assessment of any Mortgaged Property or facility of the
Borrower or any Subsidiary. Any such environmental assessments conducted
pursuant to this paragraph (b) shall be at the Borrower’s sole cost and expense
only if conducted following the occurrence of (i) an Event of Default or
(ii) any event, circumstance or condition that could reasonably be expected to
result in an Event of Default, in the case of each of clause (i) and (ii) that
concerns or relates to any Environmental Liabilities of the Borrower or any
Subsidiary; provided that the Borrower shall only be responsible for such costs
and expenses to the extent that such environmental assessment is limited to that
which is reasonably necessary to assess the subject matter of such Event of
Default or such event, circumstance or condition that could reasonably be
expected to result in an Event of Default. In addition, environmental
assessments conducted pursuant to this paragraph (b) shall not be conducted more
than once every twelve months with respect to any parcel of Mortgaged Property
or any single facility of the Borrower or any Subsidiary unless such
environmental assessments are conducted following the occurrence of (i) an Event
of Default or (ii) any event, circumstance or condition that could reasonably be
expected to result in an Event of Default, in the case of each of clause (i) and
(ii) that concerns or relates to any Environmental Liabilities of the Borrower
or any Subsidiary. The Borrower shall, and shall cause each of the Subsidiaries
to, reasonably cooperate in the performance of any such environmental assessment
and permit any such engineer or consultant designated by the Administrative
Agent to have reasonable access to each property or facility at reasonable times
and after reasonable notice to the Borrower of the plans to conduct such an
environmental assessment. Environmental assessments conducted under this
paragraph (b) shall be limited to visual inspections of the Mortgaged Property
or facility, interviews with representatives of the Borrower or facility
personnel, and review of applicable records and documents pertaining to the
property or facility.
     (c) In the event that the Administrative Agent reasonably believes that
Hazardous Materials have been Released or are threatened to be Released on any
Mortgaged Property or other facility of the Borrower or any Subsidiary or that
any such property or facility is not being operated in compliance with
applicable Environmental Law, in each case where the Release, threatened Release
or failure to comply has resulted in, or could reasonably be expected to result
in, a material Environmental Liability of the Borrower any of the Subsidiaries,
the Administrative Agent may, at its election and after reasonable notice to the
Borrower, retain, or require the Borrower to retain, an independent engineer or
other qualified environmental consultant to reasonably assess the subject matter
of such Release, threatened Release or failure to comply with applicable
Environmental Law. Such environmental assessments may include detailed visual
inspections of the Mortgaged Property or facility, including any and all storage
areas, storage tanks, drains, dry wells and leaching areas, and the taking of
soil samples, surface water samples and groundwater samples as well as such
other reasonable investigations or analyses in each case

119

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

 

as are reasonable and necessary to assess the subject matter of the Release,
threatened Release or failure to comply. The Borrower shall, and shall cause
each of the Subsidiaries to, reasonably cooperate in the performance of any such
environmental assessment and permit any such engineer or consultant designated
by the Administrative Agent to have reasonable access to each property or
facility at reasonable times and after reasonable notice to the Borrower of the
plans to conduct such an environmental assessment. All environmental assessments
conducted pursuant to this paragraph (c) shall be at the Borrower’s sole cost
and expense.
     SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and request
the issuance of Letters of Credit only for the purposes set forth in
Section 3.13.
     SECTION 5.09. Additional Collateral, etc. (a) With respect to any
Collateral acquired after the Closing Date or with respect to any property or
asset which becomes Collateral pursuant to the definition thereof after the
Closing Date or, in the case of inventory or equipment that is part of the
Collateral, any material Collateral moved after the Closing Date by the Borrower
or any other Loan Party (other than any Collateral described in paragraphs (b),
(c) or (d) of this Section) as to which the Collateral Trustee, for the benefit
of the Secured Parties, does not have a perfected security interest, promptly
(and, in any event, within 20 Business Days following the date of such
acquisition or designation) (i) execute and deliver to the Administrative Agent,
the Collateral Agent and the Collateral Trustee such amendments to the Guarantee
and Collateral Agreement or such other Security Documents as the Collateral
Agent or the Collateral Trustee, as the case may be, deems necessary or
reasonably advisable to grant to the Collateral Trustee, for the benefit of the
Secured Parties, a security interest in such Collateral and (ii) take all
actions necessary or reasonably requested by the Administrative Agent to grant
to the Collateral Trustee, for the benefit of the Secured Parties, a perfected
(subject to the limitations set forth in Section 3.19) first priority security
interest in such Collateral (other than any Excluded Perfection Assets and,
except with respect to Pledged Securities in the possession of the Collateral
Trustee, subject to Permitted Liens, and in respect of Pledged Securities in the
possession of the Collateral Trustee, the Permitted Liens set forth in clauses
(h) and (ff) of the definition thereof), including the filing of UCC financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be reasonably requested by the
Administrative Agent, the Collateral Agent or the Collateral Trustee (it being
understood and agreed that no Control Agreements shall be required pursuant to
this paragraph in respect of any Counterparty Accounts).
     (b) With respect to any fee interest in any Collateral consisting of real
property or any lease of Collateral consisting of real property acquired or
leased after the Closing Date by the Borrower or any other Loan Party or which
becomes Collateral pursuant to the definition thereof (other than any Excluded
Perfection Assets), promptly (and, in any event, within 60 days following the
date of such acquisition or such longer period as consented to by the
Administrative Agent in its sole discretion) (i) execute and deliver a first
priority Mortgage in favor of the Collateral Trustee, for the benefit of the
Secured Parties, covering such real property and complying with the provisions
herein and in the Security Documents, (ii) provide the Secured Parties with
(A) title and extended coverage insurance (or, if approved by the Administrative
Agent in its sole discretion, a UCC title insurance policy) covering such real
property in an amount at least equal to the purchase price of such real property
(or such other amount as shall be reasonably specified by the Administrative
Agent, the Collateral Agent or the Collateral Trustee, which may be the value of
the generation assets, if applicable, situated thereon), together with such
endorsements as are reasonably required by the Administrative Agent, the
Collateral Agent or the Collateral Trustee and are obtainable in the State in
which such Mortgaged Property is located, as well as a current ALTA survey
thereof complying with the requirements set forth in Schedule 5.09(b) and all of
the other provisions herein and in the Security Documents, together

120

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

 

with a surveyor’s certificate and (B) any consents or estoppels reasonably
deemed necessary or advisable by the Administrative Agent, the Collateral Agent
or the Collateral Trustee in connection with such Mortgage, each of the
foregoing in form and substance reasonably satisfactory to the Administrative
Agent, the Collateral Agent and the Collateral Trustee, (iii) if any such
Collateral (other than any Excluded Perfection Assets) consisting of fee-owned
real property is required to be insured pursuant to the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Act of 1968, and the
regulations promulgated thereunder, because it is located in an area which has
been identified by the Secretary of Housing and Urban Development as a “special
flood hazard area,” deliver to the Administrative Agent (A) a policy of flood
insurance that (1) covers such Collateral and (2) is written in an amount
reasonably satisfactory to the Administrative Agent, (B) a “life of loan”
standard flood hazard determination with respect to such Collateral and (C) a
confirmation that the Borrower or such other Loan Party has received the notice
requested pursuant to Section 208(e)(3) of Regulation H of the Board, (iv) if
reasonably requested by the Administrative Agent, deliver to the Administrative
Agent, the Collateral Agent and the Collateral Trustee legal opinions relating
to the matters described above, which opinions shall be in form and substance,
and from counsel, reasonably satisfactory to the Administrative Agent, the
Collateral Agent and the Collateral Trustee and (v) deliver to the
Administrative Agent a notice identifying the consultant’s reports,
environmental site assessments or other documents relied upon by the Borrower or
any other Loan Party to determine that any such real property included in such
Collateral does not contain Hazardous Materials of a form or type or in a
quantity or location that could, or to determine that the operations on any such
real property included in such Collateral is in compliance with Environmental
Law except to the extent any non-compliance could not, reasonably be expected to
result in a material Environmental Liability.
     (c) With respect to any new Subsidiary (other than an Unrestricted
Subsidiary or an Excluded Subsidiary) created or acquired after the Closing Date
(which, for the purposes of this paragraph, shall include any existing
Subsidiary that ceases to be an Unrestricted Subsidiary, an Excluded Foreign
Subsidiary or an Excluded Project Subsidiary) by the Borrower or any of the
Subsidiaries, promptly (and, in any event, within 20 days following such
creation or the date of such acquisition), (i) execute and deliver to the
Administrative Agent, the Collateral Agent and the Collateral Trustee such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent, the Collateral Agent or the Collateral Trustee deems necessary or
reasonably advisable to grant to the Collateral Trustee, for the benefit of the
Secured Parties, a valid, perfected first priority security interest in the
Equity Interests in such new Subsidiary that are owned by the Borrower or any of
the Subsidiaries, (ii) deliver to the Collateral Trustee the certificates, if
any, representing such Equity Interests, together with undated instruments of
transfer or stock powers, in blank, executed and delivered by a duly authorized
officer of the Borrower or such Subsidiary, as the case may be, (iii) cause such
new Subsidiary that is not an Excluded Subsidiary or an Unrestricted Subsidiary
(A) to become a party to the Guarantee and Collateral Agreement to, among other
things, provide Guarantees of the Guaranteed Obligations hereunder, the
Collateral Trust Agreement and the Intellectual Property Security Agreements and
(B) to take such actions necessary or reasonably requested by the Administrative
Agent to grant to the Collateral Trustee, for the benefit of the Secured
Parties, a perfected (subject to the limitations set forth in Section 3.19)
first priority security interest (except with respect to Pledged Securities,
subject to Permitted Liens, and in respect of Pledged Securities, the Permitted
Liens in clause (h) of the definition thereof) in the Collateral described in
the Guarantee and Collateral Agreement and the Intellectual Property Security
Agreement with respect to such new Subsidiary that is not an Excluded
Subsidiary, including the recording of instruments in the United States Patent
and Trademark Office and the United States Copyright Office (but not in any
intellectual property offices in any jurisdiction outside the United States),
the execution and delivery by all necessary Persons of Control Agreements (other
than with respect to any Counterparty Accounts)

121

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

 

and the filing of UCC financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
reasonably requested by the Administrative Agent, the Collateral Agent or the
Collateral Trustee and (iv) deliver to the Administrative Agent, the Collateral
Agent and the Collateral Trustee, if reasonably requested, legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent, the Collateral Agent and the Collateral Trustee.
     (d) With respect to any new Excluded Foreign Subsidiary (other than an
Unrestricted Subsidiary or an Excluded Subsidiary pursuant to clause (ii) or
(iii) of the definition thereof that is a subsidiary of an Excluded Foreign
Subsidiary) created or acquired after the Closing Date by the Borrower or any of
its Subsidiaries, promptly (and, in any event, within 25 days following such
creation or the date of such acquisition) (i) execute and deliver to the
Administrative Agent, the Collateral Agent and the Collateral Trustee such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent, the Collateral Agent or the Collateral Trustee deems necessary or
advisable in order to grant to the Collateral Trustee, for the benefit of the
Secured Parties, a perfected first priority security interest in the Equity
Interests in such new Excluded Foreign Subsidiary that is directly owned by the
Borrower or any of its Domestic Subsidiaries (provided that in no event shall
more than 66% of the total outstanding voting first-tier Equity Interests in any
such new Excluded Foreign Subsidiary be required to be so pledged), (ii) deliver
to the Collateral Trustee the certificates representing such Equity Interests,
together with undated instruments of transfer or stock powers, in blank,
executed and delivered by a duly authorized officer of the Borrower or such
Domestic Subsidiary, as the case may be, and take such other action as may be
necessary or, in the reasonable opinion of the Administrative Agent, the
Collateral Agent or the Collateral Trustee, desirable to perfect the security
interest of the Collateral Trustee thereon and (iii) deliver to the
Administrative Agent, the Collateral Agent and the Collateral Trustee, if
reasonably requested, legal opinions (which may be delivered by in-house counsel
if admitted in the relevant jurisdiction) relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent, the Collateral Agent and
the Collateral Trustee.
     SECTION 5.10. Further Assurances. (a) From time to time duly authorize,
execute and deliver, or cause to be duly authorized, executed and delivered,
such additional instruments, certificates, financing statements, agreements or
documents, and take all such actions (including filing UCC and other financing
statements), as the Administrative Agent, the Collateral Agent or the Collateral
Trustee may reasonably request, for the purposes of implementing or effectuating
the provisions of this Agreement and the other Loan Documents, or perfecting or
renewing the rights of the Administrative Agent, the Collateral Agent, the
Issuing Bank, the Collateral Trustee and the Secured Parties with respect to the
Collateral (or with respect to any additions thereto or replacements or proceeds
or products thereof or with respect to any other property or assets hereafter
acquired by the Borrower or any Subsidiary which assets or property may be
deemed to be part of the Collateral), as applicable, pursuant hereto or thereto.
Upon the exercise by the Administrative Agent, the Collateral Agent, the Issuing
Bank, the Collateral Trustee or any Lender of any power, right, privilege or
remedy pursuant to this Agreement or the other Loan Documents which requires any
consent, approval, recording, qualification or authorization of any Governmental
Authority, the Borrower will execute and deliver, or will cause the execution
and delivery of, all applications, certifications, instruments and other
documents and papers that the Administrative Agent, the Collateral Agent, the
Issuing Bank, the Collateral Trustee or such Lender may be required to obtain
from the Borrower or any of the Subsidiaries for such governmental consent,
approval, recording, qualification or authorization.

122

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

 

     On or prior to the 45th day after the date any additional Deposit Account,
Securities Account or Commodities Account is opened after the Closing Date
(except to the extent any such account is an Excluded Asset, an Excluded
Perfection Asset or a Counterparty Account), at its sole expense, with respect
to any such Deposit Account, Securities Account or Commodities Account, each
applicable Subsidiary Guarantor shall take any actions required for the
Collateral Trustee to obtain “control” (within the meaning of the applicable
Uniform Commercial Code) with respect thereto, including executing and
delivering and causing the relevant depositary bank or securities intermediary
to execute and deliver a Control Agreement in form and substance reasonably
satisfactory to the Collateral Trustee.
     SECTION 5.11. Ownership of Funded L/C SPV. At all times own, pledge and
grant a first-priority security interest to the Collateral Trustee, for the
benefit of the Secured Parties, in 100% of the Equity Interests of the Funded
L/C SPV owned directly or indirectly by the Borrower (other than any preferred
interests owned by any LC Issuer or other Persons on behalf of, or at the
request of, any LC Issuer in connection with Cash Collateralized Letter of
Credit Facilities).
ARTICLE VI.
Negative Covenants
     The Borrower covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document (other than indemnification and other
contingent obligations in each case not then due and payable) shall have been
paid in full and all Letters of Credit have been cancelled or have expired and
all amounts drawn thereunder have been reimbursed in full or reimbursement
thereof shall have been cash-collateralized in an amount equal to 103% of the
Revolving L/C Exposure as of such time, the Borrower will not, nor will it cause
or permit any of its Restricted Subsidiaries to:
     SECTION 6.01. Indebtedness and Preferred Stock. Directly or indirectly,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise, with respect to (collectively,
“incur”) any Indebtedness, and the Borrower will not issue any Disqualified
Stock and will not permit any of its Restricted Subsidiaries to issue any shares
of preferred stock except for:
     (a) (i) the incurrence by the Borrower (and the Guarantee thereof by the
Subsidiary Guarantors) of the Indebtedness created (and the reimbursement
obligations with respect to Letters of Credit issued) under the Loan Documents
and any Revolver Refinancing Indebtedness and (ii) the incurrence by the Funded
L/C SPV of Indebtedness and other obligations pursuant to and in accordance with
Cash Collateralized Letter of Credit Facilities providing for the issuance of an
aggregate face amount of letters of credit thereunder not to exceed
$1,300,000,000 (plus any fees, costs and interest (if any) accrued thereon) at
any time outstanding, the Funded L/C SPV Guarantee by the Borrower in respect of
any such Cash Collateralized Letter of Credit Facility and any actual or
contingent reimbursement obligations of the Borrower and its Subsidiaries to the
Funded L/C SPV with respect to any amounts drawn on letters of credit issued for
the benefit of the Borrower or any of its Subsidiaries under Cash Collateralized
Letter of Credit Facilities;
     (b) the incurrence by the Borrower and its Restricted Subsidiaries of the
Existing Indebtedness;

123

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

 

     (c) the incurrence by the Borrower and the Subsidiary Guarantors of
Indebtedness represented by the Senior Notes issued on or prior to the First
Restatement Date and the related Guarantees of the Subsidiary Guarantors
thereof;
     (d) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Indebtedness represented by Attributable Debt, Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred for
the purpose of financing all or any part of the purchase price or cost of
design, construction, installation or improvement or lease of property (real or
personal), plant or equipment used in the business of the Borrower or any of its
Restricted Subsidiaries or incurred within 270 days after any of the foregoing,
in an aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to refund, refinance, replace, defease or discharge any
Indebtedness incurred pursuant to this clause (d), not to exceed $800,000,000 at
any time outstanding;
     (e) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which
are used to refund, refinance, replace, defease or discharge Indebtedness (other
than intercompany Indebtedness) that was permitted by this Agreement to be
incurred under clauses (b), (c), (d), (e), (k), (m), clause (B) of clause (p),
(q), (r), (s) or (y) of this Section 6.01; provided that, in the case of any
Permitted Refinancing Indebtedness incurred in respect of Permitted Notes
Indebtedness that was permitted to be incurred under clause (y) of this
Section 6.01, the covenants, events of default and other terms of such Permitted
Refinancing Indebtedness (other than fees, discounts, interest rates and
redemption premiums) shall not be more restrictive to the Borrower and the
Restricted Subsidiaries, in all material respects, and taken as a whole, than
those in this Agreement;
     (f) the incurrence by the Borrower and the Restricted Subsidiaries of
unsecured intercompany Indebtedness; provided, however, that (A) if the Borrower
or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is
not the Borrower or a Subsidiary that is a Subsidiary Guarantor, such
Indebtedness must be expressly subordinated to the prior payment in full in cash
of all Guaranteed Obligations hereunder (which subordination may be pursuant to
an Affiliate Subordination Agreement or any other agreement containing terms
with respect to the subordination of the obligations thereunder that are
substantially the same as the Affiliate Subordination Agreement or are otherwise
reasonably acceptable to the Administrative Agent, in each case, executed and
delivered by both the applicable borrower and lender); and (B)(x) any subsequent
issuance or transfer of Equity Interests that results in any such Indebtedness
being held by a Person other than the Borrower or a Restricted Subsidiary and
(y) any sale or other transfer of any such Indebtedness to a Person that is not
either the Borrower or a Restricted Subsidiary will be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Borrower or such Restricted
Subsidiary, as the case may be, that was not permitted by this clause (f);
     (g) the issuance by any of the Borrower’s Restricted Subsidiaries to the
Borrower or to any of its other Restricted Subsidiaries of shares of preferred
stock; provided, however, that (i) any subsequent issuance or transfer of Equity
Interests that results in any such preferred stock being held by a Person other
than the Borrower or a Restricted Subsidiary and (ii) any sale or other transfer
of any such preferred stock to a Person that is not either the Borrower or a
Restricted Subsidiary will be deemed, in each case, to constitute an issuance of
such preferred stock by such Restricted Subsidiary that was not permitted by
this clause (g);
     (h) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Commodity Hedging Obligations, Eligible Commodity Hedging Obligations and
Interest Rate/Currency Hedging Obligations;

124

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

 

     (i) the Guarantee by (i) the Borrower or any of the Subsidiary Guarantors
of Indebtedness of the Borrower or a Restricted Subsidiary that was permitted to
be incurred by another provision of this Section 6.01 (other than clause (m) and
(w)); (ii) any of the Excluded Project Subsidiaries of Indebtedness of any other
Excluded Project Subsidiary or of any Minority Investment and (iii) any of the
Excluded Foreign Subsidiaries of Indebtedness of any other Excluded Foreign
Subsidiary; provided that, in each such case, if the Indebtedness being
guaranteed is subordinated to the Guaranteed Obligations hereunder, then the
Guarantee shall be subordinated to the same extent as the Indebtedness
guaranteed;
     (j) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument (except in the case of daylight
overdrafts) inadvertently drawn against insufficient funds, so long as such
Indebtedness is covered within five Business Days;
     (k) [reserved];
     (l) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Indebtedness in respect of workers’ compensation claims, self-insurance
obligations, bankers’ acceptance and performance and surety bonds provided by
the Borrower or a Restricted Subsidiary in the ordinary course of business;
     (m) the incurrence of Additional Non-Recourse Indebtedness by any Excluded
Project Subsidiary;
     (n) the incurrence of Indebtedness that may be deemed to arise as a result
of agreements of the Borrower or any Restricted Subsidiary providing for
indemnification, adjustment of purchase price or any similar obligations, in
each case, incurred in connection with the acquisition or disposition of any
business, assets or Equity Interests of any Subsidiary or any business, assets
or Equity Interests acquired by the Borrower or any Restricted Subsidiary;
provided that in the case of any such disposition the aggregate maximum
liability associated with such provisions may not exceed the gross proceeds
(including non-cash proceeds) of such disposition;
     (o) the incurrence by the Borrower or any Restricted Subsidiary of
Indebtedness represented by letters of credit, guarantees of Indebtedness or
other similar instruments to the extent (A) such instruments, including
instruments supporting Commodity Hedging Obligations or Interest Rate/Currency
Hedging Obligations, are cash collateralized and (B) the Borrower or such
Restricted Subsidiary would not have been prohibited from expending the funds
used to cash collateralize such instrument directly under the terms of this
Agreement;
     (p) the incurrence by the Borrower and/or any of its Restricted
Subsidiaries of Indebtedness prior to the Third Restatement Date pursuant to
Section 6.01(p) of the Second Restated Credit Agreement that is outstanding on
the Third Restatement Date and of (A) additional Indebtedness thereafter if
(1) such Indebtedness does not mature, and is not subject to mandatory
repurchase, redemption or amortization (other than pursuant to customary asset
sale or change of control provisions requiring redemption or repurchase and
other than amortization payments of up to 1% of the initial principal amount per
annum) prior to the date that is six months after the Latest Maturity Date of
all Classes of Loans or Commitments then outstanding, provided, however, that
the restrictions in this Section 6.01(p)(A)(1) shall not apply to any
Indebtedness in the form of Letters of Credit, any other letters of credit and
any Indebtedness that is secured by any assets of the Borrower or any Restricted
Subsidiary, (2) no Default or Event of Default exists immediately prior to, or
would exist immediately after giving effect to, the

125

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

 

incurrence of such Indebtedness, (3) the Consolidated Leverage Ratio for the
Borrower’s most recently ended Test Period for which financial statements are
publicly available immediately preceding the date on which such additional
Indebtedness is incurred would have been no more than 5.25 to 1.00 (or, at any
time after December 31, 2007, 5.00 to 1.00), determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom and giving pro
forma effect to any transactions (including any acquisitions and any
Consolidated EBITDA resulting therefrom) in connection with such additional
Indebtedness consummated substantially contemporaneously with the incurrence of
such additional Indebtedness), as if such additional Indebtedness (and any other
Indebtedness incurred during such Test Period or from the end of such Test
Period through the date on which such calculation is made) had been incurred,
and such transactions had been consummated, at the beginning of the applicable
Test Period and was outstanding on such calculation date and (4) the
Consolidated Interest Coverage Ratio for the Borrower’s most recently ended Test
Period for which financial statements are publicly available immediately
preceding the date on which such additional Indebtedness is incurred, would have
been at least 2.00 to 1.00 determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom and giving pro forma effect to
any transactions (including any acquisitions and any Consolidated EBITDA
resulting therefrom) in connection with such additional Indebtedness consummated
substantially contemporaneously with the incurrence of such additional
Indebtedness), as if such additional Indebtedness (and any other Indebtedness
incurred during such Test Period or from the end of such Test Period through the
date on which such calculation is made), and such transactions had been
consummated, had been incurred at the beginning of the applicable Test Period
and (B) additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance, replace, defease or
discharge any Indebtedness incurred pursuant to this clause (p)(B), not to
exceed $250,000,000; provided that in the case of any incurrence of any
Indebtedness pursuant to subclause (A) or (B) of this clause (p), (x) the
Borrower shall be in compliance as of the date of such incurrence, on a pro
forma basis after giving effect to the incurrence of such Indebtedness, with the
covenants set forth in Sections 6.13 and 6.14, as if such Indebtedness (and any
other Indebtedness incurred during such Test Period or from the end of such Test
Period through the date such calculation is made) had been incurred on the first
day of the applicable Test Period; and (y) no more than the greater of (1)
$750,000,000 and (2) an amount equal to the Consolidated EBITDA of the Borrower
for the period of four consecutive fiscal quarters most recently ended on or
prior to the date on which such Indebtedness is incurred multiplied by 25%
(less, in the case of each of clause (1) and clause (2), the aggregate principal
amount of any New Loan Commitments obtained pursuant to clause (a)(1) of
Section 2.25) in aggregate principal amount of Indebtedness incurred pursuant to
this clause (p) may be secured by first priority and/or second priority Liens on
the Collateral, and any such Liens must be granted in favor of the Collateral
Trustee in the manner set forth in, and be otherwise subject to (and in
compliance with), the Collateral Trust Agreement; and provided, further that in
connection with the incurrence of Indebtedness secured by first priority Liens
pursuant to this clause (p), the requirements of Section 9.19 shall have been
satisfied to the extent applicable;
     (q) the incurrence of Indebtedness of a Person or Indebtedness attaching to
assets of a Person that, in either case, becomes a Restricted Subsidiary or
Indebtedness attaching to assets that are acquired by the Borrower or any
Restricted Subsidiary, in each case after the Closing Date as the result of a
Permitted Acquisition; provided that (i) such Indebtedness existed at the time
such Person became a Restricted Subsidiary or at the time such assets were
acquired and, in each case, was not created in anticipation thereof, (ii) such
Indebtedness is not guaranteed in any respect by the Borrower or any Restricted
Subsidiary (other than any such Person that so becomes a Restricted Subsidiary)
except to the extent that such Guarantee is permitted to be incurred (and is so
incurred) pursuant to clause (p) of this Section 6.01 and (iii)(A) the Equity
Interests of such

126

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

 

Person are pledged to the Administrative Agent to the extent required under
Section 5.09 and (B) such Person executes a supplement to each of the Security
Documents (or alternative guarantee and security arrangements in relation to the
Obligations) to the extent required under Section 5.09;
     (r) the incurrence by the Borrower or any Restricted Subsidiary of
Indebtedness to finance a Permitted Acquisition; provided that (i) such
Indebtedness is not guaranteed in any respect by any Restricted Subsidiary
(other than any Person acquired (the “acquired Person”) as a result of such
Permitted Acquisition) or by the Borrower except to the extent that such
Guarantee is permitted to be incurred (and is so incurred) pursuant to clause
(p) of this Section 6.01, and (ii)(A) the Borrower pledges the Equity Interests
of such acquired Person to the Administrative Agent to the extent required under
Section 5.09 and (B) such acquired Person executes a supplement to the Security
Documents (or alternative guarantee and security arrangements in relation to the
Obligations) to the extent required under Section 5.09;
     (s) the incurrence by the Borrower and/or any of its Restricted
Subsidiaries of unsecured Indebtedness, in each case, (i) that does not mature,
and is not subject to mandatory repurchase, redemption or amortization (other
than pursuant to customary asset sale or change of control provisions requiring
redemption or repurchase) prior to the date that is six months after the Latest
Maturity Date of all Classes of Loans or Commitments then outstanding, (ii) that
is not exchangeable or convertible into Indebtedness of the Borrower (other than
other Indebtedness permitted by this clause (s)) or any Restricted Subsidiary or
any preferred stock or other Equity Interest and (iii) solely to the extent the
Net Cash Proceeds thereof are used to prepay Term B Loans pursuant to and to the
extent required by Section 2.13(c);
     (t) the incurrence by the Borrower or any Restricted Subsidiary of
Indebtedness consisting of (i) obligations to pay insurance premiums or
(ii) take-or-pay obligations contained in supply agreements, in each case
arising in the ordinary course of business and not in connection with the
borrowing of money or Hedging Agreements;
     (u) the issuance by any of the Excluded Subsidiaries of shares of preferred
stock the proceeds of which are used solely to finance the development,
construction or acquisition by such Subsidiary of fixed or capital assets useful
in the conduct of the Permitted Business;
     (v) the incurrence by the Borrower or any Restricted Subsidiary of
Environmental CapEx Debt or Necessary CapEx Debt, in an aggregate principal
amount not to exceed $400,000,000 at any time outstanding; provided that, prior
to the incurrence of any such Environmental CapEx Debt or Necessary CapEx Debt,
the Borrower shall deliver to the Administrative Agent an officers’ certificate
designating such Indebtedness as Environmental CapEx Debt or Necessary CapEx
Debt, as applicable;
     (w) [reserved];
     (x) Indebtedness consisting of representations, warranties, covenants and
indemnities made by, and repurchase, payment and other obligations of, the
Borrower or any Restricted Subsidiary in connection with a South Central
Securitization permitted by Section 6.04; provided that such representations,
warranties, covenants, indemnities and repurchase, payment and other obligations
are of the type customarily included in securitizations of accounts receivable
intended to constitute true sales of such accounts receivable to a
securitization vehicle;
     (y) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Indebtedness in respect of Permitted Notes (such Indebtedness, “Permitted Notes
Indebtedness”);

127

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

 

provided, that (i) 100% of the Net Cash Proceeds of such Permitted Notes
Indebtedness shall be applied to permanently prepay then existing Term B Loans
or Credit-Linked Deposits (such prepaid Term B Loans or Credit-Linked Deposits,
the “Credit Agreement Refinanced Debt”) in accordance with Section 2.13(c),
(ii) such Permitted Notes Indebtedness shall not mature, and is not subject to
mandatory repurchase, redemption or amortization (other than pursuant to
customary asset sale or change of control provisions requiring redemption or
repurchase) prior to the date that is six month after the Latest Maturity Date
of all Classes of Loans or Commitments included in the Credit Agreement
Refinanced Debt, (iii) such Permitted Notes Indebtedness is not exchangeable or
convertible into Indebtedness of the Borrower or any Restricted Subsidiary
(other than other Indebtedness permitted by this clause (y)), (iv) such
Permitted Notes Indebtedness shall not be guaranteed by any Person other than a
Loan Party and the terms of such Guarantees shall, in all material respects, and
taken as a whole, not be materially more favorable to the holders of such
Permitted Notes Indebtedness than the terms of the Guarantees under the
Guarantee and Collateral Agreement are to the Secured Parties, (v) no Default or
no Event of Default exists immediately prior to, or would exist immediately
after giving effect to, the incurrence of such Permitted Notes Indebtedness,
(vi) the covenants, events of default and other terms of such Permitted Notes
Indebtedness (other than fees, discounts, interest rates and redemption
premiums) shall not, in all material respects, and taken as a whole, be more
restrictive to the Borrower and the Restricted Subsidiaries than those in this
Agreement and (vii) if such Permitted Notes Indebtedness is secured by first
priority or second priority Liens on all or a portion of the Collateral, any
such Liens must be granted in favor of the Collateral Trustee in the manner set
forth in, and be otherwise subject to (and in compliance with), the Collateral
Trust Agreement (and the obligations in respect thereof shall not be secured by
Liens on any assets of the Borrower and the Restricted Subsidiaries, other than
assets constituting all or a portion of the Collateral); and provided, further,
that in connection with the incurrence of Permitted Notes secured by first
priority Liens pursuant to this clause (y), the requirements of Section 9.19
shall have been satisfied to the extent applicable; and
     (z) the incurrence by the Borrower or any Restricted Subsidiary of
Indebtedness evidenced by or in support of any Tax-Exempt Bonds and any
Guarantee thereof by the Borrower or any Restricted Subsidiary; provided, that
(i) to the extent that the aggregate principal amount of such Tax-Exempt Bonds
at any time outstanding shall exceed $500,000,000, the Borrower shall
permanently prepay then existing Term B Loans and/or Credit-Linked Deposits in
accordance with Section 2.13(c) in an aggregate amount equal to the excess of
the aggregate principal amount of such Tax-Exempt Bonds over $500,000,000,
(ii) such Tax-Exempt Bonds shall not mature, and shall not be subject to
mandatory repurchase, redemption or amortization (other than pursuant to
customary asset sale or change of control provisions requiring redemption or
repurchase) prior to the date that is six month after the Latest Maturity Date
of all Classes of Loans or Commitments then outstanding, (iii) such Tax-Exempt
Bonds shall not be guaranteed by any Person other than a Loan Party and the
terms of such Guarantees shall, in all material respects, and taken as a whole,
not be materially more favorable to the holders of such Tax-Exempt Bonds than
the terms of the Guarantees under the Guarantee and Collateral Agreement are to
the Secured Parties, (iv) no Default or no Event of Default exists immediately
prior to, or would exist immediately after giving effect to, the incurrence of
such Tax-Exempt Bonds, (v) the covenants, events of default and other terms of
such Tax-Exempt Bonds (other than fees, discounts, interest rates and redemption
premiums) shall not, in all material respects, and taken as a whole, be more
restrictive to the Borrower and the Restricted Subsidiaries than those in this
Agreement and (vi) if such Tax-Exempt Bonds are secured either (x) they are
secured only by the Facility with respect to which such Tax-Exempt Bonds shall
relate (and related assets of the obligor thereunder) and not by any Collateral
or (y) they are secured by Liens granted in favor of the Collateral Trustee in
the manner set forth in, and be otherwise subject to (and in compliance with),
the Collateral Trust Agreement (and the obligations in respect thereof shall not
be secured

128

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

 

by Liens on any assets of the Borrower and the Restricted Subsidiaries, other
than assets constituting all or a portion of the Collateral), provided that in
connection with the incurrence of Tax-Exempt Bonds secured as described in
clause (y) above, the requirements of Section 9.19 shall have been satisfied to
the extent applicable.
     SECTION 6.02. Liens. Directly or indirectly, create, incur, assume or
suffer to exist any Lien of any kind on any asset now owned or hereafter
acquired, except Permitted Liens.
     SECTION 6.03. Limitation on Sale and Leaseback Transactions. Enter into any
sale and leaseback transaction; provided that the Borrower or any Restricted
Subsidiary (other than the Funded L/C SPV) may enter into a sale and leaseback
transaction if (a) the Borrower or that Restricted Subsidiary, as applicable,
could have (i) incurred Indebtedness in an amount equal to the Attributable Debt
(if any) relating to such sale and leaseback transaction under Section 6.01(d)
hereof and (ii) incurred a Lien to secure such Indebtedness (if any) or other
obligations associated with such transaction pursuant to the provisions of
Section 6.02 hereof; (b) the gross cash proceeds of that sale and leaseback
transaction are at least equal to the Fair Market Value of the property that is
subject of that sale and leaseback transaction (unless such transaction is a
Permitted Tax Lease or a Permitted Environmental Control Lease); and (c) in the
event that such sale and leaseback transaction constitutes an Asset Sale, the
transfer of assets in that sale and leaseback transaction is permitted by
Section 6.04, and the Borrower applies the proceeds of such transaction in
compliance with Section 2.13(b), if and to the extent required thereby;
     SECTION 6.04. Mergers, Consolidations and Sales of Assets. (a) (x) Merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or liquidate or dissolve, or (y) sell, transfer,
lease, issue or otherwise dispose of (in one transaction or in a series of
transactions) all or substantially all of the assets (whether now owned or
hereafter acquired) of the Borrower, except that if at the time thereof and
immediately after giving effect thereto no Event of Default or Default shall
have occurred and be continuing (i) any Restricted Subsidiary (other than the
Funded L/C SPV) may merge into the Borrower in a transaction in which the
Borrower is the surviving corporation, (ii) any Restricted Subsidiary (other
than the Funded L/C SPV) may merge into or consolidate with any other Restricted
Subsidiary in a transaction in which the surviving entity is a Restricted
Subsidiary and no Person other than the Borrower or a Restricted Subsidiary
receives any consideration (provided that if any party to any such transaction
is (A) a Loan Party, the surviving entity of such transaction shall be a Loan
Party, (B) a Domestic Subsidiary, the surviving entity of such transaction shall
be a Domestic Subsidiary and (C) a Core Collateral Subsidiary, the surviving
entity shall be a Core Collateral Subsidiary), (iii) any merger or consolidation
of a Restricted Subsidiary (other than the Funded L/C SPV) will be permitted in
connection with an Investment permitted by Section 6.05(g), 6.05(j) or 6.05(l)
and (iv) any Restricted Subsidiary (other than a Core Collateral Subsidiary and
the Funded L/C SPV) may liquidate or dissolve or, solely for purposes of
reincorporating in a different jurisdiction, merge if the Borrower determines in
good faith that such liquidation or dissolution or merger is in the best
interests of the Borrower and could not reasonably be expected to result in a
Material Adverse Effect.
     (b) Consummate any Asset Sale (notwithstanding that it may be otherwise
permitted under paragraph (a) above) (including a Sale of Collateral and a Sale
of Core Collateral) (other than in respect of a sale of the South Central
Securitization Assets which shall be permitted regardless of whether the
requirements of this Section 6.04(b) are satisfied so long as the requirements
of clause (d) of this Section 6.04 shall be satisfied) unless (i) other than in
the case of a Permitted Tax Lease or a Permitted Environmental Control Lease,
the Borrower (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of the Asset Sale at least equal to the Fair Market
Value of the assets or Equity Interests issued or sold or otherwise

129

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

 

disposed of; (ii) other than in the case of a Permitted Tax Lease, a Permitted
Environmental Control Lease, a Permitted Asset Swap or the sale of equity
interests of an Excluded Project Subsidiary that is made in connection with the
conversion of a convertible note of such Excluded Project Subsidiary (or portion
thereof) into such equity interest (provided that the consideration received at
the time of such note was issued shall have satisfied the requirements of this
clause (ii)), at least 75% of the consideration received in the Asset Sale by
the Borrower or such Restricted Subsidiary is in the form of cash (for purposes
of this provision, any securities, notes or other obligations received by the
Borrower or any such Restricted Subsidiary from such transferee that are
converted by the Borrower or such Restricted Subsidiary into cash within 180
days of the receipt of such securities, notes or other obligations, to the
extent of the cash received in that conversion will be deemed to be cash);
(iii) the Borrower shall apply the Net Cash Proceeds received therefrom in
accordance with Section 2.13(b) to the extent required thereby; (iv) any
consideration in excess of $15,000,000 received by the Borrower or any
Subsidiary Guarantor in connection with such Asset Sale pursuant to this
paragraph (b) that is in the form of Indebtedness shall be pledged to the
Collateral Agent pursuant to Section 5.09; (v) with respect to any such Asset
Sale (or series of related Asset Sales) in an aggregate amount in excess of
$50,000,000, the Borrower shall be in compliance, on a pro forma basis after
giving effect to such Asset Sale, with the covenants set forth in Sections 6.13
and 6.14, as if such Asset Sale had occurred on the first day of the applicable
Test Period; and (vi) after giving effect to any such Asset Sale, no Default or
Event of Default shall have occurred and be continuing.
     (c) In the case of the Borrower, at any time own, either directly or
indirectly or through one or more Loan Parties, beneficially and of record, less
than all of the Equity Interests in any Core Collateral Subsidiary (other than
such Equity Interests constituting Excluded Core Collateral) and less than all
of the Equity Interests in the Funded L/C SPV (other than any preferred
interests owned by any LC Issuer or other Persons on behalf of, or at the
request of, any LC Issuer in connection with Cash Collateralized Letter of
Credit Facilities).
     (d) The Borrower or any Restricted Subsidiary may sell South Central
Securitization Assets to a Securitization Vehicle in a South Central
Securitization; provided that (i) each such South Central Securitization is
effected on market terms, (ii) the aggregate amount of the Sellers’ Retained
Interests in such South Central Securitization does not exceed an amount at any
time outstanding that is customary for similar transactions, (iii) the proceeds
to each such Securitization Vehicle from the issuance of Third Party Securities
are applied by such Securitization Vehicle substantially simultaneously with
receipt thereof to the purchase from the Borrower or Restricted Subsidiaries of
South Central Securitization Assets, and (iv) Seller’s Retained Interests in
respect of each such Securitization Vehicle shall be pledged in favor of the
Secured Parties pursuant to the Security Documents; provided that no such pledge
shall be required under this clause (iv) to the extent that such pledge is
prohibited by the governing documentation with respect to the applicable South
Central Securitization; provided further that the Borrower or the applicable
Restricted Subsidiary shall have used its commercially reasonable efforts to
avoid such prohibition in such governing documentation.
     SECTION 6.05. Limitation on Investments. Make any Investment except for:
     (a) extensions of trade credit, asset purchases (including purchases of
inventory, supplies and materials), the licensing of intellectual property and
contribution of intellectual property pursuant to joint marketing arrangements
with other Persons;
     (b) Cash Equivalents;

130

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

 

     (c) loans and advances to officers, directors and employees of the Borrower
or any of its Restricted Subsidiaries (i) to finance the purchase of Capital
Stock of the Borrower (provided that the amount of such loans and advances used
to acquire such Capital Stock shall be contributed to the Borrower in cash as
common equity), (ii) for reasonable and customary business related travel
expenses, moving expenses and similar expenses, and (iii) for additional
purposes not contemplated by subclause (i) or (ii) above in an aggregate
principal amount at any time outstanding with respect to this clause (iii) not
exceeding $5,000,000 in any fiscal year (with unused amounts in any such period
being carried-forward to any succeeding fiscal year);
     (d) Investments existing on the Closing Date and any extensions, renewals
or reinvestments thereof, so long as the aggregate amount of all Investments
pursuant to this clause (d) is not increased at any time above the amount of
such Investments existing on the Closing Date;
     (e) Investments in Hedging Obligations to the extent not prohibited by
Section 6.01;
     (f) Investments received in connection with the bankruptcy or
reorganization of trade creditors, trade counterparties, suppliers or customers
and in settlement of delinquent obligations of, and other disputes with,
customers;
     (g) Investments to the extent that payment for such Investments is made
with Capital Stock of the Borrower;
     (h) Investments in any Restricted Subsidiary, as valued at the Fair Market
Value of such Investment at the time each such Investment is made, in an
aggregate amount that, at the time such Investment is made, would not exceed the
Retained Prepayment Amount at such time;
     (i) Investments (including in the form of loans) in the Borrower or any
Subsidiary Guarantor;
     (j) Investments constituting Permitted Acquisitions;
     (k) Investments made to repurchase or retire common stock of the Borrower
owned by any employee stock ownership plan or key employee, directors and
officers, or other stock ownership plans of the Borrower;
     (l) (i) additional Investments (including Investments in Excluded
Subsidiaries, Minority Investments and Unrestricted Subsidiaries) and
(ii) Investments in joint ventures or similar entities that do not constitute
Restricted Subsidiaries, in each case as valued at the Fair Market Value of such
Investment at the time each such Investment is made,
               (A) (1) to the extent such Investments exist on the Third
Restatement Date and were made pursuant to Section 6.05(l)(A) or 6.05(l)(B) of
the Second Restated Credit Agreement prior to the Third Restatement Date (and so
reduced the Available Amount at the time made) plus (2) additional Investments
on or after the Third Restatement Date in an aggregate amount that, at the time
such Investment is made, would not exceed the sum of (x) $500,000,000 plus
(y) the Available Amount at such time plus (z) to the extent such amounts do not
increase the Available Amount, an amount equal to any repayments, interest,
returns, profits, distributions, income and similar amounts actually received in
cash in respect of any such Investment (which amount shall not exceed the amount
of such Investment valued at the Fair Market Value of such Investment at the
time such Investment was made) plus an amount equal to any letters of credit,
guarantees and other contingent credit support that constitute Investments that
were made

131

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

 

pursuant to this clause (l) to the extent such letters of credit, guarantees or
other contingent credit support are cancelled, expire or are otherwise
terminated except to the extent of any payment being required thereon, and/or
               (B) in the case of Investments described in clause (l)(ii) above
only that are made by the Borrower or any Restricted Subsidiary (other than any
Excluded Subsidiary), in an aggregate amount that, at the time such Investment
is made, would be permitted to be expended as a Capital Expenditure under
Section 6.12, to the extent that (x) the applicable joint venture owns an
interest in assets the addition of which would have been a Capital Expenditure
if acquired or constructed, and owned, directly by the Borrower or a Restricted
Subsidiary (other than any Excluded Subsidiary) and (y) the ability of the
Borrower and/or one or more Restricted Subsidiaries to receive cash flows
attributable to its interest therein at the time of determination are not
prohibited by contract, Applicable Law or otherwise;
               provided, however, that the face amount of any Letters of Credit
and letters of credit under Cash Collateralized Letter of Credit Facilities
issued for the benefit of a Subsidiary of the Borrower that (x) is not a
Subsidiary Guarantor or (y) is a Minority Investment (whether constituting an
Investment or not) shall, only for as long as such Letter of Credit or letter of
credit, as applicable, is outstanding (to the extent of such outstanding
amount), reduce the amount of Investments permitted to be made under this
Section 6.05(l) by an amount equal to the face amount of such Letters of Credit
and letters of credit.
     (m) additional Investments in any Minority Investment or any Excluded
Subsidiary by another Excluded Subsidiary, other than any such Investments made
with the proceeds of Non-Recourse Indebtedness; provided, however, that
(i) Investments in an Excluded Subsidiary or Minority Investment with the
proceeds of Non-Recourse Indebtedness by another Excluded Subsidiary that is a
direct or indirect parent of such Excluded Subsidiary or Minority Investment
shall be permitted and (ii) Investments in an Excluded Subsidiary or Minority
Investment with the proceeds of Non-Recourse Indebtedness by another Excluded
Subsidiary that is formed solely for the purposes of incurring such Non-Recourse
Indebtedness, that has no other assets other than de minimis assets and that has
the same direct parent as such Excluded Subsidiary or Minority Investment shall
be permitted;
     (n) the Acquisition Transactions;
     (o) the contribution of any one or more of the Specified Facilities to a
Restricted Subsidiary that is not a Loan Party;
     (p) Investments that are received in consideration of the contribution by
the Borrower or a Restricted Subsidiary of assets (other than cash, Cash
Equivalents or Core Collateral), valued at the Fair Market Value of such
Investment at the time such Investment is made, in an aggregate amount that, at
the time such Investment is made, would not exceed the Fair Market Value of the
sum of (i) to the extent such amounts do not increase the Available Amount, all
Capital Stock of the Borrower, paid as consideration in connection with a
Permitted Acquisition (valued at the time of consummation of such Permitted
Acquisition) consummated after the Closing Date and on or prior to the date of
such Investment so long as all Equity Interests and other assets that were
acquired by the Borrower or a Restricted Subsidiary through such Permitted
Acquisition have been pledged to the Collateral Agent to the extent required
under Section 5.09 (provided that such acquired assets shall not be Excluded
Assets pursuant to clauses (viii) or (xiii) of the definition thereof) and
(ii) to the extent such amounts do not increase the Available Amount, all assets
that (A) were distributed, without consideration (other than nominal
consideration to the extent required under applicable law), by an Excluded
Subsidiary (other than

132

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

 

the Funded L/C SPV) or Minority Investment to the Borrower or a Subsidiary
Guarantor after the Closing Date (valued at the time of such distribution) or
(B) were owned at the time by an Excluded Subsidiary or Unrestricted Subsidiary
that became a Subsidiary Guarantor after the Closing Date and that have been
pledged to the Collateral Agent to the extent required by Section 5.09 (valued
at the time of such guarantee); provided that any amounts specified to in
clauses (i) and (ii) above shall not be used to increase any amounts set forth
in the other clauses of this Section 6.05 (it being understood that any amounts
specified in clauses (i) and (ii) above may be combined with amounts set forth
in other clauses of this Section 6.05 to the extent such combination does not
result in duplication);
     (q) (i) Investments permitted under Section 6.06 and (ii) Guarantees
permitted under Section 6.01 (including the Funded L/C SPV Guarantee);
     (r) Investments consisting of Seller’s Retained Interests in a South
Central Securitization permitted by Section 6.04 and any servicing fees and
other similar rights related to the South Central Securitization permitted by
Section 6.04;
     (s) Investments pursuant to transactions described Section 6.08(b)(xix);
     (t) the acquisition or ownership by the Borrower or any Subsidiary of any
interest in STP Nuclear Operating Company and/or any nuclear insurance mutual,
association, fund or syndicate (including American Nuclear Insurers and/or
Nuclear Electric Insurance Limited) relating to any nuclear Facility of the
Borrower or such Subsidiary; and
     (u) (i) the Funded L/C SPV Equity Contribution, (ii) Investments in the
Funded L/C SPV in an amount not to exceed any fees (including fronting,
issuance, amendment and other similar fees), interest, costs and expenses
incurred from time to time by the Funded L/C SPV under Cash Collateralized
Letter of Credit Facilities, (iii) so long as no Default or Event of Default
exists or would exist after giving effect thereto, Investments in the Funded L/C
SPV in an amount equal to any amounts actually received in cash in respect of
the Investment resulting from the Funded L/C SPV Equity Contribution by the
Borrower or any Subsidiary Guarantor from the Funded L/C SPV and
(iv) Investments constituting an actual or contingent reimbursement obligation
of the Borrower or any of its Subsidiaries to the Funded L/C SPV with respect to
any amounts drawn on letters of credit issued for the benefit of the Borrower,
any of its Subsidiaries or any Minority Investments under Cash Collateralized
Letter of Credit Facilities.
     SECTION 6.06. Limitation on Dividends. Declare or pay any dividends (other
than dividends payable solely in its Capital Stock) or return any capital to its
shareholders or make any other distribution, payment or delivery of property or
cash to its shareholders as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, for consideration, any shares of any class of
its Capital Stock or the Capital Stock of any direct or indirect parent of the
Borrower now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued with respect to any of its Capital Stock), or permit
any of the Restricted Subsidiaries to purchase or otherwise acquire for
consideration (other than in connection with an Investment permitted by
Section 6.05 (except for any such Investment involving the purchase of Capital
Stock of the Borrower from shareholders of the Borrower) any shares of any class
of the Capital Stock of the Borrower now or hereafter outstanding (or any
options or warrants or stock appreciation rights issued with respect to any of
its Capital Stock) (all of the foregoing “Dividends”); provided that so long as
no Default or Event of Default exists or would exist after giving effect
thereto:
     (a) the Borrower may redeem in whole or in part any of its Capital Stock
for another class of Capital Stock or rights to acquire its Capital Stock or
with proceeds from substantially

133

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

 

concurrent equity contributions or issuances of new shares of its Capital Stock;
provided that such other class of Capital Stock contains terms and provisions at
least as advantageous to the Lenders in all material respects as those contained
in the Capital Stock redeemed thereby;
     (b) the Borrower may repurchase shares of its Capital Stock (or any options
or warrants or stock appreciation rights issued with respect to any of its
Capital Stock) held by current or former officers, directors and employees of
the Borrower and its Subsidiaries in an aggregate amount not to exceed (i)
$10,000,000 in any fiscal year and (ii) $50,000,000 in the aggregate from and
after the Closing Date, so long as such repurchase is pursuant to, and in
accordance with the terms of, management and/or employee stock plans, stock
subscription agreements, employment agreements or shareholder agreements or
termination agreements;
     (c) in addition to clause (d) below, the Borrower or any Restricted
Subsidiary may declare and make distributions on its Capital Stock at any time
or pay other Dividends; provided that the aggregate amount of such distributions
or Dividends paid by the Borrower and any such Restricted Subsidiary on or after
the Third Restatement Date pursuant to this clause (c) shall not exceed the
Available Amount at the time of such distribution or Dividend;
     (d) in addition to clause (c) above, the Borrower (i) may declare and make
distributions on its Preferred Stock pursuant to the terms of such Preferred
Stock (as in effect on the Closing Date), (ii) may redeem in whole or in part
any of its Preferred Stock with proceeds from substantially concurrent equity
contributions or issuances of new shares of its Capital Stock (other than
Disqualified Stock) and (iii) may redeem in whole or in part any of its Sponsor
Preferred Stock with the Net Cash Proceeds from Asset Sales but only to the
extent such Net Cash Proceeds were first offered to and declined by Term Lenders
in accordance with the provisions of Section 2.13(e) and (f) and not otherwise
used for purposes set forth in the definition of “Retained Prepayment Amount”;
     (e) any Restricted Subsidiary may pay any Dividend (or, in the case of any
partnership or limited liability company, any similar distribution) to (i) any
Loan Party or (ii) the holders of its Equity Interests on a pro rata basis;
     (f) the Borrower may make payments to holders of the Borrower’s Capital
Stock in lieu of the issuance of fractional shares of its Capital Stock; and
     (g) the Borrower may enter into transactions for the purchase, redemption,
acquisition, cancellation or other retirement for a nominal value per right of
any rights granted to all the holders of Capital Stock of the Borrower pursuant
to any shareholders’ rights plan adopted for the purpose of protecting
shareholders from takeover tactics; provided that any such purchase, redemption,
acquisition, cancellation or other retirement of such rights is not for the
purpose of evading the limitations of this covenant (all as determined in good
faith by the Board of Directors of the Borrower).
     SECTION 6.07. Limitations on Debt Payments; Restrictive Agreements.
(a) Make any distribution, whether in cash, property, securities or a
combination thereof, other than regularly scheduled payments of principal, fees
and interest as and when due (to the extent not prohibited by applicable
subordination provisions and whether or not such regularly scheduled payments
may at the obligor’s option be paid in kind or in other securities), in respect
of, or pay, or offer or commit to pay, or directly or indirectly redeem,
repurchase, retire or otherwise acquire for consideration, any Indebtedness
(other than intercompany Indebtedness of the Borrower and the Subsidiaries),
except (i) the payment of the Indebtedness created hereunder, (ii) the
incurrence of Indebtedness under Section 6.01 which refinances other
Indebtedness that was incurred under

134

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

 

Section 6.01 (and in connection with such refinancing the payment of any
interest, fees and premiums payable in respect of the principal being
refinanced) and any payments made in connection with the replacing or repricing
of certain Commodity Hedging Agreements described in subclause (iii) of clause
(b) of the definition of “Transactions”, (iii) the payment of secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of,
or a Recovery Event with respect to, the property or assets securing such
Indebtedness, (iv) the payment of Non-Recourse Indebtedness or Indebtedness
permitted by Section 6.01(p) of an Excluded Subsidiary with internally generated
cash flow of such Excluded Subsidiary or with the proceeds of Investments made
pursuant to and in accordance with Section 6.05(e), 6.05(g), 6.05(h), 6.05(l),
6.05(m), 6.05(p) or 6.05(s), (v) any such payment or distribution on or after
the Third Restatement Date in an aggregate amount not in excess of the Available
Amount at the time of such payment or distribution, (vi) the payment of
Indebtedness in connection with the Acquisition Transactions, (vii) any such
payment or distribution in an aggregate amount not in excess of the Retained
Prepayment Amount at the time of such payment or distribution, (viii) the
payment of Non-Recourse Indebtedness of any Restricted Subsidiary if the Lien on
such property or assets of such Restricted Subsidiary securing such Non-Recourse
Indebtedness shall be released and such property or assets shall become
Collateral and shall be pledged to the Collateral Agent, (ix) any such payment
of Senior Debt if the Consolidated First Lien Senior Secured Leverage Ratio for
the Borrower’s most recently ended Test Period for which financial statements
are publicly available immediately preceding the date of such payment would have
been no more than 1.50 to 1.00, determined on a pro forma basis, as if such
payment had been made at the beginning of the applicable Test Period and (x) the
payment of any drawing with respect to a letter of credit issued under a Cash
Collateralized Letter of Credit Facility by the Funded L/C SPV (including from
the Funded L/C Collateral Accounts) or any other Indebtedness thereunder.
     (b) Enter into, incur or permit to exist any agreement or other arrangement
that prohibits, restricts or imposes any condition upon the ability of the
Borrower or any Restricted Subsidiary other than an Excluded Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets in
favor of the Secured Parties securing the Guaranteed Obligations (it being
understood that any agreement that contains general prohibitions or restrictions
on the existence of Liens but expressly permits Liens in favor of the Secured
Parties securing the Guaranteed Obligations shall not be prohibited or otherwise
limited by the covenant contained in this Section 6.07(b)); provided that the
foregoing shall not apply to (i) restrictions and conditions imposed by law,
(ii) customary restrictions and conditions contained in agreements relating to
the purchase or sale of a Restricted Subsidiary or asset pending such purchase
or sale; provided such restrictions and conditions apply only to the Restricted
Subsidiary or asset that is to be purchased or sold and such purchase or sale is
permitted hereunder, (iii) restrictions and conditions on property and assets
that constitute Excluded Assets, (iv) restrictions or conditions existing on the
Closing Date, but shall apply to any extension or renewal of, or any amendment
or modification expanding the scope of, any such restriction or condition in any
material respect, (v) restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and such property or assets constitute Excluded Assets,
(vi) restrictions or conditions imposed by any agreement relating to any
Indebtedness incurred by a Restricted Subsidiary prior to the date on which such
Restricted Subsidiary was acquired by the Borrower or another Restricted
Subsidiary if such conditions or restrictions relate only to the property or
assets of such Restricted Subsidiary and its subsidiaries (provided that such
restriction or condition is not created in contemplation of or in connection
with such Person becoming a Restricted Subsidiary), but shall apply to any
extension or renewal thereof, or any amendment or modification thereto only if
it does not expand the scope of any such restriction or condition in any
material respect, (viii) restrictions in connection with sale and leaseback
transactions permitted by Section 6.03, but only with respect to the assets
subject to such transactions;

135

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

 

(ix) customary provisions in joint venture, stockholder, membership, limited
liability company or partnership agreements or organizational documents relating
to joint ventures or partnerships or owners, participation, shared facility or
other similar agreements relating to Project Interests and (x) customary
provisions (including negative pledges) in leases, licenses, permits and other
contracts restricting the assignment thereof (whether for collateral purposes or
otherwise) or otherwise restricting or affecting the property subject thereto.
     (c) Directly or indirectly, create or permit to exist or become effective
any consensual encumbrance or restriction on the ability of any Restricted
Subsidiary (other than an Excluded Subsidiary) to (i) pay dividends or make any
other distributions on its Capital Stock to the Borrower or any of its
Restricted Subsidiaries, or with respect to any other interest or participation
in, or measured by, its profits, or pay any Indebtedness owed to the Borrower or
any of its Restricted Subsidiaries; (ii) make loans or advances to the Borrower
or any of its Restricted Subsidiaries; or (iii) transfer any of its properties
or assets to the Borrower or any of its Restricted Subsidiaries. The
restrictions in this Section 6.07(c) will not apply to encumbrances or
restrictions existing under or by reason of:
     (i) agreements governing Existing Indebtedness as in effect on the Closing
Date and the Senior Notes as in effect on the First Restatement Date and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings of those agreements; provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are no more restrictive, taken as a
whole, with respect to such dividend and other payment restrictions than those
contained in those agreements on the Closing Date;
     (ii) any Loan Document and the loan documentation with respect to any
Revolver Refinancing Indebtedness (provided that such restrictions and
conditions, when taken as a whole, are the same in all material respects as (or
less restrictive than) those contained herein);
     (iii) applicable law, rule, regulation or order;
     (iv) customary non-assignment provisions in contracts, agreements, leases,
permits and licenses;
     (v) purchase money obligations for property acquired and Capital Lease
Obligations that impose restrictions on the property purchased or leased of the
nature described in clause (iii) of this Section 6.07(c);
     (vi) any agreement for the sale or other disposition of the stock or assets
of a Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending the sale or other disposition;
     (vii) Permitted Refinancing Indebtedness; provided that the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are not materially more restrictive, taken as a whole, than those contained in
the agreements governing the Indebtedness being refinanced;
     (viii) Liens permitted to be incurred under the provisions of Section 6.02
that limit the right of the debtor to dispose of the assets subject to such
Liens;

136

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

 

     (ix) provisions limiting the disposition or distribution of assets or
property in joint venture agreements, ownership, participation, shareholders,
partnership or limited liability company agreements relating to Project
Interests, asset sale agreements, sale-leaseback agreements, stock sale
agreements, agreements governing Non-Recourse Indebtedness and other similar
agreements, which limitation is applicable only to the assets that are the
subject of such agreements;
     (x) restrictions on cash or other deposits or net worth or other similar
requirements imposed by customers under contracts entered into in connection
with a Permitted Business;
     (xi) restrictions or conditions contained in any trading, netting,
operating, construction, service, supply, purchase, sale or similar agreement to
which the Borrower or any Restricted Subsidiary is a party entered into in
connection with a Permitted Business; provided that such agreement prohibits the
encumbrance of solely the property or assets of the Borrower or such Restricted
Subsidiary that are the subject of that agreement, the payment rights arising
thereunder and/or the proceeds thereof and not of any other asset or property of
the Borrower or such Restricted Subsidiary or the assets or property of any
other Restricted Subsidiary;
     (xii) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Borrower or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness or Capital
Stock was incurred in connection with or in contemplation of such acquisition),
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property or
assets of the Person, so acquired; provided that, in the case of Indebtedness,
such Indebtedness was permitted by the terms of this Agreement to be incurred;
     (xiii) Indebtedness of a Restricted Subsidiary existing at the time it
became a Restricted Subsidiary if such restriction was not created in connection
with or in anticipation of the transaction or series of transactions pursuant to
which such Restricted Subsidiary became a Restricted Subsidiary or was acquired
by the Borrower;
     (xiv) with respect to clause (iii) of this Section 6.07(c) only,
restrictions encumbering property at the time such property was acquired by the
Borrower or any of its Restricted Subsidiaries, so long as such restriction
relates solely to the property so acquired and was not created in connection
with or in anticipation of such acquisition; and
     (xv) any encumbrance or restriction of the type referred to in clauses (i),
(ii) or (iii) of this Section 6.07(c) (except to the extent that any of clauses
(A) through (N) of this Section 6.07(c) refers or applies only to certain of
such clauses (i), (ii) or (iii), and, in such case, only to such applicable
clause), imposed by any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of the
contracts, instruments or obligations referred to in clauses (A) through (N) of
this Section 6.07(c); provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings are, when taken as a whole, in the good faith judgment of the Chief
Financial Officer of the Borrower, no more restrictive with respect to such
dividend and other payment restrictions than those contained in the dividend or
other payment restrictions prior to such amendment,

137

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

 

modification, restatement, renewal, increase, supplement, refunding, replacement
or refinancing.
     SECTION 6.08. Transactions with Affiliates. (a) Make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate of the Borrower (each, an “Affiliate
Transaction”), unless (i) the Affiliate Transaction is on terms that are no less
favorable to the Borrower (as reasonably determined by the Borrower) or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Borrower or such Restricted Subsidiary with an
unrelated Person; and (ii) the Borrower delivers to the Administrative Agent
with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate Fair Market Value consideration in excess of
$75,000,000, a resolution of the Board of Directors of the Borrower attached to
an officers’ certificate certifying that such Affiliate Transaction complies
with clause (i) of this Section and that such Affiliate Transaction has been
approved by a majority of the disinterested members of such Board of Directors.
     (b) The following items will not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of this Section:
     (i) any employment agreement or director’s engagement agreement, employee
benefit plan, officer and director indemnification agreement or any similar
arrangement entered into by the Borrower or any of its Restricted Subsidiaries
in the ordinary course of business or approved by the Board of Directors of the
Borrower in good faith;
     (ii) transactions between or among the Loan Parties;
     (iii) transactions between or among Excluded Subsidiaries, and any
Guarantee, guarantee and/or other credit support provided by the Borrower and/or
any Restricted Subsidiary in respect of any Subsidiary or any Minority
Investment so long as all holders of Equity Interests in such Minority
Investment (including the Borrower or Restricted Subsidiary, as applicable)
shall participate directly or indirectly in such applicable Guarantee, guarantee
and/or other credit support or shall provide a commitment in respect of any
related obligation, in each case, on a pro rata basis relative to their Equity
Interests in such Minority Investment; provided that any such transaction shall
be fair and reasonable and beneficial to the Borrower and its Restricted
Subsidiaries (taken as a whole) and consistent with Prudent Industry Practice;
     (iv) payment of reasonable fees and other compensation to directors who are
not otherwise Affiliates of the Borrower;
     (v) any issuance of Equity Interests (other than Disqualified Stock) of the
Borrower or its Restricted Subsidiaries to Affiliates of the Borrower;
     (vi) Investments or Dividends that do not violate Section 6.05 or 6.06
hereof;
     (vii) any agreement in effect as of the Closing Date or any amendment
thereto or replacement thereof and any transaction contemplated thereby or
permitted thereunder, so long as any such amendment or replacement agreement
taken as a whole is not more

138

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

 

disadvantageous to the Lenders than the original agreement as in effect on the
Closing Date;
     (viii) payments or advances to employees or consultants that are incurred
in the ordinary course of business or that are approved by the Board of
Directors of the Borrower in good faith;
     (ix) the existence of, or the performance by the Borrower or any of its
Restricted Subsidiaries of its obligations under the terms of, any stockholders
agreement (including any registration rights agreement or purchase agreement
related thereto) to which it is a party as of the Closing Date and any similar
agreements which it may enter into thereafter; provided, however, that the
existence of, or the performance by the Borrower or any of its Restricted
Subsidiaries of obligations under, any future amendment to any such existing
agreement or under any similar agreement entered into after the Closing Date
shall only be permitted by this clause (ix) to the extent that the terms of any
such amendment or new agreement are not otherwise more disadvantageous to the
Lenders than such existing agreement in any material respect;
     (x) transactions permitted by, and complying with, the provisions of
Section 6.04(a);
     (xi) transactions with customers, clients, suppliers, joint venture
partners or purchasers or sellers of goods or services, in each case, in the
ordinary course of business (including pursuant to joint venture agreements) and
otherwise in compliance with the terms of this Agreement that are fair to the
Borrower and its Restricted Subsidiaries, in the reasonable determination of the
Board of Directors of the Borrower or the senior management thereof, or are on
terms not materially less favorable taken as a whole as might reasonably have
been obtained at such time from an unaffiliated party;
     (xii) any repurchase, redemption or other retirement of Capital Stock of
the Borrower held by employees of the Borrower or any of its Subsidiaries at a
price not in excess of the Fair Market Value thereof;
     (xiii) the Acquisition Transactions;
     (xiv) back-to-back transactions, O&M agreements and construction management
agreements, technical and other service agreements, in each case between the
Borrower or any Restricted Subsidiaries and any other Restricted Subsidiaries
entered into in the ordinary course of business and otherwise in compliance with
the terms of this Agreement that are on terms no less favorable to the relevant
Restricted Subsidiary (as reasonably determined by it) than those that would
have been obtained in a comparable transaction by such Restricted Subsidiary
with an unrelated Person;
     (xv) transactions relating to management, administrative or technical
services between the Borrower and its Restricted Subsidiaries, or between
Restricted Subsidiaries;
     (xvi) [reserved];
     (xvii) the issuance of Letters of Credit hereunder, or letters of credit
pursuant to other financing facilities, to support the obligations of any
Excluded Subsidiary, and the issuance of letters of credit under Cash
Collateralized Letter of Credit Facilities to support the obligations of the
Borrower or any Subsidiary (and any reimbursement

139

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

 

agreement of the Borrower and/or any Subsidiary Guarantor in favor of the Funded
L/C SPV with respect to any amounts drawn on letters of credit issued for the
benefit of the Borrower or any of its Subsidiaries under Cash Collateralized
Letter of Credit Facilities) and the Funded L/C SPV Guarantee;
     (xviii) any South Central Securitization permitted by Section 6.04;
     (xix) back-to-back transactions, energy management or energy marketing
services agreements and agency agreements in each case between NRG Power
Marketing and any Restricted Subsidiary entered into in the ordinary course of
business and otherwise in compliance with the terms of this Agreement that are
on terms no less favorable to NRG Power Marketing (as reasonably determined by
it) than those that would have been obtained in a comparable transaction by NRG
Power Marketing with an unrelated person;
     (xx) any tax sharing agreement between or among the Borrower and its
Subsidiaries so long as such tax sharing agreement is on fair and reasonable
terms with respect to each participant therein; and
     (xxi) any agreement to do any of the foregoing.
     SECTION 6.09. Business Activities; Limitations on Funded L/C SPV.
(a) Fundamentally and substantively alter the character of the business of the
Borrower and its Subsidiaries, taken as a whole, from the Permitted Business.
     (b) The Funded L/C SPV shall have (i) no business operations or activities
other than in respect of the issuance of letters of credit under Cash
Collateralized Letter of Credit Facilities and making payments or distributions
to the Borrower and its Subsidiaries as permitted therein (and activities
reasonably related thereto including the posting of cash collateral therefor),
(ii) no properties or assets other than the Funded L/C Collateral Accounts and
all cash, Cash Equivalents, other securities or investments comparable to Cash
Equivalents and other funds and investments held therein, any contractual
reimbursement rights granted by Affiliates of the Funded L/C SPV in favor of the
Funded L/C SPV and other assets of de minimis value and (iii) no Indebtedness or
other obligations other than obligations pursuant to and in accordance with Cash
Collateralized Letter of Credit Facilities providing for the issuance of an
aggregate face amount of letters of credit thereunder not to exceed
$1,300,000,000 at any time outstanding and liabilities and obligations
reasonably related, ancillary or incidental to any Cash Collateralized Letter of
Credit Facility.
     SECTION 6.10. Other Indebtedness and Agreements. Other than any waiver,
supplement, modification or amendment of any agreements related to Material
Indebtedness to be entered into on the Third Restatement Date in connection with
the Transactions, permit any waiver, supplement, modification or amendment of
(a) any indenture, instrument or agreement pursuant to which any Material
Indebtedness of the Borrower or any of the Subsidiaries (other than in respect
of any Specified Hedging Agreement and any Cash Collateralized Letter of Credit
Facility and Material Indebtedness between the Borrower and its Subsidiaries or
between Subsidiaries) is outstanding or (b) any indenture, instrument or
agreement governing any Permitted Note Indebtedness, in any case, if the effect
of such waiver, supplement, modification or amendment would materially increase
the obligations of the obligors or confer additional material rights on the
holder of such Indebtedness in a manner materially adverse to the Borrower and
the Subsidiaries, taken as a whole, or the Lenders; provided that any such
modification or amendment of any such indenture, instrument or agreement shall
not be prohibited by this Section

140

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

 

solely to the extent it has been effectuated to allow for the incurrence of
additional Indebtedness thereunder in compliance with Section 6.01.
     SECTION 6.11. Designation of Restricted and Unrestricted Subsidiaries and
Excluded Subsidiaries. (a) The Board of Directors of the Borrower (or any
committee expressly authorized by the Board of Directors of the Borrower) may
designate any Restricted Subsidiary (other than any Subsidiary constituting or
owning Core Collateral and other than the Funded L/C SPV) to be an Unrestricted
Subsidiary if that designation would not cause a Default or Event of Default. If
a Restricted Subsidiary (other than an Excluded Subsidiary that becomes an
Excluded Subsidiary after the Closing Date) is designated as an Unrestricted
Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned
by the Borrower and its Restricted Subsidiaries in the Subsidiary designated as
an Unrestricted Subsidiary will be deemed to be an Investment made as of the
time of the designation and, except with respect to Investments that were made
pursuant to and in accordance with Section 6.05(e), 6.05(g) or 6.05(m), will
reduce the amount available for Investments under Sections 6.05(h) (if
applicable), 6.05(l) or 6.05(p). Such designation will only be permitted if the
Investment would be permitted at that time and if the Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. The Board of
Directors of the Borrower may redesignate any Unrestricted Subsidiary to be a
Restricted Subsidiary if that redesignation would not cause a Default or Event
of Default.
     (b) Subject to the consent of the Board of Directors of the Borrower (or
any committee expressly authorized by the Board of Directors of the Borrower) in
the case of any Subsidiary Guarantor having a Fair Market Value in excess of
$200,000,000, the Borrower may designate any Subsidiary Guarantor (other than
any Subsidiary constituting or owning Core Collateral) to be an Excluded
Subsidiary if that designation would not cause a Default or Event of Default. If
a Subsidiary Guarantor is designated as an Excluded Subsidiary, the aggregate
Fair Market Value of all outstanding Investments owned by the Borrower and its
Restricted Subsidiaries in the Subsidiary Guarantor designated as an Excluded
Subsidiary will be deemed to be an Investment made as of the time of the
designation and, except with respect to Investments constituting Specified
Facilities and Investments that were made pursuant to and in accordance with
Section 6.05(e), 6.05(g) or 6.05(m), will reduce the amount available for
Investments under Section 6.05(h) (if applicable), 6.05(l) or 6.05(p). Such
designation will only be permitted if the Investment would be permitted at that
time and if the Excluded Subsidiary otherwise meets the definition of an
Excluded Subsidiary.
     SECTION 6.12. Capital Expenditures. Permit the aggregate amount of Capital
Expenditures (including any Investments made pursuant to Section 6.05(l)(ii)(B))
made by the Borrower and the Restricted Subsidiaries (other than any Excluded
Subsidiaries, which shall not be subject to this Section 6.12) in any fiscal
year to exceed $650,000,000 (such amount, the “Permitted Capital Expenditure
Amount”); provided that, notwithstanding the foregoing, additional Capital
Expenditures may be made at any time in an aggregate amount not to exceed the
sum of (a) with respect to any Capital Expenditures made on or after the Third
Restatement Date the Available Amount at the time of such Capital Expenditure
and (b) the Retained Prepayment Amount at the time of such Capital Expenditure.
To the extent that Capital Expenditures made by the Borrower and the Restricted
Subsidiaries (other than any Excluded Subsidiaries) during any fiscal year
(including any Investments made pursuant to Section 6.05(l)(ii)(B)) are less
than the Permitted Capital Expenditure Amount for such fiscal year (1) 100% of
such unused amount (the “Carry Forward Amount”) may be carried forward to the
first succeeding fiscal year and utilized to make Capital Expenditures in such
first succeeding fiscal year in the event the Permitted Capital Expenditure
Amount set forth above for such first succeeding fiscal year has been used and
(2) 100% of any unused Carry Forward Amount from such first succeeding fiscal
year may be carried forward to the second succeeding fiscal year and

141

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

 

utilized to make Capital Expenditures in such second succeeding fiscal year in
the event the Permitted Capital Expenditure Amount set forth above for such
second succeeding fiscal year has been used.
     SECTION 6.13. Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio as of the last day of any Test Period ending after
December 31, 2007 to be less than 1.75 to 1.00.
     SECTION 6.14. Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as of the last day of any Test Period ending after December 31, 2007 to be
greater than 6.00 to 1.00.
     SECTION 6.15. Fiscal Year. With respect to the Borrower, change its fiscal
year-end to a date other than December 31.
ARTICLE VII.
Events of Default
     In case of the happening of any of the following events (“Events of
Default”):
     (a) any representation or warranty made or deemed made in or in connection
with any Loan Document (other than those specified in clause (l) below) or the
Borrowings or issuances of Letters of Credit hereunder, or any representation,
warranty, statement or information contained in any report, certificate,
financial statement or other instrument furnished in connection with or pursuant
to any Loan Document by any Loan Party, shall prove to have been false or
misleading in any material respect when so made, deemed made or furnished;
     (b) default shall be made in the payment of any principal of any Loan or
the reimbursement with respect to any L/C Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or by acceleration thereof or otherwise;
     (c) default shall be made in the payment of any interest on any Loan or any
L/C Disbursement or any Fee or any other amount (other than an amount referred
to in (b) above) due under any Loan Document, when and as the same shall become
due and payable, and such default shall continue unremedied for a period of five
Business Days;
     (d) default shall be made in the due observance or performance by the
Borrower or any Subsidiary of any covenant, condition or agreement contained in
Section 5.01(a), 5.05, 5.08 or 5.11 or in Article VI;
     (e) default shall be made in the due observance or performance by the
Borrower or any Subsidiary of any covenant, condition or agreement contained in
any Loan Document (other than those specified in clauses (b), (c) or (d) above
or clause (l) below) and such default shall continue unremedied for a period of
45 days after notice thereof from the Administrative Agent, the Collateral
Agent, the Collateral Trustee or any Lender to the Borrower;
     (f) (i) the Borrower or any Restricted Subsidiary shall (A) fail to pay any
principal or interest, regardless of amount, due in respect of any Material
Indebtedness, when and as the same shall become due and payable, or (B) any
other event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits

142

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

 

(with or without the giving of notice, the lapse of time or both) the holder or
holders of any Material Indebtedness or any trustee or agent on its or their
behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that clause (B) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness; provided, further that clauses (A) and
(B) shall not apply to (1) Designated Non-Recourse Indebtedness and (2) any
other Non-Recourse Indebtedness of the Borrower and the Restricted Subsidiaries
(except to the extent that the Borrower or any of the Restricted Subsidiaries
that are not parties to such Non-Recourse Indebtedness becomes directly or
indirectly liable, including pursuant to any contingent obligation, for any such
Indebtedness that is Indebtedness for borrowed money thereunder and such
liability, individually or in the aggregate, exceeds $100,000,000) or (ii) the
Funded L/C SPV shall (A) fail to pay any principal, reimbursement obligations,
fees or interest, regardless of amount, due in respect of any Cash
Collateralized Letter of Credit Facility, when and as the same shall become due
and payable, or (B) any other event or condition occurs that results in any Cash
Collateralized Letter of Credit Facility becoming due prior to its scheduled
maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the LC Issuer(s) thereunder or any trustee or agent on
its or their behalf to cause such Cash Collateralized Letter of Credit Facility
to become due, or to require the prepayment, repurchase, redemption, termination
or defeasance thereof, prior to its scheduled maturity and such event or
condition pursuant to this clause (B) shall continue unremedied for a period of
five Business Days;
     (g) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (i) is for relief against the Borrower or any of its
Restricted Subsidiaries (other than the Exempt Subsidiaries) that is a
Significant Subsidiary or any group of Restricted Subsidiaries (other than the
Exempt Subsidiaries) that, taken together, would constitute a Significant
Subsidiary in an involuntary case; (ii) appoints a custodian of the Borrower or
any of its Restricted Subsidiaries (other than the Exempt Subsidiaries) that is
a Significant Subsidiary or any group of Restricted Subsidiaries (other than the
Exempt Subsidiaries) that, taken together, would constitute a Significant
Subsidiary or for all or substantially all of the property of the Borrower or
any of its Restricted Subsidiaries (other than the Exempt Subsidiaries) that is
a Significant Subsidiary or any group of Restricted Subsidiaries (other than the
Exempt Subsidiaries) that, taken together, would constitute a Significant
Subsidiary; or (iii) orders the liquidation of the Borrower or any of its
Restricted Subsidiaries (other than the Exempt Subsidiaries) that is a
Significant Subsidiary or any group of Restricted Subsidiaries (other than the
Exempt Subsidiaries) that, taken together, would constitute a Significant
Subsidiary; and, in each of clauses (i), (ii) or (iii), the order or decree
remains unstayed and in effect for 60 consecutive days;
     (h) the Borrower or any of its Restricted Subsidiaries (other than the
Exempt Subsidiaries) that is a Significant Subsidiary or any group of Restricted
Subsidiaries (other than the Exempt Subsidiaries) that, taken together, would
constitute a Significant Subsidiary, pursuant to or within the meaning of
Bankruptcy Law (i) commences a voluntary case; (ii) consents to the entry of an
order for relief against it in an involuntary case; (iii) consents to the
appointment of a custodian of it or for all or substantially all of its
property; (iv) makes a general assignment for the benefit of its creditors; or
(v) generally is not paying its debts as they become due;
     (i) one or more judgments for the payment of money in an aggregate amount
in excess of $100,000,000 (excluding therefrom any amount covered by insurance)
shall be rendered against the Borrower or any Restricted Subsidiary or any
combination thereof and the same shall remain undischarged for a period of 60
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to levy upon assets

143

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

 

or properties of the Borrower or any of its Restricted Subsidiaries to enforce
any such judgment; provided that this clause (i) shall not apply to
(A) Designated Non-Recourse Indebtedness and (B) any other Non-Recourse
Indebtedness of the Borrower and the Restricted Subsidiaries (except to the
extent that the Borrower or any of the Restricted Subsidiaries that are not
parties to such Non-Recourse Indebtedness becomes directly or indirectly liable,
including pursuant to any contingent obligation, for any such Indebtedness that
is Indebtedness for borrowed money thereunder and such liability, individually
or in the aggregate, exceeds $100,000,000);
     (j) an ERISA Event shall have occurred that, when taken together with all
other such ERISA Events, could reasonably be expected to result in liability of
the Borrower and its ERISA Affiliates in an aggregate amount exceeding
$75,000,000; provided, however, that the parties acknowledge and agree that that
certain Irrevocable Standby Letter of Credit (or any renewal, extension or
replacement thereof that does not increase the face amount thereof) issued by
the Sumitomo Mitsui Banking Corporation in favor of the Benefits Committee of
the Texas Genco Retirement Plan, dated as of June 28, 2005, for an amount not
exceeding $54,900,000, shall not be deemed to be a liability for purposes of
determining whether the $75,000,000 threshold set in this clause (j) of
Article VII is exceeded (but that any other letter of credit or other security
provided pursuant to Section 401(a)(29) of the Tax Code that constitutes an
ERISA Event shall be deemed to be a liability for purposes of this Article VII);
     (k) except as permitted by this Agreement or as a result of the discharge
of such Subsidiary Guarantor in accordance with the terms of the Loan Documents,
any Guarantee by a Significant Subsidiary (or group of Subsidiaries that taken
as a whole would be deemed a Significant Subsidiary) under the Guarantee and
Collateral Agreement shall be held by a final decision issued in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Subsidiary Guarantor (or any group of Subsidiary
Guarantors) that constitutes a Significant Subsidiary shall deny or disaffirm in
writing its or their obligations under its or their Guarantee(s) under the
Guarantee and Collateral Agreement;
     (l) material breach by the Borrower or any of its Restricted Subsidiaries
of any material representation or warranty or covenant, condition or agreement
in the Security Documents, the repudiation by the Borrower or any of its
Restricted Subsidiaries of any of its material obligations under any of the
Security Documents or the unenforceability of any of the Security Documents
against the Borrower or any of its Restricted Subsidiaries for any reason with
respect to Collateral having an aggregate Fair Market Value of $100,000,000 or
more in the aggregate; or
     (m) there shall have occurred a Change of Control;
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event either or both of the following actions may be taken:
(i) the Administrative Agent may with the consent of the Majority Revolving
Credit Lenders, and at the request of the Majority Revolving Credit Lenders
shall, by notice to the Borrower, terminate forthwith the Revolving Credit
Commitments and the Swingline Commitment and (ii) the Administrative Agent may
with the consent of the Required Lenders, and at the request of the Required
Lenders shall, by notice to the Borrower, declare the Loans then outstanding to
be forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities of the Borrower accrued
hereunder and under any other Loan Document, shall become forthwith due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrower, anything contained
herein or in any other Loan Document to the

144

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

 

contrary notwithstanding, and the Administrative Agent and the Collateral Agent
shall have the right to take all or any actions and exercise any remedies
available to a secured party under the Security Documents or applicable law or
in equity; and in any event with respect to an event in respect of the Borrower
described in paragraph (g) or (h) above, the Revolving Credit Commitments, and
the Swingline Commitment shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrower accrued hereunder and
under any other Loan Document, shall automatically become due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding, and the
Administrative Agent and the Collateral Agent shall have the right to take all
or any actions and exercise any remedies available to a secured party under the
Security Documents or applicable law or in equity.
     Without limitation of, and after giving effect to, Section 6.7 of the
Guarantee and Collateral Agreement and Section 3.4 of the Collateral Trust
Agreement, all proceeds received by the Administrative Agent or the Collateral
Agent, as the case may be, either from the Collateral Trustee or any other
Person in respect of any sale of, collection from, or other realization upon all
or any part of the Collateral under any Security Document shall be held by the
Administrative Agent or the Collateral Agent as Collateral for, and applied in
full or in part by the Administrative Agent or the Collateral Agent against, the
applicable Guaranteed Obligations hereunder then due and owing in the following
order of priority: first, to the ratable payment of (a) all costs and expenses
of such sale, collection or other realization, including reasonable and
documented fees, costs and expenses of the Agents and their agents and counsel,
and all other expenses, liabilities and advances made or incurred by the Agents
in connection therewith, and all amounts in each case for which such Agents are
entitled to payment, reimbursement or indemnification under the Loan Documents
(in their capacity as such), and to the payment of all costs and expenses paid
or incurred by the Agents in connection with the exercise of any right or remedy
under the Loan Documents, all in accordance with the terms of the Loan
Documents, (b) any principal and interest owed to the Administrative Agent in
respect of outstanding Revolving Loans advanced on behalf of any Lender by the
Administrative Agent for which the Administrative Agent has not then been
reimbursed by such Lender or the Borrower, (c) any principal and interest owed
to the Swingline Lender in respect of outstanding Swingline Loans that have not
been repaid and (d) any amounts owed to the Issuing Bank under a Letter of
Credit issued by it for which it has not then been reimbursed by any Lender or
the Borrower; second, to the extent of any excess proceeds, to the payment of
all other Guaranteed Obligations hereunder for the ratable benefit of the
holders thereof; and third, to the extent of any excess proceeds, to the payment
to or upon the order of the applicable Loan Party or to whosoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct.
     Notwithstanding anything to the contrary contained in this Article VII, in
the event that the Borrower fails to comply with the requirements of
Sections 6.13 or 6.14, until the expiration of the 10th day subsequent to the
date the certificate calculating such compliance is required to be delivered
pursuant to Section 5.04(c), the Borrower shall have the right to issue
Permitted Cure Securities for cash or otherwise receive cash contributions to
the capital of the Borrower (collectively, the “Cure Right”), and upon the
receipt by the Borrower of such cash (the “Cure Amount”) pursuant to the
exercise by the Borrower of such Cure Right compliance with Sections 6.13 and
6.14 shall be recalculated giving effect to the following pro forma adjustments:
     (i) Consolidated EBITDA shall be increased, solely for the purpose of
measuring compliance with Sections 6.13 and 6.14 and not for any other purpose
under this Agreement, by an amount equal to the Cure Amount; and

145

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

 

     (ii) if, after giving effect to the foregoing recalculations, the Borrower
shall then be in compliance with the requirements of Sections 6.13 and 6.14, the
Borrower shall be deemed to have satisfied the requirements of Sections 6.13 and
6.14 as of the relevant date of determination with the same effect as though
there had been no failure to comply therewith at such date, and the applicable
breach or default of Sections 6.13 and 6.14 that had occurred shall be deemed
cured for the purposes of this Agreement.
     Notwithstanding anything herein to the contrary, (a) in each
four-fiscal-quarter period there shall be at least one fiscal quarter in which
the Cure Right is not exercised, (b) in each eight-fiscal-quarter period, there
shall be a period of at least four consecutive fiscal quarters during which the
Cure Right is not exercised and (c) the Cure Amount shall be no greater than the
amount required for purposes of complying with Sections 6.13 and 6.14 as of the
relevant date of determination.
ARTICLE VIII.
The Agents and the Arrangers
     Each of the Lenders and the Issuing Banks hereby irrevocably appoints each
of the Administrative Agent and the Collateral Agent (for purposes of this
Article VIII, the Administrative Agent and the Collateral Agent are referred to
collectively as the “Agents”) its agent and authorizes the Agents to take such
actions on its behalf and to exercise such powers as are delegated to such Agent
by the terms of the Loan Documents, together with such actions and powers as are
reasonably incidental thereto. Without limiting the generality of the foregoing,
the Agents are hereby expressly authorized by the Lenders to execute any and all
documents (including releases and the Collateral Trust Agreement) with respect
to the Collateral and the rights of the Secured Parties with respect thereto,
and to appoint the Collateral Trustee as their agent in respect of the
Collateral Trust Agreement and the other Security Documents, in each case as
contemplated by and in accordance with the provisions of this Agreement and the
Security Documents. The Collateral Trustee has been expressly authorized and
directed by the Lenders to execute the Collateral Trust Agreement and the other
Security Documents (and any other documents contemplated thereby), in each case,
on the Closing Date and the First Restatement Date. Each of the Lenders and the
Issuing Banks hereby agrees to be bound by the priority of the security
interests and allocation of the benefits of the Collateral and proceeds thereof
set forth in the Security Documents. In addition, each of the Lenders
acknowledges the Credit Agreement Parallel Debt (as defined in the Collateral
Trust Agreement) that has been created in the Collateral Trust Agreement in
favor of the Collateral Trustee.
     Each bank serving as an Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not an Agent, and such bank and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
the Borrower or any Subsidiary or any Affiliate thereof as if it were not an
Agent hereunder.
     No Agent shall have any duties or obligations except those expressly set
forth in the Loan Documents. Without limiting the generality of the foregoing,
(a) no Agent shall be subject to any fiduciary or other implied duties,
regardless of whether a Default or an Event of Default has occurred and is
continuing, (b) no Agent shall have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that the Administrative Agent or the Collateral
Agent is required to exercise as directed in writing by the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.08), and (c) except as expressly set

146

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

 

forth in the Loan Documents, no Agent shall have any duty to disclose, nor shall
it be liable for the failure to disclose, any information relating to the
Borrower or any of the Subsidiaries that is communicated to or obtained by the
bank serving as any Agent or any of its Affiliates in any capacity. The
Administrative Agent and the Collateral Agent shall not be liable for any action
taken or not taken by it with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.08), in each case, in the
absence of its own gross negligence or willful misconduct, as determined by a
court of competent jurisdiction by final and nonappealable judgment. No Agent
shall be deemed to have knowledge of any Default or Event of Default unless and
until written notice thereof is given to such Agent by the Borrower or a Lender,
and no Agent shall be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
any Loan Document, (ii) the contents of any certificate, report or other
document delivered thereunder or in connection therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth in any Loan Document, (iv) the validity, enforceability, effectiveness
or genuineness of any Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article IV or
elsewhere in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to such Agent.
     Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent may also rely
upon any statement made to it orally or by telephone and believed by it to have
been made by the proper Person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
     Each Agent may perform any and all of its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by it. Each Agent
and any such sub-agent may perform any and all of its duties and exercise its
rights and powers by or through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of each Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Agent.
     Subject to the appointment and acceptance of a successor Agent as provided
below, each Agent may resign at any time by notifying the Lenders, the Issuing
Banks and the Borrower. Upon any such resignation of the Administrative Agent or
the Collateral Agent, the Required Lenders shall have the right to appoint a
successor, subject to the Borrower’s approval (not to be unreasonably withheld
or delayed) so long as no Default or Event of Default shall have occurred and be
continuing. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Agent which shall be a bank
with an office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After an Agent’s
resignation hereunder, the provisions of this Article and Section 9.05 shall
continue in effect for the benefit of such retiring Agent, its sub-agents and
their respective

147

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

 

Related Parties in respect of any actions taken or omitted to be taken by any of
them while acting as Agent.
     Each of the Syndication Agents, the Documentation Agents and each Arranger,
in its capacity as such, shall have no duties or responsibilities, and shall
incur no liability, under this Agreement or any other Loan Document.
     Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent, the Collateral Agent, the Syndication Agents, the
Documentation Agents, the Arrangers, or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Collateral Agent, the Arrangers, the Syndication
Agents, the Documentation Agents or any other Lender and based on such documents
and information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement or any other Loan Document, any related agreement or any document
furnished hereunder or thereunder.
     To the extent required by any applicable law, the Administrative Agent may
withhold from any interest payment to any Lender an amount equivalent to any
applicable withholding tax. If the Internal Revenue Service or any other
Governmental Authority asserts a claim that the Administrative Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
because the appropriate form was not delivered or was not properly executed or
because such Lender failed to notify the Administrative Agent of a change in
circumstance which rendered the exemption from, or reduction of, withholding tax
ineffective or for any other reason, such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax or otherwise, including any penalties or interest
and together with all expenses (including legal expenses, allocated internal
costs and out-of-pocket expenses) incurred.
ARTICLE IX.
Miscellaneous
     SECTION 9.01. Notices. (a) Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail, sent by fax or by any other
telecommunication device capable of creating a written record (including
electronic mail), as follows:
     (i) if to the Borrower, to it at NRG Energy, Inc., 211 Carnegie Center,
Princeton, NJ 08540, Attention of Treasurer, Chief Financial Officer and General
Counsel (Fax No. 609-524-4501); with a copy to Kirkland & Ellis LLP, 601
Lexington Avenue, New York, NY 10022, Attention of Andres Mena (Tel
No. 212-446-4737; Fax No. 212-446-6460; Email: andres.mena@kirkland.com); with a
copy to Kirkland & Ellis LLP, 300 North LaSalle St., Chicago, IL 60654,
Attention of Gerald Nowak (Tel No. 312-862-2075; Fax No. 312-862-2200; Email:
gerald.nowak.@kirkland.com);
     (ii) if to the Administrative Agent, to Citicorp North America Inc., 2
Penns Way, Suite 100, New Castle, DE 19720, Attention of David Foster (Tel
No. 302-894-6065; Fax No. 212-994-0961; Email: david.g.foster@citi.com);

148

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

 

     (iii) if to the Collateral Agent, to Citicorp North America Inc., 388
Greenwich Street, 34th Floor, New York, NY 10013, Attention of Joshua Copenhaver
(Tel No. 212-816-3146; Fax No. 646-352-0861; Email: joshua.copenhaver@citi.com)
and Frederic Chapados (Tel No. 212-816-6547; Fax No. 646-688-1813; Email:
frederic.chapados@citi.com); and
     (iv) if to a Lender, to it at its address (or fax number) set forth in the
Lender Addendum or the Assignment and Acceptance pursuant to which such Lender
shall have become a party hereto.
     (b) All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given (i) on the date of receipt if delivered by hand or overnight courier
service or sent by fax, (ii) on the date five Business Days after dispatch by
certified or registered mail if mailed, (iii) on the date on which such notice
or other communication has been made generally available on an Approved
Electronic Platform, Internet website or similar telecommunication device to the
class of Person(s) being notified (regardless of whether any such Person must
accomplish, and whether or not any such Person shall have accomplished, any
action prior to obtaining access to such items, including registration,
disclosure of contact information, compliance with a standard user agreement or
undertaking a duty of confidentiality) and such Person has been notified in
respect of such posting that a communication has been posted to such Approved
Electronic Platform, Internet website or similar telecommunication device if
delivered by posting to such Approved Electronic Platform, Internet website or
similar telecommunication device requiring that a user have prior access to such
Approved Electronic Platform, Internet website or similar telecommunication
device or (iv) on the date on which transmitted to an electronic mail address
(or by another means of electronic delivery) if delivered by electronic mail or
any other telecommunications device, in the case of each of clauses (i) – (iv),
delivered, sent or mailed (properly addressed) to such party as provided in this
Section 9.01 or in accordance with the latest unrevoked direction from such
party given in accordance with this Section 9.01; provided, however, that
notices and other communications to the Administrative Agent pursuant to
Article II or Article VIII shall not be effective until received by the
Administrative Agent.
     (c) Notwithstanding Sections 9.01(a) and 9.01(b) (unless the Administrative
Agent requests that the provisions of Sections 9.01(a) and 9.01(b) be followed)
and any other provision in this Agreement or any other Loan Document providing
for the delivery of any Approved Electronic Communication by any other means,
the Loan Parties shall deliver all Approved Electronic Communications to the
Administrative Agent by properly transmitting such Approved Electronic
Communications in an electronic/soft medium in a format acceptable to the
Administrative Agent to oploanswebadmin@citigroup.com or such other electronic
mail address (or similar means of electronic delivery) as the Administrative
Agent may notify to the Borrower. Nothing in this Section 9.01(c) shall
prejudice the right of the Administrative Agent or any Lender to deliver any
Approved Electronic Communication to any Loan Party in any manner authorized in
this Agreement or to request that the Borrower effect delivery in such manner.
     (d) Posting of Approved Electronic Communications. (i) Each Lender and each
Loan Party agree that the Administrative Agent may, but shall not be obligated
to, make the Approved Electronic Communications available to the Lenders by
posting such Approved Electronic Communications on IntraLinks™ or a
substantially similar electronic platform chosen by the Administrative Agent to
be its electronic transmission system (the “Approved Electronic Platform”).

149

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

 

     (ii) Although the Approved Electronic Platform and its primary web portal
are secured with generally-applicable security procedures and policies
implemented or modified by the Administrative Agent from time to time
(including, as of the Third Restatement Date, a dual firewall and a User
ID/Password Authorization System) and the Approved Electronic Platform is
secured through a single-user-per-deal authorization method whereby each user
may access the Approved Electronic Platform only on a deal-by-deal basis, each
Lender and each Loan Party acknowledges and agrees that the distribution of
material through an electronic medium is not necessarily secure and that there
are confidentiality and other risks associated with such distribution. In
consideration for the convenience and other benefits afforded by such
distribution and for the other consideration provided hereunder, the receipt and
sufficiency of which is hereby acknowledged, each Lender and each Loan Party
hereby approves distribution of the Approved Electronic Communications through
the Approved Electronic Platform and understands and assumes the risks of such
distribution.
     (iii) THE APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC
COMMUNICATIONS ARE PROVIDED “AS IS” AND “AS AVAILABLE”. NONE OF THE
ADMINISTRATIVE AGENT NOR ANY OF ITS AFFILIATES WARRANT THE ACCURACY, ADEQUACY OR
COMPLETENESS OF THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED
ELECTRONIC PLATFORM AND EACH EXPRESSLY DISCLAIMS ANY LIABILITY FOR ERRORS OR
OMISSIONS IN THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC
PLATFORM. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER
CODE DEFECTS, IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES IN
CONNECTION WITH THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED
ELECTRONIC PLATFORM.
     (iv) Each Lender and each Loan Party agree that the Administrative Agent
may, but (except as may be required by applicable law) shall not be obligated
to, store the Approved Electronic Communications on the Approved Electronic
Platform in accordance with the Administrative Agent’s generally-applicable
document retention procedures and policies.
     SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Banks and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the Issuing
Banks or on their behalf, and shall continue in full force and effect (but such
representations and warranties shall be deemed made by the Borrower only at such
times and as of such dates as set forth in Section 4.01(b)) as long as the
principal of or any accrued interest on any Loan or any Fee or any other amount
payable (other than indemnification and other contingent obligations that are
not then due and payable) under this Agreement or any other Loan Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not been terminated. The provisions of Sections 2.14, 2.16,
2.20, 2.21 and 9.05 shall remain operative and in full force and effect
regardless of the expiration of the term of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the

150

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

 

Commitments, the expiration of any Letter of Credit, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative Agent,
the Collateral Agent, any Lender or the Issuing Bank.
     SECTION 9.03. Binding Effect. This Agreement shall become effective in
accordance with the provisions of the Third Amendment Agreement.
     SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of the Borrower, the Administrative Agent, the
Collateral Agent, the Issuing Banks or the Lenders that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns.
     (b) Each Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans or Credit-Linked Deposits at the time
owing to it); provided, however, that (i)(x) except in the case of an assignment
of a Term B Loan or a Credit-Linked Deposit to a Lender or an Affiliate or
Related Fund of a Lender, the Administrative Agent (and, in the case of any
assignment of a Revolving Credit Commitment, the Issuing Bank, the Swingline
Lender and the Borrower) must give its prior written consent to such assignment
(which consent shall not be unreasonably withheld or delayed); provided that the
consent of the Borrower shall not be required to any such assignment (1) during
the continuance of any Event of Default, (2) during the initial syndication of
the Loans and the Commitments or (3) to a Lender or an Affiliate or Related Fund
of a Lender), and the Borrower shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to the
Administrative Agent within five Business Days after having received notice
thereof, and (y) except in the case of an assignment to a Lender or an Affiliate
or Related Fund of a Lender, the amount of the Commitment, Loan or Credit-Linked
Deposit of the assigning Lender subject to each such assignment (determined as
of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than (A) $2,500,000 in
the case of any assignment of a Revolving Credit Commitment or (B) $1,000,000 in
the case of any assignment of a Term B Loan or a Credit-Linked Deposit (or, in
each case, if less, the entire remaining amount of such Lender’s Commitment,
Loans or Credit-Linked Deposits, as the case may be and Related Funds shall be
aggregated for this purpose), (ii) the parties to each such assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance
(such Assignment and Acceptance to be (x) electronically executed and delivered
to the Administrative Agent via an electronic settlement system then acceptable
to the Administrative Agent, which shall initially be the settlement system of
ClearPar, LLC, or (y) manually executed and delivered), together with a
processing and recordation fee of $3,500 (which shall be payable by either the
assignor or the assignee, as they may agree), provided, however, that no such
processing and recordation fee shall be payable in connection with assignments
made by a Lender to an affiliate thereof and (iii) the assignee, if it shall not
be a Lender immediately prior to the assignment, shall deliver to the
Administrative Agent an Administrative Questionnaire. No Lender is permitted to
assign all or any portion of its interests, rights or obligations under this
Agreement (including all or a portion of its Commitment and the Loans or
Credit-Linked Deposits at any time owing to it) except as specifically set forth
in the immediately preceding sentence and any purported assignment not in
conformity therewith shall be null and void. Upon acceptance and recording
pursuant to paragraph (e) of this Section 9.04, from and after the effective
date specified in each Assignment and Acceptance, (A) the assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such

151

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

 

Assignment and Acceptance, have the rights and obligations of a Lender under
this Agreement and (B) the assigning Lender thereunder shall, to the extent of
the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits and obligations of
Sections 2.14, 2.16, 2.20, 2.21 and 9.05, as well as to any Fees accrued for its
account and not yet paid). Notwithstanding the foregoing (but subject to the
consent rights set forth in the first sentence of this Section 9.04(b)), an
assignment by a Lender to one of its Affiliates or Related Funds will be
effective, valid, legal and binding without regard to whether the assignor has
delivered an Assignment and Acceptance or Administrative Questionnaire to the
Administrative Agent (and the acceptance and recordation thereof under paragraph
(e) of this Section shall not be required); provided that the Administrative
Agent and the Borrower shall be entitled to deal solely with the assignor unless
and until the date that an Assignment and Acceptance and Administrative
Questionnaire have been delivered to the Administrative Agent with respect to
the applicable assignee.
     (c) By executing and delivering (to the Administrative Agent or the
assigning Lender in the case of an assignment by a Lender to one of its
Affiliates or Related Funds pursuant to the last sentence of paragraph (b) of
this Section) an Assignment and Acceptance, the assigning Lender thereunder and
the assignee thereunder shall be deemed to confirm to and agree with each other
and the other parties hereto as follows: (i) such assigning Lender warrants that
it is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim and that its Term Loan Commitment, Revolving
Credit Commitment, and the outstanding balances of its Term B Loans, Revolving
Loans and Credit-Linked Deposits, in each case without giving effect to
assignments thereof which have not become effective, are as set forth in such
Assignment and Acceptance, (ii) except as set forth in (i) above, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto, or
the financial condition of the Borrower or any Subsidiary or the performance or
observance by the Borrower or any Subsidiary of any of its obligations under
this Agreement, any other Loan Document or any other instrument or document
furnished pursuant hereto; (iii) such assignee represents and warrants that it
is legally authorized to enter into such Assignment and Acceptance; (iv) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent financial statements referred to in Section 3.05(a) or
delivered pursuant to Section 5.04 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Administrative Agent, the Collateral Agent, the
Syndication Agents, the Documentation Agents, the Arrangers, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (vi) such assignee appoints
and authorizes the Administrative Agent and the Collateral Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent and the Collateral Agent,
respectively, by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
     (d) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in the City of New York a copy of
each Assignment and Acceptance delivered to it and one or more registers for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the

152

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

 

Register shall be conclusive absent manifest error and the Borrower, the
Administrative Agent, the Issuing Bank, the Collateral Agent and the Lenders
shall treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, the Issuing Bank, the Collateral Agent and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice. In the case of any assignment made in accordance with the last sentence
of paragraph (b) of this Section that is not reflected in the Register, the
assigning Lender shall maintain a comparable register reflecting such
assignment.
     (e) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder) and, if required, the written consent of the Swingline Lender,
the Issuing Banks and the Administrative Agent to such assignment, the
Administrative Agent shall (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give
prompt notice thereof to the Lenders, the Issuing Bank, the Swingline Lender and
the Borrower. No assignment shall be effective unless it has been recorded in
the Register as provided in this paragraph (e). Notwithstanding the foregoing,
an assignment by a Lender to an Affiliate or Related Fund pursuant to the last
sentence of paragraph (b) of this Section shall not be required to be recorded
in the Register to be effective; provided that (i) such assignment is recorded
in a comparable register maintained by the assignor as provided in paragraph
(b) of this Section and (ii) the Administrative Agent and the Borrower shall be
entitled to deal solely and directly with the assignor unless and until the date
that an Assignment and Acceptance and Administrative Questionnaire have been
delivered to the Administrative Agent with respect to the applicable assignee.
     (f) Each Lender may without the consent of the Borrower, the Swingline
Lender, the Issuing Banks or the Administrative Agent sell participations to one
or more banks or other entities in all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans and Credit-Linked Deposits owing to it); provided, however, that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participating banks or other
entities shall be entitled to the benefit of the cost protection provisions and
related obligations contained in Sections 2.14, 2.16, 2.20 and 2.21 to the same
extent as if they were Lenders (but, with respect to any particular participant,
to no greater extent than the Lender that sold the participation to such
participant) and (iv) the Borrower, the Administrative Agent, the Issuing Banks
and the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement, and
such Lender shall retain the sole right to enforce the obligations of the
Borrower relating to the Loans or L/C Disbursements and to approve any
amendment, modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers decreasing any fees payable hereunder or
the amount of principal of or the rate at which interest is payable on the
Loans, extending any scheduled principal payment date or date fixed for the
payment of interest on the Loans or the Credit-Linked Deposits, increasing or
extending the Commitments or releasing any Subsidiary Guarantor or all or
substantially all of the Collateral).
     (g) Any Lender or participant may, in connection with any assignment,
pledge or participation or proposed assignment, pledge or participation pursuant
to this Section 9.04, disclose to the assignee or participant or proposed
assignee or participant any information relating to the Borrower furnished to
such Lender by or on behalf of the Borrower; provided that, prior to

153

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

 

any such disclosure of information designated by the Borrower as confidential,
each such assignee or participant or proposed assignee or participant shall
execute an agreement whereby such assignee or participant shall agree (subject
to customary exceptions) to preserve the confidentiality of such confidential
information on terms no less restrictive than those applicable to the Lenders
pursuant to Section 9.16.
     (h) Any Lender may, without the consent of the Borrower or the
Administrative Agent, at any time assign all or any portion of its rights under
this Agreement to secure extensions of credit to such Lender or in support of
obligations owed by such Lender, and, in the case of any Lender that is a fund
that invests in bank loans, such Lender may collaterally assign all or any
portion of its rights under this Agreement to any holder of, trustee for, or
other representative of any holders of, obligations owed or securities issued by
such fund as security for such obligations or securities; provided that no such
assignment described in this clause (h) shall release a Lender from any of its
obligations hereunder or substitute any such assignee for such Lender as a party
hereto.
     (i) Notwithstanding anything to the contrary contained herein, any Lender
(a “Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting Lender would otherwise be obligated
to make to the Borrower pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan and (ii) if an
SPC elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan were made by such Granting Lender. Each party hereto hereby agrees
that no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPC, it will not institute
against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof. In addition,
notwithstanding anything to the contrary contained in this Section 9.04, any SPC
may (i) with notice to, but without the prior written consent of, the Borrower
and the Administrative Agent and without paying any processing fee therefor,
assign all or a portion of its interests in any Loans to the Granting Lender or
to any financial institutions (consented to by the Borrower and Administrative
Agent) providing liquidity and/or credit support to or for the account of such
SPC to support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC.
     (j) The Borrower shall not assign or delegate any of its rights or duties
hereunder without the prior written consent of the Administrative Agent, each
Issuing Bank and each Lender, and any attempted assignment without such consent
shall be null and void.
     SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay all
reasonable and documented out-of-pocket expenses incurred by the Administrative
Agent, the Collateral Agent, the Arrangers, the Syndication Agents, the Issuing
Banks and the Swingline Lender, including the reasonable fees, charges and
disbursements of Latham & Watkins LLP, counsel for the Administrative Agent and
the Collateral Agent, in connection with the syndication of the

154

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

 

credit facilities provided for herein and the preparation and administration of
this Agreement and the other Loan Documents or in connection with any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions hereby or thereby contemplated shall be
consummated); provided that the Borrower shall not be responsible for the
reasonable fees, charges and disbursements of more than one separate law firm
(in addition to one local counsel per relevant jurisdiction or special counsel,
including special workout or regulatory counsel) pursuant to its obligations
under this sentence only. The Borrower also agrees to pay all documented
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent, the Syndication Agents, the Documentation Agents, the Arrangers, the
Issuing Banks or any Lender in connection with the enforcement or protection of
its rights in connection with this Agreement and the other Loan Documents or in
connection with the Loans or Credit-Linked Deposits made or Letters of Credit
issued hereunder, including the fees, charges and disbursements of Latham &
Watkins LLP, counsel for the Administrative Agent and the Collateral Agent, and,
in connection with any such enforcement or protection, the fees, charges and
disbursements of any other counsel (including special workout counsel) for the
Administrative Agent, the Collateral Agent, the Syndication Agents, the
Documentation Agents, the Arrangers, the Issuing Banks or any Lender.
     (b) The Borrower agrees to indemnify the Administrative Agent, the
Collateral Agent, the Syndication Agents, the Documentation Agents, CGMI, the
Arrangers, each Lender, the Issuing Banks (including, for the avoidance of
doubt, any Issuing Bank in its capacity as Issuing Bank with respect to Funded
Letters of Credit under and as defined in the Second Restated Credit Agreement),
the Deposit Bank and each Related Party of any of the foregoing Persons (each
such Person being called an “Indemnitee”) against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable and documented counsel fees, charges and
disbursements, incurred by or asserted against any Indemnitee arising out of, in
any way connected with, or as a result of (i) the execution or delivery of this
Agreement (including the 2005 Credit Agreement and all amendments thereof) or
any other Loan Document or any agreement or instrument contemplated thereby, the
performance by the parties thereto of their respective obligations thereunder
(including the undertaking of each Indemnitee under Section 9.23) or the
consummation of the Transactions and the other transactions contemplated
thereby, (ii) the use of the proceeds of the Loans or Credit-Linked Deposits or
issuance of Letters of Credit, (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is a
party thereto, or (iv) any actual or alleged presence or Release of Hazardous
Materials, or any non-compliance with Environmental Law, on any property owned
or operated by the Borrower or any of the Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of the Subsidiaries;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.
     (c) To the extent that the Borrower fails to pay any amount required to be
paid by them to the Administrative Agent, the Collateral Agent, the Syndication
Agents, CGMI, the Arrangers, the Issuing Banks, the Deposit Bank or the
Swingline Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, the Collateral Agent, the
Syndication Agents, CGMI, the Arrangers, the Issuing Banks, the Deposit Bank or
the Swingline Lender, as the case may be, such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent, the
Collateral Agent, the Syndication Agents, CGMI, the Arrangers, the

155

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

 

Issuing Banks, the Deposit Bank or the Swingline Lender in its capacity as such.
For purposes hereof, a Lender’s “pro rata share” shall be determined based upon
its share of the sum of the Aggregate Revolving Credit Exposure, outstanding
Term B Loans and Credit-Linked Deposits and unused Commitments at the time.
     (d) To the extent permitted by applicable law, the Borrower shall not
assert, and each hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the Transactions, any Loan, Credit-Linked Deposit or Letter of Credit or the use
of the proceeds thereof.
     (e) The provisions of this Section 9.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Administrative Agent, the Collateral Agent, the Syndication Agents, the
Documentation Agents, CGMI, the Arrangers, any Lender, the Issuing Banks or the
Deposit Bank. All amounts due under this Section 9.05 shall be payable promptly
upon written demand therefor.
     SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, except to the extent prohibited by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement and other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured and shall notify the Administrative
Agent promptly of any such setoff. The rights of each Lender under this
Section 9.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
     SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS MOST RECENTLY PUBLISHED AND IN EFFECT, ON THE
DATE SUCH LETTER OF CREDIT WAS ISSUED, BY THE INTERNATIONAL CHAMBER OF COMMERCE
(THE “UNIFORM CUSTOMS”) AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS,
THE LAWS OF THE STATE OF NEW YORK.
     SECTION 9.08. Waivers; Amendment; Replacement of Non-Consenting Lenders.
(a) No failure or delay of the Administrative Agent, the Collateral Agent, any
Lender, the Deposit Bank or the Issuing Banks in exercising any power or right
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or

156

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

 

power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent, the Issuing Bank, the Deposit Bank and the Lenders hereunder
and under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or any other Loan Document or consent to any departure by the
Borrower or any other Loan Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.
     (b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders; provided, however, that no such
agreement shall (i) decrease or forgive the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan or any date for reimbursement of an L/C Disbursement or
extend the date on which the Credit-Linked Deposits are required to be returned
in full, or waive or excuse any such payment or any part thereof, or decrease
the rate of interest on any Loan, Credit-Linked Deposit or L/C Disbursement,
without the prior written consent of each Lender directly affected thereby,
(ii) increase or extend the Commitment or decrease or extend the date for
payment of any Fees of any Lender without the prior written consent of such
Lender, (iii) amend or modify the pro rata requirements of Section 2.17, the
provisions of Sections 2.02, 2.09 and 2.18 requiring ratable distribution or
sharing or ratable funding, the provisions of Section 9.04(j), the provisions of
this Section or the definition of the term “Required Lenders” or release any
Subsidiary Guarantor, except in connection with a release expressly permitted
under the Loan Documents, without the prior written consent of each Lender,
(iv) amend or modify the definition of the term “Majority Revolving Credit
Lenders” without the prior written consent of each Revolving Credit Lender,
(v) except upon payment in full of the Guaranteed Obligations hereunder (except
for contingent obligations or indemnities not yet accrued as of such time),
release all or substantially all of the Collateral, except in connection with a
disposition expressly permitted under the Loan Documents, without the prior
written consent of each Lender, (vi) change the provisions of any Loan Document
in a manner that by its terms adversely affects the rights in respect of
payments due to Lenders holding Loans or Credit-Linked Deposits of one Class
differently from the rights of Lenders holding Loans or Credit-Linked Deposits
of any other Class without the prior written consent of Lenders holding a
majority in interest of the outstanding Loans, Credit-Linked Deposits and unused
Commitments of each adversely affected Class, (vii) modify the protections
afforded to an SPC pursuant to the provisions of Section 9.04(i) without the
written consent of such SPC or (viii) waive, amend or modify the definition of
“Net Cash Proceeds” and the mandatory prepayment requirements of Section 2.13,
in each case to the extent such provisions relate to a Sale of Core Collateral,
without the prior written consent of the Supermajority Lenders; provided further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, the Collateral Agent, the Issuing Bank, the
Deposit Bank or the Swingline Lender hereunder or under any other Loan Document
without the prior written consent of the Administrative Agent, the Collateral
Agent, the Issuing Bank, the Deposit Bank or the Swingline Lender, as
applicable.
     (c) Each Lender grants (i) to the Administrative Agent the right (with the
prior written consent of the Borrower) to purchase all, or all of any Class, of
such Lender’s Commitments and Loans owing to it and any related promissory notes
held by it and all its rights and obligations hereunder and under the other Loan
Documents and (ii) to the Borrower the right to cause an assignment of all, or
all of any Class, of such Lender’s Commitments and Loans owing to it and any
related promissory notes held by it and all its rights and obligations hereunder

157

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

 

and under the other Loan Documents to one or more eligible assignees pursuant to
Section 9.04, which right may be exercised by the Administrative Agent or the
Borrower, as the case may be, if such Lender (a “Non-Consenting Lender”) refuses
to execute any amendment, modification, termination, waiver or consent which
requires the written consent of Lenders other than the Required Lenders and to
which the Required Lenders and the Borrower have otherwise agreed; provided that
such Non-Consenting Lender shall receive in connection with such purchase or
assignment, payment equal to the aggregate amount of outstanding Loans owed to
such Lender, together with all accrued and unpaid interest, fees and other
amounts (other than indemnification and other contingent obligations not yet due
and payable) owed to such Lender under the Loan Documents at such time; and
provided, further, that any such assignee shall agree to such amendment,
modification, termination, waiver or consent. Each Lender agrees that if the
Administrative Agent or the Borrower, as the case may be, exercises its option
under this paragraph it shall promptly execute and deliver all agreements and
documentation necessary to effectuate such assignment as set forth in
Section 9.04. The Borrower shall be entitled (but not obligated) to execute and
deliver such agreements and documentation on behalf of such Non-Consenting
Lender and any such agreements or documentation so executed by the Borrower
shall be effective for all purposes of documenting an assignment pursuant to
Section 9.04.
     SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan or
Credit-Linked Deposit or participation in any L/C Disbursement, together with
all fees, charges and other amounts which are treated as interest on such Loan
or participation in such L/C Disbursement under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may
be contracted for, charged, taken, received or reserved by the Lender holding
such Loan or participation in accordance with applicable law, the rate of
interest payable in respect of such Loan or participation hereunder, together
with all Charges payable in respect thereof, shall be limited to the Maximum
Rate and, to the extent lawful, the interest and Charges that would have been
payable in respect of such Loan or participation but were not payable as a
result of the operation of this Section 9.09 shall be cumulated and the interest
and Charges payable to such Lender in respect of other Loans or participations
or periods shall be increased (but not above the Maximum Rate therefor) until
such cumulated amount, together with interest thereon at the Federal Funds
Effective Rate to the date of repayment, shall have been received by such
Lender.
     SECTION 9.10. Entire Agreement. This Agreement, the Second Restatement Fee
Letter and the other Loan Documents constitute the entire contract between the
parties relative to the subject matter hereof. Any other previous agreement
among the parties with respect to the subject matter hereof is superseded by
this Agreement and the other Loan Documents. Nothing in this Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any
Person (other than the parties hereto and thereto, their respective successors
and assigns permitted hereunder (including any Affiliate of the Issuing Bank
that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the Collateral
Agent, the Syndication Agents, CGMI, the Arrangers, the Issuing Banks and the
Lenders) any rights, remedies, obligations or liabilities under or by reason of
this Agreement or the other Loan Documents.
     SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER

158

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

 

PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.11.
     SECTION 9.12. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
     SECTION 9.13. Counterparts. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement or of a Lender Addendum
by facsimile or other electronic transmission (including “pdf”) shall be as
effective as delivery of a manually signed counterpart of this Agreement.
     SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
     SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) The Borrower
hereby irrevocably and unconditionally submits, for itself and its property, to
the exclusive jurisdiction of any New York State court located in New York City,
Borough of Manhattan, or Federal court of the United States of America sitting
in the Southern District of New York, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or the
other Loan Documents (other than with respect to any action or proceeding by the
Administrative Agent, the Collateral Agent, the Borrower or any other Loan Party
in respect of rights under any Security Document governed by laws other than the
laws of the State of New York or with respect to any Collateral subject
thereto), or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Collateral Agent, the
Syndication Agents, the Documentation Agents, CGMI, the Arrangers, the Issuing
Banks or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against the Borrower or
its properties in the courts of any jurisdiction.
     (b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto

159

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

 

hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
     (c) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
     SECTION 9.16. Confidentiality. Each of the Administrative Agent, the
Collateral Agent, the Issuing Banks and the Lenders agrees to maintain the
confidentiality of the Information, except that Information may be disclosed
(a) to its and its Affiliates’ officers, directors, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority or
quasi-regulatory authority (such as the National Association of Insurance
Commissioners), (c) to the extent required by Applicable Laws or by any subpoena
or similar legal process, (d) in connection with the exercise of any remedies
hereunder or under the other Loan Documents or any suit, action or proceeding
relating to the enforcement of its rights hereunder or thereunder, (e) subject
to an agreement containing provisions substantially the same as those of this
Section 9.16, to (i) any actual or prospective assignee of or participant in any
of its rights or obligations under this Agreement and the other Loan Documents,
(ii) any pledgee referred to in Section 9.04(g) or (iii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower or any Subsidiary or any of their respective
obligations, (f) to credit insurance providers, (g) with the consent of the
Borrower or (h) to the extent such Information becomes publicly available other
than as a result of a breach of this Section 9.16. For the purposes of this
Section, “Information” shall mean all financial statements, certificates,
reports, agreements and other information received from the Borrower or its
Subsidiaries and related to the Borrower or its business, other than any such
financial statements, certificates, reports, agreements and other information
that was available to the Administrative Agent, the Collateral Agent, any
Issuing Bank or any Lender on a nonconfidential basis prior to its disclosure by
the Borrower; provided that, in the case of Information received from the
Borrower after the Closing Date, such information is clearly identified at the
time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section 9.16 shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord its own confidential information.
Notwithstanding any other express or implied agreement, arrangement or
understanding to the contrary, each of the parties hereto agrees that each other
party hereto (and each of its employees, representatives or agents) are
permitted to disclose to any Persons, without limitation, the tax treatment and
tax structure of the Loans and the other transactions contemplated by the Loan
Documents and all materials of any kind (including opinions and tax analyses)
that are provided to the Loan Parties, the Lenders, the Arrangers or any Agent
related to such tax treatment and tax aspects. To the extent not inconsistent
with the immediately preceding sentence, this authorization does not extend to
disclosure of any other information or any other term or detail not related to
the tax treatment or tax aspects of the Loans or the transactions contemplated
by the Loan Documents.
     SECTION 9.17. Delivery of Lender Addenda. Each initial Lender shall become
a party to this Agreement by delivering to the Administrative Agent a Lender
Addendum duly executed by such Lender, the Borrower and the Administrative
Agent.
     SECTION 9.18. [Reserved].

160

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

 

     SECTION 9.19. Mortgage Modifications. As a condition precedent to the
Borrower’s incurrence of additional Indebtedness pursuant to Section 2.25 (other
than pursuant to clause (a)(2) thereof) or 2.26 and to the extent applicable
additional Indebtedness is required by its terms to be secured by a first
priority Lien pursuant to Section 6.01(p), 6.01(y) or 6.01(z)(vi)(y) on
Mortgaged Properties as provided for herein, the Borrower shall satisfy the
following requirements:
     (a) the Subsidiary Guarantors shall enter into, and deliver to the
Administrative Agent and the Collateral Trustee, at the direction and in the
sole discretion of the Administrative Agent and/or the Collateral Trustee (i) in
the case of additional Indebtedness incurred pursuant to Section 2.25 or 2.26, a
mortgage modification or new Mortgage, and (ii) in the case of additional
Indebtedness secured by a first priority Lien incurred pursuant to
Section 6.01(p), 6.01(y) or 6.01(z)(vi)(y), a new Mortgage; in each case in
proper form for recording in the relevant jurisdiction and in a form reasonably
satisfactory to the Administrative Agent;
     (b) the Borrower shall deliver a local counsel opinion in form and
substance as set forth in Section 4.02(a)(ii) of this Agreement;
     (c) the Borrower shall have caused a title company approved by the
Administrative Agent to have delivered to the Administrative Agent and the
Collateral Trustee an endorsement to the title insurance policy delivered
pursuant to Section 4.01(i) of the Existing Credit Agreement or Section
5.09(b)(ii)(A), as applicable, date down(s) or other evidence reasonably
satisfactory to the Administrative Agent and/or the Collateral Trustee insuring
that (i) the priority of the liens evidenced by insuring the continuing priority
of the Lien of the Mortgage as security for such Indebtedness has not changed
and (ii) confirming and/or insuring that (a) since the immediately prior
incurrence of such additional Indebtedness, there has been no change in the
condition of title and (b) there are no intervening liens or encumbrances which
may then or thereafter take priority over the Lien of the Mortgage, other than
the Permitted Liens (without adding any additional exclusions or exceptions to
coverage);
     (d) with respect to each Mortgaged Property required to be insured pursuant
to the Flood Disaster Protection Act of 1973 or the National Flood Insurance Act
of 1968, and the regulations promulgated thereunder, because it is located in an
area which has been identified by the Secretary of Housing and Urban Development
as a “special flood hazard area,” the Borrower or the applicable Subsidiary
Guarantor shall deliver to the Administrative Agent (i) a policy of flood
insurance that (A) covers such Mortgaged Property and (B) is written in an
amount reasonably satisfactory to the Administrative Agent, (ii) a “life of
loan” standard flood hazard determination with respect to such Collateral and
(iii) a confirmation that the Borrower or such Subsidiary Guarantor has received
the notice requested pursuant to Section 208(e)(3) of Regulation H of the Board;
and
     (e) the Borrower shall, upon the request of the Administrative Agent and/or
the Collateral Trustee, deliver to the approved title company, the Collateral
Trustee, the Administrative Agent and/or all other relevant third parties all
other items reasonably necessary to maintain the continuing priority of the Lien
of the Mortgage as security for such Indebtedness.
     SECTION 9.20. Certain Undertakings with Respect to Securitization Vehicles.
(a) Each Secured Party, the Administrative Agent and the Collateral Agent
agrees, and shall instruct the Collateral Trustee, that, prior to the date that
is one year and one day after the payment in full of all the obligations of the
Securitization Vehicle in connection with and under the South Central
Securitization, (i) the Collateral Agent and the other Secured Parties shall not
be entitled, whether before or after the occurrence of any Event of Default, to
(A) institute against, or join any other

161

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

 

Person in instituting against, any Securitization Vehicle any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under the laws
of the United States or any State thereof, (B) transfer and register the capital
stock of any Securitization Vehicle or any other instrument evidencing any
Seller’s Retained Interest in the name of the Collateral Agent or a Secured
Party or any designee or nominee thereof, (C) foreclose such security interest
regardless of the bankruptcy or insolvency of the Borrower or any Restricted
Subsidiary, (D) exercise any voting rights granted or appurtenant to such
capital stock of any Securitization Vehicle or any other instrument evidencing
any Seller’s Retained Interest or (E) enforce any right that the holder of any
such capital stock of any Securitization Vehicle or any other instrument
evidencing any Seller’s Retained Interest might otherwise have to liquidate,
consolidate, combine, collapse or disregard the entity status of such
Securitization Vehicle and (ii) the Collateral Agent and other Secured Parties
hereby waive and release any right to require (A) that any Securitization
Vehicle be in any manner merged, combined, collapsed or consolidated with or
into the Borrower or any Restricted Subsidiary, including by way of substantive
consolidation in a bankruptcy case or (B) that the status of any Securitization
Vehicle as a separate entity be in any respect disregarded. Each Secured Party,
the Administrative Agent and the Collateral Agent agree and acknowledge, and
shall instruct the Collateral Trustee, that the agent acting on behalf of the
holders of securitization indebtedness of the Securitization Vehicle is an
express third party beneficiary with respect to this Section 9.20 and such agent
shall have the right to enforce compliance by the Secured Parties, the
Administrative Agent, the Collateral Agent and the Collateral Trustee with this
Section.
     (b) Upon the transfer or purported transfer by the Borrower or any
Restricted Subsidiary of South Central Securitization Assets to a Securitization
Vehicle in a South Central Securitization, any Liens with respect to such South
Central Securitization Assets arising under this Agreement or any Security
Document related to this Agreement shall automatically be released (and each of
the Administrative Agent and the Collateral Agent, as applicable, is hereby
authorized, and shall instruct the Collateral Trustee, to execute and enter into
any such releases and other documents as the Borrower may reasonably request in
order to give effect thereto).
     SECTION 9.21. Effect of Amendment and Restatement of the Second Restated
Credit Agreement. (a) On the Third Restatement Date, the Second Restated Credit
Agreement shall be amended and restated in its entirety by this Agreement, and
the Second Restated Credit Agreement shall thereafter be of no further force and
effect and shall be deemed replaced and superseded in all respects by this
Agreement, except to evidence (i) the incurrence by the Borrower of the
“Obligations” under and as defined in the Second Restated Credit Agreement
(whether or not such “Obligations” are contingent as of the Third Restatement
Date), (ii) the representations and warranties made by the Borrower prior to the
Third Restatement Date (which representations and warranties made prior to the
Third Restatement Date shall not be superseded or rendered ineffective by this
Agreement as they pertain to the period prior to the Third Restatement Date) and
(iii) any action or omission performed or required to be performed pursuant to
such Second Restated Credit Agreement prior to the Third Restatement Date
(including any failure, prior to the Third Restatement Date, to comply with the
covenants contained in such Second Restated Credit Agreement). The parties
hereto acknowledge and agree that (A) this Agreement and the other Loan
Documents, whether executed and delivered in connection herewith or otherwise,
do not constitute a novation (other than with respect to the obligations of the
Borrower with respect to Funded Letters of Credit under and as defined in the
Second Restated Credit Agreement that were outstanding immediately prior to the
Third Restatement Date, which, as of the Third Restatement Date, constitute
obligations of the Funded L/C SPV pursuant to and in accordance with one or more
Cash Collateralized Letter of Credit Facilities) or termination of the
“Obligations” under the Second Restated Credit Agreement or the other Loan
Documents as in effect prior to the Third Restatement Date and which remain

162

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

 

outstanding as of the Third Restatement Date, (B) the “Obligations” under the
Second Restated Credit Agreement and the other Loan Documents are in all
respects continuing (as amended and restated hereby and which are in all
respects hereinafter subject to the terms herein) and (C) the Liens and security
interests as granted under the applicable Loan Documents securing payment of
such “Obligations” are in all respects continuing and in full force and effect
and are reaffirmed hereby.
     (b) On and after the Third Restatement Date, (i) all references to the
Second Restated Credit Agreement, the First Restated Credit Agreement or the
Credit Agreement in the Loan Documents (other than this Agreement) shall be
deemed to refer to the Second Restated Credit Agreement, as amended and restated
hereby, (ii) all references to any section (or subsection) of the Second
Restated Credit Agreement, the First Restated Credit Agreement or the Credit
Agreement in any Loan Document (but not herein) shall be amended to become,
mutatis mutandis, references to the corresponding provisions of this Agreement
and (iii) except as the context otherwise provides, on or after the Third
Restatement Date, all references to this Agreement herein (including for
purposes of indemnification and reimbursement of fees) shall be deemed to be
references to the Second Restated Credit Agreement as amended and restated
hereby.
     (c) This amendment and restatement is limited as written and is not a
consent to any other amendment, restatement or waiver or other modification,
whether or not similar and, except as expressly provided herein or in any other
Loan Document, all terms and conditions of the Loan Documents remain in full
force and effect unless otherwise specifically amended hereby or by any other
Loan Document.
     (d) Except to the extent specifically amended on the Third Restatement
Date, this amendment and restatement shall not alter, modify or in any way amend
the schedules and exhibits to the Second Restated Credit Agreement (and such
schedules and exhibits shall continue to be schedules and exhibits hereto).
     (e) The Lenders hereby authorize and direct the Collateral Trustee to
execute and deliver all Security Documents and other documents or instruments
necessary or advisable to effect this amendment and restatement, including, for
the avoidance of doubt, any modifications to any Mortgages previously executed
and delivered to the Collateral Trustee by any Loan Party.
     SECTION 9.22.Permitted Amendments. (a) The Borrower may, by written notice
to the Administrative Agent from time to time, make one or more offers to all
Lenders of an applicable Class to make one or more Permitted Amendments pursuant
to procedures reasonably specified by the Administrative Agent and reasonably
acceptable to the Borrower. Such notice shall set forth (i) the terms and
conditions of the requested Permitted Amendments and (ii) the date on which
responses from the applicable Lenders in respect of such Permitted Amendment are
required to be received (which shall not be less than three Business Days after
the date of such notice). Only those Lenders that consent to such Permitted
Amendment (the “Accepting Lenders”) will have the maturity of their applicable
Loans and Commitments extended and be entitled to receive any increase in the
Applicable Margin and any fees (including prepayment premiums or fees), in each
case, as provided therein; provided, however, that if the initial yield on any
Loans and/or Commitments the final maturity date of which is extended pursuant
to any Permitted Amendment (such Loans and/or Commitments, collectively, the
“Permitted Amendment Loans and/or Commitments”) (as determined by the
Administrative Agent to be equal to the sum of (x) the Adjusted LIBO Rate plus
the Applicable Margin applicable to the Permitted Amendment Loans and/or
Commitments and (y) if the Permitted Amendment Loans and/or Commitments are
initially made at a discount or the Lenders making the same receive a

163

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

 

fee directly or indirectly from the Borrower or any Subsidiary for doing so (the
amount of such discount or fee, expressed as a percentage of the Permitted
Amendment Loans and/or Commitments, being referred to herein as the “Permitted
Amendment Discount”), such Permitted Amendment Discount, divided by the lesser
of (A) the average life to maturity of such Permitted Amendment Loans and/or
Commitments and (B) four, exceeds by more than 25 basis points (the amount of
such excess above 25 basis points being referred to herein as the “Permitted
Amendment Yield Differential”) the Adjusted LIBO Rate plus the Applicable Margin
then in effect for any Class of Term Loans (including, for the avoidance of
doubt, the Credit-Linked Deposits) other than the Original Maturity Term Loans
and the Original Maturity Credit-Linked Deposits, then the Applicable Margin
then in effect for such Class of Term Loans, as applicable, shall automatically
be increased by the Permitted Amendment Yield Differential, effective upon the
making of the Permitted Amendment Loans and/or Commitments (and if the
Applicable Margin on the Permitted Amendment Loans and/or Commitments is subject
to a leveraged-based pricing grid, appropriate increases to the other Applicable
Margins for such Class of Term Loans, as applicable, consistent with the
foregoing, shall be made).
          (b) The Borrower and each Accepting Lender shall execute and deliver
to the Administrative Agent such documentation as the Administrative Agent shall
reasonably specify to evidence the acceptance of the Permitted Amendments and
the terms and conditions thereof. The Administrative Agent shall promptly notify
each Lender as to the effectiveness of each Permitted Amendment. Each of the
parties hereto hereby agrees that, upon the effectiveness of any Permitted
Amendment, this Agreement shall be deemed amended, as may be necessary or
appropriate, in the opinion of the Administrative Agent, to effect the terms and
provisions of the Permitted Amendment with respect to the Loans and Commitments
of the Accepting Lenders (including any amendments necessary to treat the Loans
and Commitments of the Accepting Lenders in a manner consistent with the other
Loans and Commitments under this Agreement). Notwithstanding the foregoing, no
Permitted Amendment shall become effective under this Section 9.22 unless the
Administrative Agent, to the extent so reasonably requested by the
Administrative Agent, shall have received legal opinions, board resolutions and
officer’s certificates consistent with those delivered pursuant to Section 4.02.
     SECTION 9.23.Undertaking Regarding Bankruptcy or Similar Proceeding against
Funded L/C SPV.
          (a) No party hereto shall institute (and the Borrower shall cause each
other Subsidiary not to institute) against the Funded L/C SPV any voluntary or
involuntary bankruptcy, reorganization, insolvency, liquidation or similar
proceeding, prior to the date that is one year and one day after the payment in
full of all outstanding obligations of the Funded L/C SPV with respect to any
Cash Collateralized Letter of Credit Facility. The agreement in the preceding
sentence shall survive the termination of the Commitments and the payment in
full of the Loans, Fees and all other expenses or amounts payable under any Loan
Document.
          (b) Each Lender, the Administrative Agent and the Collateral Agent
hereby agree, and shall instruct the Collateral Trustee, that, prior to the date
that is one year and one day after the later of the payment in full of all the
obligations of the Funded L/C SPV in connection with and under Cash
Collateralized Letter of Credit Facilities or the latest expiration of the
letters of credit issued thereunder, (i) the Lenders, the Administrative Agent,
the Collateral Agent and the Collateral Trustee shall not be entitled, whether
before or after the occurrence of any Event of Default, to (A) institute, or
join any other Person in instituting, against the Funded L/C SPV any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under the laws
of the United States or any State thereof or (B) for so long as the Class A
Membership Units of the Funded L/C SPV are owned by any Loan Party, enforce any
right that the holder of the Class A

164

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

 

Membership Units of the Funded L/C SPV might otherwise have to liquidate,
consolidate, combine, collapse or disregard the entity status of the Funded L/C
SPV and (ii) each Lender, the Administrative Agent and the Collateral Agent
hereby waive and release any right to require that (A) the Funded L/C SPV be in
any manner merged, combined, collapsed or consolidated with or into the
Borrower, any Subsidiary or any affiliate of the Borrower, including by way of
substantive consolidation in a bankruptcy case or (B) the status of the Funded
L/C SPV as a separate entity be in any respect disregarded. Each Lender, the
Administrative Agent and the Collateral Agent agree and acknowledge, and shall
instruct the Collateral Trustee, that each LC Issuer under any Cash
Collateralized Letter of Credit Facility is an express third party beneficiary
with respect to this Section 9.23(b) and such LC Issuer shall have the right to
enforce compliance by the Lenders, the Administrative Agent, the Collateral
Agent and the Collateral Trustee with this Section 9.23(b).
[Signature pages follow]

165

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

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

            NRG ENERGY, INC.
      By:   /s/ Christopher Sotos         Name:   Christopher Sotos       
Title:   Vice President and Treasurer     

NRG Energy, Inc. Third Amended and Restated Credit Agreement

 

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

 

            CITICORP NORTH AMERICA INC., as Administrative Agent and Collateral
Agent 

    By:   /s/ Kirkwood Roland         Name:   Kirkwood Roland        Title:  
Vice President     

NRG Energy, Inc. Third Amended and Restated Credit Agreement

 

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

 

            DEUTSCHE BANK AG, NEW YORK
BRANCH, as Issuing Bank
      By:   /s/ Jack N. Leong         Name:   Jack N. Leong        Title:  
Director              By:   /s/ Katrina Krallitsch         Name:   Katrina
Krallitsch        Title:   Assistant Vice President        BANK OF AMERICA,
N.A., as Issuing Bank
      By:   /s/ Partick Martin       Name:   Patrick Martin       Title:  
Senior Vice President    

NRG Energy, Inc. Third Amended and Restated Credit Agreement