Exhibit 10.1

 

EXECUTION VERSION

 

 

 

CREDIT AND GUARANTY AGREEMENT

 

Dated as of October 7, 2005

 

among

 

RELIANT ENERGY, INC.,
as the Borrower,

 

The Other Loan Parties Referred To Herein,
as Guarantors,

 

The Other Lenders Party Hereto,

 

and

 

DEUTSCHE BANK AG, NEW YORK BRANCH
as Administrative Agent,

 

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

 

DEUTSCHE BANK SECURITIES INC.
Sole Lead Arranger, Sole Bookrunner, and Sole Syndication Agent

 

 

 

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

 

TABLE OF CONTENTS

 

 

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

 

1.1 Defined Terms

 

1.2 Other Interpretive Provisions
[a05-17461_1ex10d1.htm#a1_2OtherInterpretiveProvisions_W_132237]

 

1.3 Accounting Terms [a05-17461_1ex10d1.htm#a1_3AccountingTerms__132238]

 

1.4 Rounding [a05-17461_1ex10d1.htm#a1_4Rounding_AnyFinancialRatiosRe_132239]

 

1.5 Times of Day
[a05-17461_1ex10d1.htm#a1_5TimesOfDay_UnlessOtherwiseSpe_132240]

 

 

 

ARTICLE II. THE COMMITMENTS AND THE LOANS
[a05-17461_1ex10d1.htm#Articleii_TheCommitmentsAndTheLoa_132244]

 

2.1 The Loans [a05-17461_1ex10d1.htm#a2_1TheLoans_SubjectToTheTermsAnd_132247]

 

2.2 Borrowings, Conversions and Continuations of Loans
[a05-17461_1ex10d1.htm#a2_2BorrowingsConversionsAndConti_132248]

 

2.3 [Reserved] [a05-17461_1ex10d1.htm#a2_3reserved__132303]

 

2.4 Optional and Mandatory Prepayments
[a05-17461_1ex10d1.htm#a2_4OptionalAndMandatoryPrepaymen_132305]

 

2.5 Termination of Commitments
[a05-17461_1ex10d1.htm#a2_5TerminationOfCommitments_TheC_132307]

 

2.6 Repayment of Loans
[a05-17461_1ex10d1.htm#a2_6RepaymentOfLoans_TheBorrowerS_132308]

 

2.7 Interest [a05-17461_1ex10d1.htm#a2_7Interest__132309]

 

2.8 Fees [a05-17461_1ex10d1.htm#a2_8Fees_TheBorrowerShallPayToThe_132310]

 

2.9 Computation of Interest
[a05-17461_1ex10d1.htm#a2_9ComputationOfInterest_AllComp_132311]

 

2.10 Evidence of Debt [a05-17461_1ex10d1.htm#a2_10EvidenceOfDebt__132313]

 

2.11 Payments Generally; Administrative Agent’s Clawback
[a05-17461_1ex10d1.htm#a2_11PaymentsGenerallyAdministrat_132316]

 

2.12 Sharing of Payments by Lenders
[a05-17461_1ex10d1.htm#a2_12SharingOfPaymentsByLenders_I_132317]

 

 

 

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY
[a05-17461_1ex10d1.htm#Articleiii_TaxesYieldProtectionAn_132321]

 

3.1 Taxes [a05-17461_1ex10d1.htm#a3_1Taxes__132325]

 

3.2 Illegality [a05-17461_1ex10d1.htm#a3_2Illegality_IfAnyLenderDetermi_132326]

 

3.3 Inability to Determine Rates
[a05-17461_1ex10d1.htm#a3_3InabilityToDetermineRates_IfT_132327]

 

3.4 Increased Costs; Capital Adequacy; Reserves on Eurodollar Rate Loans
[a05-17461_1ex10d1.htm#a3_4IncreasedCostsCapitalAdequacy_132328]

 

3.5 Compensation for Losses
[a05-17461_1ex10d1.htm#a3_5CompensationForLosses_UponDem_132329]

 

3.6 Mitigation Obligations; Replacement of Lenders
[a05-17461_1ex10d1.htm#a3_6MitigationObligationsReplacem_132330]

 

3.7 Survival [a05-17461_1ex10d1.htm#a3_7Survival_AllOfTheBorrowersObl_132331]

 

 

 

ARTICLE IV. CONDITIONS PRECEDENT TO LOANS
[a05-17461_1ex10d1.htm#Articleiv_ConditionsPrecedentToLo_132333]

 

4.1 General Conditions
[a05-17461_1ex10d1.htm#a4_1GeneralConditions_TheObligati_132334]

 

4.2 Funding Conditions
[a05-17461_1ex10d1.htm#a4_2FundingConditions_TheObligati_132338]

 

4.3 Post Closing Covenant
[a05-17461_1ex10d1.htm#a4_3PostClosingCovenant_TheBorrow_132339]

 

 

 

ARTICLE V. REPRESENTATIONS AND WARRANTIES
[a05-17461_1ex10d1.htm#Articlev_RepresentationsAndWarran_132347]

 

5.1 Existence, Qualification and Power; Compliance with Laws
[a05-17461_1ex10d1.htm#a5_1ExistenceQualificationAndPowe_132350]

 

5.2 Authorization; No Contravention
[a05-17461_1ex10d1.htm#a5_2AuthorizationNoContravention__132351]

 

5.3 Governmental Authorization; Other Consents
[a05-17461_1ex10d1.htm#a5_3GovernmentalAuthorizationOthe_132352]

 

5.4 Binding Effect
[a05-17461_1ex10d1.htm#a5_4BindingEffect_ThisAgreementHa_132353]

 

5.5 Financial Statements; No Material Adverse Effect
[a05-17461_1ex10d1.htm#a5_5FinancialStatementsNoMaterial_132354]

 

5.6 Litigation [a05-17461_1ex10d1.htm#a5_6Litigation_ThereAreNoActionsS_132355]

 

 

i

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5.7 No Default [a05-17461_1ex10d1.htm#a5_7NoDefault_NoDefaultHasOccurre_132356]

 

5.8 Ownership of Property; Liens
[a05-17461_1ex10d1.htm#a5_8OwnershipOfPropertyLiens__132357]

 

5.9 Environmental Matters
[a05-17461_1ex10d1.htm#a5_9EnvironmentalMatters__132358]

 

5.10 Insurance [a05-17461_1ex10d1.htm#a5_10Insurance_ThePropertiesOfThe_132400]

 

5.11 Taxes [a05-17461_1ex10d1.htm#a5_11Taxes_TheBorrowerAndItsSubsi_132401]

 

5.12 ERISA Compliance [a05-17461_1ex10d1.htm#a5_12ErisaCompliance__132402]

 

5.13 Subsidiaries; Equity Interests
[a05-17461_1ex10d1.htm#a5_13SubsidiariesEquityInterests__132403]

 

5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company
Act [a05-17461_1ex10d1.htm#a5_14MarginRegulationsInvestmentC_132404]

 

5.15 Disclosure [a05-17461_1ex10d1.htm#a5_15Disclosure_TheBorrowerHasDis_132405]

 

5.16 Compliance with Laws
[a05-17461_1ex10d1.htm#a5_16ComplianceWithLaws_EachLoanP_132406]

 

5.17 Intellectual Property; Licenses, Etc.
[a05-17461_1ex10d1.htm#a5_17IntellectualPropertyLicenses_132407]

 

5.18 Solvency [a05-17461_1ex10d1.htm#a5_18Solvency_TheBorrowerIsTogeth_132408]

 

5.19 Perfection, Etc [a05-17461_1ex10d1.htm#a5_19PerfectionEtc__132409]

 

5.20 Parity Secured Obligations
[a05-17461_1ex10d1.htm#a5_20ParitySecuredObligations_The_132410]

 

 

 

ARTICLE VI. AFFIRMATIVE COVENANTS
[a05-17461_1ex10d1.htm#Articlevi_AffirmativeCovenants_132412]

 

6.1 Financial Statements
[a05-17461_1ex10d1.htm#a6_1FinancialStatements_DeliverTo_132415]

 

6.2 Certificates; Other Information
[a05-17461_1ex10d1.htm#a6_2CertificatesOtherInformation__132432]

 

6.3 Notices [a05-17461_1ex10d1.htm#a6_3Notices_PromptlyNotifyTheAdmi_132435]

 

6.4 Payment of Obligations
[a05-17461_1ex10d1.htm#a6_4PaymentOfObligations_PayAndDi_132436]

 

6.5 Preservation of Existence, Etc.
[a05-17461_1ex10d1.htm#a6_5PreservationOfExistenceEtc_aP_132437]

 

6.6 Maintenance of Properties
[a05-17461_1ex10d1.htm#a6_6MaintenanceOfProperties_aMain_132438]

 

6.7 Maintenance of Insurance
[a05-17461_1ex10d1.htm#a6_7MaintenanceOfInsurance_Mainta_132439]

 

6.8 Compliance with Laws
[a05-17461_1ex10d1.htm#a6_8ComplianceWithLaws_ComplyInAl_132440]

 

6.9 Books and Records
[a05-17461_1ex10d1.htm#a6_9BooksAndRecords_aMaintainProp_132441]

 

6.10 Inspection Rights
[a05-17461_1ex10d1.htm#a6_10InspectionRights_PermitRepre_132442]

 

6.11 Use of Proceeds
[a05-17461_1ex10d1.htm#a6_11UseOfProceeds_UseTheProceeds_132607]

 

6.12 Additional Loan Parties; Security Interests
[a05-17461_1ex10d1.htm#a6_12AdditionalLoanPartiesSecurit_132609]

 

6.13 Further Assurances
[a05-17461_1ex10d1.htm#a6_13FurtherAssurances_PromptlyUp_132617]

 

6.14 Florida Mortgaged Properties
[a05-17461_1ex10d1.htm#a6_14FloridaMortgagedProperties_U_132618]

 

 

 

ARTICLE VII. NEGATIVE COVENANTS
[a05-17461_1ex10d1.htm#Articlevii_NegativeCovenants_132619]

 

7.1 Liens [a05-17461_1ex10d1.htm#a7_1Liens_CreateIncurAssumeOrOthe_132622]

 

7.2 Investments [a05-17461_1ex10d1.htm#a7_2Investments_SubjectToSections_132623]

 

7.3 Indebtedness
[a05-17461_1ex10d1.htm#a7_3Indebtedness_CreateIncurIssue_132625]

 

7.4 Consolidation and Mergers
[a05-17461_1ex10d1.htm#a7_4ConsolidationAndMergers__132626]

 

7.5 Asset Sales [a05-17461_1ex10d1.htm#a7_5AssetSales__132627]

 

7.6 Restricted Payments
[a05-17461_1ex10d1.htm#a7_6RestrictedPayments_MakeAnyRes_132628]

 

7.7 Line of Business
[a05-17461_1ex10d1.htm#a7_7LineOfBusiness_NotNorPermitAn_132629]

 

7.8 Transactions with Affiliates
[a05-17461_1ex10d1.htm#a7_8TransactionsWithAffiliates__132630]

 

7.9 Restrictive Agreements
[a05-17461_1ex10d1.htm#a7_9RestrictiveAgreements_EnterIn_132631]

 

7.10 Use of Proceeds
[a05-17461_1ex10d1.htm#a7_10UseOfProceeds_UseTheProceeds_132633]

 

7.11 Financial Covenants [a05-17461_1ex10d1.htm#a7_11FinancialCovenants__132634]

 

7.12 Capital Expenditures
[a05-17461_1ex10d1.htm#a7_12CapitalExpenditures_MakeOrBe_132635]

 

7.13 Modification of Certain Agreements
[a05-17461_1ex10d1.htm#a7_13ModificationOfCertainAgreeme_132636]

 

7.14 Fiscal Year
[a05-17461_1ex10d1.htm#a7_14FiscalYear_NotNorPermitAnyOf_132637]

 

 

ii

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7.15 Commodity Hedging
[a05-17461_1ex10d1.htm#a7_15CommodityHedging_NotNorPermi_132638]

 

7.16 Collateral Trust Agreement; Prepayment of Parity Secured Obligations
[a05-17461_1ex10d1.htm#a7_16CollateralTrustAgreementPrep_132727]

 

7.17 Orion Subsidiaries [a05-17461_1ex10d1.htm#a7_17OrionSubsidiaries__132738]

 

7.18 Designated Entities
[a05-17461_1ex10d1.htm#a7_18DesignatedEntities_Notwithst_132740]

 

7.19 Foreign Investments
[a05-17461_1ex10d1.htm#a7_19ForeignInvestments_Notwithst_132741]

 

 

 

ARTICLE VIII. GUARANTY [a05-17461_1ex10d1.htm#Articleviii_Guaranty_132743]

 

8.1 Guaranty; Limitation of Liability
[a05-17461_1ex10d1.htm#a8_1GuarantyLimitationOfLiability_132747]

 

8.2 Guaranty Absolute
[a05-17461_1ex10d1.htm#a8_2GuarantyAbsolute_EachGuaranto_132759]

 

8.3 Waivers and Acknowledgments
[a05-17461_1ex10d1.htm#a8_3WaiversAndAcknowledgments__132800]

 

8.4 Subrogation [a05-17461_1ex10d1.htm#a8_4Subrogation_EachGuarantorHere_132801]

 

8.5 Assumption and Joinder
[a05-17461_1ex10d1.htm#a8_5AssumptionAndJoinder_UponTheE_132802]

 

8.6 Subordination
[a05-17461_1ex10d1.htm#a8_6Subordination_EachGuarantorHe_132804]

 

8.7 Continuing Guaranty; Assignments
[a05-17461_1ex10d1.htm#a8_7ContinuingGuarantyAssignments_132805]

 

 

 

ARTICLE IX. EVENTS OF DEFAULT AND REMEDIES
[a05-17461_1ex10d1.htm#Articleix_EventsOfDefaultAndRemed_132810]

 

9.1 Events of Default
[a05-17461_1ex10d1.htm#a9_1EventsOfDefault_AnyOfTheFollo_132812]

 

9.2 Remedies upon Event of Default
[a05-17461_1ex10d1.htm#a9_2RemediesUponEventOfDefault_If_132820]

 

9.3 Application of Funds
[a05-17461_1ex10d1.htm#a9_3ApplicationOfFunds_AfterTheEx_132823]

 

 

 

ARTICLE X. THE ADMINISTRATIVE AGENT
[a05-17461_1ex10d1.htm#Articlex_TheAdministrativeAgent_132830]

 

10.1 Appointment and Authority
[a05-17461_1ex10d1.htm#a10_1AppointmentAndAuthority_Each_132835]

 

10.2 Rights As a Lender
[a05-17461_1ex10d1.htm#a10_2RightsAsALender_ThePersonSer_132839]

 

10.3 Exculpatory Provisions
[a05-17461_1ex10d1.htm#a10_3ExculpatoryProvisions_TheAdm_132840]

 

10.4 Reliance by the Administrative Agent
[a05-17461_1ex10d1.htm#a10_4RelianceByTheAdministrativeA_132842]

 

10.5 Delegation of Duties
[a05-17461_1ex10d1.htm#a10_5DelegationOfDuties_TheAdmini_132843]

 

10.6 Resignation of Administrative Agent
[a05-17461_1ex10d1.htm#a10_6ResignationOfAdministrativeA_132844]

 

10.7 Non-Reliance on Administrative Agent and Other Lenders
[a05-17461_1ex10d1.htm#a10_7NonrelianceOnAdministrativeA_132845]

 

10.8 No Other Duties, Etc.
[a05-17461_1ex10d1.htm#a10_8NoOtherDutiesEtc_AnythingHer_132846]

 

10.9 Administrative Agent May File Proofs of Claim
[a05-17461_1ex10d1.htm#a10_9AdministrativeAgentMayfilePr_132847]

 

10.10 Collateral and Guaranty Matters
[a05-17461_1ex10d1.htm#a10_10CollateralAndGuarantyMatter_132848]

 

 

 

ARTICLE XI. MISCELLANEOUS [a05-17461_1ex10d1.htm#Articlexi_Miscellaneous_132857]

 

11.1 Amendments, Etc.
[a05-17461_1ex10d1.htm#a11_1AmendmentsEtc_11_1NoAmendmen_132859]

 

11.2 Notices; Effectiveness; Electronic Communication
[a05-17461_1ex10d1.htm#a11_2NoticesEffectivenessElectron_132910]

 

11.3 No Waiver; Cumulative Remedies
[a05-17461_1ex10d1.htm#a11_3NoWaiverCumulativeRemedies_N_132912]

 

11.4 Expenses; Indemnity; Damage Waiver
[a05-17461_1ex10d1.htm#a11_4ExpensesIndemnityDamageWaive_132913]

 

11.5 Payments Set Aside
[a05-17461_1ex10d1.htm#a11_5PaymentsSetAside_ToTheExtent_132914]

 

11.6 Successors and Assigns
[a05-17461_1ex10d1.htm#a11_6SuccessorsAndAssigns__132915]

 

11.7 Confidentiality
[a05-17461_1ex10d1.htm#a11_7Confidentiality_EachOfTheAdm_132917]

 

11.8 Right of Setoff
[a05-17461_1ex10d1.htm#a11_8RightOfSetoff_IfAnEventOfDef_132918]

 

11.9 Interest Rate Limitation
[a05-17461_1ex10d1.htm#a11_9InterestRateLimitation_Notwi_132919]

 

11.10 Counterparts; Integration; Effectiveness
[a05-17461_1ex10d1.htm#a11_10CounterpartsIntegrationEffe_132920]

 

11.11 Survival of Representations and Warranties
[a05-17461_1ex10d1.htm#a11_11SurvivalOfRepresentationsAn_132922]

 

11.12 Severability
[a05-17461_1ex10d1.htm#a11_12Severability_IfAnyProvision_132923]

 

11.13 Replacement of Lenders
[a05-17461_1ex10d1.htm#a11_13ReplacementOfLenders_Ifiany_132924]

 

11.14 Governing Law; Jurisdiction; Etc.
[a05-17461_1ex10d1.htm#a11_14GoverningLawJurisdictionEtc_132925]

 

 

iii

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11.15 Waiver of Jury Trial
[a05-17461_1ex10d1.htm#a11_15WaiverOfJuryTrial_EachParty_132931]

 

11.16 USA PATRIOT Act Notice
[a05-17461_1ex10d1.htm#a11_16UsaPatriotActNotice_EachLen_132932]

 

11.17 No Oral Agreements
[a05-17461_1ex10d1.htm#a11_17NoOralAgreements_ThisWritte_132933]

 

11.18 Intercreditor Confirmation
[a05-17461_1ex10d1.htm#a11_18IntercreditorConfirmation__132934]

 

11.19 Designated Senior Debt
[a05-17461_1ex10d1.htm#a11_19DesignatedSeniorDebtForPurp_132937]

 

 

iv

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SIGNATURES [a05-17461_1ex10d1.htm#InWitnessWhereofThePartiesHeretoH_132945]

 

 

i

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SCHEDULES

 

1.1(a)

 

Guarantors

1.1(b)

 

Contracts Relating to the California Receivables

1.1(c)

 

Subordination Terms

1.1(d)

 

Mortgages and Title Policies

1.1(e)

 

Existing Indebtedness

2.1

 

Commitments and Pro Rata Shares

5.8(c)

 

Closing Date Mortgaged Properties

5.9(c)

 

Environmental Matters

5.13

 

Subsidiaries and Other Equity Investments

5.17

 

Intellectual Property Matters

7.3(k)

 

List of Agreements Prohibiting Subordination of Intercompany Indebtedness

11.2

 

Administrative Agent’s Office; Certain Addresses for Notices

 

 

 

EXHIBITS

 

Form of

 

A

 

Borrowing Notice

B

 

Continuation/Conversion Notice

C

 

Note

D

 

Compliance Certificate

E

 

Assignment and Assumption

F

 

Assumption and Joinder

 

ii

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

 

CREDIT AND GUARANTY AGREEMENT

 

This CREDIT AND GUARANTY AGREEMENT (as further amended, restated, supplemented
or otherwise modified from time to time, this “Agreement”) dated as of
October 7, 2005, is among RELIANT ENERGY, INC., a Delaware corporation (the
“Borrower”), the other LOAN PARTIES referred to herein, as Guarantors, each
lender from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”), and DEUTSCHE BANK AG, NEW YORK BRANCH, as
Administrative Agent.

 

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

 

ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS

 

1.1  Defined Terms.  As used in this Agreement, the following terms shall have
the meanings set forth below:

 

“Acquired Debt” means with respect to any specified Person:

 

(a)                                  Indebtedness of any other Person existing
at the time such other Person is merged with or into or became a Subsidiary of
such specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with or into,
or becoming a Subsidiary of, such specified Person; and

 

(b)                                 Indebtedness secured by a Lien encumbering
any asset acquired by such specified Person.

 

“Acquisition” means any transaction or any series of related transactions by
which a Person (1) acquires any going business (including a power generation
facility) or all or substantially all of the assets of any other Person, or
division thereof, whether through purchase of assets, merger, or otherwise or
(2) directly or indirectly acquires greater than 50% of the Voting Stock of any
other Person.

 

“Acquisition Consideration” means the gross consideration (other than Equity
Interests in the Borrower) paid (including Indebtedness assumed) in connection
with any Acquisition.

 

“Actionable Default” means (1) the failure to pay any payment of principal of or
interest on any Series of Secured Debt outstanding in the amount of $50,000,000
or more resulting in an event of default under the applicable Series of Secured
Debt after payment is due, including payments that are due (or if any required
offer had been timely made would be due) in respect of any mandatory offer to
purchase Parity Secured Debt resulting in an event of default under the
applicable Series of Secured Debt, (2) the failure to pay in full, when due and
payable in full (whether at maturity, upon acceleration or otherwise), either
the Secured Notes or the Loans or any other Series of Secured Debt outstanding
in the amount of $50,000,000 or more, (3) the exercise by the Collateral Trustee
or any of its co-trustees or agents (including the Administrative Agent) of any
right or power that is exercisable by it only upon default to take sole and
exclusive dominion or control over any deposits in a deposit account, commodity

 

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

 

contract in a commodity account or financial asset in a securities account
constituting any Shared Collateral or the delivery of any instructions to the
Collateral Trustee directing it to foreclose or otherwise enforce, or to
disburse the proceeds of enforcement of, any Lien upon any Collateral, or
(4) the occurrence of any Event of Default under this Agreement or the Secured
Note Agreements arising from the commencement of any bankruptcy case,
receivership or other insolvency or liquidation proceeding by or against the
Borrower or any of its Subsidiaries or any similar default provision at any time
in effect under any indenture or agreement governing any Series of Secured Debt.

 

“Additional Guarantor” means each Person (other than the Guarantors party hereto
on the Closing Date) that shall be required to execute and deliver an Instrument
of Assumption and Joinder pursuant to Section 6.12.

 

“Administrative Agent” means Deutsche Bank in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 11.2, or such other address or
account as the Administrative Agent may from time to time notify to the Borrower
and the Lenders.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate” of any specified Person means any other Person directly or
indirectly Controlling or Controlled by or under direct or indirect common
Control with such specified Person; provided that a Person will be deemed to be
an Affiliate of the Borrower if the Borrower has knowledge that such Person
beneficially owns 10% or more of the Voting Stock of the Borrower; provided,
further, that the Borrower shall only be deemed to have knowledge of any Person
beneficially owning 10% or more of the Borrower’s Voting Stock if such Person
has filed a statement of beneficial ownership pursuant to Sections 13(d) or
13(g) of the Exchange Act or has provided written notice thereof to the
Borrower.  Notwithstanding the foregoing, no Person (other than the Borrower or
any Restricted Subsidiary of the Borrower) in whom a Securitization Entity makes
an Investment in connection with a Qualified Securitization Transaction shall be
deemed to be an Affiliate of the Borrower solely by reason of such Investment.

 

 “Agreement” is defined in the preamble.

 

“Applicable Margin” means a per annum rate equal to (a) 1.375% with respect to
Base Rate Loans and (b) 2.375% with respect to Eurodollar Rate Loans.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

“Asset Sale” means:

 

(a)                                  the sale, lease, conveyance or other
disposition of any assets; and

 

2

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

 

(b)                                 the issuance of Equity Interests in any of
the Borrower’s Restricted Subsidiaries.

 

Notwithstanding the foregoing, none of the following items will be deemed to be
an Asset Sale:

 

(1)                                  any single transaction or series of related
transactions that involves assets with gross cash proceeds of $3,000,000 or
less;

 

(2)                                  a transfer of assets between or among the
Borrower and Restricted Subsidiaries;

 

(3)                                  an issuance of Equity Interests by a
Restricted Subsidiary to the Borrower or to a Restricted Subsidiary of the
Borrower;

 

(4)                                  the sale or lease of products, services or
accounts receivable in the ordinary course of business and any sale or other
disposition of damaged, worn out or obsolete assets or assets no longer used or
useful in the Borrower’s or any of its Restricted Subsidiaries’ business;

 

(5)                                  the sale or other disposition of cash or
Cash Equivalents;

 

(6)                                  sales of accounts receivable, equipment and
related assets (including contract rights) of the type specified in the
definition of Qualified Securitization Transaction to a Securitization Entity;

 

(7)                                  a Restricted Payment that is permitted by
the provisions of Section 7.6 hereof or a Permitted Investment;

 

(8)                                  a disposition resulting from any
Condemnation; provided, that if such disposition involves assets with gross cash
proceeds in excess of $3,000,000, that any cash proceeds received in connection
therewith are treated as Net Asset Sale Proceeds;

 

(9)                                  the disposition by Reliant Energy Wholesale
Generation, LLC of the substation at the Bighorn generating facility (and the
related real property assets) to be conveyed to Nevada Power Company pursuant to
the terms and provisions of that certain EPC Agreement dated December 18, 2002
between Reliant Energy Bighorn, LLC and Nevada Power Company; and

 

(10)                            a disposition of assets (other than any assets
securing Parity Secured Debt) in connection with a foreclosure, transfer or deed
in lieu of foreclosure or other exercise of remedial action.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 11.6(b)), and accepted by the Administrative Agent, in
substantially the form of Exhibit E or any other form approved by the
Administrative Agent.

 

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“Assignment of Leases and Rents” means any assignment of leases and rents or
equivalent document now existing or hereafter entered into, that is executed and
delivered by one or more of the Loan Parties to the Collateral Trustee (for the
benefit of the Secured Parties), and in each case, as such document may be
amended, restated, supplemented or otherwise modified from time to time.

 

“Attributable Debt” means, on any date, (a) in respect of a sale and leaseback
transaction, 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 to
be calculated using a discount rate equal to the rate of interest implicit in
such transaction, determined in accordance with GAAP; provided, 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 (b) in respect of any Synthetic
Lease Obligation or financing lease, the amount of the remaining lease payments
under the relevant lease that would as of such date be required to be
capitalized on a balance sheet in accordance with GAAP if such lease were
accounted for as a Capital Lease Obligation.

 

“Audited Financial Statements” means the audited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries for the Fiscal Year ended
December 31, 2004, and the related consolidated statements of income or
operations, shareholders’ equity and comprehensive income (loss) and cash flows
for such Fiscal Year of the Borrower and its consolidated Subsidiaries,
including the notes thereto.

 

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as heretofore and
hereafter amended, as codified at 11 U.S.C. § 101 et seq.

 

“Base Rate” means for any day a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by Deutsche as its
“prime rate.”  The “prime rate” is a rate set by Deutsche Bank based upon
various factors including Deutsche Bank’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate.  Any change in such rate announced by Deutsche Bank shall take effect at
the opening of business on the day specified in the public announcement of such
change.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Beneficial Owner” has 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.

 

“Board of Directors” means:

 

(1)                                  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;

 

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(2)with respect to a partnership, the Board of Directors of the general partner
of the partnership;

 

(3)                                  with respect to a limited liability
company, the managing member or members or any controlling committee of managing
members or board of directors thereof; and

 

(4)                                  with respect to any other Person, the board
or committee of such Person serving a similar function.

 

“Board Resolution” means a resolution passed by the Board of Directors of the
Borrower.

 

“Borrower” has the meaning specified in the introductory paragraph hereto, and
its successors.

 

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type
and, in the case of Eurodollar Rate Loans, having the same Interest Period made
by each of the Lenders pursuant to Section 2.1.

 

“Borrowing Notice” means a notice of (a) a Borrowing in substantially the form
of Exhibit A, (b) a conversion (which shall not constitute a new Borrowing) of
Loans from one Type to the other in substantially the form of Exhibit B, or
(c) a continuation (which shall not constitute a new Borrowing) of Eurodollar
Rate Loans, pursuant to Section 2.2(a), substantially in the form of Exhibit B.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, Houston, Texas or the state where the Administrative Agent’s Office
is located and, if such day relates to any Eurodollar Rate Loan, means any such
day on which dealings in Dollar deposits are conducted by and between banks in
the London interbank eurodollar market.

 

“California Receivables” means all amounts currently owing to a Loan Party and
withheld on the Closing Date in connection with the contracts set forth on
Schedule 1.1(b).

 

“Capital Expenditure” means, with respect to any Person for any period, the
aggregate amount of all expenditures by such Person during that period which, in
accordance with GAAP, are or should be included in “additions to property, plant
and equipment”, “capital expenditures” or similar items reflected in the
statement of cash flows of such Person for such period.  For purposes of this
definition, the purchase price of equipment that is purchased simultaneously
with the trade-in of existing equipment or with insurance or proceeds of any
Condemnation shall be included in Capital Expenditures only to the extent of the
gross amount of such purchase price, less the credit granted by the seller of
such equipment for the equipment being traded in at such time or the amount of
such insurance or proceeds of any Condemnation, as the case may be.

 

“Capital Lease Obligation” means, as applied to any Person, 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
of such Person in accordance with GAAP in the reasonable judgment of such
Person, and the Stated Maturity thereof shall be the

 

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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” means:

 

(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.

 

“Cash Equivalents” means:

 

(1)                                  United States dollars;

 

(2)                                  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)
having maturities of not more than one year from the date of acquisition;

 

(3)                                  deposit accounts with any lender party to
this Agreement or the Existing Credit Agreement, Mellon Bank N.A., Wells Fargo
Bank, N.A., Wachovia Bank, National Association, or any other bank that has a
long-term debt rating at the time of investment of A+ or better by S&P and A1 or
better by Moody’s (an “Approved Bank”);

 

(4)                                  time deposits, certificates of deposit,
acceptances or prime commercial paper issued by an Approved Bank at the time
acquired or issued (as applicable and whichever is latest), in each case, having
a maturity of not more than one year from the date of acquisition;

 

(5)                                  repurchase obligations for underlying
securities of the types described in clause (2) entered into with an Approved
Bank at the time acquired, issued or entered into (as applicable and whichever
is latest), in each case, having a maturity of not more than one year from the
date of acquisition and secured by securities of the type described in clause
(2), the market value of which (including accrued interest) is not less than the
amount of the applicable repurchase agreement;

 

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(6)                                  commercial paper with a rating at the time
of investment of A-1 by S&P and P-1 by Moody’s and, in each case, maturing
within one year after the date of acquisition; and

 

(7)                                  money market funds which invest primarily
in Cash Equivalents of the kinds described in clauses (1) through (6) of this
definition.

 

“Casualty Event” means the damage or destruction, as the case may be, of
property of any Person; provided, that Casualty Event shall not include any
disposition to which clause 8 of the definition of Asset Sale applies.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

 

“Change of Control” means 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 any such plan);

 

(b)                                 the adoption of a plan relating to the
liquidation or dissolution of the Borrower other than (i) the consolidation
with, merger into or transfer of all or part of the properties and assets of any
Restricted Subsidiary of the Borrower to the Borrower or any other Restricted
Subsidiary of the Borrower and (ii) the merger of the Borrower with an Affiliate
solely for the purpose of reincorporating the Borrower or reforming the Borrower
in another jurisdiction;

 

(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 50% of the Voting Stock of the Borrower, measured by voting power rather
than number of shares;

 

(d)                                 the first day on which a majority of the
members of the Board of Directors of the Borrower are not Continuing Directors;
or

 

(e)                                  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

 

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(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).

 

“Channelview” means Reliant Energy Channelview, L.P., a Delaware limited
partnership, and its successors.

 

“Closing Date” means the first date all the conditions precedent in Section 4.1
are satisfied or waived in accordance with Section 11.10.

 

“Closing Date Mortgaged Properties” has the meaning specified in
Section 4.1(b)(i).

 

“Code” means the Internal Revenue Code of 1986 as amended from time to time.

 

“Collateral” means the “Shared Collateral” as defined in the Collateral Trust
Agreement.

 

“Collateral Trust Agreement” means that certain collateral trust agreement,
dated as of July 1, 2003, entered into among the Borrower, certain of its
Subsidiaries and Wachovia Bank, National Association, as initial Collateral
Trustee, and acknowledged and agreed to by the Revolver Administrative Agent (in
its capacity as a collateral trustee agent) and Wilmington Trust Company, as
trustee for the holders of the Secured Notes, as such agreement may be amended,
restated, supplemented or otherwise modified from time to time.

 

“Collateral Trustee” means any collateral trustee for the Secured Parties under
the Collateral Trust Agreement.

 

“Commitment” means, as to each Lender, its obligation to make Loans to the
Borrower pursuant to Section 2.1 in an aggregate amount at any one time
outstanding not to exceed the amount set forth opposite such Lender’s name on
Schedule 2.1 under the caption “Commitment” or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable (in an
aggregate amount for all Lenders not to exceed $299,000,000).

 

“Commodity Hedging Obligations” means, with respect to any specified Person, the
net obligations of such Person under agreements or arrangements designed to
protect such Person against fluctuations in commodity prices.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit D.

 

“Condemnation” shall mean any condemnation or other taking, or temporary or
permanent requisition of, any property, any interest therein or right
appurtenant thereto, or any change of grade affecting any property, in each case
as the result of the exercise of any right of condemnation or eminent domain.  A
sale or other transfer to a Governmental Authority in lieu of, or in
anticipation of, condemnation shall be deemed to be a Condemnation.

 

“Consolidated EBITDAR” means, for any Person for any period determined on a
consolidated basis in accordance with GAAP, an amount equal to, without any
duplication, (a) net income (before giving effect to the cumulative effect of
changes in accounting principles and discontinued operations (including Liberty
Electric Power LLC, a Delaware limited liability

 

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company) and before income taxes and franchise taxes to the extent based on the
income of such Person and its Subsidiaries) for such period, plus
(b) Consolidated Interest Charges for such period, plus (c) depreciation,
depletion, impairment, abandonment and amortization expense for such period,
plus (d) the book accounting lease expense under the REMA Lease for such period,
plus (e) interest and fees expensed under any receivables monetization or
securitization during such period (other than interest and fees arising out of a
securitization or monetization of the California Receivables), plus (f) net
unrealized losses related to non-trading energy derivatives, plus (g) cash
dividends or distributions actually received during such period from an entity
which is not a consolidated Subsidiary of such Person other than El Dorado
Energy, LLC, plus (h) the Borrower’s pro rata share of the EBITDAR of El Dorado
Energy, LLC, and minus (i) net unrealized gains related to non-trading energy
derivatives;

 

provided, however, for purposes of this definition, (i) gains and losses on the
disposition of assets not in the ordinary course of business, (ii) any other
noncash charge or gain, and (iii) any extraordinary or other non-recurring item
or expense, including severance costs, shall be excluded to the extent incurred
or realized during such period in accordance with GAAP from the calculation of
Consolidated EBITDAR.

 

If during any period for which Consolidated EBITDAR is being determined, the
Borrower or any Subsidiary shall have (a) made or consummated any Acquisition
for gross consideration of $3,000,000 or more (including Indebtedness assumed),
then Consolidated EBITDAR shall be determined on a pro forma basis for such
period as if such Acquisition had been made or consummated as of the beginning
of the first day of such period or (b) made or consummated any Asset Sale that
is not fully included in discontinued operations, then Consolidated EBITDAR
shall, to the extent such Asset Sale is not excluded from Consolidated EBITDAR
pursuant to the foregoing proviso, be determined on a pro forma basis for such
period as if such Asset Sale had been made or consummated as of the beginning of
the first day of such period.

 

“Consolidated Interest Charges” means, without duplication, for any period for
the Borrower and its Subsidiaries on a consolidated basis, (a) the total
interest expense for such period, plus (b) the interest expense during such
period attributable to (i) the REMA Lease, (ii) the fees and yield paid in
connection with, or interest expense attributable to, any account receivables
securitization or monetization permitted hereunder (other than with respect to
the California Receivables), (iii) the Borrower’s pro rata share of the net
interest expense of El Dorado Energy, LLC, and (iv) any capitalized interest
during such period, plus (c) all cash dividends and distributions paid on
preferred or preference stock, plus (d) to the extent deducted in determining
total interest expense, net unrealized gains of any Hedging Agreements permitted
hereunder and existing on or prior to December 22, 2004 (excluding any ongoing
settlement payments in connection with permitted interest rate swap agreements),
minus (e) (i) the total interest income of such Person and its Subsidiaries,
including interest income from any escrow or trust account, but excluding any
interest income attributable to the California Receivables, including any
settlement and collection of the California Receivables for such period, (ii) in
all cases whether expensed or amortized, any interest expense attributable to
(A) any makewhole or premium paid in connection with the repayment of any Debt
permitted hereunder, (B) any upfront direct or indirect costs, expenses, or fees
incurred in connection with, including those arising out of the preparation for
the maturity of, (1) the Existing Credit Agreement, this

 

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Agreement and other Debt, and the restructuring or payoff of the Debt of OPC and
its Subsidiaries or (2) the incurrence of any Debt after December 22, 2004,
(C) to the extent added in determining total interest expense, the upfront cost
and net unrealized losses of any Hedging Agreements permitted hereunder and
existing on or prior to December 22, 2004 (excluding ongoing settlement payments
in connection with permitted interest rate swap agreements), and (D) any of the
RRI Warrants; (iii) any interest expense attributable to the Liberty Project
Financing, (iv) any interest expense attributable to the California Receivables,
including any settlement or collection thereof, and (v) all non-recurring
interest expense with respect to items not constituting Indebtedness.

 

“Consolidated Interest Coverage Ratio” means, as of any date of determination,
the ratio of (a) Consolidated EBITDAR for the period of the four prior Fiscal
Quarters ending on such date to (b) Consolidated Interest Charges for such
period.

 

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Total Debt as of such date to (b) Consolidated EBITDAR for
the period of the four Fiscal Quarters most recently ended.

 

“Consolidated Total Debt” means, as of any date of determination, for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP,
(i) all outstanding Debt of the Borrower and its Subsidiaries on such date,
minus (ii) without duplication, all (a) cash and short-term investments, in an
aggregate amount not to exceed $300,000,000 at any time, (b) restricted cash, in
an amount not to exceed the aggregate amount of Indebtedness of the Borrower or
any of its Subsidiaries, the terms of which Indebtedness cause such cash to
appear as restricted cash on the consolidated balance sheet of the Borrower and
its Subsidiaries, and (c) broker, counterparty, and customer margin/collateral
assets and deposits advanced to or held on behalf of such broker, counterparty
or customer, as each of the foregoing appears on the consolidated balance sheet
of the Borrower and its Subsidiaries.

 

“Continuing Directors” means, 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 December 22, 2004; 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 at the time of such nomination or
election.

 

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

 

“Contribution Agreement” means the Contribution Agreement dated as of the date
hereof and executed by each of the Loan Parties, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time.

 

“Control” means, with respect to any Person, 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; and the terms “controlling,” “controlled by” and “under
common control with” have correlative meanings.

 

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“Control Agreement” means a Deposit Account Control Agreement or a Securities
Account Control Agreement.

 

“Convertible Notes” means the Borrower’s 5.00% Convertible Senior Subordinated
Notes due 2010 in an aggregate principal amount of $275,000,000, issued pursuant
to that certain Indenture, dated as of June 24, 2003, by and between the
Borrower and Wilmington Trust Company, as trustee.

 

“Core Asset Consent” means, as of any date of determination, the consent of
Required Aggregate Term Lenders.

 

“Credit Agreement Obligations” means all advances to, and debts, liabilities,
Obligations, covenants and duties of, any Loan Party arising under or in
connection with any Loan Document or otherwise with respect to any Loan, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including Post-Petition Interest.

 

 “Debt” means, as of any date of determination with respect to the Borrower and
its Subsidiaries, without duplication, in accordance with GAAP the following: 
(a) the total amount of indebtedness, including any fair value adjustments, and
other obligations of the Borrower and its Subsidiaries for borrowed money
(whether by loan or the issuance of debt securities), including the unreimbursed
amount of any drawings under letters of credit issued for the account of the
Borrower or any of its Subsidiaries, (b) all Capital Lease Obligations and,
except for the REMA Lease, Attributable Debt in respect of sale and leaseback
transactions, Synthetic Lease Obligations or financing leases, (c) the unpaid
balance owed to the certificate holders under the REMA Lease, (d) obligations
under any accounts securitization or monetization arrangement permitted
hereunder and not recorded on the Borrower balance sheet for that period (other
than with respect to any securitization or monetization of the California
Receivables), and (e) all guaranties of payment or collection of any obligations
described in clauses (a) through (d) of this definition of any other Person;

 

provided, however, that Debt shall not include:  (i) any guaranties that may be
incurred by endorsement of negotiable instruments for deposit or collection in
the ordinary course of business or similar transactions, (ii) any Obligations or
guaranties of performance of Obligations under performance bonds, (iii) trade
accounts payable in the ordinary course of business, (iv) customer advance
payments and customer deposits arising in the ordinary course of business,
(v) the liability of any Person as a general partner of a partnership for Debt
of such partnership, if the partnership is not a Subsidiary of such Person, and
(vi) any completion or performance guarantees (or similar guarantees that a
project or a Subsidiary perform as planned).

 

In determining the outstanding amount of any Debt:  (a) the amount of money
borrowed shall be the outstanding principal amount thereof, (b) the amount of
all unreimbursed letters of credit shall be the unreimbursed amount thereof,
(c) the amount of any accounts monetization or securitization shall be the
amount invested by the investor therein, and (d) the amount of guaranties shall
be the amount of the guaranteed obligations determined as provided above in this
sentence.

 

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“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

 

“Default Rate” means (a) when used with respect to Credit Agreement Obligations
other than Loans, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Margin, if any, applicable to Base Rate Loans plus (iii) 2% per annum
and (b) when used with respect to Loans, a rate equal to (i) the rate of
interest applicable thereto hereunder plus (ii) the Applicable Margin, if any,
applicable thereto plus (iii) 2% per annum.

 

“Deposit Account” shall have the meaning given to such term in the Security
Agreement.

 

“Deposit Account Control Agreement” means, with respect to any Deposit Account,
a written agreement or other authenticated record, in form and substance
reasonably satisfactory to the Revolver Administrative Agent, pursuant to which
the depositary bank in which such Deposit Account is maintained shall agree,
among other things, to comply at any time with instructions from the Collateral
Trustee (or its co-trustees, agents or sub-agents) to such depositary bank
directing the disposition of funds from time to time credited to such Deposit
Account, without further consent of any Loan Party or its nominee, as any such
agreement or record may be amended, restated, supplemented or otherwise modified
from time to time.

 

“Designated Entities” means, collectively, OPH, REMA, Channelview and their
respective Subsidiaries.

 

“Deutsche Bank” means Deutsche Bank AG, New York Branch, and its successors.

 

“Disqualified Stock” means 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 Maturity Date.  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 shall 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 the provisions of Section 7.6 hereof.  The amount of Disqualified Stock
deemed to be outstanding at any time for purposes of this Agreement shall be
equal to 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.

 

“Dollar” and “$” mean lawful money of the United States.

 

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“Domestic Subsidiary” means a Subsidiary that is organized or incorporated under
the laws of the United States or a State thereof.

 

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent and (ii) unless an Event of Default has occurred
and is continuing, the Borrower (each such approval not to be unreasonably
withheld or delayed); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or
Subsidiaries or any Person who in the ordinary course of its business owns
and/or operates power generating facilities.

 

“Environmental Laws” means any and all Federal, state, local, regional and
foreign statutes, laws, rules of common law, constitutional provisions,
regulations, ordinances, rules judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or governmental restrictions relating
to pollution and the protection of the environment or Hazardous Materials,
including, without limitation, those relating to the use analysis, generation,
manufacture, storage, discharge, emission, release, disposal, transportation
treatment, investigation, removal, or remediation of Hazardous Materials. 
Environmental Laws include, without limitation, those acts commonly referred to
as the Comprehensive Environmental Response, Compensation and Liability Act of
1980; the Superfund Amendments and Reauthorization Act; the National
Environmental Policy Act; the Hazardous Materials Transportation Act; the
Resource Conservation and Recovery Act, the Solid Waste Disposal Act, the Clean
Water Act, the Clean Air Act, the Toxic Substances Control Act, and the
Occupational Safety and Health Act, and their state counterparts.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

 

“Equally and Ratably” means, in reference to sharing of any Liens on Shared
Collateral or proceeds thereof as among the holders of Parity Secured
Obligations, after allowing for the payment priorities in the Order of
Application, that such Liens or proceeds:

 

(1)                                  shall be allocated and distributed to the
applicable Parity Secured Debt Representative for account of the holders of
Secured Notes, to the Administrative Agent for account of the Lenders and to the
Secured Debt Representative for each other Series of Secured Debt for account of
the holders of such Series of Secured Debt, ratably in proportion to the
principal, interest, fees and premium (if any) outstanding, when the allocation
or distribution is made, on (i) the Secured Notes, (ii) Credit Agreement
Obligations, (iii) Hedging Obligations and amounts payable to a Lender (as
defined in the Existing Credit Agreement) in connection with a bank account or
any other banking services, in each case, that are required by the Existing
Credit Agreement to be secured

 

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on an equal and ratable basis with the Credit Agreement Obligations (as defined
in the Existing Credit Agreement) and (iv) all other Series of Secured Debt
(allocated proportionately to the Secured Debt Representative for each other
Series of Secured Debt if there is more than one), respectively; and thereafter

 

(2)                                  shall be allocated and distributed (if any
remain after payment in full of all of the principal, interest, fees and premium
(if any) outstanding on the Secured Notes, Credit Agreement Obligations, the
Hedging Obligations and other amounts payable to a lender referred to in clause
(1), and each other Series of Secured Debt) to the applicable Secured Debt
Representative for account of the holders of any remaining Secured Note
Obligations, to the Administrative Agent for account of the Lenders holding any
remaining Credit Agreement Obligations or such other amounts and to the Secured
Debt Representative for each other Series of Secured Debt for account of the
holders of any remaining Parity Secured Obligations in respect of such Series of
Secured Debt, ratably in proportion to the aggregate unpaid amount of such
remaining Secured Note Obligations, Credit Agreement Obligations, Hedging
Obligations or such other amounts and other remaining Parity Secured
Obligations, respectively, that are due and demanded prior to the date such
distribution is made.

 

For this purpose:

 

(1)                                  unfunded commitments to extend credit shall
not be counted as outstanding debt;

 

(2)                                  obligations of the Borrower or any
Guarantor in respect of outstanding letters of credit, bank guarantees, bankers’
acceptances or other similar instruments shall be counted as outstanding debt
(whether or not contingent), except that if any such instrument thereafter
expires without being funded, an equitable adjustment shall be made in any
future distribution so that the aggregate amount distributed is distributed
Equally and Ratably as if such instrument had never been outstanding (but all
distributions shall be final and non-refundable when made);

 

(3)                                  during the pendency of any Actionable
Default, and subject to the Order of Application, if any payment or distribution
is made in cash to the Lenders or any other holders of Parity Secured
Obligations from or on account of Separate Collateral by reason of enforcement
of Liens or realization in a bankruptcy case, receivership or other insolvency
or liquidation proceeding, then any concurrent or subsequent payment or
distribution that is to be made in cash to such holders from or on account of
Shared Collateral by reason of any such enforcement or realization shall be
reduced, and any concurrent or subsequent payment or distribution that is to be
made in cash to the remaining holders of Parity Secured Obligations from or on
account of Shared Collateral by reason of any such enforcement or realization
shall be increased, to the extent necessary to cause the aggregate amount of all
payments and distributions made in cash to all holders of Parity Secured
Obligations (whether made from or on account of Separate Collateral or from or
on account of Shared Collateral) by reason of any such enforcement or
realization to be distributed Equally and Ratably as fully as if the Separate
Collateral had been Shared Collateral; and

 

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(4)                                  all amounts apportioned and distributed to
the Administrative Agent or the Secured Debt Representative for any other
Series of Secured Debt may be allocated, apportioned and distributed by it in
accordance with the applicable provisions of this Agreement or the indenture or
agreement governing such other Series of Secured Debt, including to give effect
to any payment priorities provided for therein as among the holders of
obligations outstanding thereunder.

 

“Equity Interests” means Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).

 

“ERCOT” means the Electric Reliability Council of Texas.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
which is a member of the controlled group of the Borrower or under common
control with the Borrower within the meaning of Section 414(b) or (c) of the
Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

 

“Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar
Rate Loan, the rate per annum equal to the British Bankers Association LIBOR
Rate (“BBA LIBOR”), as published by Reuters (or other commercially available
source providing quotations of BBA LIBOR as designated by the Administrative
Agent from time to time) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, for Dollar deposits (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period.  If such rate is not available at such time for any
reason, then the “Eurodollar Rate” for such Interest Period shall be the rate
per annum determined by the Administrative Agent to be the rate at which
deposits in Dollars for delivery on the first day of such Interest Period in
same day funds in the approximate amount of the Eurodollar Rate Loan being made,
continued or converted by Deutsche Bank and with a term equivalent to such
Interest Period would be offered by Deutsche Bank’s London Branch to major banks
in the

 

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London interbank eurodollar market at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the commencement of such Interest
Period.

 

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.

 

“Event of Default” has the meaning specified in Section 9.1.

 

“Excepted Debt” means Indebtedness expressly permitted to be incurred or issued
pursuant to Section 7.3(a), (b), (c), (d), (e), (f), (h), (j) (other than a
refinancing of the Loans), (k), and (s).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Excluded Entities” shall mean: (a) Channelview and OPH and (b) each of their
respective Subsidiaries; provided, however, that Channelview and OPH, together
with their respective Subsidiaries, shall no longer be an “Excluded Entity” in
the event that (x) such entity is not prohibited under any agreement for
borrowed money from taking the actions set forth in Section 6.12, and (y) such
entity is no longer restricted or prohibited from paying dividends or other
distributions to a Loan Party, repaying loans or advances owed to a Loan Party
or transferring any of its properties or assets to a Loan Party, other than
restrictions imposed by Law.

 

“Excluded Proceeds” means any Net Asset Sale Proceeds that are designated by the
Borrower as Excluded Proceeds; provided, that (a) not more than $300,000,000 of
such Net Asset Sale Proceeds may be designated as Excluded Proceeds during any
single calendar year, (b) not more than $750,000,000 of such Net Asset Sale
Proceeds may be designated as Excluded Proceeds on or after December 22, 2004,
and (c) Net Asset Sale Proceeds from Asset Sales of generation assets or other
businesses, in each case acquired by the Borrower or any Restricted Subsidiary
after December 22, 2004 pursuant to an Acquisition may not be designated as
Excluded Proceeds.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) taxes imposed on or measured by its overall net
income (however denominated), and franchise taxes imposed on it (in lieu of net
income taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable Lending Office
is located, (b) any branch profits taxes imposed by the United States or any
similar tax imposed by any other jurisdiction in which the Borrower is located
and (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 11.13), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party hereto (or designates a new Lending Office) or is
attributable to such Foreign Lender’s failure or inability (other than as a
result of a Change in Law) to comply with Section 3.1(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 3.1(a).

 

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“Existing Credit Agreement” means the “Credit Agreement” as defined in the
Collateral Trust Agreement.

 

“Existing Florida Mortgages” means the mortgages listed in Item 1 of
Schedule 1.1(d).

 

“Existing Indebtedness” means Indebtedness (other than intercompany
Indebtedness) of the Borrower and its Restricted Subsidiaries in existence on
December 22, 2004 and set forth on Schedule 1.1(e).

 

“Existing Mortgages” means the mortgages listed in Item 2 of Schedule 1.1(d).

 

“Existing Title Policies” means the title policies listed in Item 3 of
Schedule 1.1(d).

 

“Extraordinary Receipt” means any cash received by or paid to or for the account
of any Person from proceeds of insurance (other than proceeds of business
interruption insurance to the extent such proceeds constitute compensation for
lost earnings).

 

“Fair Market Value” means the value that would be paid by a willing buyer to a
willing seller in a transaction not involving distress or necessity of either
party, determined in good faith by the chief financial officer of the Borrower
or Board of Directors of the Borrower or the selling entity (unless otherwise
provided in this Agreement).

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided, that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Deutsche
Bank on such day on such transactions as determined by the Administrative Agent.

 

“Fee Letter” means the letter agreements dated as of October 7, 2005 between the
Borrower and the Administrative Agent or one of its Affiliates, as amended,
restated, supplemented or otherwise modified from time to time.

 

“Fiscal Quarter” means a quarter ending on the last day of March, June,
September or December.

 

“Fiscal Year” means any period of twelve consecutive calendar months ending on
December 31; references to a Fiscal Year with a number corresponding to any
calendar year (e.g., the “2004 Fiscal Year”) refer to the Fiscal Year ending on
December 31 of such calendar year.

 

“Florida Mortgaged Properties” means the Closing Date Mortgaged Properties
described in the Existing Florida Mortgages.

 

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“Florida Mortgage Supplement” means a Supplement to the Existing Florida
Mortgages, in a form reasonably acceptable to the Administrative Agent and the
Borrower, and completed to include the Credit Agreement Obligations as Secured
Debt under each such Existing Florida Mortgage.

 

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax
purposes.  For purposes of this definition, the United States, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.

 

 “Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

 

“Free Cash Flow” means, for any period from January 1, 2005 through the date of
its determination:

 

(a)                                  the Borrower’s aggregate operating cash
flow from continuing operations;

 

plus

 

(b)                                 to the extent deducted in determining
operating cash flow from continuing operations, any extraordinary or other
non-recurring item or expense, including severance payments;

 

plus (if a reduction) or minus (if an increase)

 

(c)                                  the aggregate changes in margin deposits on
energy trading and hedging activities, net;

 

plus (if a reduction) or minus (if an increase)

 

(d)                                 the aggregate changes in restricted cash,
all during such period;

 

minus

 

(e)                                  capital expenditures during such period;

 

all, except for clause (b), as indicated on the Borrower’s consolidated
statements of cash flows.

 

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

 “GAAP” means 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

 

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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.

 

“Governmental Authority” means the government of the United States of America,
any other nation or 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, or pertaining to, government.

 

“Granting Lender” has the meaning specified in Section 11.6(h).

 

“Guarantee” means 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).  The term “Guarantee” as a verb has a corresponding meaning.

 

“Guaranteed Obligations” has the meaning specified in Section 8.1(a).

 

“Guarantors” means each of:

 

(a)                                  the entities listed on
Schedule 1.1(a) hereto; and

 

(b)                                 any other Subsidiary of the Borrower that
executes this Agreement in accordance with the provisions of this Agreement,

 

and their respective successors and assigns.

 

“Guaranty” means the guaranty of the Credit Agreement Obligations provided by
each Guarantor pursuant to the terms of Article VIII of this Agreement.

 

“Hazardous Materials” means all explosive, flammable, corrosive or radioactive
substances or wastes and all hazardous, carcinogenic, mutagenic or toxic
substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes, toxic mold and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Hedge Termination Value” means, in respect of any one or more Hedging
Agreements, after taking into account the effect of any legally enforceable
netting agreement relating to such Hedging Agreements, (a) for any date on or
after the date such Hedging Agreements have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a), the amount(s)
determined as the mark-to-market value(s) for such Hedging Agreements, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Hedging Agreements (which
may include a Lender or any Affiliate of a Lender).

 

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“Hedging Agreement” has the meaning specified in the definition of “Hedging
Obligation”.

 

“Hedging Obligations” means, with respect to any specified Person, the net
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 rate risk; and

 

(c)                                  other agreements or arrangements designed
to protect such Person against fluctuations in currency exchange rates (any
agreement or arrangement referred to in this clause or any of the foregoing
clauses (a) and (b), a “Hedging Agreement”).

 

The amount of any net obligation under any Hedging Agreement on any date shall
be deemed to be the Hedge Termination Value thereof as of such date.

 

“Indebtedness” means, with respect to any specified Person, any indebtedness of
such Person (excluding accrued expenses or trade payables), whether or not
contingent (without duplication):

 

(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 or
Attributable Debt in respect of sale and leaseback transactions (including the
REMA Lease), Synthetic Lease Obligations or financing leases;

 

(e)                                  representing the balance deferred and
unpaid of the purchase price of any property or services due more than six
months after such property is acquired or such services are completed;

 

(f)                                    representing any Hedging Obligations; or

 

(g)                                 consisting of Disqualified Stock.

 

whether or not any of the preceding items 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.  If
obligations of a Securitization Entity are Indebtedness, for the purposes of
calculating

 

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the amount of Indebtedness of a Securitization Entity outstanding as of any
date, the face or notional amount of any interest in receivables or equipment
that is outstanding as of such date shall be deemed to be Indebtedness but any
such interests held by Affiliates of such Securitization Entity shall be
excluded for purposes of such calculation.  The amount of any Indebtedness
outstanding as of any date will be:

 

(i)                                     the accreted value of the Indebtedness,
in the case of any Indebtedness issued with original issue discount;

 

(ii)                                  the principal amount of and premium (if
any) on the Indebtedness, in the case of any other Indebtedness;

 

(iii)                               in respect of Indebtedness of other Persons
secured by a Lien on the assets of the specified Person, the lesser of:

 

(A)                              the Fair Market Value of such asset at such
date of determination, and

 

(B)                                the amount of such Indebtedness of such other
Persons; and

 

(iv)                              in respect of any Guarantee, an amount equal
to the stated or determinable amount of the related primary obligation, or
portion thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitee” has the meaning specified in Section 11.4(b).

 

“Instrument of Assumption and Joinder” means an Assumption and Joinder Agreement
substantially in the form of Exhibit F.

 

“Intercreditor Confirmation” means the agreement of any holder of Parity Secured
Debt or other Parity Secured Obligations to the provisions described in the
Order of Application and definition of the term “Equally and Ratably,” as set
forth in any Secured Debt Document for the benefit of, and enforceable as a
third party beneficiary by, each present and future holder of Parity Secured
Obligations and each present and future Secured Debt Representative.

 

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, that if any Interest Period for a Eurodollar Rate Loan exceeds
three months, the respective dates that fall every three months after the
beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan, each Quarterly Payment Date and the Maturity Date.

 

“Interest Period” means as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending on the date one, two, three, six, nine, or,
if available, twelve months thereafter, as selected by the Borrower in its
Borrowing Notice, as the case may be; provided, that:

 

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(i)                                     any Interest Period that would otherwise
end on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Rate Loan, such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day;

 

(ii)                                  any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and

 

(iii)                               no Interest Period shall extend beyond the
Maturity Date.

 

“Investment” means, 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 similar obligations), advances or capital
contributions (excluding payroll, commission, travel and similar advances to
officers and employees made in the ordinary course of business), 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.  “Investment”
shall exclude extensions of trade credit by the Borrower and its Restricted
Subsidiaries in the ordinary course of business and Permitted PEDFA Bond
Indebtedness.  The acquisition by the Borrower or any Subsidiary of the Borrower
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 shall be its Fair Market Value at the time the Investment is
made and without giving effect to subsequent changes in value.

 

“IP Rights” has the meaning specified in Section 5.17.

 

“IRS” means the United States Internal Revenue Service.

 

“Junior Securities” mean the issuance by the Borrower, solely for cash proceeds
(except for the conversion of any convertible security into ordinary common
stock of the Borrower), of senior subordinated notes (where either (i) the
subordination provisions of such notes shall be at least as favorable to the
Lenders as the subordination provisions set forth in Schedule 1.1(c) or the
Convertible Notes; or (ii) the subordination provisions shall be in all respects
satisfactory to the Revolver Administrative Agent), or preferred or preference
stock of any kind, common equity securities, or any warrants, options or similar
instruments for the purchase of any equity interest, whether common or
preferred; provided, that any convertible security constituting a “Junior
Security” pursuant to the foregoing shall be convertible only into ordinary
common stock of the Borrower.

 

“Laws” means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof,

 

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and all applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority.

 

“Lender” has the meaning specified in the introductory paragraph hereto.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

 

“Liberty Project Financing” means the Indebtedness incurred by Liberty Electric
PA, LLC and Liberty Electric Power, LLC to finance the 568 Megawatt combined
cycle gas-fueled electric generating plant located in the Borough of Eddystone,
Delaware County, Pennsylvania, together with any extensions, amendments, or
refinancings thereof to the extent permitted hereunder.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement and any lease that
constitutes a security interest.

 

“Loan” means an extension of credit by a Lender to the Borrower under
Article II.

 

“Loan Documents” means (i) this Agreement, (ii) each Note, (iii) each Security
Document, (iv) each Secured Hedge Agreement, (v) the Contribution Agreement,
(vi) each UCC financing statement, (vii)  the Fee Letter, (viii) any Secured
Trading Counterparty Intercreditor Agreement, (ix) each Instrument of Assumption
and Joinder, (x) each other document, agreement, certificate or instrument
required to be or otherwise executed by any Loan Party in connection with this
Agreement or any or any of the other documents listed above and (xi) solely for
purposes of Section 6.13, the Orion Note Documents.

 

“Loan Party” means the Borrower and each Guarantor.

 

“Material Adverse Effect” means a material adverse effect upon (a) the business,
operations, property, financial condition or prospects of the Borrower and its
Subsidiaries taken as a whole; or (b) the validity or enforceability against any
Loan Party of any Loan Document to which it is a party or the material rights
and remedies of the Administrative Agent and the Lenders thereunder.

 

“Material Subsidiary” means, as of any date, any Subsidiary of the Borrower
where either (i) $25,000,000 or more of Consolidated EBITDAR during the
four-Fiscal Quarter period most recently ended was attributable to such
Subsidiary or (ii) as of such date, had assets with a book value of $50,000,000
or more.

 

“Maturity Date” means April 30, 2010.

 

“Moody’s” shall mean Moody’s Investors Service, Inc. or if such company shall
cease to issue ratings, another nationally recognized rating company selected in
good faith by mutual agreement of the Revolver Administrative Agent and the
Borrower.

 

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“Mortgage” shall mean any mortgage, deed of trust, deed to secure debt or such
equivalent document now existing or hereafter entered into covering the
Mortgaged Real Property Assets, that is executed and delivered by one or more of
the Loan Parties to the Collateral Trustee (for the benefit of the Secured
Parties), including the Existing Mortgages, as any such document may be amended,
restated, supplemented or otherwise modified from time to time.

 

“Mortgage Supplement” means Supplements to the Existing Mortgages (except for
the Existing Florida Mortgages), substantially in the form of the form of
Supplement attached to each Existing Mortgage, and completed to include the
Sharing Eligible Debt in existence on the Closing Date as an “Additional
Series of Secured Debt” under each such Existing Mortgage.

 

“Mortgaged Real Property Assets” means those real property assets of the Loan
Parties on which a Lien has been granted by the applicable Loan Party to the
Collateral Trustee (for the benefit of the Secured Parties).

 

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

 

“Net Asset Sale Proceeds” means the aggregate cash proceeds received by the
Borrower or any of its Restricted Subsidiaries in respect of any Asset Sale
(including any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale and payments made to retire Indebtedness (other than the Loans)
required to be repaid in connection therewith, including legal, accounting and
investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale, taxes paid or payable as a result of the
Asset Sale, in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, and amounts reserved for adjustment
in respect of the sale price of such asset or assets established in accordance
with GAAP.

 

“Net Casualty Proceeds” means, with respect to any Casualty Event, the amount of
any insurance proceeds or condemnation awards received by the Borrower, any Loan
Party or OPH or any of its Subsidiaries in connection with such Casualty Event
in excess of $10,000,000, individually or in the aggregate over the course of a
Fiscal Year (net of all reasonable and customary collection expenses thereof),
but excluding any proceeds or awards required to be paid to a creditor (other
than the Lenders) which holds a first priority Lien permitted by Section 7.1 on
the property which is the subject of such Casualty Event.

 

“Net Financing Proceeds” means with respect to the incurrence or issuance after
December 22, 2004 by the Borrower to any Person of any Senior Debt or Junior
Securities permitted under this Agreement, the excess of:

 

(a)                                  the gross cash proceeds received by the
Borrower from such incurrence or issuance, over

 

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(b)                                 all reasonable and customary underwriting
commissions and legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements actually incurred in
connection with such sale or issuance which have not been paid to Affiliates of
the Borrower in connection therewith.

 

“New Secured Notes” means the Borrower’s 6.75% Secured Notes due 2014.

 

“Non-Recourse” means, with respect to any specified Person and the Indebtedness
of such Person:

 

(1)                                  NEITHER THE BORROWER NOR ANY OF ITS
RESTRICTED SUBSIDIARIES (A) PROVIDES CREDIT SUPPORT OF ANY KIND (INCLUDING ANY
UNDERTAKING, AGREEMENT OR INSTRUMENT THAT WOULD CONSTITUTE INDEBTEDNESS) FOR THE
INDEBTEDNESS OF SUCH PERSON OTHER THAN A PLEDGE OF THE EQUITY INTERESTS OF SUCH
PERSON OR OF THE SUBSIDIARIES OF SUCH PERSON, (B) IS DIRECTLY OR INDIRECTLY
LIABLE AS A GUARANTOR OR OTHERWISE OF THE INDEBTEDNESS OF SUCH PERSON, OR
(C) CONSTITUTES THE LENDER WITH RESPECT TO THE INDEBTEDNESS OF SUCH PERSON; AND

 

(1)                                  IN THE CASE OF AN UNRESTRICTED SUBSIDIARY,
NO DEFAULT ON THE INDEBTEDNESS OF SUCH UNRESTRICTED SUBSIDIARY (INCLUDING ANY
RIGHTS THAT THE HOLDERS OF THE INDEBTEDNESS MAY HAVE TO TAKE ENFORCEMENT ACTION
AGAINST AN UNRESTRICTED SUBSIDIARY) WOULD PERMIT UPON NOTICE, LAPSE OF TIME OR
BOTH ANY HOLDER OF INDEBTEDNESS OF THE BORROWER OR ANY OF ITS RESTRICTED
SUBSIDIARIES TO DECLARE A DEFAULT ON SUCH INDEBTEDNESS OF THE BORROWER OR ANY OF
ITS RESTRICTED SUBSIDIARIES OR CAUSE THE PAYMENT OF SUCH INDEBTEDNESS OF THE
BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES TO BE ACCELERATED OR PAYABLE
PRIOR TO ITS STATED MATURITY.

 

“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit C.

 

“Obligations” means any principal, interest, premium, fees, indemnifications,
reimbursements, expenses, damages and other liabilities payable under the
documentation governing any Indebtedness.

 

“OPC” means Orion Power Capital, LLC, a Delaware limited liability company, and
its successors.

 

“OPH” means Orion Power Holdings, Inc., a Delaware corporation, and its
successors.

 

“OPH Asset Sale Proceeds” means any Net Asset Sale Proceeds received by the
Borrower or any of its Subsidiaries from any Asset Sale by OPH or any of its
Subsidiaries.

 

“OPH Note Indenture” means the Indenture, dated as of April 27, 2000, among OPH
and Wilmington Trust Company, as trustee, pursuant to which the OPH Notes were
issued, as amended, restated, supplemented or otherwise modified from time to
time.

 

“OPH Notes” means OPH’s 12% Senior Notes due 2010.

 

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“OPH Revolving Notes” means, collectively, the OPMW Revolving Note and the OPNY
Revolving Note.

 

“OPMW” means Orion Power MidWest, L.P., a Delaware limited partnership, and its
successors.

 

“OPMW New Term Note” means the term note, dated as of December 22, 2004, issued
by OPMW to the Borrower in an original principal amount of $188,421.290.18, as
amended, restated, supplemented or otherwise modified from time to time.

 

“OPMW Refinancing Note” means the term note, dated as of December 22, 2004,
issued by OPMW to the Borrower in an original principal amount of
$211,578,709.82, as amended, restated, supplemented or otherwise modified from
time to time.

 

“OPMW Revolving Note” means the revolving note, dated as of December 22, 2004,
issued by OPMW to the Borrower in the maximum principal amount of $75,000,000 as
amended, restated, supplemented or otherwise modified from time to time.

 

“OPMW Term Notes” means, collectively, the OPMW Refinancing Note and the OPMW
New Term Note.

 

“OPNY Revolving Note” means the revolving note, dated as of December 22, 2004,
issued by OPMW to the Borrower in the maximum principal amount of $50,000,000,
as amended, restated, supplemented or otherwise modified from time to time.

 

“OPNY Term Note” means the term note, dated as of December 22, 2004, issued by
OPNY to the Borrower in the original principal amount of $400,000,000, as
amended, restated, supplemented, or otherwise modified from time to time.

 

“Order of Application” has the meaning assigned to it in the Collateral Trust
Agreement.

 

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

“Orion Guarantors” means, collectively, OPC, OPMW, OPNY, Orion Power Midwest
GP, Inc., Orion Power New York GP, Inc., Orion Power Midwest LP, LLC, Orion
Power New York LP, LLC, Twelvepole Creek LLC and Astoria Generating Company,
L.P.

 

“Orion Note Document” means each Orion Note and each agreement or other document
executed in connection therewith.

 

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“Orion Notes” means, collectively, the OPMW Refinancing Note, the OPMW New Term
Note, the OPMW Revolving Note, the OPNY Term Note and the OPNY Revolving Note.

 

“Orion Security Agreement” means the Amended and Restated Security Agreement
executed by OPH and the Orion Guarantors in favor of Reliant Energy, Inc., as
secured party, as amended, restated, supplemented or otherwise modified from
time to time.

 

“Other Taxes” means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

 

“Outstanding Amount” means on any date the aggregate outstanding principal
amount of the Loans after giving effect to any borrowings and prepayments or
repayments of Loans occurring on such date.

 

“Parity Secured Debt” means, collectively:

 

(1)                                  the Secured Notes;

 

(2)                                  the PEDFA Guaranties;

 

(3)                                  the Credit Agreement Obligations (as
defined in the Existing Credit Agreement) and the Credit Agreement Obligations;
and

 

(4)                                  Sharing Eligible Debt that is designated by
the Borrower, in a Certificate of a Responsible Officer of the Borrower
delivered to the Collateral Trustee on or before the date of incurrence of such
Indebtedness, as entitled to share Equally and Ratably in the benefits and
proceeds of all Liens held by the Collateral Trustee in Shared Collateral.

 

“Parity Secured Obligations” means, collectively, the Secured Note Obligations,
the PEDFA Guaranty Obligations, the Credit Agreement Obligations (as defined in
the Existing Credit Agreement), the Credit Agreement Obligations and all
Obligations in respect of each other Series of Secured Debt.

 

“Participant” has the meaning specified in Section 11.6(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“PEDFA Guaranties” means collectively, the Borrower’s (i) five Guarantee
Agreements, each dated as of December 22, 2004, among the Borrower, the
Guarantors and J.P.Morgan Trust Company, as trustee, and (ii) other guaranties
constituting Permitted PEDFA Bond Indebtedness made by the Borrower from time to
time in accordance with Section 7.3.

 

“PEDFA Guaranty Obligations” means:

 

(1)                                  the Obligations of the Borrower under the
PEDFA Guaranties issued on December 22, 2004; or

 

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(2)                                  the Obligations of the Borrower under the
PEDFA Guaranties issued after December 22, 2004 that constitute another
Series of Secured Debt.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.

 

“Permitted Acquisition” means any Acquisition by the Borrower or any of its
Restricted Subsidiaries that satisfies all of the following conditions:  (1) the
aggregate Acquisition Consideration paid or incurred by the Borrower and its
Restricted Subsidiaries in connection with such Acquisition, together with the
aggregate Acquisition Consideration paid by Borrower and its Restricted
Subsidiaries in connection with all other Acquisitions since December 22, 2004,
does not exceed the Permitted Acquisition Limit, (2) no Default shall have
occurred and be continuing or would result therefrom on the date of the closing
of such Acquisition, (3) the Borrower shall have delivered to the Administrative
Agent a certificate of an Authorized Officer certifying compliance with
Section 7.11 on a pro forma basis after giving effect to the Acquisition
(without supporting calculations), (4) the acquired Person is in (or the
acquired assets are useful in) a Permitted Business, and (5) the assets,
including any Capital Stock, acquired pursuant to such Acquisition shall be
pledged as additional collateral for the Credit Agreement Obligations, and any
acquired entity shall become a Guarantor, in each case in accordance with
Section 6.12.

 

“Permitted Acquisition Limit” means, as of any date, an amount equal to the sum
of (a) the lesser of (i) 50% of Free Cash Flow for the period from December 22,
2004 through such date and (ii) $1,000,000,000, (b) in the case of the
acquisition of a Permitted ERCOT Asset, the amount of additional senior secured
Indebtedness issued for such Acquisition, not to exceed $500,000,000, (c) the
amount of additional senior secured Indebtedness issued since December 22, 2004,
not to exceed $300,000,000, (d) the amount of unsecured Indebtedness and
Specified Junior Securities issued since December 22, 2004, but only to the
extent not required hereunder to be applied to the prepayment of Term Loans (as
defined in the Existing Credit Agreement), (e) with respect to acquisitions of
Permitted ERCOT Assets through the second anniversary of December 22, 2004, an
amount, not less than zero, equal to $500,000,000 less the amounts under clauses
(a), (b), (c), (d), and (f) of this definition used for Acquisition
Consideration of Permitted ERCOT Assets; provided, that not more than
$200,000,000 of the foregoing $500,000,000 amount under this clause (e) may be
utilized for Acquisition Consideration from the first through the second
anniversary of December 22, 2004, and (f) the amount of Excluded Proceeds since
December 22, 2004, in each case to the extent such amounts are actually received
by the Borrower and permitted to be retained by it under this Agreement.

 

“Permitted Business” means the business of providing services and products in
the energy market and any businesses incidental or reasonably related thereto.

 

“Permitted Debt” has the meaning assigned to it in Section 7.3.

 

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“Permitted Encumbrances” has the meaning specified in the Mortgages.

 

“Permitted ERCOT Assets” means (1) electric generating assets together with
assets related thereto (including any assets related to the operation and fuel
supply of such electric generating assets) which assets support the Borrower’s
and/or its Restricted Subsidiaries’ retail business in the State of Texas and
(2) all (but not less than all) of the Capital Stock of any Person that owns
solely Permitted ERCOT Assets (whether directly or through one or more wholly
owned Subsidiaries) described in clause (1) above.

 

“Permitted Exceptions” means secured Indebtedness of the Borrower or any of its
Restricted Subsidiaries incurred pursuant to Section 7.3(b), (c), (d),
(h) (other than Secured Note Obligations) and (s) (solely with respect to
Indebtedness to which clause (6) or (7) of the definition of Permitted Liens
applies) and Permitted Refinancing Indebtedness with respect to the foregoing.

 

“Permitted Investments” means:

 

(1)                                  any Investment by the Borrower or any
Restricted Subsidiary in the Borrower or in a Restricted Subsidiary;

 

(2)                                  any Investment in Cash Equivalents and, in
the case of any Person, cash equivalents or other liquid investments permitted
under any credit facility constituting Permitted Debt to which such Person is a
party;

 

(3)                                  any Investment by the Borrower or any
Restricted Subsidiary constituting a Permitted Acquisition;

 

(4)                                  any Investments in any Person having an
aggregate Fair Market Value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken together
with (i) all other Investments made pursuant to this clause that are at the time
outstanding and (ii) the aggregate amount of Restricted Payments made pursuant
to Section 7.6, not to exceed $75,000,000 since December 22, 2004;

 

(5)                                  any Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with the provisions of Section 7.5;

 

(6)                                  any acquisition of assets or Capital Stock
solely in exchange for the issuance of Equity Interests (other than Disqualified
Stock) of the Borrower;

 

(7)                                  any Investments received in compromise or
resolution of (A) Obligations of trade creditors or customers that were incurred
in the ordinary course of business of the Borrower or any of its Restricted
Subsidiaries, including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade creditor or customer;
or (B) litigation, arbitration or other disputes with Persons who are not
Affiliates;

 

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(8)                                  Investments represented by Hedging
Obligations;

 

(9)                                  loans or advances to employees made in the
ordinary course of business up to an aggregate principal amount not to exceed
$10,000,000 at any one time;

 

(10)                            any Investment acquired by the Borrower or any
of its Restricted Subsidiaries on account of any claim against, or interest in,
any other Person (A) acquired in good faith in connection with or as a result of
a bankruptcy, workout, reorganization or recapitalization of such other Person
or (B) as a result of a bona fide foreclosure by the Borrower or any of its
Restricted Subsidiaries with respect to any claim against any other Person;

 

(11)                            repurchases of the Secured Notes or other Parity
Secured Debt;

 

(12)                            any Investment by the Borrower or a Restricted
Subsidiary of the Borrower in a Securitization Entity or any Investment by a
Securitization Entity in any other Person in connection with a Qualified
Securitization Transaction;

 

(13)                            payment of consolidated taxes pursuant to the
Tax Sharing Agreement, dated as of October 1, 2002, among the Borrower and its
Subsidiaries named therein, as amended, supplemented or modified from time to
time and any other tax allocation agreements among the Borrower and its
Subsidiaries;

 

(14)                            receivables owing to the Borrower or a
Restricted Subsidiary, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; provided,
that such trade terms may include such concessionary trade terms as the Borrower
or such Restricted Subsidiary deems reasonable under the circumstances; and

 

(15)                            other Investments in any Person having an
aggregate Fair Market Value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause that are at the time
outstanding not to exceed $125,000,000.

 

“Permitted Liens” means:

 

(1)                                  Liens held by the Collateral Trustee
Equally and Ratably securing all Indebtedness that is Parity Secured Debt and
Equally and Ratably securing all other Parity Secured Obligations;

 

(2)                                  Liens that are granted or maintained by the
Borrower and the Restricted Subsidiaries as security for Credit Agreement
Obligations;

 

(3)                                  Liens on assets of REMA and its
Subsidiaries securing Indebtedness of REMA and its Subsidiaries permitted to be
incurred pursuant to clause (c) of Section 7.3, including cash collateral for
letters of credit issued thereunder and Liens encumbering assets of REMA and/or
any of its Subsidiaries securing obligations under, or in

 

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connection with, or which constitute, Qualifying Credit Support (as defined in
the participation agreements to which REMA is a party);

 

(4)                                  Liens on assets of the Seward Subsidiary
securing Permitted PEDFA Bond Indebtedness incurred by the Seward Subsidiary and
that is Non-Recourse to the Borrower and all of its other Restricted
Subsidiaries (other than an unsecured Guarantee, if any, provided by the
Borrower or any Guarantor);

 

(5)                                  Liens on assets of a Restricted Subsidiary
in existence on the date on which such Person becomes a Restricted Subsidiary
(provided, that (i) such Liens existed at the time such Person became a
Restricted Subsidiary and were not created in anticipation thereof, (ii) no such
Lien shall attach to any asset acquired by such Person, after such Person became
a Restricted Subsidiary, pursuant to an Investment in such Person by the
Borrower or any Restricted Subsidiary, or in an Affiliate Transaction that does
not satisfy the requirements of Section 7.8(a) and (iii) the amount of
Indebtedness secured thereby is not increased);

 

(6)                                  Liens securing Capital Lease Obligations
and purchase money obligations, in each case permitted to be incurred pursuant
to clause (s) of Section 7.3, covering only the assets acquired with or financed
by such Indebtedness;

 

(7)                                  Liens securing obligations under sale
leaseback transactions and Synthetic Lease Obligations, in each case permitted
to be incurred pursuant to clause (s) of Section 7.3, covering only the assets
acquired with or financed by such Indebtedness;

 

(8)                                  Liens in favor of the Borrower or the
Guarantors;

 

(9)                                  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 appropriate provision
as is required in conformity with GAAP has been made therefor;

 

(10)                            Liens imposed by law, such as carriers’,
warehousemen’s, landlord’s and mechanics’ Liens, in each case, incurred in the
ordinary course of business;

 

(11)                            survey exceptions, encumbrances, easements or
reservations, including those for licenses, rights-of-way, sewers, electric
lines, telegraph and telephone lines, other utilities, mineral reservations and
rights and leases, zoning restrictions and other restrictions as to the use of
real property or other exceptions to title that were not incurred in connection
with Indebtedness and that (A) existed on December 22, 2004 and are recorded on
such date, (B) are permitted under the terms of the Security Documents or (C) 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;

 

(12)                            Liens to secure any Permitted Refinancing
Indebtedness permitted to be incurred under this Agreement if such Permitted
Refinancing Indebtedness is incurred by the same obligor on the Indebtedness
being extended, refinanced, renewed, replaced,

 

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defeased or refunded (except as provided in clause (4) of the definition of
Permitted Refinancing Indebtedness); provided, that:

 

(a)                                  the new Lien shall be limited to all or
part of the same categories of 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), except, if Permitted PEDFA Bond Indebtedness is Sharing
Eligible Debt, it may be secured by Liens held by the Collateral Trustee on the
Shared Collateral;

 

(b)                                 the Indebtedness secured by the new Lien is
not increased to any amount greater than the sum of (i) the outstanding
principal amount or, if greater, committed amount of the Permitted Refinancing
Indebtedness and (ii) an amount necessary to pay any fees and expenses,
including premiums, related to such refinancings, refunding, extension, renewal
or replacement and (iii) any protective advances with respect to the property
and assets that secure such Permitted Refinancing Indebtedness;

 

(13)                            Liens on assets transferred to a Securitization
Entity or on assets of a Securitization Entity, in either case incurred in
connection with a Qualified Securitization Transaction;

 

(14)                            financing statements (including precautionary
statements) filed in connection with a Capital Lease Obligation, financing
lease, Synthetic Lease Obligation or an operating lease, in each case, not
prohibited hereunder; provided, that no such financing statement extends to,
covers or refers to as collateral, any property or assets of the Borrower or a
Restricted Subsidiary, other than the property or assets which are subject to
such Capital Lease Obligation, financing lease, Synthetic Lease Obligation, or
operating lease;

 

(15)                            Liens arising out of or in connection with any
judgment that does not constitute an Event of Default or in connection with any
litigation or other legal proceeding as to which an appeal to contest or review
is timely commenced in good faith by appropriate proceedings and as to which
adequate reserves have been established in accordance with GAAP; provided, that
any right to levy, seizure, attachment, sequestration, foreclosure or
garnishment of any property and assets of the Borrower or a Restricted
Subsidiary thereof arising out of or in connection with any such Lien has been
and continues to be enjoined or effectively stayed;

 

(16)                            inchoate statutory Liens arising under ERISA;

 

(17)                            Liens (A) on cash and short-term investments
(i) deposited by the Borrower or any of its Subsidiaries in margin accounts with
or on behalf of futures contract brokers or paid over to other counterparties or
(ii) pledged or deposited as collateral to a contract counterparty or issuer of
surety bonds by the Borrower or any of its Subsidiaries, in the case of clause
(i) or (ii), to secure obligations with respect to (a) contracts for commercial
and trading activities in the ordinary course of business and

 

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contracts (including physical delivery, option (whether cash or financial),
exchange, swap and futures contracts) for the purchase, transmission,
distribution, sale, lease or hedge of any energy-related commodity or service or
(b) interest rate, commodity price, or currency rate management contracts or
derivatives and (B) encumbering assets other than accounts or receivables
arising out of contracts or agreements relating to the generation, distribution
or transmission of energy; provided, that all such agreements or contracts are
entered into in the ordinary course of business;

 

(18)                            Liens arising by virtue of any statutory or
common law provision relating to banker’s liens, rights of set off or similar
rights, contractual rights of setoff or netting arrangements entered into in the
ordinary course of business and similar rights with respect to deposit accounts,
commodity accounts and/or securities accounts;

 

(19)                            Liens arising under Section 9.343 of the Texas
Uniform Commercial Code or similar statutes of states other than Texas;

 

(20)                            Liens created under the Secured Trading
Counterparty Collateral Trust Agreement and the related Security Documents, as
such term is defined in the Secured Trading Counterparty Collateral Trust
Agreement, securing up to $250,000,000 of obligations of the Borrower or its
Subsidiaries from time to time owing to any Secured Trading Counterparties, as
such term is defined in the Secured Trading Counterparty Collateral Trust
Agreement, as each may be amended, amended and restated, supplemented or
otherwise modified, renewed or replaced from time to time, provided, that such
Liens are subject always to the terms of any Secured Trading Counterparty
Intercreditor Agreement;

 

(21)                            pledges and deposits to secure the payment of
worker’s compensation, unemployment insurance, social security benefits or
obligations under similar laws, or to secure the payment or performance of
statutory or public obligations (including environmental, municipal and public
utility commission obligations and requirements), reimbursement or indemnity
obligations arising out of surety, performance, or other similar bonds, and
other obligations of a like nature, in each case incurred in the ordinary course
of business;

 

(22)                            Liens granted by a Person in favor of a
commercial trading counterparty pursuant to a netting agreement, which Liens
encumber rights under agreements that are subject to such netting agreement and
which Liens secure such Person’s obligations to such counterparty under such
netting agreement; provided, that any such agreements and netting agreements are
entered into in the ordinary course of business; and provided, further, that the
Liens are incurred in the ordinary course of business and when granted, do not
secure obligations which are past due;

 

(23)                            Liens on proceeds from the issuance of Seward
Tax-Exempt Bonds or Permitted PEDFA Bond Indebtedness and Liens on Indebtedness
of the Borrower held by the Seward Subsidiary securing the Seward Tax-Exempt
Bonds or Permitted PEDFA Bond Indebtedness;

 

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(24)                            Liens on assets of Reliant Energy Channelview
L.P. and Liens on the Equity Interests in Reliant Energy Channelview (Delaware)
LLC and Reliant Energy Channelview (Texas) LLC, to the extent such Liens are
existing on December 22, 2004;

 

(25)                            Liens on assets of REMA and its Subsidiaries
created in connection with the sale-leaseback of REMA’s interests in the
Keystone, Conemaugh and Shawville generating facilities consummated in August,
2000;

 

(26)                            Liens created in connection with the indemnity
and contribution obligations in favor of underwriters or note purchasers in
connection with the Seward Tax-Exempt Bonds;

 

(27)                            Liens on assets of Reliant Energy Solutions, LLC
created in connection with Delivery Order No. DABT39-97-C-4046 dated
September 1997 and issued by the Directorate of Contracting, Contract Support
Division, Ft. Sill, Oklahoma;

 

(28)                            Liens incurred in the ordinary course of
business of the Borrower or any Restricted Subsidiary of the Borrower securing
obligations that do not exceed $25,000,000 in the aggregate at any one time
outstanding;

 

(29)                            Liens on certain of Reliant Energy Wholesale
Generation LLC’s switchyard equipment at the Choctaw generating facility granted
to Entergy in connection with an Operating and Maintenance Agreement; and

 

(30)                            Liens constituting Permitted Separate Liens.

 

“Permitted PEDFA Bond Indebtedness” means Indebtedness incurred or guaranteed by
the Borrower and/or the Guarantors in tax-exempt Pennsylvania industrial
development act financings that are not supported by Letters of Credit (as
defined in the Existing Credit Agreement), the proceeds of which are used:

 

(a)                                  to build the Seward Facility;

 

(b)                                 to reimburse the Borrower, its Restricted
Subsidiaries or the Seward Subsidiary for amounts advanced or incurred, or for
Indebtedness incurred to fund such construction costs, prior to the date of
incurrence of such Indebtedness; or

 

(c)                                  to refund or defease the Seward-Tax Exempt
Bonds or refinance Indebtedness evidenced by or in support of the Seward-Tax
Exempt Bonds.

 

“Permitted Prior Liens” means (1) Liens described in clauses (5), (6), (7), (9),
(10), (11), (14), (17), (18), (19), (20), (21), (22), (26), (27) and (29) of the
definition of “Permitted Liens,” (2) Liens refinancing or replacing any of the
Liens contemplated in clause (1) of this definition, and (3) Liens that arise by
operation of law and are not voluntarily granted, to the extent entitled by law
to priority over the security interests created by the Security Documents.

 

“Permitted Refinancing Indebtedness” means any Indebtedness of the Borrower or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to

 

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extend, refinance, renew, replace, defease or refund other Indebtedness of the
Borrower or any of its Restricted Subsidiaries (other than intercompany
Indebtedness); provided, that:

 

(1)                                  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
interest on the Indebtedness and the amount of all expenses, costs and fees and
premiums incurred in connection therewith);

 

(2)                                  except for Permitted PEDFA Bond
Indebtedness, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and 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;

 

(3)                                  if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Credit Agreement Obligations, such Permitted Refinancing
Indebtedness is subordinated in right of payment to the Credit Agreement
Obligations 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, as reasonably determined by the
Borrower or such Restricted Subsidiary;

 

(4)                                  such Indebtedness is incurred either by the
Borrower or by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded, except that
Permitted PEDFA Bond Indebtedness may be (A) incurred by the Borrower and/or
guaranteed by the Borrower and/or the Guarantors if the assets of the Seward
Subsidiary (other than Investments in the Borrower pledged to secure such
Permitted PEDFA Bond Indebtedness and proceeds from the issuance of Permitted
PEDFA Bond Indebtedness that secures Permitted PEDFA Bond Indebtedness) remain
free of all Liens securing Indebtedness, except Liens held by the Collateral
Trustee as security for Parity Secured Obligations or (B) guaranteed by the
Borrower on an unsecured basis if such Indebtedness is otherwise Non-Recourse to
the Borrower and its other Restricted Subsidiaries (other than the Seward
Subsidiary) and is secured solely by Liens on the assets of the Seward
Subsidiary and/or the Equity Interests of the Seward Subsidiary;

 

(5)                                  if incurred by the Borrower, such
Indebtedness may be guaranteed by the Guarantors; and

 

(6)                                  such Indebtedness (other than Indebtedness
permitted pursuant to clause (d) or (e) of Section 7.3 and letter of credit
facilities refinancing the Revolving Credit Facility (as defined in the Existing
Credit Agreement) and permanently reducing the Revolving Credit Commitments (as
defined in the Existing Credit Agreement), Dollar for Dollar) has a final
maturity date that is at least six years after December 22, 2004 and provides
for the amortization of not more than 10% of its original outstanding principal
amount prior to such final maturity date.

 

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“Permitted Separate Liens” means Liens on Excluded Property as defined in the
Collateral Trust Agreement which either (x) secure the obligations under the
Existing Credit Agreement or (y) secure obligations on a pari passu basis with
the Credit Agreement Obligations.

 

“Person” means any individual, corporation, firm, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.

 

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

 

“Post-Petition Interest” means interest accruing after the filing of any
petition in bankruptcy, or the commencement of any case, proceeding or action
relating to the bankruptcy, reorganization or insolvency of the Borrower or any
other Loan Party (or interest that would accrue but for the operation of
applicable bankruptcy, reorganization or insolvency laws), whether or not a
claim for post-filing or post-petition interest is allowed or allowable as a
claim in any such case, proceeding or action.

 

“Pro Rata Percentage” means, on any date of determination and with respect to
Net Asset Sale Proceeds to be applied in accordance with Section 2.4(b)(i), a
percentage equal to (i) the Outstanding Amount on such date, divided by (ii) the
sum of (A) the Outstanding Amount on such date, plus (B) the sum of the Total
Outstandings on such date, under and as defined in the Existing Credit Agreement
and the amount of the unused Aggregate Revolving Credit Commitments then in
effect under, and as defined in the Existing Credit Agreement, plus (C) the
aggregate outstanding principal amount of Parity Secured Debt described in
clause (Y) of Section 2.4(b)(i)(A) or clause (Z) of Section 2.4(b)(i)(B) with
respect to which an offer to repurchase or prepay is required to be made, or
which must be otherwise repurchased or prepaid (in part), with the Net Asset
Sale Proceeds described in such clause (Y) of Section 2.4(b)(i)(A) or clause (Z)
of Section 2.4(b)(i)(B)

 

“Pro Rata Share” means, with respect to each Lender, a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of which is
the outstanding principal amount of the Loans of the relevant Lender at such
time and the denominator of which is the Outstanding Amount at such time.

 

“Purchase Money Note” means a promissory note of a Securitization Entity
evidencing amounts owed to the Borrower or any Restricted Subsidiary of the
Borrower in connection with a Qualified Securitization Transaction to a
Securitization Entity, which note shall be repaid from cash available to the
Securitization Entity other than amounts required to be established as reserves
pursuant to agreements, amounts paid to investors in respect of interest and
principal and amounts paid in connection with the purchase of newly generated
receivables or newly acquired equipment.

 

“Qualified Securitization Transaction” means any transaction or series of
transactions that may be entered into by the Borrower or any of its Restricted
Subsidiaries pursuant to which

 

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the Borrower or any of its Restricted Subsidiaries may sell, convey or otherwise
transfer to:  (a) a Securitization Entity (in the case of a transfer by the
Borrower or any of its Restricted Subsidiaries); and (b) any other Person (in
the case of a transfer by a Securitization Entity), or may grant a security
interest in any accounts receivable or equipment (whether now existing or
arising or acquired in the future) of the Borrower or any of its Restricted
Subsidiaries, and any assets related thereto, including all collateral securing
such accounts receivable and equipment, all contracts and contract rights and
all guarantees or other obligations in respect of such accounts receivable and
equipment, proceeds of such accounts receivable and equipment and other assets
(including contract rights) which are customarily transferred or in respect of
which security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable and equipment.

 

“Quarterly Payment Date” means the first day of each April, July, October and
January, or, if any such date is not a Business Day, the next succeeding
Business Day.

 

“Register” has the meaning specified in Section 11.6(c).

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.

 

“REMA” shall mean Reliant Energy Mid-Atlantic Power Holdings, LLC, a Delaware
limited liability company, and its successors.

 

“REMA Lease” shall mean, collectively, the obligations of REMA as facility
lessee under the Facility Lease Agreements, each dated as of August 24, 2000 and
each between REMA and, respectively, Conemaugh Lessor Genco, LLC, Keystone
Lessor Genco, LLC, and Shawville Lessor Genco, LLC, and under the related
participation agreements and other documents executed in connection therewith.

 

“Remedial Action” shall have the meaning ascribed to it in Section 101(24) of
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. § 9601 et seq. or any other Environmental Law.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

 

“Required Agreement Lenders” means, as of any date of determination, Lenders
having more than 50% of the Outstanding Amount.

 

“Required Aggregate Revolver and Term Lenders” means, as of any date of
determination, lenders under the Existing Credit Agreement and Lenders under
this Agreement having, in the aggregate, more than 50% of the sum of (a) the
Total Outstandings (as defined in the Existing Credit Agreement)(with the
aggregate amount of each Lender’s (as defined in the Existing Credit Agreement)
risk participation and funded participation in L/C Obligations (as defined in
the Existing Credit Agreement) being deemed “held” by such Lender for purposes
of this definition), (b) the aggregate unused Revolving Credit Commitments (as
defined in the Existing Credit Agreement), and (c) the Outstanding Amount,

 

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“Required Aggregate Term Lenders” means, as of any date of determination,
lenders under the Existing Credit Agreement and Lenders under this Agreement
having, in the aggregate, more than 50% of the sum of (a) the Total Outstandings
(as defined in the Existing Credit Agreement) with respect to the Term Loans (as
defined in the Existing Credit Agreement) and (b) the Outstanding Amount,

 

“Required Lenders” means, as of any date of determination,

 

(a)                                  the Required Aggregate Revolver and Term
Lenders, for purposes of (i) approving amendments or waivers to any of the
provisions set forth in Section 2.4(b), Article VI, Article VII (other than
Section 7.16 or the definition of Permitted Separate Liens) Article VIII or
Article IX (other than Section 9.1(a)) of this Agreement (including, in each
case, the defined terms used therein), (ii) except to the extent provided in
clause (c) below, exercising remedies or taking other actions under Section 9.2,
and (iii) except to the extent provided in Section 7.16(a), approving amendments
or waivers to any of the provisions of the Loan Documents (other than the Notes
and the Fee Letter) other than this Agreement;

 

(b)                                 the Required Aggregate Term Lenders, for the
purposes of determining any Core Asset Consent or any amendment or waiver with
respect thereto;

 

(c)                                  the Required Agreement Lenders, for
purposes of exercising remedies under Section 9.2 (i) by reason of an Event of
Default under Section 9.1(a) at a time when an Event of Default under
Section 9.1(a) of the Existing Credit Agreement caused by the failure to pay a
proportional amount under the Existing Credit Agreement does not exist, (ii) by
reason of an Event of Default under Section 9.1(c) caused by a failure to
perform or observe performance of the covenants set forth in Section 4.3 or
7.16, (iii) by reason of an Event of Default under Section 9.1(d) or (iv) at any
time after the obligations under the Existing Credit Agreement have been
accelerated; and

 

(d)                                 the Required Agreement Lenders, for the
purposes of any other amendment, waiver or other action specified for the
Required Lenders under this Agreement not covered by clauses (a) (including the
definitions covered in such clause), (b), or (c) above.

 

For the purpose of determining whether or not any approval, authorization or
similar action under this Agreement has been taken by the Required Lenders, the
approval, authorization or similar action with respect to the applicable lenders
under the Existing Credit Agreement shall be deemed to have been taken to the
extent (1) such lenders have approved, authorized or taken similar action
regarding a substantially similar action with respect to the provisions of the
Existing Credit Agreement or (2) such lenders actually provide any such
approval, authorization or similar action with respect to this Agreement. 
Notwithstanding the foregoing, no amendment or modification of this Agreement
approved by the Required Aggregate Revolver and Term Lenders shall be effective
without the consent of the Requirement Agreement Lenders if such amendment or
modification (A) is made in contemplation of the repayment of all or
substantially all of the Indebtedness under the Existing Credit Agreement
(including pursuant to a refinancing thereof), (B) is to Section 2.4 and
non-ratably impairs the rights to prepayment of the Lenders under this Agreement
in comparison with the effect of a corresponding amendment or waiver to the
rights of the Term Lenders (as such term is defined under the Existing Credit
Agreement)

 

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under the Existing Credit Agreement, (C) is not made in connection with a
substantially corresponding amendment or waiver under the Existing Credit
Facility which has or will substantially contemporaneously become effective, or
(D) permits the granting of additional Collateral to secure obligations under
the Exiting Credit Agreement unless such additional Collateral constitutes
Shared Collateral or Excluded Property as defined in the Collateral Trust
Agreement as in effect on the date hereof.  The Lenders and Administrative Agent
acknowledge and accept that the provisions of this Agreement may cause
amendments, waivers or other actions with respect to this Agreement or the Loan
Documents that have not been approved by any Lenders or the Administrative
Agent, and waive any claims against the lenders under the Existing Credit
Agreement with respect thereto absent gross negligence or willful misconduct.

 

“RERH” means Reliant Energy Retail Holdings, LLC, a Delaware limited liability
company, and its successors.

 

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer or assistant treasurer of a Loan Party.  Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.

 

“Restricted Payment” means any of the following:

 

(1)                                  any declaration or payment of any dividend
or the making of any other payment or distribution on account of the Borrower’s
or any of its Restricted Subsidiaries’ Equity Interests (including any payment
in connection with any merger or consolidation involving the Borrower or any of
its Restricted Subsidiaries) or to the direct or indirect holders of the
Borrower’s or any of its Restricted Subsidiaries’ Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Borrower or to the Borrower or
a Restricted Subsidiary of the Borrower);

 

(2)                                  any purchase, redemption or other
acquisition or retirement for value (including in connection with any merger or
consolidation involving the Borrower) of any Equity Interests of the Borrower;

 

(3)                                  any payment on or with respect to, or
purchase, redemption, defeasance or other acquisition or retirement for value of
any Indebtedness of the Borrower or of any Guarantor that is contractually
subordinated to the Credit Agreement Obligations (excluding any intercompany
Indebtedness, intercompany receivables or intercompany advances between or among
any of the Borrower and its Restricted Subsidiaries and Permitted PEDFA Bond
Indebtedness), except a payment of interest or principal at the Stated Maturity
thereof.

 

“Restricted Subsidiary” means a Subsidiary organized or incorporated under the
laws of the United States or a State thereof that is not an Unrestricted
Subsidiary.

 

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“Revolver Administrative Agent” means the “Credit Agreement Agent” as defined in
the Collateral Trust Agreement.

 

“RRI Warrants” means the warrants issued by the Borrower pursuant to the Warrant
Agreement.

 

“S&P” shall mean Standard & Poor’s Ratings Group (presently a division of The
McGraw-Hill Companies, Inc.), together with its successors, or, if such company
shall cease to issue ratings, another nationally recognized rating company
selected in good faith by mutual agreement of the Revolver Administrative Agent
and the Borrower.

 

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

 

“Secured Debt Documents” means, collectively, the Credit Documents, the Credit
Documents (as defined in the Existing Credit Agreement), any Secured Trading
Counterparty Intercreditor Agreement, the Secured Note Agreements, the PEDFA
Guaranties and the indenture, agreement and other documents governing each other
Series of Secured Debt and all agreements binding on any obligor related
thereto.

 

“Secured Debt Representative” means:

 

(1)                                  in the case of the Secured Notes,
Wilmington Trust Company, as Trustee;

 

(2)                                  the Seward Bond Trustee;

 

(3)                                  in the case of Indebtedness under this
Agreement, the Administrative Agent and in the case of the Indebtedness under
the Existing Credit Agreement, the Revolver Administrative Agent; or

 

(4)                                  in the case of any other Series of Secured
Debt, the trustee, agent or representative of the holders of such Series of
Secured Debt who maintains, or on whose behalf is maintained, the transfer
register for or who acts as administrative agent for such Series of Secured Debt
and is appointed as Secured Debt Representative (for purposes related to the
administration of the Security Documents) pursuant to the indenture or agreement
governing such Series of Secured Debt.

 

“Secured Hedge Agreement” means any Hedging Agreement permitted under Article VI
or VII that is entered into by and between the Borrower and a counterparty that
is (or at the time such Secured Hedge Agreement was entered into, was) a Lender
or an Affiliate thereof.

 

“Secured Note Agreements” means, collectively (a) the Indenture, dated as of
July 1, 2003, among the Borrower, the guarantors referred to therein, and
Wilmington Trust Company, as trustee, pursuant to which the Borrower’s 9.25%
Secured Notes due 2010 were issued, (b) the Indenture, dated as of July 1, 2003,
among the Borrower, the guarantors referred to therein, and Wilmington Trust
Company, as trustee, pursuant to which the Borrower’s 9.50% Secured Notes due
2013 were issued, (c) the Indenture, dated as of December 22, 2004 among the
Borrower, the guarantors referred to therein, and Wilmington Trust Company, as
trustee, pursuant to which the

 

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New Secured Notes were issued, and (d) each other indenture among the Borrower,
the guarantors referred to therein (if applicable) and the indenture trustee
thereunder, and each other loan or note purchase agreement among the Borrower,
the guarantors referred to therein (if applicable), the Lenders or note
purchasers thereunder and the administrative agent (if any) thereunder, in each
case pursuant to which a series of Secured Notes was issued or a loan was made
constituting a series of Secured Notes, as each such agreement or indenture may
be amended, restated, supplemented or otherwise modified from time to time.

 

“Secured Note Obligations” means:

 

(1)                                  the Secured Notes issued on the dates of
the respective Secured Note Agreements; or

 

(2)                                  the Secured Notes issued by the Borrower
after the dates of the respective Secured Note Agreements that constitute
another Series of Secured Debt; or

 

(3)                                  all related exchange notes;

 

together with the Guarantees of the foregoing and all other Obligations
(including all Obligations owing to the applicable Secured Debt Representatives)
of any obligor under the Secured Note Agreements.

 

“Secured Notes” means, collectively, the Borrower’s (i) 9.25% Secured Notes due
2010, (ii) 9.50% Secured Notes due 2013, (iii) New Secured Notes and (iv) other
senior secured notes issued from time to time in a private placement, registered
offering, exchange offering, or loan transaction, in which notes have been
issued in accordance with Section 7.3.

 

“Secured Parties” means, collectively, the Lenders, the Administrative Agent,
each counterparty to a Secured Hedge Agreement and (in each case) each of their
respective successors, transferees and assigns and each of the other “Secured
Parties” as defined in the Collateral Trust Agreement.

 

“Secured Trading Counterparty Collateral Trust Agreement” means the Collateral
Trust Agreement dated as of June 14, 2005, among the Borrower, Reliant Energy
Electric Solutions, LLC, Reliant Energy Retail Services, LLC, Reliant Energy
Solutions East, LLC, and the Secured Trading Counterparty Collateral Trustee, as
the same may be amended, amended and restated, supplemented or otherwise
modified, renewed or replaced from time to time.

 

“Secured Trading Counterparty Collateral Trustee” means Wachovia Bank, National
Association, as Collateral Trustee under the Secured Trading Counterparty
Collateral Trust Agreement, and any successors from time to time acting as such
thereunder.

 

“Secured Trading Counterparty Intercreditor Agreement” means (1) the Second
Amended and Restated Intercreditor Agreement dated as of June 14, 2005, among
the Secured Trading Counterparty Collateral Trustee, the Collateral Trustee, and
Bank of America, N.A., as Sub-Agent, and (2) any other intercreditor agreement
on similar terms, or other terms approved by the Collateral Trustee, relating to
the liens granted under the Secured Trading Counterparty

 

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Collateral Trust Agreement, as the same may be amended, amended and restated,
supplemented or otherwise modified, renewed or replaced from time to time.

 

“Securities Account” shall mean any securities account as such term is defined
in the UCC, now or hereafter held in the name of any Loan Party.

 

“Securities Account Control Agreement” shall mean, with respect to any Pledged
Securities or other Investment Property (as such terms are defined in the
Security Agreement), a written agreement or other authenticated record, in form
and substance reasonably satisfactory to the Revolver Administrative Agent,
pursuant to which the securities intermediary which holds such Pledged
Securities or such other Investment Property shall agree, among other things, to
comply with entitlement orders or other instructions from the Collateral Trustee
(or its co-trustees, agents or sub-agents) to such securities intermediary as to
Pledged Securities or other Investment Property, without further consent of any
Loan Party or its nominee, as any such agreement or record may be amended,
amended, restated, supplemented or otherwise modified from time to time.

 

“Securitization Entity” means RE Retail Receivables, LLC, and any Person in
which the Borrower or any Restricted Subsidiary of the Borrower makes an
Investment and to which the Borrower or any Restricted Subsidiary of the
Borrower transfers accounts receivable or equipment (and related assets,
including contract rights) which engages in no activities other than in
connection with the financing, sale, or purchase of accounts receivable or
equipment or related assets (including contract rights) and which is designated
by the Borrower (as provided below) as a Securitization Entity:

 

(a)                                  no portion of the Indebtedness or any other
Obligations (contingent or otherwise) of which:

 

(i)                                     is guaranteed by the Borrower or any
Restricted Subsidiary of the Borrower (excluding guarantees of Obligations
(other than the principal of, and interest on, Indebtedness)) pursuant to
Standard Securitization Undertakings;

 

(ii)                                  is recourse to or obligates the Borrower
or any Restricted Subsidiary of the Borrower in any way other than pursuant to
Standard Securitization Undertakings; or

 

(iii)                               subjects any property or asset of the
Borrower or any Restricted Subsidiary of the Borrower, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings;

 

(b)                                 with which neither the Borrower nor any
Restricted Subsidiary of the Borrower has any material contract, agreement,
arrangement or understanding (except in connection with a Purchase Money Note or
Qualified Securitization Transaction) other than on terms no less favorable to
the Borrower or such Restricted Subsidiary than those that might be obtained at
the time from Persons that are not Affiliates of the Borrower, as determined by
the Borrower, other than amounts payable in the ordinary course of business in
connection with servicing receivables and other assets of such entity; and

 

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(c)                                  which neither the Borrower nor any
Restricted Subsidiary of the Borrower has any obligation to maintain or preserve
such Person’s financial condition or cause such Person to achieve certain levels
of operating results.

 

The Borrower shall notify the Administrative Agent of any such designation,
which notice shall include delivery to the Administrative Agent of a certificate
of a Responsible Officer certifying that such designation complied with the
foregoing conditions.

 

“Security Agreement” means the Amended and Restated Security Agreement, dated as
of July 1, 2003, among the Borrower, the other Loan Parties and the Collateral
Trustee (for the benefit of the Secured Parties), as such agreement may be
amended, restated, supplemented or otherwise modified from time to time.

 

“Security Documents” shall mean (i) the Collateral Trust Agreement, the Security
Agreement, (ii) each Control Agreement, (iii) each Mortgage, (iv) each
Assignment of Leases and Rents, and (v) each other security agreement, pledge
agreement, mortgage, deed of trust, assignment agreement and other instrument
being executed concurrently herewith or from time to time hereafter pursuant to
which a Lien has been granted by any of the Loan Parties in favor of the
Collateral Trustee (for the benefit of the Secured Parties under the Collateral
Trust Agreement) on any of its assets to secure any of the Obligations.

 

“Senior Debt” means Indebtedness that is not subordinated in right of payment to
the Credit Agreement Obligations.

 

“Separate Collateral” has the meaning assigned to it in the Collateral Trust
Agreement.

 

“Series of Secured Debt” means, severally, the Indebtedness under the Existing
Credit Agreement, the Secured Notes, the PEDFA Guaranties, the Indebtedness
under this Agreement and each other issue or series of Parity Secured Debt.

 

“Seward Bond Issuer” has the meaning given to such term in the definition of
“Seward Bond Trust Indentures” set forth in this Article.

 

“Seward Bond Trust Indentures” means (a) the Trust Indenture, dated as of
December 1, 2001, between Pennsylvania Economic Development Financing Authority
(the “Seward Bond Issuer”) and the Seward Bond Trustee pursuant to which the
Seward Series 2001A Bonds were issued by the Seward Bond Issuer, (b) the Trust
Indenture, dated as of April 1, 2002, between the Seward Bond Issuer and the
Seward Bond Trustee pursuant to which the Seward Series 2002A Bonds were issued
by the Seward Bond Issuer, (c) the Trust Indenture, dated as of April 1, 2002,
between the Seward Bond Issuer and the Seward Bond Trustee pursuant to which the
Seward Series 2002B Bonds were issued by the Seward Bond Issuer, as such Trust
Indentures may be amended, restated, supplemented or otherwise modified from
time to time, (d) the Trust Indenture, dated as of September 1, 2003, between
the Seward Bond Issuer and the Seward Bond Trustee pursuant to which the Seward
Series 2003A Bonds were issued by the Seward Bond Issuer, (e) the Trust
Indenture, dated as of December 22, 2004, between the Seward Bond Issuer and the
Seward Bond Trustee pursuant to which the Seward Series 2004A Bonds were issued
by the Seward Bond Issuer, and (f) trust indentures entered into by the Seward
Bond Issuer after

 

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December 22, 2004 as permitted hereunder in connection with any Seward
Tax-Exempt Bonds issued after December 22, 2004.

 

“Seward Bond Trustee” means J.P. Morgan Trust Company, National Association, as
Trustee, and any successor or other trustee, under the Seward Bond Trust
Indentures.

 

“Seward Facility” means the 521 MW coal facility and related assets owned by
Reliant Energy Seward, LLC, or its successors, and located in New Florence,
Indiana County, Pennsylvania.

 

“Seward Series 2001A Bonds” has the meaning given to such term in the definition
of “Seward Tax-Exempt Bonds”.

 

“Seward Series 2002A Bonds” has the meaning given to such term in the definition
of “Seward Tax-Exempt Bonds”.

 

“Seward Series 2002B Bonds” has the meaning given to such term in the definition
of “Seward Tax-Exempt Bonds”.

 

“Seward Series 2003A Bonds” has the meaning given to such term in the definition
of “Seward Tax Exempt Bonds.”

 

“Seward Series 2004A Bonds” has the meaning given to such term in the definition
of “Seward Tax Exempt Bonds.”

 

“Seward Subsidiary” means Reliant Energy Seward, LLC, a Delaware limited
liability company, and its successors.

 

“Seward Tax-Exempt Bonds” shall mean (1) the Pennsylvania Economic Financing
Authority Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project),
Series 2001A, in the original aggregate principal amount of $150,000,000 (the
“Seward Series 2001A Bonds”), (2) the Pennsylvania Economic Financing Authority
Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project),
Series 2002A, in the original aggregate principal amount of $75,000,000 (the
“Seward Series 2002A Bonds”), (3) the Pennsylvania Economic Financing Authority
Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project),
Series 2002B, in the original aggregate principal amount of $75,000,000 (the
“Seward Series 2002B Bonds”), (4) the Pennsylvania Economic Financing Authority
Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project),
Series 2003A, in the original aggregate principal amount of $100,000,000 (the
“Seward Series 2003A Bonds”), and (5) any bonds issued by PEDFA on or after
December 22, 2004 as permitted hereunder and supported by letters of credit
outstanding hereunder.

 

“Shared Collateral” has the meaning assigned to it in the Collateral Trust
Agreement.

 

“Sharing Eligible Debt” means:

 

(1)                                  Indebtedness under clauses (a), (e) and
(f) of the definition of Permitted Debt;

 

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(2)                                  Indebtedness under clause (s) of the
definition of Permitted Debt;

 

(3)                                  the Secured Notes;

 

(4)                                  the PEDFA Guaranties;

 

(5)                                  Permitted Refinancing Indebtedness of the
Borrower or, if it constitutes Permitted PEDFA Bond Indebtedness, Indebtedness
of the Borrower and/or the Seward Subsidiary and/or guaranteed by the Borrower
and/or the Guarantors, the net proceeds of which are used to refinance
Indebtedness evidenced by or in support of the Seward Tax-Exempt Bonds;
provided, that in the case of Permitted PEDFA Bond Indebtedness, the assets of
the Seward Subsidiary (other than Investments in the Borrower pledged to secure
such Permitted PEDFA Bond Indebtedness and proceeds from the issuance of
Permitted PEDFA Bond Indebtedness that secures Permitted PEDFA Bond
Indebtedness) shall remain free of all Liens securing Indebtedness, except
Permitted Prior Liens and Liens held by the Collateral Trustee as security for
the Parity Secured Debt; and

 

(6)                                  Permitted Refinancing Indebtedness, the net
proceeds of which are used to refinance Parity Secured Debt;

 

provided, that each category of Indebtedness described above:

 

(1)                                  must be guaranteed by any of the Restricted
Subsidiaries that, on the date of incurrence of such Indebtedness, is obligated
as a Guarantor under a Guarantee of the Credit Agreement Obligations;

 

(2)                                  must not be subordinated in right of
payment or in respect of the application of the proceeds of the Collateral
Trustee’s Liens on the Collateral to any other Indebtedness of the Borrower or
any Guarantor (whether or not such other Indebtedness is part of the same series
of Indebtedness), except in accordance with the Order of Application; and

 

(3)                                  is governed by an indenture or agreement
that appoints a Secured Debt Representative and includes an Intercreditor
Confirmation.

 

“Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay such debts and
liabilities as they mature and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s property would constitute an unreasonably small capital.  The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability; provided that if the context in which “Solvent” or

 

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“Solvency” is used refers to a Person together with its Subsidiaries, Person as
used above shall be deemed to be a reference to such Person together with its
Subsidiaries.

 

“SPC” has the meaning specified in Section 11.6(h).

 

“Specified Junior Securities” means subordinated debt securities issued by the
Borrower that:

 

(1)                                  are subordinated to the Loans pursuant to
subordination provisions (A) at least as favorable to the Lenders as either the
subordination provisions set forth in Schedule 1.1(d) hereto or the
subordination provisions applicable to the Borrower’s 5.00% Convertible Senior
Subordinated Notes due 2010 issued pursuant to that certain indenture, dated as
of June 24, 2003, by and between the Borrower and Wilmington Trust Company, as
trustee, or (B) otherwise acceptable to the Revolver Administrative Agent;

 

(2)                                  have a final maturity date occurring at
least 91 days after the Maturity Date and have a Weighted Average Life to
Maturity at least 91 days longer than the Weighted Average Life to Maturity of
the Loans;

 

(3)                                  are not guaranteed by any Subsidiary of the
Borrower except for any guarantee by a Guarantor that is contractually
subordinated in right of payment to the prior payment in full in cash to the
Guaranty; and

 

(4)                                  are not convertible into any other
securities except Equity Interests of the Borrower (other than Disqualified
Stock).

 

“Standard Securitization Undertakings” means representations, warranties,
covenants and indemnities entered into by the Borrower or any Subsidiary of the
Borrower, which are substantially similar to those in existence on December 22,
2004 or are otherwise reasonably customary in an accounts receivable or
equipment securitization transaction, in each case, as determined by the
Borrower.

 

“Stated Maturity” means, 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 shall 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.

 

“Subordinated Indebtedness” means any Indebtedness of a Person that is
contractually subordinated to the Credit Agreement Obligations.

 

“Subordinated Obligations” has the meaning specified in Section 8.6.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or

 

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indirectly through one or more intermediaries, or both, by such Person.  Unless
otherwise specified, all references herein to a “Subsidiary”, “Restricted
Subsidiary”, “Restricted Subsidiaries” or “Subsidiaries” shall refer to a
Subsidiary, Restricted Subsidiary, Restricted Subsidiaries or Subsidiaries of
the Borrower.

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under a
so-called synthetic, off-balance sheet or tax retention lease.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

 

“Threshold Amount” means, on any date of determination, except as otherwise set
forth in Section 6.12 as to any Domestic Subsidiary or group of Domestic
Subsidiaries which are not Loan Parties, that such Subsidiary or Subsidiaries
had either (i) $25,000,000 or more of Consolidated EBITDAR during the four
Fiscal Quarter period most recently ended or (ii) had assets the aggregate book
value of which was $50,000,000 or more.

 

“Title Company” means a title insurance company of recognized national standing
which is acceptable to the Administrative Agent in its sole discretion.

 

“Title Policy” shall mean, with respect to any Mortgage, a mortgagee policy of
title insurance (ALTA or the equivalent) or marked “commitment” of title
insurance insuring the applicable Mortgage as a first priority Lien on such real
property asset in favor of the Collateral Trustee (for the benefit of the
holders of the Parity Secured Obligations, including the Secured Parties) to
secure the Parity Secured Obligations, free of all Liens other than the
Permitted Encumbrances, which policy of title insurance shall be issued by a
Title Company in such policy amounts, with such endorsements and affirmative
insurance, and in form and substance reasonably satisfactory to the
Administrative Agent, and shall contain no exceptions to coverage other than
matters satisfactory to the Administrative Agent in its judgment reasonably
exercised and which policy of title insurance shall have been fully paid for by
the Borrower.

 

“Type” means with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

 

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

 

“United States” and “U.S.” mean the United States of America.

 

“Unrestricted Subsidiary” means (a) as of the Closing Date, RE Retail
Receivables, LLC, and (b) thereafter, any Subsidiary of the Borrower that is
designated by the Board of Directors of the Borrower as an Unrestricted
Subsidiary pursuant to a Board Resolution, but only to the extent that:

 

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(a)                                  such Subsidiary has no Indebtedness other
than Indebtedness that is Non-Recourse to the Borrower and its Restricted
Subsidiaries;

 

(b)                                 except as permitted pursuant to Section 7.8,
such Subsidiary is not party to any agreement, contract, arrangement or
understanding with the Borrower or any Restricted Subsidiary unless the terms of
any such agreement, contract, arrangement or understanding are no less favorable
to the Borrower or such Restricted Subsidiary than those that might be obtained
at the time from Persons who are not Affiliates of the Borrower;

 

(c)                                  such Subsidiary is a Person with respect to
which neither the Borrower nor any of its Restricted Subsidiaries has any direct
or indirect obligation (i) to subscribe for additional Equity Interests or
(ii) to maintain or preserve such Person’s financial condition or to cause such
Person to achieve any specified levels of operating results; and

 

(d)                                 the aggregate Fair Market Value of all
outstanding Investments owned by the Borrower and its Restricted Subsidiaries in
the Subsidiary properly designated and of all outstanding Investments owned by
such Subsidiary properly designated would be Permitted Investments under
Section 7.2 as of the time of the designation.

 

Any designation of a Subsidiary of the Borrower as an Unrestricted Subsidiary
will be evidenced to the Administrative Agent by filing with the Administrative
Agent a certified copy of the Board Resolution giving effect to such designation
and a certificate of a Responsible Officer of the Borrower certifying that such
designation complied with the preceding conditions and was permitted by
Section 7.2.  If, at any time, any Unrestricted Subsidiary would fail to meet
the preceding requirements as an Unrestricted Subsidiary, it will thereafter
cease to be an Unrestricted Subsidiary for purposes of this Agreement and the
other Loan Documents and any Indebtedness of such Subsidiary will be deemed to
be incurred by a Restricted Subsidiary of the Borrower as of such date and, if
such Indebtedness is not permitted to be incurred as of such date pursuant to
Section 7.3, the Borrower will be in default of such covenant. The Board of
Directors of the Borrower may at any time designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided, that such designation will be deemed to
be an incurrence of Indebtedness by a Restricted Subsidiary of the Borrower of
any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation will only be permitted if (i) such Indebtedness is permitted
pursuant to Section 7.3; and (ii) no Default would be in existence following
such designation. Upon any such designation of an Unrestricted Subsidiary as a
Restricted Subsidiary, the redesignated Subsidiary will become a Guarantor
pursuant to and if required by Section 6.12; provided, that any redesignated
Restricted Subsidiary that is not a Material Subsidiary need not become a
Subsidiary Guarantor until such time as it becomes a Material Subsidiary.

 

“Voting Stock” of any Person as of any date means 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.

 

“Waivable Repayment” has the meaning specified in Section 2.4(b)(ix).

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing:

 

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(1)                                  the sum of the products obtained by
multiplying (A) 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 (B) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment; by

 

(2)                                  the then outstanding principal amount of
such Indebtedness.

 

1.2  Other Interpretive Provisions.  With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

 

(a)                                  The definitions of terms herein shall apply
equally to 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”
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.”  Unless the context requires otherwise, (i) any definition of or
reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein or in any other Loan Document), (ii) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and
words of similar import when used in any Loan Document, shall be construed to
refer to such Loan Document in its entirety and not to any particular provision
thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, the Loan Document in which such references appear,
(v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

 

(b)                                 In the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including;” the words “to” and “until” each mean “to but excluding;” and the
word “through” means “to and including.”

 

(c)                                  Section headings herein and in the other
Loan Documents are included for convenience of reference only and shall not
affect the interpretation of this Agreement or any other Loan Document.

 

1.3  Accounting Terms.

 

(a)                                  Generally.  All accounting terms not
specifically or completely defined herein shall be construed in conformity with,
and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in

 

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conformity with, GAAP applied on a consistent basis, except as otherwise
specifically prescribed herein.

 

(b)                                 Changes in GAAP.  If at any time any change
in GAAP would affect the computation of any financial ratio or requirement set
forth in any Loan Document, and either the Borrower or the Required Aggregate
Revolver and Term Lenders shall so request, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Aggregate Revolver and Term
Lenders and the Borrower); provided, that until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Borrower shall provide to the Administrative Agent
and the Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio or requirement made before and after giving
effect to such change in GAAP.  Unless otherwise noted, computation of financial
covenants and financial requirements under the Loan Documents shall be made on a
consolidated basis for the Borrower and its Subsidiaries, without duplication.

 

1.4  Rounding.  Any financial ratios required to be maintained by the Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

 

1.5  Times of Day.  Unless otherwise specified, all references herein to times
of day shall be references to Eastern time (daylight or standard, as
applicable).

 

ARTICLE II.
THE COMMITMENTS AND THE LOANS

 

2.1  The Loans.  Subject to the terms and conditions set forth herein, each
Lender severally agrees to make a term loan to the Borrower on the Closing Date
in an amount equal to the Commitment of such Lender.  Amounts borrowed under
this clause and repaid or prepaid may not be reborrowed.  Loans may be Base Rate
Loans or Eurodollar Rate Loans, as further provided herein.

 

2.2  Borrowings, Conversions and Continuations of Loans.

 

(a)                                  Each Borrowing, each conversion of Loans
from one Type to the other, and each continuation of Eurodollar Rate Loans shall
be made upon the Borrower’s irrevocable notice to the Administrative Agent,
which may be given by telephone.  Each such notice must be received by the
Administrative Agent not later than 11:00 a.m. (New York time) (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate
Loans to Base Rate Loans and (ii) on the requested date of any Borrowing of Base
Rate Loans.  Each telephonic notice by the Borrower pursuant to this clause must
be confirmed promptly by delivery to the Administrative Agent of a written
Borrowing Notice, appropriately completed and signed by a Responsible Officer of
the

 

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Borrower.  Each Borrowing of, conversion to or continuation of Eurodollar Rate
Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof.  Except as provided in Section 2.3(c), each
Borrowing of or conversion to Base Rate Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof.  Each Borrowing
Notice (whether telephonic or written) shall specify (i) whether the Borrower is
requesting a Borrowing, a conversion of Loans from one Type to the other, or a
continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(iii) the principal amount of Loans to be borrowed, converted or continued,
(iv) the Type of Loans to be borrowed or to which existing Loans are to be
converted, and (v) if applicable, the duration of the Interest Period with
respect thereto.  If the Borrower fails to specify a Type of Loan in a Borrowing
Notice or if the Borrower fails to give a timely notice requesting a conversion
or continuation, then the applicable Loans shall be made as, or converted to,
Base Rate Loans.  Any such automatic conversion to Base Rate Loans shall be
effective as of the last day of the Interest Period then in effect with respect
to the applicable Eurodollar Rate Loans.  If the Borrower requests a Borrowing
of, conversion to, or continuation of Eurodollar Rate Loans in any such
Borrowing Notice, but fails to specify an Interest Period, it will be deemed to
have specified an Interest Period of one month.

 

(b)                                 Following receipt of a Borrowing Notice, the
Administrative Agent shall promptly notify each Lender of the amount of its Pro
Rata Share of the Loans, and if no timely notice of a conversion or continuation
is provided by the Borrower, the Administrative Agent shall notify each Lender
of the details of any automatic conversion to Base Rate Loans described in
Section 2.2(a).  In the case of a Borrowing, each Lender shall make the amount
of its Loan available to the Administrative Agent in immediately available funds
at the Administrative Agent’s Office not later than noon (New York time) on the
Business Day specified in the Borrowing Notice.  Upon satisfaction of the
applicable conditions set forth in Sections 4.1 and 4.2, the Administrative
Agent shall make all funds so received available to the Borrower in like funds
as received by the Administrative Agent by 1:00 p.m. (New York time) on the
Business Day specified in the Borrowing Notice, either by (i) crediting the
account of the Borrower on the books of Deutsche Bank with the amount of such
funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative Agent
by the Borrower.

 

(c)                                  Except as otherwise provided herein, a
Eurodollar Rate Loan may be continued or converted only on the last day of an
Interest Period for such Eurodollar Rate Loan.  During the existence of an Event
of Default, no Loans may be requested as, converted to or continued as
Eurodollar Rate Loans without the consent of Lenders holding in the aggregate
more than 50% of the Outstanding Amount.

 

(d)                                 The Administrative Agent shall promptly
notify the Borrower and the Lenders of the interest rate applicable to any
Interest Period for Eurodollar Rate Loans upon determination of such interest
rate.  The determination of the Eurodollar Rate by the Administrative Agent
shall be conclusive in the absence of manifest error.  At any time that Base
Rate Loans are outstanding, the Administrative Agent shall notify the Borrower
and the Lenders of any change in the Administrative Agent’s prime rate used in
determining the Base Rate promptly following the public announcement of such
change.

 

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(e)                                  After giving effect to all Borrowings, all
conversions of Loans from one Type to the other, and all continuations of Loans
as the same Type, there shall not be more than four Interest Periods in effect.

 

(f)                                    The failure of any Lender to make the
Loan to be made by it as part of any Borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its Loan on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Loan to be made by such other Lender on the date of any
Borrowing.

 

(g)                                 Notwithstanding anything to the contrary set
forth herein, all Loans incurred on the Closing Date shall be Eurodollar Rate
Loans with a one month Interest Period.

 

2.3  [Reserved].

 

2.4  Optional and Mandatory Prepayments.

 

(a)                                  Optional Prepayments.  Subject to
Section 2.4(b)(ix), the Borrower may, upon notice to the Administrative Agent,
at any time or from time to time voluntarily prepay Loans in whole or in part
without premium or penalty; provided, that (1) such notice must be received by
the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior
to any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Loans; (2) any prepayment of Eurodollar Rate Loans shall
be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof; (3) any prepayment of Base Rate Loans shall be in a principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof or, in
each case, if less, the entire principal amount thereof then outstanding; and
(4) any prepayments of Loans shall be applied ratably to the principal repayment
installments thereof on a pro rata basis.  Each such notice shall specify the
date and amount of such prepayment and the Type(s) of Loans to be prepaid.  The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender’s Pro Rata Share of such
prepayment.  If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein.  Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest on the amount prepaid, together
with any additional amounts required pursuant to Section 3.5.  Each such
prepayment shall be applied to the Loans of the Lenders in accordance with their
respective Pro Rata Shares.

 

(b)                                 Mandatory.  Subject to Section 2.4(b)(ix),
(i)  If the Borrower or any of its Restricted Subsidiaries consummates any Asset
Sale which in the aggregate results in the realization by the Borrower or such
Restricted Subsidiary of Net Asset Sale Proceeds (determined as of the date of
such Asset Sale, whether or not such Net Asset Sale Proceeds are then received
by the Borrower or such Restricted Subsidiary), the Borrower shall apply all Net
Asset Sale Proceeds received pursuant to Section 7.5 and all other Net Asset
Sale Proceeds other than Excluded Proceeds, in each case, to the extent not
previously applied in such Fiscal Year to make mandatory prepayments of Term
Loans under this clause (b)(i) (it being understood that Net Asset Sale Proceeds
subject to this clause (b)(i) applied in such Fiscal Year to make prepayments of
Term Loans prior to receipt of such Net Asset Sale Proceeds other than Excluded
Proceeds shall be deemed to have been made as a mandatory prepayment under this
clause (b)(i)),

 

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within three Business Days after the date of receipt thereof by the Borrower or
such Restricted Subsidiary subject to the provisions of Section 2.4(b)(viii)),
as follows:

 

(A)                              to the extent such Net Asset Sale Proceeds are
not OPH Asset Sale Proceeds, (X) if none of such Net Asset Sale Proceeds is
required by the terms of any Parity Secured Debt to be offered to any holder of
any Parity Secured Debt (including the Existing Credit Agreement) or otherwise
used to repurchase or prepay any Parity Secured Debt (including the Existing
Credit Agreement), to prepay Loans (determined as provided in
Section 2.4(b)(vii) below) in an amount equal to 100% of such Net Asset Sale
Proceeds received and (Y) if any of such Net Asset Sale Proceeds is required by
the terms of any Parity Secured Debt to be offered to any holder of any Parity
Secured Debt (including the Existing Credit Agreement) or otherwise used to
repurchase or prepay any Parity Secured Debt (including the Existing Credit
Agreement), to prepay Loans (determined as provided in
Section 2.4(b)(vii) below) in an amount equal to 100% of such Net Asset Sale
Proceeds received multiplied by the Pro Rata Percentage; and

 

(B)                                to the extent such Net Asset Sale Proceeds
are OPH Asset Sale Proceeds, (X) if none of such Net Asset Sale Proceeds is
required by the terms of any Parity Secured Debt (including the Existing Credit
Agreement)or the OPH Note Indenture to be offered to any holder of any Parity
Secured Debt (including the Existing Credit Agreement)or any holder of an OPH
Note or otherwise used to repurchase or prepay any Parity Secured Debt
(including the Existing Credit Agreement)or OPH Notes, to prepay Loans
(determined as provided in Section 2.4(b)(vii) below) in an amount equal to 100%
of such Net Asset Sale Proceeds received, to the extent the OPH Note Indenture
does not prohibit the distribution of such Net Asset Sale Proceeds to the
Borrower, (Y) to the extent such OPH Asset Sale Proceeds in the aggregate are
equal to or less than the outstanding principal amount of the OPMW Term Notes
and the OPNY Term Note, to prepay (without any offer to repurchase or prepay any
OPH Notes) on first, the OPMW New Term Note and the OPNY Term Note on a pro rata
basis and second the OPMW Refinancing Note, and, in turn, to prepay Loans
(determined as provided in Section 2.4(b)(vii) below) (without any offer to
repurchase or prepay any other Parity Secured Debt (other than the Existing
Credit Agreement)), and (Z) to the extent such OPH Asset Sale Proceeds (I) in
the aggregate exceed the outstanding principal amount of the OPMW Term Notes and
the OPNY Term Note, (II) are not otherwise required, in accordance with the OPH
Note Indenture, to be offered to prepay any OPH Notes, and (III) are required by
the terms of any Parity Secured Debt to be offered to any holder of Parity
Secured Debt or otherwise used to repurchase or prepay any Parity Secured Debt,
to pay a dividend in the amount of such proceeds to the Borrower and, in turn,
to prepay Loans (determined as provided in Section 2.4(b)(vii) below) in an
amount equal to 100% of such Net Asset Sale Proceeds received multiplied by the
Pro Rata Percentage, but only (so long as and to the extent such Net Asset Sale
Proceeds are not accepted by any such holder of Parity Secured Debt) to the
extent the OPH Note Indenture does not prohibit the distribution of such Net
Asset Sale Proceeds to the Borrower.

 

In addition, in the event any such Net Asset Sale Proceeds described in the
foregoing sentence (x) are required by the terms of any Parity Secured Debt to
be and are offered to any holder of Parity Secured Debt but are not accepted by
such holder, or

 

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(y) are required by the terms of the OPH Note Agreement to be and are offered to
any holder of an OPH Note but are accepted neither by such holder nor
subsequently by any holder of any Parity Secured Debt to whom they are required
by the terms of any Parity Secured Debt Agreement to be and are offered, and are
permitted in accordance with the OPH Note Indenture to be distributed to the
Borrower (such Net Asset Sale Proceeds being referred to herein as “Available
Proceeds”), then promptly, but in any event no later than three (3) Business
Days after the last day for, in each case, such holder of any Parity Secured
Debt to accept the repurchase or prepayment offer, the Borrower shall prepay
Loans (determined as provided in Section 2.4(b)(vii) below) in an amount equal
to 100% of such Available Proceeds.

 

(ii)                                  Upon the incurrence or issuance by the
Borrower or any of its Subsidiaries of any secured Senior Debt (other than
Excepted Debt) and any Permitted Refinancing Indebtedness of any of the
foregoing, the Borrower shall prepay an aggregate principal amount of Loans
equal to 100% of all Net Financing Proceeds received therefrom within three
Business Days after the date of receipt thereof by the Borrower or such
Subsidiary subject to the provisions of
Section 2.4(b)(viii).

 

(iii)                               Upon the incurrence or issuance by the
Borrower or any of its Subsidiaries of any unsecured Senior Debt (other than
Excepted Debt), the Borrower shall prepay an aggregate principal amount of Loans
equal to (x) if the Consolidated Leverage Ratio determined on a pro forma basis
after giving effect to such incurrence or issuance as of the last day of the
Fiscal Quarter most recently ended equals or exceeds to 4.0:1, 75% of all Net
Financing Proceeds received therefrom and (y) if the Consolidated Leverage Ratio
so determined is less than 4.0:1, 50% of all Net Financing Proceeds received
therefrom, within three Business Days after the date of receipt thereof by the
Borrower or such Subsidiary subject to the provisions of Section 2.4(b)(viii);
provided, that so long as no Event of Default shall have occurred and be
continuing, (A) if the Borrower intends to reinvest any Net Financing Proceeds
in accordance with this proviso, it shall deliver written notice of such
intention to the Administrative Agent on or prior to the third Business Day
immediately following the date on which Borrower receives such Net Financing
Proceeds, (B) if the Borrower shall have delivered such notice, it may reinvest
all or any portion of such Net Financing Proceeds in an aggregate amount,
together with the aggregate amount of Net Financing Proceeds reinvested pursuant
to Section 2.4(b)(iv), not to exceed $500,000,000 in ERCOT Assets so long as,
pending such reinvestment, the Net Financing Proceeds are applied to repay
Revolving Credit Loans or maintained as Collateral for the Credit Agreement
Obligations, and (C) on the date the Borrower consummates such purchase of ERCOT
Assets, it shall deliver a certificate of a Responsible Officer to the
Administrative Agent certifying that all, or, subject to the immediately
succeeding proviso, part of, such Net Financing Proceeds have been reinvested in
accordance with the proviso of this clause (b)(iii) and, as a result, no
mandatory prepayments are required under this clause (b)(iii); provided,
further, that any Net Financing Proceeds not so reinvested shall be immediately
applied to the prepayment of the Loans as set forth in this Section.

 

(iv)                              Upon the incurrence or issuance by the
Borrower of any Junior Securities (other than Excepted Debt and other than in
connection with the exercise of employee

 

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options or the RRI Warrants), the Borrower shall prepay an aggregate principal
amount of Loans equal to 50% of all Net Financing Proceeds received therefrom,
within three Business Days after the date of receipt thereof by the Borrower
subject to the provisions of Section 2.4(b)(viii); provided, that so long as no
Event of Default shall have occurred and be continuing, (A) if the Borrower
intends to reinvest any Net Financing Proceeds in accordance with this proviso,
it shall deliver written notice of such intention to the Administrative Agent on
or prior to the Business Day immediately following the date on which Borrower
receives such Net Financing Proceeds, (B) if the Borrower shall have delivered
such notice, it may reinvest all or any portion of such Net Financing Proceeds
in an aggregate amount, together with the aggregate amount of Net Financing
Proceeds reinvested pursuant to Section 2.4(b)(iii), not to exceed $500,000,000
in ERCOT Assets so long as, pending such reinvestment, the Net Financing
Proceeds are applied to repay Revolving Credit Loans or maintained as Collateral
for the Credit Agreement Obligations, and (C) on the date the Borrower
consummates such purchase of ERCOT Assets, it shall deliver a certificate of a
Responsible Officer to the Administrative Agent certifying that all, or, subject
to the immediately succeeding proviso, part of, such Net Financing Proceeds have
been reinvested in accordance with the proviso of this clause (b)(iv) and, as a
result, no mandatory prepayments are required under this clause (b)(iv);
provided, further, that any Net Financing Proceeds not so reinvested shall be
immediately applied to the prepayment of the Loans as set forth in this Section.

 

(v)                                 Upon any Extraordinary Receipt received by
or paid to or for the account of the Borrower, any of the Loan Parties or OPH or
any of its Subsidiaries in respect of its property or assets, and not otherwise
included in clause (i), (ii), (iii) or (iv) of this clause (b), the Borrower
shall prepay an aggregate principal amount of Loans equal to 100% of all Net
Casualty Proceeds received therefrom within three Business Days after the date
of receipt thereof by the Borrower or such Subsidiary subject to the provisions
of Section 2.4(b)(viii); provided, that with respect to proceeds of insurance
and Condemnation awards (or payments in lieu thereof), (A) if the Borrower
intends to reinvest the Net Casualty Proceeds thereof in accordance with this
proviso, it shall deliver written notice of such intention to the Administrative
Agent on or prior to the Business Day immediately following the date on which
Borrower receives such Net Casualty Proceeds, (B) if the Borrower shall have
delivered such notice, the Net Casualty Proceeds thereof may be reinvested, so
long as such reinvestment is to restore, repair or replace the assets or
property or purchase other assets with substantially the same utility and in the
same line of business in respect of which such Net Casualty Proceeds were
received, and so long as such reinvestment is consummated or irrevocably
committed to be consummated within 365 days after the receipt of such Net
Casualty Proceeds so long as, pending such reinvestment, the Net Casualty
Proceeds are applied to repay Revolving Credit Loans or maintained as Collateral
for the Credit Agreement Obligations, and (C) on the date the Borrower
consummates or commits to consummate such restoration, repair or replacement or
purchase, it shall deliver a certificate of a Responsible Officer to the
Administrative Agent certifying that all, or, subject to the immediately
succeeding proviso, part of, such Net Casualty Proceeds have been reinvested in
accordance with the first proviso of this clause (b)(v) and, as a result, no
mandatory prepayments are required under this clause (b)(v); provided, further,
that any Net Casualty Proceeds not so reinvested (or such lesser percentage
which represents the remaining portion of such

 

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proceeds not expended or committed pursuant to the foregoing and less any
amounts required to pay for necessary remediation expenses with respect to a
condition affecting the applicable property, to pay reasonable expenses incurred
in connection with the closure of the applicable property and to pay any costs
reasonably incurred in connection with such casualty event) shall be immediately
applied to the prepayment of the Loans in accordance with the foregoing or, to
the extent the Collateral Trustee is loss payee under any insurance policy (if
applicable), the Borrower shall irrevocably direct the Collateral Trustee to
transfer to the Administrative Agent to be applied (in each case, promptly, but
in no event later than three (3) Business Days following receipt of such
proceeds) as a prepayment of Loans in accordance with the foregoing; provided,
that if an Event of Default shall have occurred and be continuing, all Net
Casualty Proceeds  which would otherwise be payable to the Borrower pursuant to
this clause (b)(v) shall be paid to the Collateral Trustee and applied pursuant
to the Collateral Trust Agreement; provided, however, that with respect to
tangible property subject to any Permitted Encumbrance, no such prepayment shall
be required to the extent that this clause (b)(v) would require an application
of Net Casualty Proceeds that would violate or breach any of the provisions of
the instruments or documents under which such Permitted Encumbrance arises or
which governs the application of proceeds.

 

(vi)                              Notwithstanding anything to the contrary set
forth above, the Company shall not be required to prepay the Loans pursuant to
the clause (b)(i)(B)(Y), the last paragraph of clause (b)(i), and clauses
(b)(ii) through clauses (b)(v) (the “Specified Provisions”) if the Borrower is
required to make any prepayment of the loans under the Existing Credit Agreement
by reason of the circumstances set forth therein.  The Borrower agrees that it
will not incur revolving loans under the Existing Credit Agreement for the
primary purpose of avoiding the making of a prepayment of Loans under the
Specified Provisions.

 

(vii)                           Each prepayment of Loans pursuant to clauses
(i), (ii), (iii), (iv) or (v) of this clause (b) shall be applied ratably to the
Loans to the principal repayment installments thereof on a pro rata basis.

 

(viii)                        Notwithstanding the provisions of Sections
2.4(b)(i), (ii), (iii), (iv) and (v), if any mandatory prepayments under any
such clause of this clause (b) would result in the Borrower incurring any
obligation (as determined in the reasonable judgment of the Borrower) under
Section 3.5 as a result of any such mandatory prepayment of Eurodollar Loans
prior to the last day of an Interest Period, so long as no Default has occurred
and is continuing, the Borrower may defer the making of such mandatory
prepayment until the earlier of (A) the last day of such Interest Period and
(B) the date thirty days after the date on which such mandatory prepayment would
otherwise have been required to be made; provided that, pending such mandatory
prepayment, the related amounts shall be maintained as Collateral for the Credit
Agreement Obligations.

 

(ix)                                Notwithstanding anything to the contrary
contained herein, the Lenders with outstanding Loans shall have the option to
waive a voluntary prepayment of the Loans pursuant to Section 2.4(a) and a
mandatory repayment of such Loans pursuant to clauses (i), (ii), (iii), (iv) or
(v) of this clause (b) (each such prepayment or repayment, a

 

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“Waivable Repayment”), provided that no Lender shall have the right to waive any
such voluntary or mandatory prepayment at a time when no Term Loans under and as
defined in the Existing Credit Agreement are outstanding.  The Borrower shall
give to the Administrative Agent written notice of a Waivable Repayment at least
five Business Days prior to such repayment, which notice the Administrative
Agent shall promptly forward to all Lenders (indicating in such notice the
amount of such repayment to be applied to each such Lender’s outstanding
Loans).  In the event any such Lender desires to waive such Lender’s right to
receive any such Waivable Repayment in whole or in part, such Lender shall so
advise the Administrative Agent no later than the close of business two Business
Days after the date of such notice from the Administrative Agent, which notice
shall also include the amount such Lender desires to receive in respect of such
repayment.  If any Lender does not reply to the Administrative Agent within the
aforementioned two Business Day period, such Lender will be deemed not to have
waived any part of such repayment.  If any Lender does not specify an amount
such Lender wishes to receive, it will be deemed to have waived 100% of the
amount of its share of such payment.

 

2.5  Termination of Commitments.  The Commitments shall be automatically and
permanently reduced to zero on the Closing Date (after giving effect to the
Borrowing of the Loans).

 

2.6  Repayment of Loans.  The Borrower shall repay to the Administrative Agent
for the ratable account of the Lenders on each Quarterly Payment Date the
aggregate principal amount of Loans set forth opposite such Quarterly Payment
Date (which amounts shall be reduced as a result of the application of
prepayments in accordance with the order of priority set forth in Section 2.4);
provided, that the final principal repayment installment of the Loans shall be
repaid on the Maturity Date in an amount equal to the aggregate principal amount
of all Loans outstanding on such date:

 

Quarterly Payment Date

 

Amount of Loan
Repayment

January 1, 2006 (through (and including) (January 1, 2010)

 

$747,500

April 30, 2010

 

The remaining amount of Loans

 

2.7  Interest.

 

(a)                                  Subject to the provisions of clause
(b) below, (i) each Eurodollar Rate Loan shall bear interest on the outstanding
principal amount thereof for each Interest Period at a rate per annum equal to
the Eurodollar Rate for such Interest Period plus the Applicable Margin; and
(ii) each Base Rate Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate plus the Applicable Margin.

 

(b)                                 (i)                                    
During all times that an Event of Default under Section 9.1(a) shall have
occurred and be continuing, the Borrower shall pay interest on the principal
amount of all outstanding Loans and Unreimbursed Amounts and all overdue
interest, fees and other amounts,

 

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at a fluctuating interest rate per annum at all times equal to the Default Rate
to the fullest extent permitted by applicable Laws.

 

(ii)                                  Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.

 

(c)                                  Interest on each Loan shall be due and
payable in arrears on each Interest Payment Date applicable thereto and at such
other times as may be specified herein.  Interest hereunder shall be due and
payable in accordance with the terms hereof before and after judgment, and
before and after the commencement of any proceeding under any Debtor Relief Law.

 

2.8  Fees.  The Borrower shall pay to the Administrative Agent for its own
accounts fees in the amounts and at the times specified in the Fee Letter.  Such
fees shall be fully earned when paid and shall not be refundable for any reason
whatsoever.

 

2.9  Computation of Interest.  All computations of interest for Base Rate Loans
when the Base Rate is determined by Deutsche Bank’s “prime rate” shall be made
on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed.  All other computations of interest shall be made on the basis of a
360-day year and actual days elapsed (which results in more interest, as
applicable, being paid than if computed on the basis of a 365-day year). 
Interest shall accrue on each Loan for the day on which the Loan is made, and
shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid, provided, that any Loan that is repaid on the same
day on which it is made shall, subject to Section 2.11(a), bear interest for one
day.  Each determination by the Administrative Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

 

2.10  Evidence of Debt.

 

(a)                                  The Loans made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
the Administrative Agent in the ordinary course of business.  The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Loans made by the Lenders
to the Borrower and the interest and payments thereon.  Any failure to so record
or any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrower hereunder to pay any amount owing with respect to the
Credit Agreement Obligations.  In the event of any conflict between the accounts
and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error.  Upon the
request of any Lender made through the Administrative Agent, the Borrower shall
promptly execute and deliver to such Lender (through the Administrative Agent) a
Note, which shall evidence such Lender’s Loans in addition to such accounts or
records.  Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.

 

(b)                                 Entries made in good faith by the
Administrative Agent in the Register pursuant to Section 2.10(a), and by each
Lender in its account or accounts pursuant to Section 2.10(a),

 

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shall be prima facie evidence of the amount of principal and interest due and
payable or to become due and payable from the Borrower to, in the case of the
Register, each Lender and, in the case of such account or accounts, such Lender,
under this Agreement and the other Loan Documents, absent manifest error;
provided, that the failure of the Administrative Agent or such Lender to make an
entry, or any finding that an entry is incorrect, in the Register or such
account or accounts shall not limit or otherwise affect the obligations of the
Borrower under this Agreement and the other Loan Documents.

 

2.11  Payments Generally; Administrative Agent’s Clawback.

 

(a)                                  General.  All payments to be made by the
Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff.  Except as otherwise expressly provided herein,
all payments by the Borrower hereunder shall be made to the Administrative
Agent, for the account of the respective Lenders to which such payment is owed,
at the Administrative Agent’s Office in Dollars and in immediately available
funds not later than 2:00 p.m. on the date specified herein.  The Administrative
Agent will promptly distribute to each Lender its Pro Rata Share (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office.  All payments received by the
Administrative Agent after 2:00 p.m. shall be deemed received on the next
succeeding Business Day and any applicable interest shall continue to accrue. 
If any payment to be made by the Borrower shall come due on a day other than a
Business Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest.

 

(b)                                 (i)                                    
Funding by Lenders; Presumption by Administrative Agent.  Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with Section 2.2 and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount.  In such event, if a Lender
has not in fact made its share of the initial Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each day from
and including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the case of
a payment to be made by such Lender, the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation and (B) in the case of a payment to be made by
the Borrower, the interest rate applicable to Base Rate Loans.  If the Borrower
and such Lender shall pay such interest to the Administrative Agent for the same
or an overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period.  If
such Lender pays its share of the initial Borrowing to the Administrative Agent,
then the amount so paid shall constitute such Lender’s Loan included in such
Borrowing.  Any payment by the Borrower shall be without prejudice to any claim
the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.

 

(ii)                                  Payments by Borrower; Presumptions by
Administrative Agent.  Unless the Administrative Agent shall have received
notice from the Borrower prior to the date

 

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on which any payment is due to the Administrative Agent for the account of the
Lenders that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders
the amount due.  In such event, if the Borrower has not in fact made such
payment, then each of the Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender in immediately available funds with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.

 

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this clause shall be conclusive, absent manifest
error.

 

(c)                                  Failure to Satisfy Conditions Precedent. 
If any Lender makes available to the Administrative Agent funds for any Loan to
be made by such Lender as provided in the foregoing provisions of this Article,
and such funds are not made available to the Borrower by the Administrative
Agent because the conditions to the making of the Loans set forth in Article IV
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

 

(d)                                 Obligations of Lenders Several.  The
obligations of the Lenders hereunder to make Loans and to make payments pursuant
to Section 11.4(c) are several and not joint.  The failure of any Lender to make
any Loan or to make any payment under Section 11.4(c) on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan, to purchase its participation or to make its
payment under Section 11.4(c).

 

(e)                                  Funding Source.  Nothing herein shall be
deemed to obligate any Lender to obtain the funds for any Loan in any particular
place or manner or to constitute a representation by any Lender that it has
obtained or will obtain the funds for any Loan in any particular place or
manner.

 

2.12  Sharing of Payments by Lenders.  If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Loans made by it resulting in such
Lender’s receiving payment of a proportion of the aggregate amount of such Loans
and accrued interest thereon greater than its pro rata share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Loans, or make such other adjustments as shall be
equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and other amounts owing them;
provided, that:

 

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(i)                                     if any such participations or
subparticipations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations or subparticipations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and

 

(ii)                                  the provisions of this Section shall not
be construed to apply to (x) any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or (y) any payment obtained
by a Lender as consideration for the assignment of or sale of a participation in
any of its Loans to any assignee or participant, other than to the Borrower or
any Subsidiary thereof (as to which the provisions of this Section shall apply).

 

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.

 

ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.1  Taxes.

 

(a)                                  Payments Free of Taxes.  Any and all
payments by or on account of any obligation of the Borrower hereunder or under
any other Loan Document shall be made free and clear of and without reduction or
withholding for any Indemnified Taxes or Other Taxes; provided, that if the
Borrower shall be required by applicable law to deduct any Indemnified Taxes
(including any Other Taxes) from such payments, then (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent or each Lender, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall timely
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

 

(b)                                 Payment of Other Taxes by the Borrower. 
Without limiting the provisions of clause (a) above, the Borrower shall timely
pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

 

(c)                                  Indemnification by the Borrower.  The
Borrower shall indemnify the Administrative Agent and each Lender, within 10
days after demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) paid by the
Administrative Agent or such Lender, as the case may be, 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 Governmental Authority.  A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender

 

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(with a copy to the Administrative Agent), or by the Administrative Agent on its
own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(d)                                 Evidence of Payments.  As soon as
practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent 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.

 

(e)                                  Status of Lenders.  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 resident for tax purposes, or any
treaty to which such jurisdiction is a party, with respect to payments hereunder
or under any other Loan Document shall deliver to the Borrower (with a copy to
the Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent, 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 of
withholding.  In addition, any Lender, if requested by the Borrower or the
Administrative Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower or the Administrative Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements.

 

Without limiting the generality of the foregoing, in the event that the Borrower
is resident for tax purposes in the United States, any Foreign Lender shall
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:

 

(i)                                     duly completed copies of Internal
Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax
treaty to which the United States is a party,

 

(ii)                                  duly completed copies of Internal Revenue
Service Form W-8ECI,

 

(iii)                               in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under section 881(c) of the
Code, (x) a certificate to the effect that such Foreign Lender is not (A) a
“bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent
shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the
Code, or (C) a “controlled foreign corporation” described in
section 881(c)(3)(C) of the Code and (y) duly completed copies of  Internal
Revenue Service Form W-8BEN, or

 

(iv)                              any other form prescribed by applicable law as
a basis for claiming exemption from or a reduction in United States Federal
withholding tax duly completed together with such supplementary documentation as
may be prescribed by applicable law to permit the Borrower to determine the
withholding or deduction required to be made.

 

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(f)                                    Treatment of Certain Refunds.  If the
Administrative Agent or any Lender determines, in its sole discretion, that it
has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section, it shall pay to the Borrower an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this Section with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender, as the case may be, and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Borrower, upon the
request of the Administrative Agent or such Lender, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges imposed
by the relevant Governmental Authority) to the Administrative Agent or such
Lender in the event the Administrative Agent or such Lender is required to repay
such refund to such Governmental Authority.  This clause shall not be construed
to require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its taxes that it deems
confidential) to the Borrower or any other Person.

 

3.2  Illegality.  If any Lender determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make, maintain or fund Eurodollar Rate
Loans, or to determine or charge interest rates based upon the Eurodollar Rate,
or any Governmental Authority has imposed material restrictions on the authority
of such Lender to purchase or sell, or to take deposits of, Dollars in the
London interbank market, then, on notice thereof by such Lender to the Borrower
through the Administrative Agent, any obligation of such Lender to make or
continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate
Loans shall be suspended until such Lender notifies the Administrative Agent and
the Borrower that the circumstances giving rise to such determination no longer
exist.  Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. 
Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted.

 

3.3  Inability to Determine Rates.  If the Required Lenders determine that for
any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or
(c) the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, the Administrative Agent will promptly so
notify the Borrower and each Lender.  Thereafter, the obligation of the Lenders
to make or maintain Eurodollar Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice.  Upon receipt of such notice, the Borrower may revoke any pending
request for a Borrowing of, conversion to or continuation of Eurodollar Rate
Loans or, failing that, will be deemed to have

 

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converted such request into a request for a Borrowing of Base Rate Loans in the
amount specified therein.

 

3.4  Increased Costs; Capital Adequacy; Reserves on Eurodollar Rate Loans.

 

(a)                                  Increased Costs Generally.  If any Change
in Law shall:

 

(i)                                     impose, modify or deem applicable any
reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any reserve requirement
contemplated by Section 3.4(e));

 

(ii)                                  subject any Lender to any tax of any kind
whatsoever with respect to this Agreement or any Eurodollar Rate Loan made by
it, or change the basis of taxation of payments to such Lender in respect
thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.1 and
the imposition of, or any change in the rate of, any Excluded Tax payable by
such Lender); or

 

(iii)                               impose on any Lender or the London interbank
market any other condition, cost or expense affecting this Agreement or
Eurodollar Rate Loans made by such Lender;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender, the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.

 

(b)                                 Capital Requirements.  If any Lender
determines that any Change in Law affecting such Lender or any Lending Office of
such Lender or such Lender’s holding company, if any, regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender’s capital or on the capital of such Lender’s holding company, if any, as
a consequence of this Agreement, the Commitments of such Lender or the Loans
made by such Lender to a level below that which such Lender or such Lender’s
holding company could have achieved but for such Change in Law (taking into
consideration such Lender’s policies and the policies of such Lender’s holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender such additional amount or amounts as will compensate
such Lender or such Lender’s for any such reduction suffered.

 

(c)                                  Certificates for Reimbursement.  A
certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or its holding company, as the case may be, as specified
in clause (a) or (b) of this Section and delivered to the Borrower shall be
conclusive absent manifest error.  The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.

 

(d)                                 Delay in Requests.  Failure or delay on the
part of any Lender to demand compensation pursuant to the foregoing provisions
of this Section shall not constitute a waiver of

 

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such Lender’s right to demand such compensation; provided, that the Borrower
shall not be required to compensate a Lender pursuant to the foregoing
provisions of this Section for any increased costs incurred or reductions
suffered more than six months prior to the date that such Lender notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s intention to claim compensation therefor (except that, if
the Change in Law giving rise to such increased costs or reductions is
retroactive, then the nine-month period referred to above shall be extended to
include the period of retroactive effect thereof).

 

(e)                                  Reserves on Eurodollar Rate Loans.  The
Borrower shall pay to each Lender, as long as such Lender shall be required to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each
Eurodollar Rate Loan equal to the actual costs of such reserves allocated to
such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), which shall be due and payable on each date
on which interest is payable on such Loan; provided, that the Borrower shall
have received at least 10 days’ prior notice (with a copy to the Administrative
Agent) of such additional interest from such Lender.  If a Lender fails to give
notice 10 days prior to the relevant Interest Payment Date, such additional
interest shall be due and payable 10 days from receipt of such notice.

 

3.5  Compensation for Losses.  Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

 

(a)                                  any continuation, conversion, payment or
prepayment of any Loan other than a Base Rate Loan on a day other than the last
day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);

 

(b)                                 any failure by the Borrower (for a reason
other than the failure of such Lender to make a Loan) to prepay, borrow,
continue or convert any Loan other than a Base Rate Loan on the date or in the
amount notified by the Borrower; or

 

(c)                                  any assignment of a Eurodollar Rate Loan on
a day other than the last day of the Interest Period therefor as a result of a
request by the Borrower pursuant to Section 11.13;

 

excluding any loss of anticipated profits, but including any loss or expense
arising from the liquidation or reemployment of funds obtained by it to maintain
such Loan or from fees payable to terminate the deposits from which such funds
were obtained.  The Borrower shall also pay any customary administrative fees
charged by such Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section, each Lender shall be deemed to have funded each Eurodollar Rate
Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or
other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.

 

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3.6  Mitigation Obligations; Replacement of Lenders.

 

(a)                                  Designation of a Different Lending Office. 
If any Lender requests compensation under Section 3.4, or the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.1, or if any
Lender gives a notice pursuant to Section 3.2, then such Lender shall use
reasonable efforts to designate a different Lending Office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 3.1 or 3.4, as the case may be, in the future, or
eliminate the need for the notice pursuant to Section 3.2, as applicable, and
(ii) in each case, would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender.  The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

 

(b)                                 Replacement of Lenders.  If any Lender
requests compensation under Section 3.4, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 3.1, the Borrower may replace such
Lender in accordance with Section 11.13.

 

3.7  Survival.  All of the Borrower’s obligations under this Article shall
survive termination of the Commitments and repayment of all other Credit
Agreement Obligations hereunder.

 

ARTICLE IV.
CONDITIONS PRECEDENT TO LOANS

 

4.1  General Conditions.  The obligation of each Lender to make its Loans
hereunder is subject to satisfaction of the following conditions precedent:

 

(a)                                  The Administrative Agent’s receipt of the
following, each of which shall be originals or telecopies (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Loan Party, each dated the Closing Date (or, in the case
of certificates of governmental officials, a recent date before the Closing
Date) and each in form and substance satisfactory to the Administrative Agent
and each of the Lenders:

 

(i)                                     executed counterparts of this Agreement,
sufficient in number for distribution to the Administrative Agent, each Lender
and the Borrower;

 

(ii)                                  a Note executed by the Borrower in favor
of each Lender requesting a Note;

 

(iii)                               such certificates of resolutions or other
action, incumbency certificates and/or other certificates of Responsible
Officers of each Loan Party as the Administrative Agent may require evidencing
the identity, authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer in connection with this Agreement and
the other Loan Documents to which such Loan Party is a party;

 

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(iv)                              such documents and certifications as the
Administrative Agent may reasonably require to evidence that the Borrower is
duly organized or formed, is validly existing, in good standing and qualified to
engage in business in Texas and Delaware;

 

(v)                                 a favorable opinion of Bracewell and
Giuliani LLP, counsel to the Loan Parties, addressed to the Administrative Agent
and each Lender, in form and substance reasonably satisfactory to the
Administrative Agent;

 

(vi)                              a favorable opinion of general counsel to the
Loan Parties in form and substance reasonably satisfactory to the Administrative
Agent; and

 

(vii)                           a certificate signed by a Responsible Officer of
the Borrower certifying (A) that the conditions specified in Sections 4.2(a) and
(b) have been satisfied, and (B) that there has been no event or circumstance
since December 31, 2004 that, except as disclosed in any Exchange Act filings
made on or before five Business Days before the Closing Date, has had or could
be reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect;

 

(b)                                 The Administrative Agent’s receipt of the
following, each of which shall be originals or telecopies (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Loan Party:

 

(i)                                     recorded copies of the Existing
Mortgages with respect to each of the properties indicated on
Schedule 5.8(c) hereto (the “Closing Date Mortgaged Properties”), which, upon
the Closing Date, will create valid and subsisting Liens on the Closing Date
Mortgaged Properties in favor of the Collateral Trustee for the benefit of the
Secured Parties;

 

(ii)                                  such assurances as Administrative Agent
may reasonably request that no other filings, encumbrances or transfers (other
than in connection with Permitted Liens and Permitted Encumbrances) exist;

 

(iii)                               copies of the Existing Credit Agreement, the
Secured Notes and the indentures and other documents relating thereto and the
Security Documents, in each case certified as being true and complete copies
thereof; and

 

(iv)                              such other assurances, certificates,
documents, consents or opinions as the Administrative Agent reasonably may
require.

 

(c)                                  Any fees required to be paid on or before
the Closing Date shall have been paid.

 

(d)                                 Unless waived by the Administrative Agent,
the Borrower shall have paid all fees, charges and disbursements of counsel to
the Administrative Agent to the extent invoiced prior to or on the Closing Date.

 

(e)                                  All governmental authorizations and all
third party consents and approvals necessary in connection with the Loan
Documents shall have been obtained (without the imposition of any conditions
that are not acceptable to the Lenders) and shall remain in effect.

 

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(f)                                    Since December 31, 2004, there shall not
have occurred any event, development, condition or circumstance not disclosed in
the Borrower’s 2004 report filed on SEC Form 10-K, first- or second-quarter 2005
reports filed on SEC Form 10-Q, or any report filed on SEC form 8-K at least
five Business Days before the Closing Date, that shall have had a Material
Adverse Effect.

 

(g)                                 The Administrative Agent shall have received
evidence reasonably satisfactory to it that all notices and other actions
required under Section 2.6 of the Collateral Trust Agreement in order that the
Credit Agreement Obligations constitute “Parity Secured Obligations” under the
Security Documents have been taken, given or made (or will be taken, given or
made contemporaneously with the making of the Loans).

 

Without limiting the generality of the provisions of Section 11.4, for purposes
of determining compliance with the conditions specified in this Section, each
Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

 

4.2  Funding Conditions.  The obligation of each Lender to make its Loans is
subject to the following conditions precedent:

 

(a)                                  The representations and warranties of the
Borrower and each other Loan Party contained in Article V or any other Loan
Document, or which are contained in any document furnished at any time under or
in connection herewith or therewith, shall be true and correct in all material
respects on and as of the date of the making of the Loans; provided, that
representations and warranties which have Material Adverse Effect qualifiers
shall be true and correct in all respects to the extent such Material Adverse
Effect qualifier is applicable thereto.

 

(b)                                 No Default shall exist, or would result from
the making of the Loans or from the application of the proceeds thereof.

 

(c)                                  The Administrative Agent shall have
received a Borrowing Notice in accordance with the requirements hereof.

 

(d)                                 The  date of the Borrowing shall have
occurred on or before October 12, 2005.

 

The initial Borrowing Notice submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.2(a) and
(b) have been satisfied on and as of the date of the initial Borrowing.

 

4.3  Post Closing Covenant.  The Borrower shall, within 30 days after the
Closing Date, deliver to the Administrative Agent:

 

(a)                                  such documents and certifications as the
Administrative Agent may reasonably require to evidence that each Loan Party is
duly organized or formed, and that each of the

 

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Borrower and its Subsidiaries is validly existing, in good standing and
qualified to engage in business in each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires such
qualification, except to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect;

 

(b)                                 favorable opinions of local counsel for the
Loan Parties in jurisdictions in which the Closing Date Mortgaged Properties are
located, including, among other things, opinions with respect to the
enforceability and perfection of the Mortgages covering the Closing Date
Mortgaged Properties and any related fixture filings, in form and substance
reasonably satisfactory to the Administrative Agent;

 

(c)                                  pro forma modification endorsements that
the Title Companies have agreed to issue to the Collateral Trustee that, when
issued by the Title Companies, will provide the Collateral Trustee (for benefit
of the Secured Parties in accordance with the Collateral Trust Agreement) with
mortgagee’s title insurance through the Closing Date under the Existing Title
Policies insuring that the Existing Mortgages (not including the Existing
Florida Mortgages), as supplemented by the Mortgage Supplements, create a first
priority Lien (subject to Permitted Encumbrances) on the Closing Date Mortgaged
Properties (not including the Florida Mortgaged Properties) securing the Parity
Secured Obligations; provided that the coverage effectuated by the Title
Companies’ issuance of the modification endorsements shall be the substantially
the same as or better than the coverage under the Existing Title Policies prior
to the date of issuance of the modification endorsements, except for the
addition of Liens (as defined in and permitted under the Existing Credit
Agreement) arising between the date the Existing Title Policies were last
modified by the Title Companies and a date on or after the Closing Date;

 

(d)                                 such tax and Uniform Commercial Code lien
searches as the Administrative Agent may reasonably request and demonstrating
that no other filings, encumbrances or transfers (other than in connection with
Permitted Liens and Permitted Encumbrances) with regard to any Collateral are of
record in any jurisdiction in which it shall be reasonably necessary or
desirable for the Collateral Trustee to make a Uniform Commercial Code filing in
order to provide the Collateral Trustee (for the benefit of the Secured Parties)
with a perfected security interest in the Collateral and if applicable, evidence
reasonably satisfactory to the Administrative Agent that any Liens indicated by
such financing statements (or similar documents) that are not permitted under
this Agreement, have been or will be released within 45 days after the Closing
Date; and

 

(e)                                  such amendments to the Security Documents
contemplated by the Collateral Trust Agreement and not requiring an Act of
Secured Debtholders as the Administrative Agent may reasonably request.

 

ARTICLE V.
REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and the Lenders
that:

 

5.1  Existence, Qualification and Power; Compliance with Laws.  Each Loan Party
and each Subsidiary thereof (a) is duly organized or formed, validly existing
and in good standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all

 

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requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own its assets and carry on its
business and (ii) execute, deliver and perform its obligations under the Loan
Documents to which it is a party, (c) is duly qualified and is licensed and in
good standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws; except in each
case referred to in clause (b)(i), (c) or (d), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.

 

5.2  Authorization; No Contravention.  The execution, delivery and performance
by each Loan Party of each Loan Document to which such Person is party, have
been duly authorized by all necessary corporate or other organizational action,
and do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to
be made under (i) any Contractual Obligation to which such Person is a party or
affecting such Person or the properties of such Person or any of its
Subsidiaries, where such Contractual Obligation (x) evidences Indebtedness of
the Borrower or any of its Subsidiaries or (y) is identified in the exhibit list
from time to time in filings made by the Borrower with the SEC as material to
the Borrower, or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject
that could reasonably be expected to have a Material Adverse Effect; (c) violate
any Law that could reasonably be expected to have a Material Adverse Effect; or
(d) result in the creation of any Lien other than a Permitted Lien.  Each Loan
Party and each Subsidiary thereof is in compliance with all Contractual
Obligations referred to in clause (b)(i), except to the extent that failure to
do so could not reasonably be expected to have a Material Adverse Effect.

 

5.3  Governmental Authorization; Other Consents.  No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (i) the execution, delivery or performance by any Loan Party of
this Agreement or any other Loan Document, (ii) the grant by any Loan Party of
the Liens granted by it pursuant to the Loan Documents, or (iii) the perfection
or maintenance of the Liens created under the Loan Documents (including the
first priority nature thereof) (other than the filing of supplements to the
Mortgages), all of which have been duly obtained, taken, given or made and are
in full force and effect.

 

5.4  Binding Effect.  This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by each
Loan Party that is party thereto.  This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally and by general principles of equity, whether such
enforceability is considered in a proceeding at law or in equity.

 

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5.5  Financial Statements; No Material Adverse Effect.

 

(a)                                  The Audited Financial Statements (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein and (ii) fairly
present in all material respects the consolidated financial condition of the
Borrower and its consolidated Subsidiaries as of the date thereof and their
results of operations and cash flows for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein.

 

(b)                                 The unaudited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries dated June 30, 2005, and the
related consolidated statements of income and cash flows and the related notes
and supplemental information for the Fiscal Quarter ended on that date (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein, and (ii) fairly
present in all material respects the financial condition of the Borrower and its
Subsidiaries as of the date thereof and their results of operations and cash
flows for the period covered thereby, subject, in the case of clauses (i) and
(ii), to the absence of footnotes and to normal year-end audit adjustments.

 

(c)                                  Since the date of the Audited Financial
Statements, there has been no event or circumstance, either individually or in
the aggregate, except as disclosed in the Borrower’s Exchange Act filings made
on or before the five Business Days before the Closing Date, that has had or
could reasonably be expected to have a Material Adverse Effect.

 

5.6  Litigation.  There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of the Borrower, threatened or contemplated, at
law, in equity, in arbitration or before any Governmental Authority, by or
against the Borrower or any of its Subsidiaries or against any of their
properties or revenues that (a) purport to affect or pertain to this Agreement
or any other Loan Document, or any of the transactions contemplated hereby, or
(b) except as disclosed in the Borrower’s Exchange Act filings made on or before
the five Business Days before the Closing Date, either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.

 

5.7  No Default.  No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.

 

5.8  Ownership of Property; Liens.

 

(a)                                  Each of the Borrower and each Subsidiary
has good and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of its business,
except for Permitted Liens and Permitted Encumbrances and such defects in title
as could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

(b)                                 The property of the Borrower and its
Restricted Subsidiaries is subject to no Liens, other than Permitted Liens and
Permitted Encumbrances.

 

(c)                                  Set forth on Schedule 5.8(c) hereto is a
complete and accurate list of all real property interests owned as of the
Closing Date by the Borrower and its Subsidiaries which are material to their
business and are reflected on the financial statements referred to in
Section 5.5

 

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(other than such properties or assets disposed of since the date of such
financial statements), showing as of the date hereof the street address, county
or other relevant jurisdiction, state, and record owner thereof.  Except as set
forth on Schedule 5.8(c), the Borrower and each Subsidiary has good, marketable
and insurable fee simple title to such real property, free and clear of all
Liens, other than Permitted Liens and Permitted Encumbrances.

 

5.9  Environmental Matters.

 

(a)                                  Borrower and its Subsidiaries have been and
are in compliance with all Environmental Laws, including obtaining and complying
with all required environmental permits, other than non-compliances that could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.

 

(b)                                 Neither the Borrower nor any of its
Subsidiaries nor any property currently or, to the knowledge of Borrower or any
of its Subsidiaries, previously owned, operated or leased by or for Borrower or
any of its Subsidiaries is subject to any pending or, to the knowledge of
Borrower or any of its Subsidiaries, threatened, claim, order, agreement, notice
of violation, notice of potential liability or is the subject of any pending or
threatened proceeding or governmental investigation under or pursuant to
Environmental Laws other than those that could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.

 

(c)                                  Except as set forth on Schedule 5.9(c), as
of December 22, 2004 neither the Borrower nor any of its Subsidiaries has a
treatment, storage or disposal facility requiring a permit under the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the regulations
thereunder or any state analog.

 

(d)                                 There are no facts, circumstances or
conditions known to Borrower or any of its Subsidiaries arising out of or
relating to the operations or ownership of Borrower or any of its Subsidiaries
or of the property owned, operated or leased by Borrower or any of its
Subsidiaries that are not specifically included in the financial information
furnished to the Lenders that could be reasonably expected to result in any
Environmental Liabilities that could reasonably be expected to have a Material
Adverse Effect, unless such liabilities are (i) covered by environmental
liability insurance, (ii) subject to an indemnity from any Governmental
Authority, or (iii) subject to an indemnity satisfactory to the Borrower from a
Person that is not an Affiliate of the Borrower that the Borrower has determined
in good faith is appropriately credit worthy in relation to the potential amount
of such liabilities.

 

(e)                                  As of the Closing Date, no environmental
Lien has attached to any property of Borrower or its Subsidiaries and, to the
knowledge of Borrower or its Subsidiaries, no facts, circumstance or conditions
exist that could, individually or in the aggregate, reasonably be expected to
result in an environmental Lien that would have a Material Adverse Effect.

 

(f)                                    Neither Borrower nor any of its
Subsidiaries is undertaking, and has not completed, either individually or
together with other potentially responsible parties, any investigation or
assessment or Remedial Action relating to any actual or threatened release of
Hazardous Materials at any site, location or operation, either voluntarily or
pursuant to the order of any Governmental Authority or the requirements of any
Environmental Law that could

 

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reasonably be expected to have a Material Adverse Effect; and all Hazardous
Materials generated, used, treated, handled or stored at, or transported to or
from, any property currently or formerly owned or operated by Borrower or any of
its Subsidiaries have been disposed of in a manner that could not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.

 

5.10  Insurance.  The properties of the Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts (after giving effect to any self-insurance
compatible with the following standards), with such deductibles and covering
such risks as are customarily carried by companies of same or similar size
engaged in similar businesses and owning similar properties in localities where
the Borrower or the applicable Subsidiary operates.

 

5.11  Taxes.  The Borrower and its Subsidiaries have filed all Federal, state
and other material tax returns and reports required to be filed after giving
effect to applicable extensions, except for tax returns or reports the failure
of which to timely file could not reasonably be expected to have a Material
Adverse Effect, and have paid all Federal, state and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable, except those which
are being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been provided in accordance with
GAAP.  There is no proposed tax assessment against the Borrower or any
Subsidiary that would, if made, have a Material Adverse Effect.  Except for (y)
the Tax Sharing Agreement referred to in clause (13) of Permitted Investments
and (z) the Tax Allocation Agreement dated as of December 31, 2000, by and among
Reliant Energy, Inc. (now known as Centerpoint Energy, Inc.) and its affiliates
parties thereto and Reliant Resources, Inc. and its affiliates parties thereto,
on the Closing Date, neither any Loan Party nor any Subsidiary thereof is party
to any tax sharing agreement.

 

5.12  ERISA Compliance.

 

(a)                                  Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other Federal or
state Laws.  Each Plan that is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto and, to the best knowledge of the Borrower, nothing has occurred
which would prevent, or cause the loss of, such qualification.  The Borrower and
each ERISA Affiliate have made all required contributions (both quarterly and
annually) to each Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.

 

(b)                                 There are no pending or, to the best
knowledge of the Borrower, threatened claims, actions or lawsuits, or action by
any Governmental Authority, with respect to any Plan that could reasonably be
expected to have a Material Adverse Effect.  There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan that has resulted or could reasonably be expected to result in a
Material Adverse Effect.

 

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(c)                                  (i)  No ERISA Event has occurred or is
reasonably expected to occur that could reasonably be expected to have a
Material Adverse Effect; (ii) no Pension Plan has any Unfunded Pension
Liability, whether or not waived, that could reasonably be expected to have a
Material Adverse Effect, and no application for a waiver of the minimum funding
standard has been filed with respect to any Pension Plan; (iii) neither any Loan
Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA) that could
reasonably be expected to have a Material Adverse Effect; (iv) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan that could reasonably be
expected to have a Material Adverse Effect; and (v) neither the Borrower nor any
ERISA Affiliate has engaged in a transaction that could be subject to Sections
4069 or 4212(c) of ERISA.

 

5.13  Subsidiaries; Equity Interests.  On the Closing Date, the Borrower has no
Subsidiaries other than those specifically disclosed in Part (a) of
Schedule 5.13, and all of the outstanding Equity Interests in such Subsidiaries
have been validly issued, are fully paid and nonassessable and are owned in the
amounts specified on Part (a) of Schedule 5.13 free and clear of all Liens
except those created under the Loan Documents and the Permitted Liens.  On the
Closing Date, the Borrower and its Subsidiaries have no equity investments in
any other Person other than those specifically disclosed in Part (b) of
Schedule 5.13.  All of the outstanding Equity Interests in the Borrower have
been validly issued and are fully paid and nonassessable.  Set forth on
Part (c) of Schedule 5.13 is a complete and accurate list of all Loan Parties,
showing as of the Closing Date (as to each Loan Party) the jurisdiction of its
incorporation, the address of its principal place of business and its U.S.
taxpayer identification number.

 

5.14  Margin Regulations; Investment Company Act; Public Utility Holding Company
Act.

 

(a)                                  The Borrower is not engaged and will not
engage, principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock and no proceeds of any Loans will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying margin stock.

 

(b)                                 None of the Borrower, any Person Controlling
the Borrower, or any Subsidiary (i) is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or any foreign,
federal or local statute or any other Law of the United States of America or any
other jurisdiction, in each case limiting its ability to incur indebtedness for
money borrowed as contemplated hereby or by any other Loan Document or (ii) is
or is required to be registered as an “investment company” under the Investment
Company Act of 1940.  Neither the making of any Loan nor the application of the
proceeds or repayment thereof by the Borrower, nor the consummation of the other
transactions contemplated by the Loan Documents, will violate any provision of
any such Act or any rule, regulation or order of the SEC thereunder.

 

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5.15  Disclosure.  The Borrower has disclosed to the Administrative Agent and
the Lenders all agreements, instruments and corporate or other restrictions to
which it or any of its Subsidiaries is subject, and all other matters known to
it (other than general industry, political, and economic conditions), that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.  No report, financial statement, certificate or other
information furnished (whether in writing or orally) by or on behalf of any Loan
Party to the Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other information so furnished), at the time furnished or
delivered, contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, taken as a whole, in the
light of the circumstances under which they were made, not misleading; provided,
that with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time made.

 

5.16  Compliance with Laws.  Each Loan Party and each Subsidiary is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

 

5.17  Intellectual Property; Licenses, Etc.  The Borrower and its Subsidiaries
own, or possess the right to use, all of the trademarks, service marks, trade
names, copyrights, patents, patent rights, franchises, licenses and other
intellectual property rights (collectively, “IP Rights”) that are necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person, unless the failure to so own or possess the right to use
could not reasonably be expected to have a Material Adverse Effect.  To the best
knowledge of the Borrower, except as set forth on Schedule 5.17, no slogan or
other advertising device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by the Borrower or
any Subsidiary infringes upon any rights held by any other Person in a manner
that could reasonably be expected to have a Material Adverse Effect.  Except as
set forth on Schedule 5.17, no claim or litigation regarding any of the
foregoing is pending or, to the best knowledge of the Borrower, threatened,
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.

 

5.18  Solvency.  The Borrower is, together with its Subsidiaries on a
consolidated basis, Solvent.

 

5.19  Perfection, Etc.

 

(a)                                  The Security Documents (other than the
Mortgages and the Assignments of Leases and Rents), create and grant to the
Collateral Trustee for the benefit of the applicable Secured Parties, together
with (i) the filing of appropriate UCC-1 and, if applicable, UCC 3, financing
statements with the filing offices required under the Security Agreement, and
(ii) the possession of certificated Pledged Securities (together with blank
executed stock powers with

 

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respect thereto), a valid, first priority, perfected security interest in the
Collateral, subject (other than in the case of investment property) only to
Permitted Encumbrances and, as to perfection, subject to the terms and
provisions of the Security Agreement.

 

(b)                                 The Mortgages and the Assignments of Leases
and Rents, as supplemented by the Mortgage Supplements, will create in favor of
the Collateral Trustee, for the benefit of the applicable Secured Parties, a
legal, valid and enforceable Lien on all of the Loan Parties’ respective right,
title and interest in and to the real property assets (except personalty that
does not constitute fixtures) covered thereby and the proceeds thereof.  When
each of the Mortgage Supplements are filed in the appropriate offices specified
by a Loan Party and the proper amount of mortgage recording or similar taxes (if
any) are paid, each of the Mortgages and the Assignments of Leases and Rents
together with the UCC-1 financing statements relating to fixtures previously
filed in connection with the Mortgages, shall constitute fully perfected Liens
on, and fully perfected security interest in, all right, title and interest of
the applicable Loan Parties in the real property assets (except personalty that
does not constitute fixtures) covered thereby and the proceeds thereof, subject
only to Permitted Encumbrances and, as to perfection, subject to the terms and
provisions of the Mortgages and the Assignments of Leases and Rents.

 

5.20  Parity Secured Obligations.  The Credit Agreement Obligations constitute
Parity Secured Obligations under the Collateral Trust Agreement and the other
Security Documents; the Company has delivered a “Notice of Additional Secured
Debt” with respect to this Agreement to the Collateral Trustee and each Secured
Debt Representative at least three Business Days prior to the Closing Date and
the Collateral Trustee has not received a notice from any Secured Debt
Representative that any of the certifications set forth in such Notice of
Additional Secured Debt was incorrect.  On the Closing Date, no Indebtedness is
outstanding over the amount of $1,000,000 which has been incurred in under the
basket set forth in Section 7.2(s) of the Existing Credit Agreement.

 

ARTICLE VI.
AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Credit Agreement Obligation hereunder shall remain unpaid or unsatisfied, the
Borrower shall, and shall (except in the case of the covenants set forth in
Sections 6.1, 6.2, and 6.3) cause each Subsidiary to:

 

6.1  Financial Statements.  Deliver to the Administrative Agent and each Lender,
in form and detail satisfactory to the Administrative Agent:

 

(a)                                  as soon as available, but in any event
within 90 days after the end of each Fiscal Year of the Borrower, an audited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such Fiscal Year, and the related consolidated statements of
income or operations, stockholders’ equity, comprehensive income (loss) and cash
flows for such Fiscal Year, setting forth in each case in comparative form the
figures as of the end of, and for, the previous Fiscal Year, all in reasonable
detail and prepared in accordance with GAAP, such consolidated statements to be
audited and accompanied by a report and opinion of an independent registered
public accounting firm of nationally recognized standing, which report

 

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and opinion shall be prepared in accordance with the standards of the Public
Company Accounting Oversight Board or its successor and shall not be subject to
any “going concern” or like qualification or exception;

 

(b)                                 as soon as available, but in any event
within 45 days after the end of each of the first three Fiscal Quarters of each
Fiscal Year of the Borrower, an unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such Fiscal Quarter,
and the related unaudited consolidated statements of income or operations for
such Fiscal Quarter and for the portion of the Borrower’s Fiscal Year then ended
and cash flows for the portion of the Borrower’s Fiscal Year then ended, setting
forth in each case in comparative form the figures for the corresponding Fiscal
Quarter of the previous Fiscal Year and the corresponding portion of the
previous Fiscal Year, all in reasonable detail, certified by a Responsible
Officer of the Borrower as fairly presenting in all material respects the
financial condition, results of operations and cash flows of the Borrower and
its consolidated Subsidiaries in accordance with GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes;

 

(c)                                  as soon as available, but in any event
within thirty (30) days after the end of the first and second calendar months of
each Fiscal Quarter, a copy of the Borrower’s (i) internal monthly consolidated
corporate reporting package (i.e., flash reports) and (ii) monthly historical
collateral postings (liquidity) reports; and

 

(d)                                 within 15 days after approval thereof by the
Borrower’s Board of Directors for each Fiscal Year, a consolidated plan and
financial forecast for such Fiscal Year and the two immediately succeeding
Fiscal Years (or portion thereof) through the Maturity Date (a “Financial
Plan”), including (i) a forecasted consolidated balance sheet and forecasted
consolidated statements of income or operations and cash flows of the Borrower
and its Subsidiaries for each such Fiscal Year, (ii) forecasted consolidated
statements of income or operations and cash flows of the Borrower and its
Subsidiaries for each month of such Fiscal Year (but not subsequent Fiscal
Years) and (iii) forecasts of calculations under Section 7.11 for each Fiscal
Quarter of such Fiscal Year, and for each Fiscal Year in the case of subsequent
Fiscal Years.

 

As to any information contained in materials furnished pursuant to
Section 6.2(c), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.

 

6.2  Certificates; Other Information.  Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent:

 

(a)                                  concurrently with the delivery of the
financial statements referred to in Sections 6.1(a) and (b), a duly completed
Compliance Certificate signed by a Responsible Officer of the Borrower;

 

(b)                                 promptly after any request by the
Administrative Agent or any Lender, copies of any detailed audit reports,
management letters or recommendations submitted to the board of

 

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directors (or the audit committee of the board of directors) of the Borrower by
independent accountants in connection with the accounts or books of the Borrower
or any Subsidiary, or any audit of any of them;

 

(c)                                  promptly after the same are available,
copies of all quarterly and annual reports filed by the Borrower with the SEC on
Forms 10-Q and 10-K, and all current reports filed by the Borrower with the SEC
on Form 8-K;

 

(d)                                 promptly after the furnishing thereof,
copies of any notice of default furnished to any holder of debt securities of
any Loan Party or any Subsidiary thereof pursuant to the terms of any indenture,
loan or credit or similar agreement and not otherwise required to be furnished
to the Lenders pursuant to Section 6.1 or any other clause of this Section;

 

(e)                                  promptly, and in any event within five
Business Days after receipt thereof by any Loan Party or any Subsidiary thereof,
copies of each material, non-routine, written notice or other material,
non-routine, written correspondence received from the SEC concerning any
investigation or possible investigation or other inquiry by such agency
regarding financial or other operational results of any Loan Party or any
Subsidiary thereof; and

 

(f)                                    promptly, such additional information
regarding the business, financial or corporate affairs of the Borrower or any
Subsidiary, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender may from time to time reasonably request.

 

Documents required to be delivered pursuant to Section 6.1(a) or (b) or
Section 6.2(c) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on Schedule 11.2; or
(ii) on which such documents are posted on the Borrower’s behalf on an Internet
or intranet website, if any, to which each Lender and the Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by
the Administrative Agent); provided, that: (i) the Borrower shall deliver paper
copies of such documents to the Administrative Agent or any Lender that requests
the Borrower to deliver such paper copies and (ii) the Borrower shall notify the
Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents. 
Notwithstanding anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the Compliance Certificates required by
Section 6.2(a) to the Administrative Agent.  Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by the Borrower with
any such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.

 

The Borrower hereby acknowledges that (a) the Administrative Agent will make
available to the Lenders materials and/or information provided by or on behalf
of the Borrower hereunder (collectively, “Borrower Materials”) by posting the
Borrower Materials on IntraLinks

 

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or another similar electronic system (the “Platform”) and (b) certain of the
Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive
material non-public information with respect to the Borrower or its securities)
(each, a “Public Lender”).  The Borrower hereby agrees that (w) all Borrower
Materials that are to be made available to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (x) by marking
Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the
Administrative Agent and the Lenders to treat such Borrower Materials as either
publicly available information or not material information (although it may be
sensitive and proprietary) with respect to the Borrower or its securities for
purposes of United States Federal and state securities laws; (y) all Borrower
Materials marked “PUBLIC” are permitted to be made available through a portion
of the Platform designated “Public Investor;” and (z) the Administrative Agent
shall be entitled to treat any Borrower Materials that are not marked “PUBLIC”
as being suitable only for posting on a portion of the Platform not designated
“Public Investor.”

 

6.3  Notices.  Promptly notify the Administrative Agent and each Lender:

 

(a)                                  after any Responsible Officer’s obtaining
knowledge of the occurrence of any Default;

 

(b)                                 of any matter that has resulted or could
reasonably be expected to result in a Material Adverse Effect (including as a
result of (i) breach or non-performance of, or any default under, a Contractual
Obligation of the Borrower or any Subsidiary; (ii) any dispute, litigation,
investigation, proceeding or suspension between the Borrower or any Subsidiary
and any Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Borrower or any
Subsidiary, including pursuant to any applicable Environmental Laws);

 

(c)                                  after any Responsible Officer’s obtaining
knowledge of the occurrence of any ERISA Event or of any contribution failure
under Code Section 412, or ERISA Section 302 with respect to any Pension Plan;
and

 

(d)                                 of the (i) occurrence of any Asset Sale for
which the Borrower is required to make a mandatory repayment pursuant to
Section 2.4(b)(i), and (ii) incurrence or issuance of any Indebtedness for which
the Borrower is required to make a mandatory repayment pursuant to
Section 2.4(b)(ii), (iii) or (iv), in each case after the effect of
Section 2.4(b)(vi).

 

Each notice pursuant to this Section (other than subsection (d)) shall be
accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to therein and stating what action the
Borrower has taken and proposes to take with respect thereto.  Each notice
pursuant to Section 6.3(a) shall describe with particularity any and all
provisions of this Agreement and any other Loan Document that have been
breached.

 

6.4  Payment of Obligations.  Pay and discharge as the same shall become due and
payable (a) all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by

 

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the Borrower or such Subsidiary; and (b) all lawful claims which, if unpaid,
would by law become a Lien upon its property that is not a Permitted Lien.

 

6.5  Preservation of Existence, Etc.  (a)  Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by
Section 7.4 or 7.5; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.

 

6.6  Maintenance of Properties.  (a)  Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear excepted; (b) make all
necessary repairs thereto and renewals and replacements thereof; and (c) use the
standard of care typical in the industry in the operation and maintenance of its
facilities, in each of cases (a), (b) and (c), except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.

 

6.7  Maintenance of Insurance.  Maintain with financially sound and reputable
insurance companies, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons of
same or similar size engaged in the same or similar business, of such types and
in such amounts (after giving effect to any self-insurance compatible with the
following standards) as are customarily carried under similar circumstances by
such other Persons and providing for not less than 30 days’ (or such other
period as required by law) prior notice to the Collateral Trustee of
termination, lapse or cancellation of such insurance.

 

6.8  Compliance with Laws.  Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or
(b) the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.

 

6.9  Books and Records.  (a)  Maintain proper books of record and account, in
which entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of the
Borrower or such Subsidiary, as the case may be; and (b) maintain such books of
record and account in material conformity with all applicable requirements of
any Governmental Authority having regulatory jurisdiction over the Borrower or
such Subsidiary, as the case may be.

 

6.10  Inspection Rights.  Permit representatives and independent contractors of
the Administrative Agent to visit and inspect any of its properties (subject in
the case of access to its properties and assets, to any applicable restrictions
contained in the leases for the Mortgaged Real Property Assets and the
applicable Loan Party’s site safety and security requirements), to examine its
corporate, financial and operating records, and make copies thereof or abstracts

 

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therefrom, and to discuss its affairs, finances and accounts with its officers,
and independent public accountants, all at the expense of the Borrower and at
such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
that when an Event of Default exists the Administrative Agent or any Lender (or
any of their respective representatives or independent contractors) may do any
of the foregoing at the expense of the Borrower at any time during normal
business hours and without advance notice.

 

6.11  Use of Proceeds.  Use the proceeds of the Loans for general corporate
purposes.

 

6.12  Additional Loan Parties; Security Interests.

 

(a)                                  Subject to the provisions of clause
(b) below, promptly and in any event within thirty (30) Business Days (i) after
the formation or acquisition after the Closing Date of any new Subsidiary (other
than a Subsidiary that is prohibited from becoming a Loan Party pursuant to an
agreement for Indebtedness in existence on December 22, 2004 which is permitted
under Section 7.3, or an agreement for any refinancing or renewal of any such
Indebtedness pursuant to, and in accordance with, Section 7.3) that has
satisfied the Threshold Amount, (ii) with respect to any Subsidiary (other than
a Subsidiary that is prohibited from becoming a Loan Party pursuant to an
agreement for Indebtedness in existence on December 22, 2004 which is permitted
under Section 7.3, or an agreement for any refinancing or renewal of any such
Indebtedness pursuant to, and in accordance with, Section 7.3) which was formed
or acquired after the Closing Date and which did not initially satisfy the
Threshold Amount, after such Subsidiary does satisfy the Threshold Amount,
(iii) after any Subsidiary ceases to be an Excluded Entity or (iv) after any
Subsidiary Guarantees any Indebtedness of the Borrower other than the
Obligations (as the case may be), deliver to the Collateral Trustee (with copies
to the Administrative Agent) the following: (x) in the case of the Domestic
Subsidiaries, (A) an Instrument of Assumption and Joinder executed by such
Subsidiary pursuant to which, among other things, such Subsidiary shall become a
Loan Party hereunder; and a Joinder Agreement (in substantially the form of
Exhibit A to the Collateral Trust Agreement) pursuant to which, among other
things, such Subsidiary shall become a party to the Collateral Trust Agreement
and the Security Agreement, (B) appropriate UCC-1 financing statements with
respect to the collateral under the Security Agreement, (C) all applicable Lien
searches with respect to such Subsidiary, (D) Organizational Documents described
in Sections 4.1(a)(iii) and 4.3(a) with respect to such Subsidiary, (E) a
written opinion of counsel covering those matters addressed in the opinion
delivered on the Closing Date but limited to such Subsidiary, (F) Mortgages for
any of such Subsidiary’s real property assets having a book value in excess of 
$20,0000,000, (G) such other security documents as may be reasonably requested
by the Administrative Agent or its counsel and all of the foregoing in form and
substance reasonably satisfactory to the Administrative Agent and its counsel,
and (H) if applicable and the same would not be Excluded Securities (as such
term is defined in the Collateral Trust Agreement), certificates or other
instruments (if any) representing 100% of the Equity Interests in such
Subsidiary owned by a Loan Party together with an undated stock power (or other
appropriate document) executed in blank for each such certificate or other
instrument; and (y) if applicable and the same would not be Excluded Securities
(as such term is defined in the Collateral Trust Agreement) in the case of
Foreign Subsidiaries, such security documents as may be reasonably requested by,
and in form and substance reasonably satisfactory to, the Administrative Agent
or its counsel, in order to cause the pledge by the applicable Loan Parties

 

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of the Equity Interests of such Subsidiary owned by such Loan Parties if such
Foreign Subsidiary is a direct Subsidiary of a Loan Party; provided, that no
more than 65% of the total outstanding Equity Interests of such Foreign
Subsidiary shall be required to be pledged by the Loan Parties pursuant to this
Section.  Neither the Collateral Trustee nor any other Person shall be required
to release any Subsidiary from the Guaranty nor release any Lien on the Equity
Interests or assets of any Subsidiary solely for the reason that such Subsidiary
ceases to satisfy the Threshold Amount at any time.

 

(b)                                 If at any time after the Closing Date, any
one or more Domestic Subsidiaries (other than Domestic Subsidiaries that are
prohibited from becoming a Loan Party pursuant to an agreement for Indebtedness
in existence on December 22, 2004 which is permitted under Section 7.3, or an
agreement for any refinancing or renewal of any such Indebtedness pursuant to,
and in accordance with, Section 7.3) have been formed or acquired which
Subsidiaries are not Loan Parties hereunder and have individually or in the
aggregate satisfied the Threshold Amount, promptly following its determination
that the Threshold Amount has been satisfied, cause one or more of such
Subsidiaries to become Loan Parties hereunder and to provide the documents
required by Section 6.12(a) above, so that (i) the aggregate book value of the
assets of all Domestic Subsidiaries that have been formed or acquired after
December 22, 2004 and are not Loan Parties hereunder is, at all times, less than
$50,000,000 and (ii) the aggregate Consolidated EBITDAR during the four-Fiscal
Quarter period most recently ended attributable to all such Subsidiaries formed
or acquired after December 22, 2004 that are not Loan Parties does not exceed
$25,000,000.

 

(c)                                  At any time and from time to time, promptly
execute and deliver any and all further instruments and documents and take all
such other action as the Administrative Agent may reasonably deem necessary or
desirable in obtaining the full benefits of, or in perfecting and preserving the
Liens of, such Guaranties, Instruments of Assumption and Joinder, and Security
Documents.

 

Notwithstanding anything to the contrary contained herein, none of the foregoing
actions shall be required to be taken by, or with respect to, REMA or any of its
Subsidiaries.

 

6.13  Further Assurances.  Promptly upon request by the Administrative Agent, or
any Lender through the Administrative Agent, (a) correct any material defect or
error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, certificates, assurances and other instruments as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably require from time to time in order to (i) carry out more effectively
the purposes of the Loan Documents, (ii) to the fullest extent permitted by
applicable law, subject any Loan Party’s or any of its Subsidiaries’ properties,
assets, rights or interests to the Liens now or hereafter intended to be covered
by any of the Loan Documents, (iii) perfect and maintain the validity,
effectiveness and priority of any of the Loan Documents and any of the Liens
intended to be created thereunder and (iv) assure, convey, grant, assign,
transfer, preserve, protect and confirm more effectively unto the Secured
Parties the rights granted or now or hereafter intended to be granted to the
Secured Parties under any Loan Document or under any other instrument executed
in connection

 

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with any Loan Document to which any Loan Party or any of its Subsidiaries is or
is to be a party, and cause each of its Subsidiaries to do so.

 

6.14  Florida Mortgaged Properties.  Upon the occurrence and during the
continuation of any Event of Default, at the request of the Required Aggregate
Revolver and Term Lenders, the Borrower shall cause each of the Florida Mortgage
Supplements to be filed in the appropriate offices and the proper amount of
mortgage recording or similar taxes (if any) to be paid in connection therewith,
in order to grant a fully perfected Lien on, and fully perfected security
interest in, all right, title and interest of the applicable Loan Parties in the
real property assets (except personalty that does not constitute fixtures)
covered thereby and the proceeds thereof, subject only to Permitted Encumbrances
and, as to perfection, subject to the terms and provisions of the Existing
Florida Mortgages and the Assignments of Leases and Rents.

 

ARTICLE VII.
NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Credit Agreement Obligation hereunder shall remain unpaid or unsatisfied, the
Borrower shall not, nor shall it permit any Restricted Subsidiary to, directly
or indirectly:

 

7.1  Liens.  Create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind on any asset now owned or hereafter
acquired, except Permitted Liens.

 

7.2  Investments.  Subject to Sections 7.18 and 7.19, make or hold any
Investments, except for Permitted Investments.

 

7.3  Indebtedness.  Create, incur, issue, assume, suffer to exist, guarantee or
otherwise become directly or indirectly liable, contingently or otherwise, with
respect to any Indebtedness (including Acquired Debt and Disqualified Stock),
and the Borrower shall not permit any of its Restricted Subsidiaries to issue
any shares of preferred stock, in each case, other than the following
(collectively, “Permitted Debt”):

 

(a)                                  the Credit Agreement Obligations (as
defined in the Existing Credit Agreement) and the Credit Agreement Obligations
,provided that no increases in the outstanding amount or the commitments under
the Existing Credit Agreement from that existing on the Closing Date shall be
permitted unless approved by the Required Aggregate Revolver and Term Lenders;

 

(b)                                 Indebtedness of Securitization Entities
under Qualified Securitization Transactions in an aggregate principal amount at
any one time outstanding under this clause not to exceed $450,000,000;

 

(c)                                  Indebtedness of REMA and its Subsidiaries
in an aggregate principal amount at any one time outstanding under this clause
(with letters of credit being deemed to have a principal amount equal to the
maximum potential liability of REMA and its Subsidiaries thereunder) not to
exceed $60,000,000;

 

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(d)                                 the following Indebtedness of the Borrower
and the Guarantors: (i) Permitted PEDFA Bond Indebtedness and/or the guarantee
thereof by the Borrower or the Guarantors or (ii) Indebtedness evidenced by or
in support of the Seward Tax-Exempt Bonds, in an aggregate principal amount at
any one time outstanding under this clause, not to exceed $500,000,000 less the
aggregate amount of all repayments, optional or mandatory, of the principal of
any Indebtedness incurred pursuant to this clause that have been made by the
Borrower and/or the Guarantors since December 22, 2004;

 

(e)                                  Indebtedness of the Borrower, including
Parity Secured Debt, pursuant to a letter of credit or synthetic letter of
credit facility not to exceed the sum of (i) the difference of (x) $500,000,000
minus (y) the aggregate principal amount of the Seward Tax-Exempt Bonds
refinanced as fixed-rate Permitted PEDFA Bond Indebtedness on or after
December 22, 2004 in accordance with clause (d) above plus (ii) the aggregate
amount by which the Revolving Credit Commitments (as defined in the Existing
Credit Agreement) have been permanently reduced since December 22, 2004;

 

(f)                                    Indebtedness of the Borrower, including
Parity Secured Debt, in an aggregate principal amount at any one time
outstanding under this clause, not to exceed $500,000,000, the proceeds of which
are used to purchase (or which Indebtedness is assumed in connection with the
purchase of) Permitted ERCOT Assets (provided, that such ERCOT Assets become
Collateral securing the Credit Agreement Obligations on (or promptly following)
such purchase);

 

(g)                                 Specified Junior Securities issued by the
Borrower; provided, that if there is any change in the terms of such Specified
Junior Securities that results in such securities no longer meeting all of the
requirements of the definition of “Specified Junior Securities,” then such
change will be deemed to constitute an incurrence of Indebtedness by the
Borrower that was not permitted by this clause;

 

(h)                                 Existing Indebtedness of the Borrower and
its Restricted Subsidiaries;

 

(i)                                     Senior Debt of the Borrower that is not
secured by any Lien;

 

(j)                                     Permitted Refinancing Indebtedness of
the Borrower or any of its Restricted Subsidiaries in exchange for, or the net
proceeds of which are used to refund, refinance or replace Indebtedness (other
than intercompany Indebtedness) that was permitted to be incurred under clauses
(a), (b), (c), (d), (f), (g), (h), (i), (j) or (s) of this Section;

 

(k)                                  intercompany Indebtedness between or among
the Borrower and any of its Restricted Subsidiaries; provided, that:

 

(i)                                     such Indebtedness (except Permitted
PEDFA Bond Indebtedness, Indebtedness restricted from being subordinated
pursuant to agreements identified on Schedule 7.3(k) and the Orion Notes) must
be subordinated to the prior payment in full in cash of the Credit Agreement
Obligations; and

 

(ii)                                  (A) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a Person
other than the Borrower or any Restricted Subsidiary, and (B) any sale or other
transfer of any such Indebtedness to a Person that is

 

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not the Borrower or any Restricted Subsidiary (except transfers to the
Collateral Trustee to secure Parity Secured Obligations) shall 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;

 

(l)                                     shares of preferred stock issued by any
Restricted Subsidiary to the Borrower or to any Restricted Subsidiary; provided,
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 any Restricted Subsidiary; and

 

(ii)                                  any sale or other transfer of any such
preferred stock to a Person that is not either the Borrower or any Restricted
Subsidiary,

 

shall be deemed, in each case, to constitute an issuance of such preferred stock
by the Borrower or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause;

 

(m)                               Hedging Obligations incurred by the Borrower
or any of its Restricted Subsidiaries in the ordinary course of business and not
for speculative purposes;

 

(n)                                 Indebtedness of the Borrower or any of its
Restricted Subsidiaries in respect of workers’ compensation claims,
self-insurance obligations, bankers’ acceptances, performance and surety bonds
provided by the Borrower or a Restricted Subsidiary in the ordinary course of
business;

 

(o)                                 Indebtedness of the Borrower or any of its
Restricted Subsidiaries arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn against
insufficient funds, so long as such Indebtedness is covered within five business
days;

 

(p)                                 Indebtedness arising from agreements of the
Borrower or a Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or Equity Interests of a
Subsidiary; provided, that the maximum aggregate liability in respect of all
such Indebtedness shall at no time exceed the gross proceeds (including non-cash
proceeds) actually received by the Borrower and/or such Restricted Subsidiary in
connection with such disposition;

 

(q)                                 the Guarantee by the Borrower or any
Guarantor of Indebtedness of the Borrower or any Guarantor that is permitted by
clause (d) (e), (f), (g), (i), (j) or (s) of this Section;

 

(r)                                    the Guarantee by OPC and its Subsidiaries
of the Orion Notes; and

 

(s)                                  additional Indebtedness of the Borrower or
any of its Restricted Subsidiaries, including Parity Secured Debt, Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, and Disqualified Stock of the Borrower, in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding, not to exceed
$300,000,000, less the Outstanding Amount at such time, the proceeds of which
are used

 

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for, or assumed in connection with, general corporate purposes of the Borrower
or any of its Restricted Subsidiaries.

 

Notwithstanding any of the foregoing, neither OPH nor any of its Subsidiaries
shall create, incur, issue, assume, suffer to exist, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
any Indebtedness (including Acquired Debt and Disqualified Stock), or issue any
shares of preferred stock, in each case, except to the extent permitted under
clauses (h) (but not any Permitted Refinancing Indebtedness thereunder), (k),
(l), (m), (n), (o), (p) and (r) of this Section.

 

7.4  Consolidation and Mergers.

 

(a)                                  Consolidate or merge with or into another
Person, or sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Borrower and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to another
Person, except that:

 

(i)                                     so long as no Default exists or would
result therefrom, any Subsidiary may merge with or dissolve into (i) the
Borrower; provided, that the Borrower shall be the continuing or surviving
Person or (ii) any one or more other Subsidiaries; provided, that when any
Guarantor is merging with or dissolving into another Subsidiary, the Guarantor
shall be the continuing or surviving Person or such other Subsidiary shall
become a Guarantor upon the consummation of such merger or dissolution in
compliance with Section 6.12;

 

(ii)                                  in connection with any Asset Sale
permitted under Section 7.5, any Subsidiary of the Borrower may dissolve,
liquidate, consolidate or merge with any other Person or permit any other Person
to consolidate or merge with or into it; and

 

(iii)                               so long as no Default exists or would result
therefrom, in connection with any Investment permitted under Section 7.2, any
Subsidiary of the Borrower may dissolve, liquidate, consolidate or merge with or
into any other Person or permit any other Person to merge or consolidate with
it; provided, that the Person surviving such merger, dissolution or
consolidation shall be a Guarantor in compliance with Section 6.12.

 

(b)                                 In addition, the Borrower shall not, nor
shall it permit any of its Restricted Subsidiaries to, directly or indirectly,
lease all or substantially all of the properties or assets of the Borrower and
its Restricted Subsidiaries, in one or more related transactions, to any other
Person.

 

(c)                                  This Section shall not apply to (i) any
sale, transfer, assignment, conveyance, lease or other disposition of assets
between or among the Borrower and the Restricted Subsidiaries, or (ii) the
merger of the Borrower with an Affiliate solely for the purpose of
reincorporating or re-forming the Borrower in another jurisdiction.

 

7.5  Asset Sales.

 

(a)                                  Consummate an Asset Sale unless:

 

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(i)                                     the Borrower (or the Restricted
Subsidiary, as the case may be) receives consideration at the time of such Asset
Sale at least equal to the Fair Market Value of the assets or Equity Interests
issued or sold or otherwise disposed of (as reasonably determined by the
Borrower or such Restricted Subsidiary); and

 

(ii)                                  at least 90% of the consideration therefor
received in the Asset Sale by the Borrower or such Restricted Subsidiary is in
the form of cash or Cash Equivalents.  For purposes of this provision, each of
the following shall be deemed to be cash:

 

(A)                              any liabilities, as shown on the Borrower’s
most recent consolidated balance sheet, of the Borrower or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by their
terms subordinated to the Loans or any Guaranty thereof) that are assumed by the
transferee of any such assets pursuant to a customary novation agreement that
releases the Borrower or such Restricted Subsidiary from further liability;

 

(B)                                any securities, notes or other Obligations
received by the Borrower or any such Restricted Subsidiary from such transferee
that are converted (by sale or other disposition) by the Borrower or such
Restricted Subsidiary into cash, to the extent of the cash received in that
conversion within 60 days; and

 

(C)                                reasonable reserves for indemnity obligations
and purchase price adjustments funded in cash or held back by the purchaser.

 

(b)                                 In addition, without having obtained the
Core Asset Consent in writing, the Borrower shall not, and shall not permit any
of its Restricted Subsidiaries to, consummate (i) an Asset Sale of (x) any
Equity Interest in RERH or (y) any “price-to-beat” small commercial or
residential retail customers of RERH or any of its Subsidiaries that are located
in the “greater Houston area” or (ii) an Asset Sale of any Equity Interest in
REMA or OPH, or any assets of RERH (other than any asset to which clause
(b)(i)(y) applies), REMA or OPH (and, in each case, their respective
Subsidiaries), where the gross proceeds of the portion of the Equity Interest or
asset being sold, together with the gross proceeds of any other such Equity
Interest or assets sold in an Asset Sale on or after December 22, 2004, would
exceed $2,500,000,000.  For purposes of calculating the amount under the
foregoing clause (b)(ii), upon the first closing of any in a series of
transactions, all of the Equity Interests or assets whose sale is contemplated
by such series shall be deemed to have then been sold for their gross proceeds
as at the time of such first closing.

 

(c)                                  If any Net Asset Sale Proceeds from any
sale of Shared Collateral or from any issuance of Equity Securities that
constitute an Asset Sale are required pursuant to the terms of any of the
Secured Debt Documents to be deposited into a cash collateral or similar
account, then such Net Proceeds shall be deposited into a Cash Collateral
Account (as defined in the Existing Credit Agreement) as part of the Shared
Collateral.

 

7.6  Restricted Payments.  Make any Restricted Payment by way of the payment of
any dividend or distribution in cash or Cash Equivalents on any Equity Interests
of the Borrower or otherwise, make any Restricted Payment except for the
following:

 

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(a)                                  the payment of any dividend within 60 days
after the date of declaration of the dividend, if at the date of declaration the
dividend would have complied with the provisions of this Agreement (and, in the
case of any dividends to be paid by the Borrower, no Default had occurred and
was continuing on the date of such declaration);

 

(b)                                 so long as no Default has occurred and is
continuing or would be caused thereby, the making of any Restricted Payment in
exchange for, or out of the net cash proceeds of, the substantially concurrent
sale (other than to a Restricted Subsidiary of the Borrower) of, Equity
Interests of the Borrower (other than Disqualified Stock) or of the
substantially concurrent contribution of common equity capital or surplus to the
Borrower;

 

(c)                                  the defeasance, redemption, repurchase or
other acquisition of Subordinated Indebtedness of the Borrower or any Guarantor
with the net cash proceeds from a substantially concurrent incurrence of
Permitted Refinancing Indebtedness;

 

(d)                                 the payment of any dividend (or, in the case
of any partnership or limited liability company, any similar distribution) by a
Restricted Subsidiary of the Borrower to the holders of its Equity Interests on
a pro rata basis;

 

(e)                                  so long as no Default has occurred and is
continuing or would be caused thereby, (i) the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Borrower or
any Restricted Subsidiary of the Borrower in connection with any management
equity subscription agreement, stock option agreement, shareholders’ agreement,
severance agreement, employee benefit plan or agreement or similar agreement, in
each case, as in existence and as in effect on December 22, 2004, (ii) the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Borrower or any Restricted Subsidiary of the Borrower in
connection with any management equity subscription agreement, stock option
agreement, shareholders’ agreement, severance agreement, employee benefit plan
or agreement or similar agreement other than any such agreement or plan
described in clause (i) above, or (ii) the repurchase for value of any Equity
Interests of the Borrower in the open market to satisfy stock options issued by
the Borrower that are outstanding; provided, that with respect to clauses
(ii) and (iii) above, the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests after December 22, 2004 may not
exceed $25,000,000 in any calendar year (or the pro rata portion thereof for the
calendar year 2004);

 

(f)                                    the repurchase of Equity Interests deemed
to occur upon the exercise of stock options to the extent such Equity Interests
represent a portion of the exercise price of those stock options;

 

(g)                                 the purchase by the Borrower of fractional
shares upon conversion of any securities of the Borrower into Equity Interests
of the Borrower;

 

(h)                                 so long as no Default has occurred and is
continuing or would be caused thereby, the declaration and payment of dividends
to holders of any class or series of Disqualified Stock of the Borrower or any
Restricted Subsidiary of the Borrower issued on or after December 22, 2004 in
accordance with Section 7.3(s) hereof;

 

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(i)                                     the transactions with any Person
(including any Affiliate of the Borrower) set forth in clauses (b)(i) and
(b)(iv) of Section 7.8(b) hereof and the funding of any obligations in
connection therewith;

 

(j)                                     the issuance of Equity Interests of the
Borrower (other than Disqualified Stock) for other Equity Interests of the
Borrower in connection with any rights offering and payments for the redemption
of fractional shares in connection with any rights offering; and

 

(k)                                  so long as no Default has occurred and is
continuing or would be caused thereby, additional Restricted Payments, other
than the payment by the Borrower of any cash dividends or other cash
distributions in respect of the Borrower’s Equity Interests, in an aggregate
amount not to exceed, together with the aggregate amount of Investments made
pursuant to clause (4) of the definition of “Permitted Investments,” $75,000,000
since December 22, 2004.

 

The amount of all Restricted Payments (other than cash) shall be the Fair Market
Value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Borrower or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment.

 

7.7  Line of Business.  Not, nor permit any of its Restricted Subsidiaries to,
engage in any business other than the Permitted Business, except to such extent
as would not be material to the Borrower and its Subsidiaries taken as a whole.

 

7.8  Transactions with Affiliates.

 

(a)                                  Not, and not permit any of its Restricted
Subsidiaries to, 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
such Affiliate Transaction is on terms that are no less favorable (as reasonably
determined by the Borrower) to 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.

 

(b)                                 The following items shall not be deemed to
be Affiliate Transactions and, therefore, shall not be subject to the provisions
of Section 7.8(a) hereof:

 

(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;

 

(ii)                                  transactions between or among the Borrower
and/or its Restricted Subsidiaries (other than Foreign Subsidiaries);

 

(iii)                               transactions with a Person that is an
Affiliate of the Borrower solely because the Borrower owns, directly or through
a Restricted Subsidiary, an Equity Interest in, or controls, such Person;

 

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(iv)                              payment of reasonable directors’ fees to
Persons who are not otherwise Affiliates of the Borrower;

 

(v)                                 any issuance of Equity Interests (other than
Disqualified Stock) of the Borrower to Affiliates of the Borrower;

 

(vi)                              Restricted Payments that do not violate the
provisions of Section 7.6 hereof;

 

(vii)                           transactions effected as part of a Qualified
Securitization Transaction;

 

(viii)                        loans or advances to employees in the ordinary
course of business not to exceed $10,000,000 in the aggregate outstanding at any
one time;

 

(ix)                                any agreement, instrument or arrangement as
in effect as of December 22, 2004, or any amendment thereto or any transaction
contemplated thereby (including pursuant to any amendment thereto) in any
replacement agreement thereto so long as any such amendment or replacement
agreement is not more disadvantageous to the Lenders in any material respect
than the original agreement as in effect on December 22, 2004 as determined by
the Borrower; and

 

(x)                                   any pro rata distribution (including a
rights offering) to all holders of a class of Equity Interests or Indebtedness
of the Borrower or any of its Restricted Subsidiaries, including Persons who are
Affiliates of the Borrower or any of its Restricted Subsidiaries.

 

7.9  Restrictive Agreements.  Enter into, incur or permit to exist any agreement
or other arrangement that prohibits, restricts or imposes any condition upon
(a) the ability of the Borrower or any Restricted Subsidiary to create, incur or
permit to exist any Lien upon any of its property or assets, or (b) the ability
of any Restricted Subsidiary to pay dividends or make any other distributions
with respect to any shares of its capital stock or any other Equity Interest or
participation in its profits owned by a Restricted Subsidiary, or (c) the
ability of any Restricted Subsidiary to make or repay loans or advances to the
Borrower or any other Restricted Subsidiary or to Guarantee Indebtedness of the
Borrower or any other Restricted Subsidiary or to transfer any of its properties
or assets to the Borrower or any other Restricted Subsidiary; provided, that the
foregoing shall not apply to (i) restrictions and conditions imposed by Laws, or
by any Loan Document, (ii) restrictions and conditions in any agreement or
contract existing on December 22, 2004 and any amendments, modifications,
restatements, renewals or replacements thereof that are not more restrictive,
taken as a whole, than the restrictions existing on December 22 , 2004,
(iii) customary restrictions and conditions contained in agreements relating to
the sale of a Subsidiary or asset pending such sale; provided, that such
restrictions and conditions apply only to the Subsidiary or asset that is to be
sold and such sale is permitted hereunder, (iv) 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, (v) customary non-assignment provisions in
any contract, easement or lease, and other customary encumbrances and
restrictions entered into in the ordinary course of business that are not more
restrictive, taken as a whole, than the encumbrances existing on

 

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December 22, 2004, (vi) restrictions or conditions contained in any trading,
netting, operating, construction, service, supply, purchase, sale or similar
agreement to which any Restricted Subsidiary is a party and which is entered
into in the ordinary course of business; provided, that such agreement prohibits
the encumbrance of solely the property or assets of such Restricted Subsidiary
that are the subject of such agreement, the payment rights arising thereunder
and/or the proceeds thereof and not to any other asset or property of such
Restricted Subsidiary or the assets or property of any other Restricted
Subsidiary and (vii) restrictions contained in documents evidencing Indebtedness
existing at the time at which any such Person first becomes a Restricted
Subsidiary, so long as such restriction was not agreed to or entered into solely
in contemplation of such change in status, and any amendments, modifications,
restatements, renewals or replacements thereof that are not more restrictive,
taken as a whole, than the restrictions existing at the time such Person first
becomes a Restricted Subsidiary.

 

7.10  Use of Proceeds.  Use the proceeds of the Loans, whether directly or
indirectly, and whether immediately, incidentally or ultimately, to purchase or
carry margin stock (within the meaning of Regulation U of the FRB) or to extend
credit to others for the purpose of purchasing or carrying margin stock or to
refund indebtedness originally incurred for such purpose.

 

7.11  Financial Covenants.

 

(a)                                  Consolidated Interest Coverage Ratio. 
Permit the Consolidated Interest Coverage Ratio as of the end of any Fiscal
Quarter of the Borrower to be less than the ratio set forth below opposite such
Fiscal Quarter:

 

Four Fiscal Quarters Ending

 

Minimum
Consolidated
Interest Coverage Ratio

 

Closing Date through September 30, 2007

 

1.8:1.0

 

December 31, 2007 and each Fiscal Quarter thereafter

 

2.0:1.0

 

 

(b)                                 Consolidated Leverage Ratio.  Permit the
Consolidated Leverage Ratio as of the end of any Fiscal Quarter of the Borrower
set forth below to be greater than the ratio set forth below opposite such
period:

 

Four Fiscal Quarters Ending

 

Maximum
Consolidated
Leverage Ratio

 

Closing Date through September 30, 2006

 

6.0:1.0

 

December 31, 2006 through September 30, 2007

 

5.5:1.0

 

December 31, 2007 and each Fiscal Quarter thereafter

 

5.0:1.0

 

 

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7.12  Capital Expenditures.  Make or become legally obligated to make any
Capital Expenditure, except

 

(a)                                  for Capital Expenditures other than in
connection with an Acquisition, in an amount not exceeding $250,000,000 in the
aggregate for the Borrower and its Restricted Subsidiaries during each Fiscal
Year; provided, that (i) any portion of the $250,000,000 amount permitted in any
Fiscal Year that is not used during such Fiscal Year (the “Carry Amount”) may be
carried forward for a period of one Fiscal Year and added to the amount of
permitted Capital Expenditures in the immediately succeeding Fiscal Year (but no
portion of any Carry Amount shall be used (or deemed to be used) in the
applicable Fiscal Year until the entire amount of the Capital Expenditures
permitted to be made in such Fiscal Year (i.e., without giving effect to any
Carry Amount) as provided in this Section shall first have been used in full)
and (ii) any portion of the $250,000,000 amount permitted in any Fiscal Year may
be subtracted from the total amount permitted in such Fiscal Year and added to
the permitted amount in the immediately preceding Fiscal Year; and

 

(b)                                 in the case of Capital Expenditures in
connection with an Acquisition, an amount that, together with the aggregate
amount of Acquisition Consideration paid by the Borrower or its Subsidiaries on
or after December 22, 2004, in the aggregate does not exceed the Permitted
Acquisition Limit;

 

provided, that in the case of both clauses (a) and (b), regulatory and
environmental capital expenditures necessary to operate assets or to comply with
law or permits and emergency capital expenditures, shall not be limited and
shall not be included in calculating compliance with such limitations.

 

7.13  Modification of Certain Agreements.  Consent to any amendment, supplement,
waiver or other modification of, or enter into any forbearance from exercising
any rights with respect to the terms or provisions contained in,

 

(a)                                  documents relating to Subordinated
Indebtedness (other than intercompany Indebtedness) of the Borrower or any
Restricted Subsidiary in any way that:

 

(i)                                     increases the rate of or shortens the
time for payment of interest on any Subordinated Indebtedness;

 

(ii)                                  increases the principal of, shortens the
final maturity date of or shortens the Weighted Average Life to Maturity of any
Subordinated Indebtedness;

 

(iii)                               alters in a manner adverse to the Borrower
the redemption provisions or the price or terms at which the Borrower or such
Restricted Subsidiary is required to offer to purchase any Subordinated
Indebtedness; or

 

(iv)                              amends the subordination provisions of the
agreements governing any Subordinated Indebtedness;

 

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(b)                                 the Organization Documents of the Borrower
or any of its Subsidiaries, if the result could reasonably expected to have a
Material Adverse Effect; or

 

(c)                                  any Orion Note Document in any way that
(i) reduces the rate of interest or extends in a material manner the date
scheduled for payment of principal of or interest on, or reduces the principal
amount (other than as a result of a Dollar for Dollar repayment) of, any of the
Orion Notes, (ii) modifies, waives or deletes the terms of the Orion Note
Documents which provide for a cross-default to Indebtedness of OPH under the OPH
Note Indenture or the OPH Notes, or (iii) releases collateral securing the Orion
Note Documents, except in connection with any asset disposition that is not
prohibited hereunder and the Net Asset Sale Proceeds of which are applied in
accordance herewith.

 

7.14  Fiscal Year.  Not, nor permit any of its Restricted Subsidiaries to,
directly or indirectly, change its Fiscal Year from a Fiscal Year ending
December 31.

 

7.15  Commodity Hedging.  Not, nor permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into or assume any Commodity Hedging Obligations
except in the ordinary course of business and not for speculative purposes.

 

7.16  Collateral Trust Agreement; Prepayment of Parity Secured Obligations. 
Not, nor permit any of its Restricted Subsidiaries to, (a) take any action which
requires an “Act of Secured Debtholders” under the Collateral Trust Agreement
unless such action has been approved by the Administrative Agent or the Required
Aggregate Revolver and Term Lenders or (b) agree to any amendment or waiver with
respect to any provision of the Existing Credit Agreement which corresponds to a
provision of this Agreement described under clause (a) of the definition of
Required Lenders, unless the corresponding provision of this Agreement is
amended or modified in a substantially similar manner and the applicable Lenders
shall have received a ratable amount of the consideration, if any, paid to the
lenders under the Existing Credit Agreement in respect of such amendment or
modification (including, without limitation, any increase in pricing) on the
same basis as the lenders under the Existing Credit Agreement (provided that
this clause (b) shall not apply if the requisite consent required to make the
corresponding amendment or modification to this Agreement is not obtained).

 

7.17  Orion Subsidiaries.

 

(a)                                  The Borrower shall not permit OPH or any of
OPH’s Subsidiaries to distribute any cash (except Net Asset Sale Proceeds) to
the Borrower or any of its Subsidiaries, except as follows:  first, to pay
principal of and interest on the OPH Revolving Notes; second, to the extent
permitted under the OPH Note Indenture, as a dividend paid by OPH to the
Borrower; and third, to pay principal of and interest on the OPMW Term Notes and
OPNY Term Note.

 

(b)                                 The Borrower shall not take or permit any
action that would cause a “Change of Control” (as defined in the OPH Note
Indenture) to occur, without the consent of the Required Aggregate Revolver and
Term Lenders.

 

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(c)                                  The Borrower shall cause OPH and its
Subsidiaries to apply any OPH Asset Sale Proceeds to the prepayment of the OPMW
Term Notes and OPNY Term Notes, in each case until repaid in full.

 

7.18  Designated Entities.  Notwithstanding anything to the contrary contained
herein (including this Article):

 

(a)                                  neither the Borrower nor any Restricted
Subsidiary shall make any Investment in or otherwise transfer any asset to any
Designated Entity other than (i) pursuant to cash loans evidenced by promissory
notes that are pledged as Collateral under the Security Documents; provided,
that to the extent any Designated Entity has Contractual Obligations existing on
December 22, 2004 which prohibit the incurrence by such Designated Entity of
Indebtedness (including pursuant to such promissory notes), the Borrower and the
Restricted Subsidiaries may, to the extent of such prohibitions, make cash
equity contributions to such Designated Entity, (ii) credit support provided in
the ordinary course of business to support obligations other than Debt of such
Designated Entity (such as and including posting of cash and/or letters of
credit, delivery of performance guarantees or similar agreements and
arrangements to guaranty the timely and complete performance of such Designated
Entity) and (iii) Investments and transfers of assets (other than cash, Cash
Equivalents, or any power generation facility) and payments for goods and
services in the ordinary course of business; and

 

(b)                                 no Designated Entity shall incur or permit
to exist any Indebtedness other than (i) pursuant to clause (a)(i) above,
(ii) Existing Indebtedness in respect of which it is obligated and
(iii) Permitted Refinancing  Indebtedness with respect to any such Existing
Indebtedness.

 

7.19  Foreign Investments.  Notwithstanding anything to the contrary contained
herein (including this Article), neither the Borrower nor any Restricted
Subsidiary (other than a Foreign Subsidiary) shall make any Investment in any
Foreign Subsidiary unless the Borrower shall have taken all actions required by
Section 6.12 with respect thereto; provided, that the aggregate amount of
Investments made by the Borrower and/or Restricted Subsidiaries (other than a
Foreign Subsidiary) in Foreign Subsidiaries after December 22, 2004 shall not
exceed $50,000,000.

 

ARTICLE VIII.
GUARANTY

 

8.1  Guaranty; Limitation of Liability.

 

(a)                                  Each Guarantor, jointly and severally,
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Credit Agreement
Obligations of the Borrower now or hereafter existing (including any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Credit Agreement Obligations), whether direct or indirect, absolute or
contingent, and whether for principal, interest, premiums, fees, indemnities,
contract causes of action, costs, expenses or otherwise (such Credit Agreement
Obligations being the “Guaranteed Obligations”), and agrees to pay any and all
expenses (including reasonable fees and expenses of counsel) incurred by the

 

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Administrative Agent or any other Secured Party in enforcing any rights under
this Guaranty or any other Loan Document.  Without limiting the generality of
the foregoing, each Guarantor’s liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any other
Loan Party to any Secured Party under or in respect of the Loan Documents but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving such other Loan
Party.

 

(b)                                 Each Guarantor, and by its acceptance of
this Guaranty, the Administrative Agent and each other Secured Party, hereby
confirms that it is the intention of all such Persons that this Guaranty and the
Obligations of each Guarantor hereunder not constitute a fraudulent transfer or
conveyance for purposes of Debtor Relief Laws, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or
state law to the extent applicable to this Guaranty and the Obligations of each
Guarantor hereunder.  To effectuate the foregoing intention, the Administrative
Agent, the other Secured Parties and the Guarantors hereby irrevocably agree
that the Obligations of each Guarantor under this Guaranty at any time shall be
limited to the maximum amount as will result in the Credit Agreement Obligations
of such Guarantor under this Guaranty not constituting a fraudulent transfer or
conveyance.

 

(c)                                  Each Guarantor hereby unconditionally and
irrevocably agrees that in the event any payment shall be required to be made to
any Secured Party under this Guaranty or any Instrument of Assumption and
Joinder, such Guarantor will contribute, to the maximum extent permitted by law,
such amounts to each other  Guarantor and each other Guarantor so as to maximize
the aggregate amount paid to the Secured Parties under or in respect of the Loan
Documents.

 

8.2  Guaranty Absolute.  Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of any Secured
Party with respect thereto.  The Credit Agreement Obligations of each Guarantor
under or in respect of this Guaranty are independent of the Guaranteed
Obligations or any other Credit Agreement Obligations of any other Loan Party
under or in respect of the Loan Documents, and a separate action or actions may
be brought and prosecuted against each Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against the Borrower or any other
Loan Party or whether the Borrower or any other Loan Party is joined in any such
action or actions.  The liability of each Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and each Guarantor
hereby irrevocably waives any defenses it may now have or hereafter acquire in
any way relating to, any or all of the following:

 

(a)                                  any lack of validity or enforceability of
any Loan Document or any agreement or instrument relating thereto;

 

(b)                                 any change in the time, manner or place of
payment of, or in any other term of, all or any of the Guaranteed Obligations or
any other Credit Agreement Obligations of any other Loan Party under or in
respect of the Loan Documents, or any other amendment or waiver of or any
consent to departure from any Loan Document, including any increase in the
Guaranteed

 

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Obligations resulting from the extension of additional credit to any Loan Party
or any of its Subsidiaries or otherwise;

 

(c)                                  any taking, exchange, release or
non-perfection of any Collateral or any other collateral, or any taking, release
or amendment or waiver of, or consent to departure from, any other guaranty, for
all or any of the Guaranteed Obligations;

 

(d)                                 any manner of application of Collateral or
any other collateral, or proceeds thereof, to all or any of the Guaranteed
Obligations, or any manner of sale or other disposition of any Collateral or any
other collateral for all or any of the Guaranteed Obligations or any other
Credit Agreement Obligations of any Loan Party under the Loan Documents or any
other assets of any Loan Party or any of its Subsidiaries;

 

(e)                                  any change, restructuring or termination of
the corporate structure or existence of any Loan Party or any of its
Subsidiaries;

 

(f)                                    any failure of any Secured Party to
disclose to any Loan Party any information relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any other Loan Party now or hereafter known to such Secured Party (each
Guarantor waiving any duty on the part of the Secured Parties to disclose such
information);

 

(g)                                 the failure of any other Person to execute
or deliver this Guaranty, any Instrument of Assumption and Joinder or any other
guaranty or agreement or the release or reduction of liability of any Guarantor
or other guarantor or surety with respect to the Guaranteed Obligations; or

 

(h)                                 any other circumstance (including any
statute of limitations) or any existence of or reliance on any representation by
any Secured Party that might otherwise constitute a defense available to, or a
discharge of, any Loan Party or any other guarantor or surety.

 

This Guaranty shall survive termination of this Agreement and shall continue to
be effective or be reinstated, as the case may be, if at any time any payment of
any of the Guaranteed Obligations is rescinded or must otherwise be returned by
any Secured Party or any other Person upon the insolvency, bankruptcy or
reorganization of the Borrower or any other Loan Party or otherwise, all as
though such payment had not been made.

 

8.3  Waivers and Acknowledgments.

 

(a)                                  Each Guarantor hereby unconditionally and
irrevocably waives promptness, diligence, notice of acceptance, presentment,
demand for performance, notice of nonperformance, default, acceleration, protest
or dishonor and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that any Secured Party
protect, secure, perfect or insure any Lien or any property subject thereto or
exhaust any right or take any action against any Loan Party or any other Person
or any Collateral.

 

(b)                                 Each Guarantor hereby unconditionally and
irrevocably waives any right to revoke this Guaranty and acknowledges that this
Guaranty is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future.

 

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(c)                                  Each Guarantor hereby unconditionally and
irrevocably waives (i) any defense arising by reason of any claim or defense
based upon an election of remedies by any Secured Party that in any manner
impairs, reduces, releases or otherwise adversely affects the subrogation,
reimbursement, exoneration, contribution or indemnification rights of such
Guarantor or other rights of such Guarantor to proceed against any of the other
Loan Parties, any other guarantor or any other Person or any Collateral and
(ii) any defense based on any right of set-off or counterclaim against or in
respect of the Credit Agreement Obligations of such Guarantor hereunder.

 

(d)                                 Each Guarantor acknowledges that the
Administrative Agent or the Collateral Trustee may, without notice to or demand
upon such Guarantor and without affecting the liability of such Guarantor under
this Guaranty, foreclose under any mortgage by nonjudicial sale, and each
Guarantor hereby waives any defense to the recovery by the Collateral Trustee
and the other Secured Parties against such Guarantor of any deficiency after
such nonjudicial sale and any defense or benefits that may be afforded by
applicable law.

 

(e)                                  Each Guarantor hereby unconditionally and
irrevocably waives any duty on the part of any Secured Party to disclose to such
Guarantor any matter, fact or thing relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any other Loan Party or any of its Subsidiaries now or hereafter known by such
Secured Party.

 

(f)                                    Each Guarantor acknowledges that it will
receive substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth in Section 8.2
and this Section are knowingly made in contemplation of such benefits.

 

8.4  Subrogation.  Each Guarantor hereby unconditionally and irrevocably agrees
not to exercise any rights that it may now have or hereafter acquire against the
Borrower, any other Loan Party or any other insider guarantor that arise from
the existence, payment, performance or enforcement of such Guarantor’s
Guaranteed Obligations under or in respect of this Guaranty or any other Loan
Document, including any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of any Secured Party against the Borrower, any other Loan Party or any
other insider guarantor or any Collateral, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including the
right to take or receive from the Borrower, any other Loan Party or any other
insider guarantor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim,
remedy or right, unless and until all of the Guaranteed Obligations and all
other amounts payable under this Guaranty shall have been paid in full in cash
and the Commitments shall have expired or been terminated.  If any amount shall
be paid to any Guarantor in violation of the immediately preceding sentence at
any time prior to the latest of (a) the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Guaranty and
(b) Maturity Date, such amount shall be received and held in trust for the
benefit of the Secured Parties, shall be segregated from other property and
funds of such Guarantor and shall forthwith be paid or delivered to the
Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guaranty, whether matured
or unmatured, in accordance with the terms of the

 

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Loan Documents, or to be held as Collateral for any Guaranteed Obligations or
other amounts payable under this Guaranty thereafter arising.  If (i) any
Guarantor shall make payment to any Secured Party of all or any part of the
Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Guaranty shall have been paid in full in cash, and
(iii) Maturity Date shall have occurred, the Secured Parties will, at such
Guarantor’s request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Guaranteed Obligations resulting from such payment made by such
Guarantor pursuant to this Guaranty.

 

8.5  Assumption and Joinder.  Upon the execution and delivery by any Additional
Guarantor of an Instrument of Assumption and Joinder as required under
Section 6.12(a), (a) such Person shall become and be a Guarantor hereunder, and
each reference in this Guaranty to a “Guarantor” shall also mean and be a
reference to such Additional Guarantor, and each reference in any other Loan
Document to a “Guarantor” shall also mean and be a reference to such Additional
Guarantor, and (b) each reference herein to “this Guaranty,” “hereunder,”
“hereof” or words of like import referring to this Guaranty, and each reference
in any other Loan Document to the “Guaranty,” “thereunder,” “thereof” or words
of like import referring to this Guaranty, shall mean and be a reference to this
Guaranty as supplemented by such Instrument of Assumption and Joinder.

 

8.6  Subordination.  Each Guarantor hereby subordinates any and all debts,
liabilities and other Obligations owed to such Guarantor by each other Loan
Party (the “Subordinated Obligations”) to the Guaranteed Obligations to the
extent and in the manner hereinafter set forth in this Section:

 

(a)                                  Prohibited Payments, Etc.  Except during
the continuance of a Default (including the commencement and continuation of any
proceeding under any Debtor Relief Law relating to any other Loan Party), each
Guarantor may receive regularly scheduled payments from any other Loan Party on
account of the Subordinated Obligations.  After the occurrence and during the
continuance of any Default (including the commencement and continuation of any
proceeding under any Debtor Relief Law relating to any other Loan Party),
however, unless the Required Aggregate Revolver and Term Lenders otherwise
agree, no Guarantor shall demand, accept or take any action to collect any
payment on account of the Subordinated Obligations.

 

(b)                                 Prior Payment of Guaranteed Obligations.  In
any proceeding under any Debtor Relief Law relating to any other Loan Party,
each Guarantor agrees that the Secured Parties shall be entitled to receive
payment in full in cash of all Guaranteed Obligations (including all
Post-Petition Interest) before such Guarantor receives payment of any
Subordinated Obligations.

 

(c)                                  Turn-Over.  After the occurrence and during
the continuance of any Default (including the commencement and continuation of
any proceeding under any Debtor Relief Law relating to any other Loan Party),
each Guarantor shall, if the Administrative Agent so request, collect, enforce
and receive payments on account of the Subordinated Obligations as trustee for
the Secured Parties and deliver such payments to the Administrative Agent on
account of the Guaranteed Obligations (including all Post-Petition Interest),
together with any necessary

 

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endorsements or other instruments of transfer, but without reducing or affecting
in any manner the liability of such Guarantor under the other provisions of this
Guaranty.

 

8.7  Continuing Guaranty; Assignments.  This Guaranty is a continuing guaranty
and shall (a) remain in full force and effect until the latest of (i) the
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Guaranty, (ii) the Maturity Date, and (iii)  the release
thereof in accordance with Section 10.10, (b) be binding upon the Guarantor, its
successors and assigns and (c) inure to the benefit of and be enforceable by the
Secured Parties and their successors, transferees and assigns.  Upon the
occurrence of the latest date specified in clause (a) above, the Guarantors
shall be released from other Credit Agreement Obligations under the Loan
Documents.  Without limiting the generality of clause (c) of the immediately
preceding sentence, any Secured Party may assign or otherwise transfer all or
any portion of its rights and Obligations under this Agreement (including all or
any portion of its Commitments, the Advances owing to it and the Note or Notes
held by it) to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Secured Party
herein or otherwise, in each case as and to the extent provided in this
Section.  No Guarantor shall have the right to assign its rights hereunder or
any interest herein without the prior written consent of the Secured Parties.

 

ARTICLE IX.
EVENTS OF DEFAULT AND REMEDIES

 

9.1  Events of Default.  Any of the following shall constitute an Event of
Default:

 

(a)                                  Non-Payment.  The Borrower or any other
Loan Party fails to pay (i) when and as required to be paid herein, any amount
of principal of any Loan, or (ii) within three Business Days after the same
becomes due, any interest on any Loan, or any fee or other amount payable
hereunder or under any other Loan Document; or

 

(b)                                 Specific Covenants.  The Borrower fails to
perform or observe any term, covenant or agreement contained in any of
Section 6.3, 6.5 (only with respect to the existence of the Borrower), 6.11 or
6.12 or Article VII; or

 

(c)                                  Other Defaults.  Any Loan Party fails to
perform or observe any other covenant or agreement (not specified in clause
(a) or (b) above) contained in any Loan Document on its part to be performed or
observed and such failure continues for 30 days after the earlier to occur of
(i) a Loan Party receiving notice thereof from the Administrative Agent (which
notice shall be given at the request of any Lender) or any other Person, or
(ii) a Responsible Officer or other executive officer of a Loan Party obtains
knowledge of such occurrence; or

 

(d)                                 Representations and Warranties.  Any
representation, warranty, certification or statement of fact made or deemed made
by or on behalf of the Borrower or any other Loan Party herein, in any other
Loan Document, or in any document delivered in connection herewith or therewith
shall be incorrect or misleading in any material respect when made or deemed
made; or

 

(e)                                  Cross-Default.  (i) Any Loan Party, any
Person required to become a Loan Party pursuant to Section 6.12, REMA, OPH or
any Subsidiary of REMA or OPH (A) fails to make

 

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any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness under or
Guarantee in respect of the REMA Lease or any other Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Hedging Agreements)
having an aggregate principal amount (including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $50,000,000,
or (B) fails to observe or perform any other agreement or condition relating to
any such Indebtedness or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect
of which default or other event is (x) in the case of all such Indebtedness or
Guarantees (including under or in respect of the REMA Lease), to cause, or (y)
in the case of all such Indebtedness or Guarantees (other than under or in
respect of the REMA Lease), to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its Stated Maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or
(ii) there occurs under any Hedging Agreement an Early Termination Date (as
defined in such Hedging Agreement) resulting from (A) any event of default under
such Hedging Agreement as to which the Borrower or any Subsidiary is the
Defaulting Party (as defined in such Hedging Agreement) or (B) any Termination
Event (as so defined) under such Hedging Agreement as to which the Borrower or
any Subsidiary is an Affected Party (as so defined) and, in either event, the
Hedge Termination Value owed by the Borrower or such Subsidiary as a result
thereof is greater than $50,000,000 and not paid when due; or

 

(f)                                    Insolvency Proceedings, Etc.  The
Borrower or any Loan Party (or Person that is required to become a Loan Party
pursuant to Section 6.12) that is a Material Subsidiary or REMA, OPH or any
Subsidiary of REMA or OPH institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer
for it or for all or any material part of their respective property; or any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer is appointed without the application or consent of such Person and the
appointment continues undischarged or unstayed for 60 calendar days; or any
proceeding under any Debtor Relief Law relating to any such Person or to all or
any material part of their respective property is instituted without the consent
of such Person and continues undismissed or unstayed for 60 calendar days, or an
order for relief is entered in any such proceeding; or

 

(g)                                 Inability to Pay Debts; Attachment.  The
Borrower or any Loan Party (or Person that is required to become a Loan Party
pursuant to Section 6.12) that is a Material Subsidiary or REMA, OPH or any
Subsidiary of REMA or OPH becomes unable or admits in writing its inability or
fails generally to pay its debts as they become due; or

 

(h)                                 Judgments.  There is entered against the
Borrower, any Loan Party, any Person that is required to become a Loan Party
pursuant to Section 6.12, OPH, REMA or any Subsidiary of OPH or REMA a final
judgment or order for the payment of money in an aggregate amount exceeding
$50,000,000 (to the extent not covered by independent third-party insurance or
that

 

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has not been paid), and (A) enforcement proceedings are commenced by any
creditor upon such judgment or order, or (B) within thirty (30) days from the
later of (X) the entry of any such judgment or the date of any such order (as
applicable) and (Y) the date any payment is required to be made on or with
respect to any such judgment or order pursuant to the terms thereof, the same
shall not have been paid, discharged or vacated or, in the case of a judgment,
stayed pending appeal, or shall not have been discharged or vacated within
thirty (30) days from the entry of a final order of affirmance on appeal; or

 

(i)                                     ERISA.  (i) An ERISA Event occurs with
respect to a Pension Plan or Multiemployer Plan which has resulted or could
reasonably be expected to result in liability of the Borrower under Title IV of
ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount
in excess of $50,000,000, or (ii) the Borrower or any ERISA Affiliate fails to
pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$50,000,000; or the Borrower fails to make a contribution under Code Section 412
or ERISA Section 302 with respect to a Pension Plan, within 30 days after the
date on which the Borrower obtains knowledge that such contribution is due, in
an aggregate amount in excess of $50,000,000; or

 

(j)                                     Change of Control.  There occurs any
Change of Control; or

 

(k)                                  Invalidity of Documents.  (i) Any Security
Agreement, Mortgage or other Security Document after delivery thereof pursuant
to Section 4.1 or 6.12 shall for any reason (other than pursuant to the terms
thereof or as expressly permitted thereby) cease to create a valid and perfected
first priority Lien (subject to Permitted Encumbrances and Permitted Liens) on
and security interest in the Collateral purported to be covered thereby;
provided, that no such defects pursuant to this clause with respect to a Lien
granted or purported to be granted by any of the Loan Documents shall give rise
to an Event of Default under this clause unless such defects shall adversely
affect the aggregate value of the Collateral by an aggregate amount of
$50,000,000 or more; or (ii) any Loan Party shall so assert such invalidity or
lack of perfection or priority; or (iii) any other Loan Document, at any time
after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or satisfaction in full of all the Credit
Agreement Obligations thereunder, ceases to be in full force and effect; or any
Loan Party or any other Person contests in any manner the validity or
enforceability of any provision of any other Loan Document; or any Loan Party
denies that it has any or further liability or obligation under any other Loan
Document, or purports to revoke, terminate or rescind any provision of any other
Loan Document; or

 

(l)                                     Failure of Subordination.  Unless
otherwise waived or consented to by the Administrative Agent and the Required
Aggregate Revolver and Term Lenders in writing, the subordination provisions
relating to any Subordinated Indebtedness (the “Subordination Provisions”) shall
fail to be enforceable by the Administrative Agent and the Lenders in accordance
with the terms thereof, or the monetary Credit Agreement Obligations shall fail
to constitute “Senior Indebtedness” or “Senior Debt” (or similar term) referring
to the Credit Agreement Obligations; or the Borrower or any of its Restricted
Subsidiaries shall, directly or indirectly, disavow or contest in any manner
(i) the effectiveness, validity or enforceability of any of the Subordination
Provisions, (ii) that the Subordination Provisions exist for the benefit of

 

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the Secured Parties or (iii) that all payments of principal of or premium and
interest on the Subordinated Debt, or realized from the liquidation of any
property of any Loan Party, shall be subject to any of such Subordination
Provisions.

 

9.2  Remedies upon Event of Default.  If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:

 

(a)                                  declare by written notice to the Borrower
the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower and

 

(b)                                 exercise on behalf of itself and the Lenders
all rights and remedies available to it and the Lenders under the Loan
Documents;

 

provided, that upon the occurrence of an actual or deemed entry of an order for
relief with respect to the Borrower under the Bankruptcy Code of the United
States, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable
without further act of the Administrative Agent or any Lender.

 

9.3  Application of Funds.  After the exercise of remedies provided for in
Section 9.2 (or after the Loans have automatically become immediately due and
payable as set forth in the proviso to Section 9.2), any amounts received on
account of the Credit Agreement Obligations shall be applied by the
Administrative Agent in the following order:

 

(a)                                  to payment of that portion of the Credit
Agreement Obligations constituting fees, indemnities, expenses and other amounts
(including fees, charges and disbursements of counsel to the Administrative
Agent and amounts payable under Article III) payable to the Administrative Agent
in its capacity as such;

 

(b)                                 to payment of that portion of the Credit
Agreement Obligations constituting fees, indemnities and other amounts (other
than principal and interest) payable to the Lenders (including reasonable fees,
charges and disbursements of counsel to the respective Lenders (including fees
and time charges for attorneys who may be employees of any Lender) and amounts
payable under Article III), ratably among them in proportion to the amounts
described in this clause payable to them;

 

(c)                                  to payment of Hedging Obligations and that
portion of the Credit Agreement Obligations constituting accrued and unpaid
interest on the Loans and other Credit Agreement Obligations, ratably among the
Lenders in proportion to the respective amounts described in this clause payable
to them;

 

(d)                                 to payment of that portion of the Credit
Agreement Obligations constituting unpaid principal of the Loans, ratably among
the Lenders in proportion to the respective amounts described in this clause
held by them;

 

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(e)                                  to the payment of all other Credit
Agreement Obligations of the Loan Parties owing under or in respect of the Loan
Documents that are due and payable to the Secured Parties on such date, ratably
based upon the respective aggregate amounts of all such Credit Agreement
Obligations owing to the Secured Parties on such date; and

 

(f)                                    the balance, if any, after all of the
Credit Agreement Obligations have been indefeasibly paid in full, to the
Borrower or as otherwise required by Law.

 

ARTICLE X.
THE ADMINISTRATIVE AGENT

 

10.1  Appointment and Authority.  Each of the Lenders hereby irrevocably
appoints Deutsche Bank to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto.  The
provisions of this Article are solely for the benefit of the Administrative
Agent and the Lenders, and neither the Borrower nor any other Loan Party shall
have rights as a third party beneficiary of any of such provisions.

 

10.2  Rights As a Lender.  The Person serving as the Administrative Agent or
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 the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity.  Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.

 

10.3  Exculpatory Provisions.  The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents.  Without limiting the generality of the foregoing, the
Administrative Agent:

 

(a)                                  shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing;

 

(b)                                 shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that the Administrative 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 expressly provided for herein or in the other Loan Documents); provided, that
the Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and

 

(c)                                  shall not, except as expressly set forth
herein and in the other Loan Documents, have any duty to disclose, and shall not
be liable for the failure to disclose, any information

 

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relating to the Borrower or any of its Affiliates that is communicated to or
obtained by the Person serving as the Administrative Agent or any of its
Affiliates in any capacity.

 

The Administrative Agent shall not be liable for any action taken or not taken
by it, WHETHER OR NOT RELATED TO ANY SINGULAR, JOINT OR CONCURRENT NEGLIGENCE OF
THE ADMINISTRATIVE AGENT, (i) with the consent or at the request of Lenders
holding in the aggregate more than 50% of the Outstanding Amount (or such other
number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 11.1 and 9.2) or (ii) in the absence of
its own gross negligence or willful misconduct.  The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower or
a Lender.

 

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

10.4  Reliance by the Administrative Agent.  The Administrative 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 (including any electronic message, Internet or intranet website posting
or other distribution) believed by them to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person.  The Administrative Agent
also may 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.  In determining compliance with any condition hereunder to
the making of a Loan that by its terms must be fulfilled to the satisfaction of
a Lender, the Administrative Agent may presume that such condition is
satisfactory to such Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender prior to the making of such Loan.  The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by them, and shall
not be liable for any action taken or not taken by them in accordance with the
advice of any such counsel, accountants or experts.

 

10.5  Delegation of Duties.  The Administrative Agent may perform any and all of
their respective duties and exercise their respective rights and powers
hereunder or under any other Loan Document by or through any one or more sub
agents appointed by the Administrative Agent.  The Administrative Agent and any
such sub agent may perform any and all of their respective duties and exercise
their respective rights and powers by or through their respective Related
Parties.  The exculpatory provisions of this Article shall apply to any such sub
agent and to the Related Parties of the Administrative Agent and any such sub
agent, and shall apply to

 

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their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

 

10.6  Resignation of Administrative Agent.  The Administrative Agent may at any
time give notice of its resignation to the Lenders and the Borrower.  Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor, which shall be
a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States.  If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the
Lenders, appoint a successor Administrative Agent meeting the qualifications set
forth above; provided, that if the Administrative Agent shall notify the
Borrower and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders under any of the Loan Documents,
the retiring Administrative Agent shall continue to hold such collateral
security until such time as a successor Administrative Agent is appointed) and
(2) all payments, communications and determinations provided to be made by, to
or through the Administrative Agent shall instead be made by or to each Lender
directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section.  Upon the acceptance
of a successor’s appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section).  The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor. 
After the retiring Administrative Agent’s resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 11.4 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.

 

10.7  Non-Reliance on Administrative Agent and Other Lenders.  Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties 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 or any other Lender or any of their Related Parties 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, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

 

10.8  No Other Duties, Etc.  Anything herein to the contrary notwithstanding,
none of the Sole Bookrunner, Sole Lead Arranger or Sole Syndication Agent listed
on the cover page hereof shall have any powers, duties or responsibilities under
this Agreement or any of the other

 

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Loan Documents, except in its capacity, as applicable, as the Administrative
Agent or a Lender hereunder.

 

10.9  Administrative Agent May File Proofs of Claim.  In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
any Loan Party, the Administrative Agent (irrespective of whether the principal
of any Loan shall then be due and payable as herein expressed or by declaration
or otherwise and irrespective of whether the Administrative Agent shall have
made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise

 

(a)                                  to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the Loans
and all other Credit Agreement Obligations that are owing and unpaid and to file
such other documents as may be necessary or advisable in order to have the
claims of the Lenders and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders and
the Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders and the Administrative Agent under Sections 2.8 and
11.4) allowed in such judicial proceeding; and

 

(b)                                 to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.8 and 11.4.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the Credit
Agreement Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.

 

10.10  Collateral and Guaranty Matters.

 

(a)                                  Subject to the terms of the Security
Documents, the Administrative Agent is irrevocably authorized, at the discretion
of the Administrative Agent from time to time, to take any of the following
actions or to direct the appropriate Persons to take any of the following
actions or to confirm the taking of the same, in each case as the Administrative
Agent shall determine to be in the interest of the Lenders:

 

(i)                                     accept, release, subordinate or
otherwise modify any Lien on any real or personal property, including any
security issued by or other ownership interest in any Person, (A) with respect
to acceptances, at any time, (B) with respect to releases, upon payment in full
of all Credit Agreement Obligations (other than contingent

 

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indemnification obligations), (C) with respect to releases, to the extent of
property that is or will be sold, monetized, securitized, leased or otherwise
transferred or disposed of as part of or in connection with any transaction
required or permitted under any Loan Document or otherwise to the extent
contemplated by any transaction required or permitted under any Loan Document
(and without limiting any other applicable releases, to the extent any
Subsidiary ceases to be a Subsidiary of the Borrower, or all or substantially
all of its assets is sold or otherwise transferred or disposed of, then
regardless of the form of such transaction such release may extend to all of the
ownership interests in such Subsidiary and the assets of such Subsidiary),
(D) with respect to subordinations, to the extent the Lien which benefits from
the subordination is permitted by Section 7.1, or (E) under other circumstances,
to the extent such actions under such other circumstances are approved,
authorized or ratified in writing by the Required Lenders or such greater
percentage of Lenders required under Section 11.1(i) or (j); provided that in
any circumstances when any release is authorized, any lesser modification such
as a partial release or subordination is also authorized;

 

(ii)                                  accept, release, subordinate or otherwise
modify the Guaranty, any other Guarantee of any Credit Agreement Obligations or
as applicable any Person obligated under the Guaranty or any such Guarantee,
(A) with respect to acceptances, at any time, (B) with respect to releases, if
the applicable guarantor ceases to be a Subsidiary as a result of a transaction
permitted hereunder or otherwise to the extent contemplated by any transaction
required or permitted under any Loan Document (and without limiting any other
applicable releases, to the extent any Subsidiary that is an issuer of “Excluded
Securities” as defined in the Collateral Trust Agreement is released from the
Guaranty or any such Guarantee, then such release may extend to a release of
Liens in the Excluded Securities issued by such Subsidiary) or (C) under other
circumstances, to the extent such other actions under such circumstances are
approved, authorized or ratified in writing by the Required Lenders or such
greater percentage of Lenders required under Section 11.1(i) or (j); provided
that in any circumstances when any release is authorized, any lesser
modification such as a partial release or subordination is also authorized;

 

(iii)                               take or direct the taking of or confirm any
action to which clause (i) above applies (other than the release of, or the
subordination of the Secured Parties’ Lien on, all or substantially all of the
Collateral in any transaction or series of related transactions) if and to the
extent determined by the Administrative Agent that the cost to the Credit
Parties of not taking such action, including administrative costs, is
disproportionate to the benefit to be maintained by the Secured Parties by not
taking such action;

 

(iv)                              enter into any Secured Trading Counterparty
Intercreditor Agreement and other intercreditor agreements, subordination
agreements and other agreements related to the Security Documents or the
Guaranty or any other Guarantee of any Credit Agreement Obligations determined
by the Administrative Agent or the Collateral Trustee to be in the interest of
the Lenders, (A) with Persons who have been granted Liens permitted by
Section 7.1, (B) to the extent contemplated by any transaction required or
permitted under any Loan Document or (C) under other circumstances to the extent
such other circumstances are approved, authorized or ratified in writing by the
Required Lenders or such greater percentage of Lenders required under
Section 11.1(i) or (j); and

 

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(v)                                 exercise rights (other than enforcement
rights unless authorized by the Required Lenders) and perform obligations under
the Collateral Trust Agreement and the other Security Documents, the Guaranty
and any other Guarantee of any Credit Agreement Obligations, the documents and
agreements referred to in clause (iv) above and related documents and
agreements, in each case as required or as deemed appropriate in the discretion
of the Administrative Agent or the Collateral Trustee, including amending,
supplementing, waiving, providing consent under or otherwise modifying any of
the foregoing documents or agreements, directing or providing notices or other
communications to the Collateral Trustee and becoming or appointing any agent,
co-agent, sub-agent, trustee, co-trustee, sub-trustee or the like for the
Collateral Trustee or for other Persons.

 

(b)                                 The Administrative Agent hereby agrees at
the option of the Borrower to take or direct the Collateral Trustee or other
applicable Person to take or to confirm, to the extent not otherwise prohibited
by this Agreement, (1) any of the actions described under clause (a)(i)(A)-(D),
(a)(ii)(A) or (B), or (iv)(A) or (B) above upon the occurrence of any of the
applicable circumstances set forth in such clauses and the receipt of the
Borrower’s written request that such action be taken.  The manner of taking such
actions shall be determined by the Administrative Agent in its reasonable
discretion after consultation with the Borrower following the occurrence of any
of such applicable circumstances.  In connection therewith, the Administrative
Agent shall timely execute and deliver, provide, return or otherwise make
available or direct the execution and delivery, provision, return or otherwise
making available of all filings, recordings, notices, and other documents and
agreements, including financing statements, recordable real property documents
and general releases and notices, directions and other communications to the
Collateral Trustee, required by the terms of this Agreement or reasonably
requested by the Borrower.

 

(c)                                  Upon request by the Administrative Agent at
any time, the Required Lenders will confirm in writing any authority to take or
direct the taking of or to confirm any of the actions in accordance with this
Section.

 

(d)                                 Any actions taken or directed to be taken or
confirmed by the Administrative Agent under the authority granted under this
Section shall be deemed for all purposes to be authorized by and shall be
binding on and may be made on behalf of the Lenders and the other Secured
Parties under this Agreement.  In addition, whether or not so authorized, the
Collateral Trustee, any agent, co-agent, sub-agent, trustee, co-trustee,
sub-trustee or the like for the Collateral Trustee and any other Person to whom
these provisions may relate are directed to follow, and shall be entitled to
rely upon as so authorized by the Lenders and the other Secured Parties under
this Agreement, any document or agreement, notice, direction or other
communication signed by or received from the Administrative Agent purporting to
be authorized by or to be on behalf of the Lenders or any other Secured Parties
under this Agreement or any subset thereof under this Section or otherwise.

 

(e)                                  Contemporaneously with the execution
hereof, in addition to all other authorizations provided in this Section, the
Administrative Agent is irrevocably authorized to, and direct the Collateral
Trustee and any agent, co-agent, sub-agent, trustee, co-trustee, sub-trustee or
the like to, and hereby so direct all of them to, execute and deliver, provide,
return or

 

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otherwise make available all filings, recordings, notices and documents and
agreements (i) necessary or desirable to satisfy the conditions set forth in
Section 4.1 and (ii) otherwise deemed necessary or desirable by the
Administrative Agent to effect the transactions contemplated in connection with
the execution and delivery of this Agreement.

 

ARTICLE XI.
MISCELLANEOUS

 

11.1  Amendments, Etc.  11.1  No amendment or waiver of any provision of this
Agreement or any other Loan Document (other than the Fee Letter), and no consent
to any departure by the Borrower or any other Loan Party therefrom, shall be
effective unless approved, authorized or otherwise similarly acted upon in favor
by the Required Lenders in accordance with the definition thereof unless
otherwise specified herein (or the Administrative Agent with the approval,
authorization or vote of such Required Lenders) and the Borrower or the
applicable Loan Party, as the case may be, and, if not signed by the
Administrative Agent, acknowledged by the Administrative Agent (which
acknowledgement shall not be withheld to the extent so approved, authorized or
similarly acted upon by such Required Lenders), and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, that no such amendment, waiver or consent shall:

 

(a)                                  waive any condition set forth in
Section 4.1(a) or Section 4.2, without the written consent of each Lender;

 

(b)                                 extend or increase the Commitment of any
Lender without the written consent of such Lender;

 

(c)                                  postpone any date fixed by this Agreement
or any other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) without the written consent of each
Lender directly affected thereby;

 

(d)                                 reduce the principal of, or the rate of
interest specified herein on, any Loan, or (subject to clause (iii) of the
second proviso to this Section) any fees or other amounts payable hereunder or
under any other Loan Document without the written consent of each Lender
directly affected thereby; provided, that only the consent of the Required
Agreement Lenders shall be necessary to amend the definition of “Default Rate”;

 

(e)                                  change Section 2.12 or Section 9.3 in a
manner that would alter the pro rata sharing of payments required thereby
without the written consent of each Lender;

 

(f)                                    change any provision of this Section, the
definitions of “Core Asset Consent”, “Required Agreement Lenders”, “Required
Aggregate Revolver and Term Lenders”, “Required Aggregate Term Lenders”, or
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders and lenders under the Existing Credit Agreement required
to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender;

 

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(g)                                 change any provision of Section 11.6 the
effect of which would impose additional restrictions on assignments and
participations by Lenders without the written consent of each Lender;

 

(h)                                 except as otherwise permitted, authorized or
required by any Loan Document, release any Guarantor from the Guaranty without
the written consent of each Lender; or

 

(i)                                     except as otherwise permitted,
authorized or required by any Loan Document, release all or substantially all of
the Collateral in any transaction or series of related transactions, without the
written consent of each Lender;

 

and, provided, further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; and (ii) Section 11.6(h) may not be
amended, waived or otherwise modified without the consent of each Granting
Lender all or any part of whose Loans are being funded by an SPC at the time of
such amendment, waiver or other modification; and (iii) the Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto.

 

11.2  Notices; Effectiveness; Electronic Communication.

 

(a)                                  Notices Generally.  Except in the case of
notices and other communications expressly permitted to be given by telephone
(and except as provided in clause (b) below), all 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 or
sent by telecopier as follows, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:

 

(i)                                     if to the Borrower or the Administrative
Agent, to the address, telecopier number, electronic mail address or telephone
number specified for such Person on Schedule 11.2; and

 

(ii)                                  if to any other Lender, to the address,
telecopier number, electronic mail address or telephone number specified in its
Administrative Questionnaire.

 

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient).  Notices delivered through electronic communications to the extent
provided in clause (b) below, shall be effective as provided in such clause (b).

 

(b)                                 Electronic Communications.  Notices and
other communications to the Lenders hereunder may be delivered or furnished by
electronic communication (including e mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent; provided, that the
foregoing shall not apply to notices to any Lender pursuant to Article II if
such Lender has notified the Administrative Agent that it is incapable of
receiving notices under such

 

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Article by electronic communication.  The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided, that approval of such procedures may be limited to particular notices
or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided, that if such notice or other communication
is not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

 

(c)                                  Change of Address, Etc.  Each of the
Borrower and the Administrative Agent may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the
other parties hereto.  Each other Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the
Borrower and the Administrative Agent.

 

(d)                                 Reliance by Administrative Agent and
Lenders.  The Administrative Agent and the Lenders shall be entitled to rely and
act upon any notices (including telephonic Borrowing Notices) purportedly given
by or on behalf of the Borrower even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof received after any action
was taken in accordance with such terms.  The Borrower shall indemnify the
Administrative Agent, each Lender and the Related Parties of each of them from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower.  All
telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.

 

11.3  No Waiver; Cumulative Remedies.  No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.  The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

 

11.4  Expenses; Indemnity; Damage Waiver.

 

(a)                                  Costs and Expenses.  The Borrower shall pay
(i) all reasonable out of pocket expenses incurred by the Administrative Agent
and its Affiliates (including the reasonable fees,

 

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charges and disbursements of one principal counsel and reasonably required local
counsel for the Administrative Agent), in connection with the syndication of the
credit facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), and (ii)  all reasonable out of pocket expenses incurred by the
Administrative Agent or any Lender (including the reasonable fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender), and
shall pay all fees and time charges for attorneys who may be employees of the
Administrative Agent or any Lender, in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other
Loan Documents, including its rights under this Section, or (B) in connection
with the Loans made hereunder, including all such out of pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans.

 

(b)                                 Indemnification by the Borrower.  The
Borrower shall indemnify the Administrative Agent (and any sub-agent thereof),
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, WHETHER OR NOT RELATED TO ANY
NEGLIGENCE OF THE INDEMNIFIED PARTIES, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including
the reasonable fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees
and time charges and disbursements for attorneys who may be employees of any
Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any
third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the
proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto, in all cases, whether or not caused by or
arising, in whole or in part, out of the comparative, contributory or sole
negligence of the Indemnitee; provided, that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) 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, (y) result from a claim
brought by the Borrower or any other Loan Party against an Indemnitee for breach
in bad faith of such Indemnitee’s obligations hereunder or under any other Loan
Document, if the Borrower or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction or (z) result from any dispute arising solely between or
among any Lenders or Administrative Agent, which dispute is not a result of any
act or omission of any Loan Party.

 

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(c)                                  Reimbursement by Lenders.  To the extent
that the Borrower for any reason fails to indefeasibly pay any amount required
under clause (a) or (b) of this Section to be paid by it to the Administrative
Agent (or any sub-agent thereof) or any Related Party of any of the foregoing,
each Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent) or such Related Party, 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 (or any such sub-agent) in its capacity as such or against
any Related Party of any of the foregoing acting for the Administrative Agent
(or any such sub-agent) in connection with such capacity.  The obligations of
the Lenders under this clause (c) are subject to the provisions of
Section 2.11(d).

 

(d)                                 Waiver of Consequential Damages, Etc.  To
the fullest extent permitted by applicable law, the Borrower shall not assert,
and 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, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or the use of
the proceeds thereof.  No Indemnitee referred to in clause (b) above shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.

 

(e)                                  Payments.  All amounts due under this
Section shall be payable not later than ten Business Days after the Borrower’s
receipt of a written demand therefor.

 

(f)                                    Survival.  The agreements in this
Section shall survive the resignation of the Administrative Agent, the
replacement of any Lender, the termination of the Commitments and the repayment,
satisfaction or discharge of all the other Credit Agreement Obligations.

 

11.5  Payments Set Aside.  To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the Credit Agreement
Obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (b) each Lender severally agrees to pay to the
Administrative Agent upon demand its applicable share (without duplication) of
any amount so recovered from or repaid by the Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time in
effect.  The Obligations of the Lenders under clause (b) of the preceding
sentence shall survive the payment in full of the Credit Agreement Obligations
and the termination of this Agreement.

 

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11.6  Successors and Assigns.

 

(a)                                  Successors and Assigns Generally.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that neither the Borrower nor any other Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an Eligible Assignee in accordance with the provisions of clause (b) of
this Section, (ii) by way of participation in accordance with the provisions of
clause (d) of this Section, or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of clause (f) of this Section, or
(iv) to an SPC in accordance with the provisions of clause (h) of this
Section (and any other attempted assignment or transfer by any party hereto
shall be null and void).  Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in clause (d) of this Section and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.

 

(b)                                 Assignments by Lenders.  Any Lender may at
any time assign to one or more Eligible Assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided, that:

 

(i)                                     except in the case of an assignment of
the entire remaining amount of the assigning Lender’s Commitment and the Loans
at the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund with respect to a Lender, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $1,000,000, unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed);

 

(ii)                                  each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned; and

 

(iii)                               the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee of $3,500, and the Eligible Assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire; provided that only one such fee shall be required
in connection with a concurrent assignment by a Lender to one or more Approved
Funds.

 

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Subject to acceptance and recording thereof by the Administrative Agent pursuant
to clause (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the 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 of Sections 3.1, 3.4, 3.5, and 11.4 with respect
to facts and circumstances occurring prior to the effective date of such
assignment.  Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this
clause shall be treated for purposes of this Agreement as a sale by such Lender
of a participation in such rights and obligations in accordance with clause
(d) of this Section.

 

(c)                                  Register.  The Administrative Agent, acting
solely for this purpose as an agent of the Borrower, shall maintain at the
Administrative Agent’s Office a copy of each Assignment and Assumption delivered
to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans owing to,
each Lender pursuant to the terms hereof from time to time (the “Register”). 
The entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may 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 each of the Borrower at any
reasonable time and from time to time upon reasonable prior notice.  In
addition, at any time that a request for a consent for a material or substantive
change to the Loan Documents is pending, any Lender wishing to consult with
other Lenders in connection therewith may request and receive from the
Administrative Agent a copy of the Register.

 

(d)                                 Participations.  Any Lender may at any time,
without the consent of, or notice to, the Borrower or the Administrative Agent,
sell participations to any Person (other than a natural person or the Borrower
or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in
all or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided, 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 and (iii) the Borrower, the
Administrative Agent, 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.

 

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided, that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 11.1 that affects such Participant.  Subject to clause (e) of this
Section, the Borrower

 

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agrees that each Participant shall be entitled to the benefits of Sections 3.1,
3.4 and 3.5 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to clause (b) of this Section.  To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 11.8 as though it were a Lender, provided, that such Participant agrees
to be subject to Section 2.11 as though it were a Lender.

 

(e)                                  Limitations upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under
Section 3.1 or 3.4 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent.  A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.1 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 3.1(e) as though
it were a Lender.

 

(f)                                    Certain Pledges.  Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement (including under its Note, if any) to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided, that no such pledge or assignment shall release
such Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for such Lender as a party hereto.

 

(g)                                 Electronic Execution of Assignments.  The
words “execution,” “signed,” “signature,” and words of like import in any
Assignment and Assumption shall be deemed to include electronic signatures or
the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

 

(h)                                 Special Purpose Funding Vehicles. 
Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle identified as
such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrower (an “SPC”) the option to provide all or any part of any
Loan that such Granting Lender would otherwise be obligated to make pursuant to
this Agreement; provided, that (i) nothing herein shall constitute a commitment
by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such
option or otherwise fails to make all or any part of such Loan, the Granting
Lender shall be obligated to make such Loan pursuant to the terms hereof or, if
it fails to do so, to make such payment to the Administrative Agent as is
required under Section 2.11(b)(ii).  Each party hereto hereby agrees that
(i) neither the grant to any SPC nor the exercise by any SPC of such option
shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrower under this Agreement (including its obligations
under Section 3.4), (ii) no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would be liable, and
(iii) the Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the lender of record hereunder.

 

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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.  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 debt 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 proceeding
under the laws of the United States or any State thereof.  Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to, but
without prior consent of the Borrower and the Administrative Agent and without
paying any processing fee therefor, assign all or any portion of its right to
receive payment with respect to any Loan to the Granting Lender and
(ii) disclose on a confidential basis any non-public information relating to its
funding of Loans to any rating agency, commercial paper dealer or provider of
any surety or Guarantee or credit or liquidity enhancement to such SPC.

 

11.7  Confidentiality.  Each of the Administrative Agent and the Lenders
understands that some of the information furnished to it pursuant to this
Agreement and the other Loan Documents may be received by it prior to the time
that such information shall have been made public, and each of the
Administrative Agent and the Lenders hereby agrees that it will keep all the
Information (as defined below) received by it confidential except that such
Person shall be permitted to disclose Information (i) only to such of its
officers, directors, employees, agents, representatives, auditors, consultants,
advisors, trustees, investment advisors, lawyers and affiliates as need to know
such Information in connection with this Agreement or any other Loan Document
and who will be advised of the confidential nature of such Information; (ii) to
any other party to this Agreement; (iii) to a proposed assignee or participant
in accordance with Section 11.6 hereof; provided that prior to any such
disclosure each such proposed assignee or participant shall agree in writing to
be bound by the provisions of this Section 11.7; (iv) to the extent required by
Law and regulations or by any subpoena or other legal process; (v) to the extent
requested by any bank regulatory authority or other regulatory authority;
(vi) to the extent such information (A) becomes publicly available other than as
a result of a breach of this Agreement or (B) becomes available to such Lender
on a nonconfidential basis from a source other than a Loan Party or any of its
Affiliates; (vii) to the extent the Borrower shall have consented to such
disclosure; (viii) in connection with the servicing of the Loans hereunder, in
protecting, exercising or enforcing any rights and/or remedies in connection
with any Loan Document or in any proceeding in connection with any Loan Document
or any of the transactions contemplated thereby or (ix) to the Collateral
Trustee.  For the purposes of this Section, “Information” means all information
received from the Borrower, any other Loan Party or their respective officers,
directors, employees, agents, representatives, auditors, consultants, advisors,
trustees, investment advisors, lawyers and affiliates (collectively, “Credit
Party Agents”) relating to the Borrower, any Loan Party, any Subsidiary of a
Loan Party or any of their respective businesses, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by the Borrower, any Loan Party or any
Subsidiary of a Loan Party.  Any Person required to maintain the confidentiality
of Information as provided in this Section 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 to its own confidential information.  In the event of any required
disclosure of Information, any Person required to maintain the confidentiality
of such Information as provided in this Section agrees to use reasonable efforts
to inform the

 

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Borrower as promptly as practicable of the circumstances and the Information
required to be disclosed to the extent not prohibited by Law.

 

11.8  Right of Setoff.  If an Event of Default shall have occurred and be
continuing, each Lender and each of its respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender or any
such Affiliate to or for the credit or the account of the Borrower or any other
Loan Party against any and all of the Credit Agreement Obligations of the
Borrower or such Loan Party now or hereafter existing under this Agreement or
any other Loan Document to such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement or any other Loan
Document and although such Credit Agreement Obligations of the Borrower or such
Loan Party may be contingent or unmatured or are owed to a branch or office of
such Lender different from the branch or office holding such deposit or
obligated on such indebtedness.  The rights of each Lender and its respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender or its respective Affiliates
may have.  Each Lender agrees to notify the Borrower and the Administrative
Agent promptly after any such setoff and application; provided, that the failure
to give such notice shall not affect the validity of such setoff and
application.

 

11.9  Interest Rate Limitation.  Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent
or any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower.  In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Credit Agreement Obligations hereunder.

 

11.10  Counterparts; Integration; Effectiveness.  This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof.  Except as provided in
Section 4.1, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.

 

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11.11  Survival of Representations and Warranties.  All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof.  Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of the making of the Loans, and shall continue in full
force and effect as long as any Loan or any other Credit Agreement Obligation
hereunder shall remain unpaid or unsatisfied.

 

11.12  Severability.  If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions.  The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

11.13  Replacement of Lenders.  If (i) any Lender requests compensation under
Section 3.4, (ii) the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.1, or (iii) any other circumstance exists hereunder that gives the
Borrower the right to replace a Lender as a party hereto, then the Borrower may,
at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 11.6), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided, that:

 

(a)                                  the Borrower shall have paid to the
Administrative Agent the assignment fee specified in Section 11.6(b);

 

(b)                                 such Lender shall have received payment of
an amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents (including any amounts under Section 3.5) from the
assignee (to the extent of such outstanding principal and accrued interest) or
the Borrower (in the case of all other amounts);

 

(c)                                  in the case of any such assignment
resulting from a claim for compensation under Section 3.4 or payments required
to be made pursuant to Section 3.1, such assignment will result in a reduction
in such compensation or payments thereafter; and

 

(d)                                 such assignment does not conflict with
applicable Laws.

 

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A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

11.14  GOVERNING LAW; JURISDICTION; ETC.

 

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

 

(b)                                 SUBMISSION TO JURISDICTION.  THE BORROWER
AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK SITTING IN NEW YORK CITY AND OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT COURT OF THE STATE OF NEW YORK, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO 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 COURT OR, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE 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 OR IN ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

 

(c)                                  WAIVER OF VENUE.  THE BORROWER AND EACH
OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN CLAUSE
(b) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)                                 SERVICE OF PROCESS.  EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 10.2.  NOTHING IN THIS AGREEMENT WILL AFFECT THE

 

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RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.

 

11.15  Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON 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 BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

11.16  USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act.

 

11.17  No Oral Agreements.  THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

11.18  Intercreditor Confirmation.

 

(a)                                  Notwithstanding (i) anything to the
contrary contained in the Secured Debt Documents, (ii) the time of incurrence of
any Series of Secured Debt, (iii) the order or method of attachment or
perfection of any Liens securing any Series of Secured Debt, (iv) the time or
order of filing or recording of financing statements, mortgages or other
documents filed or recorded to perfect any Lien upon any Shared Collateral,
(v) the time of taking possession or control over any Shared Collateral or
(vi) the rules for determining priority under any law governing relative
priorities of Liens:

 

(A)                              all Liens at any time granted by the Borrower
or any of its Subsidiaries in the Shared Collateral to secure any of the Parity
Secured Debt shall secure, Equally and

 

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Ratably, all liabilities of the Borrower or such Subsidiary under or in respect
of the Parity Secured Debt and other Parity Secured Obligations; and

 

(B)                                all proceeds of all Liens at any time granted
by the Borrower or any its Subsidiaries in the Shared Collateral to secure any
of the Parity Secured Debt shall be allocated and distributed Equally and
Ratably on account of all liabilities of the Borrower or such Subsidiary under
or in respect of the Parity Secured Debt and other Parity Secured Obligations.

 

(b)                                 Each Lender agrees to the provisions
described in the Order of Application and the definition of the term “Equally
and Ratably.”

 

(c)                                  The provisions of Section 11.18(a) hereof
are intended for the benefit of, and will be enforceable as a third party
beneficiary by, each present and future holder of Secured Obligations and each
present and future Secured Debt Representative.

 

11.19  Designated Senior Debt For purposes of the Convertible Notes, the Credit
Agreement Obligations shall constitute “Designated Senior Debt”, as such term is
defined in the indenture relating thereto.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

 

RELIANT ENERGY, INC.

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

RELIANT ENERGY ASSET MANAGEMENT, LLC

 

RELIANT ENERGY BROADBAND, INC.

 

RELIANT ENERGY CALIFORNIA HOLDINGS, LLC

 

RELIANT ENERGY COMMUNICATIONS, INC.

 

RELIANT ENERGY COOLWATER, INC.

 

RELIANT ENERGY CORPORATE SERVICES, LLC

 

RELIANT ENERGY ELLWOOD, INC.

 

RELIANT ENERGY ETIWANDA, INC.

 

RELIANT ENERGY FLORIDA, LLC

 

RELIANT ENERGY FLORIDA HOLDINGS, LLC

 

RELIANT ENERGY KEY/CON FUELS, LLC

 

RELIANT ENERGY MANDALAY, INC.

 

RELIANT ENERGY NET VENTURES, INC.

 

RELIANT ENERGY NORTHEAST GENERATION, INC.

 

RELIANT ENERGY NORTHEAST HOLDINGS, INC.

 

RELIANT ENERGY ORMOND BEACH, INC.

 

RELIANT ENERGY POWER GENERATION, INC.

 

RELIANT ENERGY RETAIL HOLDINGS, LLC

 

RELIANT ENERGY SABINE (TEXAS), INC.

 

RELIANT ENERGY SERVICES DESERT BASIN, LLC

 

RELIANT ENERGY SERVICES MID-STREAM, LLC

 

RELIANT ENERGY SEWARD, LLC

 

RELIANT ENERGY TRADING EXCHANGE, INC.

 

RELIANT ENERGY VENTURES, INC.

 

RELIANT ENERGY WHOLESALE GENERATION, LLC

 

 

 

 

 

By:

 

 

 

Name:  Andrew Johannesen

 

Title:  Assistant Treasurer of the corporations and limited liability companies,
and of the general partners of the limited partnerships, listed above

 

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

 

 

RELIANT ENERGY SERVICES, INC.

 

 

 

 

 

By:

 

 

 

Name:  Andrew Johannesen

 

Title:    Vice President and Treasurer

 

 

 

 

 

RELIANT ENERGY RETAIL SERVICES, LLC

 

RELIANT ENERGY ELECTRIC SOLUTIONS, LLC

 

RELIANT ENERGY SOLUTIONS EAST, LLC

 

 

 

 

 

By:

 

 

 

Name:  Lloyd A. Whittington

 

Title:    Vice President and Treasurer of the limited liability companies listed
above

 

 

 

 

 

RELIANT ENERGY CAPTRADES HOLDING CORP.

 

RELIANT ENERGY SABINE (DELAWARE), INC.

 

 

 

 

 

By:

 

 

 

Name:  Patricia F. Genzel

 

Title:    President

 

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DEUTSCHE BANK AG, NEW YORK

 

BRANCH, as Administrative Agent and a Lender

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

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

 

 

DEUTSCHE BANK SECURITIES INC., as Sole Lead

 

Arranger, Sole Bookrunner, and Sole Syndication Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

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