Exhibit 10.2

$1,500,000,000

CREDIT AGREEMENT

among

MIRANT NORTH AMERICA, LLC,

as Borrower,

The Several Lenders from Time to Time Parties Hereto,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent,

and

DEUTSCHE BANK SECURITIES INC.

and

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Co-Syndication Agents

 

Dated as of January 3, 2006

 

J.P. MORGAN SECURITIES INC., DEUTSCHE BANK SECURITIES INC.

and GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Joint Bookrunners

J.P. MORGAN SECURITIES INC. and DEUTSCHE BANK SECURITIES INC.,

as Co-Lead Arrangers in respect of the Revolving Facility

J.P. MORGAN SECURITIES INC. and GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Co-Lead Arrangers in respect of the Term Facility

CREDIT SUISSE, LEHMAN COMMERCIAL PAPER INC. and THE ROYAL BANK OF

SCOTLAND PLC, as Senior Managing Agents

CREDIT SUISSE and THE ROYAL BANK OF SCOTLAND PLC,

as Co-Documentation Agents

 

 

$800,000,000 Revolving Facility

$700,000,000 Term Facility

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TABLE OF CONTENTS

 

         

    Page    

SECTION 1.        DEFINITIONS    6

    1.1.

  

Defined Terms

   6

    1.2.

  

Other Definitional Provisions

   30 SECTION 2.        AMOUNT AND TERMS OF COMMITMENTS    30

    2.1.

  

Term Commitments

   30

    2.2.

  

Procedure for Term Loan Borrowing

   30

    2.3.

  

Repayment of Term Loans

   31

    2.4.

  

Revolving Commitments

   31

    2.5.

  

Procedure for Revolving Loan Borrowing

   31

    2.6.

  

Swingline Commitment

   32

    2.7.

  

Procedure for Swingline Borrowing; Refunding of SwinglineLoans

   32

    2.8.

  

Commitment Fees, etc.

   34

    2.9.

  

Termination or Reduction of Revolving Commitments

   34

    2.10.

  

Optional Prepayments

   34

    2.11.

  

Mandatory Prepayments and Commitment Reductions

   35

    2.12.

  

Conversion and Continuation Options

   36

    2.13.

  

Limitations on Eurodollar Tranches

   37

    2.14.

  

Interest Rates and Payment Dates

   37

    2.15.

  

Computation of Interest and Fees

   38

    2.16.

  

Inability to Determine Interest Rate

   38

    2.17.

  

Pro Rata Treatment and Payments

   39

    2.18.

  

Requirements of Law

   40

    2.19.

  

Taxes

   41

    2.20.

  

Indemnity

   43

    2.21.

  

Change of Lending Office

   44

    2.22.

  

Replacement of Lenders

   44 SECTION 3.        LETTERS OF CREDIT    44

    3.1.

  

Revolving L/C Commitment

   44

    3.2.

  

Procedure for Issuance of Revolving Letters of Credit

   45

    3.3.

  

Revolving L/C Fees and Other Charges

   45

    3.4.

  

Revolving L/C Participations

   46

    3.5.

  

Revolver L/C Reimbursement Obligation of the Borrower

   47

    3.6.

  

Synthetic L/C Letters of Credit

   47

 

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    3.7.

  

Procedure for Issuance of Synthetic Letters of Credit

   48

    3.8.

  

Synthetic L/C Deposit Account

   48

    3.9.

  

Synthetic L/C Deposit Fees and Other Charges

   49

    3.10.

  

Synthetic L/C Reimbursement Obligations

   50

    3.11.

  

Obligations Absolute

   50

    3.12.

  

Letter of Credit Payments

   50

    3.13.

  

Applications

   51 SECTION 4.        REPRESENTATIONS AND WARRANTIES    51

    4.1.

  

Organization; Power and Authority

   51

    4.2.

  

Due Authorization

   51

    4.3.

  

Governmental Approval

   51

    4.4.

  

Binding and Enforceable

   52

    4.5.

  

No Violation

   52

    4.6.

  

No Default

   52

    4.7.

  

Litigation

   52

    4.8.

  

Financial Condition

   52

    4.9.

  

Material Adverse Change

   53

    4.10.

  

Investment Company Act; Public Utility Holding Company Act

   53

    4.11.

  

Environmental Matters

   53

    4.12.

  

Accuracy of Information, etc

   53

    4.13.

  

Employee Benefit Plans

   53

    4.14.

  

Tax Returns and Payments

   53

    4.15.

  

Security Documents

   54

    4.16.

  

Ownership of Property

   54

    4.17.

  

Labor Matters

   54

    4.18.

  

Subsidiaries

   54 SECTION 5.        CONDITIONS PRECEDENT    55

    5.1.

  

Conditions to Initial Extension of Credit

   55

    5.2.

  

Conditions to Each Extension of Credit

   58 SECTION 6.        AFFIRMATIVE COVENANTS    58

    6.1.

  

Compliance with Law; Maintenance of Existence

   58

    6.2.

  

Financial Statements

   58

    6.3.

  

Certificates; Other Information

   59

    6.4.

  

Notices

   60

    6.5.

  

Inspection

   61

 

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    6.6.

  

Maintenance of Property; Insurance

   61

    6.7.

  

Subsequent Acquired Property; New Subsidiaries

   61

    6.8.

  

Collateral Information

   63

    6.9.

  

Further Assurances

   63

    6.10.

  

Use of Proceeds

   63 SECTION 7.        FINANCIAL COVENANTS    64

    7.1.

  

Interest Coverage Ratio

   64

    7.2.

  

Leverage Ratio

   64

    7.3.

  

Capital Expenditures

   64 SECTION 8.        NEGATIVE COVENANTS    65

    8.1.

  

Debt

   65

    8.2.

  

Restricted Payments

   65

    8.3.

  

Liens

   66

    8.4.

  

Mergers

   68

    8.5.

  

Asset Sales

   68

    8.6.

  

Investments

   69

    8.7.

  

Transactions with Affiliates

   70

    8.8.

  

Sales and Leasebacks

   71

    8.9.

  

Changes in Fiscal Periods

   71 SECTION 9.        EVENTS OF DEFAULT    71 SECTION 10.        THE AGENTS   
74

    10.1.

  

Appointment

   74

    10.2.

  

Delegation of Duties

   74

    10.3.

  

Exculpatory Provisions

   74

    10.4.

  

Reliance by Administrative Agent

   75

    10.5.

  

Notice of Default

   75

    10.6.

  

Non-Reliance on Agents and Other Lenders

   75

    10.7.

  

Indemnification

   76

    10.8.

  

Agent in Its Individual Capacity

   76

    10.9.

  

Successor Administrative Agent

   76

    10.10.

  

Co- Syndication Agents

   77

    10.11.

  

Intercreditor Agreements

   77

 

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SECTION 11.        MISCELLANEOUS    77

    11.1.

  

Amendments and Waivers

   77

    11.2.

  

Notices

   79

    11.3.

  

No Waiver; Cumulative Remedies

   81

    11.4.

  

Survival of Representations and Warranties

   81

    11.5.

  

Payment of Expenses and Taxes

   81

    11.6.

  

Successors and Assigns; Participations and Assignments

   83

    11.7.

  

Adjustments; Set-off

   86

    11.8.

  

Counterparts

   87

    11.9.

  

Severability

   87

    11.10.

  

Integration

   87

    11.11.

  

GOVERNING LAW

   87

    11.12.

  

Submission To Jurisdiction; Waivers

   87

    11.13.

  

Acknowledgements

   88

    11.14.

  

Releases of Guarantees and Liens

   88

    11.15.

  

Confidentiality

   89

    11.16.

  

WAIVERS OF JURY TRIAL

   89

    11.17.

  

Delivery of Addenda

   89

 

iv

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SCHEDULES : 1.1A    Commitments 1.1B    Mortgaged Property 1.1C    Existing Debt
4.15(a)    UCC Filing Jurisdictions 4.15(b)    Mortgage Filing Jurisdictions
4.18    Subsidiaries 8.1    Subordinated Indebtedness 8.3(l)    Existing Liens
8.6(l)    Existing Investments 8.7    MET Agreements EXHIBITS : A    Form of
Guarantee and Collateral Agreement B    Form of Compliance Certificate C   
Form of Closing Certificate D    Form of Mortgage E    Form of Assignment and
Assumption F    Form of Legal Opinion of White & Case LLP G    Form of Exemption
Certificate H    Form of Addendum I    Form of First Lien/Second Lien
Intercreditor Agreement J-1    Form of Letter of Credit Application of JPMCB J-2
   Form of Letter of Credit Application of DBTCA K    Form of Permitted Pari
Passu Debt Intercreditor Agreement

 

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CREDIT AGREEMENT (this “Agreement”), dated as of January 3, 2006, among MIRANT
NORTH AMERICA, LLC, a Delaware limited liability company (the “Borrower”), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the “Lenders”), DEUTSCHE BANK SECURITIES INC. and
GOLDMAN SACHS CREDIT PARTNERS L.P., as co-syndication agents (in such capacity,
the “Co-Syndication Agents”), and JPMORGAN CHASE BANK, N.A. (“JPMCB”), as
administrative agent.

RECITALS

WHEREAS, on July 14, 2003, Mirant Corporation and certain of its Domestic
Subsidiaries and Affiliates (each as defined below) filed voluntary petitions
for relief (the “Chapter 11 Cases”) under Chapter 11 of Title 11 of the United
States Code (as amended, the “Bankruptcy Code”) with the United States
Bankruptcy Court for the Northern District of Texas, Fort Worth Division (the
“Bankruptcy Court”), and continued in possession of their property and in the
management of their businesses pursuant to Bankruptcy Code Sections 1107 and
1108;

WHEREAS, on December 9, 2005, the Bankruptcy Court entered an order (the
“Confirmation Order”) confirming the Plan of Reorganization (as defined below);
and

WHEREAS, in connection with confirmation and implementation of the Plan of
Reorganization, the Borrower has requested the Lenders to make loans and other
extensions of credit available to it to enable it to finance a part of the Plan
of Reorganization and pay related fees and expenses, and the Lenders have
agreed, subject to the terms and conditions hereof, to enter into this
Agreement.

Accordingly, the parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS

1.1.        Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.

“ABR”: for any day, a rate per annum (rounded upwards, if necessary, to the next
 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on such day
and (b) the Federal Funds Effective Rate in effect on such day plus  1/2 of 1%.
For purposes hereof, “Prime Rate” shall mean the rate of interest per annum
publicly announced from time to time by JPMCB, as its prime rate in effect at
its principal office in New York City (the Prime Rate not being intended to be
the lowest rate of interest charged by JPMCB, in connection with extensions of
credit to debtors). Any change in the ABR due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.

“ABR Loans”: Loans the rate of interest applicable to which is based upon the
ABR.

“Addendum”: an instrument, substantially in the form of Exhibit H, by which a
Lender becomes a party to this Agreement as of the Closing Date.

 

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“Adjustment Date”: as defined in the Pricing Grid.

“Administrative Agent”: JPMCB, together with its affiliates, as the arranger of
the Commitments and as the administrative agent for the Lenders under this
Agreement and the other Loan Documents, together with any of its successors.

“Affiliate”: as to any Person (other than an individual), any other Person
(other than an individual) that, directly or indirectly through one or more
intermediaries, is in Control of, is Controlled by, or is under common Control
with, such Person.

“Affiliate Subordinated Debt”: Subordinated Debt of the Borrower which is owed
to or held by an Affiliate of the Borrower other than a Subsidiary of the
Borrower.

“Agents”: the collective reference to the Co-Syndication Agents and the
Administrative Agent.

“Aggregate Exposure”: with respect to any Lender at any time, an amount equal to
(a) until the Closing Date, the aggregate amount of such Lender’s Commitments at
such time and (b) thereafter, the sum of (i) the aggregate then unpaid principal
amount of such Lender’s Term Loans and (ii) the amount of such Lender’s
Revolving Commitment then in effect or, if the Revolving Commitments have been
terminated, the amount of such Lender’s Revolving Extensions of Credit then
outstanding.

“Aggregate Exposure Percentage”: with respect to any Lender at any time, the
ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such
time to the Aggregate Exposure of all Lenders at such time.

“Agreement”: as defined in the preamble hereto.

“Applicable Margin”: for each Type of Loan, the rate per annum set forth under
the relevant column heading below:

 

           ABR Loans             Eurodollar Loans    

Revolving Loans and Swingline Loans

   1.25 %    2.25 % 

Term Loans

   0.75 %    1.75 % 

provided, that on and after the first Adjustment Date occurring after the
completion of one full fiscal quarter of the Borrower after the Closing Date,
the Applicable Margin with respect to Revolving Loans and Swingline Loans will
be determined pursuant to the Pricing Grid.

“Application”: an application in the form attached hereto as Exhibit J-1 with
respect to JPMCB, in the form attached hereto as Exhibit J-2 with respect to
DBTCA or, with respect to any other Issuing Lender, in such form as such Issuing
Lender may specify from time to time, requesting such Issuing Lender to open a
Letter of Credit.

“Approved Fund”: as defined in Section 11.6(b).

 

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“Arrangers”: the collective reference to J.P. Morgan Securities Inc., Deutsche
Bank Securities Inc. and Goldman Sachs Credit Partners L.P.

“Assets”: with respect to any Person, all or any part of its business, property
and assets, both tangible and intangible, wherever situated.

“Asset Sale”: any Disposition or series of related Dispositions other than any
Excluded Asset Sale.

“Assignee”: as defined in Section 11.6(b).

“Assignment and Assumption”: an Assignment and Assumption, substantially in the
form of Exhibit E.

“Available Revolving Commitment”: as to any Revolving Lender at any time, an
amount equal to the excess, if any, of (a) such Lender’s Revolving Commitment
then in effect over (b) such Lender’s Revolving Extensions of Credit then
outstanding; provided, that in calculating any Lender’s Revolving Extensions of
Credit for the purpose of determining such Lender’s Available Revolving
Commitment pursuant to Section 2.8(a), the aggregate principal amount of
Swingline Loans then outstanding shall be deemed to be zero.

“Bankruptcy Code”: as defined in the recitals hereto.

“Bankruptcy Court”: as defined in the recitals hereto.

“Benefitted Lender”: as defined in Section 11.7(a).

“Board”: the Board of Governors of the Federal Reserve System of the United
States (or any successor).

“Borrower”: as defined in the preamble hereto.

“Borrowing Date”: any Business Day specified by the Borrower as a date on which
the Borrower requests the relevant Lenders to make Loans hereunder.

“Business Day”: a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close,
provided, that with respect to notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, such day is also a
day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.

“Capital Expenditures”: for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, repairs and improvements
during such period) that should be capitalized under GAAP on a consolidated
balance sheet of such Person and its Subsidiaries. For purposes of this
definition, the purchase price of equipment that is purchased simultaneously
with the trade-in of existing equipment or with insurance proceeds shall be
included in Capital Expenditures only to the

 

8

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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 proceeds, as the case may be.

“Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

“Cash Equivalents”: (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody’s; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; (g) money market mutual or similar funds that invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition; or (h) money market funds that (i) (x) comply with the criteria set
forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended and
are rated A by S&P and A by Moody’s or (y) are rated AAA by S&P and Aaa by
Moody’s and (ii) have portfolio assets of at least $2,500,000,000.

“Chapter 11 Cases”: as defined in the recitals hereto.

“Closing Date”: the date on which the conditions precedent set forth in
Section 5.1 shall have been satisfied or waived, which date is January 3, 2006.

“Co-Syndication Agents”: as defined in the preamble hereto.

“Code”: the Internal Revenue Code of 1986, as amended from time to time, and the
regulations promulgated thereunder.

 

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“Collateral”: all property of the Loan Parties, now owned or hereafter acquired,
upon which a Lien is purported to be created by any Security Document.

“Commitment”: as to any Lender, the sum of the Term Commitment and the Revolving
Commitment of such Lender.

“Commitment Fee Rate”: 0.375% per annum; provided, that on and after the first
Adjustment Date occurring after the completion of one full fiscal quarter of the
Borrower after the Closing Date, the Commitment Fee Rate will be determined
pursuant to the Pricing Grid.

“Common Stock”: with respect to any Person, any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person’s common stock whether or not outstanding
on the Closing Date, including all series and classes of such common stock.

“Compliance Certificate”: a certificate duly executed by a Responsible Officer
substantially in the form of Exhibit B.

“Conduit Lender”: any special purpose corporation organized and administered by
any Lender for the purpose of making Loans otherwise required to be made by such
Lender and designated by such Lender in a written instrument; provided, that the
designation by any Lender of a Conduit Lender shall not relieve the designating
Lender of any of its obligations to fund a Loan under this Agreement if, for any
reason, its Conduit Lender fails to fund any such Loan, and the designating
Lender (and not the Conduit Lender) shall have the sole right and responsibility
to deliver all consents and waivers required or requested under this Agreement
with respect to its Conduit Lender, and provided, further, that no Conduit
Lender shall (a) be entitled to receive any greater amount pursuant to
Section 2.18, 2.19, 2.20 or 11.5 than the designating Lender would have been
entitled to receive in respect of the extensions of credit made by such Conduit
Lender or (b) be deemed to have any Commitment.

“Confidential Information Memorandum”: the Confidential Information Memorandum
dated December 2005 and furnished to certain Lenders.

“Confirmation Order”: as defined in the recitals hereto.

“Consolidated Capitalization”: the sum of Consolidated Total Debt and
Consolidated Net Worth.

“Consolidated Net Worth”: at any date, all amounts that would, in conformity
with GAAP, be included on a consolidated balance sheet of the Borrower and its
Subsidiaries in the Capital Stock and other equity accounts (including, without
limitation, retained earnings and paid-in capital but excluding accumulated
other comprehensive income) at such date.

“Consolidated Total Debt”: at any date, the aggregate principal amount of all
Debt of the Borrower and its Subsidiaries at such date, determined on a
consolidated basis in accordance with GAAP.

 

10

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“Contractual Obligation”: 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.

“Control”: has the meaning set forth in Rule 12b-2 under the Exchange Act.

“Corporate Interest”: for any period, the aggregate of interest expense accrued
during such period by the Borrower and its consolidated Subsidiaries on Debt
less the sum of (a) the amount of interest, if any, included in such interest
expense which was capitalized in accordance with GAAP, (b) an amount equal to
the percentage of the interest expense of any Subsidiary corresponding to the
percentage of the EBITDA of such Subsidiary not taken into account in
determining EBITDA for such period pursuant to the proviso to the first sentence
of the definition thereof and (c) interest income accrued on the Synthetic L/C
Deposit, subject to the last sentence of the definition of EBITDA.

“DBTCA”: Deutsche Bank Trust Company Americas.

“Debt”: for any Person, any obligations of such Person for or in respect of
(a) moneys borrowed or raised (whether or not for cash) by whatever means
including acceptances, deposits, discounting, reimbursement obligations for
drawn letters of credit, factoring (other than on a non-recourse basis), Finance
Leases, hire purchase, conditional sale or other form of title retention
agreement, sale-and-lease back, sale and repurchase and any other form of
financing which is recognized in such Person’s financial statements as being in
the nature of a borrowing (excluding for the avoidance of doubt, asset
retirement obligations, share capital, share premium account and any capital
prepayment reserve), (b) the deferred purchase price of Assets or services
(other than goods and services obtained on normal commercial terms in the
ordinary course of business or operations), and (c) all Guarantee Obligations of
such Person in respect of obligations of the kind referred to in clauses (a) and
(b) above. Notwithstanding the foregoing, (x) any of the obligations identified
in the immediately foregoing sentence owed by any Subsidiary of the Borrower to
the Borrower or to any other Subsidiary of the Borrower shall not constitute
“Debt”, (y) Affiliate Subordinated Debt shall not constitute “Debt” and
(z) notwithstanding that after the Closing Date the obligations under the
Facility Lease Documents shall be required to be accounted for as a Finance
Lease (other than as a result of any amendment to the Facility Lease Documents),
such obligations shall not constitute “Debt” for purposes of this Agreement.

“Default”: any of the events specified in Section 9, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Designated Party”: has the meaning set forth in Section 9(g).

“Disposition”: (a) with respect to any Assets, any sale, lease conveyance or
other disposition thereof and (b) the sale or issuance of Capital Stock in any
of the Restricted Subsidiaries. The terms “Dispose” and “Disposed of” shall have
correlative meanings.

“Disqualified Stock”: means, with respect to any Person, any Capital Stock of
such Person which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event:

 

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  (1) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise;

 

  (2)            is convertible or exchangeable for Debt or Disqualified Stock
(excluding Capital Stock which is convertible or exchangeable solely at the
option of the Company or a Restricted Subsidiary); or

 

  (3) is redeemable at the option of the holder of the Capital Stock in whole or
in part,

in each case on or prior to the date that is 91 days after the earlier of
(x) the date on which there are no Loans outstanding and the Commitments have
been terminated and (y) the seventh anniversary of the Closing Date, provided
that only the portion of Capital Stock which so matures or is mandatorily
redeemable, is so convertible or exchangeable or is so redeemable at the option
of the holder thereof prior to such date will be deemed to be Disqualified
Stock; provided, further that any Capital Stock that would constitute
Disqualified Stock solely because the holders thereof have the right to require
the Company to repurchase such Capital Stock upon the occurrence of a change of
control or asset sale (each defined in a substantially identical manner to the
corresponding definitions herein) shall not constitute Disqualified Stock if the
terms of such Capital Stock (and all such securities into which it is
convertible or for which it is ratable or exchangeable) provide that the Company
may not repurchase or redeem any such Capital Stock (and all such securities
into which it is convertible or for which it is ratable or exchangeable)
pursuant to such provision prior to compliance by the Borrower with Section 7,
Section 8.2 and Section 8.5.

“Dollars” and “$”: dollars in lawful currency of the United States.

“Domestic Subsidiary”: any Subsidiary of the Borrower organized under the laws
of any jurisdiction within the United States.

“EBITDA”: for any period, with reference to the Borrower’s consolidated
financial statements (a) income from continuing operations before income taxes
and minority interest; plus (b) depreciation and amortization; plus
(c) Corporate Interest; provided, however that in determining EBITDA for the
purposes of the Interest Coverage Ratio under Sections 7.1, 7.4(b) and 8.2 and
the definition of “Free Cash Flow” only, the amounts referred to in (a), (b) and
(c) above for a consolidated Subsidiary of the Borrower will not be included to
the extent that such Subsidiary is prohibited from making distributions or
dividends as of the date of determination (unless such prohibition arises solely
from the requirement under the Facility Lease Documents that MIRMA and its
Subsidiaries deliver financial statements for the most recently completed fiscal
year or fiscal quarter, as the case may be, and the date of determination is
less than 90 or 60 days, as the case may be, from the end of such fiscal year or
fiscal quarter). “EBITDA” shall not include the effect of (i) gains or losses on
sales or dispositions of Assets; (ii) non-recurring items (including, for the
avoidance of doubt, restructuring expenses) or (iii) non-cash expenses and
non-cash gains or losses, including as a result of Swap Agreements being marked
to market and the effects of “fresh start” accounting under SOP 90-7, but shall
include cash payments and receipts from and in respect of settlement of Swap
Agreements. In addition, if, but for clause (z) of the last sentence in the
definition of “Debt”, the obligations under the Facility Lease Documents would
otherwise constitute Debt hereunder, for purposes of

 

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calculating EBITDA, the amounts paid under the Facility Lease Documents shall be
treated as expenses for purposes of determining income from continuing
operations, and no portion of such amounts shall be treated as Corporate
Interest or principal amortization, such that, to the extent possible, the
treatment of the obligations under the Facility Lease Documents as such
obligations are treated on the date hereof is preserved.

For the purposes of calculating EBITDA for any period of four consecutive fiscal
quarters (each, a “Reference Period”) pursuant to any determination of the
Leverage Ratio, (i) if at any time during such Reference Period the Borrower or
any Subsidiary shall have made any Material Disposition, the EBITDA for such
Reference Period shall be reduced by an amount equal to the EBITDA (if positive)
attributable to the property that is the subject of such Material Disposition
for such Reference Period or increased by an amount equal to the EBITDA (if
negative) attributable thereto for such Reference Period and (ii) if during such
Reference Period the Borrower or any Subsidiary shall have made a Material
Acquisition, EBITDA for such Reference Period shall be calculated after giving
pro forma effect thereto as if such Material Acquisition occurred on the first
day of such Reference Period. As used in this definition, “Material Acquisition”
means any acquisition of property or series of related acquisitions of property
that (a) constitutes assets comprising all or substantially all of an operating
unit of a business or constitutes all or substantially all of the common stock
of a Person and (b) involves the payment of consideration by the Borrower and
its Subsidiaries in excess of $20,000,000; and “Material Disposition” means any
Disposition of property or series of related Dispositions of property that
yields gross proceeds to the Borrower or any of its Subsidiaries in excess of
$20,000,000.

“Environmental Capital Expenditures”: capital expenditures required by, or
reasonably related to the Borrower’s or its Subsidiaries’ compliance with,
Environmental Laws.

“Environmental Laws”: any and all foreign, Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated thereunder.

“ERISA Affiliate”: all members of a group of corporations and all members of a
group of trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414(b) or (c) of the Code.

“ERISA Event”: any of the following events: (i) the appointment of a trustee to
administer or terminate any Plan, (ii) the termination of a Plan, (iii) the
existence of any “accumulated funding deficiency” (as defined in Section 302 of
ERISA) with respect to a Plan, (iv) the imposition of a Lien under the Code or
ERISA on the assets of the Borrower on account of any Plan, (v) the occurrence
of a reportable event described in Section 4043(c) of ERISA (other than those
events as to which the 30-day notice period is waived) with respect to a Plan,
or

 

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(vi) the incurrence by the Borrower of any liability in connection with a
withdrawal from, or the insolvency or reorganization of, a multiemployer pension
plan.

“Eurocurrency Reserve Requirements”: for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the maximum rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including
basic, supplemental, marginal and emergency reserves) under any regulations of
the Board or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System.

“Eurodollar Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum determined on the basis of
the rate for deposits in Dollars for a period equal to such Interest Period
commencing on the first day of such Interest Period appearing on Page 3750 of
the Telerate screen as of 11:00 A.M., London time, two Business Days prior to
the beginning of such Interest Period. In the event that such rate does not
appear on Page 3750 of the Telerate screen (or otherwise on such screen), the
“Eurodollar Rate” shall be determined by reference to such other comparable
publicly available service for displaying eurodollar rates as may be selected by
the Administrative Agent or, in the absence of such availability, by reference
to the rate at which the Administrative Agent is offered Dollar deposits at or
about 11:00 A.M., New York City time, two Business Days prior to the beginning
of such Interest Period in the interbank eurodollar market where its eurodollar
and foreign currency and exchange operations are then being conducted for
delivery on the first day of such Interest Period for the number of days
comprised therein.

“Eurodollar Loans”: Loans the rate of interest applicable to which is based upon
the Eurodollar Rate.

“Eurodollar Tranche”: the collective reference to Eurodollar Loans under a
particular Facility the then current Interest Periods with respect to all of
which begin on the same date and end on the same later date (whether or not such
Loans shall originally have been made on the same day).

“Event of Default”: any of the events specified in Section 9, provided that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Exchange Act”: the Securities Exchange Act of 1934, as amended from time to
time.

“Excluded Asset Sale”: each of the following transactions:

 

  (i)          the Disposition of obsolete, uneconomic or worn out property, or
property which in the good faith judgment of the Borrower is no longer useful in
its business, in each case, in the ordinary course of business;

 

  (ii) the Disposition of inventory in the ordinary course of business;

 

  (iii) Dispositions to the Borrower or any Subsidiary Guarantor;

 

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  (iv) Dispositions of Cash Equivalents or other short-term investments;

 

  (v)          the Disposition by the Borrower or any Subsidiary of power,
capacity, fuel and other products or services, in each case in the ordinary
course of business (it being understood that a Disposition of a quantity of
power, capacity or fuel that is material to the Borrower or such Subsidiary, as
the case may be, shall not alone cause such Disposition to be not in the
ordinary course of business);

 

  (vi)          sales by the Borrower or any Subsidiary of emission credits in
the ordinary course of business (it being understood that a Disposition of a
quantity of emissions credits that is material to the Borrower or such
Subsidiary, as the case may be, shall not alone cause such Disposition to be not
in the ordinary course of business);

 

  (vii)          any Disposition of Assets or series of related Dispositions of
Assets having a value not in excess of $10,000,000;

 

  (viii) Restricted Payments permitted by the Section 8.2;

 

  (ix)          Disposition of Assets in connection with a foreclosure, transfer
or deed in lieu of foreclosure or other exercise of remedial action;

 

  (x)          Compromises and settlements of claims against third-parties and,
in an amount not to exceed $10,000,000, Dispositions of Assets in connection
with the settlement of claims and litigation;

 

  (xi) Dispositions made pursuant to the Plan of Reorganization; and

 

  (xii)          Grants by the Borrower or any of its Subsidiaries of licenses,
sublicenses, leases or subleases or easements to other Persons not materially
interfering with the conduct by the Borrower or such Subsidiary of its business
on or at the property that is the subject of such license, sublicense, lease or
sublease or easement.

“Excluded Foreign Subsidiary”: any Foreign Subsidiary in respect of which either
(a) the pledge of all of the Capital Stock of such Subsidiary as Collateral or
(b) the guaranteeing by such Subsidiary of the Obligations, would, in the good
faith judgment of the Borrower, result in adverse tax consequences to the
Borrower.

“Facility”: each of (a) the Term Commitments and the Term Loans made thereunder
(the “Term Facility”) and (b) the Revolving Commitments and the extensions of
credit made thereunder (the “Revolving Facility”).

“Facility Lease Documents”: the eleven Facility Lease Agreements, dated
December 19, 2000, the related Participation Agreements and all other agreements
entered into in connection therewith and related thereto, in each case as
amended, modified, or supplemented from time to time.

 

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“FCF Percentage”: 50%; provided that, with respect to each fiscal year of the
Borrower, the FCF Percentage shall be reduced to 25% if the Leverage Ratio as of
the last day of such fiscal year is not greater than 2.0 to 1.0.

“Federal Funds Effective Rate”: for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for
the day of such transactions received by JPMCB from three federal funds brokers
of recognized standing selected by it.

“Fee Payment Date”: (a) the third Business Day following the last day of each
March, June, September and December and (b) the last day of the Revolving
Commitment Period.

“Finance Leases”: as to any Person, the obligations of such Person to pay rent
or other amounts under any lease of (or other arrangement conveying the right to
use) real or personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a balance sheet
of such Person under GAAP and, for the purposes of this Agreement, the amount of
such obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.

“Foreign Subsidiary”: any Subsidiary of the Borrower that is not a Domestic
Subsidiary.

“Free Cash Flow”: for any fiscal period of the Borrower, without duplication,
(a) EBITDA for such period minus (b) Corporate Interest for such period minus
(c) the aggregate amount of any cash payments made in respect of taxes during
such period by the Borrower or any of its consolidated Subsidiaries net of cash
tax refunds for such period minus (d) the aggregate amount of all scheduled
principal payments of Debt, if any, of the Borrower and its consolidated
Subsidiaries made during such period minus (e) Capital Expenditures made by the
Borrower and its consolidated Subsidiaries for such period (other than Capital
Expenditures made with (w) Net Cash Proceeds of Asset Sales, (x) Net Cash
Proceeds of Recovery Events, (y) amounts reserved in a prior period for Capital
Expenditures (to the extent deducted from Free Cash Flow in such period in
accordance with clause (f) of this definition) and (z) the proceeds of the
incurrence of Permitted Debt) minus (f) amounts reserved by the Borrower and its
consolidated Subsidiaries during such period for Capital Expenditures to be made
by the Borrower and its consolidated Subsidiaries in any subsequent period plus
(g) amounts received by the Borrower or its consolidated Subsidiaries during
such period with respect to equity contributions made by an Affiliate of the
Borrower or Affiliate Subordinated Debt plus (h) amounts received by the
Borrower or its consolidated Subsidiaries during such period pursuant to the MAI
Series A Preferred Shares plus (i) the Net Cash Proceeds of Asset Sales and
Recovery Events (to the extent not reflected in clauses (e) and (f) above or
otherwise required to be applied to the prepayment of the Loans pursuant to
Section 2.11); provided that, in the case of any consolidated Subsidiary of the
Borrower whose contribution to EBITDA is reduced in accordance with the proviso
to the first sentence of the definition of “EBITDA”, the amounts deducted from
Free Cash Flow in accordance with clauses (c), (d), (e) and (f) above for such

 

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Subsidiary shall, in each case, be reduced by an amount equal to the percentage
of such deduction corresponding to the percentage of the EBITDA of such
Subsidiary not taken into account in determining EBITDA for such period.

“Free Cash Flow Application Date”: as defined in Section 2.11(b).

“FSA” means (a) an arms-length, executed, valid and binding agreement
(including, without limitation, a tolling agreement) that is then in full force
and effect and not in default in any material respect and which is not
terminable without cause between the Borrower or any Subsidiary and either:

 

  (i)          a third party purchaser whose, or whose obligations are
unconditionally guaranteed by an entity whose, long-term senior unsecured debt
is rated no less than Baa3 by Moody’s and BBB- by S&P on the date the relevant
transaction is entered into by the Borrower or such Subsidiary; or

 

  (ii)          an Affiliate of the Borrower, so long as such Affiliate has
executed a valid and binding agreement with a third party purchaser whose, or
whose obligations are unconditionally guaranteed by an entity whose, long-term
senior unsecured debt is rated no less than Baa3 by Moody’s and BBB- by S&P on
the date the relevant transaction is entered into by the Borrower or such
Subsidiary with substantially the same terms (other than any pricing spread) as
the Affiliate’s agreement with the Borrower or such Subsidiary;

in each case, for the purchase of fuel (on a take or pay, take and pay, or take,
if tendered basis) at prices established at a formula, index or other price risk
management methodology not based on spot market prices by the Borrower or such
Subsidiary to the third party or Affiliate; or

 

  (b) financial hedge agreements relating to fuel pricing that are:

 

  (i) fully supported by available fuel of the Borrower and its Subsidiaries;
and

 

  (ii)           with counterparties having, or whose obligations are
unconditionally guaranteed by an entity having, long-term senior unsecured debt
that is rated no less than Baa2 by Moody’s and BBB by S&P on the date the
relevant transaction is entered into by the Borrower or such Subsidiary.

“Funding Office”: the office of the Administrative Agent specified in
Section 11.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.

“GAAP”: those accounting principles, standards and practices generally accepted
in the United States as in effect on the date hereof.

“Governmental Authority”: any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, central bank

 

17

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or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative functions of or pertaining to government, any securities
exchange and any self-regulatory organization (including the National
Association of Insurance Commissioners).

“Group Members”: the collective reference to the Borrower and its Restricted
Subsidiaries.

“Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement to
be executed and delivered by the Borrower and each Subsidiary Guarantor,
substantially in the form of Exhibit A.

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation, including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing Person that guarantees or in effect guarantees, or which is
given to induce the creation of a separate obligation by another Person
(including any bank under any letter of credit) that guarantees or in effect
guarantees, any Debt, leases, dividends or other obligations (the “primary
obligations”) of any other third Person (the “primary obligor”) in any manner,
whether directly or indirectly, including any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor or (iii) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person’s maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.

“Hedging Arrangement”: any Swap Agreement in respect of interest rates or
currency exchange rates entered into by any Loan Party and the Administrative
Agent or any Person which at the time such Swap Agreement is entered into is a
Lender or Affiliate thereof.

“Intercreditor Agreement”: any intercreditor agreement in the form of Exhibit I
or Exhibit K hereto, as applicable, or otherwise on terms reasonably
satisfactory to the Administrative Agent, entered into pursuant hereto in
respect of (i) Permitted Pari Passu Debt or (ii) junior Liens permitted under
Section 8.3(i)(x).

“Interest Coverage Ratio”: for any period, the ratio of (a) EBITDA for such
period to (b) Corporate Interest for such period.

 

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“Interest Payment Date”: (a) as to any ABR Loan (other than any Swingline Loan),
the last day of each March, June, September and December to occur while such
Loan is outstanding and the final maturity date of such Loan, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the last day
of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period
longer than three months, each day that is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day of such
Interest Period, (d) as to any Loan (other than any Revolving Loan that is an
ABR Loan and any Swingline Loan), the date of any repayment or prepayment made
in respect thereof and (e) as to any Swingline Loan, the day that such Loan is
required to be repaid.

“Interest Period”: as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six months thereafter (or
such other period as the Borrower and all Lenders of the relevant Facility may
agree), as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months (or
such other period as the Borrower and all Lenders of the relevant Facility may
agree) thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not later than 11:00 A.M., New York City time, on the date
that is three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing provisions
relating to Interest Periods are subject to the following:

(i)            if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;

(ii)            the Borrower may not select an Interest Period under a
particular Facility that would extend beyond, with respect to Revolving Loans,
the Revolving Termination Date or, with respect to Term Loans, beyond the date
final payment is due on the Term Loans, as the case may be; and

(iii)            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 a calendar month.

“Investments”: as defined in Section 8.6.

“Issuing Lenders”: collectively, the Revolving Issuing Lenders and the Synthetic
Issuing Lender.

“JPMCB”: as defined in the preamble hereto.

 

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“Lenders”: as defined in the preamble hereto; provided, that unless the context
otherwise requires, each reference herein to the Lenders shall be deemed to
include any Conduit Lender.

“Letters of Credit”: collectively, the Revolving Letters of Credit and the
Synthetic Letters of Credit.

“Leverage Ratio”: as at the last day of any period, the ratio of (a) Net Debt on
such day to (b) EBITDA for such period.

“Lien”: any mortgage, pledge, lien, hypothecation, security interest or other
charge, encumbrance or other arrangement in the nature of a security interest in
property; provided, however, that the term “Lien” shall not mean any easements,
rights-of-way, zoning restrictions, encroachments, minor title deficiencies,
leases, subleases, licenses, sublicenses, or other restrictions on the use of
property or other similar encumbrances.

“Loan”: any loan made by any Lender pursuant to this Agreement.

“Loan Documents”: this Agreement, the Security Documents, the Notes and any
amendment, waiver, supplement or other modification to any of the foregoing.

“Loan Parties”: the Borrower and each of its Subsidiaries that is a party to a
Loan Document.

“MAG”: Mirant Americas Generation, LLC, a Delaware limited liability company.

“MAG Interest Distribution”: for any period, the aggregate amount of cash the
Borrower paid or otherwise distributed to MAG during such period that MAG
applied during such period to the payment of accrued interest on the MAG Senior
Notes that was due and payable during such period.

“MAG Senior Notes”: the following series of notes issued by MAG: the
$850,000,000 of Senior Notes due 2011, the $450,000,000 of Senior Notes due
2021, and the $400,000,000 of Senior Notes due 2031.

“MAI Series A Preferred Shares”: as defined in the Plan of Reorganization.

“MAI Series B Preferred Shares”: as defined in the Plan of Reorganization.

“Majority Facility Lenders”: with respect to any Facility, the holders of more
than 50% of the aggregate unpaid principal amount of the Term Loans or the Total
Revolving Extensions of Credit, as the case may be, outstanding under such
Facility (or, in the case of the Revolving Facility, prior to any termination of
the Revolving Commitments, the holders of more than 50% of the Total Revolving
Commitments).

“Majority Lenders”: at any time, the holders of more than 50% of (a) until the
Closing Date, the Commitments then in effect and (b) thereafter, the sum of
(i) the aggregate

 

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unpaid principal amount of the Term Loans then outstanding and (ii) the Total
Revolving Commitments then in effect or, if the Revolving Commitments have been
terminated, the Total Revolving Extensions of Credit then outstanding.

“Material Adverse Effect”: a material adverse change in, or material adverse
effect on, (i) the financial condition, operations, business or Assets of the
Borrower or its Subsidiaries, which would have a material adverse effect on the
ability of the Borrower to pay amounts owed by it from time to time hereunder,
or (ii) the validity or enforceability of this Agreement or any of the other
Loan Documents against the Borrower or any Subsidiary Guarantor which would have
a material adverse effect on the rights, remedies and benefits available to, or
conferred upon, the Administrative Agent or the Lenders, taken as a whole.

“MET”: Mirant Energy Trading, LLC, a Delaware limited liability company.

“MIRMA”: Mirant Mid-Atlantic, LLC, a Delaware limited liability company.

“Moody’s”: Moody’s Investors Service, Inc. or any successor thereto.

“Moody’s Rating”: at any time, the rating issued by Moody’s and then in effect
with respect to a Person’s senior unsecured long-term debt securities without
third party credit enhancement.

“Mortgaged Properties”: the real properties listed on Schedule 1.1B and
designated as properties for which a Mortgage will be delivered and any real
property with respect to which a Mortgage is granted pursuant to Section 6.7(b).

“Mortgages”: each of the mortgages and deeds of trust made by any Loan Party in
favor of, or for the benefit of, the Administrative Agent for the benefit of the
Lenders, substantially in the form of Exhibit D (with such changes thereto as
shall be advisable under the law of the jurisdiction in which such mortgage or
deed of trust is to be recorded).

“Net Cash Proceeds”: (a) in connection with any Asset Sale or any Recovery
Event, the proceeds thereof in the form of cash and Cash Equivalents (including
any such proceeds received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable or
otherwise, but only as and when received), net of attorneys’ fees, accountants’
fees, investment banking fees, amounts required to be applied to the repayment
of Debt secured by a Lien expressly permitted hereunder on any asset that is the
subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a
Security Document) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be payable
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of Capital Stock or any incurrence of Debt, the cash proceeds
received from such issuance or incurrence, net of attorneys’ fees, investment
banking fees, accountants’ fees, underwriting discounts and commissions and
other customary fees and expenses actually incurred in connection therewith.

“Net Debt”: at any time, the aggregate principal amount of Debt of the Borrower
and its Subsidiaries at such time outstanding less (i) cash and deposits
restricted pursuant to

 

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agreements with a Person other than an Affiliate of the Borrower, and
(ii) 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 items described in clauses (i) and (ii) appears on the
consolidated balance sheet of the Borrower and its Subsidiaries, as either
restricted deposits or deposits with brokers and in any event shall include the
Synthetic L/C Deposit.

“New Mirant”: Mirant Corporation (formerly known as Newco 2005 Corporation), a
Delaware corporation.

“Non-Excluded Taxes”: as defined in Section 2.19(a).

“Non-U.S. Lender”: as defined in Section 2.19(d).

“Notes”: the collective reference to any promissory note evidencing Loans.

“Obligations”: the unpaid principal of and interest on (including interest
accruing after the maturity of the Loans and Reimbursement Obligations and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender (or, in
the case of Hedging Arrangements or Specified Cash Management Programs, any
affiliate of any Lender or any other Person which, at the time any such Hedging
Arrangement was entered into, was a Lender or an affiliate thereof), whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, the Letters of Credit, any
Hedging Arrangement, any Specified Cash Management Program or any other document
made, delivered or given in connection herewith or therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise.

“Other Taxes”: any and 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 from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document.

“Participant”: as defined in Section 11.6(c).

“Permitted Debt”: (i) the Loans and other obligations of any Loan Party under
any Loan Document and Debt outstanding on the date hereof and listed on
Schedule 1.1C (which may be secured to the extent currently secured on the date
hereof); (ii) Permitted Pari Passu Debt; (iii) Subordinated Debt; (iv) Project
Finance Debt and Debt secured by Liens permitted pursuant to clauses (f) and
(g) of Section 8.3; (v) Debt incurred (x) to finance Environmental Capital
Expenditures and other capital expenditures made to comply with Requirements of
Law and (y) with respect to MIRMA and its Subsidiaries, to finance Required
Improvements (as such term is used in the Facility Lease Documents), which Debt
may be secured by the capital assets or Required Improvements and related assets
financed by such Debt; and (vi) refinancings or

 

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renewals of the Debt permitted to be incurred pursuant to the terms hereof
(which may be secured by the same assets as the refinanced or renewed Debt);
provided, that any such refinancing or renewal of Debt is (x) either in an
amount not in excess of the principal amount outstanding or committed under the
Debt being refinanced or renewed immediately prior to such refinancing (plus any
applicable fees or expenses and redemption or repurchase premiums or penalties)
or renewal, or such excess amount can otherwise be incurred hereunder, and
(y) provides for a final maturity date no earlier than the existing scheduled
maturity date of the Debt being refinanced or renewed.

“Permitted Pari Passu Debt”: Debt of the Borrower or any Subsidiary Guarantor
not to exceed $250,000,000 in the aggregate that is pari passu, including with
respect to the Collateral, with the Obligations (as defined in the Guarantee and
Collateral Agreement) pursuant to a security agreement in form and substance
satisfactory to the Administrative Agent and an intercreditor agreement in the
form of Exhibit K or otherwise on terms reasonably satisfactory to the
Administrative Agent.

“Person”: an individual, company, corporation, firm, partnership, joint venture,
undertaking, association, organization, trust, state or agency of a state or
limited liability company (in each case whether or not having separate legal
personality).

“Plan”: any plan described in Section 3(2) of ERISA that is subject to Title IV
of ERISA, maintained or contributed to by the Borrower or any ERISA Affiliate.

“Plan of Reorganization”: the Amended and Restated Second Amended Joint Chapter
11 Plan of Reorganization for Mirant Corporation and its Affiliated Debtors,
dated December 9, 2005, In re Mirant Corporation, et al., Debtors, as amended,
modified or waived either (x) with the consent of the Administrative Agent, such
consent not to be unreasonably withheld or (y) as would not reasonably be
expected to have a Material Adverse Effect.

“Plan Secured Note”: as defined in the Plan of Reorganization.

“PPA”: (a) an arms-length, executed, valid and binding agreement (including,
without limitation, a tolling agreement) that is then in full force and effect
and not in default in any material respect and which is not terminable without
cause between the Borrower or any Subsidiary and either:

 

  (i)         a third party purchaser whose, or whose obligations are
unconditionally guaranteed by an entity whose, long-term senior unsecured debt
is rated no less than Baa3 by Moody’s and BBB- by S&P on the date the relevant
transaction is entered into by the Borrower or such Subsidiary; or

 

  (ii)         an Affiliate of the Borrower, so long as such Affiliate has
executed a valid and binding agreement with a third party purchaser whose, or
whose obligations are unconditionally guaranteed by an entity whose, long-term
senior unsecured debt is rated no less than Baa3 by Moody’s and BBB- by S&P on
the date the relevant transaction is entered into by the Borrower or such
Subsidiary with substantially the same terms (other than any pricing spread) as
the Affiliate’s agreement with the Borrower or such Subsidiary;

 

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in each case, for the sale of electric energy or capacity (in the case of both
energy and capacity, on a take or pay, take and pay, or take, if tendered basis)
at prices established at a formula, index or other price risk management
methodology not based on spot market prices by the Borrower or such Subsidiary
to the third party or Affiliate; or

 

  (b)             financial hedge agreements relating to energy or capacity
pricing that are:

 

  (i)                 fully supported by available energy or capacity of the
Borrower and its Subsidiaries; and

 

  (ii)                 with counterparties having, or whose obligations are
unconditionally guaranteed by an entity having, long-term senior unsecured debt
that is rated no less than Baa2 by Moody’s and BBB by S&P on the date the
relevant transaction is entered into by the Borrower or such Subsidiary.

“Pricing Grid”: the table set forth below.

 

Leverage Ratio

 

Applicable Margin

for Revolving Loans

that are Eurodollar

Loans

 

Applicable Margin

for Revolving Loans

that are ABR Loans

 

Commitment Fee Rate

> 2.5 to 1.0

  2.25%   1.25%   0.375%

< 2.5 to 1.0 and

> 2.0 to 1.0

  2.00%   1.00%   0.375%

< 2.0 to 1.0

  1.75%   0.75      0.250%

For the purposes of the Pricing Grid, changes in the Applicable Margin for
Revolving Loans resulting from changes in the Leverage Ratio shall become
effective on the date (the “Adjustment Date”) that is three Business Days after
the date on which financial statements are delivered to the Lenders pursuant to
Section 6.2 and shall remain in effect until the next change to be effected
pursuant to this paragraph. If any financial statements referred to above are
not delivered within the time periods specified in Section 6.2, then, from the
latest date on which such financial statements are required to be delivered
until the date that is three Business Days after the date on which such
financial statements are delivered, the highest rate set forth in each column of
the Pricing Grid shall apply. Each determination of the Leverage Ratio pursuant
to the Pricing Grid shall be made in a manner consistent with the determination
thereof pursuant to Section 7.2.

“Project Finance Debt”: Debt (not exceeding the cost of the acquisition,
construction or creation of the relevant Asset or project) of any Subsidiary
incurred or existing in connection with the financing or refinancing of any
Asset or project, the repayment of which Debt is to be made from the revenues
arising out of, or other proceeds of realization from, the acquired or created
Asset or project, with recourse to those revenues and proceeds and Assets
forming the subject matter of such Asset or project (including, without
limitation, insurance, contracts and Capital Stock or other rights of ownership
in the entity(ies) which own the relevant

 

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Assets or project) and other Assets ancillary thereto but without substantial
recourse to any other Asset or otherwise to the Borrower or a Restricted
Subsidiary; provided that substantial recourse shall not be deemed to exist by
reason of normal and customary sponsor support arrangements.

“Projections”: as defined in Section 6.3(c).

“Recovery Event”: any settlement of or payment in respect of any property or
casualty insurance claim or any condemnation proceeding relating to any asset of
any Group Member.

“Refunded Swingline Loans”: as defined in Section 2.7(b).

“Register”: as defined in Section 11.6(b).

“Regulation U”: Regulation U of the Board as in effect from time to time.

“Reimbursement Obligation”: the obligation of the Borrower to reimburse any
Issuing Lender pursuant to Section 3.5 or Section 3.10 for amounts drawn under
Letters of Credit.

“Reinvestment Commitment Notice” a written notice executed by a Responsible
Officer on or prior to the date falling 365 days after an Asset Sale or Recovery
Event, stating (x) that, in the case of an Asset Sale only, no Event of Default
has occurred and is continuing and (y) that the Borrower (directly or through a
Restricted Subsidiary) has committed to use all or a specified portion of the
Net Cash Proceeds of (i) an Asset Sale within 180 days after the date of such
notice or (ii) a Recovery Event within 24 months after the date of such notice
to acquire or repair assets useful in its business.

“Reinvestment Event”: any Asset Sale or Recovery Event in respect of which the
Borrower has delivered a Reinvestment Notice.

“Reinvestment Notice”: a written notice executed by a Responsible Officer
stating (i) in the case of an Asset Sale only, that no Event of Default has
occurred and is continuing and (ii) that the Borrower (directly or indirectly
through a Restricted Subsidiary) intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire
or repair assets useful in its business.

“Requirement of Law”: as to any Person, any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

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

“Restricted Payment”: as defined in Section 8.2.

 

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“Restricted Subsidiaries”: all Subsidiaries of the Borrower other than
Unrestricted Subsidiaries.

“Revolving Commitment”: as to any Lender, the obligation of such Lender, if any,
to make Revolving Loans and participate in Swingline Loans and Revolving Letters
of Credit in an aggregate principal and/or face amount not to exceed the amount
set forth under the heading “Revolving Commitment” opposite such Lender’s name
on Schedule 1.1A or in the Assignment and Assumption pursuant to which such
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof.

“Revolving Commitment Period”: the period from and including the Closing Date to
the Revolving Termination Date.

“Revolving Extensions of Credit”: as to any Revolving Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all Revolving
Loans held by such Lender then outstanding, (b) such Lender’s Revolving
Percentage of the Revolving L/C Obligations then outstanding and (c) such
Lender’s Revolving Percentage of the aggregate principal amount of Swingline
Loans then outstanding.

“Revolving Issuing Lender”: any of JPMCB, DBTCA and any other Revolving Lender
from time to time designated by the Borrower as a Revolving Issuing Lender with
the consent of such other Revolving Lender and the Administrative Agent, or any
Affiliate thereof, in its capacity as issuer of any Revolving Letter of Credit;
collectively, the “Revolving Issuing Lenders”.

“Revolving L/C Commitment”: $800,000,000.

“Revolving L/C Obligations”: at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Revolving
Letters of Credit and (b) the aggregate amount of drawings under Revolving
Letters of Credit that have not then been reimbursed pursuant to Section 3.5.

“Revolving L/C Participants”: as to any Revolving Letter of Credit, the
collective reference to all the Revolving Lenders other than the Revolving
Issuing Lender of such Letter of Credit.

“Revolving Lender”: each Lender that has a Revolving Commitment or that holds
Revolving Loans.

“Revolving Letters of Credit”: as defined in Section 3.1(a).

“Revolving Loans”: as defined in Section 2.4(a).

“Revolving Percentage”: as to any Revolving Lender at any time, the percentage
which such Lender’s Revolving Commitment then constitutes of the Total Revolving
Commitments or, at any time after the Revolving Commitments shall have expired
or terminated, the percentage which the aggregate principal amount of such
Lender’s Revolving Loans then

 

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outstanding constitutes of the aggregate principal amount of the Revolving Loans
then outstanding, provided, that, in the event that the Revolving Loans are paid
in full prior to the reduction to zero of the Total Revolving Extensions of
Credit, the Revolving Percentages shall be determined in a manner designed to
ensure that the other outstanding Revolving Extensions of Credit shall be held
by the Revolving Lenders on a comparable basis.

“Revolving Termination Date”: the sixth anniversary of the Closing Date.

“S&P”: Standard & Poor’s Ratings Services, a division of the McGraw Hill
Companies, Inc., or any successor thereto.

“S&P Rating”: at any time, the rating issued by S&P and then in effect with
respect to a Person’s senior unsecured long-term debt securities without third
party credit enhancement.

“SEC”: the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.

“Security Documents”: the collective reference to the Guarantee and Collateral
Agreement, the Mortgages, any Intercreditor Agreements, the Synthetic L/C
Deposit Agreement and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.

“Specified Cash Management Program”: any cash management arrangement between the
Borrower and any Lender or any Affiliate thereof (to the extent designated by
the Borrower).

“Specified Issuing Lender Commitment”: with respect to JPMCB, its commitment to
act as Revolving Issuing Lender for up to $300,000,000 of the Revolving L/C
Commitment; with respect to DBTCA, its commitment to act as Revolving Issuing
Lender for up to $250,000,000 of the Revolving L/C Commitment; and with respect
to any other Revolving Issuing Lender, its commitment to act as Revolving
Issuing Lender for up to a percentage of the Revolving L/C Commitment agreed by
the Borrower and such Revolving Issuing Lender.

“Step-In Rights”: Liens in favor of counterparties to any PPA (other than
Affiliates of the Borrower) that create rights the exercise of which are limited
to the taking of actions pursuant to any provisions of such PPA designed to
enable the counterparty to assume operational control of the relevant facility
or facilities (e.g., step-in rights) or otherwise necessary to continue
performance of the Borrower’s or the applicable Subsidiary’s obligations under
such PPA.

“Subordinated Debt”: unsecured Debt of the Borrower and/or any Subsidiary
Guarantor that is subordinated and junior in right of payment to the Obligations
(as defined in the Guarantee and Collateral Agreement) and is issued solely for
cash proceeds where either (i) the subordination provisions of such Debt shall
be at least as favorable to the Lenders as the subordination provisions set
forth in Schedule 8.1 or (ii) the subordination provisions shall be in all
respects reasonably satisfactory to the Administrative Agent.

 

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“Subsidiary”: as to any Person, any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more than 50%
of (a) the voting stock, (b) the interest in the capital or profits of such
limited liability company, partnership or joint venture or (c) the beneficial
interest in such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its Subsidiaries or
by one or more of such Person’s other Subsidiaries. Unless otherwise qualified,
all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall
refer to a Subsidiary or Subsidiaries of the Borrower.

“Subsidiary Guarantor”: each Restricted Subsidiary of the Borrower other than
(a) any Excluded Foreign Subsidiary, (b) MET and any Subsidiaries of MET,
(c) MIRMA and any Subsidiaries of MIRMA and (d) New MAEM Holdco, LLC and any
Subsidiaries of New MAEM Holdco, LLC, which the Borrower shall Dispose of within
60 days after the Closing Date in accordance with the Plan of Reorganization.

“Swap Agreement”: any agreement, including any Hedging Arrangement, with respect
to any swap, forward, future or derivative transaction or option or similar
agreement involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or any of its Subsidiaries shall be a “Swap
Agreement”.

“Swingline Commitment”: the obligation of the Swingline Lender to make Swingline
Loans pursuant to Section 2.6 in an aggregate principal amount at any one time
outstanding not to exceed $25,000,000.

“Swingline Lender”: JPMCB, in its capacity as the lender of Swingline Loans.

“Swingline Loans”: as defined in Section 2.6.

“Swingline Participation Amount”: as defined in Section 2.7.

“Synthetic Issuing Lender”: JPMCB or any Affiliate thereof, in its capacity as
issuer of any Synthetic Letter of Credit.

“Synthetic L/C Deposit”: at any time, the amounts then actually on deposit in
the Synthetic L/C Deposit Account.

“Synthetic L/C Deposit Account”: the account established by the Borrower in the
name of the Synthetic Issuing Lender pursuant to Section 3.8.

“Synthetic L/C Deposit Agreement”: as defined in Section 3.8(a).

“Synthetic L/C Termination Date”: the seventh anniversary of the Closing Date.

 

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“Synthetic Letter of Credit Outstandings”: at any time, the sum of (i) the
aggregate undrawn stated amount of all Synthetic Letters of Credit issued then
outstanding at such time and plus (ii) the aggregate amount of drawings under
Synthetic Letters of Credit that have not then been reimbursed pursuant to
Section 3.10.

“Synthetic Letters of Credit”: as defined in Section 3.6.

“Term Commitment”: as to any Lender, the obligation of such Lender, if any, to
make a Term Loan to the Borrower on the Closing Date in a principal amount not
to exceed the amount set forth under the heading “Term Commitment” opposite such
Lender’s name on Schedule 1.1A. The aggregate amount of the Term Commitments is
$700,000,000.

“Term Lender”: each Lender that has a Term Commitment or that holds a Term Loan.

“Term Loans”: as defined in Section 2.1.

“Term Percentage”: as to any Term Lender at any time, the percentage which such
Lender’s Term Commitment then constitutes of the aggregate Term Commitments (or,
at any time after the Closing Date, the percentage which the aggregate principal
amount of such Lender’s Term Loans then outstanding constitutes of the aggregate
principal amount of the Term Loans then outstanding).

“Total Revolving Commitments”: at any time, the aggregate amount of the
Revolving Commitments then in effect. The original amount of the Total Revolving
Commitments is $800,000,000.

“Total Revolving Extensions of Credit”: at any time, the aggregate amount of the
Revolving Extensions of Credit of the Revolving Lenders outstanding at such
time.

“Transferee”: any Assignee or Participant.

“Type”: as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

“United States”: the United States of America.

“Unrestricted Subsidiaries”: (a) until such time as such entities emerge from
the Chapter 11 Cases, Mirant New York, Inc., Mirant Lovett, LLC, Mirant Bowline,
LLC, Mirant NY-Gen, LLC and Hudson Valley Gas Corporation and (b) any Subsidiary
of the Borrower that is designated by the Board of Directors of the Borrower as
an Unrestricted Subsidiary, but only to the extent that such Subsidiary (i) has
no Assets other than Assets acquired after, or immaterial or unproductive Assets
owned prior to, the date of this Agreement, (ii) has no Debt other than Debt
that is non-recourse to the Borrower or the Restricted Subsidiaries, (iii) is
not party to any agreement or contract with the Borrower or a Restricted
Subsidiary unless the terms of such agreement are no less favorable to the
Borrower or such Restricted Subsidiary than those that might be obtained from an
unaffiliated third-party, and (iv) is a Person with respect to which neither the
Borrower nor any Restricted Subsidiary has any direct or indirect obligation to
make capital contributions or to maintain such Subsidiary’s financial condition.

 

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1.2.         Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.

(b)         As used herein and in the other Loan Documents, and any certificate
or other document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to any Group Member not defined in Section 1.1 and accounting
terms partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP, (ii) the words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”, (iii) the word “incur” shall be construed to mean incur, create,
issue, assume, become liable in respect of or suffer to exist (and the words
“incurred” and “incurrence” shall have correlative meanings), (iv) 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, Capital Stock, securities, revenues, accounts, leasehold
interests and contract rights, and (v) references to agreements or other
Contractual Obligations shall, unless otherwise specified, be deemed to refer to
such agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified from time to time.

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

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

SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

2.1.        Term Commitments. Subject to the terms and conditions hereof, each
Term Lender severally agrees to make a term loan (a “Term Loan”) to the Borrower
on the Closing Date in an amount not to exceed the amount of the Term Commitment
of such Lender. The Term Loans may from time to time be Eurodollar Loans or ABR
Loans, as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.12.

2.2.        Procedure for Term Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, one Business Day
prior to the anticipated Closing Date) requesting that the Term Lenders make the
Term Loans on the Closing Date and specifying the amount to be borrowed. The
Term Loans made on the Closing Date shall initially be ABR Loans and, unless
otherwise agreed by the Administrative Agent in its sole discretion, no Term
Loan may be converted into or continued as a Eurodollar Loan having an Interest
Period in excess of one month prior to the earlier of (i) the date the
Administrative Agent determines that the primary syndication of Term Loans has
been completed or (ii) the date that is 30 days after the Closing Date. Upon
receipt of such notice the Administrative Agent shall promptly notify each Term
Lender thereof. Not later than 12:00 Noon, New York City time, on the Closing
Date each Term Lender shall make available to the Administrative Agent at the
Funding Office an amount in immediately available funds equal to the Term Loan
or Term

 

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Loans to be made by such Lender. The Administrative Agent shall credit the
account of the Borrower on the books of such office of the Administrative Agent
with the aggregate of the amounts made available to the Administrative Agent by
the Term Lenders in immediately available funds.

2.3.        Repayment of Term Loans. The principal amount of the Term Loan of
each Term Lender shall mature in 28 consecutive installments (each due on the
last day of each calendar quarter, except for the last such installment),
commencing on March 31, 2006, each of which shall be in an amount equal to such
Lender’s Term Percentage multiplied by (i) in the case of the first 27 such
installments, $1,750,000 and (ii) in the case of the last such installment
(which shall be due on the seventh anniversary of the Closing Date), the
remaining aggregate principal amount of the Term Loans.

2.4.        Revolving Commitments. (a) Subject to the terms and conditions
hereof, each Revolving Lender severally agrees to make revolving credit loans
(“Revolving Loans”) to the Borrower from time to time during the Revolving
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender’s Revolving Percentage of the sum of (i) the
Revolving L/C Obligations then outstanding and (ii) the aggregate principal
amount of the Swingline Loans then outstanding, does not exceed the amount of
such Lender’s Revolving Commitment. During the Revolving Commitment Period the
Borrower may use the Revolving Commitments by borrowing, prepaying the Revolving
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.5 and 2.12.

(b)        The Borrower shall repay all outstanding Revolving Loans on the
Revolving Termination Date.

2.5.        Procedure for Revolving Loan Borrowing. (a) The Borrower may borrow
under the Revolving Commitments during the Revolving Commitment Period on any
Business Day, provided that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
(i) prior to 11:00 A.M., New York City time, three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, or (ii) prior to
10:00 A.M., New York City time on the requested Borrowing Date, in the case of
ABR Loans (including for purposes of financing payments required by
Section 3.5), specifying (A) the amount and Type of Revolving Loans to be
borrowed, (B) the requested Borrowing Date and (C) in the case of Eurodollar
Loans, the respective amounts of each such Type of Loan and the respective
lengths of the initial Interest Period therefor. Any Revolving Loans made on the
Closing Date shall initially be ABR Loans. Each borrowing under the Revolving
Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$1,000,000 or a whole multiple thereof (or, if the then aggregate Available
Revolving Commitments are less than $1,000,000, such lesser amount) and (y) in
the case of Eurodollar Loans, $5,000,000 or a whole multiple of $1,000,000 in
excess thereof; provided, that the Swingline Lender may request, on behalf of
the Borrower, borrowings under the Revolving Commitments that are ABR Loans in
other amounts pursuant to Section 2.7. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Revolving Lender
thereof. Each Revolving Lender will make the amount of its pro rata share of

 

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each borrowing available to the Administrative Agent for the account of the
Borrower at the Funding Office prior to 12:00 Noon, New York City time, on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the Borrower
by the Administrative Agent crediting the account of the Borrower on the books
of such office with the aggregate of the amounts made available to the
Administrative Agent by the Revolving Lenders and in like funds as received by
the Administrative Agent.

(b)         In the event that the Borrower fails to reimburse any Revolving
Issuing Lender in accordance with Section 3.5 for the amount of any draft paid
by such Revolving Issuing Lender under any Revolving Letter of Credit issued by
it, and for all other amounts due in connection therewith pursuant to
Section 3.5 (the “Reimbursement Payment”), then on the date that the
Reimbursement Payment is due, the Borrower shall be deemed to have made a
request for a borrowing of ABR Loans in an amount equal to the Reimbursement
Payment, which deemed request shall not be subject to any condition precedent
set forth in Section 5.2 and shall be irrevocable. Each Revolving Lender
acknowledges and agrees that its obligation to make its pro rata share of any
such borrowing available to the Administrative Agent is absolute and
unconditional and shall not be affected by any event, happening or circumstance
whatsoever, including the failure of any condition precedent set forth in
Section 5 to be satisfied at the time of such deemed request.

2.6.        Swingline Commitment. (a) Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Commitments from time to time
during the Revolving Commitment Period by making swing line loans (“Swingline
Loans”) to the Borrower; provided that (i) the aggregate principal amount of
Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender’s other outstanding
Revolving Loans, may exceed the Swingline Commitment then in effect) and
(ii) the Borrower shall not request, and the Swingline Lender shall not make,
any Swingline Loan if, after giving effect to the making of such Swingline Loan,
the aggregate amount of the Available Revolving Commitments would be less than
zero. During the Revolving Commitment Period, the Borrower may use the Swingline
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof. Swingline Loans shall be ABR Loans only.

(b)         The Borrower shall repay to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the earlier of the Revolving
Termination Date and the first date after such Swingline Loan is made that is
the 15th or last day of a calendar month and is at least two Business Days after
such Swingline Loan is made; provided that on each date that a Revolving Loan is
borrowed, the Borrower shall repay all Swingline Loans then outstanding.

2.7.        Procedure for Swingline Borrowing; Refunding of Swingline
Loans. (a) Whenever the Borrower desires that the Swingline Lender make
Swingline Loans it shall give the Swingline Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swingline Lender not later than 1:00 P.M., New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii)

 

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the requested Borrowing Date (which shall be a Business Day during the Revolving
Commitment Period). Each borrowing under the Swingline Commitment shall be in an
amount equal to $500,000 or a whole multiple of $100,000 in excess thereof. Not
later than 3:00 P.M., New York City time, on the Borrowing Date specified in a
notice in respect of Swingline Loans, the Swingline Lender shall make available
to the Administrative Agent at the Funding Office an amount in immediately
available funds equal to the amount of the Swingline Loan to be made by the
Swingline Lender. The Administrative Agent shall make the proceeds of such
Swingline Loan available to the Borrower on such Borrowing Date by depositing
such proceeds in the account of the Borrower with the Administrative Agent on
such Borrowing Date in immediately available funds.

(b)         The Swingline Lender, at any time and from time to time in its sole
and absolute discretion may, on behalf of the Borrower (which hereby irrevocably
directs the Swingline Lender to act on its behalf), on one Business Day’s notice
given by the Swingline Lender no later than 12:00 Noon, New York City time,
request each Revolving Lender to make, and each Revolving Lender hereby agrees
to make, a Revolving Loan, in an amount equal to such Revolving Lender’s
Revolving Percentage of the aggregate amount of the Swingline Loans (the
“Refunded Swingline Loans”) outstanding on the date of such notice, to repay the
Swingline Lender. Each Revolving Lender shall make the amount of such Revolving
Loan available to the Administrative Agent at the Funding Office in immediately
available funds, not later than 10:00 A.M., New York City time, one Business Day
after the date of such notice. The proceeds of such Revolving Loans shall be
immediately made available by the Administrative Agent to the Swingline Lender
for application by the Swingline Lender to the repayment of the Refunded
Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to
charge the Borrower’s accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of such
Refunded Swingline Loans to the extent amounts received from the Revolving
Lenders are not sufficient to repay in full such Refunded Swingline Loans.

(c)         If prior to the time a Revolving Loan would have otherwise been made
pursuant to Section 2.7(b), one of the events described in Section 9(g) shall
have occurred and be continuing with respect to the Borrower or if for any other
reason, as determined by the Swingline Lender in its sole discretion, Revolving
Loans may not be made as contemplated by Section 2.7(b), each Revolving Lender
shall, on the date such Revolving Loan was to have been made pursuant to the
notice referred to in Section 2.7(b), purchase for cash an undivided
participating interest in the then outstanding Swingline Loans by paying to the
Swingline Lender an amount (the “Swingline Participation Amount”) equal to
(i) such Revolving Lender’s Revolving Percentage times (ii) the sum of the
aggregate principal amount of Swingline Loans then outstanding that were to have
been repaid with such Revolving Loans.

(d)         Whenever, at any time after the Swingline Lender has received from
any Revolving Lender such Lender’s Swingline Participation Amount, the Swingline
Lender receives any payment on account of the Swingline Loans, the Swingline
Lender will distribute to such Lender its Swingline Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender’s participating interest was outstanding and
funded and, in the case of principal and interest payments, to reflect such
Lender’s pro rata portion of such payment if such payment is not sufficient to
pay the principal

 

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of and interest on all Swingline Loans then due); provided, however, that in the
event that such payment received by the Swingline Lender is required to be
returned, such Revolving Lender will return to the Swingline Lender any portion
thereof previously distributed to it by the Swingline Lender.

(e)         Each Revolving Lender’s obligation to make the Loans referred to in
Section 2.7(b) and to purchase participating interests pursuant to
Section 2.7(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (i) any setoff, counterclaim, recoupment, defense or
other right that such Revolving Lender or the Borrower may have against the
Swingline Lender, the Borrower or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 5, (iii) any
adverse change in the condition (financial or otherwise) of the Borrower,
(iv) any breach of this Agreement or any other Loan Document by the Borrower,
any other Loan Party or any other Revolving Lender or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.

2.8.        Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee
for the period from and including the date hereof to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the average
daily amount of the Available Revolving Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on each Fee
Payment Date, commencing on the first such date to occur after the date hereof.

(b)         The Borrower agrees to pay to the Administrative Agent the fees in
the amounts and on the dates as set forth in any fee agreements with the
Administrative Agent and to perform any other obligations contained therein.

2.9.        Termination or Reduction of Revolving Commitments. The Borrower
shall have the right, upon not less than three Business Days’ notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to
time, to reduce the amount of the Revolving Commitments; provided that no such
termination or reduction of Revolving Commitments shall be permitted if, after
giving effect thereto and to any prepayments of the Revolving Loans and
Swingline Loans made on the effective date thereof, the Total Revolving
Extensions of Credit would exceed the Total Revolving Commitments. Any such
reduction shall be in an amount equal to $1,000,000, or a whole multiple
thereof, and shall reduce permanently the Revolving Commitments then in effect.

2.10.      Optional Prepayments. The Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent no later than 11:00
A,M., New York City time, one Business Day prior thereto, in the case of
Eurodollar Loans, and no later than 11:00 A.M., New York City time, on the same
Business Day, in the case of ABR Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans or ABR
Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the
last day of the Interest Period applicable thereto, the Borrower shall also pay
any amounts owing pursuant to

 

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Section 2.20. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof. If any such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein, together with (except in the case of Revolving Loans that are ABR Loans
and Swingline Loans) accrued interest to such date on the amount
prepaid. Partial prepayments of Term Loans and Revolving Loans shall be in an
aggregate principal amount of $1,000,000 or a whole multiple thereof. Partial
prepayments of Swingline Loans shall be in an aggregate principal amount of
$100,000 or a whole multiple thereof.

2.11.      Mandatory Prepayments and Commitment Reductions. (a) (i) If within
ten (10) Business Days of any date the Borrower or any Restricted Subsidiary
shall receive Net Cash Proceeds (x) in excess of $50,000,000 from any Asset Sale
or (y) in excess of $20,000,000 from any Recovery Event, then, if the Borrower
shall not have delivered a Reinvestment Notice in respect thereof on or prior to
such date, the Borrower shall apply such Net Cash Proceeds on such date to the
prepayment of the Term Loans and the reduction of the Revolving Commitments as
set forth in Section 2.11(c). If the Borrower shall have delivered a
Reinvestment Notice in respect thereof, then on the tenth (10th ) Business Day
after the date of receipt of such Net Cash Proceeds, the Borrower shall apply
the portion thereof, if any, that neither the Borrower nor any Restricted
Subsidiary intends to use to acquire or repair assets useful in its business to
such prepayment and reduction.

(ii)         If on or prior to the date falling 365 days after a Reinvestment
Event, the Borrower shall not have delivered a Reinvestment Commitment Notice in
respect of the Net Cash Proceeds described in clause (i) above, the Borrower
shall apply such Net Cash Proceeds on such date (to the extent not previously so
applied or expended) to the prepayment of the Term Loans and the reduction of
the Revolving Commitments as set forth in Section 2.11(c). If on or prior to the
date falling 365 days after a Reinvestment Event, the Borrower shall have
delivered a Reinvestment Commitment Notice in respect of the Net Cash Proceeds
described in clause (i) above, then (x) on the date of such notice, the Borrower
shall apply (to the extent not previously so applied or expended) the portion,
if any, of such Net Cash Proceeds that the Borrower or any Restricted Subsidiary
has not committed in such notice to use to acquire or to repair assets useful in
its business to such prepayment and reduction and (y) on the date falling 180
days after such notice in the case of Net Cash Proceeds from an Asset Sale
described in clause (i) above and 24 months after such notice in the case of Net
Cash Proceeds from a Recovery Event described in clause (i) above, the Borrower
shall apply any Net Cash Proceeds not applied to the acquisition or repair of
assets useful in its business to such prepayment and reduction as set forth in
Section 2.11(c) (to the extent not previously so applied).

(b)         If, for any fiscal year of the Borrower commencing with the fiscal
year ending December 31, 2006, there shall be Free Cash Flow, the Borrower
shall, on the relevant Free Cash Flow Application Date, prepay the Term Loans as
set forth in Section 2.11(c) by an amount equal to (x) the FCF Percentage times
(y) such Free Cash Flow minus the MAG Interest Distribution for such fiscal
year. Each such prepayment shall be made on a date (a “Free Cash Flow
Application Date”) no later than ten (10) Business Days after the earlier of
(i) the date on which the financial statements of the Borrower referred to in
Section 6.2(a), for the fiscal year with respect to which such prepayment is
made, are required to be delivered to the Lenders and (ii) the date such
financial statements are actually delivered.

 

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(c)         Amounts to be applied in connection with prepayments and Commitment
reductions made pursuant to Section 2.11 shall be applied, first, to the
prepayment of the Term Loans in accordance with Section 2.17(b) and, second, in
the case of amounts applied pursuant to clause (a) above, to reduce permanently
the Revolving Commitments. Any such reduction of the Revolving Commitments shall
be accompanied by prepayment of the Revolving Loans and/or Swingline Loans to
the extent, if any, that the Total Revolving Extensions of Credit exceed the
amount of the Total Revolving Commitments as so reduced, provided that if the
aggregate principal amount of Revolving Loans and Swingline Loans then
outstanding is less than the amount of such excess (because Revolving L/C
Obligations constitute a portion thereof), the Borrower shall, to the extent of
the balance of such excess, replace outstanding Revolving Letters of Credit
and/or deposit an amount in cash in a cash collateral account established with
the Administrative Agent for the benefit of the Lenders pursuant to an account
control agreement in form and substance reasonably satisfactory to the
Administrative Agent. The application of any prepayment pursuant to Section 2.11
shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each
prepayment of the Loans under Section 2.11 (except in the case of Revolving
Loans that are ABR Loans and Swingline Loans) shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.

(d)         If the Borrower is required by this Section 2.11 to prepay any
Eurodollar Loans and such prepayment will result in the Borrower being required
to pay breakage costs under Section 2.20 (any such Eurodollar Loans, “Affected
Loans”), the Borrower may elect, by written notice to the Administrative Agent
so long as no Default or Event of Default shall have occurred and be continuing,
to deposit with the Administrative Agent, on or prior to the date of prepayment
of such Affected Loans, 100% (or such lesser percentage elected by the Borrower)
of the principal amounts that otherwise would have been paid in respect of the
Affected Loans and defer the date of prepayment of such Affected Loans to the
extent such Loans are cash collateralized as provided in this
Section 2.11(d). Such amounts will be held as security for the obligations of
the Borrower hereunder pursuant to an account control agreement to be entered
into in form and substance reasonably satisfactory to the Administrative Agent,
with such cash collateral to be released from such cash collateral account (and
applied to repay the principal amount of Affected Loans) upon each occurrence
thereafter of the last day of an Interest Period applicable to the relevant
Loans (or such earlier date or dates as shall be requested by the Borrower),
with the amount to be so released and applied on the last day of each Interest
Period to be the amount of the relevant Loans to which such Interest Period
applies (or, if less, the amount remaining in such cash collateral account);
provided that, notwithstanding anything in this Agreement to the contrary, the
Borrower acknowledges and agrees that in calculating the Available Revolving
Commitments, such Eurodollar Loans that have not been prepaid in accordance with
this Section 2.11(d) shall be treated as Revolving Extensions of Credit until
such unpaid Eurodollar Loans are actually prepaid; and provided further that
such unpaid Eurodollar Loans shall continue to bear interest in accordance with
Section 2.14 until such unpaid Eurodollar Loans or the related portion of such
Eurodollar Loans, as the case may be, have or has been prepaid.

2.12.      Conversion and Continuation Options. (a) The Borrower may elect from
time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent prior irrevocable notice of such election no later than
11:00 A.M., New York City time, on the Business Day preceding the proposed
conversion date, provided that any such conversion of

 

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Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto. The Borrower may elect from time to time to convert ABR Loans
to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice
of such election no later than 11:00 A.M., New York City time, on the third
Business Day preceding the proposed conversion date (which notice shall specify
the length of the initial Interest Period therefor), provided that no ABR Loan
under a particular Facility may be converted into a Eurodollar Loan when any
Event of Default has occurred and is continuing and the Administrative Agent or
the Majority Facility Lenders in respect of such Facility have determined in its
or their sole discretion not to permit such conversions. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.

(b)         Any Eurodollar Loan may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term “Interest Period” set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan under a particular Facility may be continued as such
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations, and
provided, further, that if the Borrower shall fail to give any required notice
as described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Loans shall be automatically converted to
ABR Loans on the last day of such then expiring Interest Period. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.

2.13.      Limitations on Eurodollar Tranches. Notwithstanding anything to the
contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans and all selections of Interest Periods shall be in such amounts
and be made pursuant to such elections so that, (a) after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall
be outstanding at any one time.

2.14.      Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.

(b)         Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.

(c)         (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to (x) in the case of the Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section plus 2% or (y) in the case of Reimbursement Obligations, the rate
applicable to ABR Loans under the Revolving Facility plus 2%, and (ii) if all or
a portion of any interest payable on any Loan or Reimbursement Obligation or any
commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated

 

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maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to the rate then applicable to ABR Loans under the
relevant Facility plus 2% (or, in the case of any such other amounts that do not
relate to a particular Facility, the rate then applicable to ABR Loans under the
Revolving Facility plus 2%), in each case, with respect to clauses (i) and
(ii) above, from the date of such non-payment until such amount is paid in full
(as well after as before judgment).

(d)         Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section shall
be payable from time to time on demand.

2.15.      Computation of Interest and Fees. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to ABR Loans the rate of interest
on which is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.

(b)         Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.14(a).

2.16.      Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:

(a)         the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or

(b)         the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during
such Interest Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been

 

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converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then-current
Interest Period, to ABR Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans under the relevant Facility
shall be made or continued as such, nor shall the Borrower have the right to
convert Loans under the relevant Facility to Eurodollar Loans.

2.17.      Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower
from the Lenders hereunder, each payment by the Borrower on account of any
commitment fee and any reduction of the Commitments of the Lenders shall be made
pro rata according to the respective Term Percentages or Revolving Percentages,
as the case may be, of the relevant Lenders.

(b)         Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Term Loans shall be made pro rata according
to the respective outstanding principal amounts of the Term Loans then held by
the Term Lenders. The amount of each principal prepayment of the Term Loans
shall be applied to reduce the then remaining installments of the Term Loans pro
rata based upon the respective then remaining principal amounts thereof,
provided that, in the case of any optional prepayment of Term Loans pursuant to
Section 2.10, the amount of principal prepayment shall be applied as directed by
the Borrower in its notice issued pursuant to such Section. Amounts prepaid or
repaid on account of the Term Loans may not be reborrowed.

(c)         Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Revolving Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving Loans
then held by the Revolving Lenders.

(d)         All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Funding Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.

(e)         Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the

 

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Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon, at a rate equal to the greater of (i) the Federal Funds
Effective Rate and (ii) a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation, for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender’s share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
after such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans under the relevant Facility, on demand, from the Borrower.

(f)         Unless the Administrative Agent shall have been notified in writing
by the Borrower prior to the date of any payment due to be made by the Borrower
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective
pro rata shares of a corresponding amount. If such payment is not made to the
Administrative Agent by the Borrower within three Business Days after such due
date, the Administrative Agent shall be entitled to recover, on demand, from
each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest thereon at the rate per annum
equal to the daily average Federal Funds Effective Rate. Nothing herein shall be
deemed to limit the rights of the Administrative Agent or any Lender against the
Borrower.

2.18.      Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:

(i)          shall change the basis of taxation of payments to such Lender in
respect of this Agreement, any Letter of Credit, any Application or any
Eurodollar Loan made by it (except for changes in the rate of tax on, or
determined by reference to, the overall net income or gross income of such
Lender); or

(ii)         shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Lender that is not otherwise included in the determination of the
Eurodollar Rate.

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay

 

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such Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such increased cost or reduced amount receivable. If any Lender
becomes entitled to claim any additional amounts pursuant to this paragraph, it
shall promptly notify the Borrower (with a copy to the Administrative Agent) of
the event by reason of which it has become so entitled.

(b)         If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender’s or such corporation’s capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender’s or such corporation’s policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction.

(c)         A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest
error. Notwithstanding anything to the contrary in this Section, the Borrower
shall not be required to compensate a Lender pursuant to this Section for any
amounts incurred more than four months prior to the date that such Lender
notifies the Borrower of such Lender’s intention to claim compensation therefor;
provided that, if the circumstances giving rise to such claim have a retroactive
effect, then such four-month period shall be extended to include the period of
such retroactive effect. The obligations of the Borrower pursuant to this
Section shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.

2.19.      Taxes. (a) All payments made by the Borrower under this Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
any tax imposed on or measured by the net income or net profits or capital (or
any franchise or similar tax imposed in lieu thereof) of the Administrative
Agent or any Lender as a result of a present or former connection between the
Administrative Agent or such Lender or the principal office or applicable
lending office of such Lender or any subdivision thereof or therein and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Administrative Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
(“Non-Excluded Taxes”) or Other Taxes are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder, the amounts
so payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-

 

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Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement, provided,
however, that the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. federal income tax purposes, and the
Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to such
Lender’s failure to comply with the requirements of paragraph (d) or (e) of this
Section or (ii) that are United States withholding taxes imposed on amounts
payable to such Lender at the time such Lender becomes a party to this
Agreement, except to the extent that such Lender’s assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.

(b)         In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(c)         Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, within thirty (30) days thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of a tax receipt received by the
Borrower showing payment thereof or such other document reasonably satisfactory
to the Administrative Agent showing payment thereof. If the Borrower fails to
pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority, the Borrower shall indemnify the Administrative Agent and the Lenders
upon their written request for any incremental taxes, interest or penalties that
may become payable by the Administrative Agent or any Lender as a result of any
such failure.

(d)         Each Lender (or Transferee) that is not a “U.S. Person” as defined
in Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN (with respect to a
complete exemption under an income tax treaty) or Form W-8ECI, or any successors
thereto, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of “portfolio interest”, a statement substantially in the form of
Exhibit G and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly signed and executed by such Non-U.S. Lender
claiming complete exemption from U.S. federal withholding tax on all payments by
the Borrower under this Agreement and the other Loan Documents. Such forms shall
be delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S.
Lender shall deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender
shall promptly notify the Borrower at any time it determines that it is no
longer in a position to provide any previously delivered certificate to the
Borrower (or any other form of certification adopted by the U.S. taxing
authorities for such purpose). Notwithstanding any other provision of this
paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Lender is not legally

 

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able to deliver as a result of a change in applicable law after the date such
Lender becomes a party to this Agreement (or, in the case of any Participant,
after the date such Participant purchases the related participation).

(e)         A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender’s judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.

(f)         If the Administrative Agent or any Lender determines, in its sole
discretion, that it has received a refund or credit of any Non-Excluded 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 2.19,
it shall pay over such refund or credit to the Borrower (but only to the extent
of indemnity payments made, or additional amounts paid, by the Borrower under
this Section 2.19 with respect to the Non-Excluded Taxes or Other Taxes giving
rise to such refund or credit), net of all out-of-pocket expenses of the
Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such refund
or credit); provided, that the Borrower, upon the written 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 paragraph 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 which it deems confidential) to the
Borrower or any other Person.

(g)        The agreements in this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

2.20.     Indemnity. The Borrower agrees to indemnify each Lender for, and to
hold each Lender harmless from, any actual and documented loss or expense
determined in accordance with this Section 2.20 that such Lender may sustain or
incur as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest that would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest

 

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Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Loans provided for herein (excluding,
however, the Applicable Margin included therein, if any) over (ii) the amount of
interest (as reasonably determined by such Lender) that would have accrued to
such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market. A certificate as
to any amounts payable pursuant to this Section submitted to the Borrower by any
Lender shall be conclusive in the absence of manifest error. Notwithstanding
anything to the contrary in this Section, the Borrower shall not be required to
compensate a Lender pursuant to this Section for any loss or expense resulting
from any event set forth in clauses (a), (b) or (c) of the first sentence of
this Section if such event occurred more than sixty (60) days prior to any
demand for indemnification by such Lender. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

2.21.     Change of Lending Office. Each Lender agrees that, upon the occurrence
of any event giving rise to the operation of Section 2.18 or 2.19(a) with
respect to such Lender, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event with the object of
avoiding the consequences of such event; provided, that such designation is made
on terms that, in the sole judgment of such Lender, cause such Lender and its
lending office(s) to suffer no economic, legal or regulatory disadvantage, and
provided, further, that nothing in this Section shall affect or postpone any of
the obligations of the Borrower or the rights of any Lender pursuant to
Section 2.18 or 2.19(a).

2.22.     Replacement of Lenders. The Borrower shall be permitted to replace any
Lender in accordance with Section 11.6 that (a) requests reimbursement for
amounts owing pursuant to Section 2.18 or 2.19(a) or (b) defaults in its
obligation to make Loans hereunder, with a replacement financial institution;
provided that (i) such replacement does not conflict with any Requirement of
Law, (ii) the replacement financial institution shall purchase, at par, all
Loans and other amounts owing to such replaced Lender on or prior to the date of
replacement in accordance with Section 11.6, (iii) the Borrower shall be liable
to such replaced Lender under Section 2.20 if any Eurodollar Loan owing to such
replaced Lender shall be purchased other than on the last day of the Interest
Period relating thereto, (iv) the Administrative Agent and each Issuing Lender
shall have consented to the replacement financial institution (such consent not
to be unreasonably withheld), (v) the replaced Lender shall be obligated to make
such replacement in accordance with the provisions of Section 11.6 (provided
that the Borrower shall be obligated to pay the registration and processing fee
referred to therein), (vi) until such time as such replacement shall be
consummated, the Borrower shall pay all additional amounts (if any) required
pursuant to Section 2.18 or 2.19(a), as the case may be, and (vii) any such
replacement shall not be deemed to be a waiver of any rights that the Borrower,
the Administrative Agent or any other Lender shall have against the replaced
Lender.

SECTION 3. LETTERS OF CREDIT

3.1.        Revolving L/C Commitment. (a) Subject to the terms and conditions
hereof, each Revolving Issuing Lender, in reliance on the agreements of the
other Revolving Lenders set forth in Section 3.4(a), agrees to issue letters of
credit (“Revolving Letters of Credit”) for the account of the Borrower on any
Business Day during the Revolving

 

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Commitment Period in such form as may be approved from time to time by such
Revolving Issuing Lender (such approval not to be unreasonably withheld);
provided that no Revolving Issuing Lender shall have any obligation to issue any
Revolving Letter of Credit if, after giving effect to such issuance, (i) the
Revolving L/C Obligations would exceed the Revolving L/C Commitment, (ii) the
aggregate amount of the Available Revolving Commitments would be less than zero
or (iii) the Revolving L/C Obligations with respect to all Revolving Letters of
Credit issued by such Revolving Issuing Lender would exceed such Revolving
Issuing Lender’s Specified Issuing Lender Commitment. Each Revolving Letter of
Credit shall (i) be denominated in Dollars and payable on an “at sight” basis
and (ii) expire no later than the earlier of (x) the first anniversary of its
date of issuance and (y) the date that is five Business Days prior to the
Revolving Termination Date, provided that any Revolving Letter of Credit with a
one-year term may provide for the automatic renewal thereof for additional
one-year periods (which shall in no event extend beyond the date referred to in
clause (y) above).

(b)         No Revolving Issuing Lender shall at any time be obligated to issue
any Revolving Letter of Credit if such issuance would conflict with, or cause
such Revolving Issuing Lender or any Revolving L/C Participant to exceed any
limits imposed by, any applicable Requirement of Law.

3.2.        Procedure for Issuance of Revolving Letters of Credit. The Borrower
may from time to time request that the relevant Revolving Issuing Lender issue a
Revolving Letter of Credit by delivering to such Revolving Issuing Lender at its
address for notices specified herein an Application therefor. Upon receipt of a
duly completed and executed Application and any certificates, documents and
other papers and information (referred to herein or in the Application)
delivered to the Revolving Issuing Lender in connection therewith, the relevant
Revolving Issuing Lender shall process such Application in accordance with its
customary procedures and promptly issue the Revolving Letter of Credit requested
thereby (but in no event shall any Revolving Issuing Lender be required to issue
any Revolving Letter of Credit earlier than three (3) Business Days (or such
shorter period as such Revolving Issuing Lender may agree) after its receipt of
the duly completed and executed Application therefor and all such other
certificates, documents and other papers and information referred to herein and
therein and relating thereto) by issuing the original of such Revolving Letter
of Credit to the beneficiary thereof or as otherwise may be agreed to by such
Revolving Issuing Lender and the Borrower. Such Revolving Issuing Lender shall
furnish a copy of such Revolving Letter of Credit to the Borrower promptly
following the issuance thereof. Each Revolving Issuing Lender shall promptly
furnish to the Administrative Agent, which shall in turn promptly furnish to the
Lenders, notice of the issuance of each Revolving Letter of Credit (including
the amount thereof).

3.3.        Revolving L/C Fees and Other Charges. (a) The Borrower will pay a
fee on all the average daily aggregate maximum amount available to be drawn
under all outstanding Revolving Letters of Credit at a per annum rate equal to
the Applicable Margin then in effect with respect to Eurodollar Loans under the
Revolving Facility, less any fees paid pursuant to the second sentence of this
paragraph, shared ratably among the Revolving Lenders and payable quarterly in
arrears on each Fee Payment Date after the issuance date. In addition, the
Borrower shall pay to each Revolving Issuing Lender for its own account a
fronting fee of 0.125% per

 

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annum on the stated amount of each Revolving Letter of Credit issued by such
Revolving Issuing Lender, payable quarterly in arrears on each Fee Payment Date
after the issuance date.

(b)         In addition to the foregoing fees, the Borrower shall pay or
reimburse each Revolving Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by such Revolving Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Revolving Letter of Credit.

3.4.        Revolving L/C Participations. (a) Each Revolving Issuing Lender
irrevocably agrees to grant and hereby grants to each Revolving L/C Participant,
and, to induce such Revolving Issuing Lender to issue Revolving Letters of
Credit, each Revolving L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from such Revolving Issuing Lender, on the
terms and conditions set forth below, for such Revolving L/C Participant’s own
account and risk an undivided interest equal to such Revolving L/C Participant’s
Revolving Percentage in such Revolving Issuing Lender’s obligations and rights
under and in respect of each Revolving Letter of Credit issued by such Revolving
Issuing Lender and the amount of each draft paid by such Revolving Issuing
Lender thereunder. Each Revolving L/C Participant agrees with each Revolving
Issuing Lender that, if a draft is paid under any Revolving Letter of Credit
issued by such Revolving Issuing Lender for which such Revolving Issuing Lender
is not reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such Revolving L/C Participant shall pay to such Revolving Issuing
Lender upon demand at such Revolving Issuing Lender’s address for notices
specified herein an amount equal to such Revolving L/C Participant’s Revolving
Percentage of the amount of such draft, or any part thereof, that is not so
reimbursed. Each Revolving L/C Participant’s obligation to pay such amount shall
be absolute and unconditional and shall not be affected by any circumstance,
including (i) any setoff, counterclaim, recoupment, defense or other right that
such Revolving L/C Participant may have against any Revolving Issuing Lender,
the Borrower or any other Person for any reason whatsoever, (ii) the occurrence
or continuance of a Default or an Event of Default or the failure to satisfy any
of the other conditions specified in Section 5, (iii) any adverse change in the
condition (financial or otherwise) of the Borrower, (iv) any breach of this
Agreement or any other Loan Document by the Borrower, any other Loan Party or
any other Revolving L/C Participant or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.

(b)         If any amount required to be paid by any Revolving L/C Participant
to any Revolving Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by such Revolving Issuing Lender under
any Revolving Letter of Credit is paid to such Revolving Issuing Lender within
three Business Days after the date such payment is due, such Revolving L/C
Participant shall pay to such Revolving Issuing Lender on demand an amount equal
to the product of (i) such amount, times (ii) the daily average Federal Funds
Effective Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to such
Revolving Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any Revolving L/C Participant
pursuant to Section 3.4(a) is not made available to the relevant Revolving
Issuing Lender by such Revolving L/C Participant within three Business Days
after the date such payment is due, such Revolving Issuing Lender shall be
entitled to recover from such Revolving

 

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L/C Participant, on demand, such amount with interest thereon calculated from
such due date at the rate per annum applicable to ABR Loans under the Revolving
Facility. A certificate of the relevant Revolving Issuing Lender submitted to
any Revolving L/C Participant with respect to any amounts owing under this
Section shall be conclusive in the absence of manifest error.

(c)         Whenever, at any time after any Revolving Issuing Lender has made
payment under any Revolving Letter of Credit and has received from any Revolving
L/C Participant its pro rata share of such payment in accordance with
Section 3.4(a), such Revolving Issuing Lender receives any payment related to
such Revolving Letter of Credit (whether directly from the Borrower or
otherwise, including proceeds of collateral applied thereto by such Revolving
Issuing Lender), or any payment of interest on account thereof, such Revolving
Issuing Lender will distribute to such Revolving L/C Participant its pro rata
share thereof; provided, however, that in the event that any such payment
received by such Revolving Issuing Lender shall be required to be returned by
such Revolving Issuing Lender, such Revolving L/C Participant shall return to
such Revolving Issuing Lender the portion thereof previously distributed by such
Revolving Issuing Lender to it.

3.5.        Revolver L/C Reimbursement Obligation of the Borrower. If any draft
is paid under any Revolving Letter of Credit, the Borrower shall reimburse the
relevant Revolving Issuing Lender for the amount of (a) the draft so paid and
(b) any taxes, fees, charges or other costs or expenses incurred by such
Revolving Issuing Lender in connection with such payment, not later than 12:00
Noon, New York City time, on (i) the Business Day that the Borrower receives
notice of such draft, if such notice is received on such day prior to
10:00 A.M., New York City time, or (ii) if clause (i) above does not apply, the
Business Day immediately following the day that the Borrower receives such
notice. Each such payment shall be made to the relevant Revolving Issuing Lender
at its address for notices referred to herein in Dollars and in immediately
available funds. Interest shall be payable on any such amounts from the date on
which the relevant draft is paid until payment in full at the rate set forth in
(x) until the Business Day next succeeding the date of the relevant notice,
Section 2.14(b) and (y) thereafter, Section 2.14(c). If the Borrower fails to
reimburse any Revolving Issuing Lender in accordance with this Section 3.5, the
Borrower shall be deemed to have made a request for a borrowing of ABR Loans
pursuant to Section 2.5(b) as provided in such Section.

3.6.        Synthetic L/C Letters of Credit. (a) Subject to the terms and
conditions hereof, the Synthetic Issuing Lender, in reliance on the agreement of
the Borrower set forth in Section 3.8(b), agrees to issue letters of credit (the
“Synthetic Letters of Credit”) for the account of the Borrower on any Business
Day prior to the date set forth in clause (y) of the next succeeding sentence in
such form as may be approved from time to time by the Synthetic Issuing Lender
(such approval not to be unreasonably withheld); provided, that the Synthetic
Issuing Lender shall have no obligation to issue any Synthetic Letter of Credit
if, after giving effect to such issuance, the aggregate principal amount of
Synthetic L/C Letter of Credit Outstandings would exceed the Synthetic L/C
Deposit Amount. Each Synthetic Letter of Credit shall (i) be denominated in
Dollars and payable on an “at sight” basis and (ii) expire no later than the
earlier of (x) the first anniversary of its date of issuance and (y) the date
that is five Business Days prior to the Synthetic L/C Termination Date, provided
that any Synthetic Letter of Credit with a one-year term may provide for the
automatic renewal thereof for additional one-year periods (which shall in no
event extend beyond the date referred to in clause (y) above).

 

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(b)         The Synthetic Issuing Lender shall not at any time be obligated to
issue any Synthetic Letter of Credit hereunder if (i) such issuance would
conflict with, or cause the Synthetic Issuing Lender to exceed any limits
imposed by, any applicable Requirement of Law or (iii) the Synthetic L/C
Termination Date shall have occurred.

3.7.        Procedure for Issuance of Synthetic Letters of Credit. The Borrower
may from time to time request that the Synthetic Issuing Lender issue a
Synthetic Letter of Credit by delivering to the Synthetic Issuing Lender at its
address for notices specified herein an Application therefor. Upon receipt of a
duly completed and executed Application and any certificates, documents and
other papers and information (referred to herein or in the Application)
delivered to the Synthetic Issuing Lender in connection therewith, the Synthetic
Issuing Lender shall process such Application in accordance with its customary
procedures and promptly issue the Synthetic Letter of Credit requested thereby
(but in no event shall the Synthetic Issuing Lender be required to issue any
Synthetic Letter of Credit earlier than three (3) Business Days (or such shorter
period as the Synthetic Issuing Lender may agree) after its receipt of the duly
completed and executed Application therefor and all such other certificates,
documents and other papers and information referred to herein and therein and
relating thereto) by issuing the original of such Synthetic Letter of Credit to
the beneficiary thereof or as otherwise may be agreed to by the Synthetic
Issuing Lender and the Borrower. The Synthetic Issuing Lender shall furnish a
copy of such Synthetic Letter of Credit to the Borrower promptly following the
issuance thereof. The Synthetic Issuing Lender shall promptly furnish to the
Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Synthetic Letter of Credit (including the amount
thereof).

3.8.        Synthetic L/C Deposit Account. (a) Establishment of Synthetic L/C
Deposit Account. On or prior to the Closing Date, the Borrower shall establish
and maintain the Synthetic L/C Deposit Account at the Synthetic Issuing Lender
in the name of the Synthetic Issuing Lender for the benefit of the Synthetic
Issuing Lender and the other Secured Parties (as defined in the Guarantee and
Collateral Agreement) and shall enter into a synthetic letter of credit deposit
and account control agreement (the “Synthetic L/C Deposit Agreement”) with the
Synthetic Issuing Lender in form and substance satisfactory to it. Amounts on
deposit in the Synthetic L/C Deposit Account shall be invested, or caused to be
invested, by the Synthetic Issuing Lender as set forth in Section 3.8(d), and no
Person (other than the Synthetic Issuing Lender or any of its respective
sub-agents) shall have the right to make any withdrawals from the Synthetic L/C
Deposit Account or exercise any other right or power with respect thereto,
except as expressly provided in Section 3.8(c). Without limiting the generality
of the foregoing, each party hereto acknowledges and agrees that the amount on
deposit at any time in the Synthetic L/C Deposit Account shall constitute
“Collateral” under the Loan Documents and shall be available, subject to the
terms of the Loan Documents, to satisfy any Obligation of any Loan Party under
the Loan Documents to the extent that such amount exceeds the Synthetic Letter
of Credit Outstandings.

(b)         Deposits in Synthetic L/C Deposit Account.

(1)         On the Closing Date, the Borrower shall deposit $200,000,000 of
proceeds of Term Loans made on the Closing Date in the Synthetic L/C Deposit
Account.

 

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(2)         At any time after the Closing Date, the Borrower shall be permitted
to deposit additional amounts in the Synthetic L/C Deposit Account to the extent
amounts have been withdrawn from the Synthetic L/C Deposit Account pursuant to
Section 3.8(c) (1) or (3) below, provided that after giving effect to any such
deposit, the aggregate amount on deposit shall not exceed $200,000,000.

(c)         Withdrawals from and Closing of Synthetic L/C Deposit
Account. Amounts on deposit in the Synthetic L/C Deposit Account shall be
withdrawn and distributed as follows:

(1)         on any date on which the Borrower fails to reimburse the Synthetic
Issuing Lender for any payment made by the Synthetic Issuing Lender with respect
to any Synthetic Letter of Credit, the Synthetic Issuing Lender shall withdraw
from the Synthetic L/C Deposit Account an amount equal to the amount of such
unreimbursed payment, in accordance with Section 3.10;

(2)         following the occurrence of an Event of Default, the Synthetic
Issuing Lender shall permit the Administrative Agent to withdraw from the
Synthetic L/C Deposit Account an amount equal to the amount by which the
Synthetic L/C Deposit exceeds the Synthetic Letter of Credit Outstandings,
pursuant to and to be applied in accordance with the Security Documents;

(3)         at any time prior to the Synthetic L/C Termination Date, upon three
(3) Business Days’ prior written notice to the Synthetic Issuing Bank and so
long as no Default or Event of Default has occurred and is continuing, the
Borrower may withdraw a portion of the Synthetic L/C Deposit (including any
accrued income on the Synthetic L/C Deposit) that is in excess of the Synthetic
L/C Letter of Credit Outstandings; and

(4)         upon (A) the reduction or termination of the Synthetic L/C Deposit
Amount to $0 and (B) the expiration or cancellation of all outstanding Synthetic
Letters of Credit to the satisfaction of the Synthetic Issuing Lender, the
Synthetic Issuing Lender shall permit the Borrower to withdraw all remaining
amounts from the Synthetic L/C Deposit Account and shall close the Synthetic L/C
Deposit Account.

The commitment of the Synthetic Issuing Lender shall never exceed the Synthetic
L/C Deposit, after giving effect to outstanding Synthetic Letters of Credit,
withdrawals and deposits.

(d)         Investment of Synthetic L/C Amount. The Synthetic Issuing Lender
shall invest, or cause to be invested, the amount on deposit in the Synthetic
L/C Deposit Account in certain Cash Equivalents reasonably approved by the
Borrower and the Synthetic Issuing Lender. Any return on the Synthetic L/C
Deposit shall accrue for the benefit of the Borrower. The Borrower acknowledges
and agrees that the return earned on the Synthetic L/C Deposit shall not in any
way affect the Borrower’s obligations with respect to the Term Loans.

3.9.        Synthetic L/C Deposit Fees and Other Charges. (a) The Borrower shall
pay to the Synthetic Issuing Lender for its own account a fronting fee of
0.125% per annum on

 

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the undrawn and unexpired amount of each Synthetic Letter of Credit issued by
the Synthetic Issuing Lender, payable quarterly in arrears on each Fee Payment
Date after the issuance date.

(b)         In addition to the foregoing fee, the Borrower shall pay or
reimburse the Synthetic Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by the Synthetic Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Synthetic Letter of Credit.

3.10.      Synthetic L/C Reimbursement Obligations. If any draft is paid under
the Synthetic Letter of Credit, the Borrower shall reimburse the Synthetic
Issuing Lender for the amount of (a) the draft so paid and (b) any taxes, fees,
charges or other costs or expenses incurred by the Synthetic Issuing Lender in
connection with such payment, not later than 12:00 Noon, New York City time, on
the second Business Day following the Business Day on which the Borrower
receives notice of such draft. Each such payment shall be made to the Synthetic
Issuing Lender at its address for notices referred to herein in Dollars and in
immediately available funds. Interest shall be payable on any such amounts from
the date the relevant draft is paid until payment in full at the rate set forth
in (x) until the Business Day next succeeding the date of the relevant draw
notice, Section 2.14(b) and (y) thereafter, Section 2.14(c). If the Borrower
fails to reimburse the Synthetic Issuing Lender at the time and place and in the
manner described above in this Section 3.10, the Synthetic Issuing Lender shall
withdraw from the Synthetic L/C Deposit Account an amount equal to the amount of
such unreimbursed payment. Drawings under a Synthetic Letters of Credit shall be
deemed to be reimbursed to the extent funds on deposit in the Synthetic L/C
Deposit Account are withdrawn and applied thereto in accordance with Sections
3.8(c)(1).

3.11.      Obligations Absolute. The Borrower’s obligations under this Section 3
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment that the Borrower
may have or have had against any Issuing Lender, any beneficiary of a Letter of
Credit or any other Person. The Borrower also agrees with each Issuing Lender
that such Issuing Lender shall not be responsible for, and the Borrower’s
Reimbursement Obligations under Sections 3.5 and 3.10 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. No Issuing
Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Issuing Lender. The Borrower agrees that any action taken or omitted by any
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct, shall be binding on the Borrower and shall not result in any
liability of such Issuing Lender to the Borrower.

3.12.      Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender that issued such Letter
of Credit shall promptly

 

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notify the Borrower of the date and amount thereof. The responsibility of each
Issuing Lender to the Borrower in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.

3.13.      Applications. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the relevant provisions of
this Section 3, the provisions of this Section 3 shall apply.

SECTION 4. REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Agreement
and to make the Loans and issue or participate in the Letters of Credit, the
Borrower hereby represents and warrants to the Administrative Agent and each
Lender that:

4.1.        Organization; Power and Authority. The Borrower and each Group
Member (a) is duly organized, validly existing and in good standing under the
laws of the state of its organization and (b) has all requisite corporate or
limited liability company power and authority to own its property and assets, to
lease the property it operates as lessee and to carry on its business as now
conducted and as proposed to be conducted, and is qualified to do business, and
is in good standing, in every jurisdiction where such qualification is required,
except where the failure to have such power and authority and so to qualify
would not reasonably be expected to result in a Material Adverse Effect. Each
Loan Party has the corporate or limited liability company power to execute,
deliver and perform its obligations under each Loan Document to which it is a
party, and each Loan Party has the corporate or limited liability company power
to take all action necessary to consummate the transactions contemplated by the
Loan Documents to which it is a party.

4.2.        Due Authorization. Each Loan Party has taken all necessary corporate
or limited liability company action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case of the
Borrower, to authorize the extensions of credit on the terms and conditions of
this Agreement. Each Loan Document has been duly executed and delivered on
behalf of each Loan Party party thereto.

4.3.        Governmental Approval. Except for (i) the Confirmation Order,
(ii) the filings referred to in Section 4.15, (iii) such consents,
authorizations, filings and notices which have been duly obtained or made and
are in full force and effect or (iv) as would not reasonably be expected to have
a Material Adverse Effect, no consent or authorization of, filing with, notice
to or other act by or in respect of, any Governmental Authority is required in
connection with the extensions of credit hereunder or with the execution,
delivery, performance by any Loan Party of, or the validity or enforceability
of, this Agreement or any of the Loan Documents (to which it is a party) or the
conduct by any Loan Party of its business (as conducted on the date this
representation is made or deemed made). The Borrower has delivered to the
Administrative Agent a complete and correct copy of the Plan of Reorganization,
the Confirmation Order and

 

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Plan Secured Notes, if any, including any amendments, supplements or
modifications with respect to any of the foregoing.

4.4.        Binding and Enforceable. This Agreement constitutes, and each other
Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

4.5.        No Violation. The execution, delivery and performance by any Loan
Party of this Agreement and the other Loan Documents to which it is a party, the
issuance of Letters of Credit, the borrowings hereunder and the use of the
proceeds thereof will not violate (i) its organizational documents or (ii) in
any manner which has had or would reasonably be expected to have a Material
Adverse Effect, any Requirement of Law or any Contractual Obligation of such
Loan Party.

4.6.        No Default. No Default or Event of Default has occurred and is
continuing, other than any Default or Event of Default which has been waived
pursuant to Section 11.1. As of the Closing Date, no Group Member is in default
(and, for purposes of making this representation on any date after the Closing
Date, has not been in default for more than 45 days) in any material respect
under or with respect to any of its material Contractual Obligations (other than
in respect of Debt) that, in the aggregate with other such defaults, would
reasonably be expected to have a Material Adverse Effect.

4.7.        Litigation. No litigation, investigation, arbitration, or
administrative proceeding is currently pending or, to the Borrower’s knowledge,
threatened against it or any Restricted Subsidiary or against any of their
respective properties or revenues (i) to restrain the entry by any Loan Party
into, the enforcement of or exercise of any rights by the Lenders or the
Administrative Agent under, or the performance or compliance by any Loan Party
with any obligations under, the Loan Documents to which it is a party or
(ii) which has had or would reasonably be expected to have a Material Adverse
Effect.

4.8.        Financial Condition. The unaudited pro forma consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at December 31, 2004
and the related pro forma consolidated statement of income for the fiscal year
then ended (including the notes thereto), copies of which have heretofore been
delivered to the Lenders, present fairly the pro forma consolidated financial
condition of the Borrower and its consolidated Subsidiaries as at said date and
the pro forma consolidated results of its operations for said fiscal year in
accordance with GAAP, excluding (i) the effects of “fresh start” accounting
under SOP 90-7 and (ii) the issuance of securities and the incurrence of Debt
pursuant to the Plan of Reorganization. As of the Closing Date and except as
would not reasonably be expected to have a Material Adverse Effect, neither the
Borrower nor any of its Subsidiaries will have any material debt or Guarantee
Obligations, contingent liabilities or liabilities for taxes, or any long-term
leases including any interest rate or foreign currency swap or exchange
transaction, that are not reflected in the foregoing financial statements
referred to in this Section 4.8, reflected in the

 

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disclosure statement for the Plan of Reorganization or otherwise expressly
disclosed to the Administrative Agent prior to the Closing Date.

4.9.        Material Adverse Change. Since December 31, 2004, there has been no
material adverse change in the financial condition, operations, business or
Assets of the Borrower or its Subsidiaries, which would have a material adverse
effect on the ability of the Borrower to pay when due amounts owed by it from
time to time under this Agreement.

4.10.      Investment Company Act; Public Utility Holding Company Act. No Loan
Party is an “investment company”, within the meaning of the Investment Company
Act of 1940, as amended. Prior to the effectiveness of the repeal of the Public
Utility Holding Company Act of 1935, as amended (“PUHCA”), no Loan Party is a
“holding company” or a “subsidiary company” of a “holding company” as defined in
PUHCA subject to any regulation under PUHCA restricting its ability to incur
Debt or execute or perform its obligations under the Loan Documents to which it
is a party. No Loan Party is subject to any regulation under the Federal Power
Act restricting its ability to incur Debt or execute or perform its obligations
under the Loan Documents to which it is a party.

4.11.      Environmental Matters. There has been no matter with respect to
environmental compliance which has had or would reasonably be expected to have a
Material Adverse Effect.

4.12.      Accuracy of Information, etc. No statement or information contained
in the Confidential Information Memorandum (other than projections and pro forma
financial information) as of the date of the Confidential Information Memorandum
or as of the Closing Date, contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements contained
herein or therein not misleading in light of the circumstances under which such
statements are made. The projections and pro forma financial information
contained in the Confidential Information Memorandum were prepared in good faith
based upon estimates and assumptions believed by management of the Borrower to
be reasonable at the time made, which are believed by management to remain
reasonable as of the Closing Date, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount.

4.13.      Employee Benefit Plans. Each Plan is in compliance in all material
respects with the applicable provisions of ERISA and the Code and the
regulations and published interpretations thereunder, except as would not result
in a Material Adverse Effect. No ERISA Event has occurred that, when taken
together with all other such ERISA Events, would result in a Material Adverse
Effect.

4.14.      Tax Returns and Payments. Each of the Borrower and its Restricted
Subsidiaries has filed or caused to be filed with the appropriate taxing
authorities, all Federal, state and other tax returns, statements, forms and
reports for taxes (the “Returns”) that are required to be filed by or with
respect to the income, property or operations of the Borrower and/or any of its
Restricted Subsidiaries and has paid or caused to be paid, all taxes shown to be

 

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due and payable on said Returns (other than any the amount or validity of which
is currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books and records of the relevant entities), except where failure to take any
such action is excused by the filing of the Chapter 11 Cases or would not
reasonably be expected to have a Material Adverse Effect.

4.15.      Security Documents. (a) The Guarantee and Collateral Agreement is
effective to create in favor of the Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements and other filings specified on
Schedule 4.15(a) in appropriate form are filed in the offices specified on
Schedule 4.15(a), the Guarantee and Collateral Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person (except, in the case of
Collateral other than Pledged Stock, Liens permitted by Section 8.3).

(b)         Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on
Schedule 4.15(b), each such Mortgage shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
the Mortgaged Properties and the proceeds thereof, as security for the
Obligations (as defined in the relevant Mortgage), in each case prior in right
to any other Person other than Liens permitted by Section 8.3 and those Persons
claiming through exceptions shown on title. Schedule 1.1B lists, as of the
Closing Date, each parcel of owned real property and each leasehold interest in
real property located in the United States and held by the Borrower or any of
its Subsidiaries.

4.16.      Ownership of Property. Except as would not reasonably be expected to
have a Material Adverse Effect, the Borrower and each Restricted Subsidiary has
good and marketable title to, or a subsisting leasehold interest in or right to
use, all material items of real and personal property necessary for its
operations free and clear of all Liens, except as permitted by Section 8.3.

4.17.      Labor Matters. Except as, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect, there are no strikes against or
other work stoppages by employees of any Group Member pending.

4.18.      Subsidiaries. Schedule 4.18 sets forth as of the Closing Date the
name and jurisdiction of incorporation of each Subsidiary and, as to each such
Subsidiary, the percentage of each class of Capital Stock owned by any Loan
Party. The shares of Capital Stock or other ownership interests so indicated on
Schedule 4.18 are fully paid and non-assessable and are owned by such Loan
Party, directly or indirectly, free and clear of all Liens (other than as
permitted by Section 8.3).

 

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SECTION 5. CONDITIONS PRECEDENT

5.1.        Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:

(a)         Credit Agreement; Guarantee and Collateral Agreement. The
Administrative Agent shall have received (i) this Agreement or, in the case of
the Lenders, an Addendum, executed and delivered by the Administrative Agent,
the Borrower and each Person listed on Schedule 1.1A, (ii) the Guarantee and
Collateral Agreement, executed and delivered by the Borrower and each Subsidiary
Guarantor and (iii) an Acknowledgement and Consent in the form attached to the
Guarantee and Collateral Agreement, executed and delivered by each Issuer (as
defined therein) that is a Subsidiary of the Borrower, if any, that is not a
Loan Party.

In the event that any one or more Persons listed on Schedule 1.1A have not
executed and delivered an Addendum on the date scheduled to be the Closing Date
(each such Person being referred to herein as a “Non-Executing Person”), the
condition referred to in clause (i) above shall nevertheless be deemed satisfied
if on such date the Borrower and the Administrative Agent shall have designated
one or more Persons (the “Designated Lenders”) to assume, in the aggregate, all
of the Commitments that would have been held by the Non-Executing Persons
(subject to each such Designated Lender’s consent and its execution and delivery
of an Addendum). Schedule 1.1A shall automatically be deemed to be amended to
reflect the respective Commitments of the Designated Lenders and the omission of
the Non-Executing Persons as Lenders hereunder.

(b)         Closing Certificate; Certified Certificate of Formation; Good
Standing Certificates. The Administrative Agent shall have received (i) a
certificate of each Loan Party, dated the Closing Date, substantially in the
form of Exhibit C, with appropriate insertions and attachments, including the
certificate of incorporation of each Loan Party that is a corporation certified
by the relevant authority of the jurisdiction of organization of such Loan Party
or the certificate of formation and limited liability company agreement of each
Loan party that is a limited liability company, and (ii) a long form good
standing certificate for each Loan Party from its jurisdiction of organization
(where available).

(c)         Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:

(i)          the legal opinion of White & Case LLP counsel to the Borrower and
its Subsidiaries, substantially in the form of Exhibit F; and

(ii)         the legal opinion of local counsel in each of California, Texas,
Michigan and Massachusetts and of such other special and local counsel as may be
required by the Administrative Agent.

 

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Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.

(d)         Representations and Warranties. Each of the representation and
warranties made by any Loan Party in or pursuant to the Loan Documents shall be
true and correct in all material respects on and as of the Closing Date. No
Default or Event of Default shall have occurred and be continuing on the Closing
Date or after giving effect to the extensions of credit requested to be made on
the Closing Date and the application of proceeds therefrom.

(e)         Fees. The Lenders and the Administrative Agent shall have received
all fees required to be paid, and all reasonable and documented expenses for
which invoices have been presented (including the reasonable fees and expenses
of legal counsel), at least one (1) day prior to the Closing Date. All such
amounts will be paid with proceeds of Loans made on the Closing Date and will be
reflected in the funding instructions given by the Borrower to the
Administrative Agent on or before the Closing Date.

(f)         Plan of Reorganization. (i) All conditions precedent to the
confirmation of the Plan of Reorganization and the Effective Date (as defined
and described in the Plan of Reorganization) in respect thereof shall have been
met or waived (and the waiver thereof, if material and adverse to the Lenders,
shall have been consented to by the Administrative Agent), (ii) each of the
Effective Date and the substantial consummation of the Plan of Reorganization
shall have occurred and the Plan of Reorganization, as confirmed by the
Confirmation Order, shall be in full force and effect and (iii) the Arrangers
shall have received a certificate, dated the Closing Date and signed by a
financial officer of the Borrower, confirming compliance with this
condition. The Arrangers shall have received a certified copy of the
Confirmation Order and, except as would not reasonably be expected to have a
Material Adverse Effect, such Confirmation Order shall not have been reversed,
modified, stayed or amended or be the subject of a pending appeal and at least
ten (10) days shall have passed since the entry of the Confirmation Order.

(g)         Financial Statements. The Lenders shall have received (i) audited
financial statements of MAG for the 2002, 2003 and 2004 fiscal years,
(ii) unaudited interim consolidated financial statements of MAG for each
quarterly period ended after the latest fiscal year referred to in clause
(i) above if such period ends on a date falling 60 days or more prior to the
Closing Date or is otherwise available and such unaudited consolidated financial
statements for the same period of the prior fiscal year and (iii) as soon as
available to management, monthly financial data generated by MAG’s internal
accounting systems for use by senior and financial management for each month
ended after the latest fiscal quarter referred to in clause (ii) above

(h)         Pro Forma Balance Sheet. The Lenders shall have received a pro forma
condensed combined balance sheet of the Borrower and its Subsidiaries as at the
date of the most recent consolidated balance sheet delivered pursuant to
Section 5.1(g) and a pro forma condensed combined statement of operations for
the year ended December 31, 2004, in each case adjusted to give effect to the
consummation of the Plan of

 

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Reorganization and the financings contemplated hereby as if such transactions,
with respect to the pro forma balance sheet, had occurred on such date or with
respect to the pro forma statements of operations, had occurred on the first day
of the year ended December 31, 2004.

(i)         Environmental Assessment. ENVIRON shall have delivered an original
copy of its environmental report, dated September 2005 to the Administrative
Agent, and such report shall be reasonably satisfactory to the Administrative
Agent.

(j)         Restructuring of Debt. The Administrative Agent shall have received
evidence satisfactory to it that substantially all of the existing Debt of the
Borrower and its Subsidiaries (other than Permitted Debt) shall have been repaid
or restructured as expressly contemplated in the Plan of Reorganization or
otherwise on terms satisfactory to the Administrative Agent.

(k)         Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets of the
Loan Parties are located, and such search shall reveal no liens on any of the
assets of the Loan Parties except for liens permitted by Section 8.3 or
discharged on or prior to the Closing Date pursuant to documentation
satisfactory to the Administrative Agent.

(l)         Pledged Stock; Stock Powers. The Administrative Agent shall have
received the certificates representing the shares of Capital Stock pledged
pursuant to the Guarantee and Collateral Agreement, together with an undated
stock power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof.

(m)         Filings, Registrations and Recordings. Each document (including any
Uniform Commercial Code financing statement) required by the Security Documents
or under law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the Administrative Agent,
for the benefit of the Lenders, a perfected Lien on the Collateral described
therein, prior and superior in right to any other Person (other than with
respect to Liens expressly permitted by Section 8.3), shall be in proper form
for filing, registration or recordation.

(n)         Mortgages, etc. The Administrative Agent shall have received a
Mortgage with respect to each Mortgaged Property, executed and delivered by a
duly authorized officer of each party thereto. The Administrative Agent shall
have received in respect of each Mortgaged Property a mortgagee’s title
insurance policy (or policies), and each such policy shall (i) be in an amount
satisfactory to the Administrative Agent, (ii) insure that the Mortgage insured
thereby creates a valid first Lien on such Mortgaged Property free and clear of
all Liens, defects and encumbrances, except for Liens permitted by Section 8.3
or exceptions shown on title, (iii) be in the form reasonably acceptable to the
Administrative Agent, (iv) name the Administrative Agent for the benefit of the
Lenders as the insured thereunder and (v) contain such endorsements and
affirmative coverage as reasonably required by the Administrative Agent.

 

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(o)         MIRMA. The Lenders shall have received (i) certification from the
Borrower that MIRMA is not prohibited from making distributions or dividends as
of the Closing Date and, based upon financial projections of MIRMA and its
Subsidiaries prepared in good faith and based upon estimates and assumptions
that the Borrower believes to be reasonable at the time delivered, MIRMA is not
projected to be prohibited from making distributions and dividends during the
term of the Loans (unless such prohibition arises solely from the requirement
under the Facility Lease Documents with respect to MIRMA and its Subsidiaries
that MIRMA and its Subsidiaries deliver financial statements for the most
recently completed fiscal year or fiscal quarter, as the case may be, and the
date of determination is less than 90 or 60 days, as the case may be, from the
end of such fiscal year or fiscal quarter) and (ii) reasonably detailed
computations that demonstrate to the reasonable satisfaction of the Arrangers
compliance with any restrictions on restricted payments applicable to MIRMA.

5.2.        Conditions to Each Extension of Credit. The agreement of each Lender
to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:

(a)         Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents (other
than those set forth in Sections 4.7, 4.9 and 4.12 of this Agreement) shall be
true and correct in all material respects on and as of such date as if made on
and as of such date.

(b)         No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the extensions of credit
requested to be made on such date and the application of proceeds therefrom.

Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.

SECTION 6. AFFIRMATIVE COVENANTS

The Borrower hereby agrees that, so long as the Commitments remain in effect,
any Letter of Credit remains outstanding or any Loan or other amount is due and
owing to any Lender or the Administrative Agent hereunder:

6.1.        Compliance with Law; Maintenance of Existence. (a) Each Loan Party
and its Subsidiaries shall comply with all Requirements of Law (including
Environmental Laws) applicable to such Loan Party and such Subsidiaries in the
conduct of their respective businesses except to the extent that failure to
comply therewith would not reasonably be expected to have a Material Adverse
Effect; and (b) each Loan Party shall preserve, renew and keep in full force and
effect its organizational existence except as otherwise permitted by
Section 8.4.

6.2.        Financial Statements. The Borrower shall furnish to the
Administrative Agent with copies for each Lender:

 

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(a)         within the earlier of (x) ninety (90) days after the end of each
fiscal year of the Borrower (beginning with the fiscal year ended December 31,
2005) and (y) five (5) Business Days of the date on which such financial
statements are filed with the SEC (the Borrower shall be deemed to have
delivered such financial statements if the Borrower provides written notice
(which may be in electronic form) of the making or filing of any financial
statements required in this clause (a) and the same are continuously available
on “EDGAR,” the Electronic Data Gathering Analysis and Retrieval system of the
SEC), a copy of the audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year, certified by
KPMG or other independent certified public accountants of nationally recognized
standing; and

(b)         within the earlier of (x) sixty (60) days after the end of each
fiscal quarter (other than the last fiscal quarter) of each fiscal year of the
Borrower (commencing with the fiscal quarter ending March 31, 2006) and (y) five
(5) Business Days of the date on which such financial statements are filed with
the SEC (the Borrower shall be deemed to have delivered such financial
statements if the Borrower provides written notice (which may be in electronic
form) of the making or filing of any financial statements required in this
clause (b) and the same are continuously available on “EDGAR,” the Electronic
Data Gathering Analysis and Retrieval system of the SEC), the unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such quarter, certified by a Responsible Officer as being prepared
in accordance with GAAP (subject to normal year-end audit adjustments).

All such financial statements shall present fairly the financial condition of
the Borrower and its consolidated Subsidiaries and shall be prepared in
reasonable detail and in accordance with GAAP.

6.3.        Certificates; Other Information. The Borrower shall furnish to the
Administrative Agent with copies for each Lender (or, in the case of clause (c),
to such Lender or, in the case of clause (d) and (e), to the Administrative
Agent):

(a)         concurrently with the delivery of any financial statements pursuant
to Section 6.2, in the case of quarterly or annual financial statements, (i) a
certificate of a Responsible Officer stating that each Loan Party during such
period has complied with the terms of this Agreement and the other Loan
Documents to which it is a party, and that such Responsible Officer has obtained
no knowledge of any Default or Event of Default except as specified in such
certificate (and if such certificate specifies any Default or Event of Default
has occurred, specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto) and (ii) a Compliance
Certificate containing all information and calculations necessary for
determining compliance by each Group Member with the provisions of this
Agreement referred to therein as of the last day of the fiscal quarter or fiscal
year of the Borrower, as the case may be;

(b)         as soon as available, and in any event no later than sixty (60) days
(or, in the case of the initial Projections delivered after the fiscal year
ended December 31, 2005,

 

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ninety (90) days) after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year prepared on a quarterly basis
(including a projected consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of the following fiscal year, the related
consolidated statements of projected cash flow, projected changes in financial
position and projected income and a description of the underlying assumptions
applicable thereto) (collectively, the “Projections”), which Projections shall
in each case be accompanied by a certificate of a Responsible Officer stating
that such Projections are prepared in good faith based on estimates, information
and assumptions that such Responsible Officer believes to be reasonable at the
time they are prepared;

(c)         promptly after the request by any Lender, all documentation and
other information that such Lender reasonably requests in order to comply with
its ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, as amended (the “USA PATRIOT Act”);

(d)         as soon as reasonably practicable, such additional financial and
other information relating to the then existing financial condition of the
Borrower and its Restricted Subsidiaries as the Administrative Agent may from
time to time reasonably request, subject to an agreed upon confidentiality
provision or except where the disclosure of such information is prohibited by
law or by regulatory requirement; and,

(e)         copies of compliance certificates in the form of Exhibit GG to the
Participation Agreements constituting Facility Lease Documents required to be
delivered thereunder, together with all information delivered pursuant to
Exhibit Three to Exhibit F to the Plan of Reorganization that supports the
calculations set forth in such compliance certificates, at the times such
compliance certificates and information are required to be delivered under the
Facility Lease Documents.

6.4.        Notices. Within five (5) Business Days of a Responsible Officer
obtaining knowledge thereof, the Borrower shall give notice to the
Administrative Agent and each Lender of:

(a)         the occurrence of any Default or Event of Default;

(b)         the occurrence of any ERISA Event that, alone or together with any
other ERISA Event, would result in a Material Adverse Effect;

(c)         any change in the Borrower’s S&P Rating or Moody’s Rating; and

(d)         any litigation, investigation or proceeding affecting any Loan Party
that may exist at any time that would reasonably be expected to have a Material
Adverse Effect.

Each notice pursuant to this Section 6.4 (other than clause (c)) shall be
accompanied by a statement of a Responsible Officer setting forth details of the
occurrence

 

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referred to therein and stating what action the relevant Group Member or other
Subsidiary of the Borrower proposes to take with respect thereto.

6.5.        Inspection. The Borrower shall permit the Administrative Agent or
any other Lender or any agents or representatives thereof (at the expense of the
Administrative Agent and/or such Lender unless an Event of Default has occurred
and is continuing), to examine and make copies of and abstracts from records and
books of, and visit the properties of, the Borrower to discuss the affairs,
finances and accounts of the Borrower with any of its officers or directors and
with its independent certified public accountants (in the presence of the
Borrower) from time to time during normal business hours upon reasonable
notice. The Administrative Agent agrees to coordinate and consolidate visits
pursuant to this Section 6.5 by Lenders and their agents and representatives
(including the examination of books and records and the making of copies and
abstracts of books and records) at mutually convenient times and in such a
manner so as to cause minimum disruption to the operations of the Borrower and
to minimize costs associated with such visits.

6.6.        Maintenance of Property; Insurance. The Borrower shall, and shall
cause each Restricted Subsidiary to (a) keep all material property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted except (x) if in the good faith business judgment of the Borrower
it is in its economic interest not to preserve and maintain such property or
(y) the failure to do so would not reasonably be expected to have a Material
Adverse Effect and (b) maintain with financially sound and reputable insurance
companies insurance on all its property in at least such amounts and against at
least such risks as are usually insured against in the same general area by
companies engaged in the same or a similar business to the extent available on
commercially reasonable terms.

6.7.        Subsequent Acquired Property; New Subsidiaries. (a) The Borrower
shall with respect to any material property acquired after the Closing Date by
any Loan Party (other than (x) any property described in paragraph (b), (c) or
(d) below, (y) any property subject to a Lien expressly permitted by
Section 8.3(c), (f) and (g), and in which and to the extent that the
Administrative Agent is prohibited from taking a security interest by the terms
of the agreement imposing such Lien and (z) property acquired by any Excluded
Foreign Subsidiary) as to which the Administrative Agent, for the benefit of the
Lenders, does not have a perfected Lien, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
or such other documents as the Administrative Agent reasonably deems necessary
or advisable to grant to the Administrative Agent, for the benefit of the
Lenders, a security interest in such property and (ii) take all actions
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest in such property,
including the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Administrative Agent; provided that the
Borrower and its Subsidiaries shall not be required (A) to perfect the security
interests in deposits and investment accounts by entering into separate lockbox
or account control agreements; (B) to perfect any security interest in motor
vehicles or (C) to perfect any security interests in any Collateral (other than
Capital Stock of Subsidiaries) by possession except as otherwise agreed or
required pursuant to the Loan Documents.

 

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(b)         The Borrower shall with respect to any fee interest in any real
property having a value (together with improvements thereof) of at least
$25,000,000 (i) acquired after the Closing Date by the Borrower or any
Subsidiary Guarantor or (ii) owned by any Subsidiary that becomes a Subsidiary
Guarantor after the Closing Date (other than (x) any such real property subject
to a Lien expressly permitted by Section 8.3 and (y) real property acquired by
any Excluded Foreign Subsidiary), promptly (1) execute and deliver a first
priority Mortgage, in favor of the Administrative Agent, for the benefit of the
Lenders, covering such real property, which in the case of each of: (A) the
Hydros (Rio, Mongap and Swingline Bridge) including Hillburn Generating Plant;
(B) Lovett Generating Plant; and (C) Bowline Generating Plant (including West
Haverstraw) shall be “capped” at $10,000,000 each, (2) if reasonably requested
by the Administrative Agent, provide the Lenders with title and extended
coverage insurance covering such real property in an amount at least equal to
the purchase price of such real property (or such other amount as shall be
reasonably specified by the Administrative Agent; provided, however, that the
Borrower shall be required to deliver title policies for the following
properties only in the amount of $10,000,000 each: (i) the Hydros (Rio, Mongap
and Swinging Bridge), including Hillburn Generating Plant; (ii) Lovett
Generating Plant; and (iii) Bowline Generating Plant (including West Haverstraw)
and otherwise conforming to the requirements set forth in Section 5.1(n) and
(3) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions related to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.

(c)         If any additional Subsidiary is formed or acquired after the Closing
Date or any Subsidiary ceases to be an Unrestricted Subsidiary, the Borrower
shall promptly notify the Administrative Agent thereof. The Borrower shall with
respect to any new Subsidiary (other than an Excluded Foreign Subsidiary or a
new Subsidiary substantially all of the Assets and the Capital Stock of which
are subject to Liens permitted by Section 8.3) created or acquired after the
Closing Date by any Group Member (which, for the purposes of this paragraph (c),
shall include (x) any existing Subsidiary that ceases to be an Excluded Foreign
Subsidiary and (y) any existing Subsidiary that is no longer an Unrestricted
Subsidiary), promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by any Group Member,
(ii) deliver to the Administrative Agent the certificates representing such
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the relevant Group Member, and
(iii) if such new Subsidiary is a Restricted Subsidiary (other than any new
Subsidiary of MIRMA, MET, or New MAEM Holdco, LLC), cause such new Restricted
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement as a
Subsidiary Guarantor, (B) to take such actions necessary or advisable to grant
to the Administrative Agent for the benefit of the Lenders a perfected first
priority security interest in the Collateral described in the Guarantee and
Collateral Agreement with respect to such new Restricted Subsidiary, including
the filing of Uniform Commercial Code financing statements in such jurisdictions
as may be required by the Guarantee and Collateral Agreement or by law or as may
be reasonably requested by the Administrative Agent and (C) to deliver to the
Administrative Agent a certificate of such Subsidiary, substantially in the form
of Exhibit C, with appropriate insertions and attachments.

 

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(d)         With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by any Group Member (other than by any Group
Member that is an Excluded Foreign Subsidiary), promptly (i) execute and deliver
to the Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is
owned by any such Group Member (provided that in no event shall more than 66% of
the total outstanding voting Capital Stock of any such new Subsidiary be
required to be so pledged), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
relevant Group Member, and take such other action as may be necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Administrative
Agent’s security interest therein, and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.

(e)         The Borrower shall promptly (i) notify the Administrative Agent in
writing of the designation of any Subsidiary as an “Unrestricted Subsidiary” and
(ii) deliver to the Administrative Agent a certificate signed by a Responsible
Officer certifying that such designation complied with the conditions set forth
in the definition of “Unrestricted Subsidiary”.

6.8.        Collateral Information. The Borrower shall, and shall cause each
Restricted Subsidiary to, furnish to the Administrative Agent prompt written
notice of any change (i) in any Loan Party’s corporate name, (ii) in the
jurisdiction of organization or formation or the location of the chief executive
office or sole place of business or principal residence of any Loan Party from
that referred to in Section 4.2 of the Guarantee and Collateral Agreement, or
(iii) in any Loan Party’s Federal Taxpayer Identification Number. The Borrower
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the Uniform Commercial Code or otherwise
that are required in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all of the Collateral.

6.9.        Further Assurances. The Borrower shall, and shall cause each
Restricted Subsidiary to, execute any and all further documents, financing
statements, agreements and instruments, and take all further action (including
filing Uniform Commercial Code and other financing statements, mortgages and
deeds of trust and delivering to the Administrative Agent certificates
representing securities pledged under the Security Documents) that may be
required under applicable law, or that the Majority Lenders or the
Administrative Agent may reasonably request, in order to grant, preserve,
protect and perfect the validity and priority of the security interests created
or intended to be created by the Security Documents.

6.10.      Use of Proceeds. The Borrower shall deposit $200,000,000 of the
proceeds of the Term Loans made on the Closing Date in the Synthetic L/C Deposit
Account in accordance with Section 3.8(b). The remaining proceeds of the Loans
and the Letters of Credit shall be used for general corporate purposes. No part
of the proceeds of any Loans or other extension of credit under this Agreement,
shall be used for any purpose that violates the provisions of Regulation U of
the Board. If requested by any Lender or the Administrative

 

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Agent, the Borrower shall furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR
Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.

SECTION 7. FINANCIAL COVENANTS

The Borrower hereby agrees that, so long as the Commitments remain in effect,
any Letter of Credit remains outstanding or any Loan or other amount is due and
owing to any Lender or the Administrative Agent hereunder:

7.1.        Interest Coverage Ratio. The Borrower shall not permit the Interest
Coverage Ratio for any period of four consecutive fiscal quarters of the
Borrower (including the fourth fiscal quarter) (or, if less than four fiscal
quarters have ended since the Closing Date, the number of full fiscal quarters
commencing with the fiscal quarter ending March 31, 2006) to be less than 2.0 to
1.0.

7.2.        Leverage Ratio. The Borrower shall not permit the Leverage Ratio as
at the last day of any period of four consecutive fiscal quarters of the
Borrower (including the fourth fiscal quarter) to exceed 6.0 to 1.0 (or, if less
than four fiscal quarters have ended since the Closing Date, EBITDA for the
relevant period shall be deemed to equal EBITDA for the one, two or three
immediately preceding completed fiscal quarters commencing with the fiscal
quarter ending March 31, 2006, multiplied by 4, 2 and 4/3 respectively).

7.3.        Capital Expenditures. The Borrower shall not, and shall not permit
any Restricted Subsidiary to, make Capital Expenditures during any fiscal year
of the Borrower (not including any amount of (i) Environmental Capital
Expenditures and other Capital Expenditures made to comply with Requirements of
Law, (ii) Capital Expenditures incurred under long-term service agreements or
(iii) without duplication, Capital Expenditures financed with Debt referred to
in clauses (iv) and (v) of the definition of Permitted Debt or from Net Cash
Proceeds from Asset Sales, Recovery Events or from the proceeds of equity
contributions or Affiliate Subordinated Debt) exceeding $200,000,000 in the
aggregate for the Borrower and its Restricted Subsidiaries; provided, that
(a) any such amount referred to above, if not so expended in the fiscal year for
which it is permitted, may be carried over for expenditure in the next
succeeding fiscal year, and (b) the Borrower shall be permitted to increase the
permitted amount of Capital Expenditures in any fiscal year by reducing such
permitted amount with respect to the next succeeding fiscal year by an amount
equal to such increase. For purposes of determining any carry-over amount
pursuant to clause (a) of the proviso above, Capital Expenditures made pursuant
to this Section during any fiscal year shall be deemed made first, in respect of
amounts permitted for such fiscal year as provided above and second, in respect
of amounts carried over from the prior fiscal year pursuant to such clause (a).

7.4.        Notwithstanding any financial covenant set forth above in Sections
7.1, 7.2 and 7.3 in this Section 7, if the Borrower’s Moody’s Rating is not less
than Baa3 and the Borrower’s S&P rating is not less than BBB-, in each case with
a stable or better outlook, such financial covenants shall be deemed replaced
with the following for so long as such ratings are maintained (without regard to
outlook):

 

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(a)         Capitalization Ratio. The Borrower shall not permit the ratio of
(i) Consolidated Total Debt to (ii) Consolidated Capitalization for any period
of four consecutive fiscal quarters of the Borrower (including the fourth fiscal
quarter) to be greater than 0.65 to 1.0; and

(b)         Interest Coverage Ratio. The Borrower shall not permit the Interest
Coverage Ratio for any period of four consecutive fiscal quarters of the
Borrower (including the fourth fiscal quarter) to be less than 2.5 to 1.0.

SECTION 8. NEGATIVE COVENANTS

The Borrower hereby agrees that, so long as the Commitments remain in effect,
any Letter of Credit remains outstanding or any Loan or other amount is due and
owing to any Lender or the Administrative Agent hereunder (provided that if the
Borrower’s Moody’s Rating is not less than Baa3 and the Borrower’s S&P Rating is
not less than BBB-, in each case with a stable or better outlook, Section 8.1,
8.2, 8.5 and 8.6 below shall not be effective so long as such ratings are
maintained (without regard to outlook)):

8.1.        Debt. The Borrower shall not, and shall not permit any Restricted
Subsidiary to, create, issue, incur, assume, become liable in respect of or
suffer to exist any Debt, except Permitted Debt; unless, in the case of the
Borrower or any Subsidiary Guarantor only, at the end of the fiscal quarter
(including the fourth fiscal quarter) of the Borrower for which financial
statements have been delivered to the Administrative Agent immediately preceding
the date on which such Debt is incurred, the Leverage Ratio was less than 4.0 to
1.0, calculated, in the case of EBITDA, on a rolling four fiscal quarter basis
ending on the last day of such fiscal quarter and giving pro forma effect to the
incurrence of such Debt as of the first date of such period (or, if at such time
less than four fiscal quarters have ended since the Closing Date, EBITDA shall
be calculated as EBITDA for one, two or three immediately preceding completed
fiscal quarters commencing with the fiscal quarter ending March 31, 2006,
multiplied by 4, 2 and 4/3 respectively).

8.2.        Restricted Payments. The Borrower shall not, and shall not permit
any Restricted Subsidiary, to (i) declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of Capital Stock of the Borrower or such
Restricted Subsidiary, (ii) make any payments with respect to Affiliate
Subordinated Debt or make any redemption or repurchase of any Affiliate
Subordinated Debt or (iii) purchase, redeem or otherwise acquire for value any
shares of any class of Capital Stock of the Borrower or Restricted Subsidiary or
any warrants, rights or options to acquire any such shares, now or hereafter
outstanding, or reduce its capital (each, a “Restricted Payment”); provided,
however, that the Borrower may, and may permit its Restricted Subsidiaries to
(w) declare and pay dividends and other distributions within five (5) Business
Days of the Closing Date, as contemplated by the Plan of Reorganization, in an
amount not to exceed $250,000,000, (x) declare and make any dividend payment or
other distribution payable in Common Stock of the Borrower, (y) with respect to
any Restricted Subsidiary, declare and make any dividend payment or other
distribution (A) payable to the Borrower or any Restricted Subsidiary, or
(B) where the Borrower or the Restricted Subsidiary which owns the Capital Stock
in the payor receives at least its proportionate share thereof (after giving
effect to the relative rights and

 

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preferences of the various classes of Capital Stock of such payor), and (z) with
respect to the Borrower, if there is no Default or Event of Default and none
would result therefrom, take action specified in clause (i), (ii) and
(iii) above (I) if, at the end of the fiscal quarter (including the fourth
fiscal quarter) of the Borrower for which financial statements have been
delivered to the Administrative Agent, most recently preceding the date on which
the Borrower takes such action, the Interest Coverage Ratio was at least 3.0 to
1.0, calculated on a rolling four fiscal quarter basis ending on the date of
such financial statements and with effect from the date of such delivery of such
financial statements (or, if at such time less than four fiscal quarters have
ended since the Closing Date, the immediately preceding fiscal quarters
commencing with the fiscal quarter ending March 31, 2006), and the aggregate
amount of payments made under this clause (z) of this Section 8.2 since the
Closing Date (including the contemplated Restricted Payment and under clause
(II) of this Section 8.2) is less than the sum of (a) 100% of cash on hand on
the Closing Date (after giving effect to all cash payments and distributions
made or to be made pursuant to the Plan of Reorganization) plus (b) 100% of Free
Cash Flow since the Closing Date (less any amounts of Free Cash Flow applied to
prepay the Term Loans as required under Section 2.11) and (II) in an amount
equal to the amount of interest payable by MAG with respect to the MAG Senior
Notes within five (5) Business Days of such distribution or dividend.

8.3.        Liens. The Borrower shall not, and shall not permit any Restricted
Subsidiary to, create, incur, assume or suffer to exist any Lien upon any of its
property, whether now owned or hereafter acquired, except:

(a)         Liens arising solely by operation of law or by order of a court or
tribunal or other Governmental Authority (or by an agreement of similar effect);

(b)         Liens arising in the ordinary course of business or operations, in
respect of overdue amounts which either (A) have not been overdue for more than
thirty (30) days or (B) are being contested in good faith;

(c)         Liens securing Permitted Debt as contemplated by the definition
thereof;

(d)         Liens arising out of title retention or like provisions in relation
to the acquisition of goods or equipment acquired in the ordinary course of
business or operations and relating only to such goods or equipment;

(e)         Liens on deposits to secure, or any Lien otherwise securing, the
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations, surety bonds, appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;

(f)         Liens created or arising over any Asset which is acquired,
constructed or created by the Borrower or a Restricted Subsidiary, but only if
(x) such Lien secures only principal amounts (not exceeding the cost of such
acquisition, construction or creation) of Debt incurred for the purposes of such
acquisition, construction or creation, together with any costs, expenses,
interest and fees incurred in relation thereto or a guarantee given in respect
thereof, (y) such Lien is created or arises on or before ninety (90) days after
the

 

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completion of such acquisition, construction or creation and (z) such Lien is
confined solely to the property so acquired, constructed or created;

(g)         Liens (x) outstanding on or over any Asset acquired after the date
hereof, (y) in existence at the date of such acquisition and (z) where the
Borrower does not take any step to increase the principal amount secured thereby
from that so secured and outstanding at the time of such acquisition (other than
in the case of Liens for a fluctuating balance facility, by way of utilization
of that facility within the limits applicable thereto at the time of
acquisition);

(h)         Liens constituted by a right of set off or rights over a margin call
account or any form of cash collateral and letters of credit or any similar
arrangement for obligations incurred in respect of any agreement for the sale
of, or the hedging or management of risks with respect to, electric energy or
capacity, commodities, currency or interest rates, which arrangement was entered
into on arm’s-length, commercial terms;

(i)          (x) Liens in favor of counterparties to any PPA or FSA (other than
Affiliates of the Borrower) that are junior to the Liens created by the Security
Documents pursuant to an agreement in the form of Exhibit I or otherwise on
terms reasonably satisfactory to the Administrative Agent; (y) Step-In Rights;
and (z) Liens in favor of counterparties to any PPA or FSA (other than
Affiliates of the Borrower) that are pari passu with the Liens securing the
Obligations and are granted solely to secure the obligations of the Borrower or
any Restricted Subsidiary under such PPA or FSA, which in the aggregate for the
Borrower and its Restricted Subsidiaries do not exceed at any time outstanding
$100,000,000, provided that (1) the Lien is limited to the Assets of the
Borrower or Restricted Subsidiary specific to its performance under the PPA or
FSA, as the case may be, secured by such Assets and (2) the obligations secured
by each such Lien are structured so that the counterparty’s credit exposure and
actual or projected mark-to market exposure to the Borrower or Restricted
Subsidiary, as the case may be, is positively correlated with power prices;

(j)         Liens in favor of a plaintiff or defendant in any action before a
court or tribunal as security for costs or expenses where such action is being
prosecuted or defended in the bona fide interest of the Borrower;

(k)        Liens described in any of clauses (d) through (g) above or clauses
(l) and (m) below which are renewed or extended upon the renewal or extension or
refinancing or replacement of the Debt secured thereby, provided that there is
no increase in the principal amount of the Debt secured thereby over the
principal, capital or nominal amount thereof (plus any accrued interest and
prepayment premium) outstanding immediately prior to such refinancing;

(l)         Liens existing on the date hereof and listed on Schedule 8.3(l),
provided that no such Lien is spread to cover any additional property after the
Closing Date and that the amount of the obligations secured thereby is not
increased;

 

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(m)        Liens on the property of a Person existing at the time such Person is
merged into or consolidated with, or acquired by, the Borrower or a Restricted
Subsidiary thereof and not incurred in contemplation with such merger,
consolidation or acquisition;

(n)         Liens created pursuant to the Security Documents;

(o)         pledges or deposits in connection with workers’ compensation,
unemployment insurance and other social security legislation;

(p)         Liens for taxes not yet due or that are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books and records of the Borrower or its
Restricted Subsidiaries, as the case may be, in conformity with GAAP;

(q)         Liens securing Debt or other obligations not exceeding $50,000,000
at any one time outstanding;

(r)         any interest or title of a lessor under any lease entered into by
the Borrower or any other Subsidiary in the ordinary course of its business and
covering only the assets so leased; and

(s)         any interest or title of a lessor whether by statute, common-law or
by virtue of a lease entered into by the Borrower or any Subsidiary in the
ordinary course of its business and covering the property of the Borrower or any
such Subsidiary located in, at or on the leased premises.

8.4.        Mergers. The Borrower will not, and will not permit any Restricted
Subsidiary to, enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or Dispose of all or substantially all of its property or
business, except that:

(a)         any Loan Party may merge, consolidate or amalgamate with, or dispose
of all or substantially all of its property or business to, another Loan Party
or any Person which, immediately following such transaction, shall be a Loan
Party;

(b)         any Restricted Subsidiary (other than a Subsidiary Guarantor) may
merge, consolidate or amalgamate with, or dispose of all or substantially all of
its property or business to, the Borrower or any other Restricted Subsidiary;

(c)         any Loan Party may dispose of all or substantially all of its
property or business in a transaction which does not violate Section 8.5; and

(d)         any Restricted Subsidiary may liquidate, wind-up or dissolve itself
into another Restricted Subsidiary or the Borrower.

8.5.        Asset Sales. The Borrower will not, and will not permit any
Restricted Subsidiary to, conduct any Asset Sale other than the sale or
disposition of Assets for which 75% of the consideration received (excluding any
Debt of any such Restricted Subsidiary assumed in

 

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connection with any such sale or Disposition) is in cash (which, for purposes of
this Section 8.5, shall include liabilities, securities, notes or other
obligations received by the Borrower or any Restricted Subsidiary that are
convertible into cash (and are so converted within 180 days after the completion
of the Asset Sale) and certain replacement and other capital assets and
operating assets received by the Borrower or any Restricted Subsidiary);
provided that prior to the execution of a legally binding agreement to
consummate (A) any Asset Sale which shall relate to Assets with a fair market
value in excess of $150,000,000 or (B) if the fair market value of all Assets
sold, transferred, leased or disposed of pursuant to this paragraph shall exceed
$150,000,000 in any fiscal year, each Asset Sale thereafter during such fiscal
year, the Borrower shall have received written confirmation from each of S&P and
Moody’s that the credit ratings assigned by such entities to the Loans shall be
no lower than such ratings assigned by S&P and Moody’s, as the case may be, to
the Loans immediately prior to the time that S&P and Moody’s, as the case may
be, shall have become aware of such proposed Asset Sale, the use of the proceeds
thereof and all transactions related thereto, in each case after giving effect
to such Asset Sale, the use of the proceeds thereof and all transactions related
thereto.

8.6.        Investments. The Borrower will not, and will not permit any
Restricted Subsidiary to, make any advance, loan, extension of credit (by way of
guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, any Person (all of
the foregoing, “Investments”), except:

(a)         extensions of trade credit in the ordinary course of business;

(b)         Investments in cash and Cash Equivalents;

(c)         Guarantee Obligations of Permitted Debt;

(d)         loans and advances to employees of the Borrower or any Subsidiary in
the ordinary course of business (including for travel, entertainment and
relocation expenses);

(e)         Investments in Assets useful in the business of the Borrower and its
Restricted Subsidiaries made by the Borrower or any of its Restricted
Subsidiaries with the Net Cash Proceeds of any Recovery Event or Asset Sale;

(f)         Investments which constitute proceeds of any permitted Disposition;

(g)        Investments by the Borrower or any Restricted Subsidiary in the
Borrower, any Subsidiary Guarantor, MET or MIRMA; provided, that such Investment
made in MET or MIRMA pursuant to this clause (g) shall not take the form of a
contribution of Assets, other than cash or Capital Stock of any Person;

(h)        any acquisition of Assets or Capital Stock solely in exchange for the
issuance of equity interests (other than Disqualified Stock) of the Borrower;

(i)         Investments represented by obligations under Hedging Arrangements;

(j)         any Investment in a Person, if as a result of such Investment, such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially

 

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all of its assets to, or is liquidated into, the Borrower or a Restricted
Subsidiary of the Borrower or will immediately following such Investment be a
Restricted Subsidiary; provided that the Borrower and its Restricted
Subsidiaries shall maintain minimum liquidity (defined as availability under
this Agreement plus cash and Cash Equivalents of the Loan Parties on hand not
subject to any Lien (other than the Lien created under the Security Documents)
and cash and Cash Equivalents of the Borrower’s Restricted Subsidiaries which
are not Loan Parties that are then distributable to a Loan Party) of at least
$250,000,000 on a pro forma basis after giving effect to the consummation of
such Investment and any permitted financing thereof;

(k)        any Investments received (i) in compromise or resolution of
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 (A) obligations of financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss and (B) pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or insolvency
of any trade creditor or customer, (ii) in compromise or resolution of
litigation, arbitration or other disputes, or (iii) on account of any claim
against, or an 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;

(l)         any Investment existing or committed to on the date hereof and
listed on Schedule 8.6(l);

(m)       Investments in the form of, or pursuant to, working interests, royalty
interests, mineral leases, processing agreements, farm-out agreements, contracts
for the sale, transportation or exchange of oil and natural gas, unitization
agreements, pooling agreements, area of mutual interest agreements, production
sharing agreements or other similar or customary agreements, transactions,
properties, interests or arrangements, and Investments and expenditures in
connection therewith or pursuant thereto, in each case, made or entered into in
the ordinary course of business; and

(n)        in addition to Investments otherwise expressly permitted by this
Section, Investments by the Borrower or any of its Restricted Subsidiaries in an
aggregate amount (valued at cost) not to exceed $75,000,000 at any time
outstanding.

8.7.      Transactions with Affiliates. The Borrower shall not, and shall not
permit any Restricted Subsidiary to, enter into any transaction, including any
purchase, sale, lease or exchange of property, the rendering of any service or
the payment of any management, advisory or similar fees, with any Affiliate
(other than the Borrower or any Restricted Subsidiary) unless such transaction
is (a) otherwise permitted under this Agreement, and (b) is either (w) pursuant
to agreements set forth in Schedule 8.7, as such agreements may be amended,
modified, supplemented, extended or renewed, provided that any future amendment,
modification, supplement, extension or renewal of any such agreement entered
into after the Closing Date will be permitted to the extent that its terms are
not more disadvantageous in any material respect to the Lenders than the terms
of such agreement in effect on the Closing Date, (x) upon fair and

 

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reasonable terms no less favorable to the Borrower or such Restricted
Subsidiary, as the case may be, than it would obtain in a comparable arm’s
length transaction with a Person that is not an Affiliate, (y) structured as a
commercially reasonable and fair allocation of costs, including corporate
overhead costs, or (z) is disclosed in the Plan of Reorganization.

8.8.        Sales and Leasebacks. The Borrower shall not, and shall not permit
any Restricted Subsidiary to, enter into any arrangement with any Person
providing for the leasing by the Borrower or any Restricted Subsidiary of real
or personal property that has been or is to be sold or transferred by the
Borrower or such Restricted Subsidiary to such Person or to any other Person to
whom funds have been or are to be advanced by such Person on the security of
such property or rental obligations of the Borrower or such Restricted
Subsidiary except to the extent that the sale of the relevant property is
permitted under Section 8.5 and such lease, if treated as a Lien and Debt, does
not violate Sections 8.1 or 8.3.

8.9.        Changes in Fiscal Periods. The Borrower shall not change its fiscal
year to end on a day other than December 31 or change its method of determining
fiscal quarters.

SECTION 9. EVENTS OF DEFAULT

If any of the following events shall occur and be continuing:

(a)         the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation,
or any other amount payable hereunder or under any other Loan Document, within
five (5) Business Days after any such interest or other amount becomes due in
accordance with the terms hereof; or

(b)         (i) any Loan Party shall default in the observance or performance of
any agreement contained in Section 6.4(a), 7 or 8 of this Agreement (other than
Section 8.3) or (ii) any Loan Party shall default in the observance or
performance of any agreement contained in Section 8.3, and such default shall
continue unremedied for a period of 15 days after written notice to the Borrower
from the Administrative Agent or the Majority Lenders; or

(c)         any representation or warranty made or deemed made by any Loan Party
herein or in any other Loan Document or in any certificate, document or
financial or other statement delivered or required to be delivered pursuant
hereto or thereto shall prove to have been inaccurate in any material respect on
or as of the date made or deemed made and in the case of any representation or
warranty made in any such certificate, document or financial or other statement
that does not refer to or incorporate by reference any of the representations or
warranties otherwise made or deemed made in any Loan Document, such inaccuracy
could reasonably be expected to have a Material Adverse Effect; or

(d)         any Loan Party shall default in the observance or performance in any
material respect of any other agreement contained in this Agreement or any other
Loan Document (other than as provided in paragraphs (a) through (c) of this
Section), and such

 

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default shall continue unremedied for a period of 30 days after written notice
to the Borrower from the Administrative Agent or the Majority Lenders; or

(e)         The Borrower, any of its Restricted Subsidiaries or New Mirant
(subject in the case of New Mirant to there being outstanding more than
$100,000,000 of unfunded MAI Series A Preferred Shares and MAI Series B
Preferred Shares in the aggregate) shall fail to pay any principal of or premium
or interest on any Debt of such entity that is outstanding in a principal or
notional amount equal to or in excess of $50,000,000, when the same becomes due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such Debt;
or any other event shall occur or condition shall exist under the agreement or
instrument relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate the maturity of such Debt by reason
of default; or

(f)         Any judgment or order for the payment of money in excess of
$50,000,000 shall be rendered against the Borrower or any of its material
Restricted Subsidiaries and there shall be any period of sixty (60) consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or

(g)         The Borrower, any of its material Restricted Subsidiaries or New
Mirant (subject in the case of New Mirant to there being outstanding more than
$100,000,000 of unfunded MAI Series A Preferred Shares and MAI Series B
Preferred Shares in the aggregate) (each a “Designated Party”) shall (i) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of all or a substantial
part of its property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Bankruptcy Code (as now or
hereafter in effect) or any similar law of any applicable jurisdiction,
(iv) file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
readjustment of debts, or (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code or any similar law of any applicable
jurisdiction; or a proceeding or case shall be commenced, without the
application or consent of such Designated Party, in any court of competent
jurisdiction, seeking (x) its liquidation, reorganization, dissolution or
winding up, or the composition or readjustment of its debts, (y) the appointment
of a trustee, receiver, custodian, liquidator or the like of such Designated
Party or of all or any substantial part of its assets, or (z) similar relief in
respect of such Designated Party under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of debts,
and such proceeding or case shall continue unstayed and in effect for a period
of sixty (60) or more days; or

(h)         Except with the prior written consent of the Majority Lenders, the
MAI Series A Preferred Shares or the MAI Series B Preferred Shares cease to be
enforceable or rights of the holders thereof are amended or waived; or

 

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(i)         The Borrower ceases to be Controlled, directly or indirectly, by New
Mirant; or

(j)         (i) Any Security Document shall for any reason be asserted in
writing by the Borrower or any material Subsidiary Guarantor not to be a legal,
valid and binding obligation of any party thereto, (ii) any security interest
purported to be created by any Security Document and to extend to assets that
are material to the Borrower and its Subsidiaries on a consolidated basis shall
cease to be, or shall be asserted in writing by the Borrower or any other Loan
Party not to be, a valid and perfected security interest (having the priority
required by this Agreement or the relevant Security Document) in the securities,
assets or properties covered thereby, except to the extent that any such loss of
perfection or priority results from the failure of the Administrative Agent to
maintain possession of certificates actually delivered to it representing
securities pledged under the Security Documents and except to the extent that
such loss is covered by a lender’s title insurance policy and the Administrative
Agent shall be reasonably satisfied with the credit of such insurer; or
(iii) any intercreditor agreement in respect of second-lien or subordinated
indebtedness shall for any reason be asserted in writing by the Borrower or any
material Subsidiary Guarantor not to be a legal, valid and binding obligation of
any party thereto or shall otherwise cease to be enforceable; or

(k)         the guarantee contained in Section 2 of the Guarantee and Collateral
Agreement of any Subsidiary Guarantor that holds material Assets shall cease,
for any reason, to be in full force and effect or any Loan Party shall so assert
in writing; or

(l)         An ERISA Event shall occur and be continuing that, when taken
together with all other such ERISA Events, would result in a Material Adverse
Effect; or

(m)       The Facility Leases shall have been terminated pursuant to
Section 18.1(b) of the Facility Lease (as defined in the Facility Lease
Documents).

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i), (ii), (iii) or (iv) of paragraph (g) above with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of Revolving L/C
Obligations, whether or not the beneficiaries of the then outstanding Revolving
Letters of Credit shall have presented the documents required thereunder) shall
immediately become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken: (i) with the
consent of the Majority Lenders, the Administrative Agent may, or upon the
request of the Majority Lenders, the Administrative Agent shall, by notice to
the Borrower declare the Revolving Commitments to be terminated forthwith,
whereupon the Revolving Commitments shall immediately terminate; and (ii) with
the consent of the Majority Lenders, the Administrative Agent may, or upon the
request of the Majority Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of Revolving L/C Obligations, whether or not the beneficiaries of the
then outstanding Revolving Letters of Credit shall have presented the documents
required thereunder) to be due and payable forthwith, whereupon the same shall

 

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immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of
Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled
thereto). Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived by
the Borrower.

SECTION 10. THE AGENTS

10.1.        Appointment. Each Lender hereby irrevocably designates and appoints
the Administrative Agent as the agent of such Lender under this Agreement and
the other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.

10.2.        Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.

10.3.        Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person’s own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document

 

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or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or for any failure of
any Loan Party a party thereto to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.

10.4.        Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Majority Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Majority Lenders (or, if so specified by this Agreement, all Lenders),
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Loans.

10.5.        Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”. In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Majority Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.

10.6.        Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
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business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates and made its own
decision to make its Loans hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon any Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent hereunder, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or any
affiliate of a Loan Party that may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.

10.7.        Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent’s gross negligence or
willful misconduct. The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.

10.8.        Agent in Its Individual Capacity. Each Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with any Loan Party as though such Agent were not an Agent. With respect to its
Loans made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, each Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, and the terms “Lender” and “Lenders” shall
include each Agent in its individual capacity.

10.9.        Successor Administrative Agent. The Administrative Agent may resign
as Administrative Agent upon 10 days’ notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
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Loan Documents, then the Majority Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall (unless an Event of
Default under Section 9(a) or Section 9(g) with respect to the Borrower shall
have occurred and be continuing) be subject to approval by the Borrower (which
approval shall not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term “Administrative Agent” shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent’s rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is ten (10) days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative
Agent’s resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Majority Lenders appoint a successor
agent as provided for above. After any retiring Administrative Agent’s
resignation as Administrative Agent, the provisions of this Section 10 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.

10.10.        Co- Syndication Agents. None of the Co-Syndication Agents shall
have any duties or responsibilities hereunder in its capacity as such.

10.11.        Intercreditor Agreements. Each Lender hereby agrees that the
Administrative Agent may enter into any Intercreditor Agreement pursuant to the
terms hereof on its behalf and agrees to be bound by the terms thereof and, in
the case of any Intercreditor Agreement relating to Permitted Pari Passu Debt,
consents and agrees to the appoint of JPMCB on its behalf as collateral agent
thereunder. In addition, the Lenders hereby agree that pursuant to any
Intercreditor Agreement entered into substantially in the forms attached as
Exhibits I or K, the Administrative Agent may designate any addition Security
Document hereunder as an “Addition Existing Facilities Security Document” and/or
a “First Priority Security Document” or similar term, as the case may be,
thereunder.

SECTION 11. MISCELLANEOUS

11.1.        Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 11.1. The
Majority Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Majority Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Majority Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled

 

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date of maturity of any Loan, extend the scheduled date of any amortization
payment in respect of any Term Loan, reduce the stated rate of any interest or
fee payable hereunder (except (x) in connection with any reduction in the
post-default rate of interest set forth in Section 2.14(c); (y) in connection
with the waiver of applicability of any post-default increase in interest rates
(which waiver shall be effective with the consent of the Majority Facility
Lenders of each adversely affected Facility); and (z) that any amendment or
modification of defined terms used in the financial covenants in this Agreement
shall not constitute a reduction in the rate of interest or fees for purposes of
this clause (i)) or extend the scheduled date of any payment thereof, or
increase the amount or extend the expiration date of any Lender’s Revolving
Commitment, or otherwise change the time, place or the currency of payments to
be made on the Loans, in each case without the written consent of each Lender
directly affected thereby; (ii) eliminate or reduce the voting rights of any
Lender under this Section 11.1 without the written consent of such Lender;
(iii) reduce any percentage specified in the definition of Majority Lenders,
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents, release all or
substantially all of the Collateral or release all or substantially all of the
Subsidiary Guarantors from their obligations under the Guarantee and Collateral
Agreement, in each case without the written consent of all Lenders; (iv) reduce
the percentage specified in the definition of Majority Facility Lenders with
respect to any Facility without the written consent of all Lenders under such
Facility; (v) amend, modify or waive any provision of Section 2.17 without the
written consent of each Lender adversely affected thereby; (vi) amend, modify or
waive any provision of Section 10 without the written consent of the
Administrative Agent; (vii) amend, modify or waive any provision of Section 2.6
or 2.7 without the written consent of the Swingline Lender; or (viii) amend,
modify or waive any provision of Section 3 without the written consent of each
Issuing Lender. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Loan Parties, the Lenders, the Administrative Agent and all future
holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders
and the Administrative Agent shall be restored to their former position and
rights hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.

Notwithstanding the foregoing, this Agreement may be amended (or amended and
restated) with the written consent of the Majority Lenders, the Administrative
Agent and the Borrower (a) to add one or more additional credit facilities to
this Agreement (each, an “Incremental Facility”) and to permit the extensions of
credit from time to time outstanding thereunder and the accrued interest and
fees in respect thereof to share ratably in the benefits of this Agreement and
the other Loan Documents with the Term Loans and Revolving Extensions of Credit
and the accrued interest and fees in respect thereof and (b) to include
appropriately the Lenders holding such credit facilities in any determination of
the Majority Lenders and Majority Facility Lenders, provided that no consent of
the Majority Lenders or Administrative Agent (except as provided in clause
(iv) below) shall be required if (i) such Incremental Facility constitutes
Permitted Pari Passu Debt hereunder, (ii) no Default or Event of Default has
occurred and is continuing or would result after giving effect to the making of
Loans under such Incremental Facility, (iii) the Applicable Margin for such
Loans shall not be greater than the Applicable Margin then in effect for the
comparable Loans hereunder by more than 0.25% and, other than with respect to
such pricing term, such Loans shall otherwise be on the same terms

 

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and conditions as those applicable to the Loans and (iv) any bank, financial
institution or other entity that becomes a Lender under such Incremental
Facility shall be subject to the consent of the Administrative Agent.

In addition, notwithstanding the foregoing, this Agreement may be amended with
the written consent of the Administrative Agent, the Borrower and the Lenders
providing the relevant Replacement Term Loans (as defined below) to permit the
refinancing, replacement or modification of all outstanding Term Loans
(“Refinanced Term Loans”) with a replacement “B” term loan tranche hereunder
(“Replacement Term Loans”), provided that (a) the aggregate principal amount of
such Replacement Term Loans shall not exceed the aggregate principal amount of
such Refinanced Term Loans, (b) the Applicable Margin for such Replacement Term
Loans shall not be higher than the Applicable Margin for such Refinanced Term
Loans and (c) the weighted average life to maturity of such Replacement Term
Loans shall not be shorter than the weighted average life to maturity of such
Refinanced Term Loans at the time of such refinancing.

If, in connection with any proposed amendment, waiver or consent pursuant to
Section 11.1 hereof requiring the consent of all Lenders, the consent of
Majority Lenders is obtained but the consent of all Lenders whose consent if
required is not obtained (any Lender withholding consent being referred to as a
“Non-Consenting Lender”), then, upon written notice to any Non-Consenting Lender
and the Administrative Agent, the Borrower shall be permitted, at its sole
expense, to replace such Non-Consenting Lender by requiring such Non-Consenting
Lender to assign and delegate, without recourse, all of its rights and
obligations under this Agreement and the other Loan Documents to a replacement
financial institution that shall assume such obligations (which replacement
financial institution may be another Lender, if such Lender accepts such
assignment); provided, that (i) the Administrative Agent and, in the case of any
assignment of a Lender’s Revolving Commitment, each Revolving Issuing Lender
shall have consented to such replacement financial institution (such consent not
to be unreasonably withheld), (ii) the Non-Consenting Lender shall be obligated
to make such replacement in accordance with the provisions of Section 11.6
(provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein), (iii) the replacement financial institution
shall purchase, at par, all Loans and other amounts owing to such replaced
Lender on or prior to the date of replacement in accordance with Section 11.6,
and (iv) the Borrower shall be liable to such Non-Consenting Lender under
Section 2.20 if any Eurodollar Loan owing to such Non-Consenting Lender shall be
purchased other than on the last day of the Interest Period relating thereto.

11.2.        Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower, the Administrative
Agent and the Issuing Lenders identified below, and as set forth in an
administrative questionnaire delivered to the Administrative Agent in the case
of the Lenders, or to such other address as may be hereafter notified by the
respective parties hereto:

 

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Borrower:   

Mirant North America, LLC

1155 Perimeter Center West,

Suite 100

Atlanta, GA 30338

      Attention: William Holden       Telecopy: (678) 579-7634       Telephone:
(678) 579-7728       With a copy to: Steve Nickerson       Telecopy: (678)
579-5951       Telephone: (678) 579-6440    Administrative Agent:    JP Morgan
Chase Bank, N.A.       1111 Fannin Street, Floor 10       Houston, Texas 77002
      Attention: Loan and Agency Services       Telecopy: (713) 427-6307      
Telephone: (713) 750-2377    JPMCB, as an Issuing Lender    JPMorgan Chase Bank,
N.A.       10420 Highland Manner Drive       BL 2, Floor 4       Tampa, Florida
33610       Attention: Standby Letter of Credit       Telecopy: (813) 432-5161
      Telephone: (813) 432-6339    DBTCA, as an Issuing Lender    Deutsche Bank
Trust Company       Americas       60 Wall Street       38 th Floor       New
York, NY 10005       Attention: Standby Letter of Credit       Unit      
Telecopy: (212) 250-1014       Telephone: (212) 797-0403   

provided that any notice, request or demand to or upon the Administrative Agent,
any Issuing Lender or the Lenders shall not be effective until received.

Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Section 2 unless otherwise agreed by the Administrative Agent and
the applicable Lender. 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.

 

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11.3.        No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents 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.        Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

11.5.        Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent (i) for all its out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable fees and disbursements
of counsel to the Administrative Agent and filing and recording fees and
expenses, with statements with respect to the foregoing to be submitted to the
Borrower prior to the Closing Date (in the case of amounts to be paid on the
Closing Date) and from time to time thereafter on a quarterly basis or such
other periodic basis as the Administrative Agent shall deem appropriate and
(ii) for all of its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including the fees and disbursements of
counsel to the Administrative Agent, (b) to pay or reimburse each Lender for all
its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, in each case, during the continuance of an Event of
Default, including the fees and disbursements of counsel (including the
allocated fees and expenses of in-house counsel) to each Lender, (c) to pay,
indemnify, and hold each Lender and the Administrative Agent harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other taxes, if any,
that may be payable or determined to be payable in connection with the execution
and delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold each Lender and
the Administrative Agent and their respective officers, directors, trustees,
employees, affiliates, agents and controlling persons (each, an “Indemnitee”)
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including any of the foregoing relating
to the use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Borrower or any of its Subsidiaries or any real property currently or formerly
owned, leased, operated or otherwise used (including properties to which wastes
or other materials were sent for treatment, storage or disposal) by the

 

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Borrower or any of its Subsidiaries or any of their predecessors and the
reasonable fees and expenses of legal counsel in connection with claims, actions
or proceedings by any Indemnitee against any Loan Party under any Loan Document
(all the foregoing in this clause (d), collectively, the “Indemnified
Liabilities”), provided, that the Borrower shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. Without limiting the foregoing, and to
the extent permitted by applicable law, the Borrower agrees not to assert and to
cause its Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries to waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee.

Promptly after receipt by an Indemnitee of notice of the commencement of any
claim, litigation, investigation, responding to or proceedings against it
relating to any Indemnified Liability (“Proceedings”), such Indemnitee will, if
a claim is to be made hereunder against the Borrower in respect thereof, notify
the Borrower in writing of the commencement thereof; provided, however, that
(i) the omission so to notify the Borrower will not relieve it from any
liability that it may have hereunder except to the extent it has been materially
prejudiced by such failure and (ii) the omission so to notify the Borrower will
not relieve the Borrower from any liability that it may have to an Indemnitee
otherwise than on account hereof. Thereafter, the Indemnitee and the Borrower
shall consult, to the extent appropriate, with a view to minimizing the cost to
the Borrower of the obligations under this Section 11.5. In case any such
Proceedings are brought against any Indemnitee and it notifies the Borrower of
the commencement thereof, the Borrower will be entitled to participate therein,
and, to the extent that it may elect by written notice delivered to such
Indemnitee, to assume the defense thereof, with counsel reasonably satisfactory
to such Indemnitee, provided that if the defendants in any such Proceedings
include both such Indemnitee and the Borrower and such Indemnitee shall have
concluded that there may be legal defenses available to it that are different
from or additional to those available to the Borrower, such Indemnitee shall
have the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such Proceedings on behalf of such
Indemnitee. Upon receipt of notice from the Borrower to such Indemnitee of its
election so to assume the defense of such Proceedings and approval by such
Indemnitee of counsel, the Borrower shall not be liable to such Indemnitee for
expenses incurred by such Indemnitee in connection with the defense thereof
(other than reasonable costs of investigation) unless (i) such Indemnitee shall
have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence
(it being understood, however, that the Borrower shall not be liable for the
expenses of more than one separate counsel representing the Indemnitees who are
parties to such Proceedings), (ii) the Borrower shall not have employed counsel
reasonably satisfactory to such Indemnitee to represent such Indemnitee within a
reasonable time after notice of commencement of the Proceedings or (iii) the
Borrower shall have authorized in writing the employment of counsel for such
Indemnitee.

The Borrower shall not be liable for any settlement of any Proceedings effected
without its written consent (which consent shall not be unreasonably
withheld). If any settlement of

 

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any Proceeding is consummated with the written consent of the Borrower or if
there is a final judgment for the plaintiff in any such Proceedings, the
Borrower agrees to indemnify and hold harmless each Indemnitee from and against
any and all losses, claims, damages, liabilities and expenses by reason of such
settlement or judgment in accordance with the provisions of this
Section 11.5(d). Notwithstanding anything in this Section 11.5(d) to the
contrary, if at any time an Indemnitee shall have requested the Borrower to
reimburse such Indemnitee for legal or other expenses in connection with
investigating, responding to or defending any Proceedings as contemplated by
this Section 11.5(d), the Borrower shall be liable for any settlement of any
Proceedings effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by the Borrower of such request for
reimbursement and (ii) the Borrower shall not have reimbursed such Indemnitee in
accordance with such request prior to the date of such settlement. The Borrower
shall not, without the prior written consent of an Indemnitee (which consent
shall not be unreasonably withheld), effect any settlement of any pending or
threatened Proceedings in respect of which indemnity could have been sought
hereunder by such Indemnitee unless such settlement (i) includes an
unconditional release of such Indemnitee in form and substance satisfactory to
such Indemnitee from all liability on claims that are the subject matter of such
Proceedings and (ii) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnitee.

All amounts due under this Section 11.5 shall be payable not later than 10 days
after written demand therefor. Statements payable by the Borrower pursuant to
this Section 11.5 shall be submitted to the Treasurer (Telephone No. (678)
579-7728) (Telecopy No. (678) 579-7634), at the address of the Borrower set
forth in Section 11.2, or to such other Person or address as may be hereafter
designated by the Borrower in a written notice to the Administrative Agent. The
agreements in this Section 11.5 shall survive repayment of the Loans and all
other amounts payable hereunder.

11.6.        Successors and Assigns; Participations and Assignments. (a) 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
(including any affiliate of the Issuing Lender that issues any Letter of
Credit), except that (i) the Borrower may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section.

(b)            (i) Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more assignees (each, an
“Assignee”) all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans at the time owing
to it) with the prior written consent of:

(A)        the Borrower (such consent not to be unreasonably withheld or
delayed), provided that no consent of the Borrower shall be required for an
assignment to a Lender, an affiliate of a Lender, an Approved Fund (as defined
below) or, if an Event of Default has occurred and is continuing, any other
Person; and

 

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(B)        the Administrative Agent and each Issuing Lender (such consent not to
be unreasonably withheld or delayed), provided that no consent of the
Administrative Agent shall be required for assignments of Commitments and/or
Loans among Lenders, affiliates of Lenders or Approved Funds within the same
Facility, and provided, further, that no consent of any Issuing Lender shall be
required for an assignment of Term Loans only.

(ii)            Assignments shall be subject to the following additional
conditions:

(A)        except in the case of an assignment to a Lender, an affiliate of a
Lender or an Approved Fund or an assignment of the entire remaining amount of
the assigning Lender’s Commitments or Loans under any Facility, the amount of
the Commitments or 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) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent (which assignment may be on a non-pro rata basis), provided that such
amounts shall be aggregated in respect of each Lender and its affiliates or
Approved Funds, if any;

(B)        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, provided that only one such fee shall be payable
to the Administrative Agent in connection with simultaneous assignments by a
Lender to two or more related Approved Funds; and

(C)        the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire.

For the purposes of this Section 11.6, “Approved Fund” means any Person (other
than a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
and 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.

(iii)            Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in each
Assignment and Assumption the Assignee thereunder shall be a party hereto 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
2.18, 2.19, 2.20 and 11.5 with respect to facts and circumstances occurring
prior to the effective date of such assignment). To the extent that an
assignment of all or any portion of a Lender’s outstanding obligations pursuant
to this Section 11.6 would, at the time of such assignment, result in increased
costs under Sections 2.18, 2.19, or

 

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2.20 from those being charged by the respective assigning Lender prior to such
assignment, then the Borrower shall not be obligated to pay such increased
costs. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section 11.6 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 paragraph (c) of this Section.

(iv)            The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices 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 amount of the
Loans and Revolving L/C Obligations 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, the Issuing Lenders 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. With respect to any Lender,
the transfer of the Commitments of such Lender and the rights to the principal
of, and the interest on, any Loan made pursuant to such Commitments shall not be
effective until such transfer is recorded on the Register maintained by the
Administrative Agent with respect to ownership of such Commitments and
Loans. The Register shall be available for inspection by the Borrower, the
Issuing Lenders and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.

(v)            Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an Assignee, the Assignee’s completed
administrative questionnaire (unless the Assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.

(c)            (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans owing to it); provided that (A) such Lender’s obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Lenders and the
other 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 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 may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver that (1) requires the consent of each Lender directly affected thereby
pursuant to the proviso to the second sentence of Section 11.1 and (2) directly
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.18, 2.19 and 2.20 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph

 

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(b) of this Section. To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 11.7(b) as though it were a Lender,
provided such Participant shall be subject to Section 11.7(a) as though it were
a Lender.

(ii)            A Participant shall not be entitled to receive any greater
payment under Section 2.18 or 2.19 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. Any Participant that is a Non-U.S. Lender
shall not be entitled to the benefits of Section 2.19 unless such Participant
complies with Sections 2.19(d) and (e).

(d)            Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or Assignee for such Lender as a party hereto.

(e)            The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (d) above.

(f)            Notwithstanding the foregoing, any Conduit Lender may assign any
or all of the Loans it may have funded hereunder to its designating Lender
without the consent of the Borrower or the Administrative Agent and without
regard to the limitations set forth in Section 11.6(b). Each of the Borrower,
each Lender and the Administrative Agent hereby confirms that it will not
institute against a Conduit Lender or join any other Person in instituting
against a Conduit Lender any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding under any state bankruptcy or similar law, for one
year and one day after the payment in full of the latest maturing commercial
paper note issued by such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or expense arising
out of its inability to institute such a proceeding against such Conduit Lender
during such period of forbearance.

11.7.            Adjustments; Set-off. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a “Benefitted
Lender”) shall receive any payment of all or part of the Obligations owing to
it, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 9(g), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter

 

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recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.

(b)                    In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower, as the case may
be. Each Lender agrees promptly to notify the Borrower and the Administrative
Agent after any such setoff and application made by such Lender, provided that
the failure to give such notice shall not affect the validity of such setoff and
application.

11.8.            Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

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

11.10.            Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.

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

11.12.            Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:

(a)                    submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general

 

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jurisdiction of the courts of the State of New York, the courts of the United
States for the Southern District of New York, and appellate courts from any
thereof;

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

(c)                    agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 11.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;

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

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

11.13.            Acknowledgements . The Borrower hereby acknowledges that:

(a)                    it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;

(b)                    neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and

(c)                    no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrower and the Lenders.

11.14.            Releases of Guarantees and Liens. (a) Notwithstanding anything
to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 11.1) to take any action requested by the Borrower having the effect
of releasing any Collateral or guarantee obligations (i) to the extent necessary
to permit consummation of any transaction not prohibited by any Loan Document or
that has been consented to in accordance with Section 11.1 or (ii) under the
circumstances described in paragraph (b) below.

(b)                At such time as the Loans, the Reimbursement Obligations and
the other obligations under the Loan Documents (other than obligations under or
in respect of Swap

 

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Agreements) shall have been paid in full, the Commitments have been terminated
and no Letters of Credit shall be outstanding, the Collateral shall be released
from the Liens created by the Security Documents, and the Security Documents and
all obligations (other than those expressly stated to survive such termination)
of the Administrative Agent and each Loan Party under the Security Documents
shall terminate, all without delivery of any instrument or performance of any
act by any Person.

11.15.            Confidentiality. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
any Loan Party, the Administrative Agent or any Lender pursuant to or in
connection with this Agreement that is designated by the provider thereof as
confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate thereof, (b) subject to
an agreement to comply with the provisions of this Section, to any actual or
prospective Transferee or any direct or indirect counterparty to any Swap
Agreement (or any professional advisor to such counterparty), (c) to its
employees, directors, trustees, agents, attorneys, accountants and other
professional advisors or those of any of its affiliates, (d) upon the request or
demand of any Governmental Authority, (e) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed, (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender’s investment portfolio in connection with ratings issued with
respect to such Lender, or (i) in connection with the exercise of any remedy
hereunder or under any other Loan Document.

11.16.            WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

11.17.            Delivery of Addenda. Each initial Lender shall become a party
to this Agreement by delivering to the Administrative Agent an Addendum duly
executed by such Lender.

 

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

 

MIRANT NORTH AMERICA, LLC By:  

 

Name:   Title:  

JPMORGAN CHASE BANK, N.A., as

Administrative Agent and as a Lender

By:  

 

Name:   Title:  

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Co-Syndication Agent

By:  

 

Name:   Title:  

DEUTSCHE BANK SECURITIES, INC., as

Co-Syndication Agent

By:  

 

Name:   Title:   By:  

 

Name:   Title:  

 

90

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30

 

Schedule 1.1A

 

Lenders for the Revolving Commitment    Revolving Commitment

JPMorgan Chase Bank, N.A.

   $133,333,333.34

Deutsche Bank Trust Company Americas

   $133,333,333.33

Goldman Sachs Credit Partners, L.P.

   $133,333,333.33

Credit Suisse, Cayman Islands Branch

   $100,000,000.00

Lehman Commercial Paper Inc.

   $100,000,000.00

The Royal Bank of Scotland plc

   $100,000,000.00

CIT Capital USA Inc.

   $50,000,000.00

Barclays Bank plc

   $25,000,000.00

Merrill Lynch Capital Corporation

   $25,000,000.00

 

Lenders for the Term Commitment    Term Commitment

JPMorgan Chase Bank, N.A.

   $233,333,333.34

Deutsche Bank Trust Company Americas

   $233,333,333.33

Goldman Sachs Credit Partners, L.P.

   $233,333,333.33

 

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

31

 

Schedule 1.1B

MORTGAGED PROPERTY

 

 

REAL PROPERTY1

 

Property    County/State/Locality    Mirant Entity Holding Interest       Contra
Costa Generating Plant*    Antioch, CA Contra Costa County    Mirant Delta, LLC
      Pittsburg Generating Plant*    Pittsburg, CA Contra Costa County    Mirant
Delta, LLC       Potrero Generating Plant*    San Francisco, CA San Francisco
County    Mirant Potrero, LLC       Collinsville (Land)*    Solano County, CA   
Mirant Delta, LLC       Chalk Point Generating Station    Prince George’s Co.,
MD    Mirant Chalk Point, LLC      

Morgantown Generating Facility

(Portion is subject to Leveraged Lease)

   Charles Co., MD   

Land: Mirant Mid-Atlantic, LLC Facility: Morgantown OL (1 through 7) LLC

 

Non-leveraged lease portion: Mirant Mid-Atlantic, LLC

      Faulkner Ash Storage Facility    Charles Co., MD    Mirant MD Ash
Management, LLC       Production Service Center – 8711 Westphalia Rd.    Prince
George’s Co., MD    Mirant Mid-Atlantic, LLC       Ryceville Pumping Station   
Charles Co., MD    Mirant Piney Point, LLC

 

1

Mortgaged Properties denoted with “*”. Properties denoted with “**” will be
mortgaged to the extent the applicable entity becomes a Subsidiary Guarantor
upon emergence from bankruptcy.

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

 

REAL PROPERTY1

 

Property    County/State/Locality    Mirant Entity Holding Interest      
Brandywine Fly Ash Facility    Prince George’s Co., MD    Mirant MD Ash
Management, LLC      

Dickerson Station – Lots 1,2,3 (Plat #21493)/Lot 7 (Plat #21495)

 

 

(Portion subject to Leveraged Lease)

   Montgomery Co., MD   

Land: Mirant Mid-Atlantic, LLC Facility: Dickerson OL (1 through 4) LLC

 

Non-leveraged lease portion: Mirant Mid-Atlantic, LLC

      Westland Ash Disposal Site (Dickerson) – Lots 4,5,6    Montgomery Co., MD
   Mirant MD Ash Management, LLC       Railroad Spur Tract    Charles Co., MD   
Mirant Mid-Atlantic, LLC       Piney Point Oil Pipeline    MD    Mirant Piney
Point, LLC       Kendall Generating Plant*    Cambridge, MA    Mirant Kendall,
LLC       Martha’s Vineyard Diesels*   

Oak Bluffs, MA

West Tisbury, MA

   Mirant Canal, LLC       Canal Generating Plant*    Sandwich, MA    Mirant
Canal, LLC       Wyman 4    Yarmouth, ME    Mirant Canal, LLC (1.4325% interest)
      Zeeland Generating Plant*    Zeeland, MI    Mirant Zeeland, LLC      
Grahamsville Generating Plant    Grahamsville, NY    Mirant NY Gen, LLC      
Shoemaker Generating Plant    Orange County, NY    Mirant NY Gen, LLC      

The Hydros**

(Rio, Mongaup and Swinging Bridge)

   NY    Mirant NY Gen, LLC       Hillburn Generating Plant**    Rockland
County, NY    Mirant NY Gen, LLC

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

 

REAL PROPERTY1

 

Property

  

County/State/Locality

  

Mirant Entity Holding Interest

      Lovett Generating Plant**    Rockland County, NY    Mirant Lovett, LLC    
  Bowline Generating Plant**    Rockland County, NY    Mirant Bowline, LLC      
West Haverstraw**    Rockland County, NY    Mirant Bowline, LLC       Hudson
Valley Gas Pipeline    NY    Hudson Valley Gas Corporation       Bosque County
Generating Plant*    Bosque County, TX    Mirant Texas, LP       Weatherford
Prop. (Vacant Land)    Parker County, TX    MLW Development, LLC       Potomac
River Generating Plant    Alexandria, VA   

Land: Potomac Electric Company

 

Improvements: Mirant Potomac River, LLC

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

32

 

Schedule 1.1C

EXISTING DEBT

 

1. $850 million principal amount of 7.375% Senior Notes due 2013 issued pursuant
to an Indenture dated December 23, 2005 (the “7.375% Senior Notes”).

 

2. Approximately $12.5 million of capitalized lease obligations of Mirant
Zeeland, LLC arising from the Transportation Services Contract, dated
December 17, 1999, between Mirant Zeeland, LLC (f/k/a SEI Michigan, L.L.C.) and
SEMCO Energy Gas Company, as amended, supplemented and/or modified from time to
time, and any other agreements related thereto.

 

3. Approximately $36.5 million of capitalized lease obligations of Mirant Chalk
Point, LLC1 arising from (i) the Site Lease Agreement, dated March 21, 1989,
between Potomac Electric Power Company (“PEPCO”) and Southern Maryland Electric
Cooperative, Inc. (“SMECO”) (as assigned by PEPCO to Mirant Chalk Point, LLC)
and (ii) the Facility and Capacity Credit Agreement, dated as of March 21, 1989,
between PEPCO and SMECO (as assigned by PEPCO to Mirant Peaker, LLC), in each
case as amended, supplemented and/or modified from time to time, and any other
agreements related thereto.

 

1

Mirant Peaker, LLC was merged into Mirant Chalk Point, LLC on December 16, 2005.

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

37

 

Schedule 4.15(a)

UCC FILING JURISDICTIONS

 

Company

 

  

UCC Filing Jurisdiction

 

Mirant North America, LLC

 

   DE - SOS

MNA Finance Corp.

 

   DE – SOS

Mirant Texas Management, LLC

 

   DE – SOS

Mirant Texas, LP

 

   DE – SOS

Mirant California, LLC

 

   DE – SOS

Mirant Potrero, LLC

 

   DE – SOS

Mirant Delta, LLC

 

   DE – SOS

Mirant Canal, LLC

 

   DE – SOS

Mirant Kendall, LLC

 

   DE – SOS

Mirant Zeeland, LLC

 

   DE – SOS

Mirant Special Procurement, Inc.

 

   DE – SOS

MLW Development, LLC

 

   DE - SOS

PATENT, TRADEMARKS, COPYRIGHTS FILINGS

None

OTHER

None

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

38

 

Schedule 4.15(b)

MORTGAGE FILING JURISDICTIONS

 

Property    Owner    Mortgage Filing Office Contra Costa Generating Plant   
Mirant Delta, LLC   

Contra Costa County Recorder’s Office, California

 

Pittsburg Generating Plant    Mirant Delta, LLC   

Contra Costa County Recorder’s Office, California

 

Potrero Generating Plant    Mirant Potrero, LLC   

San Francisco County Recorder’s Office, California

 

Collinsville (Land)    Mirant Delta, LLC   

Solano County Recorder’s Office, California

 

Kendall Generating Plant    Mirant Kendall, LLC   

Middlesex South District Registry of Deeds, Massachusetts

 

Martha’s Vineyard Diesels    Mirant Canal, LLC   

Dukes County Registry of Deeds, Massachusetts

 

Canal Generating Plant    Mirant Canal, LLC   

Barnstable County Registry of Deeds, Massachusetts

 

Barnstable County Registry, District of the Massachusetts Land Court

 

Zeeland Generating Plant    Mirant Zeeland, LLC   

Ottawa County Register of Deeds, Michigan

 

Bosque County Generating Plant    Mirant Texas, LP   

Deed Records for Bosque County, Texas (Tracts 1 and 2)

Deed Records for Hill County, Texas (Tract 3)

 

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

39

 

Schedule 4.18

SUBSIDIARIES

 

Name    Jurisdiction of Incorporation   

Percentage of each class of

Capital Stock owned by any

Loan Party

 

MNA Finance Corp.    DE   

100% owned by Mirant North America, LLC

 

Mirant Texas Management, LLC    DE   

100% owned by Mirant North America, LLC

 

Mirant Texas, LP    DE   

99% owned by Mirant North America, LLC

1% owned by Mirant Texas Management, LLC

 

MLW Development, LLC    DE   

99% owned by Mirant North America, LLC

1% owned by Mirant Texas Management, LLC

 

Mirant California, LLC    DE   

100% owned by Mirant North America, LLC

 

Mirant Potrero, LLC    DE   

100% owned by Mirant California, LLC

 

Mirant Delta, LLC    DE   

100% owned by Mirant California, LLC

 

Mirant New York, Inc.    DE   

100% owned by Mirant North America, LLC

 

Mirant Bowline, LLC    DE   

100% owned by Mirant New York, Inc. (which is not a Loan Party)

 

Mirant Lovett, LLC    DE   

100% owned by Mirant New York, Inc. (which is not a Loan Party)

 

Mirant NY-Gen, LLC    DE   

100% owned by Mirant New York, Inc. (which is not a Loan Party)

 

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

40

 

Hudson Valley Gas Corporation    NY   

100% owned by Mirant New York, Inc. (which is not a Loan Party)

 

Mirant Canal, LLC    DE   

100% owned by Mirant North America, LLC

 

Mirant Kendall, LLC    DE   

100% owned by Mirant North America, LLC

 

Mirant Mid-Atlantic, LLC    DE   

100% owned by Mirant North America, LLC

 

Mirant Potomac River, LLC    DE   

100% owned by Mirant Chalk Point, LLC (which is not a Loan Party)

 

Mirant Chalk Point, LLC    DE   

100% owned by Mirant Mid-Atlantic, LLC (which is not a Loan Party)

 

Mirant Piney Point, LLC    DE   

100% owned by Mirant Mid-Atlantic, LLC (which is not a Loan Party)

 

Mirant MD Ash Management, LLC    DE   

100% owned by Mirant Mid-Atlantic, LLC (which is not a Loan Party)

 

Mirant Zeeland, LLC    DE   

100% owned by Mirant North America, LLC

 

Mirant Special Procurement, Inc.    DE   

100% owned by Mirant North America, LLC

 

Mirant Energy Trading, LLC    DE   

100% owned by Mirant North America, LLC

 

New MAEM Holdco, LLC    DE   

100% owned by Mirant North America, LLC

 

Mirant Americas Production Company, LLC    DE   

100% owned by New MAEM Holdco, LLC (which is not a Loan Party)

 

Mirant Americas Development, LLC    GA   

100% owned by New MAEM Holdco, LLC (which is not a

 

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

41

 

         

Loan Party)

 

Mirant Americas Energy Capital, LP    DE   

99% owned by Mirant Americas Production Company, LLC and 1% owned by Mirant
Americas Development, LLC (both of which are not Loan Parties)

 

Mirant Americas Energy Capital Assets, LLC    DE   

100% owned by Mirant Americas Energy Capital, LP (which is not a Loan Party)

 

Mirant Americas Energy Marketing, LP    DE   

99% owned by Mirant Americas Production Company, LLC and 1% owned by Mirant
Americas Development, LLC (both of which are not Loan Parties)

 

Mirant Americas Gas Marketing I, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing II, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing III, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing IV, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing V, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing VI, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing VII, LLC    DE   

100% owned by Mirant Americas Energy Marketing,

 

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

42

 

         

LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing VIII, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing IX, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing X, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing XI, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing XII, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing XIII, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing XIV, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Gas Marketing XV, LLC    DE   

100% owned by Mirant Americas Energy Marketing, LP (which is not a Loan Party)

 

Mirant Americas Development Capital, LLC    DE   

100% owned by Mirant Americas Development, LLC (which is not a Loan Party)

 

Mirant Americas Retail Energy Marketing, LP    DE   

99% owned by Mirant Americas Energy Marketing, LP and 1% owned by Mirant
Americas Development, LLC (both of which are not Loan Parties)

 

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

Schedule 8.1

SUBORDINATED DEBT

The principal amount of indebtedness evidenced by this instrument, together with
accrued and unpaid interest thereon and any fees, expenses or other amounts of
any kind whatsoever from time to time owing under this instrument (herein called
the “Subordinated Debt”) is expressly “subordinate and junior in right of
payment” (as defined herein) to all Senior Debt (as defined herein) of [Mirant
North America, LLC, a Delaware limited liability company][name of Subsidiary
Guarantor obligor, a                     ] (the “Obligor”). Each holder of this
instrument, by its acceptance hereof, agrees to and shall be bound by all the
provisions hereof.

As used herein, the term “Senior Debt” shall mean the collective reference to
all indebtedness, reimbursement obligations and all other obligations and
liabilities of the Obligor (whether in respect of fees, expenses, indemnities or
otherwise), arising out of or in connection with [(i) the Credit Agreement,
dated as of January 3, 2006 (as the same may be amended, supplemented or
otherwise modified from time to time, the “Senior Credit Agreement”), between
Mirant North America, LLC, as Borrower, the several financial institutions and
other entities parties thereto from time to time (“Senior Lenders”), Deutsche
Bank Securities Inc. and Goldman Sachs Credit Partners L.P., as Co-Syndication
Agents, and JPMorgan Chase Bank, N.A., as Administrative Agent (the
“Administrative Agent”) and, (ii)] the Guarantee and Collateral Agreement, dated
as of January 3, 2006, made by Mirant North America, LLC and certain of its
subsidiaries, [including the Obligor], in favor of the Administrative Agent for
the Senior Lenders and (iii) any other Loan Document (as such term is defined in
the Senior Credit Agreement).

“Subordinate and junior in right of payment” means that:

(a) no part of the Subordinated Debt shall have any claim against the assets of
the Obligor on parity with or prior to the claim of Senior Debt; and

(b) unless and until all Senior Debt shall have been indefeasibly paid in cash
in full in accordance with its terms, and all commitments thereunder shall have
been terminated in accordance with the Senior Credit Agreement, the holder of
Subordinated Debt shall not take, demand or receive from the Obligor, and the
Obligor shall not make, give or permit, directly or indirectly, by set-off,
redemption, purchase or in any other manner, any payment on account of
principal, interest or other amounts arising in connection with the Subordinated
Debt for either the whole or any part of the Subordinated Debt:

provided, however, that at any time, except during the occurrence and
continuance of an Event of Default (as defined in the Senior Credit Agreement),
the Obligor may make, and the holder of Subordinated Debt may receive, scheduled
payments on account of interest on the Subordinated Debt in accordance with the
terms thereof.

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

Upon (a) any acceleration of the principal amount due on the Subordinated Debt
or (b) any payment or distribution of assets of Obligor of any kind or
character, whether in cash, property, securities, claims or otherwise
(collectively, “Distribution Property”), to creditors upon any dissolution or
winding up or total or partial liquidation or reorganization of Obligor, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership or other
proceedings, then and in any such event all Senior Debt shall first be paid in
full and in cash before the holders of the Subordinated Debt shall have any
right to receive Distribution Property or any entitlement to Distribution
Property in respect of all or any portion of the Subordinated Debt; and, upon
any such acceleration, dissolution or winding up or liquidation or
reorganization, unless and until the Senior Debt shall be paid in full in cash
in accordance with the Senior Credit Agreement and the terms herein, then any
payment or distribution of Distribution Property to which the holders of the
Subordinated Debt would otherwise be entitled, except as otherwise provided
herein, shall be paid by Obligor or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making payment or distribution of
Distribution Property, or by the holders of the Subordinated Debt if received by
them, directly to the Administrative Agent for application in accordance with
the Senior Credit Agreement.

The holder of this instrument hereby irrevocably authorizes and empowers
(without imposing any obligation on) the Administrative Agent, under the
circumstances set forth in the immediately preceding paragraph, to demand, sue
for, collect and receive every such payment or distribution described therein
and give acquittance therefor, to file claims and proofs of claims in any
statutory or nonstatutory proceeding, to vote the full amount of the
Subordinated Debt evidenced by this instrument in its sole discretion in
connection with any resolution, arrangement, plan of reorganization, compromise,
settlement or extension and to take all such other action (including without
limitation, the right to participate in any composition of creditors and the
right to vote the Subordinated Debt evidenced by this instrument at creditors’
meetings for the election of trustees, acceptances of plans and otherwise), in
the name of the holder of the Subordinated Debt evidenced by this instrument or
otherwise, as the Administrative Agent may deem necessary or desirable for the
enforcement of the subordination provisions of this instrument. The holder of
this instrument shall execute and deliver to the Administrative Agent all such
further instruments confirming the foregoing authorization, and all such powers
of attorney, proofs of claim, assignments of claim and other instruments, and
shall take all such other action as may be requested by the Administrative Agent
in order to enable the Administrative Agent to enforce all claims upon or in
respect of the Subordinated Debt evidenced by this instrument.

Should any payment or distribution be collected or received by the holder of
this instrument and such collection or receipt is not expressly permitted by the
foregoing provisions, such holder shall forthwith turn over the same to the
Administrative Agent in the form received (except for the endorsement or the
assignment of such holder when necessary) and, until so turned over, the same
shall be held in trust by such holder as the property of the holders of the
Senior Debt.

If any Senior Debt shall become or be declared to be immediately due and
payable, the Subordinated Debt evidenced by this instrument shall become
immediately due and payable, notwithstanding any inconsistent terms hereof. No
holder of this instrument shall, without the prior written consent of the
Administrative Agent, have any right to demand payment

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

of, or accelerate the maturity of, or institute any proceedings to enforce, any
indebtedness or covenant evidenced by this instrument until the Senior Debt is
paid in full in cash and all commitments thereunder are terminated in accordance
with the terms of the Senior Credit Agreement.

Until the Senior Debt shall have been paid in full in cash, the holders of the
Subordinated Debt will not, without the prior written consent of the
Administrative Agent, commence or join with any other Person in commencing any
proceeding against Obligor or any other Person with respect to the Subordinated
Debt under any bankruptcy, reorganization, readjustment of debt, dissolution,
receivership, liquidation or insolvency law or statute now or hereafter in
effect in any jurisdiction, nor shall the holders of the Subordinated Debt,
without the prior written consent of the Administrative Agent, participate in
any assignment for benefit of creditors, compositions, or arrangements with
respect to Obligor’s debts with respect to the Subordinated Debt.

Obligor shall give prompt written notice to the holders of Subordinated Debt of
any dissolution, winding up, liquidation or reorganization of Obligor.

Subject to the payment in full in cash of all Senior Debt, the holders of the
Subordinated Debt shall be subrogated to the rights of the holders of Senior
Debt to receive payments or distributions of assets of Obligor made on the
Senior Debt until the Subordinated Debt shall be paid in full; provided,
however, that nothing herein contained shall be deemed to assign or grant to any
holder of Subordinated Debt, or subrogate any such holder to, any right of a
holder of Senior Debt as a mortgagee, secured party or other lien or
pledgeholder to any property of Obligor which secures such Senior Debt.

Nothing contained in this instrument is intended or shall impair as between
Obligor, their creditors other than the holders of Senior Debt, and the holders
of the Subordinated Debt, the obligation of Obligor, which is absolute and
unconditional, to pay to the holders of the Subordinated Debt, as and when the
same shall become due and payable in accordance with its terms, principal and
interest hereon, subject to the rights of the holders of Senior Debt as herein
provided, or to affect the relative rights of the holders of the Subordinated
Debt and creditors of Obligor other than the holders of Senior Debt.

Application of the foregoing provisions to the Subordinated Debt, the
subordination effected thereby and the rights of the holders of the Senior Debt
shall not be affected by (i) any change in the amount of or any amendment of or
addition or supplement to any Loan Document or any Senior Debt or any instrument
or agreement relating thereto or providing collateral security for any Senior
Debt, (ii) any exercise or non-exercise of any right, power or remedy under or
in respect of any Loan Document or any Senior Debt or any instrument or
agreement relating thereto, or any release of any collateral securing any Senior
Debt, or (iii) any waiver, consent, release, indulgence, extension, renewal,
sale, exchange, modification, delay or any other action, inaction or omission in
respect of any Loan Document or any Senior Debt or any instrument or agreement
relating thereto or providing collateral security for any Senior Debt; in each
case whether or not any holders of any Subordinated Debt shall have had notice
or knowledge of any of the foregoing.

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

The holder of Subordinated Debt hereby waives notice of or proof of reliance by
any holder of Senior Debt upon the provisions hereof, and the Senior Debt shall
conclusively be deemed to have been created, contracted, incurred or maintained
in reliance upon the provisions hereof.

The Obligor hereby waives diligence, presentment, demand, protest and notice of
any kind whatsoever. The nonexercise by the Administrative Agent or any other
holder of Senior Debt of any of its rights hereunder in any particular instance
shall not constitute a waiver thereof in that or any subsequent instance.

Any amounts received by the Administrative Agent hereunder for application to
the Senior Debt shall be so applied to such portion of the Senior Debt as shall
be determined by the Administrative Agent in its sole discretion.

The subordination provisions contained herein are for the benefit of the holders
of the Senior Debt and their respective successors and assigns and may not be
rescinded or cancelled or modified in any way without the prior written consent
of the Administrative Agent.

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

Schedule 8.3(l)

EXISTING LIENS

 

1. Liens securing capitalized lease obligations of Mirant Zeeland, LLC referred
to in paragraph 2 of Schedule 1.1C to the Credit Agreement.

 

2. Liens securing capitalized lease obligations of Mirant Chalk Point, LLC
referred to in paragraph 3 of Schedule 1.1C to the Credit Agreement.

 

3. In order to secure its obligations under the eleven Conditional Indemnity
Agreements executed by MIRMA in favor of each of the eleven Owner Lessors, MIRMA
(f/k/a Southern Energy Mid-Atlantic, LLC ) as “mortgagor” executed in favor of
the applicable Owner Lessor (identified below) an Indemnity Mortgage (identified
below) which encumbered, among other assets, the above-ground improvements
defined as the “Dickerson Facility” and the “Morgantown Facility.” Each of the
Indemnity Mortgages is described in greater detail below:

 

Indemnity Mortgage

 

  

Owner Lessor

 

  

Date

Executed

 

1.     Indemnity Mortgage, Security

        Agreement and Fixture Filing (L1)

   Dickerson OL1 LLC    12/19/00

2.     Indemnity Mortgage, Security

        Agreement and Fixture Filing (L2)

   Dickerson OL2 LLC    12/19/00

3.     Indemnity Mortgage, Security

        Agreement and Fixture Filing (L3)

   Dickerson OL3 LLC    12/19/00

4.     Indemnity Mortgage, Security

        Agreement and Fixture Filing (L4)

   Dickerson OL4 LLC    12/19/00

5.     Indemnity Mortgage, Security

        Agreement and Fixture Filing (L1)

   Morgantown OL1 LLC    12/19/00

6.     Indemnity Mortgage, Security

        Agreement and Fixture Filing (L2)

   Morgantown OL2 LLC    12/19/00

7.     Indemnity Mortgage, Security

        Agreement and Fixture Filing (L3)

   Morgantown OL3 LLC    12/19/00

8.     Indemnity Mortgage, Security

        Agreement and Fixture Filing (L4)

   Morgantown OL4 LLC    12/19/00

9.     Indemnity Mortgage, Security

        Agreement and Fixture Filing (L5)

   Morgantown OL5 LLC    12/19/00

10.   Indemnity Mortgage, Security

        Agreement and Fixture Filing (L6)

   Morgantown OL6 LLC    12/19/00

11.   Indemnity Mortgage, Security

        Agreement and Fixture Filing (L7)

   Morgantown OL7 LLC    12/19/00

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

Related UCC filings below:

 

DE-SOS

 

MD-Dept. of Assessments and Taxation

   Mirant Mid-

Atlantic, LLC

   Dickerson
OL2 LLC    Indemnity finance statement covering collateral including assets
relating to Dickerson facility.

DE-SOS

 

MD-Dept. of Assessments and Taxation

   Mirant Mid-
Atlantic, LLC    Morgantown
OL1 LLC    Indemnity finance statement covering collateral including assets
relating to Morgantown facility.

DE-SOS

 

MD-Dept. of Assessments and Taxation

   Mirant Mid-
Atlantic, LLC    Dickerson
OL1 LLC    Indemnity finance statement covering collateral including assets
relating to Dickerson facility.

DE-SOS

 

MD-Dept. of Assessments and Taxation

   Mirant Mid-
Atlantic, LLC    Dickerson
OL4 LLC    Indemnity finance statement covering collateral including assets
relating to Dickerson facility.

DE-SOS

 

MD-Dept. of Assessments and Taxation

   Mirant Mid-
Atlantic, LLC    Dickerson
OL3 LLC    Indemnity finance statement covering collateral including assets
relating to Dickerson facility.

DE-SOS

 

MD-Dept. of Assessments and Taxation

   Mirant Mid-
Atlantic, LLC    Morgantown
OL3 LLC    Indemnity finance statement covering collateral including assets
relating to Morgantown facility.

DE-SOS

 

MD-Dept. of Assessments and Taxation

   Mirant Mid-
Atlantic, LLC    Morgantown
OL2    Indemnity finance statement covering collateral including assets relating
to Morgantown facility.

DE-SOS

 

MD-Dept. of Assessments and Taxation

   Mirant Mid-
Atlantic, LLC    Morgantown
OL5 LLC    Indemnity finance statement covering collateral including assets
relating to Morgantown facility.

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

DE-SOS

 

MD-Dept. of Assessments and Taxation

   Mirant Mid-

Atlantic, LLC

   Morgantown
OL4 LLC    Indemnity finance statement covering collateral including assets
relating to Morgantown facility.

DE-SOS

 

MD-Dept. of Assessments and Taxation

   Mirant Mid-
Atlantic, LLC    Morgantown
OL7 LLC    Indemnity finance statement covering collateral including assets
relating to Morgantown facility.

DE-SOS

 

MD-Dept. of Assessments and Taxation

   Mirant Mid-
Atlantic, LLC    Morgantown
OL6 LLC    Indemnity finance statement covering collateral including assets
relating to Morgantown facility.

4.         Security interest in and easement on an undivided interest in the
“SEMA Shared Facilities” (as defined in the Shared Facilities Agreement, dated
as of December 18, 2000, among Southern Energy Mid-Atlantic, LLC, Dickerson OL1
LLC, Dickerson OL2 LLC, Dickerson OL3 LLC and Dickerson OL4 LLC (the “Dickerson
Shared Facilities Agreement”)) and contingent security interest in and easement
on an undivided interest in the “Owner Lessor Shared Facilities” (as defined in
the Dickerson Shared Facilities Agreement), in each case granted pursuant to the
Plan of Reorganization in connection with and upon the assumption of the MIRMA
Leases (as defined in the Plan of Reorganization) and to be documented post
closing under a deed of trust, security agreement and fixture filing and related
agreements and recorded in Montgomery County, Maryland among MIRMA as trustor, a
trustee to be determined and Dickerson OL1 LLC as beneficiary.

5.         Security interest in and easement on an undivided interest in the
“SEMA Shared Facilities” (as defined in the Dickerson Shared Facilities
Agreement) and contingent security interest in and easement on an undivided
interest in the “Owner Lessor Shared Facilities” (as defined in the Dickerson
Shared Facilities Agreement), in each case granted pursuant to the Plan of
Reorganization in connection with and upon the assumption of the MIRMA Leases
and to be documented post closing under a deed of trust, security agreement and
fixture filing and related agreements and recorded in Montgomery County,
Maryland among MIRMA as trustor, a trustee to be determined and Dickerson OL2
LLC as beneficiary.

6.         Security interest in and easement on an undivided interest in the
“SEMA Shared Facilities” (as defined in the Dickerson Shared Facilities
Agreement) and contingent security interest in and easement on an undivided
interest in the “Owner Lessor Shared Facilities” (as defined in the Dickerson
Shared Facilities Agreement), in each case granted pursuant to the Plan of
Reorganization in connection with and upon the assumption of the MIRMA Leases
and to be documented post closing under a deed of trust, security agreement and
fixture filing and related agreements and recorded in Montgomery County,
Maryland among MIRMA as trustor, a trustee to be determined and Dickerson OL3
LLC as beneficiary.

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

7.    Security interest in and easement on an undivided interest in the “SEMA
Shared Facilities” (as defined in the Dickerson Shared Facilities Agreement) and
contingent security interest in and easement on an undivided interest in the
“Owner Lessor Shared Facilities” (as defined in the Dickerson Shared Facilities
Agreement), in each case granted pursuant to the Plan of Reorganization in
connection with and upon the assumption of the MIRMA Leases and to be documented
post closing under a deed of trust, security agreement and fixture filing and
related agreements and recorded in Montgomery County, Maryland among MIRMA as
trustor, a trustee to be determined and Dickerson OL4 LLC as beneficiary.

8.    Security interest in and easement on an undivided interest in the “SEMA
Shared Facilities” (as defined in the Shared Facilities Agreement, dated as of
December 18, 2000, among Southern Energy Mid-Atlantic, LLC, Morgantown OL1 LLC,
Morgantown OL2 LLC, Morgantown OL3 LLC, Morgantown OL4 LLC, Morgantown OL5 LLC,
Morgantown OL6 LLC and Morgantown OL7 LLC (the “Morgantown Shared Facilities
Agreement”)) and contingent security interest in and easement on an undivided
interest in the “Owner Lessor Shared Facilities” (as defined in the Morgantown
Shared Facilities Agreement), in each case granted pursuant to the Plan of
Reorganization in connection with and upon the assumption of the MIRMA Leases
and to be documented post closing under a deed of trust, security agreement and
fixture filing and related agreements and recorded in Charles County, Maryland
among MIRMA as trustor, a trustee to be determined and Morgantown OL1 LLC as
beneficiary.

9.    Security interest in and easement on an undivided interest in the “SEMA
Shared Facilities” (as defined in the Morgantown Shared Facilities Agreement)
and contingent security interest in and easement on an undivided interest in the
“Owner Lessor Shared Facilities” (as defined in the Morgantown Shared Facilities
Agreement), in each case granted pursuant to the Plan of Reorganization in
connection with and upon the assumption of the MIRMA Leases and to be documented
post closing under a deed of trust, security agreement and fixture filing and
related agreements and recorded in Charles County, Maryland among MIRMA as
trustor, a trustee to be determined and Morgantown OL2 LLC as beneficiary.

10.    Security interest in and easement on an undivided interest in the “SEMA
Shared Facilities” (as defined in the Morgantown Shared Facilities Agreement)
and contingent security interest in and easement on an undivided interest in the
“Owner Lessor Shared Facilities” (as defined in the Morgantown Shared Facilities
Agreement), in each case granted pursuant to the Plan of Reorganization in
connection with and upon the assumption of the MIRMA Leases and to be documented
post closing under a deed of trust, security agreement and fixture filing and
related agreements and recorded in Charles County, Maryland among MIRMA as
trustor, a trustee to be determined and Morgantown OL3 LLC as beneficiary.

11.    Security interest in and easement on an undivided interest in the “SEMA
Shared Facilities” (as defined in the Morgantown Shared Facilities Agreement)
and contingent security interest in and easement on an undivided interest in the
“Owner Lessor Shared Facilities” (as defined in the Morgantown Shared Facilities
Agreement), in each case granted pursuant to the Plan of Reorganization in
connection with and upon the assumption of the MIRMA Leases and

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

to be documented post closing under a deed of trust, security agreement and
fixture filing and related agreements and recorded in Charles County, Maryland
among MIRMA as trustor, a trustee to be determined and Morgantown OL4 LLC as
beneficiary.

12.        Security interest in and easement on an undivided interest in the
“SEMA Shared Facilities” (as defined in the Morgantown Shared Facilities
Agreement) and contingent security interest in and easement on an undivided
interest in the “Owner Lessor Shared Facilities” (as defined in the Morgantown
Shared Facilities Agreement), in each case granted pursuant to the Plan of
Reorganization in connection with and upon the assumption of the MIRMA Leases
and to be documented post closing under a deed of trust, security agreement and
fixture filing and related agreements and recorded in Charles County, Maryland
among MIRMA as trustor, a trustee to be determined and Morgantown OL5 LLC as
beneficiary.

13.        Security interest in and easement on an undivided interest in the
“SEMA Shared Facilities” (as defined in the Morgantown Shared Facilities
Agreement) and contingent security interest in and easement on an undivided
interest in the “Owner Lessor Shared Facilities” (as defined in the Morgantown
Shared Facilities Agreement), in each case granted pursuant to the Plan of
Reorganization in connection with and upon the assumption of the MIRMA Leases
and to be documented post closing under a deed of trust, security agreement and
fixture filing and related agreements and recorded in Charles County, Maryland
among MIRMA as trustor, a trustee to be determined and Morgantown OL6 LLC as
beneficiary.

14.        Security interest in and easement on an undivided interest in the
“SEMA Shared Facilities” (as defined in the Morgantown Shared Facilities
Agreement) and contingent security interest in and easement on an undivided
interest in the “Owner Lessor Shared Facilities” (as defined in the Morgantown
Shared Facilities Agreement), in each case granted pursuant to the Plan of
Reorganization in connection with and upon the assumption of the MIRMA Leases
and to be documented post closing under a deed of trust, security agreement and
fixture filing and related agreements and recorded in Charles County, Maryland
among MIRMA as trustor, a trustee to be determined and Morgantown OL7 LLC as
beneficiary.

15.        The following tax claims:2

 

Debtor    Secured Party    Lien2 Mirant Americas Energy Marketing, LP    Fulton
County Tax Commissioner    $73,191.27 Mirant Americas Energy Capital, LP   
Harris County/City of Houston    $568.67

 

2

Secured tax claims are required to be paid in full with interest (less any
setoff) under the Plan of Reorganization. The discharge injunction set forth in
Section 17.20 of the Plan of Reorganization prevents enforcement of the liens by
the holders of secured tax claims.

 

3

Unless otherwise noted, claims shown hereon are the subject of negotiation as to
the amount of interest to be paid.

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

Mirant Canal, LLC   

Town of West Tisbury

 

Town of Sandwich

 

 

County of Dukes

  

$2,647.41

 

$177,510.26 (post-petition interest on an ordered and paid claim relating to
real and personal property)

 

$2,877.31 (for the year 2004; assessed upon land in Oak Bluffs, Mass. with the
buildings thereon, at 200 Edgartown Vineyard haven Rd.)

Mirant Delta, LLC    State of California    $2,764.28 (sales taxes) Mirant
Kendall, LLC    City of Cambridge    $2,439,200.27 (taxes, assessments and
charges including real estate taxes, CPA surcharge, sewer committed interest,
sewer lien, water committed interest, water lien, water/sewer account no.
004022-89) Mirant Potrero, LLC    City and County of San Francisco    Amount not
to exceed $1,792,627.10 (property taxes)

16. Other

 

Jurisdiction    Debtor Name    Secured Party    Collateral         DE-SOS   
Mirant
California,
LLC    United Rentals, Inc.    Equipment #662391 Sullair 375H Compressor
s/n 004-145869.         DE-SOS    Mirant Canal,
LLC    Toyota Motor Credit Corp    One (1) New Toyota Pneumatic Tire Forklift
Model 7FGU25 s/n: 68242 with New Rightline Fork Positioner Model E5D1019-16 s/n:
025842.         DE-SOS    Mirant
Americas
Energy
Marketing, LP    BP Corporation North America Inc.    All of Debtor’s right,
title and interest in and to any and all cash and earnings of such cash in the
custodial account maintained by a Qualified Institution and such other
collateral acceptable to the Secured Group and Obligations of the BP Group under
a North American Master Netting Agreement, dated as of December 1, 2001, among
Secured Party, each other BP party named therein, Debtor and each other Mirant
party named therein and any Underlying Master Agreement and all Transactions,
together with all contract rights in respect of such BP Group Obligations (each
as defined in such Netting Agreement).

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

        DE-SOS    Mirant
Americas
Energy
Marketing, LP    Reliant Energy Services, Inc.    Chattel paper, securities,
documents of title, instruments, money and intangibles, accounts and proceeds of
the foregoing, of the Debtor as described in or related to certain Master
Netting, Setoff and Security Agreements among Secured Party, Debtor, certain
other Reliant parties and certain other Mirant parties, and the underlying
master agreements and any trade, transaction and other open contractual
commitment relating thereto.         DE-SOS    Mirant
Americas
Energy
Marketing, LP    El Paso Merchant Energy, LP    Chattel paper, instruments,
money and general and payment intangibles, accounts and proceeds of the
foregoing, of the Debtor as described in or related to a Master Netting, Setoff
and Security Agreement among by and between Secured Party and Debtor and the
Underlying Master Agreements thereunder and any Transaction.

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

Schedule 8.6(l)

EXISTING INVESTMENTS

 

1. Investments in Mirant New York, Inc., Mirant Bowline, LLC, Mirant Lovett,
LLC, Mirant NY-Gen, LLC and Hudson Valley Gas Corporation.

 

2. Balances owed to Mirant North America, LLC and its subsidiaries owed under
intercompany arrangements described in the Offering Memorandum related to the
offering of the 7.375% Senior Notes dated December 20, 2005 (the “Offering
Memorandum”).

 

3. Investments consisting of advances not exceeding $20 million to the extent
not backed by cash collateral made pursuant to the Intercompany DIP facility
(the “Intercompany DIP”) made available by Mirant Americas Energy Marketing, LP
(“MAEM”) and Mirant North America, LLC to Mirant New York, Inc., Mirant Bowline,
LLC, Mirant Lovett, LLC and Hudson Valley Gas Corporation on terms described in
the Offering Memorandum, which agreement MAEM will assign to Mirant Energy
Trading LLC (“MET”).

 

4. Investments made pursuant to the Plan of Reorganization (i) in connection
with the restructuring of MAEM and MET as described in the Offering Memorandum
in furtherance of the MAEM/MET Effective Date (as defined in the Plan of
Reorganization) and (ii) consisting of investments by MIRMA in MAI Series A
Preferred Shares.

 

5. 815, 199 shares of Intercontinental Exchange Inc. owned by MAEM.

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

Schedule 8.7

TRANSACTIONS WITH AFFILIATES

 

1. MAEM is party to Power Sale, Fuel, Supply and Services Agreements, dated as
of January 3, 2006 with each subsidiary of Mirant North America, LLC and certain
affiliated entities that are subsidiaries of Mirant Americas, Inc., which
agreements MAEM will assign to MET.

 

2. Administrative Services Agreements, dated as of January 3, 2006 between
Mirant Services, LLC and each of Mirant North America, LLC and its subsidiaries.

 

3. The Intercompany DIP.

 

4. Services Agreement, dated as of January 3, 2006, between Mirant Power
Purchase, LLC and MAEM which agreement MAEM will assign to MET.

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

EXHIBIT A

 

 

 

GUARANTEE AND COLLATERAL AGREEMENT

made by

MIRANT NORTH AMERICA, LLC

and certain of its Subsidiaries

in favor of

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

Dated as of January 3, 2006

 

 

 

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

TABLE OF CONTENTS

 

          Page SECTION 1.   

DEFINED TERMS

   1

1.1

  

Definitions

   1

1.2    

  

Other Definitional Provisions

   4 SECTION 2.   

GUARANTEE

   4

2.1   

  

Guarantee

   4

2.2   

  

Right of Contribution

   5

2.3   

  

No Subrogation

   5

2.4   

  

Amendments, etc. with respect to the Borrower Obligations

   6

2.5   

  

Guarantee Absolute and Unconditional

   6

2.6   

  

Reinstatement

   7

2.7   

  

Payments

   7 SECTION 3.   

GRANT OF SECURITY INTEREST

   7 SECTION 4.   

REPRESENTATIONS AND WARRANTIES

   8

4.1   

  

No Other Liens

   8

4.2   

  

Jurisdiction of Organization; Chief Executive Office

   8

4.3   

  

Inventory and Equipment

   9

4.4   

  

Farm Products

   9

4.5   

  

Investment Property

   9

4.6   

  

Receivables

   9

4.7   

  

Intellectual Property

   9

4.8   

  

Commercial Tort Claims

   9 SECTION 5.   

COVENANTS

   10

5.1   

  

Maintenance of Perfected Security Interest; Further Documentation

   10

5.2   

  

Changes in Name, etc

   10

5.3   

  

Investment Property/Intellectual Property

   10

5.4   

  

Intellectual Property

   11

5.5   

  

Commercial Tort Claims

   12

5.6   

  

Intercreditor Agreements

   12 SECTION 6.   

REMEDIAL PROVISIONS

   12

6.1   

  

Certain Matters Relating to Receivables

   12

6.2   

  

Communications with Obligors; Grantors Remain Liable

   12

6.3   

  

Pledged Stock

   13

6.4   

  

Proceeds to be Turned Over To Administrative Agent

   13

6.5   

  

Application of Proceeds

   14

6.6   

  

Code and Other Remedies

   14

6.7   

  

Registration Rights

   15

6.8   

  

Deficiency

   16 SECTION 7.   

THE ADMINISTRATIVE AGENT

   16

7.1   

  

Administrative Agent’s Appointment as Attorney-in-Fact, etc

   16

7.2   

  

Duty of Administrative Agent

   17

 

i

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

7.3

    

Execution of Financing Statements

   18

7.4

    

Authority of Administrative Agent

   18 SECTION 8.     

MISCELLANEOUS

   18

8.1

    

Amendments in Writing

   18

8.2

    

Notices

   18

8.3

    

No Waiver by Course of Conduct; Cumulative Remedies

   18

8.4

    

Enforcement Expenses; Indemnification

   19

8.5

    

Successors and Assigns

   19

8.6

    

Set-Off

   19

8.7

    

Counterparts

   20

8.8

    

Severability

   20

8.9

    

Section Headings

   20

8.10

    

Integration

   20

8.11

    

Governing Law

   20

8.12

    

Submission To Jurisdiction; Waivers

   20

8.13

    

Acknowledgements

   20

8.14

    

Additional Grantors

   21

8.15

    

Releases

   21

8.16

    

Waiver Of Jury Trial

   21

 

SCHEDULES    Schedule 1   

Notice Addresses

   Schedule 2   

Investment Property

   Schedule 3   

Jurisdictions of Organization and Chief Executive Offices

   Schedule 4   

Inventory and Equipment Locations

   Schedule 5   

Intellectual Property

   ANNEXES    Annex 1   

Assumption Agreement

  

 

ii

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

GUARANTEE AND COLLATERAL AGREEMENT

GUARANTEE AND COLLATERAL AGREEMENT, dated as of January 3, 2006, made by each of
the signatories hereto (together with any other entity that may become a party
hereto as provided herein, the “Grantors”), in favor of JPMorgan Chase Bank,
N.A., as Administrative Agent (in such capacity, the “Administrative Agent”) for
the banks and other financial institutions or entities (the “Lenders”) from time
to time parties to the Credit Agreement, dated as of January 3, 2006 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Mirant North America, LLC (the “Borrower”), the Lenders,
Deutsche Bank Securities Inc. and Goldman Sachs Credit Partners L.P., as
co-syndication agents (in such capacity, the “Co-Syndication Agents”), and the
Administrative Agent.

W I T N E S S E T H:

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

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

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

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

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

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Secured Parties, as follows:

SECTION 1. DEFINED TERMS

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

(b)      The following terms shall have the following meanings:

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

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

“Collateral”: as defined in Section 3.

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

“Contracts”: as defined in Section 6.2.

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

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

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

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

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

“Guarantor Obligations”: with respect to any Guarantor, all obligations and
liabilities of such Guarantor which may arise under or in connection with this
Agreement (including, without

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limitation, Section 2) or any other Loan Document, any Hedging Arrangement, or
any Specified Cash Management Program to which such Guarantor is a party, in
each case whether on account of guarantee obligations, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative Agent or
to the Lenders that are required to be paid by such Guarantor pursuant to the
terms of this Agreement or any other Loan Document).

“Guarantors”: the collective reference to each Grantor other than the Borrower.

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

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

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

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

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

“Obligations”: (i) in the case of the Borrower, the Borrower Obligations, and
(ii) in the case of each Guarantor, its Guarantor Obligations.

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

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

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

“Pledged Stock”: the shares of Capital Stock listed on Schedule 2, together with
any other shares, stock certificates, options, interests or rights of any nature
whatsoever in respect of the Capital Stock of any Person that may be issued or
granted to, or held by, any Grantor while this

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Agreement is in effect; provided that in no event shall more than 66% of the
total outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be
required to be pledged hereunder.

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

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

“Secured Parties”: the collective reference to the Administrative Agent, the
Lenders and any Affiliate of any Lender (or any other Person which, at the time
any Hedging Arrangement was entered into, was a Lender or an Affiliate thereof)
to which Borrower Obligations or Guarantor Obligations, as applicable, are owed.

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

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

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

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

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

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

SECTION 2. GUARANTEE

2.1      Guarantee. (a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.

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(b)     Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).

(c)     Each Guarantor agrees that the Borrower Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Section 2 or affecting the
rights and remedies of the Administrative Agent or any Lender hereunder.

(d)     The guarantee contained in this Section 2 shall remain in full force and
effect until all the Borrower Obligations and the obligations of each Guarantor
under the guarantee contained in this Section 2 shall have been satisfied by
payment in full, no Letter of Credit shall be outstanding and the Commitments
shall be terminated, notwithstanding that from time to time during the term of
the Credit Agreement the Borrower may be free from any Borrower Obligations.

(e)     No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Lender from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid in
full, no Letter of Credit shall be outstanding and the Commitments are
terminated.

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

2.3      No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Administrative Agent or any Lender, no Guarantor shall be entitled to enforce or
otherwise exercise any right of subrogation to any of the rights of the
Administrative Agent or any Lender against the Borrower or any other Guarantor
or any collateral security or guarantee or right of offset held by the
Administrative Agent or any Lender for the payment of the Borrower Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the Administrative
Agent and the Lenders by the Borrower on account of the Borrower Obligations are
paid in full, no Letter of Credit shall be outstanding and the Commitments are
terminated. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Borrower Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in trust for
the Administrative Agent and the Lenders, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Administrative Agent in the exact form received by such Guarantor (duly
indorsed by such

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6

 

Guarantor to the Administrative Agent, if required), to be applied against the
Borrower Obligations, whether matured or unmatured, in such order as the
Administrative Agent may determine. If all Borrower Obligations due and owing
shall have been paid in full, no Letter of Credit shall be outstanding and the
Commitments shall have been terminated, each of the Administrative Agent and the
Lenders will, at such Guarantor’s reasonable request and expense, execute and
deliver to such Guarantor appropriate documents, without recourse and without
representation and warranty, necessary to evidence the transfer by subrogation
to such Guarantor of an interest in the Borrower Obligations resulting from any
payment made by such Guarantor pursuant to this Agreement.

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

2.5      Guarantee Absolute and Unconditional. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Borrower
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon the guarantee contained in this Section 2 or acceptance of the
guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the Administrative Agent and the Lenders,
on the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Section 2. Each
Guarantor waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon the Borrower or any of the Guarantors with
respect to the Borrower Obligations. Each Guarantor understands and agrees that
the guarantee contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Credit Agreement or any other Loan Document,
any of the Borrower Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the Administrative Agent or any Lender, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Borrower or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, the Administrative Agent or any Lender
may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or

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7

 

against any collateral security or guarantee for the Borrower Obligations or any
right of offset with respect thereto, and any failure by the Administrative
Agent or any Lender to make any such demand, to pursue such other rights or
remedies or to collect any payments from the Borrower, any other Guarantor or
any other Person or to realize upon any such collateral security or guarantee or
to exercise any such right of offset, or any release of the Borrower, any other
Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent or
any Lender against any Guarantor. For the purposes hereof “demand” shall include
the commencement and continuance of any legal proceedings.

2.6      Reinstatement. The guarantee contained in this Section 2 shall continue
to be effective, or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any of the Borrower Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any Lender upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.

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

SECTION 3.      GRANT OF SECURITY INTEREST

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

(a) all Accounts;

(b) all Chattel Paper;

(c) all Deposit Accounts;

(d) all Documents;

(e) all Equipment;

(f) all Fixtures;

(g) all General Intangibles;

(h) all Instruments;

(i) all Intellectual Property;

(j) all Inventory;

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(k) all Investment Property;

(l) all Letter-of-Credit Rights;

(m) all other property not otherwise described above (except for any property
specifically excluded from any clause in this section above, and any property
specifically excluded from any defined term used in any clause of this section
above);

(n) all books and records pertaining to the Collateral; and

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

provided, however, that notwithstanding any of the other provisions set forth in
this Section 3, this Agreement shall not constitute a grant of a security
interest in any property to the extent that such grant of a security interest is
prohibited by any Requirements of Law of a Governmental Authority, requires a
consent not obtained of any Governmental Authority pursuant to such Requirement
of Law or is prohibited by, or constitutes a breach or default under or results
in the termination of or requires any consent not obtained under, any contract,
license, agreement, instrument or other document evidencing or giving rise to
such property or, in the case of any Investment Property, Pledged Stock or
Pledged Note, any applicable shareholder or similar agreement, except to the
extent that such Requirement of Law or the term in such contract, license,
agreement, instrument or other document or shareholder or similar agreement
providing for such prohibition, breach, default or termination or requiring such
consent is ineffective under applicable law.

SECTION 4.      REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby represents and warrants
to the Administrative Agent and each Lender that:

4.1      No Other Liens. No financing statement or other public notice with
respect to all or any part of the Collateral is on file or of record in any
public office, except such as have been filed in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties, pursuant to this
Agreement or as are permitted by the Credit Agreement. For the avoidance of
doubt, it is understood and agreed that any Grantor may, as part of its
business, grant licenses to third parties to use Intellectual Property owned or
developed by a Grantor. For purposes of this Agreement and the other Loan
Documents, such licensing activity shall not constitute a “Lien” on such
Intellectual Property. Each of the Administrative Agent and each Lender
understands that any such licenses may be exclusive to the applicable licensees,
and such exclusivity provisions may limit the ability of the Administrative
Agent to utilize, sell, lease or transfer the related Intellectual Property or
otherwise realize value from such Intellectual Property pursuant hereto.

4.2      Jurisdiction of Organization; Chief Executive Office. On the date
hereof, such Grantor’s jurisdiction of organization, identification number from
the jurisdiction of organization (if any), and the location of such Grantor’s
chief executive office or sole place of business or principal residence, as the
case may be, are specified on Schedule 3. Such Grantor has furnished to the
Administrative Agent a certified charter, certificate of incorporation or other
organization document and long-form good standing certificate as of a date which
is recent to the date hereof.

 

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9

 

4.3      Inventory and Equipment. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on Schedule
4.

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

4.5      Investment Property. (a) The shares of Pledged Stock pledged by such
Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 66% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.

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

4.6      Receivables. (a) As of the Closing Date, no amount in excess of $10
million payable to such Grantor under or in connection with any Receivable is
evidenced by any Instrument or Chattel Paper.

(b)      If any such Grantor acquires any Instrument or Chattel Paper evidencing
an amount in excess of $10 million payable to such Grantor under or in
connection with any Receivable, such Grantor will within ten (10) Business Days
notify the Administrative Agent thereof, and upon request by the Administrative
Agent, will promptly deliver such Instrument or Chattel Paper to the
Administrative Agent appropriately endorsed to the order of the Administrative
Agent.

4.7      Intellectual Property. (a) Schedule 5 lists all material (i) Patents,
Patent applications, registered Trademarks and applications for Trademarks and
all registered Copyrights owned by such Grantor in its own name on the date
hereof and (ii) licenses under which any Grantor uses any Intellectual Property
owned by an Affiliate or any material Intellectual Property owned by a third
party.

(b)      On the date hereof, all Intellectual Property is valid, subsisting,
unexpired and enforceable, has not been abandoned and does not infringe the
intellectual property rights of any other Person except in each case as could
not reasonably be expected to result in a Material Adverse Effect.

4.8      Commercial Tort Claims.

(a)      On the date hereof, no Grantor has rights in any Commercial Tort Claim
with potential value in excess of $10 million.

(b)      Upon the filing of a financing statement covering any Commercial Tort
Claim referred to in Section 5.5 hereof against such Grantor in the jurisdiction
specified in Schedule 4.15 to the Credit Agreement, the security interest
granted in such Commercial Tort Claim will constitute a valid perfected security
interest in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, as collateral security for such Grantor’s Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase such Collateral from Grantor,
which security interest shall be prior to all other Liens on such Collateral
except for Liens permitted by the Credit Agreement that have priority over the
Liens on such Collateral by operation of law.

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SECTION 5.      COVENANTS

Each Grantor covenants and agrees with the Administrative Agent and the Lenders
that, from and after the date of this Agreement until all due and owing
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:

5.1      Maintenance of Perfected Security Interest; Further Documentation.
(a) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority described in
Section 4.15 of the Credit Agreement and shall defend such security interest
against the claims and demands of all Persons whomsoever, subject to the rights
of such Grantor under the Loan Documents to dispose of the Collateral.

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

(c)      Such Grantor shall execute any and all further documents, financing
statements, agreements and instruments, and take all further action (including
filing Uniform Commercial Code and other financing statements, mortgages and
deeds of trust and delivering to the Administrative Agent certificates
representing securities pledged under the Security Documents) that may be
required under applicable law, or that the Majority Lenders or the
Administrative Agent may reasonably request, in order to grant, preserve,
protect and perfect the validity and priority of the security interests created
or intended to be created by the Security Documents.

(d)      Notwithstanding anything to the contrary in this Section 5.1 or any
Loan Document, no Grantor shall be required (A) to perfect the security
interests in deposits and investment accounts by entering into separate lockbox
or account control agreements; (B) to perfect any security interest in motor
vehicles or (C) to perfect any security interests in any Collateral (other than
Pledged Stock) by possession except as otherwise agreed or required pursuant to
the Loan Documents.

5.2      Changes in Name, etc. Such Grantor will furnish prompt written notice
to the Administrative Agent of any change (i) in its corporate name, (ii) in the
jurisdiction of organization or formation or the location of its chief executive
office or sole place of business or principal residence from that referred to in
Section 4.2 or (iii) its Federal Taxpayer Identification Number. Such Grantor
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the Uniform Commercial Code or otherwise
that are required in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all of the Collateral as provided for herein.

5.3      Investment Property/Intellectual Property. (a) If such Grantor shall
become entitled to receive or shall receive any certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Lenders, hold the same in
trust for the Administrative Agent and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by such Grantor to the Administrative Agent, if required, together with an
undated stock power

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covering such certificate duly executed in blank by such Grantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations. If an Event of Default shall have occurred and be
continuing, any sums paid upon or in respect of the Investment Property upon the
liquidation or dissolution of any Issuer shall be paid over to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Investment Property or any property shall be
distributed upon or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent,
be delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Investment Property shall be
received by such Grantor, such Grantor shall, until such money or property is
paid or delivered to the Administrative Agent, hold such money or property in
trust for the Administrative Agent and the Lenders, segregated from other funds
of such Grantor, as additional collateral security for the Obligations.

(b)      Without the prior written consent of the Administrative Agent, such
Grantor will not (i) vote to enable, or take any other action to permit, any
Issuer to issue any Capital Stock of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any Capital
Stock of any nature of any Issuer, unless such Capital Stock or other security
is pledged to the Administrative Agent hereunder or (ii) enter into any
agreement or undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Pledged Stock
constituting Capital Stock of a Subsidiary or Intercompany Notes or Proceeds
thereof, other than any restrictions (x) imposed pursuant to an agreement
entered into for the direct or indirect sale or disposition of the Pledged Stock
pending the closing of such sale or disposition or (y) contained in agreements
that are not more restrictive, taken as a whole, than those applicable to the
Borrower in the Credit Agreement or agreements evidencing Permitted Debt
described in clause (i) of the definition thereof.

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

5.4      Intellectual Property. (a) Such Grantor shall, consistent with its
reasonable business judgment, take commercially reasonable actions to maintain
the value and validity of all Intellectual Property owned by it, except to the
extent the failure to take any such action would not reasonably be expected to
have a Material Adverse Effect.

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

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5.5      Commercial Tort Claims. If such Grantor shall obtain an interest in any
Commercial Tort Claim with a potential value in excess of $10 million, such
Grantor shall within 30 days of obtaining such interest sign and deliver
documentation acceptable to the Administrative Agent granting a security
interest under the terms and provisions of this Agreement in and to such
Commercial Tort Claim.

5.6      Intercreditor Agreements. In the event any Grantor becomes a party to
any Intercreditor Agreement in respect of Permitted Pari Passu Debt or in
respect of junior Liens permitted under Section 8.3(i)(x) of the Credit
Agreement, such Grantor agrees that it shall not at any time execute or deliver
any amendment or other modification to any “Additional Facilities Document” or
“Second Priority Document”, as applicable, or similar documents as used in such
Intercreditor Agreement, inconsistent with or in violation of such Intercreditor
Agreement.

SECTION 6.      REMEDIAL PROVISIONS

6.1      Certain Matters Relating to Receivables. (a) If an Event of Default
shall have occurred and be continuing, the Administrative Agent shall have the
right to make test verifications of the Receivables in any manner and through
any medium that it reasonably considers advisable, and each Grantor shall
furnish all such assistance and information as the Administrative Agent may
require in connection with such test verifications.

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

6.2      Communications with Obligors; Grantors Remain Liable. (a) The
Administrative Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables and with parties to any material
contract or agreement to which any Grantor is a party (the “Contracts”) to
verify with them to the Administrative Agent’s satisfaction the existence,
amount and terms of any Receivables or Contracts.

(b)      Upon the request of the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables and parties to the Contracts that the
Receivables and the Contracts have been assigned to the Administrative Agent for
the ratable benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Administrative Agent.

(c)      Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Receivables and Contracts to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any

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Receivable (or any agreement giving rise thereto) or Contract by reason of or
arising out of this Agreement or the receipt by the Administrative Agent or any
Lender of any payment relating thereto, nor shall the Administrative Agent or
any Lender be obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto) or Contract, to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.

6.3      Pledged Stock. (a) Unless an Event of Default shall have occurred and
be continuing and the Administrative Agent shall have given notice to the
relevant Grantor of the Administrative Agent’s intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, to the extent permitted in the
Credit Agreement, and to exercise all voting and corporate or other
organizational rights with respect to the Investment Property; provided,
however, that no vote shall be cast or corporate or other organizational right
exercised or other action taken which would result in any violation of any
provision of the Credit Agreement, this Agreement or any other Loan Document.

(b)      If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Investment Property and make application thereof to the
Obligations in such order as the Administrative Agent may determine, and
(ii) any or all of the Investment Property shall be registered in the name of
the Administrative Agent or its nominee, and the Administrative Agent or its
nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Investment Property at any meeting of shareholders of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Investment Property as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate or
other organizational structure of any Issuer, or upon the exercise by any
Grantor or the Administrative Agent of any right, privilege or option pertaining
to such Investment Property, and in connection therewith, the right to deposit
and deliver any and all of the Investment Property with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.

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

6.4      Proceeds to be Turned Over To Administrative Agent. In addition to the
rights of the Administrative Agent and the Lenders specified in Section 6.1 with
respect to payments of Receivables, if an Event of Default shall occur and be
continuing, all Proceeds received by any Grantor consisting of cash, checks and
other near-cash items shall be held by such Grantor in trust for the
Administrative Agent

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and the Lenders, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the Administrative
Agent in the exact form received by such Grantor (duly indorsed by such Grantor
to the Administrative Agent, if required). All Proceeds received by the
Administrative Agent hereunder shall be held by the Administrative Agent in a
Collateral Account maintained under its sole dominion and control. All Proceeds
while held by the Administrative Agent in a Collateral Account (or by such
Grantor in trust for the Administrative Agent and the Lenders) shall continue to
be held as collateral security for all the Obligations and shall not constitute
payment thereof until applied as provided in Section 6.5.

6.5      Application of Proceeds. At such intervals as may be agreed upon by the
Borrower and the Administrative Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent’s election,
the Administrative Agent may apply all or any part of Proceeds constituting
Collateral, whether or not held in any Collateral Account, and any proceeds of
the guarantee set forth in Section 2, in payment of the Obligations in the
following order (subject to any applicable Intercreditor Agreement with respect
to Permitted Pari Passu Debt or to any Lien in favor of counterparties to a PPA
pursuant to Section 8.3(i) of the Credit Agreement):

First, to pay incurred and unpaid fees and expenses of the Administrative Agent
under the Loan Documents;

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

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

Fourth, any balance remaining after the Obligations shall have been paid in
full, no Letters of Credit shall be outstanding and the Commitments shall have
terminated shall be paid over to the Borrower or to whomsoever may be lawfully
entitled to receive the same.

6.6      Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the New York UCC
or any other applicable law. Without limiting the generality of the foregoing,
the Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker’s board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any Lender shall have
the right upon any such public sale or sales, and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any part of
the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Administrative Agent’s request, to

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15

 

assemble the Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select, whether at such
Grantor’s premises or elsewhere. The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 6.6, after deducting
all reasonable costs and expenses of every kind incurred in connection therewith
or incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation, reasonable attorneys’ fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as is provided in Section 6.5, and only after such application and after
the payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-615(a)(3) of the New
York UCC, need the Administrative Agent account for the surplus, if any, to any
Grantor. To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any Lender arising out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition.

6.7      Registration Rights. (a) If the Administrative Agent shall determine to
exercise its right to sell any or all of the Pledged Stock pursuant to
Section 6.6, and if in the opinion of the Administrative Agent it is necessary
or advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the relevant Grantor will
cause the Issuer thereof to (i) execute and deliver, and cause the directors and
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Administrative Agent, necessary or advisable to register the
Pledged Stock, or that portion thereof to be sold, under the provisions of the
Securities Act, (ii) use its best efforts to cause the registration statement
relating thereto to become effective and to remain effective for a period of one
year from the date of the first public offering of the Pledged Stock, or that
portion thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Administrative Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Grantor agrees to cause such Issuer to
comply with the provisions of the securities or “Blue Sky” laws of any and all
jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings statement
(which need not be audited) which will satisfy the provisions of Section 11(a)
of the Securities Act.

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

(c)      Each Grantor agrees to use its best efforts to do or cause to be done
all such other acts as may be necessary to make such sale or sales of all or any
portion of the Pledged Stock pursuant to this Section 6.7 valid and binding and
in compliance with any and all other applicable Requirements of Law. Each
Grantor further agrees that a breach of any of the covenants contained in this
Section 6.7 will cause irreparable injury to the Administrative Agent and the
Lenders, that the Administrative Agent and the

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Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 6.7 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred
under the Credit Agreement.

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

SECTION 7.      THE ADMINISTRATIVE AGENT

7.1      Administrative Agent’s Appointment as Attorney-in-Fact, etc. (a) Each
Grantor hereby irrevocably constitutes and appoints the Administrative Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do any or all of the following:

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

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

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

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

(v)      (1) direct any party liable for any payment under any of the Collateral
to make payment of any and all moneys due or to become due

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thereunder directly to the Administrative Agent or as the Administrative Agent
shall direct; (2) ask or demand for, collect, and receive payment of and receipt
for, any and all moneys, claims and other amounts due or to become due at any
time in respect of or arising out of any Collateral; (3) sign and indorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence and prosecute
any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce any
other right in respect of any Collateral; (5) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral;
(6) settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Administrative
Agent may deem appropriate; (7) assign any Copyright, Patent or Trademark (along
with the goodwill of the business to which any such Copyright, Patent or
Trademark pertains), throughout the world for such term or terms, on such
conditions, and in such manner, as the Administrative Agent shall in its sole
discretion determine; and (8) generally, sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or realize upon
the Collateral and the Administrative Agent’s and the Lenders’ security
interests therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.

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

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

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

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

7.2      Duty of Administrative Agent. The Administrative Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the New York UCC or otherwise, shall
be to deal with it in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the Administrative Agent, any
Lender nor any of

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18

 

their respective officers, directors, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of any Grantor or any other Person or to take
any other action whatsoever with regard to the Collateral or any part thereof.
The powers conferred on the Administrative Agent and the Lenders hereunder are
solely to protect the Administrative Agent’s and the Lenders’ interests in the
Collateral and shall not impose any duty upon the Administrative Agent or any
Lender to exercise any such powers. The Administrative Agent and the Lenders
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.

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

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

SECTION 8.      MISCELLANEOUS

8.1      Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 11.1 of the Credit Agreement.

8.2      Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 11.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.

8.3      No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be

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construed as a bar to any right or remedy which the Administrative Agent or such
Lender would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights or remedies provided by law.

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

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

(c)      Each Guarantor agrees to pay, and to save the Administrative Agent and
the Lenders harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Borrower would be required to do so pursuant to Section 11.5 of the Credit
Agreement.

(d)      The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.

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

8.6      Set-Off. Each Grantor hereby irrevocably authorizes the Administrative
Agent and each Lender at any time and from time to time, without notice to such
Grantor or any other Grantor, any such notice being expressly waived by each
Grantor, to set-off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such Lender to or for the credit or the
account of such Grantor, or any part thereof in such amounts as the
Administrative Agent or such Lender may elect, against and on account of the
obligations and liabilities of such Grantor to the Administrative Agent or such
Lender hereunder and claims of every nature and description of the
Administrative Agent or such Lender against such Grantor, in any currency,
whether arising hereunder, under the Credit Agreement, any other Loan Document
or otherwise, as the Administrative Agent or such Lender may elect, whether or
not the Administrative Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The Administrative Agent and each Lender shall notify such Grantor
promptly of any such set-off and the application made by the Administrative
Agent or such Lender of the proceeds thereof, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of the Administrative Agent and each Lender under this Section 8.6 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Administrative Agent or such Lender may have.

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

20

 

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

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

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

8.10      Integration. This Agreement and the other Loan Documents represent the
agreement of the Grantors, the Administrative Agent and the Lenders with respect
to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Loan Documents.

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

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

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

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

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

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

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

8.13      Acknowledgements. Each Grantor hereby acknowledges that:

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

21

 

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

(b)      neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Administrative Agent and Lenders, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and

(c)      no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Grantors and the Lenders.

8.14      Additional Grantors. Each Subsidiary of the Borrower that is required
to become a party to this Agreement pursuant to Section 6.7 of the Credit
Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.

8.15      Releases. (a) At such time as the Loans, the Reimbursement Obligations
and the other Obligations (other than Obligations in respect of Hedging
Arrangements) shall have been paid in full, the Commitments have been terminated
and no Letters of Credit shall be outstanding, the Collateral shall be released
from the Liens created hereby, and this Agreement and all obligations (other
than those expressly stated to survive such termination) of the Administrative
Agent and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors. At the request and sole expense of any
Grantor following any such termination, the Administrative Agent shall deliver
to such Grantor any Collateral held by the Administrative Agent hereunder, and
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination.

(b)      If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Administrative Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. At the request and sole expense of the Borrower, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit Agreement;
provided that the Borrower shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a written
request for release identifying the relevant Subsidiary Guarantor and the terms
of the sale or other disposition in reasonable detail, including the price
thereof and any expenses in connection therewith, together with a certification
by the Borrower stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.

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

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

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

 

MIRANT NORTH AMERICA, LLC By:  

 

  Name:   Title: MIRANT TEXAS MANAGEMENT, LLC By:  

 

  Name:   Title: MIRANT TEXAS, LP By:  

 

  Name:   Title: MIRANT CALIFORNIA, LLC By:  

 

  Name:   Title: MIRANT POTRERO, LLC By:  

 

  Name:   Title:

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

23

 

MIRANT DELTA, LLC By:  

 

  Name:   Title: MIRANT CANAL, LLC By:  

 

  Name:   Title: MIRANT KENDALL, LLC By:  

 

  Name:   Title: MIRANT ZEELAND, LLC By:  

 

  Name:   Title: MLW DEVELOPMENT, LLC By:  

 

  Name:   Title: MIRANT SPECIAL PROCUREMENT, INC. By:  

 

  Name:   Title:

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

24

 

MNA FINANCE CORP. By:  

 

  Name:   Title:

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

25

 

Schedule 1

NOTICE ADDRESS

 

Company

 

 

Notice Address

 

Mirant North America, LLC  

1155 Perimeter Center West

Atlanta, GA 30338

Attention: J. William Holden III

Telecopier No.: 678-579-7734

Telephone No.: 678-579-7728

 

with copies to:

 

Mirant Corporation

1155 Perimeter Center West

Atlanta, GA 30338

Attention: Steven B. Nickerson

Telecopier No.: 678-579-5951

Telephone No.: 678-579-6440

 

MNA Finance Corp.  

1155 Perimeter Center West

Atlanta, GA 30338

Attention: J. William Holden III

Telecopier No.: 678-579-7734

Telephone No.: 678-579-7728

 

with copies to:

 

Mirant Corporation

1155 Perimeter Center West

Atlanta, GA 30338

Attention: Steven B. Nickerson

Telecopier No.: 678-579-5951

Telephone No.: 678-579-6440

 

Mirant Texas Management, LLC  

1155 Perimeter Center West

Atlanta, GA 30338

Attention: J. William Holden III

Telecopier No.: 678-579-7734

Telephone No.: 678-579-7728

 

with copies to:

 

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

26

 

   

Mirant Corporation

1155 Perimeter Center West

Atlanta, GA 30338

Attention: Steven B. Nickerson

Telecopier No.: 678-579-5951

Telephone No.: 678-579-6440

 

Mirant Texas, LP  

1155 Perimeter Center West

Atlanta, GA 30338

Attention: J. William Holden III

Telecopier No.: 678-579-7734

Telephone No.: 678-579-7728

 

with copies to:

 

Mirant Corporation

1155 Perimeter Center West

Atlanta, GA 30338

Attention: Steven B. Nickerson

Telecopier No.: 678-579-5951

Telephone No.: 678-579-6440

 

Mirant California, LLC  

1155 Perimeter Center West

Atlanta, GA 30338

Attention: J. William Holden III

Telecopier No.: 678-579-7734

Telephone No.: 678-579-7728

 

with copies to:

 

Mirant Corporation

1155 Perimeter Center West

Atlanta, GA 30338

Attention: Steven B. Nickerson

Telecopier No.: 678-579-5951

Telephone No.: 678-579-6440

 

Mirant Potrero, LLC  

1155 Perimeter Center West

Atlanta, GA 30338

Attention: J. William Holden III

Telecopier No.: 678-579-7734

Telephone No.: 678-579-7728

 

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

27

 

   

with copies to:

 

Mirant Corporation

1155 Perimeter Center West

Atlanta, GA 30338

Attention: Steven B. Nickerson

Telecopier No.: 678-579-5951

Telephone No.: 678-579-6440

 

Mirant Delta, LLC  

1155 Perimeter Center West

Atlanta, GA 30338

Attention: J. William Holden III

Telecopier No.: 678-579-7734

Telephone No.: 678-579-7728

 

with copies to:

 

Mirant Corporation

1155 Perimeter Center West

Atlanta, GA 30338

Attention: Steven B. Nickerson

Telecopier No.: 678-579-5951

Telephone No.: 678-579-6440

 

Mirant Canal, LLC  

1155 Perimeter Center West

Atlanta, GA 30338

Attention: J. William Holden III

Telecopier No.: 678-579-7734

Telephone No.: 678-579-7728

 

with copies to:

 

Mirant Corporation

1155 Perimeter Center West

Atlanta, GA 30338

Attention: Steven B. Nickerson

Telecopier No.: 678-579-5951

Telephone No.: 678-579-6440

 

Mirant Kendall, LLC  

1155 Perimeter Center West

Atlanta, GA 30338

Attention: J. William Holden III

Telecopier No.: 678-579-7734

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

28

 

   

Telephone No.: 678-579-7728

 

with copies to:

 

Mirant Corporation

1155 Perimeter Center West

Atlanta, GA 30338

Attention: Steven B. Nickerson

Telecopier No.: 678-579-5951

Telephone No.: 678-579-6440

 

Mirant Zeeland, LLC  

1155 Perimeter Center West

Atlanta, GA 30338

Attention: J. William Holden III

Telecopier No.: 678-579-7734

Telephone No.: 678-579-7728

 

with copies to:

 

Mirant Corporation

1155 Perimeter Center West

Atlanta, GA 30338

Attention: Steven B. Nickerson

Telecopier No.: 678-579-5951

Telephone No.: 678-579-6440

 

Mirant Special Procurement, Inc.  

1155 Perimeter Center West

Atlanta, GA 30338

Attention: J. William Holden III

Telecopier No.: 678-579-7734

Telephone No.: 678-579-7728

 

with copies to:

 

Mirant Corporation

1155 Perimeter Center West

Atlanta, GA 30338

Attention: Steven B. Nickerson

Telecopier No.: 678-579-5951

Telephone No.: 678-579-6440

 

MLW Development, LLC  

1155 Perimeter Center West

Atlanta, GA 30338

Attention: J. William Holden III

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

29

 

   

Telecopier No.: 678-579-7734

Telephone No.: 678-579-7728

 

with copies to:

 

Mirant Corporation

1155 Perimeter Center West

Atlanta, GA 30338

Attention: Steven B. Nickerson

Telecopier No.: 678-579-5951

Telephone No.: 678-579-6440

 

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

33

 

Schedule 2

INVESTMENT PROPERTY

Pledged Stock

 

Issuer

 

 

Class of Stock

 

 

Stock Certificate No.

 

 

No. of Shares

 

Mirant Special Procurement, Inc.

 

  Common   2   1000

MNA Finance Corp.

 

  Common   2   1000

Mirant New York, Inc.

 

  Common   2   1000

Mirant Texas Management, LLC

 

 

LLC Membership Interests

 

  N/A   N/A

Mirant Texas, LP

 

 

Partnership Interests

 

  N/A   N/A

Mirant California, LLC

 

 

LLC Membership Interests

 

  N/A   N/A

Mirant Potrero, LLC

 

 

LLC Membership Interests

 

  N/A   N/A

Mirant Delta, LLC

 

 

LLC Membership Interests

 

  N/A   N/A

Mirant Canal, LLC

 

 

LLC Membership Interests

 

  N/A   N/A

Mirant Kendall, LLC

 

 

LLC Membership Interests

 

  N/A   N/A

Mirant Zeeland, LLC

 

 

LLC Membership Interests

 

  N/A   N/A

MLW Development, LLC

 

 

LLC Membership Interests

 

  N/A   N/A

Mirant Energy Trading, LLC

 

 

LLC Membership Interests

 

  N/A   N/A

Mirant Mid-Atlantic, LLC

 

 

LLC Membership Interests

 

  N/A   N/A

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

34

 

New MAEM Holdco, LLC

 

 

LLC Membership Interests

 

  N/A   N/A

Pledged Notes

 

Issuer

 

  Payee   Principal Amount

None.

 

       

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

35

 

Schedule 3

JURISDICTIONS OF ORGANIZATION AND CHIEF EXECUTIVE OFFICES

 

Company  

Jurisdiction of

Organization

 

  Organizational ID   Chief Executive Office Mirant North America, LLC   DE –
SOS   2968459  

1155 Perimeter Center West Atlanta, GA 30338

 

MNA Finance Corp.   DE – SOS   4077673  

1155 Perimeter Center West Atlanta, GA 30338

 

Mirant Texas Management, LLC   DE – SOS   2941017  

1155 Perimeter Center West Atlanta, GA 30338

 

Mirant Texas, LP   DE – SOS   2999913  

1155 Perimeter Center West Atlanta, GA 30338

 

Mirant California, LLC   DE – SOS   2996553  

1155 Perimeter Center West Atlanta, GA 30338

 

Mirant Potrero, LLC   DE – SOS   2968474  

1155 Perimeter Center West Atlanta, GA 30338

 

Mirant Delta, LLC   DE – SOS   2968477  

1155 Perimeter Center West Atlanta, GA 30338

 

Mirant Canal, LLC   DE – SOS   2900994  

1155 Perimeter Center West Atlanta, GA 30338

 

Mirant Kendall, LLC   DE – SOS   2901233  

1155 Perimeter Center West Atlanta, GA 30338

 

Mirant Zeeland, LLC   DE – SOS   3120426  

1155 Perimeter Center West Atlanta, GA 30338

 

Mirant Special Procurement, Inc.   DE – SOS   3394736  

1155 Perimeter Center West Atlanta, GA 30338

 

MLW Development, LLC   DE - SOS   3642469  

1155 Perimeter Center West Atlanta, GA 30338

 

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

36

 

Schedule 4

INVENTORY AND EQUIPMENT LOCATIONS

 

Company

 

  Locations

Mirant North America, LLC

 

  None

MNA Finance Corp.

 

  None

Mirant Texas Management, LLC

 

  None

Mirant Texas, LP

 

 

Bosque County, TX

 

Mirant California, LLC

 

  None

Mirant Potrero, LLC

 

  San Francisco, CA

Mirant Delta, LLC

 

 

Solano County County, CA

Contra Costa County, CA

 

Mirant Canal, LLC  

Barnstable County, MA

Cumberland County, ME

Dukes County, MA

 

Mirant Kendall, LLC  

Middlesex County, MA

 

Mirant Zeeland, LLC  

Ottawa County, MI

 

Mirant Special Procurement, Inc.  

Shelby County, TN

 

MLW Development, LLC  

Parker County, TX

 

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

43

 

Schedule 5

INTELLECTUAL PROPERTY

None.

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

Annex 1 to

Guarantee and Collateral Agreement

ASSUMPTION AGREEMENT, dated as of                         , 200    , made by
                                                                  (the
“Additional Grantor”), in favor of JPMorgan Chase Bank, N.A., as administrative
agent (in such capacity, the “Administrative Agent”) for the banks and other
financial institutions or entities (the “Lenders”) parties to the Credit
Agreement referred to below. All capitalized terms not defined herein shall have
the meaning ascribed to them in such Credit Agreement.

W I T N E S S E T H :

WHEREAS, Mirant North America, LLC (the “Borrower”), the Lenders and the
Administrative Agent have entered into a Credit Agreement, dated as of January
    , 2006 (as amended, supplemented or otherwise modified from time to time,
the “Credit Agreement”);

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of
its Affiliates (other than the Additional Grantor) have entered into the
Guarantee and Collateral Agreement, dated as of January     , 2006 (as amended,
supplemented or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”) in favor of the Administrative Agent for the ratable
benefit of the Secured Parties;

WHEREAS, the Credit Agreement requires the Additional Grantor to become a party
to the Guarantee and Collateral Agreement;

[WHEREAS, in connection with the Credit Agreement, the Borrower and certain of
its Affiliates (other than the Additional Grantor), the Administrative Agent and
certain other parties named therein have entered into the [describe any
Intercreditor Agreement then in effect], dated as of                      (as
amended, supplemented or otherwise modified from time to time, the
“Intercreditor Agreement”), and the Intercreditor Agreement requires the
Additional Grantor to become a party to the Intercreditor Agreement; and]

WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement [and the Intercreditor Agreement];

NOW, THEREFORE, IT IS AGREED:

1. Guarantee and Collateral Agreement[/Intercreditor Agreements]. By executing
and delivering this Assumption Agreement, the Additional Grantor (i) as provided
in Section 8.14 of the Guarantee and Collateral Agreement, hereby becomes a
party to the Guarantee and Collateral Agreement as a Grantor thereunder with the
same force and effect as if originally named therein as a Grantor and, without
limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor thereunder, and (ii) as provided in
Section [    ] of the Intercreditor Agreement, hereby becomes a party to the
Intercreditor Agreement as a Loan Party thereunder with the same force and
effect as if originally named therein as a Loan Party and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Loan Party thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in the Schedules to the
Guarantee and Collateral Agreement. The Additional Grantor hereby represents and
warrants that each of the representations and warranties contained in Section 4
of the Guarantee and Collateral Agreement is true

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

2

 

and correct on and as the date hereof (after giving effect to this Assumption
Agreement) as if made on and as of such date.

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

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

 

[ADDITIONAL GRANTOR] By:  

 

  Name:   Title:

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

Annex 1-A to

Assumption Agreement

Supplement to Schedule 1

 

Supplement to Schedule 2

 

Supplement to Schedule 3

 

Supplement to Schedule 4

 

Supplement to Schedule 5

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

4

 

EXHIBIT B

FORM OF

COMPLIANCE CERTIFICATE

This Compliance Certificate is delivered pursuant to Section 6.3(a) of the
Credit Agreement, dated as of January 3, 2006 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among Mirant
North America, LLC (the “Borrower”), the Lenders party thereto, the
Co-Syndication Agents named therein and JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, the “Administrative Agent”). Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.

1. I am the duly elected, qualified and acting [Chief Executive Officer]
[President] [Chief Financial Officer] [Treasurer] [Controller] of the Borrower.

2. I have reviewed and am familiar with the contents of this Certificate.

3. During the accounting period covered by the financial statements attached
hereto as Attachment 1 (the “Financial Statements”), each Loan Party has
complied with the terms of the Credit Agreement and the other Loan Documents to
which it is a party. I have no knowledge of the existence during or at the end
of the accounting period covered by the Financial Statements, and I have no
knowledge of the existence, as of the date of this Certificate, of any condition
or event which constitutes a Default or Event of Default[, except as set forth
below].

4. Attached hereto as Attachment 2 are the computations showing compliance with
the covenants set forth in Sections 7.1, 7.2 and 7.3 of the Credit Agreement.

IN WITNESS WHEREOF, I have executed this Certificate this [    ] day of
[            ], [            ].

 

 

Name: Title:

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

Attachment 1

to Compliance Certificate

[Attach Financial Statements]

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

Attachment 2

to Compliance Certificate

The information described herein is as of                 ,             , and
pertains to the period from                         ,              to
                                     ,             .

[Set forth Covenant Calculations]

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

EXHIBIT C

FORM OF

CLOSING CERTIFICATE

Pursuant to Section 5.1(b) of the Credit Agreement, dated as of January 3, 2006
(the “Credit Agreement”; terms defined therein being used herein as therein
defined), among Mirant North America, LLC (the “Borrower”), the Lenders party
thereto, the Co-Syndication Agents named therein and JPMorgan Chase Bank, N.A.,
as administrative agent (in such capacity, the “Administrative Agent”), the
undersigned [INSERT TITLE OF OFFICER] of [INSERT NAME OF LOAN PARTY] (the
“Certifying Loan Party”) hereby certifies as follows:

1.    Each of the representations and warranties of the Certifying Loan Party
set forth in each of the Loan Documents to which it is a party or which are
contained in any certificate furnished by or on behalf of the Certifying Loan
Party pursuant to any of the Loan Documents to which it is a party are true and
correct in all material respects on and as of the date hereof with the same
effect as if made on the date hereof.

2.                                              is the duly elected and
qualified [Corporate Secretary] of the Certifying Loan Party and the signature
set forth for such officer below is such officer’s true and genuine signature.

3.    No Default or Event of Default has occurred and is continuing as of the
date hereof or after giving effect to the extensions of credit requested to be
made on the date hereof and the application of proceeds therefrom. [Borrower
only]

4.    The conditions precedent set forth in Section 5.1 of the Credit Agreement
were satisfied as of the Closing Date (except to the extent a condition is
required to be satisfactory or reasonably satisfactory to the Agent or to the
extent waived). [Borrower only]

The undersigned Corporate Secretary of the Certifying Loan Party certifies as
follows:

5.    There are no liquidation or dissolution proceedings pending or to my
knowledge threatened against the Certifying Loan Party.

6.    Attached hereto as Annex 1 is a true and complete copy of resolutions duly
adopted by the [Board of Directors] [Members] of the Certifying Loan Party on
December 20, 2005; such resolutions have not in any way been amended, modified,
revoked or rescinded, have been in full force and effect since their adoption to
and including the date hereof and are now in full force and effect and are the
only [corporate/company] proceedings of the Certifying Loan Party now in force
relating to or affecting the matters referred to therein.

7.    Attached hereto as Annex 2 is a true and complete copy of the [By-Laws]
[Limited Liability Company Agreement] of the Certifying Loan Party as in effect
on the date hereof.

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

2

 

8. Attached hereto as Annex 3 is a true and complete copy of the [Certificate of
Incorporation/Certificate of Formation] of the Certifying Loan Party as in
effect on the date hereof.

9. The following persons are now duly elected and qualified officers of the
Certifying Loan Party holding the offices indicated next to their respective
names below, and the signatures appearing opposite their respective names below
are the true and genuine signatures of such officers, and each of such officers
is duly authorized to execute and deliver on behalf of the Certifying Loan Party
each of the Loan Documents to which it is a party and any certificate or other
document to be delivered by the Certifying Loan Party pursuant to the Loan
Documents to which it is a party:

 

Name

 

Office

 

Signature

   

 

   

 

   

 

 

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3

 

IN WITNESS WHEREOF, the undersigned have hereunto set our names as of the date
set forth below.

 

 

   

 

Name:     Name: Title:     Title: [Corporate Secretary] Date:
                        , 2006    

 

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EXHIBIT D

MORTGAGE

by

[MIRANT ZEELAND LLC],

Mortgagor,

to

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent, Mortgagee,

DATED: As of [January 3, 2006]

 

 

 

THIS INSTRUMENT IS TO BE INDEXED AS BOTH A

MORTGAGE AND A FIXTURE FILING

 

 

 

This instrument was prepared by and

after recording please return to:

Mardi R. Merjian

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

 

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MORTGAGE

THIS MORTGAGE, which also constitutes a Security Agreement, an Assignment of
Leases and Rents, and a Financing Statement, and constitutes a Fixture Filing
(“Mortgage”) is made as of [January 3, 2006], by [MIRANT ZEELAND LLC], a
Delaware limited liability company, with its principal office at c/o Mirant
North America, LLC, 1155 Perimeter Center West, Suite 100, Atlanta, Georgia
30338 (“Mortgagor”), to JPMORGAN CHASE BANK, N.A., as Administrative Agent,
whose address is 1111 Fannin Street, Floor 10, Houston, Texas 77002, Attention:
Loan and Agency Services, as mortgagee, assignee and secured party, in its
capacity as agent on behalf of itself as lender and for the Secured Parties
(together with any successors or assigns in such capacity, the “Agent” or
“Mortgagee”). References to this “Mortgage” shall mean this instrument and any
and all renewals, modifications, amendments, supplements, extensions,
consolidations, substitutions, spreaders and replacements of this instrument.

1.        RECITALS

WHEREAS, Mortgagor is the owner and holder of fee simple title in and to all of
the real estate located in the County of Ottawa and State of Michigan (the
“State”) set forth in, and as more fully described in, Exhibit A attached hereto
(the “Premises”), which Premises forms a portion of the Property (as hereinafter
defined);

WHEREAS, Mirant North America, LLC (the “Borrower”), the several banks and other
financial institutions or entities from time to time parties thereto
(collectively, the “Lenders”), Deutsche Bank Securities Inc. and Goldman Sachs
Credit Partners L.P., as co-syndication agents, and Mortgagee, are parties to
that certain Credit Agreement, dated as of January 3, 2006 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
under which the Secured Parties agreed to make available to Borrower certain
loans and other financial accommodations to Borrower and letters of credit for
the account of Borrower.

WHEREAS, Mortgagor wishes to provide further assurance and security to the Agent
and the Secured Parties and as a condition to the Agent and the Lenders
executing the Credit Agreement, the Agent and the Secured Parties are requiring
that Mortgagor grant to the Agent, on behalf of the Secured Parties, a security
interest in and a mortgage lien upon the Property (as hereinafter defined),
subject to the Permitted Mortgage Liens (as hereinafter defined), to secure all
of Mortgagor’s obligations under the Credit Agreement, this Mortgage and the
other Loan Documents.

II.        THE GRANT

NOW, THEREFORE, in order to secure all obligations and liabilities of Mortgagor
which may arise under or in connection with the Guarantee and Collateral
Agreement (including, without limitation, Section 2 thereof) or any other Loan
Document, any Hedging Arrangement, or any Specified Cash Management Program to
which Mortgagor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Mortgagee or to the Lenders that are required to be paid by Mortgagor
pursuant to the terms of the Guarantee and Collateral Agreement or any other
Loan Document) (collectively, the “Obligations”), and in consideration of Ten
and No/100 Dollars ($10.00) in hand paid by Mortgagee to Mortgagor, the Recitals
above stated, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor GRANTS, BARGAINS, SELLS,
ASSIGNS, RELEASES, ALIENS, TRANSFERS, WARRANTS, DEMISES, CONVEYS and MORTGAGES
to Mortgagee and its successors and assigns (for the benefit of the Secured
Parties) forever (and grants to Mortgagee and its successors and assigns (for
the benefit of

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the Secured Parties) forever a continuing security interest in and to) all of
Mortgagor’s right, title and interest in and to the Premises, together with all
of Mortgagor’s right, title and interest in and to the following described
property, all of which other property is pledged primarily on a parity with the
Premises and not secondarily (the Premises and the following property are
collectively referred to as the “Property”):

(a)      all buildings, structures and other improvements of every kind and
description now or hereafter erected, situated, or placed upon the Premises (the
“Improvements”), together with any and all personal property now or hereafter
owned by Mortgagor and located in or on, forming part of, attached to, used or
intended to be used in connection with, or incorporated in any such
Improvements, including all extensions of, additions to, betterments, renewals
of, substitutions for and replacements for any of the foregoing;

(b)      any and all (i) land or vaults lying within the right-of-way of any
street, avenue, way, passage, highway, or alley, open or proposed, vacated or
otherwise, adjoining the Premises; (ii) alleys, sidewalks, streets, avenues,
strips and gores of land belonging, adjacent or pertaining to the Premises or
the Improvements; (iii) storm and sanitary sewer, water, gas, electric, railway
and telephone services relating to the Premises and the Improvements;
(iv) development rights, air rights, water, water rights, water stock, gas, oil,
minerals, coal and other substances of any kind or character underlying or
relating to the Premises or any part thereof; and (v) tenements, hereditaments,
easements, appurtenances, other rights, liberties, reservations, allowances and
privileges relating to the Premises or the Improvements or in any way now or
hereafter appertaining thereto, including homestead and any other claims at law
or in equity;

(c)      any and all leases, subleases, management agreements, arrangements,
concessions or agreements, written or oral, relating to the use and occupancy of
the Premises or the Improvements or any portion thereof, now or hereafter
existing or entered into (collectively, “Leases”);

(d)      all rents, issues, profits, royalties, revenue, advantages, income,
avails, claims against guarantors, all cash or security deposits, advance
rentals, deposits or payments given and other benefits now or hereafter derived
directly or indirectly from the Premises and Improvements under the Leases or
otherwise (collectively, “Rents”), subject to the right, power and authority
granted to Mortgagee pursuant to Section 3.8 hereof;

(e)      all options to purchase or lease the Premises or the Improvements or
any portion thereof or interest therein, or any other rights, interests or
greater estates in the rights and properties comprising the Property now owned
or hereafter acquired by Mortgagor;

(f)      any interests, estates or other claims of every name, kind or nature,
both in law and in equity, which Mortgagor now has or may acquire in the
Premises and Improvements or other rights, interests or properties comprising
the Property now owned or hereafter acquired;

(g)      any and all plans and specifications, designs, drawings and other
matters prepared for any construction on the Premises or regarding the
Improvements;

(h)      any contracts executed by Mortgagor with any provider of goods or
services for or in connection with any construction undertaken on or services
performed or to be performed in connection with the Premises or the
Improvements;

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(i)      all tangible personal property now or hereafter owned by Mortgagor and
located in, on or at the Premises or the Improvements and used or useful in
connection therewith, including, without limitation:

(i)      all building materials and equipment located upon the Premises and
intended for construction, reconstruction, alteration, repair or incorporation
in or to the Improvements now or hereafter to be constructed thereon, whether or
not yet incorporated in such Improvements (all of which shall be deemed to be
included in the Property upon delivery thereto);

(ii)      all machines, machinery, fixtures, apparatus, equipment or articles
used in supplying heating, gas, electricity, air-conditioning, water, light,
power, plumbing, sprinkler, waste removal, refrigeration, ventilation, and all
fire sprinklers, alarm systems, protection, electronic monitoring equipment and
devices;

(iii)      all window, structural, maintenance and cleaning equipment and rigs;
and

(iv)      all Fixtures now or hereafter owned by Mortgagor and attached to or
contained in and used or useful in connection with the Premises or the
Improvements; and

(j)      all the estate, interest, right, title or other claim or demand which
the Mortgagor now has or may hereafter have or acquire with respect to
(i) proceeds of insurance in effect with respect to the Property and (ii) any
and all awards, claims for damages, judgments, settlements and other
compensation made for or consequent upon the taking by condemnation, eminent
domain or any like proceeding, or by any proceeding or purchase in lieu thereof,
of the whole or any part of the Property, including, without limitation, any
awards and compensation resulting from a change of grade of streets and awards
and compensation for severance damages (collectively, “Awards”).

TO HAVE AND TO HOLD the Property hereby mortgaged and conveyed or so intended,
unto the Mortgagee, its successors and assigns, forever, for the uses and
purposes herein set forth, subject, however, only to (i) the lien of this
Mortgage, (ii) the liens, encumbrances and other matters set forth on Schedule B
to the title insurance policy, if any, insuring the lien of this Mortgage and
(iii) all easements, rights of way, zoning restrictions, encroachments, minor
title deficiencies, leases, subleases, licenses, sublicenses or other
restrictions in the use of the property or other similar encumbrances and any
other lien or encumbrance as permitted by Section 8.3 of the Credit Agreement
(collectively, clauses (i), (ii) and (iii) shall be referred to as “Permitted
Mortgage Liens”).

The Mortgagor hereby covenants with the Mortgagee: (i) that at the execution and
delivery hereof, Mortgagor holds good and marketable title to the Premises;
(ii) that the Property is free from all encumbrances and exceptions to title
(and any claim of any other person) other than the Permitted Mortgage Liens,
(iii) that it has good and lawful right to sell, mortgage and convey the
Property; and (iv) that Mortgagor and its successors and assigns shall forever
warrant and defend the Property against all claims and demands whatsoever
subject to Permitted Mortgage Liens.

At such time as the Loans, the Reimbursement Obligations and the other
Obligations (other than Obligations in respect of Hedging Arrangements) shall
have been paid in full, the Commitments have been terminated and no Letters of
Credit shall be outstanding, the Property shall be released from the Liens
created hereby, and this Mortgage and all obligations (other than those
expressly

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

stated to survive such termination) of the Agent and the Mortgagor hereunder
shall terminate, all without delivery of any instrument or performance of any
act by any party, and all rights to the Property shall revert to the Mortgagor.
At the request and sole expense of any Mortgagor following any such termination,
the Agent shall execute and deliver to Mortgagor such documents as Mortgagor
shall reasonably request to evidence such termination.

III.        GENERAL AGREEMENTS

3.1      Defined Terms. Capitalized terms used herein (including in the
“Recitals” and the “Grant” sections above) and not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement. References in
this Mortgage to the “Default Rate” shall mean the interest rate applicable
pursuant to Section 2.14(c) of the Credit Agreement. References herein to the
“Secured Parties” shall mean the collective reference to the Mortgagee, the
Lenders and any Affiliate of any Lender (or any other Person which, at the time
any Hedging Arrangement was entered into, was a Lender or an Affiliate thereof)
to which Obligations or Borrower Obligations (as defined in the Guarantee and
Collateral Agreement) are owed.

3.2      Omitted.

3.3      Impositions. Mortgagor shall pay prior to delinquency, all general
taxes, special taxes, special assessments, water charges, sewer charges, and any
other charges, fees, taxes, claims, levies, expenses, liens and assessments,
ordinary or extraordinary, governmental or nongovernmental, statutory or
otherwise (all of the foregoing being herein collectively referred to as
“Impositions”), that may be asserted against the Property or any part thereof or
Mortgagor’s interest therein), except where (i) the validity or amount thereof
is being contested in good faith by appropriate proceedings, and (ii) the
Mortgagor has set aside on its books adequate reserves with respect thereto in
accordance with GAAP.

3.4      Payment of Impositions by Mortgagee. Upon the occurrence and during the
continuance of an Event of Default (as hereinafter defined), Mortgagee is hereby
authorized to make or advance, in the place and stead of Mortgagor, any payment
relating to Impositions. Mortgagee may do so according to any bill, statement,
or estimate procured from the appropriate public office without inquiry into the
accuracy or the validity of any Impositions, lien, sale, forfeiture, or related
title or claim. From and after the ocurrence and during the continuance of an
Event of Default, Mortgagee is further authorized to make or advance, in place
of Mortgagor (and after giving prior notice to Mortgagor of its intention to do
so), any payment relating to any apparent or threatened adverse title, lien,
statement of lien, encumbrance, claim, charge, or payment otherwise relating to
any other purpose herein and hereby authorized, but not enumerated in this
Section 3.4. All such advances and indebtedness authorized by this Section 3.4
shall constitute Obligations and shall be repayable by Mortgagor upon demand
with interest at the Default Rate.

3.5      Condemnation, Eminent Domain and Casualty. (a) Mortgagor shall give
Mortgagee prompt notice of all proceedings, instituted or threatened, seeking
condemnation or a taking by eminent domain or like process (herein collectively
called “Taking”), of all or any material part of the Property or affecting any
related material easement or material appurtenance (including severance of,
consequential damage to, or change in grade of streets), and shall deliver to
Mortgagee copies of any and all papers served in connection with any such
proceeding if so requested by Mortgagee. If an Event of Default has occurred and
is continuing, Mortgagee (or, after entry of decree of foreclosure, the
purchaser at the foreclosure sale or decree creditor, as the case may be) is
hereby authorized at its option to participate in such proceeding and control
the same and to be represented therein by counsel of its own choice, and
Mortgagor will deliver, or cause to be delivered to Mortgagee such instruments
as may be requested by it from time to time to permit such participation or
control. Any Award in connection with a Taking, less

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

the amount of any expenses incurred in litigating, arbitrating, compromising, or
settling any claim arising out of a Taking, shall be applied or reinvested in
the same manner as if they were Net Cash Proceeds from a Recovery Event in
accordance with the Credit Agreement.

(b)      If the Property, or any part thereof, shall be destroyed or damaged and
the reasonably estimated cost thereof would exceed $20,000,000, Mortgagor shall
give prompt notice thereof to Mortgagee. All Awards paid or payable in
connection with any damage or casualty to the Property shall be deemed Net Cash
Proceeds from a Recovery Event and applied or reinvested in the manner specified
in the Credit Agreement.

3.6      Maintenance of Property. Mortgagor shall maintain the Property in
accordance with Section 6.6 of the Credit Agreement.

3.7      Prohibited Liens; Prohibited Transfers.

(a)      Except as otherwise permitted in Section 8.3 of the Credit Agreement,
Mortgagor shall not create, suffer, or permit to be created or filed against the
Property any Lien superior or inferior to the lien created by this Mortgage.

(b)      Except as otherwise provided in Section 8.5 of the Credit Agreement, or
except with respect to any Excluded Asset Sale, Mortgagor may not sell, lease or
convey all or any part of the Property or any interest therein. In the event
Mortgagor shall be permitted to transfer the Property, Mortgagee shall deliver
to Mortgagor a document in recordable form sufficient to release this Mortgage
of record on reasonable prior written request of Mortgagor and at Mortgagor’s
expense.

3.8      Assignment of Leases and Rents.

(a)      All right, title, and interest of Mortgagor in and to all Leases and
Rents are hereby transferred and assigned simultaneously herewith to Mortgagee.
Although it is the intention of the parties that the assignment contained in
this paragraph shall be a present assignment, it is expressly understood and
agreed, anything to the contrary notwithstanding, that Mortgagee shall not
exercise any of the rights or powers conferred upon it by this paragraph until
an Event of Default shall exist and be continuing. The Mortgagee shall be
entitled to all the rights and remedies conferred by Act No. 210 of the Michigan
Public Acts of 1953 as amended by Act No. 151 of the Michigan Public Acts of
1966 (MCLA 554.231 et seq.) or Act No. 228 of the Michigan Public Acts of 1925,
as amended by Act No. 55 of the Michigan Public Acts of 1933 (MCLA 554.211 et
seq.), whichever is applicable.

(b)      Following the occurrence of an Event of Default and during the
continuance thereof, (a) Mortgagee shall have the rights and powers as are
provided herein, (b) this Mortgage shall constitute a direction to each lessee
under the Leases and each guarantor thereof to pay all Rents directly to
Mortgagee without proof of the Event of Default, and (c) Mortgagee shall have
the authority, as Mortgagor’s attorney-in-fact (such authority being coupled
with an interest and irrevocable), to sign the name of Mortgagor and to bind
Mortgagor on all papers and documents relating to the operation, leasing and
maintenance of the Property.

(c)      Following the occurrence of an Event of Default and during the
continuance thereof, if Mortgagor, as lessor under any Lease, shall neglect or
refuse to perform, observe and keep all of the covenants, provisions and
agreements contained in such Lease, then Mortgagee may perform and comply with
any such Lease covenants, agreements and provisions. All reasonable costs and
expenses incurred by Mortgagee in complying with such covenants, agreements, and
provisions shall constitute Obligations and shall be payable upon demand with
interest payable at the Default Rate.

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(d)      Mortgagee shall not be obligated to perform or discharge any
obligation, duty or liability under any Lease, and Mortgagor shall and does
hereby agree, except to the extent of Mortgagee’s gross negligence or willful
misconduct, to indemnify and hold the Mortgagee harmless of and from any and all
liability, loss or damage which it may or might incur under any Lease or under
or by reason of their assignments and of and from any and all claims and demands
whatsoever which may be asserted against it by reason of alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants or
agreements contained in such Lease. Should Mortgagee incur any such liability,
loss or damage under any Lease or under or by reason of its assignment to
Mortgagee, or in the defense of any claims or demands, the amount thereof,
including costs, expenses and reasonable attorneys’ fees, shall constitute
Obligations and shall be payable upon demand with interest payable at the
Default Rate.

(e)      All Rents collected by Mortgagee, or by a receiver, shall be held and
applied in the following order:

(i)      to payment of all reasonable fees of the receiver, if any, approved by
the court;

(ii)     to payment of all delinquent or otherwise due and payable real estate
taxes and special assessments payable with respect to the Property;

(iii)    to payment of all premiums then due for the insurance required by the
provisions of this Mortgage;

(iv)    to payment of expenses incurred for normal maintenance of the Property;

(v)     if received prior to any foreclosure sale of the Property to Mortgagee
for payment of the indebtedness secured by this Mortgage in accordance with
Section 6.5 of the Guarantee and Collateral Agreement, but no such payment made
after acceleration of the indebtedness shall affect such acceleration;

(vi)    if received during or with respect to a period after a foreclosure sale
of the Property:

(a)      if the purchaser at the foreclosure sale is not Mortgagee, first to
Mortgagee to the extent of any deficiency of the sale proceeds to repay the
indebtedness secured by this Mortgage in accordance with Section 6.5 of the
Guarantee and Collateral Agreement, second to the purchaser as a credit to the
redemption price, but if the Property is not redeemed, then to the purchaser of
the Property;

(b)      if the purchaser at the foreclosure sale is Mortgagee, first to
Mortgagee to the extent of any deficiency of the sale proceeds to repay the
indebtedness secured by this Mortgage in accordance with Section 6.5 of the
Guarantee and Collateral Agreement.

3.9      Uniform Commercial Code.

(a)      This Mortgage constitutes a “security agreement” as that term is used
in the Uniform Commercial Code in the State (the “Code”) with respect to any
part of the Property which may or might now or hereafter be or be deemed to be
personal property, fixtures or property other than real estate (including all
replacements thereof, additions thereto and substitutions therefor)
(collectively, the

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

“Personal Property Collateral”). All of Mortgagor’s right, title and interest in
the Personal Property Collateral is hereby assigned to Mortgagee to secure the
payment of the Obligations.

(b)      At any time after an Event of Default has occurred and shall be
continuing, Mortgagee shall have the remedies of a secured party under the Code,
including without limitation the right to take immediate and exclusive
possession of the Personal Property Collateral or any part thereof. The remedies
of Mortgagee hereunder are cumulative and the exercise of any one or more of the
remedies provided for herein or under the Code shall not be construed as a
waiver of any of the other remedies of the Mortgagee, including having the
Personal Property Collateral deemed part of the realty upon any foreclosure so
long as any part of the Obligations remain unsatisfied.

(c)      This Mortgage is intended to be a “fixture filing” for purposes of the
Code with respect to the items of Property which are or may become fixtures
relating to the Premises upon recording of this Mortgage in the real estate
records of the proper office. The addresses of Mortgagor (Debtor) and Mortgagee
(Secured Party) are set forth above.

(d)      The Mortgagor hereby directs that the Mortgagee shall cause to be
recorded in the County in which the Premises are located, as well as with the
applicable offices of the State, such financing statements and fixture filings
as shall be necessary in order to perfect and preserve the priority of
Mortgagee’s lien upon the Personal Property Collateral.

3.10      Releases. Without notice and without regard to the consideration
therefor, and to the existence at that time of any inferior liens, Mortgagee may
release from the lien created hereby all or any part of the Property, or release
from liability any person obligated to repay any of the Obligations, without
affecting the liability of any party to any of the Credit Agreement, the Notes,
this Mortgage, or any of the other Loan Documents (including without limitation
any guaranty given as additional security) and without in any way affecting the
priority of the lien created hereby. Mortgagee may agree with any liable party
to extend the time for payment of any part or all of the Obligations. Such
agreement shall not in any way release or impair the lien created by this
Mortgage or reduce or modify the liability of any person or entity obligated
personally to repay the Obligations, but shall extend the lien created by this
Mortgage as against the title of all parties having any interest in the
Property.

3.11      Further Assurances. Mortgagor agrees that, upon the request of
Mortgagee from time to time, it will, at Mortgagor’s sole cost and expense,
execute, acknowledge and deliver all such additional instruments and further
assurances of title and will do or cause to be done all such further acts and
things as may reasonably be necessary to fully effectuate the intent of this
Mortgage.

IV.        EVENT OF DEFAULT AND REMEDIES

4.1      Event of Default. The occurrence of an “Event of Default,” as such term
is defined in the Credit Agreement, shall constitute an “Event of Default” under
this Mortgage.

4.2      Foreclosure and Remedies. Upon the occurrence and during the
continuance of any Event of Default, Mortgagee may immediately take such action,
without notice or demand (except as required by law), as it deems advisable to
protect and enforce its rights against Mortgagor and in and to the Mortgaged
Property, including, but not limited to, the following actions, each of which
may be pursued concurrently or otherwise, at such time and in such manner as
Mortgagee may determine, in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Mortgagee:

(i)      Mortgagee may, to the extent permitted by applicable law, (A) institute
and maintain an action of mortgage foreclosure against all or any part of the
Property, (B) institute and maintain

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an action on the Credit Agreement, the Guarantee and Collateral Agreement or any
other Loan Document, (C) foreclose this Mortgage by advertisement, pursuant to
the statutes of the State of Michigan in such case made and provided, power
being expressly granted hereby to sell all or part of the Property at public
auction and convey the same to the purchaser, or (D) take such other action at
law or in equity for the enforcement of this Mortgage or any of the Loan
Documents as the law may allow. Mortgagee may proceed in any such action to
final judgment and execution thereon for all sums due hereunder, together with
interest thereon at the Default Rate and all costs of suit, including, without
limitation, reasonable attorneys’ fees and disbursements. Interest at the
Default Rate shall be due on any judgment obtained by Mortgagee from the date of
judgment until actual payment is made of the full amount of the judgment; and

(ii)      Mortgagee may personally, or by its agents, attorneys and employees
and without regard to the adequacy or inadequacy of the Property or any other
collateral as security for the Obligations enter into and upon the Property and
each and every part thereof and exclude Mortgagor and its agents and employees
therefrom without liability for trespass, damage or otherwise (Mortgagor hereby
agreeing to surrender possession of the Property to Mortgagee upon demand at any
such time) and use, operate, manage, maintain and control the Property and every
part thereof. Following such entry and taking of possession, Mortgagee shall be
entitled, without limitation, (x) to lease all or any part or parts of the
Property for such periods of time and upon such conditions as Mortgagee may, in
its discretion, deem proper, (y) to enforce, cancel or modify any Lease and
(z) generally to execute, do and perform any other act, deed, matter or thing
concerning the Property as Mortgagee shall deem appropriate as fully as
Mortgagor might do.

4.3      Remedies Cumulative and Non-Waiver. No remedy or right of Mortgagee
hereunder or under the Credit Agreement, or any of the Loan Documents or
otherwise, or available under applicable law, shall be exclusive of any other
right or remedy. Each such remedy or right shall be in addition to every other
remedy or right now or hereafter existing under any such document or under
applicable law. No delay in the exercise of, or omission to exercise, any remedy
or right accruing on the occurrence of any Event of Default shall impair any
such remedy or right or be construed to be a waiver of any such Event of Default
or an acquiescence therein, nor shall it affect any subsequent Event of Default
of the same or a different nature, nor shall it extend or affect any grace
period. Every remedy or right may be exercised concurrently or independently,
when and as often as may be deemed expedient by the Mortgagee. All obligations
of the Mortgagor, and all rights, powers and remedies of the Mortgagee shall be
in addition to, and not in limitation of, those provided by law or in the Credit
Agreement or contained in any of the other Loan Documents or any other written
agreement or instrument relating to any of the Obligations or any security
therefor.

4.4      Expenses. In any proceeding to foreclose or partially foreclose the
lien of this Mortgage, there shall be allowed and included, as additional
indebtedness in the judgment or decree resulting therefrom, all expenses paid or
incurred by or on behalf of Mortgagee in the protection of the Property and the
exercise of Mortgagee’s rights and remedies hereunder, which expenses may be
estimated as to items to be expended after entry of any judgment or decree of
foreclosure. Such expenses shall include: reasonable attorney’s fees,
appraiser’s fees, outlays for documentary and expert evidence, stenographer’s
charges, publication costs, survey costs, and costs of procuring all abstracts
of title, title searches and examinations, title insurance policies, and any
similar data and assurances with respect to title to the Property as Mortgagee
may deem reasonably necessary either to prosecute any such proceeding or to
evidence to bidders at any sale pursuant to such decree the true condition of
the title to or value of the Premises or the Property. All such expenses shall
be due and payable by Mortgagor upon demand with interest thereon at the Default
Rate.

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4.5      Mortgagee’s Performance of Mortgagor’s Obligations. Following the
occurrence of an Event of Default and during the continuance thereof, Mortgagee,
either before or after acceleration of the Obligations or the foreclosure of the
lien hereof and during the period of redemption, if any, may, but shall not be
required to (a) make any payment or perform any act herein, in the Credit
Agreement or any other Loan Document which is required of Mortgagor (whether or
not Mortgagor is personally liable therefor) in any form and manner deemed
expedient to Mortgagee; (b) make full or partial payments of principal or
interest on any permitted prior mortgage or encumbrance and purchase, discharge,
compromise or settle any tax lien or other prior lien on title or claim thereof,
or redeem from any tax sale or forfeiture affecting the Premises, or contest any
Impositions; and (c) complete construction, furnishing and equipping of the
Improvements upon the Premises and rent, operate and manage the Premises and
such Improvements and pay operating costs and expenses, including management
fees, of every kind and nature in connection therewith, so that the Premises and
Improvements shall be operational and usable for their intended purposes. All
monies paid for any of the purposes herein authorized, and all expenses
reasonably paid or incurred in connection therewith, including reasonable
attorneys’ fees, shall constitute Obligations, and shall become due and payable
upon demand and with interest thereon at the Default Rate. Mortgagee, in making
any payment hereby authorized: (x) for the payment of Impositions, may do so
according to any bill or statement, without inquiry into the validity of any
tax, assessment, sale, forfeiture, tax lien or title or claim thereof; (y) for
the purchase, discharge, compromise or settlement of any other prior lien, may
do so without inquiry as to the validity or amount of any claim or lien which
may be asserted; or (z) for the completion of construction, furnishing or
equipping of the Improvements or the Premises or the rental, operation or
management of the Premises or the payment of operating cost and expenses
thereof, may do so in such amounts and to such persons as Mortgagee may
reasonably deem appropriate and may enter into such contracts therefor as
Mortgagee may deem reasonably appropriate or may perform the same itself.

4.6      Right of Possession. Following the occurrence of an Event of Default
and during the continuance thereof, Mortgagor shall, immediately upon
Mortgagee’s demand, surrender to Mortgagee, and Mortgagee shall be entitled to
take actual possession of the Property or any part thereof, personally or by its
agent or attorneys. Mortgagee may enter upon and take and maintain possession or
may apply to the court in which a foreclosure is pending to be placed in
possession of all or any part of the Property, together with all documents,
books, records, papers, and accounts of Mortgagor or the then owner of the
Property relating thereto. Mortgagee may exclude Mortgagor, such owner, and any
agents and servants from the Property. As attorney-in-fact or agent of Mortgagor
or such owner, or in its own name Mortgagee may hold, operate, manage, and
control all or any part of the Property, either personally or by its agents.
Mortgagee shall have full power to use such measures, legal or equitable, as it
may deem proper or necessary to enforce the payment or security of the rents,
issues, deposits, profits, and avails of the Property, including actions for
recovery of rent, actions in forcible detainer, and actions in distress for
rent, all without notice to Mortgagor.

4.7      Application of Income Received by Mortgagee. Mortgagee, in the exercise
of the rights and powers hereinabove conferred upon it, shall have full power to
use and apply the avails, rents, issues and profits of the Property to the
payment of or on account of the following, in such order as Mortgagee may
determine: (i) to the payment of the operating expenses of the Property
including cost of management thereof, established claims for damages, if any,
and premiums on insurance hereinabove authorized; (ii) to the payment of taxes
and special assessments now due or which may hereafter become due on the
Premises; (iii) as provided in Section 6.5 of the Guarantee and Collateral
Agreement.

4.8      Appointment of Receiver. Upon the occurrence and during the continuance
of an Event of Default, the Mortgagee shall be entitled as a matter of right
without notice and without giving bond and without regard to the solvency or
insolvency of Mortgagor, or waste of the Property or adequacy of the security of
the Property, to apply for the appointment of a receiver, in accordance with the
statutes and

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law made and provided. The receiver shall collect the rents, and all other
income of any kind; manage the Property so to prevent waste; execute leases
within or beyond the period of receivership, pay all expenses for normal
maintenance of the Property and perform the terms of this Mortgage and apply the
rents, issues and profits in the following order to (i) payment of the
reasonable fees of said receiver, (ii) payment when due of prior or otherwise
due and payable real estate taxes or special assessments with respect to the
Property, (iii) the payment when due of premiums for insurance of the type
required by the Loan Documents and (iv) the repayment of the Obligations in
accordance with the Credit Agreement. Mortgagor does hereby irrevocably consent
to such appointment.

4.9      Foreclosure Sale. In the event of any foreclosure sale, the Property
may be sold in one or more parcels. Mortgagee may bid for and acquire the
Property or any part thereof at any sale made under or by virtue of this
Mortgage and, in lieu of paying cash therefor, may make settlement for the
purchase price by crediting against the purchase price the unpaid amounts due
and owing in respect of the Obligations or any other liabilities after deducting
from the sales price the expenses of the sale and the costs of the action or
proceedings and any other sums that Mortgagee is authorized to deduct under this
Mortgage or applicable law.

4.10      Application of Proceeds of Foreclosure Sale. The proceeds of any
foreclosure sale of the Property shall be distributed and applied in the
following order of priority: first, to all costs and expenses incident to the
foreclosure proceedings, including all such items as are mentioned in
Section 4.4 above; second, as provided in Section 6.5 of the Guarantee and
Collateral Agreement.

4.11      Adjournment of Foreclosure Sale. Mortgagee may adjourn from time to
time any sale by it to be made under or by virtue of this Mortgage by
announcement at the time and place appointed for such sale or for such adjourned
sale or sales, and, except as otherwise provided by any applicable provisions of
law, Mortgagee, without further notice or publication, may make such sale at the
time and place to which the same shall be so adjourned.

4.12      Insurance Upon Foreclosure. In case of an insured loss after
foreclosure proceedings have been instituted, the proceeds of any insurance
policy or policies, if not applied in repairing, restoring, replacing or
rebuilding any portion of the Property, shall be used to pay the amount due in
accordance with any decree of foreclosure that may be entered in any such
proceedings, and the balance, if any, shall be paid as the court may direct. In
case of the foreclosure of this Mortgage, the court in its judgment may provide
that the judgment creditor may cause a new or additional loss clause to be
attached to each of said policies making the loss thereunder payable to said
judgment creditor; and any such foreclosure judgment may further provide, unless
the right of redemption has been waived, that in case of redemption under said
judgment, then, and in every such case, the redemptory may cause the preceding
loss clause attached to each insurance policy to be canceled and a new loss
clause to be attached thereto, making the loss thereunder payable to such
redemptory.

4.13      Waiver of Statutory Rights. Mortgagor shall not apply for or avail
itself of any appraisement, valuation, redemption, stay, extension, or exemption
laws, or any so-called “moratorium laws,” now existing or hereafter enacted, in
order to prevent or hinder the enforcement or foreclosure of this Mortgage, and
Mortgagor hereby waives the benefit of such laws. Mortgagor, for itself and all
who may claim through or under it, waives any and all rights to have the
Property and estates comprising the Property marshaled upon any foreclosure of
the lien of this Mortgage, and agrees that any court having jurisdiction to
foreclose such lien may order the Property sold in its entirety. Mortgagor
further waives any and all rights of redemption from foreclosure and from sale
under any order or decree of foreclosure of the lien created by this Mortgage,
for itself and on behalf of: (i) any trust estate of which the Premises are a
part; (ii) all beneficially interested persons; (iii) each and every person
acquiring any interest in the

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Property or title to the Premises subsequent to the date of this Mortgage; and
(iv) all other persons to the extent permitted by the provisions of laws of the
State in which the Premises are located.

4.14      Effect of Judgment. The obtaining of any judgment by Mortgagee and any
levy of any execution under any judgment upon the Property shall not affect in
any manner or to any extent the Lien of this Mortgage upon the Property or any
part thereof, or any Liens, powers, rights and remedies of Mortgagee hereunder,
but such Liens, powers, rights and remedies shall continue unimpaired as before
until the judgment or levy is satisfied.

V.        MISCELLANEOUS

5.1      Notices. All notices, requests and demands to or upon the Mortgagee or
the Mortgagor hereunder shall be effected in the manner provided for in
Section 11.2 of the Credit Agreement; provided that any such notice, request or
demand to or upon Mortgagor shall be addressed to Mortgagor at its address set
forth above.

5.2.      Time of Essence. Time is of the essence with respect to this Mortgage.

5.3      Covenants Run with Land. All of the covenants of this Mortgage shall
run with the land constituting the Premises.

5.4      Governing Law. This Mortgage shall be governed by and construed and
interpreted in accordance with the laws of the State in which the Mortgaged
Property is located, except that Mortgagor expressly acknowledges that by their
respective terms the Credit Agreement and the Guarantee and Collateral Agreement
shall be governed and construed in accordance with the laws of the State of New
York, and for purposes of consistency, Mortgagor agrees that in any in personam
proceeding related to this Mortgage the rights of the parties to this Mortgage
shall also be governed by and construed in accordance with the laws of the State
of New York governing contracts made and to be performed in that State.

5.5      Severability. In the event any one or more of the provisions contained
in this Mortgage shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, but each shall be construed as if
such invalid, illegal or unenforceable provision had never been included.
Notwithstanding to the contrary anything contained in this Mortgage or in any
provisions of any Loan Document, the obligations of Mortgagor and of any other
obligor under any Loan Documents shall be subject to the limitation that
Mortgagee shall not charge, take or receive, nor shall Mortgagor or any other
obligor be obligated to pay to Mortgagee, any amounts constituting interest in
excess of the maximum rate permitted by law to be charged by Mortgagee.

5.6      Non-Waiver. Unless expressly provided in this Mortgage to the contrary,
no consent or waiver, express or implied, by any party, to or of any breach or
default by any other party shall be deemed a consent to or waiver of the
performance by such defaulting party of any other obligations or the performance
by any other party of the same, or of any other, obligations.

5.7      Headings. The headings of sections and paragraphs in this Mortgage are
for convenience or reference only and shall not be construed in any way to limit
or define the content, scope, or intent of the provisions.

5.8      Grammar. As used in this Mortgage, the singular shall include the
plural, and masculine, feminine, and neuter pronouns shall be fully
interchangeable, where the context so requires.

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5.9      Deed in Trust. If title to the Property or any part thereof is now or
hereafter becomes vested in a trustee, any prohibition or restriction against
the creation of any lien on the Property shall be construed as a similar
prohibition or restriction against the creation of any lien on or security
interest in the beneficial interest of such trust.

5.10      Successors and Assigns. This Mortgage shall be binding upon Mortgagor,
its successors, assigns, legal representatives, and all other persons or
entities claiming under or through Mortgagor. The word “Mortgagee,” when used
herein, shall include each of: (i) the Agent in its capacity as a Lender and as
Agent for the Secured Parties; and (ii) the Secured Parties, together with each
of their successors, assigns and legal representatives.

5.11      Mortgagee in Possession. Nothing contained in this Mortgage shall be
construed as constituting Mortgagee a mortgagee in possession in the absence of
the actual taking of possession of the Property.

5.12      Incorporation of Credit Agreement; No Conflicts. The terms of the
Credit Agreement are incorporated by reference herein as though set forth in
full detail. In the event of any conflict between the terms and provisions of
this Mortgage and the Credit Agreement, the terms and provisions of the Credit
Agreement shall control.

5.13      Duty of Mortgagee; Authority of Mortgagee. (a) The Mortgagee’s sole
duty with respect to the custody, safekeeping and physical preservation of the
Mortgaged Property which is in its possession, or otherwise, shall be to deal
with it in the same manner as the Mortgagee deals with similar property for its
own account. Neither the Mortgagee, any Secured Party nor any of their
respective officers, directors, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Mortgaged Property or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Mortgaged Property upon the request of Mortgagor or any other Person or
to take any other action whatsoever with regard to the Mortgaged Property or any
part thereof. The powers conferred on the Mortgagee and the Secured Parties
hereunder are solely to protect the Mortgagee’s and the Secured Parties’
interests in the Mortgaged Property and shall not impose any duty upon the
Mortgagee or any Secured Party to exercise any such powers. The Mortgagee and
the Secured Parties shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of
their officers, directors, employees or agents shall be responsible to Mortgagor
for any act or failure to act hereunder, except for their own gross negligence
or willful misconduct.

(b)    Mortgagor acknowledges that the rights and responsibilities of the
Mortgagee under this Mortgage with respect to any action taken by the Mortgagee
or the exercise or non-exercise by the Mortgagee of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Mortgage shall, as between the Mortgagee and the Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Mortgagee and Mortgagor, the Mortgagee shall be conclusively presumed to be
acting as agent for the Secured Parties with full and valid authority so to act
or refrain from acting, and Mortgagor shall be under no obligation, or
entitlement, to make any inquiry respecting such authority.

5.14      Enforcement Expenses; Indemnification. (a) Mortgagor agrees to pay, or
reimburse each Secured Party and the Mortgagee for, all its costs and expenses
incurred in collecting against Mortgagor or otherwise enforcing or preserving
any rights under this Mortgage, including, without limitation, the fees and
disbursements of counsel to each Secured Party and of counsel to the Mortgagee.

(b)    Mortgagor agrees to pay, and to save the Mortgagee and the Secured
Parties

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harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may be
payable or determined to be payable with respect to any of the Mortgaged
Property or in connection with any of the transactions contemplated by this
Mortgage.

(c)    Mortgagor agrees to pay, and to save the Mortgaqee and the Secured
Parties harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Mortgage to the extent the Borrower would
be required to do so pursuant to Section 11.5 of the Credit Agreement.

(d)    The agreements in this Section shall survive repayment of the Obligations
and all other amounts payable.

5.15      No Oral Modification. This Mortgage may not be amended, supplemented
or otherwise modified except in accordance with the provisions of Section 11.1
of the Credit Agreement. Any agreement made by Mortgagor and Mortgagee after the
date of this Mortgage relating to this Mortgage shall be superior to the rights
of the holder of any intervening or subordinate lien or encumbrance.

5.16      No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Mortgage. In the event an ambiguity or
question of intent or interpretation arises, this Mortgage shall be construed as
if drafted jointly by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
this Mortgage.

5.17.      Future Advances. Pursuant to Mich. Comp. Laws § 565.901, the lien of
this Mortgage with respect to any future advances, modifications, extensions,
and renewals referred to herein and made from time to time shall have the same
priority to which this Mortgage otherwise would be entitled as of the date this
Mortgage is executed and recorded without regard to the fact that any such
future advance, modification, extension, or renewal may occur after the Mortgage
is executed.

[SIGNATURE APPEARS ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, Mortgagor has duly signed and delivered this Mortgage as of
the date first above written.

 

[MIRANT ZEELAND LLC],

a Delaware limited liability

By:  

 

Name:   Title:  

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STATE OF                      )

) ss:

COUNTY OF                  )

On                          , 2005, before me, the undersigned, a Notary Public
in and for said State personally appeared                      known to me to be
the                      of                             , a
                            , and acknowledged to me that such individual
executed the within instrument on behalf of said                             .

WITNESS my hand and official seal.

Notary Public in and for

said County and State

[SEAL]

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EXHIBIT E

FORM OF

ASSIGNMENT AND ASSUMPTION

Reference is made to the Credit Agreement, dated as of January 3, 2006 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Mirant North America, LLC (the “Borrower”), the Lenders party
thereto, the Co-Syndication Agents named therein and JPMorgan Chase Bank, N.A.,
as administrative agent for the Lenders (in such capacity, the “Administrative
Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.

The Assignor identified on Schedule l hereto (the “Assignor”) and the Assignee
identified on Schedule l hereto (the “Assignee”) agree as follows:

The Assignor hereby irrevocably sells and assigns to the Assignee without
recourse to the Assignor, and the Assignee hereby irrevocably purchases and
assumes from the Assignor without recourse to the Assignor, as of the Effective
Date (as defined below), the interest described in Schedule 1 hereto (the
“Assigned Interest”) in and to the Assignor’s rights and obligations under the
Credit Agreement with respect to those credit facilities contained in the Credit
Agreement as are set forth on Schedule 1 hereto (individually, an “Assigned
Facility”; collectively, the “Assigned Facilities”), in a principal amount for
each Assigned Facility as set forth on Schedule 1 hereto.

The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim and (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any of its Affiliates or any other obligor
or the performance or observance by the Borrower, any of its Affiliates or any
other obligor of any of their respective obligations under the Credit Agreement
or any other Loan Document or any other instrument or document furnished
pursuant hereto or thereto.

The Assignee (a) represents and warrants that it is legally authorized to enter
into this Assignment and Assumption; (b) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements delivered
pursuant to Section 4.8 thereof and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Assumption; (c) agrees that it will, independently and
without reliance upon the Assignor, the Agents or any Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (d) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are incidental thereto; and (e) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Credit Agreement are required to
be performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to
Section 2.19(d) of the Credit Agreement.

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2

 

The effective date of this Assignment and Assumption shall be the Effective Date
of Assignment described in Schedule 1 hereto (the “Effective Date”). Following
the execution of this Assignment and Assumption, it will be delivered to the
Administrative Agent for acceptance by it and recording by the Administrative
Agent pursuant to the Credit Agreement, effective as of the Effective Date
(which shall not, unless otherwise agreed to by the Administrative Agent, be
earlier than five Business Days after the date of such acceptance and recording
by the Administrative Agent).

Upon such acceptance and recording, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to the Effective Date and to the
Assignee for amounts which have accrued subsequent to the Effective Date.

From and after the Effective Date, (a) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Assumption,
have the rights and obligations of a Lender thereunder and under the other Loan
Documents and shall be bound by the provisions thereof and (b) the Assignor
shall, to the extent provided in this Assignment and Assumption, relinquish its
rights and be released from its obligations under the Credit Agreement.

This Assignment and Assumption shall be governed by and construed in accordance
with the laws of the State of New York.

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

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Schedule 1

to Assignment and Assumption with respect to

the Credit Agreement, dated as of January 3, 2006

among Mirant North America, LLC (the “Borrower”),

the Lenders party thereto, the Co-Syndication Agents named therein

and JPMorgan Chase Bank, N.A., as Administrative Agent

 

Name of Assignor:

 

 

     

Name of Assignee:

 

 

          [and is an Affiliate/Approved Fund of [identify Lender] – select as
applicable]

 

  Effective Date of Assignment:  

 

     

 

Credit Facility Assigned

  

Principal

Amount Assigned

  

Commitment Percentage Assigned*

   $                                .                    %

 

[Name of Assignee]     [Name of Assignor] By:  

 

    By:  

 

    Name:           Name:       Title:           Title:  

 

*

Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all of the Lenders thereunder

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Accepted for Recordation in the Register:     Required Consents (if any):

JPMORGAN CHASE BANK, N.A., as

Administrative Agent

   

[MIRANT NORTH AMERICA, LLC, as

Borrower

By:  

 

    By:  

 

  Name:         Name:     Title:         Title:]          

[JPMORGAN CHASE BANK, N.A., as

Administrative Agent

        By:  

 

            Name:               Title: ]          

[JPMORGAN CHASE BANK, N.A., as an

Issuing Lender

        By:  

 

          Name:             Title:]           [DEUTSCHE BANK TRUST COMPANY
AMERICAS, as an Issuing Lender         By:  

 

            Name:               Title:]           [[NAME OF ADDITIONAL ISSUING
LENDER, IF ANY], as an Issuing Lender         By:  

 

            Name:               Title:]  

 

2

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EXHIBIT F

January 3, 2006

 

To: The Administrative Agent and the Lenders each as defined in that certain
Credit Agreement, dated as of January 3, 2006, among Mirant North America, LLC
(the “Borrower”), the Lenders, JPMorgan Chase Bank, N.A. as Administrative
Agent, and Deutsche Bank Securities Inc. and Goldman Sachs Credit Partners L.P.,
as Co-Syndication Agents (the “Credit Agreement”) and each of their respective
successors, assigns and transferees.

 

Ladies and Gentlemen:

We have acted as special counsel to each of the Borrower, MNA Finance Corp., a
Delaware corporation (“Finance Corp.), Mirant Texas Management, LLC, a Delaware
limited liability company (“Texas Management”), Mirant Texas, LP, a Delaware
limited partnership (“Texas LP”), Mirant California, LLC, a Delaware limited
liability company (“California LLC”), Mirant Potrero, LLC, a Delaware limited
liability company (“Potrero”), Mirant Delta, LLC, a Delaware limited liability
company (“Delta”), Mirant Canal, LLC, a Delaware limited liability company
(“Canal”), Mirant Kendall, LLC, a Delaware limited liability company
(“Kendall”), Mirant Zeeland, LLC, a Delaware limited liability company
(“Zeeland”), Mirant Special Procurement, Inc., a Delaware corporation (“Special
Procurement”) and MLW Development, LLC, a Delaware limited liability company
(“MLW” and together the Company, Finance Corp., Texas Management, Texas LP,
California LLC, Potrero, Delta, Canal, Kendall, Zeeland, and Special
Procurement, the “Opinion Parties” and each an “Opinion Party”) in connection
with the execution and/or delivery of each document listed on Schedule A hereto
(collectively, the “NY Documents”) and each document listed on Schedule B
hereto, (collectively, the “Non-NY Documents” and together with the NY
Documents, the “Documents”). This opinion is delivered to you pursuant to
Section 5.1(c) of the Credit Agreement. Unless otherwise defined herein,
capitalized terms used herein (including in Schedule A hereto) shall have the
meanings set forth in the Credit Agreement.

In connection with this opinion, we have examined executed originals or copies
certified to our satisfaction of each Document and such other agreements,
documents, certificates and other statements of government officials and
corporate officers of each Opinion Party, and such other documents as we have
deemed necessary or appropriate as a basis for this opinion. As to questions of
fact relevant to this opinion, we have relied upon certificates of officers and

 

3

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representatives of each Opinion Party or of public officials and on the
representations and warranties made by the Opinion Parties in the Documents to
which they are a party.

In addition, we have assumed that (1) the Opinion Parties have rights in the
Collateral existing on the date hereof and will have rights in property which
becomes Collateral after the date hereof, (2) “value” (as defined in
Section 1-201(44) of the Uniform Commercial Code as in effect on the date hereof
in the State of New York) has been given by the Lenders to the Opinion Parties
for the security interests and other rights in the Collateral, (3) the
Securities Account (as defined in the Synthetic L/C Deposit Agreement) is a
“securities account” as such term is defined in §8-501(a) of the New York UCC,
(4) the Synthetic L/C Issuer is a “securities intermediary” and is acting in
such capacity with respect to the Borrower and (5) all securities or other
property underlying any financial assets credited to the Securities Account
shall be registered in the name of the Depository Agent (as defined in the
Synthetic L/C Deposit Agreement), indorsed to the Depository Agent or in blank
or credited to another securities account maintained in the name of the
Depository Agent and in no case will any financial asset credited to the
Securities Account be registered in the name of the Borrower, payable to the
order of the Borrower or specially indorsed to the Borrower except to the extent
the foregoing have been specially indorsed to the Depository Agent or in blank.

In addition, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals and the conformity to authentic
original documents of all documents submitted to us as certified, conformed or
photostatic copies. We have also assumed, for purposes of the opinions expressed
herein, that (v) each party (other than the Opinion Parties) to each Document,
is a company validly existing and in good standing under the laws of the
jurisdiction of its organization, (w) each party (other than the Opinion
Parties) to each Document, has the corporate or limited liability company power
and authority to enter into and perform its obligations under each Document,
(x) each Document has been duly authorized, executed and delivered by each party
(other than the Opinion Parties) to such Document, (y) each NY Document
constitutes the valid and binding obligation of each party thereto (other than
the Opinion Parties) enforceable against such party in accordance with its terms
and (z) the execution, delivery and performance of the Documents does not
violate any laws, other than in the case of the Opinion Parties the Applicable
Laws (as defined below), or require the approval, order, consent, license,
authorization, validation of, or filing, recording or registration with, or
exemptions by, any governmental or public body, other than in the case of the
Opinion Parties as may be required by any Applicable Laws (as defined below).

For purposes hereof, the documents listed as items 1 through 9, inclusive, on
Schedule B are referred to collectively as the “Mortgages”.

Based upon the foregoing, and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that:

1.        Each of Finance Corp. and Special Procurement is a corporation validly
existing and in good standing under the laws of the State of Delaware. Each of
the Borrower, Texas Management, California LLC, Potrero, Delta, Canal, Kendall,
Zeeland and MLW is a limited liability company, validly existing and in good
standing under the laws of the State of Delaware. Texas LP is a limited
partnership validly existing and in good standing under the laws of the State of
Delaware. Each Opinion Party has the corporate, limited liability company or
limited partnership power and authority, as applicable, to enter into, and
perform its obligations and to

 

4

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incur liabilities under, each of the Documents to which it is a party. The
execution, delivery and performance by each Opinion Party of the Documents to
which such Opinion Party is a party have been duly authorized and approved by
all necessary corporate, limited liability company or limited partnership
action, as applicable, on the part of such Opinion Party and have been duly
executed and delivered by such Opinion Party.

2.        The execution, delivery and performance by each Opinion Party of the
Documents to which such Opinion Party is a party will not violate any provision
of the certificate of incorporation, certificate of formation, by-laws, limited
liability company agreement or partnership agreement of such Opinion Party.

3.        The execution, delivery and performance by each Opinion Party, and the
incurrence of obligations by such Opinion Party under, the Documents to which
such Opinion Party is party does not (i) result in the violation of any Federal
or New York State law, statute or regulation which in our experience are
normally applicable to transactions of the type contemplated by the Documents,
the Delaware General Corporation Law (the “DGCL”), the Delaware Limited
Liability Company Act (the “DLLCA”, the Delaware Revised Uniform Limited
Partnership Act (“DRULPA”) or any judgment, order, rule or regulation of any
court or arbitrator or governmental or regulatory authority of which we are
aware (the laws, statutes, rules and regulations referred to in this clauses
(i) collectively, “Applicable Laws”) or (ii) result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Borrower or any of the Subsidiaries pursuant to any of the
agreements listed on Schedule C hereto and which the Borrower has represented
lists all material agreements and instruments to which the Borrower or any of
its Subsidiaries is a party or by which the Borrower or any of the Subsidiaries
are bound or to which any of the property or assets of any of the Borrower or
any of the Subsidiaries is subject, except in the case of clauses (i) and
(ii) above, for any such conflict, breach or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.

4.        No order, consent, approval, license, authorization or validation of,
or filing, recording or registration with, or exemption by, any New York,
Delaware or Federal governmental or public body or authority under any
Applicable Law, is required of any Opinion Party to authorize, or is required of
any Opinion Party in connection with, (i) the execution, delivery and
performance by any Opinion Party of any Document to which it is a party or
(ii) the validity, binding effect or enforceability against any Opinion Party of
any such Document, except as have been obtained or made on or prior to the date
hereof and for such filings as may be required for the perfection of security
interests granted pursuant to the Guarantee and Collateral Agreement and the
Mortgages.

5.        Each NY Document is the valid and binding obligation of each Opinion
Party party thereto, enforceable against such Opinion Party in accordance with
its respective terms.

6.        The Guarantee and Collateral Agreement creates a valid security
interest in favor of the Administrative Agent, for the benefit of the Secured
Parties under the Guarantee and Collateral Agreement, as security for the
Obligations (as defined in the Guarantee and Collateral Agreement), in that
portion of the collateral described in the Guarantee and Collateral Agreement

 

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to which Article 9 of the Uniform Commercial Code as in effect in the State of
New York (the “New York UCC”) is applicable (such collateral, the “Article 9
General Collateral”). The Synthetic L/C Deposit Agreement is effective to create
a valid security interest in favor of the Synthetic L/C Issuer, for its benefit
and the benefit of the Lenders, as security for the Obligations in that portion
of the collateral described in the Synthetic L/C Deposit Agreement to which
Article 9 of the New York UCC is applicable (the “Article 9 Synthetic L/C
Collateral”). The Synthetic L/C Issuer will have a perfected security interest
in the security entitlements, if any, of the Borrower carried in the Securities
Account (as defined in the Synthetic L/C Deposit Agreement) for its benefit and
the benefit of the Lenders under the New York UCC upon JPMorgan Chase Bank,
N.A., as the securities intermediary that maintains the securities account in
which the securities entitlements are carried agreeing that it will comply with
entitlement orders originated by the Synthetic L/C Issuer without further
consent by any Opinion Party. Assuming neither the Synthetic L/C Issuer nor any
of the Lenders has notice of an adverse claim to any such security entitlements
and that the Synthetic L/C Issuer and the Lenders have given value for such
security interest, no action based on an adverse claim to such security
entitlement may be asserted against the Synthetic L/C Issuer or any Lender.

7.        All the outstanding shares of capital stock or other equity interests
of each subsidiary of the Borrower have been validly issued, are fully paid and
non-assessable. To the extent any of the Article 9 General Collateral
constitutes “certificated securities” (as defined in Article 8 of the New York
UCC) or “instruments” (as defined in Article 9 of the New York UCC), the
Administrative Agent will have a perfected security interest in such
certificated securities or instruments under the New York UCC, for the benefit
of the Secured Parties under the Guarantee and Collateral Agreement, as security
for the Obligations upon delivery in the State of New York to the Administrative
Agent (and for so long as such certificated securities or instruments are held
in the State of New York by the Administrative Agent), for the benefit of the
Secured Parties under the Guarantee and Collateral Agreement, of the
certificates representing such certificated securities or instruments, in each
case endorsed by an effective endorsement or accompanied by undated stock powers
duly endorsed in blank. Assuming neither the Administrative Agent nor any of the
Lenders has notice of any adverse claim to such certificated securities and
instruments and that the Administrative Agent and the Lenders have given value
for such security interest, the Administrative Agent will acquire the security
interest in such certificated securities and instruments for the benefit of the
Lenders free of any adverse claim.

8.        We have reviewed the financing statements (the “Financing Statements”)
naming each Opinion Party as debtor, which are to be filed against such parties
in the office of the Secretary of the State of State of Delaware (the “Filing
Office”). Each of the Financing Statements is in appropriate form for filing in
the Filing Office. Upon due filing of such Financing Statements in such filing
office together with payment of any applicable filing fees, the security
interest created by the Guarantee and Collateral Agreement in the Article 9
General Collateral will constitute a perfected security interest in the Article
9 Collateral owned by such party and granted by such party to the extent the
Article 9 Collateral owned by such party consists of property in which a
security interest may be perfected by filing a financing statement under Article
9 of the Uniform Commercial Code as in effect on the date hereof in the State of
Delaware (the “Delaware UCC”).

 

6

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9.        No Opinion Party is an “investment company” within the meaning of, or
subject to regulation under, the Investment Company Act of 1940, as amended.

10.      No Opinion Party is a “holding company” or a “subsidiary company” of a
holding company, within the meaning of the Public Utility Holding Company Act of
1935, as amended (“PUHCA”), subject to any regulation under PUHCA restricting
its ability to incur debt or execute or perform its obligations under the Loan
Documents to which it is a party, or (2) is subject to any regulation under the
Federal Power Act restricting its right to execute or perform its respective
obligations under the Loan Documents to which it is a party.

11.      Assuming that the Borrower will comply with the provisions of the
Credit Agreement relating to the use of proceeds, the execution and delivery of
the Credit Agreement by the Borrower and the making of the Loans under the
Credit Agreement will not violate Regulation T, U or X of the Board of Governors
of the Federal Reserve System.

12.      To our knowledge there is no action, suit or proceeding now pending
before or by any court, arbitrator or governmental agency, body or official to
which any Opinion Party is a party or to which the business, assets or property
of any Opinion Party is subject that questions the validity of the Loan
Documents, and no such action, suit or proceeding is threatened.

The opinions contained herein are subject to the following additional
limitations, qualifications, exceptions and assumptions:

(a) Our opinions expressed in paragraphs 5 and 6 herein are subject to the
effects of applicable bankruptcy, insolvency, reorganization or other similar
laws affecting creditors’ rights and by general equitable principles (regardless
of whether considered in a proceeding in equity or at law).

(b) In connection with our opinion set forth in paragraph 5 hereof (i) such
opinion is limited to the extent that a U.S. Federal court sitting in diversity
jurisdiction may not give effect to (x) the waiver of any objection to the
laying of venue and of any claim of forum non conveniens and (y) the forum
selection provisions contained in each Document and (ii) no opinion is being
expressed with respect to subject matter jurisdiction of any United States
Federal court.

(c) We express no opinion as to the enforceability of any indemnification or
contribution provisions in the Documents to the extent the rights to
indemnification or contribution provided for therein are violative of any law,
rule or regulation or public policy relating thereto.

(d) We wish to point out that there may be limitations upon the exercise of
remedial or procedural provisions contained in the Documents, but we believe
that such limitations do not make the rights and remedies provided in or
contemplated by each Document (other than the Mortgages) inadequate for the
practical realization of the rights and remedies afforded thereby. We further
note that the authorization of the Federal Energy Regulatory Commission may be
required under the Federal Power Act for the exercise of certain remedial
provisions of the Guarantee and Collateral Agreement and the other Security
Documents.

(e) We express no opinion as to the applicability to any Document or the
transactions contemplated thereby of Section 548 of the Bankruptcy Code (11
U.S.C. Section 548) or Article 10 of the New York Debtor and Creditor Law
relating to fraudulent transfers and obligations.

 

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(f) We wish to point out that the law of the State of New York generally imposes
an obligation of good faith and reasonableness in the performance and
enforcement of contracts.

(g) We express no opinion as to (i) the title of any Opinion Party to any
property constituting collateral under the Guarantee and Collateral Agreement or
any Mortgage, (ii) the priority of any security interest created under the
Guarantee and Collateral Agreement or (iii) except as expressly provided in
paragraphs 7 and 8 hereof, the perfection of any security interest created under
any Document.

(h) In the case of collateral acquired by any Opinion Party after the date
hereof, Section 552 of 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”) limits
the extent to which property acquired by a debtor after the commencement of a
case under the Bankruptcy Code may be subject to a security interest arising
from a security agreement entered into by the debtor before the commencement of
such case.

(i) We call to your attention that under the New York UCC and the Delaware UCC
(collectively, the “UCC”), events occurring subsequent to the creation of a
security interest subject to the UCC may affect such security interest,
including, but not limited to, factors of the type identified in Section 9-315
of the UCC with respect to proceeds; Section 9-316 of the UCC with respect to
changes in governing law or the location of the debtor; Sections 9-507 and 9-508
of the UCC with respect to the name and identity of the debtor; Section 9-339 of
the UCC with respect to subordination agreements; and Sections 9-320, 9-330 and
9-331 of the UCC with respect to subsequent purchasers of collateral. In
addition, actions taken by a secured party (e.g., releasing or assigning the
security interest, delivery of possession of the collateral to the debtor or
another person and voluntarily subordinating a security interest) may affect the
validity, perfection or priority of a security interest.

(j) We call to your attention that federal and state courts located in New York
could decline to hear a case on grounds of forum non conveniens or any other
doctrine limiting the availability of the courts in New York as a forum for the
resolution of disputes not having sufficient nexus to New York and we express no
opinion as to any waiver of rights to assert the applicability of forum non
conveniens doctrine or any such other doctrine.

(k) Our opinions in paragraphs 6, 7 and 8 hereof are limited to Articles 8 (with
respect to certificated securities and security entitlements only) and 9 of the
New York UCC (in the case of paragraphs 6 and 7) or the Delaware UCC (in the
case of paragraph 8 hereof), and therefore those opinion paragraphs do not
address (i) laws of jurisdictions other than New York and Delaware, (ii) laws of
New York and Delaware other than Articles 8 (with respect to certificated
securities and security entitlements only) and 9 of the New York UCC and the
Delaware UCC, as the case may be, (iii) collateral of a type not subject to
Articles 8 (with respect to certificated securities and security entitlements
only) and 9 of the New York UCC and the Delaware UCC, as the case may be, and
(iv) under Article 9 of the New York UCC or the Delaware UCC, what law governs
perfection of the security interests granted in the collateral covered by this
opinion letter. Our opinion set forth in paragraph 8 hereof, to the extent
pertaining to matters governed by the Delaware UCC is based solely on our review
of Article 9 of the Uniform Commercial Code of such state as set forth in the
Delaware UCC Annotated 2005-2006 Edition published by Lexis Publishing, and
without regard to the case law decided under the Delaware UCC.

(l) We call to your attention that under the UCC, with certain limited
exceptions, the effectiveness of the Financing Statements will lapse five years
after the date of filing thereof and the security interest therein will at that
time become unperfected, unless a continuation statement is filed within six
months prior to the end of such five-year period.

(m) We express no opinion as to the adequacy of the description of the
Collateral set forth in Section 3(m) of the Guarantee and Collateral Agreement.

 

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The opinions expressed above are limited to questions arising under the DGCL,
DLLCA, DRULPA and the Delaware UCC (to the extent specified in paragraph 8
hereof and clause (l) above), Federal law of the United States and the law of
the State of New York. This opinion does not cover the law of any jurisdiction
other than that specified in the immediately preceding sentence (collectively,
the “Other Jurisdictions”), nor did we review codifications of the laws of Other
Jurisdictions. Furthermore, we express no opinion as to, and assume no
responsibility for, the effect of any fact or circumstance occurring subsequent
to the date of this letter, including, without limitation, legislative and other
changes in the law or changes in circumstances affecting the Opinion Parties. We
assume no responsibility to advise you of any such facts or circumstances of
which we become aware, regardless of whether or not they affect the opinions
herein.

This opinion may not be used or relied upon or published or communicated to any
person or entity other than the addressees hereof for any purpose whatsoever
without our prior written consent in each instance; provided that you may
furnish copies of this opinion to your accountants and to bank auditors and
examiners, in each case in connection with their audit and review activities.

 

Very truly yours,

White & Case LLP

DEJ:PG

 

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SCHEDULE A

Documents

1. Credit Agreement, dated as of January 3, 2006, among Mirant North America,
LLC, the lenders from time to time party thereto, JPMorgan Chase Bank, as
Administrative Agent and Deutsche Bank Securities Inc. and Goldman Sachs Credit
Partners L.P., as Co-Syndication Agents.

2. Guarantee and Collateral Agreement, dated as of January 3, 2006, by Mirant
North America, LLC and certain of its subsidiaries in favor of JPMorgan Chase
Bank, as Administrative Agent.

3. Financing Statements

4. Synthetic L/C Deposit Agreement.

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SCHEDULE B

Mortgages

1. Mortgage dated as of January 3, 2006, between Mirant Zeeland, LLC and
JPMorgan Chase Bank, N.A.

2. Deed of Trust, Security Agreement, Assignment of Leases and Rents, Financing
Statement and Fixture Filing dated as of January 3, 2006, between Mirant Texas,
L.P. and JPMorgan Chase Bank, N.A.

3. Mortgage, Security Agreement, Assignment of Leases and Rents, Financing
Statement and Fixture Filing dated as of January 3, 2006, between Mirant
Kendall, LLC and JPMorgan Chase Bank, N.A.

4. Deed of Trust, Security Agreement, Assignment of Leases and Rents, Financing
Statement and Fixture Filing dated as of January 3, 2006, between Mirant
Potrero, LLC and JPMorgan Chase Bank, N.A.

5. Deed of Trust, Security Agreement, Assignment of Leases and Rents, Financing
Statement and Fixture Filing dated as of January 3, 2006, between Mirant Delta,
LLC and JPMorgan Chase Bank, N.A. in respect of the property located in Antioch,
California.

6. Deed of Trust, Security Agreement, Assignment of Leases and Rents, Financing
Statement and Fixture Filing dated as of January 3, 2006, between Mirant Delta,
LLC and JPMorgan Chase Bank, N.A. in respect of the property located in
Pittsburg, California.

7. Deed of Trust, Security Agreement, Assignment of Leases and Rents, Financing
Statement and Fixture Filing dated as of January 3, 2006, between Mirant Delta,
LLC and JPMorgan Chase Bank, N.A. in respect of the property located in Solano
County, California.

8. Mortgage, Security Agreement, Assignment of Leases and Rents, Financing
Statement and Fixture Filing dated as of January 3, 2006, between Mirant Canal,
LLC and JPMorgan Chase Bank, N.A. in respect of the property located in Dukes
County, Massachusetts.

9. Mortgage, Security Agreement, Assignment of Leases and Rents, Financing
Statement and Fixture Filing dated as of January 3, 2006, between Mirant Canal,
LLC and JPMorgan Chase Bank, N.A. in respect of the property located in
Barnstable County, Massachusetts.

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SCHEDULE C

Material Contracts

 

Number    

 

Description

    

I.

  Assignment Agreements    a.   Assignment and Assumption Agreement (Dickerson)
between Southern Energy Mid-Atlantic, LLC, Dickerson OL1 LLC, Dickerson OL2 LLC,
Dickerson OL3 LLC, and Dickerson OL4 LLC, dated as of December 19, 2000    b.  
Assignment and Assumption Agreement (Morgantown) between Southern Energy
Mid-Atlantic, LLC, Morgantown OL1 LLC, Morgantown OL2 LLC, Morgantown OL3 LLC,
Morgantown OL4 LLC, Morgantown OL5 LLC, Morgantown OL6 LLC, and Morgantown OL7
LLC, dated as of December 19, 2000    II.   Easement, License and Attachment
Agreements    a.   Easement, License and Attachment Agreement (Dickerson)
between Potomac Electric Power Company, Southern Energy Mid-Atlantic, LLC and
Southern Energy MD Ash Management, LLC (currently known as Mirant MD Ash
Management, LLC) dated as of December 19, 2000    b.   Easement, License and
Attachment Agreement (Morgantown) between Potomac Electric Power Company,
Southern Energy Mid-Atlantic, LLC and Southern Energy Piney Point, LLC dated as
of December 19, 2000    c.   Easement, License and Attachment Agreement (Chalk
Point) between Potomac Electric Power Company, Southern Energy Chalk Point, LLC
and Southern Energy Piney Point, LLC dated as of December 19, 2000    III.  
Facility and Lease Agreements    a.   Facility Lease Agreement (Dickerson L1)
between Southern Energy Mid-Atlantic, LLC, as Lessee, and Dickerson OL1 LLC, as
Owner Lessor, dated as of December 19, 2000    b.   Facility Lease Agreement
(Dickerson L2) between Southern Energy Mid-Atlantic, LLC, as Lessee, and
Dickerson OL2 LLC, as Owner Lessor, dated as of December 19, 2000    c.  
Facility Lease Agreement (Dickerson L3) between Southern Energy Mid-Atlantic,
LLC, as Lessee, and Dickerson OL3 LLC, as Owner Lessor, dated as of December 19,
2000    d.   Facility Lease Agreement (Dickerson L4) between Southern Energy
Mid-Atlantic, LLC, as Lessee, and Dickerson OL4 LLC, as Owner Lessor, dated as
of December 19, 2000    e.   Facility Lease Agreement (Morgantown L1) between
Southern Energy Mid-Atlantic, LLC, as Lessee, and Morgantown OL1 LLC, as Owner
Lessor, dated as of December 19, 2000    f.   Facility Lease Agreement
(Morgantown L2) between Southern Energy Mid-Atlantic, LLC, as Lessee, and
Morgantown OL2 LLC, as Owner Lessor, dated as of December 19, 2000    g.  
Facility Lease Agreement (Morgantown L3) between Southern Energy Mid-Atlantic,
LLC, as Lessee, and Morgantown OL3 LLC, as Owner Lessor, dated as of
December 19, 2000   

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h.   Facility Lease Agreement (Morgantown L4) between Southern Energy
Mid-Atlantic, LLC, as Lessee, and Morgantown OL4 LLC, as Owner Lessor, dated as
of December 19, 2000    i.   Facility Lease Agreement (Morgantown L5) between
Southern Energy Mid-Atlantic, LLC, as Lessee, and Morgantown OL5 LLC, as Owner
Lessor, dated as of December 19, 2000    j.   Facility Lease Agreement
(Morgantown L6) between Southern Energy Mid-Atlantic, LLC, as Lessee, and
Morgantown OL6 LLC, as Owner Lessor, dated as of December 19, 2000    k.  
Facility Lease Agreement (Morgantown L7) between Southern Energy Mid-Atlantic,
LLC, as Lessee, and Morgantown OL7 LLC, as Owner Lessor, dated as of
December 19, 2000    l.   Facility Lease Agreement (Dickerson L1) between
Southern Energy Mid-Atlantic, LLC, as Lessee, and Dickerson OL1 LLC, as Owner
Lessor, dated as of December 19, 2000    m.   Facility Site Lease Agreement
(Dickerson L1) between Southern Energy Mid-Atlantic, LLC, Dickerson OL1 LLC and
Southern Energy MD Ash Management, LLC dated as of December 19, 2000    n.  
Facility Site Lease Agreement (Dickerson L2) between Southern Energy Mid-
Atlantic, LLC, Dickerson OL2 LLC and Southern Energy MD Ash Management, LLC
dated as of December 19, 2000    o.   Facility Site Lease Agreement (Dickerson
L3) between Southern Energy Mid- Atlantic, LLC, Dickerson OL3 LLC and Southern
Energy MD Ash Management, LLC dated as of December 19, 2000    p.   Facility
Site Lease Agreement (Dickerson L4) between Southern Energy Mid- Atlantic, LLC,
Dickerson OL4 LLC and Southern Energy MD Ash Management, LLC dated as of
December 19, 2000    q.   Facility Site Lease Agreement (Morgantown L1) between
Southern Energy Mid-Atlantic, LLC, Morgantown OL1 LLC and Southern Energy MD Ash
Management, LLC dated as of December 19, 2000    r.   Facility Site Lease
Agreement (Morgantown L2) between Southern Energy Mid- Atlantic, LLC, Morgantown
OL2 LLC and Southern Energy MD Ash Management, LLC dated as of December 19, 2000
   s.   Facility Site Lease Agreement (Morgantown L3) between Southern Energy
Mid- Atlantic, LLC, Morgantown OL3 LLC and Southern Energy MD Ash Management,
LLC dated as of December 19, 2000    t.   Facility Site Lease Agreement
(Morgantown L4) between Southern Energy Mid- Atlantic, LLC, Morgantown OL4 LLC
and Southern Energy MD Ash Management, LLC dated as of December 19, 2000    u.  
Facility Site Lease Agreement (Morgantown L5) between Southern Energy Mid-
Atlantic, LLC, Morgantown OL5 LLC and Southern Energy MD Ash Management, LLC
dated as of December 19, 2000    v.   Facility Site Lease Agreement (Morgantown
L6) between Southern Energy Mid- Atlantic, LLC, Morgantown OL6 LLC and Southern
Energy MD Ash Management, LLC dated as of December 19, 2000    w.   Facility
Site Lease Agreement (Morgantown L7) between Southern Energy Mid- Atlantic, LLC,
Morgantown OL7 LLC and Southern Energy MD Ash Management, LLC dated as of
December 19, 2000    x.   Facility Site Sublease Agreement (Dickerson L1)
between Southern Energy Mid-Atlantic, LLC, Dickerson OL1 LLC dated as of
December 19, 2000   

 

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y.   Facility Site Sublease Agreement (Dickerson L2) between Southern Energy
Mid- Atlantic, LLC and Dickerson OL2 LLC dated as of December 19, 2000    z.  
Facility Site Sublease Agreement (Dickerson L3) between Southern Energy Mid-
Atlantic, LLC and Dickerson OL3 LLC dated as of December 19, 2000    aa.  
Facility Site Sublease Agreement (Dickerson L4) between Southern Energy Mid-
Atlantic, LLC and Dickerson OL4 LLC dated as of December 19, 2000    bb.  
Facility Site Sublease Agreement (Morgantown L1) between Southern Energy
Mid-Atlantic, LLC, Morgantown OL1 LLC dated as of December 19, 2000    cc.  
Facility Site Sublease Agreement (Morgantown L2) between Southern Energy Mid-
Atlantic, LLC and Morgantown OL2 LLC dated as of December 19, 2000    dd.  
Facility Site Sublease Agreement (Morgantown L3) between Southern Energy Mid-
Atlantic, LLC and Morgantown OL3 LLC dated as of December 19, 2000    ee.  
Facility Site Sublease Agreement (Morgantown L4) between Southern Energy Mid-
Atlantic, LLC and Morgantown OL4 LLC dated as of December 19, 2000    ff.  
Facility Site Sublease Agreement (Morgantown L5) between Southern Energy Mid-
Atlantic, LLC and Morgantown OL5 LLC dated as of December 19, 2000    gg.  
Facility Site Sublease Agreement (Morgantown L6) between Southern Energy Mid-
Atlantic, LLC and Morgantown OL6 LLC dated as of December 19, 2000    hh.  
Facility Site Sublease Agreement (Morgantown L7) between Southern Energy Mid-
Atlantic, LLC and Morgantown OL7 LLC dated as of December 19, 2000    ii.  
Shared Facilities Agreement (Dickerson) between Southern Energy Mid-Atlantic,
LLC, Dickerson OL1 LLC, Dickerson OL2 LLC, Dickerson OL3 LLC, and Dickerson OL4
LLC, dated as of December 18, 2000    jj.   Shared Facilities Agreement
(Morgantown) between Southern Energy Mid-Atlantic, LLC, Morgantown OL1 LLC,
Morgantown OL2 LLC, Morgantown OL3 LLC, Morgantown OL4 LLC, Morgantown OL5 LLC,
Morgantown OL6 LLC, and Morgantown OL7 LLC, dated as of December 18, 2000    IV.
  Indentures    a.   Indenture of Trust, Mortgage and Security Agreement
(Dickerson L1) between Dickerson OL1 LLC, as Lessor, and State Street Bank and
Trust Company of Connecticut, National Association, as Lease Indenture Trustee,
dated as of December 19, 2000    b.   Indenture of Trust, Mortgage and Security
Agreement (Dickerson L2) between Dickerson OL2 LLC, as Owner Lessor, and State
Street Bank and National Association, as Lease Indenture Trustee, dated as of
December 19, 2000    c.   Indenture of Trust, Mortgage and Security Agreement
(Dickerson L3) between Dickerson OL3 LLC, as Owner Lessor, and State Street Bank
and   

 

3

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  Trust Company of Connecticut, National Association, as Lease Indenture
Trustee, dated as of December 19, 2000    d.   Indenture of Trust, Mortgage and
Security Agreement (Dickerson L4) between Dickerson OL4 LLC, as Owner Lessor,
and State Street Bank and Trust Company of Connecticut, National Association, as
Lease Indenture Trustee, dated as of December 19, 2000    e.   Indenture of
Trust, Mortgage and Security Agreement (Morgantown L1) between Morgantown OL1
LLC, as Lessor, and State Street Bank and Trust Company of Connecticut, National
Association, as Lease Indenture Trustee, dated as of December 19, 2000    f.  
Indenture of Trust, Mortgage and Security Agreement (Morgantown L2) between
Morgantown OL2 LLC, as Owner Lessor, and State Street Bank and Trust Company of
Connecticut, National Association, as Lease Indenture Trustee, dated as of
December 19, 2000    g.   Indenture of Trust, Mortgage and Security Agreement
(Morgantown L3) between Morgantown OL3 LLC, as Owner Lessor, and State Street
Bank and Trust Company of Connecticut, National Association, as Lease Indenture
Trustee, dated as of December 19, 2000    h.   Indenture of Trust, Mortgage and
Security Agreement (Morgantown L4) between Morgantown OL4 LLC, as Owner Lessor,
and State Street Bank and Trust Company of Connecticut, National Association, as
Lease Indenture Trustee, dated as of December 19, 2000    i.   Indenture of
Trust, Mortgage and Security Agreement (Morgantown L5) between Morgantown OL5
LLC, as Owner Lessor, and State Street Bank and Trust Company of Connecticut,
National Association, as Lease Indenture Trustee, dated as of December 19, 2000
   j.   Indenture of Trust, Mortgage and Security Agreement (Morgantown L6)
between Morgantown OL6 LLC, as Owner Lessor, and State Street Bank and Trust
Company of Connecticut, National Association, as Lease Indenture Trustee, dated
as of December 19, 2000    k.   Indenture of Trust, Mortgage and Security
Agreement (Morgantown L7) between Morgantown OL7 LLC, as Owner Lessor, and State
Street Bank and Trust Company of Connecticut, National Association, as Lease
Indenture Trustee, dated as of December 19, 2000    l.   Indenture between
Mirant Americas Generation, Inc. and Bankers Trust Company, as Trustee, dated as
of May 1, 2001    m.   First Supplemental Indenture between Mirant Americas
Generation, Inc. and Bankers Trust Company, as Trustee, dated as of May 1, 2001
   n.   Second Supplemental Indenture between Mirant Americas Generation, Inc.
and Bankers Trust Company, as Trustee, dated as of May 1, 2001    o.   Third
Supplemental Indenture between Mirant Americas Generation, Inc. and Bankers
Trust Company, as Trustee, dated as of May 1, 2001    p.   Fourth Supplemental
Indenture between Mirant Americas Generation, Inc. and Bankers Trust Company, as
Trustee, dated as of October 9, 2001    q.   Fifth Supplemental Indenture
between Mirant Americas Generation, Inc. and Bankers Trust Company, as Trustee,
dated as of October 9, 2001    V.   Interconnection Agreements    a.  
Interconnection Agreement (Dickerson) between Potomac Electric Power Company and
Southern Energy Mid-Atlantic, LLC dated as of   

 

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  December 19, 2000    b.   Interconnection Agreement (Morgantown) between
Potomac Electric Power Company and Southern Energy Mid-Atlantic, LLC dated as of
December 19, 2000    c.   Interconnection Agreement (Chalk Point) between
Potomac Electric Power Company, Southern Energy Chalk Point, LLC and Southern
Energy Peaker, LLC dated as of December 19, 2000    VI.   Notes    a.   Series A
Lessor Note due June 30, 2012 for Dickerson OL1 LLC, dated December 19, 2000, by
and between Dickerson OL1 LLC, as Owner Lessor, SEMA OP3 LLC as Owner
Participant and State Street Bank and Trust Company of Connecticut, National
Association, as Pass Through Trustee    b.   Series A Lessor Note due June 30,
2008, for Morgantown OL1 LLC, dated December 19, 2000, by and between Morgantown
OL1 LLC as Owner Lessor, SEMA OP1 LLC as Owner Participant and Trust Company of
Connecticut, National Association, as Pass Through Trustee    c.   Series A
Lessor Note due June 30, 2008, for Morgantown OL2 LLC, dated December 19, 2000,
by and between Morgantown OL2 LLC as Owner Lessor, SEMA OP1 LLC as Owner
Participant and Trust Company of Connecticut, National Association, as Pass
Through Trustee    d.   Series A Lessor Note due June 30, 2008, for Morgantown
OL3 LLC, dated December 19, 2000, by and between Morgantown OL3 LLC as Owner
Lessor, SEMA OP1 LLC as Owner Participant and Trust Company of Connecticut,
National Association, as Pass Through Trustee    e.   Series A Lessor Note due
June 30, 2008, for Morgantown OL4 LLC, dated December 19, 2000, by and between
Morgantown OL4 LLC as Owner Lessor, SEMA OP1 LLC as Owner Participant and Trust
Company of Connecticut, National Association, as Pass Through Trustee    f.  
Series A Lessor Note due June 30, 2008, for Morgantown OL5 LLC, dated December
19, 2000, by and between Morgantown OL5 LLC as Owner Lessor, SEMA OP1 LLC as
Owner Participant and Trust Company of Connecticut, National Association, as
Pass Through Trustee    g.   Series A Lessor Note due June 30, 2008, for
Morgantown OL6 LLC, dated December 19, 2000, by and between Morgantown OL6 LLC
as Owner Lessor, SEMA OP1 LLC as Owner Participant and Trust Company of
Connecticut, National Association, as Pass Through Trustee    h.   Series A
Lessor Note due June 30, 2008, for Morgantown OL7 LLC, dated December 19, 2000,
by and between Morgantown OL7 LLC as Owner Lessor, SEMA OP1 LLC as Owner
Participant and Trust Company of Connecticut, National Association, as Pass
Through Trustee    i.   Series B Lessor Note due June 30, 2015 for Dickerson OL1
LLC, dated December 19, 2000, by and between Dickerson OL1 as Owner Lessor, SEMA
OP3 LLC as Owner Participant and State Street Bank and Trust Company of
Connecticut, National Association, as Pass Through Trustee    j.   Series B
Lessor Note due June 30, 2015 for Dickerson OL2 LLC, dated December 19, 2000, by
and between Dickerson OL2 as Owner Lessor, SEMA OP3 LLC as Owner Participant and
State Street Bank and Trust Company of Connecticut, National Association, as
Pass Through Trustee    k.   Series B Lessor Note due June 30, 2015 for
Dickerson OL3 LLC, dated   

 

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  December 19, 2000, by and between Dickerson OL3 as Owner Lessor, SEMA OP3 LLC
as Owner Participant and State Street Bank and Trust Company of Connecticut,
National Association, as Pass Through Trustee    l.   Series B Lessor Note due
June 30, 2015 for Dickerson OL4 LLC, dated December 19, 2000, by and between
Dickerson OL4 as Owner Lessor, SEMA OP3 LLC as Owner Participant and State
Street Bank and Trust Company of Connecticut, National Association, as Pass
Through Trustee    m.   Series B Lessor Note due June 30, 2017 for Morgantown
OL1 LLC, dated December 19, 2000, by and between Morgantown OL1 LLC as Owner
Lessor, SEMA OP1 LLC as Owner Participant and Trust Company of Connecticut,
National Association, as Pass Through Trustee    n.   Series B Lessor Note due
June 30, 2017 for Morgantown OL2 LLC, dated December 19, 2000, by and between
Morgantown OL2 LLC as Owner Lessor, SEMA OP1 LLC as Owner Participant and Trust
Company of Connecticut, National Association, as Pass Through Trustee    o.  
Series B Lessor Note due June 30, 2017 for Morgantown OL3 LLC, dated December
19, 2000, by and between Morgantown OL3 LLC as Owner Lessor, SEMA OP1 LLC as
Owner Participant and Trust Company of Connecticut, National Association, as
Pass Through Trustee    p.   Series B Lessor Note due June 30, 2017 for
Morgantown OL4 LLC, dated December 19, 2000, by and between Morgantown OL4 LLC
as Owner Lessor, SEMA OP1 LLC as Owner Participant and Trust Company of
Connecticut, National Association, as Pass Through Trustee    q.   Series B
Lessor Note due June 30, 2017 for Morgantown OL5 LLC, dated December 19, 2000,
by and between Morgantown OL5 LLC as Owner Lessor, SEMA OP1 LLC as Owner
Participant and Trust Company of Connecticut, National Association, as Pass
Through Trustee    r.   Series B Lessor Note due June 30, 2017 for Morgantown
OL6 LLC, dated December 19, 2000, by and between Morgantown OL6 LLC as Owner
Lessor, SEMA OP1 LLC as Owner Participant and Trust Company of Connecticut,
National Association, as Pass Through Trustee    s.   Series B Lessor Note due
June 30, 2017 for Morgantown OL7 LLC, dated December 19, 2000, by and between
Morgantown OL7 LLC as Owner Lessor, SEMA OP1 LLC as Owner Participant and Trust
Company of Connecticut, National Association, as Pass Through Trustee    t.  
Series C Lessor Note due June 30, 2020 for Morgantown OL1 LLC, dated December
19, 2000, by and between Morgantown OL1 LLC as Owner Lessor, SEMA OP1 LLC as
Owner Participant and Trust Company of Connecticut, National Association, as
Pass Through Trustee    u.   Series C Lessor Note due June 30, 2020 for
Morgantown OL1 LLC, dated December 19, 2000, by and between Morgantown OL1 LLC
as Owner Lessor, SEMA OP1 LLC as Owner Participant and Trust Company of
Connecticut, National Association, as Pass Through Trustee    v.   Series C
Lessor Note due June 30, 2020 for Morgantown OL2 LLC, dated December 19, 2000,
by and between Morgantown OL2 LLC as Owner Lessor, SEMA OP1 LLC as Owner
Participant and Trust Company of Connecticut, National Association, as Pass
Through Trustee    w.   Series C Lessor Note due June 30, 2020 for Morgantown
OL3 LLC, dated December 19, 2000, by and between Morgantown OL3 LLC as Owner
Lessor, SEMA OP1 LLC as Owner Participant and Trust Company of   

 

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  Connecticut, National Association, as Pass Through Trustee    x.   Series C
Lessor Note due June 30, 2020 for Morgantown OL4 LLC, dated December 19, 2000,
by and between Morgantown OL4 LLC as Owner Lessor, SEMA OP1 LLC as Owner
Participant and Trust Company of Connecticut, National Association, as Pass
Through Trustee    y.   Series C Lessor Note due June 30, 2020 for Morgantown
OL5 LLC, dated December 19, 2000, by and between Morgantown OL5 LLC as Owner
Lessor, SEMA OP1 LLC as Owner Participant and Trust Company of Connecticut,
National Association, as Pass Through Trustee    z.   Series C Lessor Note due
June 30, 2020 for Morgantown OL6 LLC, dated December 19, 2000, by and between
Morgantown OL6 LLC as Owner Lessor, SEMA OP1 LLC as Owner Participant and Trust
Company of Connecticut, National Association, as Pass Through Trustee    aa.  
Series C Lessor Note due June 30, 2020 for Morgantown OL7 LLC, dated December
19, 2000, by and between Morgantown OL7 LLC as Owner Lessor, SEMA OP1 LLC as
Owner Participant and Trust Company of Connecticut, National Association, as
Pass Through Trustee    VII.   Operation Agreements    a.   Ownership and
Operation Agreement (Dickerson) between Southern Energy Mid-Atlantic, LLC,
Dickerson OL1 LLC, Dickerson OL2 LLC, Dickerson OL3 LLC, and Dickerson OL4 LLC,
dated as of December 18, 2000    b.   Ownership and Operation Agreement
(Morgantown) between Southern Energy Mid-Atlantic, LLC, Morgantown OL1 LLC,
Morgantown OL2 LLC, Morgantown OL3 LLC, Morgantown OL4 LLC, Morgantown OL5 LLC,
Morgantown OL6 LLC, and Morgantown OL7 LLC, dated as of December 18, 2000   
VIII.   Participation Agreements    a.   Participation Agreement (Dickerson L1)
among Southern Energy Mid-Atlantic, LLC, as Lessee, Dickerson OL1 LLC, as Owner
Lessor, Wilmington Trust Company, as Owner Manager, SEMA OP3, as Owner
Participant and State Street Bank and Trust Company of Connecticut, National
Association, as Lease Indenture Trustee and as Pass Through Trustee, dated as of
December 18, 2000    b.   Participation Agreement (Dickerson L2) among Southern
Energy Mid-Atlantic, LLC, as Lessee, Dickerson OL2 LLC, as Owner Lessor,
Wilmington Trust Company, as Owner Manager, SEMA OP6, as Owner Participant and
State Street Bank and Trust Company of Connecticut, National Association, as
Lease Indenture Trustee and as Pass Through Trustee, dated as of December 18,
2000    c.   Participation Agreement (Dickerson L3) among Southern Energy
Mid-Atlantic, LLC, as Lessee, Dickerson OL3 LLC, as Owner Lessor, Wilmington
Trust Company, as Owner Manager, SEMA OP7, as Owner Participant and State Street
Bank and Trust Company of Connecticut, National Association, as Lease Indenture
Trustee and as Pass Through Trustee, dated as of December 18, 2000    d.  
Participation Agreement (Dickerson L4) among Southern Energy Mid-Atlantic, LLC,
as Lessee, Dickerson OL4 LLC, as Owner Lessor, Wilmington Trust Company, as
Owner Manager, SEMA OP8, as Owner   

 

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  Participant and State Street Bank and Trust Company of Connecticut, National
Association, as Lease Indenture Trustee and as Pass Through Trustee, dated as of
December 18, 2000    e.   Participation Agreement (Morgantown L1) among Southern
Energy Mid-Atlantic, LLC, as Lessee, Morgantown OL1 LLC, as Owner Lessor,
Wilmington Trust Company, as Owner Manager, SEMA OP1, as Owner Participant and
State Street Bank and Trust Company of Connecticut, National Association, as
Lease Indenture Trustee and as Pass Through Trustee, dated as of December 18,
2000    f.   Participation Agreement (Morgantown L2) among Southern Energy
Mid-Atlantic, LLC, as Lessee, Morgantown OL2 LLC, as Owner Lessor, Wilmington
Trust Company, as Owner Manager, SEMA OP2, as Owner Participant and State Street
Bank and Trust Company of Connecticut, National Association, as Lease Indenture
Trustee and as Pass Through Trustee, dated as of December 18, 2000    g.  
Participation Agreement (Morgantown L3) among Southern Energy Mid-Atlantic, LLC,
as Lessee, Morgantown OL3 LLC, as Owner Lessor, Wilmington Trust Company, as
Owner Manager, SEMA OP4, as Owner Participant and State Street Bank and Trust
Company of Connecticut, National Association, as Lease Indenture Trustee and as
Pass Through Trustee, dated as of December 18, 2000    h.   Participation
Agreement (Morgantown L4) among Southern Energy Mid-Atlantic, LLC, as Lessee,
Morgantown OL4 LLC, as Owner Lessor, Wilmington Trust Company, as Owner Manager,
SEMA OP5, as Owner Participant and State Street Bank and Trust Company of
Connecticut, National Association, as Lease Indenture Trustee and as Pass
Through Trustee, dated as of December 18, 2000    i.   Participation Agreement
(Morgantown L5) among Southern Energy Mid-Atlantic, LLC, as Lessee, Morgantown
OL5 LLC, as Owner Lessor, Wilmington Trust Company, as Owner Manager, SEMA OP8,
as Owner Participant and State Street Bank and Trust Company of Connecticut,
National Association, as Lease Indenture Trustee and as Pass Through Trustee,
dated as of December 18, 2000    j.   Participation Agreement (Morgantown L6)
among Southern Energy Mid-Atlantic, LLC, as Lessee, Morgantown OL6 LLC, as Owner
Lessor, Wilmington Trust Company, as Owner Manager, SEMA OP9, as Owner
Participant and State Street Bank and Trust Company of Connecticut, National
Association, as Lease Indenture Trustee and as Pass Through Trustee, dated as of
December 18, 2000    k.   Participation Agreement (Morgantown L7) among Southern
Energy Mid-Atlantic, LLC, as Lessee, Morgantown OL7 LLC, as Owner Lessor,
Wilmington Trust Company, as Owner Manager, SEMA OP9, as Owner Participant and
State Street Bank and Trust Company of Connecticut, National Association, as
Lease Indenture Trustee and as Pass Through Trustee, dated as of December 18,
2000    IX.   Pass Through Agreements    a.   Pass Through Trust Agreement A
between Southern Energy Mid-Atlantic, LLC and State Street Bank and Trust
Company of Connecticut, National Association, as Pass Through Trustee, dated as
of December 19, 2000   

 

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b.   Pass Through Trust Agreement B between Southern Energy Mid-Atlantic, LLC
and State Street Bank and Trust Company of Connecticut, National Association, as
Pass Through Trustee, dated as of December 19, 2000    c.   Pass Through Trust
Agreement C between Southern Energy Mid-Atlantic, LLC and State Street Bank and
Trust Company of Connecticut, National Association, as Pass Through Trustee,
dated as of December 19, 2000    d.   Supplemental Pass Through Trust Agreement
A between Mirant Mid-Atlantic, LLC, and State Street Bank and Trust Company of
Connecticut, National Association, as Pass Through Trustee, dated as of June 29,
2001    e.   Supplemental Pass Through Trust Agreement B between Mirant
Mid-Atlantic, LLC and State Street Bank and Trust Company of Connecticut,
National Association, as Pass Through Trustee, dated June 29, 2001    f.  
Supplemental Pass Through Trust Agreement C between Mirant Mid-Atlantic, LLC and
State Street Bank and Trust Company of Connecticut, National Association, as
Pass Through Trustee, dated June 29, 2001    X.   Plans, Orders, Settlements and
other Transaction Documents    a.   Amended and Restated Second Amended Joint
Chapter 11 Plan of Reorganization for Mirant Corporation and its affiliated
debtors, dated as of December 7, 2005, In re Mirant Corporation, et al.,
Debtors, Case No. 03-46590    b.   Order Confirming the Amended and Restated
Second Amended Joint Chapter 11 Plan Of Reorganization For Mirant Corporation
And Its Affiliated Debtors dated December 9, 2005 (docket no. 12569), In re
Mirant Corporation, et al., Case No. 03-46590    c.   Settlement and Release of
Claims Agreement, dated January 14, 2005, among Mirant Corporation, Mirant
Americas, Mirant Americas Energy Marketing, Mirant Americas Energy Marketing
Investments, Inc., Mirant Americas Generation, LLC, Mirant California
Investments, Inc. (the predecessor to Mirant North America, LLC), Mirant
California, LLC, Mirant Delta, LLC, Mirant Potrero, LLC, Mirant Special
Procurement, Mirant Services, Mirant Americas Development, Inc., PG&E, Southern
California Edison Company, San Diego Gas and Electric Company, the CPUC, the
DWR, the EOB and the Attorney General of the State of California    d.  
Purchase Agreement, dated December 20, 2005, among Mirant North America, LLC,
MNA Finance Corp., the Guarantors thereto, J.P. Morgan Securities Inc., Deutsche
Bank Securities Inc., Goldman, Sachs & Co., Credit Suisse First Boston LLC,
Lehman Brothers Inc. and Greenwich Capital Markets, Inc.    e.   Indenture,
dated as of December 23, 2005, among Mirant North America, LLC, MNA Finance
Corp., the Guarantors thereto, J.P. Morgan Securities Inc., Deutsche Bank
Securities Inc., Goldman, Sachs & Co., Credit Suisse First Boston LLC, Lehman
Brothers Inc., Greenwich Capital Markets, Inc. and Law Debenture Trust Company
of New York, as trustee    f.   Guarantee Agreements by which the Guarantors to
the Indenture guarantee, on a senior unsecured basis, $850,000,000 aggregate
principal amount of 7.375% Senior Notes due 2013 issued pursuant to the
Indenture    g.   Escrow and Security Agreement, dated as of December 23, 2005,
between Mirant North America Escrow, LLC, MNA Finance Corp. and Deutsche   

 

9

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  Bank Trust Company Americas, as escrow agent    h.   Registration Rights
Agreement, dated as of December 23, 2005, among Mirant North America, LLC, MNA
Finance Corp., the Guarantors thereto, J.P. Morgan Securities Inc., Deutsche
Bank Securities Inc., Goldman, Sachs & Co., Credit Suisse First Boston LLC,
Lehman Brothers Inc. and Greenwich Capital Markets, Inc.   

 

10

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EXHIBIT G

FORM OF EXEMPTION CERTIFICATE

Reference is made to the Credit Agreement, dated as of January 3, 2006 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Mirant North America, LLC (the “Borrower”), the Lenders party
thereto, the Co-Syndication Agents named therein, and JPMorgan Chase Bank, N.A.,
as administrative agent (in such capacity, the “Administrative Agent”). Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.
                                              (the “Non-U.S. Lender”) is
providing this certificate pursuant to Section 2.19(d) of the Credit Agreement.
The Non-U.S. Lender hereby represents and warrants that:

1. The Non-U.S. Lender is the sole record and beneficial owner of the Loans in
respect of which it is providing this certificate.

2. The Non-U.S. Lender is not a “bank” for purposes of Section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended (the “Code”). In this regard, the
Non-U.S. Lender further represents and warrants that:

(a) the Non-U.S. Lender is not subject to regulatory or other legal requirements
as a bank in any jurisdiction; and

(b) the Non-U.S. Lender has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any Governmental Authority,
any application made to a rating agency or qualification for any exemption from
tax, securities law or other legal requirements.

3. The Non-U.S. Lender is not a 10-percent shareholder of the Borrower within
the meaning of Section 881(c)(3)(B) of the Code.

4. The Non-U.S. Lender is not a controlled foreign corporation receiving
interest from a related person within the meaning of Section 881(c)(3)(C) of the
Code.

IN WITNESS WHEREOF, the undersigned has duly executed this certificate.

 

[NAME OF NON-U.S. LENDER]   By:  

 

    Name:         Title:           Date:        

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EXHIBIT H

FORM OF

LENDER ADDENDUM

The undersigned Lender (i) agrees to all of the provisions of the Credit
Agreement, dated as of January 3, 2006 (the “Credit Agreement”), among Mirant
North America, LLC (the “Borrower”), the Lenders party thereto, the
Co-Syndication Agents named therein and JPMorgan Chase Bank, N.A., as
Administrative Agent, and (ii) becomes a party thereto, as a Lender, with
obligations applicable to such Lender thereunder, including, without limitation,
the obligation to make extensions of credit to the Borrower in an aggregate
principal amount not to exceed the amount of its Term Commitment and/or
Revolving Commitment, as the case may be, as set forth opposite the undersigned
Lender’s name in Schedule 1.1A to the Credit Agreement, as such amount may be
changed from time to time as provided in the Credit Agreement. Unless otherwise
defined herein, terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement.

 

 

      (Name of Lender) By:  

 

  Name:   Title:

Dated as of                             , 2006 [Insert scheduled Closing Date]

 

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EXHIBIT I

FORM OF FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT

Intercreditor Agreement (this “Agreement”), dated as of                     ,
20    , among JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such
capacity, with its successors and assigns, and as more specifically defined
below, the “First Priority Agent”) for the First Priority Secured Parties (as
defined below),                             , a                              (in
such capacity, with its successors and assigns, and as more specifically defined
below, the “Second Priority Secured Party”), MIRANT NORTH AMERICA, LLC (the
“Borrower”) and each of the other Loan Parties (as defined below) party hereto.

RECITALS

WHEREAS, the Borrower, the First Priority Agent and certain financial
institutions and other entities are parties to the Credit Agreement, dated as of
January     , 2006 (the “Existing First Priority Agreement”), pursuant to which
such financial institutions and other entities have agreed to make loans and
extend other financial accommodations to the Borrower; and

WHEREAS, the Borrower and the Second Priority Secured Party are parties to a
[IDENTIFY PPA/FSA] (the “Existing Second Priority Agreement”), pursuant to which
[DESCRIBE PPA/FSA]; and

WHEREAS, the Borrower and the other Loan Parties have granted to the First
Priority Agent security interests in the Common Collateral as security for
payment and performance of the First Priority Obligations; and

WHEREAS, the Borrower and the other Loan Parties propose to grant to the Second
Priority Secured Party junior security interests in the Common Collateral as
security for payment and performance of the Second Priority Obligations; and

WHEREAS, pursuant to the terms of the Existing First Priority Agreement, the
First Priority Creditors under the Existing First Priority Agreement have agreed
to permit the Borrower and the other Loan Parties to grant junior security
interests in the Common Collateral to the Second Priority Secured Party on the
terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained and other good and valuable consideration, the existence and
sufficiency of which is expressly recognized by all of the parties hereto, the
parties agree as follows:

SECTION 2.     Definitions.

1.1.       Defined Terms. The following terms, as used herein, have the
following meanings:

“Additional First Priority Agreement” means any agreement approved for
designation as such by the First Priority Agent and the Second Priority Secured
Party.

 

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“Additional Second Priority Agreement” means any agreement approved for
designation as such by the First Priority Agent and the Second Priority Secured
Party.

“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. §101 et
seq.), as amended from time to time.

“Borrower” has the meaning set forth in the introductory paragraph hereof.

“Cash Management Obligations” means any obligations owed to any First Priority
Secured Party (or any of its affiliates) in respect of any cash management
arrangement between the Borrower and such First Priority Secured Party (or any
of its affiliates) (to the extent designated by the Borrower as a “Specified
Cash Management Program” under any First Priority Agreement).

“Credit Party” means the Borrower and each direct or indirect affiliate or
shareholder (or equivalent) of the Borrower or any of its affiliates that is now
or hereafter becomes a party to any First Priority Document or Second Priority
Document. All references in this Agreement to any Credit Party shall include
such Credit Party as a debtor-in-possession and any receiver or trustee for such
Credit Party in any Insolvency Proceeding.

“Common Collateral” means all assets that are both First Priority Collateral and
Second Priority Collateral.

“Comparable Second Priority Security Document” means, in relation to any Common
Collateral subject to any First Priority Security Document, that Second Priority
Security Document that creates a security interest in the same Common
Collateral, granted by the same Credit Party, as applicable.

“DIP Financing” has the meaning set forth in Section 5.2.

“Enforcement Action” means, with respect to the First Priority Obligations or
the Second Priority Obligations, any demand for payment or acceleration thereof,
the exercise of any rights and remedies with respect to any Common Collateral
securing such obligations or the commencement or prosecution of enforcement of
any of the rights and remedies under, as applicable, the First Priority
Documents or the Second Priority Documents, or applicable law, including without
limitation the exercise of any rights of set-off or recoupment, and the exercise
of any rights or remedies of a secured creditor under the Uniform Commercial
Code of any applicable jurisdiction or under the Bankruptcy Code.

“Existing First Priority Agreement” has the meaning set forth in the recitals to
this Agreement.

“Existing Second Priority Agreement” has the meaning set forth in the recitals
to this Agreement.

“First Priority Agent” has the meaning set forth in the introductory paragraph
hereof. In the case of any Replacement First Priority Agreement, the First
Priority Agent shall be the Person identified as such in such Agreement.

“First Priority Agreement” means the collective reference to (a) the Existing
First Priority Agreement, (b) any Additional First Priority Agreement and
(c) any other credit agreement, loan agreement, note agreement, promissory note,
indenture or other agreement or instrument evidencing or governing the terms of
any indebtedness or other financial accommodation that has been incurred to
extend, replace, refinance or refund in whole or in part the indebtedness and
other obligations outstanding under the

 

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Existing First Priority Agreement, any Additional First Priority Agreement or
any other agreement or instrument referred to in this clause (c) unless such
agreement or instrument expressly provides that it is not intended to be and is
not a First Priority Agreement hereunder (a “Replacement First Priority
Agreement”). Any reference to the First Priority Agreement hereunder shall be
deemed a reference to any First Priority Agreement then extant.

“First Priority Collateral” means all assets, whether now owned or hereafter
acquired by the Borrower or any other Credit Party, in which a Lien is granted
or purported to be granted to any First Priority Secured Party as security for
any First Priority Obligation.

“First Priority Creditors” means the “Lenders” as defined in the First Priority
Agreement, or any Persons that are designated under the First Priority Agreement
as the “First Priority Creditors” for purposes of this Agreement.

“First Priority Documents” means the First Priority Agreement, each First
Priority Security Document and each First Priority Guarantee.

“First Priority Guarantee” means any guarantee by any Credit Party of any or all
of the First Priority Obligations.

“First Priority Lien” means any Lien created by the First Priority Security
Documents.

“First Priority Obligations” means (a) all principal of and interest (including
without limitation any Post-Petition Interest) and premium (if any) on all loans
made pursuant to the First Priority Agreement, (b) all reimbursement obligations
(if any) and interest thereon (including without limitation any Post-Petition
Interest) with respect to any letter of credit or similar instruments issued
pursuant to the First Priority Agreement, (c) all Hedging Obligations, (d) all
Cash Management Obligations and (e) all guarantee obligations, fees, expenses
and other amounts payable from time to time pursuant to the First Priority
Documents, in each case whether or not allowed or allowable in an Insolvency
Proceeding. To the extent any payment with respect to any First Priority
Obligation (whether by or on behalf of any Credit Party, as proceeds of
security, enforcement of any right of setoff or otherwise) is declared to be a
fraudulent conveyance or a preference in any respect, set aside or required to
be paid to a debtor in possession, any Second Priority Secured Party, receiver
or similar Person, then the obligation or part thereof originally intended to be
satisfied shall, for the purposes of this Agreement and the rights and
obligations of the First Priority Secured Parties and the Second Priority
Secured Parties, be deemed to be reinstated and outstanding as if such payment
had not occurred.

“First Priority Obligations Payment Date” means the first date on which (a) the
First Priority Obligations (other than those that constitute Unasserted
Contingent Obligations) have been indefeasibly paid in cash in full (or cash
collateralized or defeased in accordance with the terms of the First Priority
Documents), (b) all commitments to extend credit under the First Priority
Documents have been terminated, (c) there are no outstanding letters of credit
or similar instruments issued under the First Priority Documents (other than
such as have been cash collateralized or defeased in accordance with the terms
of the First Priority Security Documents), and (d) the First Priority Agent has
delivered a written notice to the Second Priority Secured Party stating that the
events described in clauses (a), (b) and (c) have occurred to the satisfaction
of the First Priority Secured Parties.

“First Priority Secured Parties” means the First Priority Agent, the First
Priority Creditors and any other holders of the First Priority Obligations.

 

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“First Priority Security Documents” means the “Security Documents” as defined in
the First Priority Agreement, and any other documents that are designated under
the First Priority Agreement as “First Priority Security Documents” for purposes
of this Agreement.

“Hedging Obligations” means, with respect to any Credit Party, any obligations
of such Credit Party owed in respect of any swap agreement or hedge agreement in
respect of interest rates or currency exchange rates to any First Priority
Creditor (or any of its affiliates) or any other Person which, at the time such
swap agreement or hedge agreement was entered into was a First Priority Creditor
(or any of its affiliates).

“Insolvency Proceeding” means any proceeding in respect of bankruptcy,
insolvency, winding up, receivership, dissolution or assignment for the benefit
of creditors, in each of the foregoing events whether under the Bankruptcy Code
or any similar federal, state or foreign bankruptcy, insolvency, reorganization,
receivership or similar law.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, deed
to secure debt, lien, pledge, hypothecation, assignment, encumbrance, charge or
security interest in, on or of such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities.

“Person” means any person, individual, sole proprietorship, partnership, joint
venture, corporation, limited liability company, unincorporated organization,
association, institution, entity, party, including any government and any
political subdivision, agency or instrumentality thereof.

“Post-Petition Interest” means any interest or entitlement to fees or expenses
or other charges that accrues after the commencement of any Insolvency
Proceeding, whether or not allowed or allowable in any such Insolvency
Proceeding.

“Replacement First Priority Agreement” has the meaning set forth in the
definition of “First Priority Agreement”.

“Second Priority Agreement” means the collective reference to (a) the Existing
Second Priority Agreement and (b) any Additional Second Priority Agreement. Any
reference to the Second Priority Agreement hereunder shall be deemed a reference
to any Second Priority Agreement then extant.

“Second Priority Collateral” means all assets, whether now owned or hereafter
acquired by the Borrower or any other Credit Party, in which a Lien is granted
or purported to be granted to the Second Priority Secured Party as security for
any Second Priority Obligation.

“Second Priority Documents” means each Second Priority Agreement, each Second
Priority Security Document and each Second Priority Guarantee.

“Second Priority Guarantee” means any guarantee by any Credit Party of any or
all of the Second Priority Obligations.

“Second Priority Lien” means any Lien created by the Second Priority Security
Documents.

 

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“Second Priority Obligations” means all guarantee obligations, fees, expenses
and other amounts payable from time to time pursuant to the Second Priority
Documents, in each case whether or not allowed or allowable in an Insolvency
Proceeding. To the extent any payment with respect to any Second Priority
Obligation (whether by or on behalf of any Credit Party, as proceeds of
security, enforcement of any right of setoff or otherwise) is declared to be a
fraudulent conveyance or a preference in any respect, set aside or required to
be paid to a debtor in possession, any First Priority Secured Party, receiver or
similar Person, then the obligation or part thereof originally intended to be
satisfied shall, for the purposes of this Agreement and the rights and
obligations of the First Priority Secured Parties and the Second Priority
Secured Parties, be deemed to be reinstated and outstanding as if such payment
had not occurred.

“Second Priority Secured Party” has the meaning set forth in the introductory
paragraph hereof, but shall also include any Person identified as a “Second
Priority Secured Party” in any Second Priority Agreement other than the Existing
Second Priority Agreement.

“Second Priority Security Documents” means the “[Security Documents]” as defined
in the Second Priority Agreement and any documents that are designated under the
Second Priority Agreement as “Second Priority Security Documents” for purposes
of this Agreement.

“Secured Parties” means the First Priority Secured Parties and the Second
Priority Secured Party.

“Second Priority Obligations” means all guarantee obligations, fees, expenses
and other amounts payable from time to time pursuant to the Second Priority
Documents, in each case whether or not allowed or allowable in an Insolvency
Proceeding. To the extent any payment with respect to any Second Priority
Obligation (whether by or on behalf of any Credit Party, as proceeds of
security, enforcement of any right of setoff or otherwise) is declared to be a
fraudulent conveyance or a preference in any respect, set aside or required to
be paid to a debtor in possession, any First Priority Secured Party, receiver or
similar Person, then the obligation or part thereof originally intended to be
satisfied shall, for the purposes of this Agreement and the rights and
obligations of the First Priority Secured Parties and the Second Priority
Secured Parties, be deemed to be reinstated and outstanding as if such payment
had not occurred.

“Second Priority Secured Party” has the meaning set forth in the introductory
paragraph hereof, but shall also include any Person identified as a “Second
Priority Secured Party” in any Second Priority Agreement other than the Existing
Second Priority Agreement.

“Second Priority Security Documents” means the “[Security Documents]” as defined
in the Second Priority Agreement and any documents that are designated under the
Second Priority Agreement as “Second Priority Security Documents” for purposes
of this Agreement.

“Secured Parties” means the First Priority Secured Parties and the Second
Priority Secured Party.

First Priority Document or Second Priority Document or any other circumstance
whatsoever and (iii) the fact that any such Liens in favor of any First Priority
Secured Party securing any of the First Priority Obligations are
(x) subordinated to any Lien securing any obligation of any Credit Party other
than the Second Priority Obligations or (y) otherwise subordinated, voided,
avoided, invalidated or lapsed.

(b) No First Priority Secured Party shall, and the Second Priority Secured Party
shall not, object to or contest, or support any other Person in contesting or
objecting to, in any proceeding (including without limitation, any Insolvency
Proceeding), the validity, extent, perfection, priority or enforceability of any
security interest in the Common Collateral granted to the other. Notwithstanding
any failure by any First Priority Secured Party or the Second Priority Secured
Party to perfect its security interests in the

 

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Common Collateral or any avoidance, invalidation or subordination by any third
party or court of competent jurisdiction of the security interests in the Common
Collateral granted to the First Priority Secured Parties or the Second Priority
Secured Party, the priority and rights as between the First Priority Secured
Parties and the Second Priority Secured Party with respect to the Common
Collateral shall be as set forth herein.

2.2      Nature of First Priority Obligations. The Second Priority Secured Party
acknowledges that a portion of the First Priority Obligations represents debt
that is revolving in nature and that the amount thereof that may be outstanding
at any time or from time to time may be increased or reduced and subsequently
reborrowed, and that the terms of the First Priority Obligations may be
modified, extended or amended from time to time, and that the aggregate amount
of the First Priority Obligations may be increased, replaced or refinanced, in
each event, without notice to or consent by the Second Priority Secured Party
and without affecting the provisions hereof. The Lien priorities provided in
Section 2.1 shall not be altered or otherwise affected by any such amendment,
modification, supplement, extension, repayment, reborrowing, increase,
replacement, renewal, restatement or refinancing of either the First Priority
Obligations or the Second Priority Obligations, or any portion thereof.

2.3      Agreements Regarding Actions to Perfect Liens. (a) The Second Priority
Secured Party agrees that UCC-1 financing statements, patent, trademark or
copyright filings or other filings or recordings filed or recorded by or on
behalf of the Second Priority Secured Party shall be in form satisfactory to the
First Priority Agent.

(b) The Second Priority Secured Party agrees that all mortgages, deeds of trust,
deeds and similar instruments (collectively, “mortgages”) now or thereafter
filed against real property in favor of or for the benefit of the Second
Priority Secured Party shall be in form satisfactory to the First Priority Agent
and shall contain the following notation: “The lien created by this mortgage on
the property described herein is junior and subordinate to the lien on such
property created by any mortgage, deed of trust or similar instrument now or
hereafter granted to JPMorgan Chase Bank, N.A., as Administrative Agent, and its
successors and assigns, in such property, in accordance with the provisions of
the Intercreditor Agreement dated as of                      , 20     among
JPMorgan Chase Bank, N.A., as Administrative Agent,                      as
                    , and the Loan Parties referred to therein, as amended from
time to time.”

(c) The First Priority Agent hereby acknowledges that, to the extent that it
holds, or a third party holds on its behalf, physical possession of or “control”
(as defined in the Uniform Commercial Code) over Common Collateral pursuant to
the First Priority Security Documents, such possession or control is also for
the benefit of the Second Priority Secured Party solely to the extent required
to perfect its security interest in such Common Collateral. Nothing in the
preceding sentence shall be construed to impose any duty on the First Priority
Agent (or any third party acting on its behalf) with respect to such Common
Collateral or provide the Second Priority Secured Party with any rights with
respect to such Common Collateral beyond those specified in this Agreement and
the Second Priority Security Documents, provided that subsequent to the
occurrence of the First Priority Obligations Payment Date, the First Priority
Agent shall (i) deliver to the Second Priority Secured Party, at the Borrower’s
sole cost and expense, the Common Collateral in its possession or control
together with any necessary endorsements to

the extent required by the Second Priority Documents or (ii) direct and deliver
such Common Collateral as a court of competent jurisdiction otherwise directs,
and provided, further, that the provisions of this Agreement are intended solely
to govern the respective Lien priorities as between the First Priority

 

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Secured Parties and the Second Priority Secured Party and shall not impose on
the First Priority Secured Parties any obligations in respect of the disposition
of any Common Collateral (or any proceeds thereof) that would conflict with
prior perfected Liens or any claims thereon in favor of any other Person that is
not a Secured Party.

2.4      No New Liens. So long as the First Priority Obligations Payment Date
has not occurred, the parties hereto agree that (a) there shall be no Lien, and
no Credit Party shall have any right to create any Lien, on any assets of any
Credit Party securing any Second Priority Obligation if these same assets are
not subject to, and do not become subject to, a Lien securing the First Priority
Obligations and (b) if the Second Priority Secured Party shall acquire or hold
any Lien on any assets of any Credit Party securing any Second Priority
Obligation which assets are not also subject to the first-priority Lien of the
First Priority Agent under the First Priority Documents, then the Second
Priority Secured Party, upon demand by the First Priority Agent, notwithstanding
anything to the contrary in any other Second Priority Document either
(i) release such Lien or (ii) assign it to the First Priority Agent as security
for the First Priority Obligations (in which case the Second Priority Secured
Party may retain a junior lien on such assets subject to the terms hereof). To
the extent that the foregoing provisions are not complied with for any reason,
without limiting any other rights and remedies available to the First Priority
Secured Parties, the Second Priority Secured Party agrees that any amounts
received by or distributed to it pursuant to or as a result of Liens granted in
contravention of this Section 2.4 shall be subject to Section 4.1.

SECTION 3.    Enforcement Rights.

3.1      Exclusive Enforcement. Until the First Priority Obligations Payment
Date has occurred, whether or not an Insolvency Proceeding has been commenced by
or against any Credit Party, the First Priority Secured Parties shall have the
exclusive right to take and continue any Enforcement Action with respect to the
Common Collateral, without any consultation with or consent of the Second
Priority Secured Party, but subject to the proviso set forth in Section 5.1.
Upon the occurrence and during the continuance of a default or an event of
default under the First Priority Documents, the First Priority Agent and the
other First Priority Secured Parties may take and continue any Enforcement
Action with respect to the First Priority Obligations and the Common Collateral
in such order and manner as they may determine in their sole discretion.

3.2      Standstill and Waivers. The Second Priority Secured Party agrees that,
until the First Priority Obligations Payment Date has occurred, subject to the
proviso set forth in Section 5.1:

(a) it will not take or cause to be taken any action, the purpose or effect of
which is to make any Lien in respect of any Second Priority Obligation pari
passu with or senior to, or to give any Person any preference or priority
relative to, the Liens with respect to the First Priority Obligations or the
First Priority Secured Parties with respect to any of the Common Collateral;

(b) it will not contest, oppose, object to, interfere with, hinder or delay, in
any manner, whether by judicial proceedings (including without limitation the
filing of an Insolvency Proceeding) or otherwise, any foreclosure, sale, lease,
exchange, transfer or other disposition of the Common Collateral by any First
Priority Secured Party or any other Enforcement Action taken (or any forbearance
from taking any Enforcement Action) by or on behalf of any First Priority
Secured Party;

 

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(c) it has no right to (i) direct either the First Priority Agent or any other
First Priority Secured Party to exercise any right, remedy or power with respect
to the Common Collateral or pursuant to the First Priority Security Documents or
(ii) consent or object to the exercise by the First Priority Agent or any other
First Priority Secured Party of any right, remedy or power with respect to the
Common Collateral or pursuant to the First Priority Security Documents or to the
timing or manner in which any such right is exercised or not exercised (or, to
the extent they may have any such right described in this clause (c), whether as
a junior lien creditor or otherwise, they hereby irrevocably waive such right);

(d) it will not institute any suit or other proceeding or assert in any suit,
Insolvency Proceeding or other proceeding any claim against any First Priority
Secured Party seeking damages from or other relief by way of specific
performance, instructions or otherwise, with respect to, and no First Priority
Secured Party shall be liable for, any action taken or omitted to be taken by
any First Priority Secured Party with respect to the Common Collateral or
pursuant to the First Priority Documents;

(e) it will not make any judicial or nonjudicial claim or demand or commence any
judicial or non-judicial proceedings against any Credit Party or any of its
subsidiaries or affiliates under or with respect to any Second Priority Security
Document seeking payment or damages from or other relief by way of specific
performance, instructions or otherwise under or with respect to any Second
Priority Security Document (other than filing a proof of claim) or exercise any
right, remedy or power under or with respect to, or otherwise take any action to
enforce, other than filing a proof of claim, any Second Priority Security
Document;

(f) it will not commence judicial or nonjudicial foreclosure proceedings with
respect to, seek to have a trustee, receiver, liquidator or similar official
appointed for or over, attempt any action to take possession of any Common
Collateral, exercise any right, remedy or power with respect to, or otherwise
take any action to enforce their interest in or realize upon, the Common
Collateral or pursuant to the Second Priority Security Documents; and

(g) they will not seek, and hereby waive any right, to have the Common
Collateral or any part thereof marshaled upon any foreclosure or other
disposition of the Common Collateral.

3.3      Judgment Creditors. In the event that the Second Priority Secured Party
becomes a judgment lien creditor in respect of Common Collateral as a result of
its enforcement of its rights as an unsecured creditor, such judgment lien shall
be subject to the terms of this Agreement for all purposes (including in
relation to the First Priority Liens and the First Priority Obligations) to the
same extent as all other Liens securing the Second Priority Obligations are
subject to the terms of this Agreement.

3.4      Cooperation. The Second Priority Secured Party agrees that it shall
take such actions as the First Priority Agent shall request in connection with
the exercise by the First Priority Secured Parties of their rights set forth
herein.

3.5      No Additional Rights For the Loan Parties Hereunder. Except as provided
in Section 3.6, if any First Priority Secured Party or the Second Priority
Secured Party shall enforce its rights or remed in violation of the terms of
this Agreement, no Credit Party shall be entitled to use such violation as a
defense to any action by any First Priority Secured Party or the Second Priority
Secured Party, nor to assert such violation as a counterclaim or basis for set
off or recoupment against any First Priority Secured Party or the Second
Priority Secured Party.

 

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3.6      Actions Upon Breach. (a) If the Second Priority Secured Party, contrary
to this Agreement, commences or participates in any action or proceeding against
any Credit Party or the Common Collateral, such Credit Party, with the prior
written consent of the First Priority Agent, may interpose as a defense or
dilatory plea the making of this Agreement, and any First Priority Secured Party
may intervene and interpose such defense or plea in its or their name or in the
name of such Credit Party.

(b) Should the Second Priority Secured Party, contrary to this Agreement, in any
way take, attempt to or threaten to take any action with respect to the Common
Collateral (including, without limitation, any attempt to realize upon or
enforce any remedy with respect to this Agreement), or fail to take any action
required by this Agreement, any First Priority Secured Party (in its own name or
in the name of the relevant Credit Party) or the relevant Credit Party may
obtain relief against the Second Priority Secured Party by injunction, specific
performance and/or other appropriate equitable relief, it being understood and
agreed by the Second Priority Secured Party that (i) the First Priority Secured
Parties’ damages from its actions may at that time be difficult to ascertain and
may be irreparable, and (ii) the Second Priority Secured Party waives any
defense that the Loan Parties and/or the First Priority Secured Parties cannot
demonstrate damage and/or be made whole by the awarding of damages.

SECTION 4.    Application Of Proceeds Of Common Collateral; Dispositions And
Releases Of Common Collateral; Inspection and Insurance.

4.1      Application of Proceeds; Turnover Provisions. All proceeds of Common
Collateral (including without limitation any interest earned thereon) resulting
from the sale, collection or other disposition of Common Collateral in
connection with or resulting from any Enforcement Action, and whether or not
pursuant to an Insolvency Proceeding, shall be distributed as follows: first to
the First Priority Agent for application to the First Priority Obligations in
accordance with the terms of the First Priority Documents, until the First
Priority Obligations Payment Date has occurred and thereafter, to the Second
Priority Secured Party for application in accordance with the Second Priority
Documents. Until the occurrence of the First Priority Obligations Payment Date,
any Common Collateral, including without limitation any such Common Collateral
constituting proceeds, that may be received by the Second Priority Secured Party
in violation of this Agreement shall be segregated and held in trust and
promptly paid over to the First Priority Agent, for the benefit of the First
Priority Secured Parties, in the same form as received, with any necessary
endorsements, and the Second Priority Secured Party hereby authorizes the First
Priority Agent to make any such endorsements as agent for the Second Priority
Secured Party (which authorization, being coupled with an interest, is
irrevocable).

4.2      Releases of Second Priority Lien. (a) Upon any release, sale or
disposition of Common Collateral permitted pursuant to the terms of the First
Priority Documents that results in the release of the First Priority Lien on any
Common Collateral (including without limitation any sale or other disposition
pursuant to any Enforcement Action), the Second Priority Lien on such Common
Collateral (excluding any portion of the proceeds of such Common Collateral
remaining after the First Priority Obligations Payment Date occurs) shall be
automatically and unconditionally released with no further consent or action of
any Person.

(b) The Second Priority Secured Party shall promptly execute and deliver such
release documents and instruments and shall take such further actions as the
First Priority Agent shall request to evidence any release of the Second
Priority Lien described in paragraph (a). The Second Priority Secured Party
hereby appoints the First Priority Agent and any officer or duly authorized
person of the First Priority Agent, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power of attorney in the place
and stead of the Second Priority Secured Party and in the name of the Second
Priority Secured Party or in the First Priority Agent’s own name, from time to
time, in the First Priority Agent’s sole discretion, for the purposes of
carrying out the terms of this Section 4.2, to take any

 

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and all appropriate action and to execute and deliver any and all documents and
instruments as may be necessary or desirable to accomplish the purposes of this
Section 4.2, including, without limitation, any financing statements,
endorsements, assignments, releases or other documents or instruments of
transfer (which appointment, being coupled with an interest, is irrevocable).

4.3      Inspection Rights and Insurance. (a) Any First Priority Secured Party
and its representatives and invitees may at any time inspect, repossess, remove
and otherwise deal with the Common Collateral, and the First Priority Agent may
advertise and conduct public auctions or private sales of the Common Collateral,
in each case without notice to, the involvement of or interference by the Second
Priority Secured Party or liability to the Second Priority Secured Party.

(b) Until the First Priority Obligations Payment Date has occurred, the First
Priority Agent will have the sole and exclusive right (i) to be named as
additional insured and loss payee under any insurance policies maintained from
time to time by any Credit Party (except that the Second Priority Secured Party
shall have the right to be named as additional insured and loss payee so long as
its second lien status is identified in a manner satisfactory to the First
Priority Agent); (ii) to adjust or settle any insurance policy or claim covering
the Common Collateral in the event of any loss thereunder and (iii) to approve
any award granted in any condemnation or similar proceeding affecting the Common
Collateral.

SECTION 5.    Insolvency Proceedings.

5.1      Filing of Motions. Until the First Priority Obligations Payment Date
has occurred, the Second Priority Secured Party agrees that the Second Priority
Secured Party shall not, in or in connection with any Insolvency Proceeding,
file any pleadings or motions, take any position at any hearing or proceeding of
any nature, or otherwise take any action whatsoever, in each case in respect of
any of the Common Collateral, including, without limitation, with respect to the
determination of any Liens or claims held by the First Priority Agent (including
the validity and enforceability thereof) or any other First Priority Secured
Party or the value of any claims of such parties under Section 506(a) of the
Bankruptcy Code or otherwise; provided that the Second Priority Secured Party
may file a proof of claim in an Insolvency Proceeding, subject to the
limitations contained in this Agreement and only if consistent with the terms
and the limitations on the Second Priority Secured Party imposed hereby.

5.2      Financing Matters. If any Credit Party becomes subject to any
Insolvency Proceeding, and if the First Priority Agent or the other First
Priority Secured Parties desire to consent (or not object) to the use of cash
collateral under the Bankruptcy Code or to provide financing to any Credit Party
under the Bankruptcy Code or to consent (or not object) to the provision of such
financing to any Credit Party by any third party (any such financing, “DIP
Financing”), then the Second Priority Secured Party agrees that the Second
Priority Secured Party (a) will be deemed to have consented to, will raise no
objection to, nor support any other Person objecting to, the use of such cash
collateral or to such DIP Financing, (b) will not request or accept adequate
protection or any other relief in connection with the use of such cash
collateral or such DIP Financing except as set forth in paragraph 5.4 below and
(c) will subordinate (and will be deemed hereunder to have subordinated) the
Second Priority Liens (i) to such DIP Financing on the same terms as the First
Priority Liens are subordinated thereto (and such subordination will not alter
in any manner the terms of this Agreement), (ii) to any adequate protection
provided to the First Priority Secured Parties and (iii) to any “carve-out”
agreed to by the First Priority Agent or the other First Priority Secured
Parties, and (d) agrees that notice received two calendar days prior to the
entry of an order approving such usage of cash collateral or approving such
financing shall be adequate notice.

5.3      Relief From the Automatic Stay. The Second Priority Secured Party
agrees that none of them will seek relief from the automatic stay or from any
other stay in any Insolvency Proceeding or take

 

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any action in derogation thereof, in each case in respect of any Common
Collateral, without the prior written consent of the First Priority Agent.

5.4      Adequate Protection. The Second Priority Secured Party agrees that it
shall not object, contest, or support any other Person objecting to or
contesting, (a) any request by the First Priority Agent or the other First
Priority Secured Parties for adequate protection or any adequate protection
provided to the First Priority Agent or the other First Priority Secured Parties
or (b) any objection by the First Priority Agent or any other First Priority
Secured Parties to any motion, relief, action or proceeding based on a claim of
a lack of adequate protection or (c) the payment of interest, fees, expenses or
other amounts to the First Priority Agent or any other First Priority Secured
Party under Section 506(b) or 506(c) of the Bankruptcy Code or otherwise.
Notwithstanding anything contained in this Section and in Section 5.2(b) (but
subject to all other provisions of this Agreement, including, without
limitation, Sections 5.2(a) and 5.3), in any Insolvency Proceeding, (i) if the
First Priority Secured Parties (or any subset thereof) are granted adequate
protection consisting of additional collateral (with replacement liens on such
additional collateral) and superpriority claims in connection with any DIP
Financing or use of cash collateral, and the First Priority Secured Parties do
not object to the adequate protection being provided to them, then in connection
with any such DIP Financing or use of cash collateral the Second Priority
Secured Party may seek or accept adequate protection consisting solely of (x) a
replacement Lien on the same additional collateral, subordinated to the Liens
securing the First Priority Obligations and such DIP Financing on the same basis
as the other Liens securing the Second Priority Obligations are so subordinated
to the First Priority Obligations under this Agreement and (y) superpriority
claims junior in all respects to the superpriority claims granted to the First
Priority Secured Parties, provided, however, that the Second Priority Secured
Party shall have irrevocably agreed, pursuant to Section 1129(a)(9) of the
Bankruptcy Code in any stipulation and/or order granting such adequate
protection, that such junior superpriority claims may be paid under any plan of
reorganization in any combination of cash, debt, equity or other property having
a value on the effective date of such plan equal to the allowed amount of such
claims and (ii) in the event the Second Priority Secured Party seeks or accepts
adequate protection in accordance with clause (i) above and such adequate
protection is granted in the form of additional collateral, then the Second
Priority Secured Party agrees that the First Priority Agent shall also be
granted a senior Lien on such additional collateral as security for the First
Priority Obligations and any such DIP Financing and that any Lien on such
additional collateral securing the Second Priority Obligations shall be
subordinated to the Liens on such collateral securing the First Priority
Obligations and any such DIP Financing (and all Obligations relating thereto)
and any other Liens granted to the First Priority Secured Parties as adequate
protection, with such subordination to be on the same terms that the other Liens
securing the Second Priority Obligations are subordinated to such First Priority
Obligations under this Agreement. The Second Priority Secured Party agrees that
except as expressly set forth in this Section it shall not seek or accept
adequate protection without the prior written consent of the First Priority
Agent.

5.5      Avoidance Issues. If any First Priority Secured Party is required in
any Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay
to the estate of any Credit Party, because such amount was avoided or ordered to
be paid or disgorged for any reason, including without limitation because it was
found to be a fraudulent or preferential transfer, any amount (a “Recovery”),
whether received as proceeds of security, enforcement of any right of set-off or
otherwise, then the First Priority Obligations shall be reinstated to the extent
of such Recovery and deemed to be outstanding as if such payment had not
occurred and the First Priority Obligations Payment Date shall be deemed not to
have occurred. If this Agreement shall have been terminated prior to such
Recovery, this Agreement shall be reinstated in full force and effect, and such
prior termination shall not diminish, release, discharge, impair or otherwise
affect the obligations of the parties hereto. The Second Priority Secured Party
agrees that it shall not be entitled to benefit from any avoidance action
affecting or otherwise relating to any distribution or allocation made in
accordance with this Agreement, whether by preference or otherwise, it being
understood and agreed that the benefit of such avoidance action otherwise
allocable to them shall

 

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instead be allocated and turned over for application in accordance with the
priorities set forth in this Agreement.

5.6      Asset Dispositions in an Insolvency Proceeding. The Second Priority
Secured Party shall not, in an Insolvency Proceeding or otherwise, oppose any
sale or disposition of any assets of any Credit Party that is supported by the
First Priority Secured Parties, and the Second Priority Secured Party will be
deemed to have consented under Section 363 of the Bankruptcy Code (and
otherwise) to any sale supported by the First Priority Secured Parties and to
have released their Liens on such assets.

5.7      Separate Grants of Security and Separate Classification. The Second
Priority Secured Party acknowledges and agrees that (a) the grants of Liens
pursuant to the First Priority Security Documents and the Second Priority
Security Documents constitute two separate and distinct grants of Liens and
(b) because of, among other things, their differing rights in the Common
Collateral, the Second Priority Obligations are fundamentally different from the
First Priority Obligations and must be separately classified in any plan of
reorganization proposed or adopted in an Insolvency Proceeding. To further
effectuate the intent of the parties as provided in the immediately preceding
sentence, if it is held that the claims of the First Priority Secured Parties
and the Second Priority Secured Party in respect of the Common Collateral
constitute only one secured claim (rather than separate classes of senior and
junior secured claims), then the Second Priority Secured Party hereby
acknowledge and agree that all distributions shall be made as if there were
separate classes of senior and junior secured claims against the Loan Parties in
respect of the Common Collateral (with the effect being that, to the extent that
the aggregate value of the Common Collateral is sufficient (for this purpose
ignoring all claims held by the Second Priority Secured Party), the First
Priority Secured Parties shall be entitled to receive, in addition to amounts
distributed to them in respect of principal, pre-petition interest and other
claims, all amounts owing in respect of Post-Petition Interest before any
distribution is made in respect of the claims held by the Second Secured
Priority Secured Party, with the Second Priority Secured Party hereby
acknowledging and agreeing to turn over to the First Priority Secured Parties
amounts otherwise received or receivable by them to the extent necessary to
effectuate the intent of this sentence, even if such turnover has the effect of
reducing the claim or recovery of the Second Priority Secured Party.

5.8      No Waivers of Rights of First Priority Secured Parties. Nothing
contained herein shall prohibit or in any way limit the First Priority Agent or
any other First Priority Secured Party from objecting in any Insolvency
Proceeding or otherwise to any action taken by the Second Priority Secured
Party, including the seeking by the Second Priority Secured Party of adequate
protection (except as provided in Section 5.4) or the asserting by the Second
Priority Secured Party of any of its rights and remedies under the Second
Priority Documents or otherwise.

5.9      Plans of Reorganization. The Second Priority Secured Party shall not
support or vote in favor of any plan of reorganization (and each shall be deemed
to have voted to reject any plan of reorganization) unless such plan (a) pays
off, in cash in full, all First Priority Obligations or (b) is accepted by the
class of holders of First Priority Obligations voting thereon and is supported
by the First Priority Agent.

5.10      Other Matters. To the extent that the Second Priority Secured Party
has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code
with respect to any of the Common Collateral, the Second Priority Secured Party
agrees not to assert any of such rights without the prior written consent of the
First Priority Agent; provided that if requested by the First Priority Agent,
the Second Priority Secured Party shall timely exercise such rights in the
manner requested by the First Priority Agent, including any rights to payments
in respect of such rights.

 

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5.11      Effectiveness in Insolvency Proceedings. This Agreement, which the
parties hereto expressly acknowledge is a “subordination agreement” under
section 510(a) of the Bankruptcy Code, shall be effective before, during and
after the commencement of an Insolvency Proceeding.

SECTION 6.    Second Priority Documents and First Priority Documents.

In the event the First Priority Agent enters into any amendment, waiver or
consent in respect of any of the First Priority Security Documents for the
purpose of adding to, or deleting from, or waiving or consenting to any
departures from any provisions of, any First Priority Security Document or
changing in any manner the rights of any parties thereunder, then such
amendment, waiver or consent shall apply automatically to any comparable
provision of the Comparable Second Priority Security Document without the
consent of or action by any Second Priority Secured Party (with all such
amendments, waivers and modifications subject to the terms hereof); provided
that (other than with respect to amendments, modifications or waivers that
secure additional extensions of credit and add additional secured creditors),
(i) no such amendment, waiver or consent shall have the effect of removing
assets subject to the Lien of any Second Priority Security Document, except to
the extent that a release of such Lien is permitted by Section 4.2, and
(ii) notice of such amendment, waiver or consent shall be given to the Second
Priority Secured Party no later than 30 days after its effectiveness, provided
that the failure to give such notice shall not affect the effectiveness and
validity thereof.

SECTION 7.    Reliance; Waivers; etc.

7.1      Reliance. The First Priority Documents are deemed to have been executed
and delivered, and all extensions of credit thereunder are deemed to have been
made or incurred, in reliance upon this Agreement. The Second Priority Secured
Party expressly waives all notice of the acceptance of and reliance on this
Agreement by the First Priority Secured Parties. The Second Priority Documents
are deemed to have been executed and delivered in reliance upon this Agreement.
The First Priority Agent expressly waives all notices of the acceptance of and
reliance by the Second Priority Secured Party.

7.2      No Warranties or Liability. The Second Priority Secured Party and the
First Priority Agent acknowledge and agree that neither has made any
representation or warranty with respect to the execution, validity, legality,
completeness, collectibility or enforceability of any other First Priority
Document or any Second Priority Document. Except as otherwise provided in this
Agreement, the Second Priority Secured Party and the First Priority Agent will
be entitled to manage and supervise their respective extensions of credit or
credit exposures to any Credit Party in accordance with law and their usual
practices, modified from time to time as they deem appropriate.

7.3      No Waivers. No right or benefit of any party hereunder shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of such party or any other party hereto or by any noncompliance by any
Credit Party with the terms and conditions of any of the First Priority
Documents or the Second Priority Documents.

SECTION 8.    Obligations Unconditional.

8.1      First Priority Obligations Unconditional. All rights and interests of
the First Priority Secured Parties hereunder, and all agreements and obligations
of the Second Priority Secured Party (and, to the extent applicable, the Loan
Parties) hereunder, shall remain in full force and effect irrespective of:

(a) any lack of validity or enforceability of any First Priority Document;

 

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(b) any change in the time, place or manner of payment of, or in any other term
of, all or any portion of the First Priority Obligations, or any amendment,
waiver or other modification, whether by course of conduct or otherwise, or any
refinancing, replacement, refunding or restatement of any First Priority
Document;

(c) prior to the First Priority Obligations Payment Date, any exchange, release,
voiding, avoidance or non-perfection of any security interest in any Common
Collateral or any other collateral, or any release, amendment, waiver or other
modification, whether by course of conduct or otherwise, or any refinancing,
replacement, refunding or restatement of all or any portion of the First
Priority Obligations or any guarantee or guaranty thereof; or

(d) any other circumstances that otherwise might constitute a defense available
to, or a discharge of, any Credit Party in respect of the First Priority
Obligations, or of the Second Priority Secured Party, or any Credit Party, to
the extent applicable, in respect of this Agreement.

8.2      Second Priority Obligations Unconditional. All rights and interests of
the Second Priority Secured Party hereunder, and all agreements and obligations
of the First Priority Secured Parties (and, to the extent applicable, the Loan
Parties) hereunder, shall remain in full force and effect irrespective of:

(a) any lack of validity or enforceability of any Second Priority Document;

(b) any change in the time, place or manner of payment of, or in any other term
of, all or any portion of the Second Priority Obligations, or any amendment,
waiver or other modification, whether by course of conduct or otherwise, or any
refinancing, replacement, refunding or restatement of any Second Priority
Document;

(c) any exchange, release, voiding, avoidance or non-perfection of any security
interest in any Common Collateral or any other collateral, or any release,
amendment, waiver or other modification, whether by course of conduct or
otherwise, or any refinancing, replacement, refunding or restatement of all or
any portion of the Second Priority Obligations or any guarantee or guaranty
thereof; or

(d) any other circumstances that otherwise might constitute a defense available
to, or a discharge of, any Credit Party in respect of the Second Priority
Obligations or any First Priority Secured Party in respect of this Agreement.

SECTION 9.    Miscellaneous.

9.1      Conflicts. In the event of any conflict between the provisions of this
Agreement and the provisions of any First Priority Document or any Second
Priority Document, the provisions of this Agreement shall govern.

9.2      Continuing Nature of Provisions. This Agreement shall continue to be
effective, and shall not be revocable by any party hereto, until the First
Priority Obligation Payment Date shall have occurred. This is a continuing
agreement and the First Priority Secured Parties and the Second Priority Secured
Party may continue, at any time and without notice to the other parties hereto,
to extend credit and other financial accommodations, lend monies and provide
indebtedness to, or for the benefit of, Borrower or any other Credit Party on
the faith hereof.

 

16

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9.3      Amendments; Waivers. (a) No amendment or modification of any of the
provisions of this Agreement shall be effective unless the same shall be in
writing and signed by the First Priority Agent and the Second Priority Secured
Party, and, in the case of amendments or modifications of Sections 3.5, 3.6, 9.5
or 9.6 that directly affect the rights or duties of any Credit Party, such
Credit Party.

(b) It is understood that the First Priority Agent, without the consent of any
other First Priority Secured Party or the Second Priority Secured Party, may in
its discretion determine that a supplemental agreement (which make take the form
of an amendment and restatement of this Agreement) is necessary or appropriate
to facilitate having additional indebtedness or other obligations (“Additional
Debt”) of any of the Loan Parties become First Priority Obligations under this
Agreement, which supplemental agreement shall specify whether such Additional
Debt constitutes First Priority Obligations, provided, that such Additional Debt
is permitted to be incurred by the First Priority Agreement then extant, and is
permitted by First Priority Agreement to be subject to the provisions of this
Agreement as First Priority Obligations.

9.4      Information Concerning Financial Condition of the Borrower and the
other Loan Parties. Each of the Second Priority Secured Party and the First
Priority Agent hereby assume responsibility for keeping itself informed of the
financial condition of the Borrower and each of the other Loan Parties and all
other circumstances bearing upon the risk of nonpayment of the First Priority
Obligations or the Second Priority Obligations. The Second Priority Secured
Party and the First Priority Agent hereby agree that no party shall have any
duty to advise any other party of information known to it regarding such
condition or any such circumstances. In the event the Second Priority Secured
Party or the First Priority Agent, in its sole discretion, undertakes at any
time or from time to time to provide any information to any other party to this
Agreement, it shall be under no obligation (a) to provide any such information
to such other party or any other party on any subsequent occasion, (b) to
undertake any investigation not a part of its regular business routine, or
(c) to disclose any other information.

9.5      GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, EXCEPT AS OTHERWISE REQUIRED BY
MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK ARE GOVERNED BY
THE LAWS OF SUCH JURISDICTION.

9.6      Submission to Jurisdiction. (a) Each First Priority Secured Party, the
Second Priority Secured Party and each Credit Party hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each such party hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each such party agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the any First Priority
Secured Party or the Second Priority Secured Party may otherwise have to bring
any action or proceeding against any Credit Party or its properties in the
courts of any jurisdiction.

(b) Each First Priority Secured Party, the Second Priority Secured Party and
each Credit Party hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so (i) any objection it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising

 

17

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out of or relating to this Agreement in any court referred to in paragraph
(a) of this Section and (ii) the defense of an inconvenient forum to the
maintenance of such action or proceeding.

(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.7. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

9.7      Notices. Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, telecopied, or sent by overnight express courier
service or United States mail and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of a telecopy or five
days after deposit in the United States mail (certified, with postage prepaid
and properly addressed). For the purposes hereof, the addresses of the parties
hereto (until notice of a change thereof is delivered as provided in this
Section) shall be as set forth below each party’s name on the signature pages
hereof, or, as to each party, at such other address as may be designated by such
party in a written notice to all of the other parties.

9.8      Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of each of the parties hereto and each of the First Priority
Secured Parties and the Second Priority Secured Party and their respective
successors and assigns, and nothing herein is intended, or shall be construed to
give, any other Person any right, remedy or claim under, to or in respect of
this Agreement or any Common Collateral.

9.9      Headings. Section headings used herein are for convenience of reference
only, are not part of this Agreement and shall not affect the construction of,
or be taken into consideration in interpreting, this Agreement.

9.10      Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

9.11      Other Remedies. For avoidance of doubt, it is understood that nothing
in this Agreement shall prevent the Second Priority Secured Party from
exercising any available remedy to accelerate the maturity of any obligations
owing under the Second Priority Agreement or to demand payment under any
guarantee in respect thereof.

9.12      Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. 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. This Agreement
shall become effective when it shall have been executed by each party hereto.

9.13      Additional Loan Parties. Each Person that becomes a Credit Party after
the date hereof shall become a party to this Agreement upon execution and
delivery by such Person of an Assumption Agreement in the form of Annex 1 to the
Guarantee and Collateral Agreement referred to in the First Priority Agreement.

 

18

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

JPMORGAN CHASE BANK, N.A., as First Priority Agent for and on behalf of the
First Priority Secured Parties By:  

 

Name: Title:

 

Address for Notices:  

[1111 Fannin Street, Floor 10]

[Houston, Texas 77002]

Attention:   [Loan and Agency Services] Telecopy No.:   [(713) 427-6307]

 

                    , as Second Priority Secured Party By:  

 

Name: Title: Address for Notices: Attention: Telecopy No.:

 

MIRANT NORTH AMERICA, LLC By:  

 

Name: Title:

 

Address for Notices:   1155 Perimeter Center West,   Suite 100   Atlanta, GA
30338 Attention:   [            ] Telecopy No.:   [            ]

 

19

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[LIST LOAN PARTIES] By:  

 

Name: Title: Address for Notices: Attention: Telecopy No.:

 

20

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EXHIBIT J-1

 

 

 

Application and Agreement for Irrevocable   JPMorgan Chase Bank, N.A            
Standby Letter of Credit  

 

 

This application and the Letter of Credit issued hereunder are issued under and
subject to and governed by the terms, provisions and covenants of the Credit
Agreement, dated as of January 3, 2006 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”) among Mirant North America,
LLC, the several Lenders from time to time parties thereto, Deutsche Bank
Securities Inc. and Goldman Sachs Credit Partners L.P., as co-syndication
agents, and JPMorgan Chase Bank, N.A., as administrative agent. Capitalized
terms used herein and not otherwise defined have the meaning assigned to them in
the Credit Agreement.

When transmitting this application by facsimile all pages must be transmitted.

 

To: JPMorgan Chase Bank, N.A. and/or its subsidiaries and/or affiliates (the
“Bank”).    Date:            

I. Pursuant to the Terms and Conditions contained herein and in the Credit
Agreement, please issue an IRREVOCABLE STANDBY Letter of Credit (together with
any replacements, extensions or modifications, the “Credit”) as a:

 

¨    Revolving Letter of Credit   

¨    Synthetic Letter of Credit

and transmit it by:

      ¨    Teletransmission    ¨    Courier    ¨    Air Mail (Domestic addresses
only)

If completing application in Microsoft Word, please enter data by ‘clicking’ on
the gray boxes.

 

 

Applicant/Obligor (Full name and address- jointly and severally if more than
one, individually and collectively, “Applicant/Obligor”):

 

[Signature lines are on last page].

 

   Beneficiary (Full name and address):

 

Account Party (Full name and address of entity to be named in Letter of Credit
if different than the above Applicant/Obligor):

 

   Advising Bank-Optional (If blank, Issuer will select its branch or affiliate
or correspondent in the domicile of the beneficiary):

 

Amount:

Up to an aggregate amount of

If not USD, indicate currency

   Expiry Date: Demands/claims must be presented to the counters of the Issuing
bank not later than                                .

 

1

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Complete only if Automatic Extension of the expiry date is required.

 

Credit to contain Automatic Extension clause with extension period of ¨ one
year/¨ other             (please specify).

 

No less than                                         calendar days non-extension
notice to the beneficiary.

 

Automatic Extension final expiration
date:                                        
                                (the date after which the Credit will no longer
be subject to Automatic Extension).

 

AVAILABLE BY (indicate A, B or C)

 

¨         A. Beneficiary’s dated statement referencing JPMorgan Chase Bank, N.A.
Letter of Credit Number indicating amount of demand/claim and purportedly signed
by an authorized person reading as follows (Please state within the quotation
marks the wording to appear on the statement to be presented):

 

“(insert appropriate reason for drawing)

 

”

 

Note: If Beneficiary is a bank, demands received by authenticated
teletransmission are acceptable in lieu of the beneficiary’s signed and dated
statement provided that such authenticated teletransmission contains the
beneficiary’s statement as provided for in the Credit.

 

¨          B. See attached sheet(s) for continuation of other documents and/or
special instructions, including a specimen to be used in connection with this
Application, which form an integral part of this Application. The Bank agrees to
issue the Credit substantially in the form of any such specimen, with such
changes as the Bank deems necessary or advisable, and such specimen should be
approved and signed by the applicant/obligor.

 

¨          C. Other:

 

 

 

Complete only when the Beneficiary’s bank or Correspondent is to issue its
guarantee or undertaking based on the issued Standby Letter of Credit.

 

We understand and agree that by making this request, we shall remain liable
under this Credit until Issuer is fully released in writing by such entity.

 

¨         Request Beneficiary’s bank to issue and deliver its:

(Specify type of bid or performance bond, guarantee, undertaking or other)

 

In favor of:        Name(s)

 

                          Attention Party Name

 

2

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(a)     Address

 

City/State/Zip/Country

Telephone

Fax

 

For an amount not exceeding that specified above, effective immediately and
expiring at their office on

 

(at least 30 days prior to Expiry Date above) covering (brief description):

 

 

¨         Multiple drawings prohibited (if blank, multiple drawings will be
permitted).

 

¨         Credit is transferable only in its entirety (Issuer is authorized to
include its standard transfer conditions and is authorized to nominate a
transferring bank, if applicable).

 

The Credit, or any Credit issued shall be subject to the International Standby
Practices 1998 (International Chamber of Commerce Publication 590) (“the “ISP”)
or, ¨ if box is checked, it shall be subject to the Uniform Customs and Practice
for Documentary Credits (1993) Revision International Chamber of Commerce
Publication No. 500 (the “UCP”).

 

Please include a brief description of the purpose of the Standby Letter of
Credit:

 

Unless otherwise stated herein, the nominated bank (if any) is authorized to
send all documents to you in one airmail or courier service, if available.

BY SUBMITTING THIS APPLICATION, THE UNDERSIGNED APPLICANT HEREBY AGREES TO THE
FOLLOWING ADDITIONAL TERMS AND CONDITIONS:

1. Indemnification; Limitation of Liability: a) Without limiting any other
provisions of this Application or the Credit Agreement, Bank and each other
Indemnitee (as defined in the Credit Agreement) shall not be responsible to
Applicant for, and Bank’s rights and remedies against Applicant and Applicant’s
obligation to reimburse the Bank under the Credit Agreement shall not be
impaired by: (i) honor of a presentation under any Credit which on its face
substantially complies with the terms of such Credit; (ii) honor of a
presentation of any Drawing Documents which appear on their face to have been
signed, presented or issued (X) by any purported successor or transferee of any
beneficiary or other party required to sign, present or issue the Drawing
Documents or (Y) under a new name of the beneficiary; (iii) acceptance as a
draft of any written or electronic demand or request for payment under a Credit,
even if nonnegotiable or not in the form of a draft, and may disregard any
requirement that such draft, demand or request bear any or adequate reference to
the Credit; (iv) the identity or authority of any presenter or signer of any
Drawing Document or the form, accuracy, genuineness, or legal effect of any
presentation under any Credit or of any Drawing Documents; (v) disregard of any
non-documentary conditions stated in any Credit; (vi) acting upon any inquiries,
communications and instructions (whether oral, telephonic, written, telegraphic,
facsimile, electronic or other) regarding a Credit (an “Instruction” or
“Instructions”, and the term

 

3

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Application is subsumed within the term Instruction) which it, in Good Faith,
believes to have been given by a Person or entity authorized to give such
Instruction; (vii) any errors, omissions, interruptions or delays in
transmission or delivery of any message, advice or document (regardless of how
sent or transmitted) or for errors in interpretation of technical terms or in
translation; (xiii) any delay in giving or failing to give any notice; (ix) any
acts, omissions or fraud by, or the solvency of, any beneficiary, any nominated
Person or any other Person; (x) any breach of contract between the beneficiary
and Applicant or any of the parties to the underlying transaction;
(xi) assertion or waiver of any provision of the UCP or ISP which primarily
benefits an issuer of a letter of credit, including, any requirement that any
Drawing Document be presented to it at a particular hour or place; (xii) payment
to any paying or negotiating bank (designated or permitted by the terms of the
applicable Credit) claiming that it rightfully honored or is entitled to
reimbursement or indemnity under the Standard Letter of Credit Practice
applicable to it; (xiii) dishonor of any presentation upon or during any Event
of Default or for which Applicant is unable or unwilling to reimburse or
indemnify Bank (provided that Applicant acknowledges that if Bank shall later be
required to honor the presentation, Applicant shall be liable therefor in
accordance with Section 3 of the Credit Agreement); or (xiv) acting or failing
to act as required or permitted under Standard Letter of Credit Practice
applicable to where it has issued, confirmed or advised such Credit, as the case
may be. For purposes of this paragraph, (1) “Good Faith” shall mean honesty in
fact in the conduct of the transaction concerned, and (2) “Standard Letter of
Credit Practice” shall mean, for Bank, any domestic or foreign law or letter of
credit practices applicable in the city in which Bank issued the applicable
Credit or for its branch or correspondent, such laws and practices applicable in
the city in which it has advised, confirmed or negotiated such Credit, as the
case may be (such practices to be (i) of banks that regularly issue Credits in
the particular city and (ii) required or permitted under the UCP or the ISP, as
chosen in the applicable Credit).

(b) Without limiting Section 11.5 of the Credit Agreement, such Section 11.5
shall apply to the Issuing Bank and each related Indemnitee notwithstanding the
occurrence of any of the events specified in clause (a) of this Section 1.

2. Instructions. Bank’s records of the content of any Instruction shall be
conclusive absent manifest error. Bank may transmit a Credit and any amendment
thereto by S.W.I.F.T. message and thereby bind Applicant directly and as
indemnitor to the S.W.I.F.T. rules, including rules obligating Bank or Applicant
to pay charges.

3. Assertion of Rights. To the extent Bank honors a presentation for which Bank
remains unpaid, Bank may assert rights of Applicant and Applicant shall
cooperate with Bank in its assertion of Applicant’s rights, if any, against the
beneficiary, the beneficiary’s rights against Applicant and any other rights
that Bank may have by subordination, subrogation, reimbursement, indemnity or
assignment.

4. Electronic Transmissions. Bank is authorized to accept and process any
Application and any amendments, transfers, assignments of proceeds,
Instructions, consents, waivers and all documents relating to the Credit or the
Application which are sent to Bank by electronic transmission, including SWIFT,
electronic mail, telex, telecopy, telefax, courier, mail or other computer
generated telecommunications and such electronic communication shall have the
same legal effect as if written and shall be binding upon and enforceable
against the Applicant. Bank may, but shall not be obligated to, require
authentication of such electronic transmission or that Bank receives original
documents prior to acting on such electronic transmission.

5. Waiver of Defense; Joint and Several Liability. Applicant waives any defense
whatsoever which might constitute a defense available to, or discharge of, a
surety or a guarantor. If more than one Person signs this Application, each of
them shall be jointly and severally liable hereunder.

6. Commencement of Action. Any action or proceeding in respect of any matter
arising under or in connection with Credits or the Applications may be brought
by Applicant against the Bank within the time period specified in Section 5-115
of the Uniform Commercial Code.

THE UNDERSIGNED HEREBY AGREES TO ALL THE TERMS AND CONDITIONS SET FORTH IN THIS
APPLICATION AND IN THE CREDIT AGREEMENT, ALL OF WHICH HAVE BEEN READ AND
UNDERSTOOD BY THE UNDERSIGNED.

 

4

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  (Applicant/Obligor)  

 

  (Authorized Signature/Title)  

 

  (Phone)  

 

  (Fax)  

 

  (Date)

 

5

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EXHIBIT J-2

FORM OF LETTER OF CREDIT REQUEST

Dated      2      

Deutsche Bank Trust Company Americas

as Revolving Issuing Lender under the Credit

Agreement dated January 3, 2006 among

Mirant North America, LLC (the “Borrower”), the

Several Lenders from Time to Time Parties

Thereto, Deutsche Bank Securities Inc. and

Goldman Sachs Credit Partners L.P. (the

“Co-Syndication Agents”) and JPMorgan

Chase Bank, N.A. (the “Administrative Agent”)

(the “Credit Agreement”)

[complete address ]

Attention:                     

Fronting Bank:      3      

Dear Ladies and Gentlemen:

We hereby request that the Fronting Bank, in its individual capacity, issue a
standby Letter of Credit for the account of the undersigned on      4       (the
“Date of Issuance”), which Letter of Credit shall be denominated in United
States Dollars and shall be in the aggregate amount of      5      . The Letter
of Credit should be substantially in the form of the attached specimen, with
such changes as the Fronting Bank deems necessary or advisable, and

 

 

2

Date of Letter of Credit Request. On or after the initial Borrowing Date and
prior to the 30th day prior to the Revolving Termination Date.

 

3

If standby Letter of Credit is to be issued by Deutsche Bank Trust Company
Americas insert: Deutsche Bank Trust Company Americas, Global Loan Operations,
Standby Letter of Credit Unit, 60 Wall Street, New York, New York 10005, MS NYC
60-3812. For standby Letters of Credit to be issued by other Fronting Bank
insert name and address of applicable Fronting Bank.

 

4

Date of Issuance, which shall be at least three (3) Business Days from the date
hereof (or such shorter period as is reasonably acceptable to the Fronting
Bank).

 

5

Aggregate initial amount of the Letter of Credit.

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such specimen should be approved and signed by us. We request that the Letter of
Credit be transmitted by:

¨  Teletransmission            ¨  Courier            ¨  Air Mail (Domestic
addresses only)

For the purposes of this Letter of Credit Request, unless otherwise defined
herein, all capitalized terms used herein and defined in the Credit Agreement
shall have the respective meaning provided such terms in the Credit Agreement.

The beneficiary of the requested Letter of Credit will be      6      , and such
Letter of Credit will be in support of      7       and will have a stated
expiration date of      8      .

We hereby certify that:

(i)                    each of the representations and warranties made by any
Loan Party in or pursuant to the Loan Documents (other than those set forth in
Sections 4.7, 4.9 and 4.12 of the Credit Agreement) shall be true and correct in
all material respects, both before and after giving effect to the issuance of
the Letter of Credit requested hereby, on the Date of Issuance as if made on and
as of such date; and

(ii)                    no Default or Event of Default shall have occurred and
be continuing on the date hereof or after giving effect to the issuance of the
Letter of Credit requested hereby and the application of proceeds therefrom.

By      

Name:

Title:

cc: JPMorgan Chase Bank, N.A.,

as Administrative Agent under the Credit Agreement

 

 

6

Insert name and address of beneficiary.

 

7

Insert brief description of supportable obligations.

 

8

Insert the last date upon which drafts may be presented which may not be later
than the dates referred to in Section 3 of the Credit Agreement.

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EXHIBIT K

THE FOLLOWING IS TO BE EXECUTED IF THE CREDIT IS TO BE ISSUED FOR THE ACCOUNT OF
A PERSON OTHER THAN THE PERSON SIGNING ABOVE:

AUTHORIZATION AND AGREEMENT OF ADDITIONAL PARTY NAMED AS ACCOUNT PARTY

To:    THE ISSUER OF THE CREDIT

We join in this Application, naming us as Account Party, for the issuance of the
Credit and, in consideration thereof, we irrevocably agree (i) that the above
Applicant has sole right to give instructions and make agreements with respect
to this Application, the Agreement, the Credit and the disposition of documents,
and we have no right or claim against you, any of your affiliates or
subsidiaries, or any correspondent in respect of any matter arising in
connection with any of the foregoing and (ii) to be bound by the Credit
Agreement and all obligations of the Applicant thereunder as if we were a party
thereto. The Applicant is authorized to assign or transfer to you all or any
part of any security held by the Applicant for our obligations arising in
connection with this transaction and, upon any such assignment or transfer, you
shall be vested with all powers and rights in respect of the security
transferred or assigned to you and you may enforce your rights under the
Agreement against us or our Property in accordance with the terms hereof.

 

 

 

  (Account Party)  

 

  (Authorized Signature/Title)  

 

  (Phone)  

 

  (Fax)  

 

  (Date)

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EXHIBIT K

FORM OF PERMITTED PARI PASSU DEBT INTERCREDITOR AGREEMENT

INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT, dated as of
[                    , 20    ] (as amended, supplemented or otherwise restated
from time to time, this “Agreement”), among JPMORGAN CHASE BANK, N.A., as
Administrative Agent under the Existing Facilities Credit Agreement (as defined
below) (in such capacity, the “Existing Facilities Representative”) for the
Existing Facilities Secured Parties (as defined below); JPMORGAN CHASE BANK,
N.A., as collateral agent for the Secured Parties (as defined below) (in such
capacity, the “Collateral Agent”); MIRANT NORTH AMERICA, LLC (the “Borrower”)
and each of the other Loan Parties (as defined below) party hereto; and [NAME OF
PARI PASSU LENDING AGENT/ENTITY], as [agent/lender] under the Additional
Facilities Credit Agreement (as defined below) (in such capacity, the
“Additional Facilities Representative”).

RECITALS:

WHEREAS, the Borrower, the Existing Facilities Representative and certain other
financial institutions and other entities entered into a $1,500,000,000 Credit
Agreement, dated as of January 3, 2006 (the “Existing Facilities Credit
Agreement”), pursuant to which such financial institutions and other entities
made loans and extended other financial accommodations to the Borrower;

WHEREAS, pursuant to the Existing Facilities Credit Agreement and the Existing
Facilities Security Documents (as defined below), the Borrower and the other
Loan Parties have granted to the Existing Facilities Secured Parties security
interests in the Existing Facilities Collateral (as defined below) as security
for the Existing Facilities Obligations (as defined below) and certain related
matters;

WHEREAS, the [Borrower/Loan Party] desires to enter into a [credit agreement],
dated as of [                    , 20    ] (the “Additional Facilities Credit
Agreement”) with the Additional Facilities Representative [and other financial
institutions and other entities] pursuant to which the Additional Facilities
Representative [and such financial institutions and other entities] will make
loans and extend other financial accommodations to the [Borrower/Loan Party];

WHEREAS, the [Borrower and the other Loan Parties] propose to grant to the
Additional Facilities Secured Parties (as defined below) a pari passu security
interest in the Additional Facilities Collateral (as defined below) as security
for the Additional Facilities Obligations (as defined below);

WHEREAS, the Additional Facilities Secured Parties will agree to be bound by the
terms of this Agreement and will appoint the Collateral Agent as collateral
agent under the Additional Facilities Security Documents;

WHEREAS, it is a condition to the closing of the Additional Facilities Credit
Agreement and the granting of such security interests to the Additional
Facilities Secured Parties that the parties hereto enter into this Agreement to
provide for the pari passu sharing of the Common Collateral (as defined below)

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and to set forth the relative rights of the Secured Parties (as defined below)
in respect of the Common Collateral and in respect to certain other matters
specified herein; and

WHEREAS, it is a condition to the acceptance of the Additional Facilities
Obligations as Permitted Pari Passu Debt (as defined in the Existing Facilities
Credit Agreement) and the security interest in the Common Collateral as a
permitted Lien pursuant to Section 8.3(c) of the Existing Facilities Credit
Agreement that the parties hereto enter into this Agreement.

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained and other good and valuable consideration, the existence and
sufficiency of which is expressly recognized by all of the parties hereto, the
parties agree as follows:

SECTION 1.    Definitions.

1.1      Defined Terms. The following terms, as used herein, have the following
meanings:

“Additional Facilities Agreements” means the collective reference to (a) the
Additional Facilities Credit Agreement and (b) any other credit agreement, loan
agreement, note agreement, promissory note, indenture or other agreement or
instrument evidencing or governing the terms of any indebtedness or other
financial accommodation that has been incurred to extend, replace, refinance or
refund in whole or in part the indebtedness and other obligations outstanding
under the Additional Facilities Credit Agreement, or any other agreement or
instrument referred to in this clause (b) unless such agreement or instrument
expressly provides that it is not intended to be and is not an Additional
Facilities Agreement hereunder (a “Replacement Additional Facilities
Agreement”). Any reference to the Additional Facilities Agreement hereunder
shall be deemed a reference to any Additional Facilities Agreement then extant.

“Additional Facilities Collateral” means all assets, whether now owned or
hereafter acquired by the Borrower or any other Loan Party, in which a Lien is
granted to the Collateral Agent or purported to be granted to any Additional
Facilities Secured Parties as security for any Additional Facilities Obligation.

“Additional Facilities Credit Agreement” has the meaning set forth in the
recitals to this Agreement.

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[“Additional Facilities Creditors” means the “[Lenders]” as defined in the
Additional Facilities Agreement and any Persons that are designated under the
Additional Facilities Agreement as the “Additional Facilities Creditors” for
purposes of this Agreement.]

“Additional Facilities Documents” means the collective reference to the
Additional Facilities Agreement, each Additional Facilities Security Document
and each Additional Facilities Guarantee, if any.

“Additional Facilities Guarantee” means any guarantee by any Loan Party of any
or all of the Additional Facilities Obligations.

“Additional Facilities Lien” means any Lien created by the Additional Facilities
Security Documents.

“Additional Facilities Obligations” means [(a) all principal of and interest
(including, without limitation, any Post-Petition Interest) and premium (if any)
on all indebtedness under the Additional Facilities Agreement, and (b) all
guarantee obligations, fees, expenses and other amounts payable from time to
time pursuant to the Additional Facilities Documents, including without
limitation Post-Petition Interest.] [describe nature of obligations under the
Additional Facilities Agreement]. To the extent any payment with respect to any
Additional Facilities Obligation (whether by or on behalf of any Loan Party, as
proceeds of security, enforcement of any right of setoff or otherwise) is
determined to be a fraudulent conveyance or a preference in any respect and is
disgorged, turned over or otherwise paid to the estate of any Loan Party, then,
in accordance with Section 6.4 herein, the obligation or part thereof originally
intended to be satisfied shall, for the purposes of this Agreement and the
rights and obligations of the Additional Facilities Representative, be deemed to
be reinstated and outstanding as if such payment had not occurred.

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“Additional Facilities Obligations Payment Date” means the first date on which
the Additional Facilities Obligations (other than those that constitute
Unasserted Contingent Obligations) have been indefeasibly paid in cash in full.

“Additional Facilities Representative” has the meaning set forth in the
introductory paragraph to this Agreement.

“Additional Facilities Security Documents” means the “[Security Documents]” as
defined in the Additional Facilities Agreement and the other documents that are
designated under the Additional Facilities Agreement as “Additional Facilities
Security Documents” for purposes of this Agreement.

“Additional Facilities Secured Parties” means the Additional Facilities
Representative, [the Additional Facilities Creditors] and any other holders of
the Additional Facilities Obligations.

“Agreement” has the meaning set forth in the introductory paragraph to this
Agreement.

“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. §101 et
seq.), as amended from time to time.

“Borrower” has the meaning set forth in the introductory paragraph hereof.

“Cash Management Obligations” means any obligations owed to any Existing
Facilities Secured Party (or any of its affiliates) in respect of any cash
management arrangement between the Borrower and such Existing Facilities Secured
Party (or any of its affiliates) (to the extent designated by the Borrower as a
“Specified Cash Management Program” under any Existing Facilities Agreement).

“Collateral Account” has the meaning set forth in Section 3.2.

“Collateral Agent” has the meaning set forth in the introductory paragraph
hereof.

“Collateral Proceeds” has the meaning set forth in Section 3.1.

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“Common Collateral” means all assets that are both Existing Facilities
Collateral and Additional Facilities Collateral.

“Comparable Additional Facilities Security Document” means, in relation to any
Common Collateral subject to any Existing Facilities Security Document, the
Additional Facilities Security Document that creates a security interest in the
same Common Collateral.

“Enforcement Action” means, with respect to any of the Secured Obligations, the
exercise of any rights and remedies with respect to any Common Collateral
securing such obligations or the commencement or prosecution of enforcement of
any of the rights and remedies under, as applicable, the Existing Facilities
Security Documents or the Additional Facilities Security Documents, or
applicable law, including without limitation the exercise of any rights of
set-off or recoupment, and the exercise of any rights or remedies of a secured
creditor under the Uniform Commercial Code of any applicable jurisdiction or
under the Bankruptcy Code.

“Existing Facilities Agreements” means the collective reference to (a) the
Existing Facilities Credit Agreement and (b) any other credit agreement, loan
agreement, note agreement, promissory note, indenture or other agreement or
instrument evidencing or governing the terms of any indebtedness or other
financial accommodation that has been incurred to extend, replace, refinance or
refund in whole or in part the indebtedness and other obligations outstanding
under the Existing Facilities Credit Agreement, or any other agreement or
instrument referred to in this clause (b) unless such agreement or instrument
expressly provides that it is not intended to be and is not an Existing
Facilities Agreement hereunder (a “Replacement Existing Facilities Agreement”).
Any reference to the Existing Facilities Agreement hereunder shall be deemed a
reference to any Existing Facilities Agreement then extant.

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“Existing Facilities Collateral” means all assets, whether now owned or
hereafter acquired by the Borrower or any other Loan Party, in which a Lien is
granted or purported to be granted to any Existing Facilities Secured Party as
security for any Existing Facilities Obligation.

“Existing Facilities Credit Agreement” has the meaning set forth in the recitals
to this Agreement.

“Existing Facilities Creditors” means the “Lenders” as defined in the Existing
Facilities Agreement and any Persons that are designated under the Existing
Facilities Agreement as the “Existing Facilities Creditors” for purposes of this
Agreement.

“Existing Facilities Documents” means the collective reference to the Existing
Facilities Agreement, the Existing Facilities Security Documents and each
Existing Facilities Guarantee.

“Existing Facilities Guarantee” means any guarantee by any Loan Party of any or
all of the Existing Facilities Obligations.

“Existing Facilities Lien” means any Lien created by the Existing Facilities
Security Documents.

“Existing Facilities Obligations” means (a) all principal of and interest
(including without limitation any Post-Petition Interest) and premium (if any)
on all loans made pursuant to the Existing Facilities Agreement, (b) all
reimbursement obligations (if any) and interest thereon (including without
limitation any Post-Petition Interest) with respect to any letter of credit or
similar instruments issued pursuant to the Existing Facilities Agreement,
(c) all Hedging Obligations, (d) all Cash Management Obligations and (e) all
guarantee obligations, fees, expenses and other amounts payable from time to
time pursuant to the Existing Facilities Documents, including without limitation
Post-Petition Interest. To the extent any payment with respect to any Existing
Facilities Obligation (whether by or on behalf of any Loan Party, as proceeds of
security, enforcement of any right of setoff or otherwise) is determined to be a
fraudulent conveyance or a preference in any respect and is disgorged, turned
over or otherwise

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

paid to the estate of any Loan Party, then, in accordance with Section 6.4
herein, the obligation or part thereof originally intended to be satisfied
shall, for the purposes of this Agreement and the rights and obligations of the
Existing Facilities Secured Parties, be deemed to be reinstated and outstanding
as if such payment had not occurred.

“Existing Facilities Obligations Payment Date” means the first date on which
(a) the Existing Facilities Obligations (other than those that constitute
Unasserted Contingent Obligations) have been indefeasibly paid in cash in full
(or cash collateralized or defeased in accordance with the terms of the Existing
Facilities Documents), (b) all commitments to extend credit under the Existing
Facilities Documents have been terminated, (c) there are no outstanding letters
of credit or similar instruments issued under the Existing Facilities Documents
(other than such as have been cash collateralized or defeased in accordance with
the terms of the Existing Facilities Documents), and (d) the Existing Facilities
Representative has delivered a written notice to the Additional Facilities
Representative stating that the events described in clauses (a), (b) and
(c) have occurred to the satisfaction of the Existing Facilities Secured
Parties.

“Existing Facilities Representative” has the meaning set forth in the
introductory paragraph hereof. In the case of any Replacement Existing
Facilities Agreement, the Existing Facilities Representative shall be the Person
identified as such in such agreement.

“Existing Facilities Security Documents” means the “Security Documents” as
defined in the Existing Facilities Agreement, and any other documents that are
designated under the Existing Facilities Agreement as “Existing Facilities
Security Documents” for purposes of this Agreement.

“Existing Facilities Secured Parties” means the Existing Facilities
Representative, the Existing Facilities Creditors and any other holders of the
Existing Facilities Obligations.

“Hedging Obligations” means, with respect to any Loan Party, any obligations of
such Loan Party owed in respect of any swap agreement or hedge agreement in
respect of interest rates or currency exchange rates to any Existing Facilities
Creditor (or any of its affiliates) or any other

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

Person which, at the time such swap agreement or hedge agreement was entered
into was an Existing Facilities Creditor (or any of its affiliates).

“Insolvency Proceeding” means any proceeding in respect of bankruptcy,
insolvency, winding up, receivership, dissolution or assignment for the benefit
of creditors, in each of the foregoing events whether under the Bankruptcy Code
or any similar federal, state or foreign bankruptcy, insolvency, reorganization,
receivership or similar law.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, deed
to secure debt, lien, pledge, hypothecation, assignment, encumbrance, charge or
security interest in, on or of such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities.

“Loan Party” means the Borrower and each direct or indirect subsidiary of the
Borrower or any of its affiliates that is now or hereafter becomes a party to
any Existing Facilities Document or Additional Facilities Document. All
references in this Agreement to any Loan Party shall include such Loan Party as
a debtor-in-possession and any receiver or trustee for such Loan Party in any
Insolvency Proceeding.

“Pari Passu Loan Documents” means the collective reference to the Existing
Facilities Documents and the Additional Facilities Documents.

“Person” means any person, individual, sole proprietorship, partnership, joint
venture, corporation, limited liability Borrower, unincorporated organization,
association, institution, entity, party, including any government and any
political subdivision, agency or instrumentality thereof.

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“Post-Petition Interest” means any interest or entitlement to fees or expenses
or other charges that accrues after the commencement of any Insolvency
Proceeding, whether or not allowed or allowable in any such Insolvency
Proceeding.

“Replacement Additional Facilities Agreement” has the meaning set forth in the
definition of “Additional Facilities Agreement”.

“Replacement Existing Facilities Agreement” has the meaning set forth in the
definition of “Existing Facilities Agreement”.

“Requisite Existing Facilities Creditors” means holders, at such time of,
without duplication, more than 50% of the aggregate amount of (a) revolving or
other undrawn commitments to extend credit under the Existing Facilities
Agreement that have not expired or terminated, (b) the aggregate principal
amount of loans outstanding under the Existing Facilities Agreement and (c) the
aggregate undrawn and unexpired amount of all letters of credit then outstanding
under the Existing Facilities Agreement (or, in the event that no amounts shall
be subject to the calculation pursuant to clauses (a), (b) and (c) above, 50% of
the aggregate amount of the Existing Facilities Obligations then outstanding).

“Requisite Secured Parties” means holders, at such time of, without duplication,
more than 50% of the aggregate amount of:

(a) of the aggregate amount of (i) revolving or other undrawn commitments to
extend credit under the Existing Facilities Agreement which has not expired or
terminated, (ii) the aggregate principal amount of loans outstanding under the
Existing Facilities Agreement and (iii) the aggregate undrawn and unexpired
amount of all letters of credit then outstanding under the Existing Facilities
Agreement (or, in the event that no amounts shall be subject to the calculation
pursuant to clauses (i), (ii) and (iii) above, the aggregate amount of the
Existing Facilities Obligations then outstanding); and

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

(b) of the aggregate amount of [(i) revolving or other undrawn commitments, if
any, to extend credit under the Additional Facilities Agreement which has not
expired or terminated, (ii) the aggregate principal amount of loans, if any,
outstanding under the Additional Facilities Agreement and (iii) the aggregate
undrawn and unexpired amount of all letters of credit, if any, then outstanding
under the Additional Facilities Agreement][describe nature of obligations under
the Additional Facilities Agreement] (or, in the event that no amounts shall be
subject to the calculation pursuant to clauses (i), (ii) and (iii) above, the
aggregate amount of the Additional Facilities Obligations then outstanding).

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer or secretary of the applicable Borrower, but in any
event, with respect to financial matters, the chief financial officer or
treasurer of the applicable Borrower.

“Secured Obligations” means the collective reference to the Existing Facilities
Obligations and the Additional Facilities Obligations.

“Secured Parties” means the collective reference to the Existing Facilities
Secured Parties and the Additional Facilities Secured Parties.

“Secured Parties’ Representatives” means the collective reference to the
Existing Facilities Representative and the Additional Facilities Representative.

“Security Documents” means the collective reference to the Existing Facilities
Security Documents and the Additional Facilities Security Documents.

“Unasserted Contingent Obligations” means, at any time, the applicable Secured
Obligations for taxes, costs, indemnifications, reimbursements, damages and
other liabilities (excluding (a) the principal of, and interest and premium (if
any) on, and fees and expenses relating to, any Secured Obligations and
(b) contingent reimbursement obligations in respect of amounts that may be drawn
under outstanding letters of credit) in respect of which no assertion of
liability (whether oral or written) and no claim or demand for payment (whether
oral or written)

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

has been made (and, in the case of Secured Obligations for indemnification, no
notice for indemnification has been issued by the indemnitee) at such time.

“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect
from time to time in the applicable jurisdiction.

1.2      Amended Agreements. All references in this Agreement to agreements or
other contractual obligations shall, unless otherwise specified, be deemed to
refer to such agreements or contractual obligations as amended, supplemented,
restated or otherwise modified from time to time.

SECTION 2.    Collateral Matters.

2.1      Pari Passu Sharing. Subject to Section 6.7, notwithstanding anything to
the contrary contained in any of the Security Documents and irrespective of the
time, order, method or effectiveness of attachment or perfection of any security
interests created in the Common Collateral or anything contained in any filing
or agreement to which the Collateral Agent or any Secured Party now or hereafter
may be a party, the rules for determining attachment, perfection or priority
under the Uniform Commercial Code or any other law governing the relative
priorities of secured creditors or the avoidance of liens, the interests of the
Secured Parties in the Common Collateral shall secure the Secured Obligations on
a pari passu basis and the Collateral Agent shall hold the Common Collateral for
the equal and ratable benefit of the Secured Parties pursuant to this Agreement
and the other Security Documents.

2.2      Nature of Existing Facilities Obligations. Each of the Additional
Facilities Secured Parties acknowledges that a portion of the Existing
Facilities Secured Obligations represents debt that is revolving in nature and
that the amount thereof that may be outstanding at any time or from time to time
may be increased or reduced and subsequently reborrowed, and that the terms of
the Existing Facilities Secured Obligations may be modified, extended or amended
from time to time, and that the aggregate amount of the Existing Facilities
Secured Obligations may be increased, replaced or refinanced, in each event,
without notice to or consent by any of the Additional Facilities Secured Parties
and without affecting the provisions hereof. The pari passu sharing provided in
Section 2.1 shall not be altered or otherwise affected by any such amendment,
modification, supplement, extension, repayment, reborrowing, increase,
replacement, renewal, restatement or refinancing of any of the Existing
Facilities Obligations or any portion thereof.

2.3      No New Liens. If (a) any Loan Party or any of their subsidiaries
creates or grants a Lien on any assets of such Loan Party or its subsidiaries
securing either the Existing Facilities Obligations or the Additional Facilities
Obligations, such Loan Party shall create a pari passu Lien on such assets in
favor of the Additional Facilities Secured Parties or the Existing Facilities
Secured Parties, as the case may be, and (b) any Secured Party shall acquire or
hold any Lien on any assets of any Loan Party securing any Secured Obligation
that does not secure on a pari passu basis the Existing Facilities Obligations
and the Additional Facilities Obligations, then notwithstanding anything to the
contrary in any Pari Passu Loan Document, either (i) such Secured Party, upon
demand by the Collateral Agent, will assign such Lien to the Collateral Agent as
security for the Secured Obligations or (ii) such assets shall be deemed to
secure on a pari passu basis all of the Secured Obligations. To the extent that
the foregoing provisions are not complied with for any reason, any amounts
received by or distributed to it pursuant to or as a result of Liens granted in
contravention of this Section 2.3 shall be subject to Section 3.6.

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SECTION 3.    Collateral Agent; Collateral Account; Application of Proceeds.

3.1      Appointment. The Existing Facilities Representative, on behalf of
itself and the other Existing Facilities Secured Parties, the Additional
Facilities Representative, on behalf of itself and the other Additional
Facilities Secured Parties, and the Borrower hereby appoint JPMorgan Chase Bank,
N.A., as Collateral Agent under this Agreement and the Security Documents. The
Collateral Agent accepts such appointments and will hold all amounts received by
it in accordance with the terms of this Agreement (all such amounts being
hereinafter referred to as the “Collateral Proceeds”) under and subject to the
conditions set forth in this Agreement for the benefit of the Secured Parties
for the payment of the Secured Obligations in accordance with the terms of this
Agreement and the Security Documents.

3.2      Collateral Account. At all times prior to payment in full of the
Secured Obligations, there shall be maintained with the Collateral Agent an
account which shall be entitled the “Mirant Common Collateral Account” (the
“Collateral Account”). All monies which are required by this Agreement to be
deposited in the Collateral Account or which are delivered to or received by the
Collateral Agent or any agent or nominee of the Collateral Agent in respect of
the Common Collateral, whether in connection with the exercise of the remedies
provided in this Agreement, the Security Documents or otherwise, shall be
deposited in the Collateral Account and applied in accordance with the terms of
this Agreement. The Collateral Account shall be subject to the exclusive
dominion and control of the Collateral Agent, who shall (in its capacity as a
securities intermediary), with respect to the Collateral Account and all items
from time to time on deposit therein, comply with all instructions from the
Requisite Secured Parties (or the Requisite Existing Facilities Creditors, as
the case may be) given in accordance with this Agreement without further consent
of the Borrower or any other Loan Party. The Collateral Account shall be
maintained as a securities account (as defined in Section 8-501 of the Uniform
Commercial Code) for purposes of the Uniform Commercial Code and all items on
deposit therein (including securities entitlements (as defined in the Uniform
Commercial Code)) shall be “financial assets” under and as defined in the
Uniform Commercial Code. The parties acknowledge and agree that notwithstanding
anything to the contrary in any Security Document, any amounts required to be
deposited in a collateral account pursuant to any Security Document shall be
deposited by the Collateral Agent into the Collateral Account.

3.3      Lien in Collateral Account. The Borrower hereby grants to the
Collateral Agent for the benefit of the Secured Parties a continuing first
priority security interest in and to all of the Borrower’s right, title and
interest in and to all amounts now or at any time hereafter on deposit in the
Collateral Account as security for the payment of the Secured Obligations in
accordance with the terms of this Agreement.

3.4      Permitted Investments of Collateral Account. The Collateral Agent shall
invest and reinvest monies on deposit in the Collateral Account at any time in
any Cash Equivalents (as defined in the Existing Facilities Credit Agreement),
as determined in the sole discretion of the Collateral Agent. All such
investments and the interest and income received thereon and the net proceeds
realized on the sale or redemption thereof shall be held in the Collateral
Account. In no event shall the Collateral Agent be liable for any loss in the
investment or reinvestment of amounts held in the Collateral Account unless such
loss is found by a non-appealable court of competent jurisdiction to be the
direct result of the Collateral Agent’s gross negligence or willful misconduct.

3.5      Actions by Collateral Agent

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(a)      The Collateral Agent shall have the sole right to exercise any and all
rights and remedies under this Agreement and the other Security Documents,
including, without limitation, the determination of the order in which it shall
exercise remedies against any of the Common Collateral. All actions taken by the
Collateral Agent pursuant to this Agreement shall be subject to the direction of
the Requisite Secured Parties and, in the absence of such direction, the
Collateral Agent shall be entitled to take all action reasonably determined by
it, and shall be fully protected in taking such action, in accordance with this
Agreement; provided however that at any time that an event of default has
occurred and is continuing under the Existing Facilities Agreement and no event
of default has occurred and is continuing under the Additional Facilities
Agreement, all such actions shall be subject to the direction of the Requisite
Existing Facilities Creditors, and not the Requisite Secured Parties, as
provided in Section 3.5(b). Notwithstanding anything to the contrary herein, the
Collateral Agent shall not release any Liens on any or all of the Common
Collateral if such action would result in a default or event of default under
the Existing Facilities Agreement.

(b)      Upon the occurrence and during the continuance of an event of default
under the Existing Facilities Agreement when no event of default has occurred
and is continuing under the Additional Facilities Agreement, the Requisite
Existing Facilities Creditors shall have the right to direct the Collateral
Agent to take Enforcement Action under this Agreement and the Existing
Facilities Security Documents and, in the absence of such direction, the
Collateral Agent shall be entitled to take all action reasonably determined by
it, and shall be fully protected in taking such action, in accordance with this
Agreement, provided that all proceeds of such actions are applied in accordance
with Section 3.6 hereof. On or prior to the Existing Facilities Obligations
Payment Date, neither the Additional Facilities Representative nor any other
Additional Facilities Secured Party shall have the right to direct the
Collateral Agent to begin exercising remedies or otherwise to take any action
under this Agreement if at such time no event of default has occurred or is
continuing under the Existing Facilities Agreement and whether or not an event
of default has occurred or is continuing under the Additional Facilities
Agreement. With respect to any Enforcement Action taken when an event of default
exists under both the Existing Facilities Agreement and the Additional
Facilities Agreement, any Additional Facilities Secured Party shall only have
such right to the extent it may be part of the Requisite Secured Parties.

3.6      Application of Proceeds. To the extent available for distribution (it
being understood that the Collateral Agent may liquidate investments prior to
maturity in order to make a distribution pursuant to this Section 3.6), all
monies held by the Collateral Agent in the Collateral Account, including all
proceeds of, or any other monies received in connection with the Security
Documents and any interest earned thereon resulting from sales, foreclosures or
collections on or other dispositions of the Common Collateral in connection with
or resulting from any Enforcement Action, and whether or not pursuant to an
Insolvency Proceeding, shall be applied by the Collateral Agent in the following
order of priority:

(a)      first, to the payment in full of all costs and expenses of the
Collateral Agent incurred in connection with such realization on the Common
Collateral or the protection of the rights and interests of the Secured Parties
therein;

(b)      second, to the payment in full of the unpaid Existing Facilities
Obligations and Additional Facilities Obligations (including all incurred and
unpaid fees and expenses of the Existing Facilities Representative under the
Existing Facilities Documents and the Additional Facilities

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Representative under the Additional Facilities Documents), pro rata based on the
amounts owing with respect to the Existing Facilities Obligations and the
Additional Facilities Obligations for application to such obligations in
accordance with the Existing Facilities Agreements and Additional Facilities
Agreements, as applicable; and

(c)      third, if the Secured Obligations shall have been paid in full, no
letters of credit shall be outstanding under the Pari Passu Loan Documents, all
commitments to provide extensions of credit shall have terminated under the Pari
Passu Loan Documents and the requirements of Section 3.7 shall have been
satisfied, any balance to the Borrower or its successors or assigns or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct;

provided however that, subject to Section 5.1 of this Agreement, the foregoing
order of priority of distributions shall apply to all distributions from the
Collateral Account.

3.7      Amounts Held for Contingent Secured Obligations. In the event that any
Secured Party shall be entitled to receive any proceeds pursuant to Section 3.6
in respect of the unliquidated, unmatured or contingent portion of the
outstanding Secured Obligations (including, without limitation, obligations
under then outstanding letters of credit, guarantees and termination liabilities
with respect to any Hedging Obligations and obligations which are not
determinable or are unmatured), then the Collateral Agent shall invest such
proceeds in Cash Equivalents maturing within three months after they are
acquired by the Collateral Agent and shall hold all such amounts so
distributable, and all investments and the net proceeds thereof, for the benefit
of such Secured Party and for no other purpose until (i) such Secured Party
shall have notified the Collateral Agent that all or part of such unliquidated,
unmatured or contingent claims shall have become matured or fixed, in which case
the Collateral Agent shall distribute from such investments and the proceeds
thereof an amount equal to such matured or fixed claim to such Secured Party for
application to the payment of such matured or fixed claim or (ii) all or part of
such unliquidated, unmatured or contingent claim shall have been extinguished,
whether as the result of an expiration without drawing of any letter of credit,
payment of amounts secured or covered by any letter of credit other than by
drawing thereunder, payment of amounts covered by any guarantee or otherwise, in
which case such Secured Party shall, as soon as practicable thereafter notify
the Collateral Agent and such investments, and the proceeds thereof, shall be
held in the Collateral Account for the benefit of all Secured Parties pending
application in accordance with Section 3.6.

3.8      General Authority of the Collateral Agent. The Collateral Agent is
hereby expressly authorized as Collateral Agent on behalf of the Secured
Parties, without further consent by the Secured Parties:

(a)      to receive all documents and items to be furnished under the Security
Documents relating to the Common Collateral;

(b)      to maintain physical possession of any of the Common Collateral as
contemplated in any of the Security Documents; and

(c)      to take such other actions as are reasonably incidental to any powers
granted to the Collateral Agent hereunder or actions of the Collateral Agent
authorized hereunder and not in conflict with applicable law or regulation, this
Agreement or any Security Document.

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3.9      Exculpatory Provisions

(a)      The Collateral Agent makes no representations as to the value or
condition of the Common Collateral or any part thereof, or as to the title of
the Loan Parties thereto or as to the security or perfection afforded by this
Agreement or any Security Agreement, or as to the validity, execution (except
its own execution), enforceability, legality or sufficiency of this Agreement,
the Security Documents or the Secured Obligations, and the Collateral Agent
shall incur no liability or responsibility in respect of any such matters. The
Collateral Agent shall not be responsible for insuring the Common Collateral or
for the payment of taxes, charges or assessments or discharging of liens upon
the Common Collateral or otherwise as to the maintenance of the Common
Collateral, except that if the Collateral Agent takes possession of any Common
Collateral, the Collateral Agent shall use the care accorded its own assets in
the preservation of the Collateral in its possession and as required by any
applicable law. Notwithstanding the foregoing, the Collateral Agent shall be
responsible and accountable for damages occasioned by such taking of possession
or control, which are found by a non-appealable court of competent jurisdiction
to be the direct result of the Collateral Agent’s gross negligence or willful
misconduct.

(b)      The Collateral Agent shall not be required to ascertain or inquire as
to the performance by the Loan Parties of any of the covenants or agreements
contained herein or in any Security Agreement or be responsible for any
recitals, statements, representations or warranties made by any Loan Party in or
pursuant to any Parri Passu Loan Document or to inspect the properties, books or
records of any Loan Party. Whenever it is necessary, or in the opinion of the
Collateral Agent advisable, for the Collateral Agent to ascertain the amount of
Secured Obligations then held by the Secured Parties, the Collateral Agent may
conclusively rely on a certificate of (i) the Existing Facilities
Representative, in the case of the Existing Facilities Documents, or (ii) the
Additional Facilities Representative, in the case of the Additional Facilities
Documents.

(c)      The Collateral Agent shall be under no obligation or duty to take any
action under this Agreement or any Security Agreement if taking such action
(i) would subject the Collateral Agent to a tax in any jurisdiction where it is
not then subject to a tax or (ii) would require the Collateral Agent to qualify
to do business in any jurisdiction where it is not then so qualified, unless the
Collateral Agent receives security or indemnity satisfactory to it against such
tax (or equivalent liability), or any liability resulting from such
qualification, in each case as results solely from the taking of such action
under this Agreement or any Security Agreement.

(d)      Notwithstanding any other provision of this Agreement (other than those
relating to the care of the Common Collateral in its possession), neither the
Collateral Agent nor any officer, director, employee, agent or representative
thereof shall be personally liable for any action taken or omitted to be taken
by it in accordance with this Agreement or the Security Documents except for its
own gross negligence or willful misconduct.

(e)      The Collateral Agent shall have the same rights with respect to any
Secured Obligation held by it as any other Secured Party and may (i) exercise
such rights as though it were not the Collateral Agent hereunder, (ii) accept
deposits from, lend money to, and (iii) generally engage in any kind of banking
or trust business with, any of the Loan Parties as if it were not the Collateral
Agent.

3.10    Delegation of Duties. The Collateral Agent may execute any of the trusts
or powers hereof and perform any duty hereunder either directly or by or through
agents or attorneys-in-fact, who may include officers and employees of any of
the Loan Parties. The Collateral Agent shall be entitled to

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advice of counsel concerning all matters pertaining to such trusts, powers and
duties. The Collateral Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care. The Collateral Agent may enter into agreements with such agents or
attorneys-in-fact in such form as it may reasonably deem necessary or advisable,
and shall be entitled to amend, modify, or waive the provisions of such
agreements from time to time.

3.11    Reliance by Collateral Agent.

(a)      Whenever, in the administration of this Agreement or the Security
Documents, the Collateral Agent shall deem it necessary or desirable that a
factual matter be proved or established in connection with the Collateral Agent
taking, suffering or omitting any action hereunder or thereunder, such matter
(unless other evidence in respect thereof is herein specifically prescribed) may
be deemed to be conclusively proved or established by a certificate of a
Responsible Officer of the Borrower, delivered to the Collateral Agent, and such
certificate shall be full warrant to the Collateral Agent for any action taken,
suffered or omitted in reliance thereon.

(b)      The Collateral Agent may consult with counsel, and any opinion of
counsel shall be full and complete authorization and protection in respect of
any action taken or suffered by it hereunder or under any Security Agreement in
accordance therewith. The Collateral Agent shall have the right at any time to
seek instructions concerning the administration of this Agreement and the
Security Documents from any court of competent jurisdiction.

(c)      The Collateral Agent may rely, and shall be fully protected in acting,
upon any resolution, statement, certificate, instrument, opinion, report,
notice, request, consent, order, bond or other paper or document which it has no
reason to believe to be other than genuine and to have been signed or presented
by the proper party or parties, or, in the case of cables, facsimiles, telexes
and electronic communications, to have been sent by the proper party or parties
and upon advice and statements of legal counsel (including counsel to the
Borrower), independent accountants and other experts selected by the Collateral
Agent. In the absence of its gross negligence or willful misconduct, the
Collateral Agent may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Collateral Agent and conforming to the requirements of
this Agreement.

(d)      The Collateral Agent shall not be under any obligation to exercise any
of the rights or powers vested in the Collateral Agent by this Agreement and the
Security Documents, at the request or direction of the Secured Parties pursuant
to this Agreement or otherwise, unless the Collateral Agent shall have been
provided adequate security and indemnity against the costs, expenses and
liabilities which may be incurred by it in compliance with such request or
direction.

(e)      Upon any application or demand by any of the Loan Parties (except any
such application or demand which is expressly permitted to be made orally) to
the Collateral Agent to take or permit any action under any of the provisions of
this Agreement or any Security Document, the Borrower shall furnish to the
Collateral Agent, the Existing Facilities Representative and the Additional
Facilities Representative a certificate of a Responsible Officer stating that
all conditions precedent, if any, provided for in this Agreement, or in any
applicable Pari Passu Loan Document relating to the proposed action have been or
will be (in the case of application of proceeds from sales of assets) complied
with, and in the case of any such application or demand as to which the
furnishing of any document is specifically required by any provisions of this
Agreement or any applicable Pari Passu Loan Document relating to such particular
application or demand, such additional document shall also be furnished.

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(f)      The Collateral Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Existing Facilities Document
or Additional Facilities Document unless it shall first receive such advice or
concurrence of the Requisite Secured Parties (or the Requisite Existing
Facilities Creditors, as the case may be) as it deems appropriate. In any
circumstance where the Collateral Agent may be required to exercise discretion,
approve documentation or distribute proceeds, the Collateral Agent, may, at its
option, seek to obtain instructions or directions from the Requisite Secured
Parties (or the Requisite Existing Facilities Creditors, as the case may be)
with respect to such action. If the Collateral Agent so elects, then it may
refrain from taking such action until such directions or instructions are
received and shall have no liability to the Secured Parties for so refraining.

3.12.    Limitations on Duties of the Collateral Agent.

(a)      The Collateral Agent shall be obligated to perform such duties and only
such duties as are specifically set forth in this Agreement and the Security
Documents, and no implied covenants or obligations shall be read into this
Agreement or any Security Agreement against the Collateral Agent except as may
be required by applicable law.

(b)      No provision of this Agreement or of any Security Agreement shall be
deemed to impose any duty or obligation on the Collateral Agent to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal, or in which the
Collateral Agent shall be unqualified or incompetent, to perform any such act or
acts or to exercise any such right, power, duty or obligation or if such
performance or exercise would constitute doing business by the Collateral Agent
in such jurisdiction or imposes a tax on the Collateral Agent by reason thereof.
No provision of this Agreement or any other Security Document shall require the
Collateral Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or under
any Security Document or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.

3.13.    Resignation of the Collateral Agent. The Collateral Agent may resign at
any time upon 10 days’ notice to the Secured Parties’ Representatives and the
Borrower; provided that on the Existing Facilities Obligations Payment Date, the
Collateral Agent at such time shall immediately be deemed to have resigned and
the Additional Facilities Representative shall automatically become the
Collateral Agent under this Agreement. If the initial or any successor
Collateral Agent ever ceases to be a party to this Agreement or shall resign as
Collateral Agent under this Agreement, then the Requisite Secured Parties shall
appoint a successor to the Collateral Agent from among the Secured Parties. If
the Requisite Secured Parties fail to agree on a successor to such Collateral
Agent within thirty (30) days after the resigning Collateral Agent has given
notice or resignation, then the resigning Collateral Agent may, on behalf of the
Secured Parties, appoint a successor Collateral Agent that must be a commercial
bank or trust company in good standing and have a combined capital and surplus
of at least $500,000,000. Upon its acceptance of appointment as successor
Collateral Agent, the successor Collateral Agent shall succeed to and becomes
vested with all of the rights, powers and duties of the prior Collateral Agent,
and the term “Collateral Agent” shall mean such successor agent effective upon
such appointment and approval, and the former Collateral Agent’s rights, powers
and duties shall be terminated, without any other or further act or deed on the
part of such former Collateral Agent or any of the parties to this Agreement.
Each Secured Parties’ Representative shall execute any documents that any
Secured Party, the resigning Collateral Agent or the successor Collateral Agent
may reasonably request to reflect the change of Collateral Agent hereunder.
After any retiring Collateral Agent’s resignation as Collateral Agent, the
provisions of this Agreement shall inure to its benefit as to any

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actions taken or omitted to be taken by it while it was Collateral Agent under
this Agreement and the Security Documents.

3.14.    Compensation and Expenses. The Borrower shall pay or reimburse the
Collateral Agent for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other
Security Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Collateral Agent and filing and
recording fees and expenses. Such fees, costs and expenses are intended to
constitute expenses of administration under any bankruptcy law relating to
creditors rights generally. The obligations of the Borrower under this Section
shall survive the termination of the other provisions of this Agreement and the
resignation or removal of the Collateral Agent hereunder with respect to such
fees, costs and expenses incurred prior to such termination, resignation or
removal.

3.15.    Stamp and Other Similar Taxes. The Borrower shall pay, indemnify, and
hold harmless the Collateral Agent and each Secured Party from any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, that
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, any Security Agreement or the
Common Collateral.

3.16.    Filing Fees, Excise Taxes, Etc. The Borrower shall pay or to reimburse
the Collateral Agent for any and all payments made by the Collateral Agent in
respect of all search, filing, recording and registration fees, taxes, excise
taxes and other similar imposts that may be payable or determined to be payable
in respect of the execution and delivery of this Agreement and each Security
Agreement. The obligations of the Borrower under this Section shall survive the
termination of the other provisions of this Agreement and the resignation or
removal of the Collateral Agent hereunder.

3.17.    Indemnity.

(a)      The Borrower shall pay, indemnify, and hold the Collateral Agent and
each of its affiliates and their respective directors, officers employees,
affiliates, agents and controlling persons (each an “Indemnified Party”),
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other
Security Documents and the actual or proposed use of the proceeds of the Common
Collateral in accordance with the terms of this Agreement (including any of the
foregoing arising from the negligence of the Indemnified Party), except to the
extent such claim, damage, loss, liability, cost, or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful misconduct.
In the case of an investigation, litigation, or other proceeding to which the
indemnity in this Section applies, such indemnity shall be effective whether or
not such investigation, litigation, or proceeding is brought by the Borrower or
any other Loan Party, their directors, shareholders, or creditors or an
Indemnified Party or any other Person or any Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated. The Borrower shall not assert any claim against the Collateral
Agent or any of its affiliates or any of their respective directors, officers,
employees, attorneys, agents, and advisers, on any theory of liability, for
special, indirect, consequential, or punitive damages arising out of or
otherwise

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relating to this Agreement or the Security Documents, any of the transactions
contemplated herein or therein or the actual or proposed use of the proceeds of
any Common Collateral in accordance with the terms of this Agreement. The
agreements in this Section shall survive the termination of the other provisions
of this Agreement and the resignation or removal of the Collateral Agent
hereunder.

(b)      Each of the Existing Facilities Representative, on behalf of itself and
the other Existing Facilities Secured Parties, and the Additional Facilities
Representative, on behalf of itself and the other Additional Facilities Secured
Parties, shall indemnify on a pro rata basis the Collateral Agent and its
representatives and hold them harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses, and reasonable disbursements of any kind or nature
whatsoever that may be imposed on, asserted against, or incurred by them in any
way relating to or arising out of this Agreement or the Security Documents or
any action taken or omitted by them under this Agreement (except to the extent
the same result from the gross negligence or willful misconduct of the
Collateral Agent) or the Security Documents if the Collateral Agent or its
representatives are not reimbursed for such amounts by the Borrower or by the
Collateral Agent’s priority distribution of Common Collateral pursuant to
Section 2.5.

3.18.    Further Assurances. At any time and from time to time, on the written
request of the Collateral Agent and at the expense of the Borrower, the Borrower
and each other Loan Party will promptly execute and deliver any and all such
further instruments and documents and take such further action as is necessary
or reasonably requested further to perfect, or to protect the perfection of, the
liens and security interests granted under the applicable Security Documents (to
the extent that perfection is required thereunder), including, without
limitation, the filing of any financing or continuation statements under the
Uniform Commercial Code in effect in any applicable jurisdiction. In addition to
the foregoing, at any time and from time to time, upon the written request of
the Collateral Agent and at the expense of the Borrower, the Borrower and each
other Loan Party will promptly execute and deliver any and all such further
instruments and documents and take such further action as the Collateral Agent
determines is necessary or reasonably requested to obtain the full benefits of
this Agreement and the Security Documents and of the rights and powers herein
and therein granted, including, without limitation, the filing of any financing
or continuation statements under the Uniform Commercial Code in effect in any
applicable jurisdiction with respect to the liens and security interests granted
by the Security Documents. Each Loan Party also hereby authorizes the Collateral
Agent to file any such financing or continuation statements without the consent
of such Loan Party to the extent permitted by applicable law. Notwithstanding
the foregoing, in no event shall the Collateral Agent have any obligation to
monitor the perfection or continuation of perfection or the sufficiency or
validity of any security interest in or related to the Common Collateral.

SECTION 4.    Enforcement Rights.

4.1.      Exclusive Enforcement. Whether or not any Insolvency Proceeding has
been commenced by or against any Loan Party, but subject to Section 3.6, the
Collateral Agent shall have the exclusive right to take and continue any
Enforcement Action with respect to the Common Collateral in such order and
manner as it may determine in its sole discretion.

4.2.      Standstill and Waivers.

(a)      Subject to Section 3.5(b) and the proviso set forth in Section 5.1
neither Secured Parties’ Representative shall (for itself or on behalf of any
Secured Party):

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(i)      take or cause to be taken any action, the purpose or effect of which is
to make any of its Liens in respect of any Secured Obligations, senior to, or to
give any Secured Party any preference or priority relative to, any Liens or any
other Secured Party with respect to any of the Common Collateral;

(ii)      contest, oppose, object to, interfere with, hinder or delay, in any
manner, whether by judicial proceedings (including, without limitation, the
filing of an Insolvency Proceeding) or otherwise, any foreclosure, sale, lease,
exchange, transfer or other disposition of the Common Collateral by the
Collateral Agent or any other Enforcement Action taken (or any forbearance from
taking any Enforcement Action) by the Collateral Agent on behalf of the Secured
Parties (or the Existing Facilities Secured Parties, as applicable);

(iii)      institute any suit or other proceeding or assert in any suit,
Insolvency Proceeding or other proceeding any claim against the Collateral Agent
or any Secured Party seeking damages from or other relief by way of specific
performance, instructions or otherwise, with respect to, and neither the
Collateral Agent nor any Secured Party shall be liable for, any action taken or
omitted to be taken by the Collateral Agent with respect to the Common
Collateral;

(iv)      make any judicial or nonjudicial claim or demand or commence any
judicial or non-judicial proceedings against any Loan Party or any of its
subsidiaries or affiliates under or with respect to any Security Document
seeking payment or damages from or other relief by way of specific performance,
instructions or otherwise under or with respect to any Security Document (other
than filing a proof of claim) or exercise any right, remedy or power under or
with respect to, or otherwise take any action to enforce, other than filing a
proof of claim, any Security Document;

(v)      commence judicial or nonjudicial foreclosure proceedings with respect
to, seek to have a trustee, receiver, liquidator or similar official appointed
for or over, attempt any action to take possession of any Common Collateral,
exercise any right, remedy or power with respect to, or otherwise take any
action to enforce their interest in or realize upon, the Common Collateral or
pursuant to this Agreement or the Security Documents; and

(vi)      seek, and hereby waives any right, to have the Common Collateral or
any part thereof marshaled upon any foreclosure or other disposition of the
Common Collateral.

(b)    Without limiting the agreements set forth in Section 4.2(a) above, until
the Existing Facilities Obligations Payment Date, neither the Additional
Facilities Representative nor any Additional Facilities Secured Party (i) shall
have any right to direct the Collateral Agent or any Secured Party to exercise
any right, remedy or power with respect to the Common Collateral or pursuant to
this Agreement or any of the Additional Facilities Security Documents upon the
occurrence and during the continuance of an event of default under the
Additional Facilities Agreement if no event of default has occurred and is
continuing under the Existing Facilities Agreement (and, in the event that such
an event of default has occurred and is continuing under the Existing Facilities
Agreement, it shall only have such right to the extent it may be part of the
Requisite Secured Parties), and (ii) shall have any right to object to the
exercise by the Collateral Agent or any Existing Facilities Secured Party of any
right, remedy or power with respect to the Common Collateral or pursuant to this
Agreement or the Existing Facilities Security Documents or to the timing or
manner in which any such right is exercised or not exercised upon the occurrence
and during the continuance of an event of default under the Existing Facilities
Agreement

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when no event of default has occurred and is continuing under the Additional
Facilities Agreement at such time. The Additional Facilities Representative
shall take such actions as the Collateral Agent or the Existing Facilities
Representative, as the case may be, shall request in connection with the
exercise by the Collateral Agent or the Existing Facilities Representative of
its respective rights set forth herein.

(c)      Judgment Creditors. In the event that any Secured Party becomes a
judgment lien creditor in respect of any Common Collateral as a result of its
enforcement of its rights as a secured creditor, such judgment lien shall be
subject to the terms of this Agreement for all purposes (including in relation
to the Existing Facilities Liens, the Additional Facilities Liens and the
Secured Obligations) to the same extent as all other Liens securing the Secured
Obligations are subject to the terms of this Agreement.

(d)      No Additional Rights For the Loan Parties Hereunder. If any Secured
Party shall enforce its rights or remedies in violation of the terms of this
Agreement, no Loan Party shall be entitled to use such violation as a defense to
any action by any Secured Party, nor to assert such violation as a counterclaim
or basis for set off or recoupment against any Secured Party.

4.5.      Participations. (a) To the extent that the Collateral Agent
distributes proceeds collected with respect to the Secured Obligations held by a
Secured Party to or on behalf of the Secured Obligations held by another Secured
Party, the first Secured Party shall be deemed to have purchased a participation
in the Secured Obligations of the second Secured Party or shall be subrogated to
the rights of the second Secured Party to receive any subsequent payments or
distributions with respect to the portion thereof paid or to be paid to the
second Secured Party.

(b)      Any participations sold or purchased pursuant to this Section shall, at
the Collateral Agent’s request, be documented in a manner acceptable to the
Collateral Agent and each Secured Party shall execute and deliver such
documentation as may be reasonably requested by the Collateral Agent. Any
payments received by any Secured Party in respect of any of its Secured
Obligations in respect of which another Secured Party shall have purchased a
participation pursuant to this Section shall be promptly shared with the other
Secured Parties in accordance with their participations. In addition, each
Secured Party shall cooperate and consult with the other Secured Parties in
respect of any participations purchased by such other Secured Parties in the
Secured Obligations of such Secured Parties in order to allow such other Secured
Parties to participate in decisions affecting such Secured Obligations.

SECTION 5.    Dispositions And Releases Of Common Collateral; Inspection and
Insurance.

5.1.      Releases of Liens.

(a)      The Collateral Agent may release the Existing Facilities Lien and the
Additional Facilities Lien on all or any portion of the Common Collateral in
accordance with and subject to the terms hereof. Upon any release, sale or
disposition of Common Collateral permitted pursuant to the terms of the Existing
Facilities Documents that results in the release of the Existing Facilities Lien
on any Common Collateral (including without limitation any sale or other
disposition pursuant to any Enforcement Action), the Additional Facilities Lien
on such Common Collateral (excluding any portion of the proceeds of such Common
Collateral remaining after application thereof in accordance with the Existing
Facilities Documents) shall be automatically and unconditionally released with
no further consent or action of any Person; provided that if at the time of such
release, sale or disposition an event of default by any Loan Party shall have
occurred and be continuing under the Additional Facilities

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Agreement, any release of the Additional Facilities Lien in respect of such
Common Collateral shall require the consent of the Additional Facilities
Representative (not to be unreasonably withheld or delayed) unless either
(i) such sale is permitted by the Existing Facilities Agreement or (ii) all
proceeds of such release, sale or disposition are applied in accordance with
Section 3.6 hereof. In no event shall the Collateral Agent release any Lien on
all or any portion of the Common Collateral in connection with any release, sale
or disposition of Common Collateral (including without limitation any sale or
other disposition pursuant to any Enforcement Action) unless (x) such release,
sale or disposition is permitted under the terms of the Existing Facilities
Documents or (y) is a result of an Enforcement Action taken in connection with
an event of default under the Existing Facilities Documents, notwithstanding
whether such release, sale or disposition is permitted under the Additional
Facilities Documents or whether or not an event of default exists under the
Additional Facilities Documents.

(b)      The Collateral Agent, each Secured Party and each Loan Party shall
promptly execute and deliver such release documents and instruments and shall
take such further actions as the Collateral Agent shall request to evidence the
release of any Existing Facilities Lien or Additional Facilities Lien, as the
case may be, described in paragraph (a). Each Secured Party hereby appoints the
Collateral Agent and any officer or duly authorized person of the Collateral
Agent, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power of attorney in the place and stead of such Secured
Party, from time to time, in the Collateral Agent’s sole discretion, for the
purposes of carrying out the terms of this Section 5.1, to take any and all
appropriate action and to execute and deliver any and all documents and
instruments as may be, necessary or desirable to accomplish the purposes of this
Section 5.1, including, without limitation, any financing statements,
endorsements, assignments, releases or other documents or instruments of
transfer (which appointment, being coupled with an interest, is irrevocable).

5.2      Inspection Rights and Insurance.

(a)      The Collateral Agent and its representatives and invitees may at any
time inspect, repossess, remove and otherwise deal with the Common Collateral,
and the Collateral Agent may advertise and conduct public auctions or private
sales of the Common Collateral, in each case without notice to, the involvement
of or interference by or liability to any Secured Party.

(b)      The Collateral Agent will have the sole and exclusive right (i) to be
named as additional insured and loss payee under any insurance policies
maintained from time to time by any Loan Party; (ii) to adjust or settle any
insurance policy or claim covering the Common Collateral in the event of any
loss thereunder and (iii) to approve any award granted in any condemnation or
similar proceeding affecting the Common Collateral.

SECTION 6.    Insolvency Proceedings.

6.1      Filing of Motions. No Secured Party shall, in or in connection with any
Insolvency Proceeding, file any pleadings or motions, take any position at any
hearing or proceeding of any nature, or otherwise take any action whatsoever, in
each case in respect of any of the Common Collateral, which is inconsistent with
this Agreement, including, without limitation, with respect to the determination
of any Liens or claims held by any Secured Party or the value of any claims of
such parties under Section 506(a) of the Bankruptcy Code or otherwise.

6.2      Relief From the Automatic Stay. No Secured Party shall seek relief from
the automatic stay or from any other stay in any Insolvency Proceeding or take
any action in derogation

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thereof, in each case in respect of any Common Collateral without the prior
written consent of the Collateral Agent.

6.3.      Adequate Protection. No Secured Party shall object, contest, or
support any other Person objecting to or contesting, (a) any request by the
Collateral Agent for adequate protection or any adequate protection provided to
any of the Secured Parties or (b) any objection by the Collateral Agent to any
motion, relief, action or proceeding based on a claim of a lack of adequate
protection or (c) the payment of interest, fees, expenses or other amounts to
any Secured Party under Section 506(b) of the Bankruptcy Code or otherwise. In
any Insolvency Proceeding, if any Secured Party is granted adequate protection
of any type or amount in respect of the Secured Obligations, then each of the
other Secured Parties shall be entitled to share in such adequate protection on
a pari passu basis in accordance with this Agreement.

6.4.      Avoidance Issues. If any Secured Party is required in any Insolvency
Proceeding or otherwise to disgorge, turn over or otherwise pay to the estate of
any Loan Party, because such amount was avoided or ordered to be paid or
disgorged for any reason including, without limitation, because it was found to
be a fraudulent or preferential transfer, any amount (such amount, a
“Recovery”), whether received as proceeds of security, enforcement of any right
of set-off or otherwise, then the Existing Facilities Obligations or the
Additional Facilities Obligations, as the case may be, shall be reinstated to
the extent of such Recovery and deemed to be outstanding as if such payment had
not occurred and the Existing Facilities Obligations Payment Date or the
Additional Facilities Obligations Payment Date, as the case may be, shall be
deemed not to have occurred. If this Agreement shall have been terminated prior
to such Recovery, this Agreement shall be reinstated in full force and effect,
and such prior termination shall not diminish, release, discharge, impair or
otherwise affect the obligations of the parties hereto. No Secured Party shall
be entitled to benefit from any avoidance action affecting or otherwise relating
to any distribution or allocation made in accordance with this Agreement,
whether by preference or otherwise, it being understood and agreed that the
benefit of such avoidance action otherwise allocable to it shall instead be
allocated and turned over for application in accordance with the pari passu
sharing provisions set forth in this Agreement.

6.5.      Asset Dispositions in an Insolvency Proceeding. No Secured Party
shall, in an Insolvency Proceeding or otherwise, oppose any sale or disposition
of any assets of any Loan Party that is supported by the Collateral Agent to the
extent the such Secured Party’s consent to a release of such Lien would not be
required under this Agreement or is otherwise consented to by the Requisite
Secured Parties, and such Secured Party will be deemed to have consented under
Section 363 of the Bankruptcy Code (and otherwise) to any such sale supported by
the Collateral Agent and to have released its Liens on such assets to the extent
required to permit the sale or disposition of the applicable assets.

6.6.      Other Matters. To the extent that any Secured Party, in its capacity
as such, has or acquires rights under Section 363 or Section 364 of the
Bankruptcy Code with respect to any of the Common Collateral, such Secured Party
shall not assert any of such rights without the prior consent of the Collateral
Agent; provided that if requested by the Collateral Agent, each Secured Party
shall timely exercise such rights in the manner requested by the Collateral
Agent, including any rights to payments in respect of such rights.

6.7.      Subordination. If through the operation of any laws applicable to any
Insolvency Proceeding, (a) any claim with respect to the Additional Facilities
Obligations then outstanding is not treated as an allowed claim, in whole or in
part, (b) the security interest of the Additional Facilities Representative is
enforced with respect to some but not all of the Additional Facilities
Obligations then

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outstanding or (c) such security interest is subordinated to the claim of any
other creditor in any such Insolvency Proceeding, and in each case the Existing
Facilities Obligations are not similarly affected or treated, then the portion
of the Additional Facilities Obligations affected (or an amount of Additional
Facilities Obligations equal to the value of any security so substituted) by the
foregoing circumstances shall not be “Secured Obligations” for purposes of this
Agreement and such portion of the Additional Facilities Obligations shall not be
entitled to the benefits of this Agreement.

SECTION 7.    Additional Facilities Documents and Existing Facilities Documents.

7.1.      Additional Facilities Security Documents. The Additional Facilities
Security Documents shall (a) be substantially similar to the Existing Facilities
Security Documents, and (b) shall provide that (x) the liens and security
interests in the Additional Facilities Collateral described therein shall be
granted in favor of the Collateral Agent and (y) the Additional Facilities
Secured Parties agree to be bound by the terms of this Agreement.

7.2.      Amendments to Pari Passu Loan Documents.

(a)      None of the Secured Parties shall at any time execute or deliver
(i) any amendment or other modification to any of the Pari Passu Loan Documents
inconsistent with or in violation of this Agreement, (ii) any amendment or other
modification to any of the Security Documents that results in the release of a
portion of the Common Collateral without the prior written consent of the
Requisite Secured Parties, unless otherwise permitted under this Agreement.

(b)      In the event the Existing Facilities Representative enters into any
amendment, waiver or consent in respect of any of the Existing Facilities
Security Documents for the purpose of adding to, or deleting from, or waiving or
consenting to any departures from any provisions of, any Existing Facilities
Security Document or changing in any manner the rights of any parties
thereunder, then such amendment, waiver or consent shall apply automatically to
any comparable provision of the Comparable Additional Facilities Security
Document without the consent of or action by any Additional Facilities Secured
Party (with all such amendments, waivers and modifications subject to the terms
hereof); provided that (other than with respect to amendments, modifications or
waivers that secure additional extensions of credit and add additional secured
creditors), (i) no such amendment, waiver or consent shall have the effect of
removing assets subject to the Lien of any Additional Facilities Security
Document, except to the extent that a release of such Lien is permitted by
Section 5.1(a) and (ii) notice of such amendment, waiver or consent shall be
given to the Additional Facilities Representative no later than thirty (30) days
after its effectiveness, provided that the failure to give such notice shall not
affect the effectiveness and validity thereof.

SECTION 8.    Reliance; Waivers; etc.

8.1.      Reliance. The Existing Facilities Documents are deemed to have been
executed and delivered, and all extensions of credit thereunder are deemed to
have been made or incurred, in reliance upon this Agreement. The Additional
Facilities Representative expressly waives all notice of the acceptance of and
reliance on this Agreement by the Existing Facilities Secured Parties. The
Additional Facilities Documents are deemed to have been executed and delivered
and all extensions of credit thereunder are deemed to have been made or
incurred, in reliance upon this Agreement. The Existing Facilities
Representative expressly waive all notices of the acceptance of and reliance by
the Additional Facilities Representative.

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8.2      No Warranties or Liability. The Additional Facilities Representative
and the Existing Facilities Representative acknowledge that neither has made,
nor has the Collateral Agent made, any representation or warranty with respect
to the execution, validity, legality, completeness, collectibility or
enforceability of any other Existing Facilities Document or any Additional
Facilities Document. Except as otherwise provided in this Agreement, the
Additional Facilities Representative and the Existing Facilities Representative
will be entitled to manage and supervise their respective extensions of credit
to any Loan Party in accordance with law and their usual practices, modified
from time to time as they deem appropriate.

8.3.      No Waivers. No right or benefit of any party hereunder shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of such party or any other party hereto or by any noncompliance by any Loan
Party with the terms and conditions of any of the Existing Facilities Documents
or the Additional Facilities Documents.

SECTION 9.    Obligations Unconditional.

9.1.      Secured Obligations Unconditional. All rights and interests of the
Secured Parties hereunder, and all agreements and obligations of the Secured
Parties (and, to the extent applicable, the Loan Parties) hereunder, shall
remain in full force and effect irrespective of:

(a)      any lack of validity or enforceability of any Pari Passu Loan Document;

(b)                    any change in the time, place or manner of payment of, or
in any other term of, all or any portion of the Secured Obligations, or any
amendment, waiver or other modification, whether by course of conduct or
otherwise, or any refinancing, replacement, refunding or restatement of any Pari
Passu Loan Document;

(c)      any exchange, release, voiding, avoidance or non-perfection of any
security interest in any Common Collateral or any other collateral, or any
release, amendment, waiver or other modification, whether by course of conduct
or otherwise, or any refinancing, replacement, refunding or restatement of all
or any portion of the Secured Obligations, the Common Collateral or any
guarantee or guaranty thereof; or

(d)      any other circumstances that otherwise might constitute a defense
available to, or a discharge of, any Loan Party in respect of the Secured
Obligations, or any Loan Party, to the extent applicable, in respect of this
Agreement.

SECTION 10.  Miscellaneous.

10.1.      Conflicts. In the event of any conflict between the provisions of
this Agreement and the provisions of any Existing Facilities Document or any
Additional Facilities Document, the provisions of this Agreement shall govern.

10.2.      Termination of this Agreement; Continuing Nature of Provisions. This
Agreement shall continue to be effective, and shall not be revocable by any
party hereto, until the date upon which both the Existing Facilities Obligations
Payment Date and the Additional Facilities Obligations Payment Date shall have
occurred. This is a continuing agreement and the Existing Facilities Secured
Parties and the Additional Facilities Secured Parties may continue, at any time,
and without

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notice to the other parties hereto, to extend credit and other financial
accommodations, lend monies and provide indebtedness to, or for the benefit of,
the Borrower or any other Loan Party on the faith hereof.

10.3.      Amendments; Waivers.

(a)      No amendment or modification of any of the provisions of this Agreement
shall be effective unless the same shall be in writing and signed by the
Collateral Agent, the Existing Facilities Representative and the Additional
Facilities Representative, and, in the case of amendments or modifications that
directly affect the rights or duties of any Loan Party, such Loan Party.

(b)        It is understood that the Existing Facilities Representative, on
behalf of itself and the other Secured Parties, may in its discretion determine
that a supplemental agreement (which make take the form of an amendment and
restatement of this Agreement) is necessary or appropriate to facilitate having
additional indebtedness or other obligations (“Additional Debt”) of any of the
Loan Parties become Existing Facilities Obligations under this Agreement,
provided, that such Additional Debt is permitted to be incurred by the Existing
Facilities Agreements then extant, and is permitted by said agreements to be
subject to the provisions of this Agreement as Existing Facilities Obligations.

10.4.      Information Concerning Financial Condition of the Borrower and the
other Loan Parties. The Existing Facilities Representative and the Additional
Facilities Representative hereby assume responsibility for keeping itself
informed of the financial condition of the Borrower and each of the other Loan
Parties and all other circumstances bearing upon the risk of nonpayment of the
Secured Obligations. The Existing Facilities Representative and the Additional
Facilities Representative hereby agree that no party shall have any duty to
advise any other party of information known to it regarding such condition or
any such circumstances. In the event any of the Existing Facilities
Representative or the Additional Facilities Representative, in its sole
discretion, undertakes at any time or from time to time to provide any
information to any other party to this Agreement, it shall be under no
obligation (a) to provide any such information to such other party or any other
party on any subsequent occasion, (b) to undertake any investigation not a part
of its regular business routine, or (c) to disclose any other information.

10.5.      GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, EXCEPT AS
OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT
REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK ARE GOVERNED BY THE LAWS OF SUCH JURISDICTION.

10.6.      Submission to Jurisdiction.

(a)      Each party hereto hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each such
party hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each such party
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

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in this Agreement shall affect any right that any Secured Party may otherwise
have to bring any action or proceeding against any Loan Party or its properties
in the courts of any jurisdiction.

(b)      Each party hereto hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so (i) any objection it may now
or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (a) of this Section and (ii) the defense of an inconvenient forum to
the maintenance of such action or proceeding.

(c)      Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 10.7. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.

10.7.    Notices. Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, telecopied, or sent by overnight express courier
service or United States mail and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of a telecopy or five
days after deposit in the United States mail (certified, with postage prepaid
and properly addressed). For the purposes hereof, the addresses of the parties
hereto (until notice of a change thereof is delivered as provided in this
Section) shall be as set forth below each party’s name on the signature pages
hereof, or, as to each party, at such other address as may be designated by such
party in a written notice to all of the other parties.

10.8    Expenses. The Borrower shall pay (a) all out-of-pocket expenses incurred
by the Collateral Agent and the Secured Parties, including the reasonable fees,
charges, and disbursements of counsel for the Collateral Agent and the Secured
Parties, in connection with the preparation and administration of this Agreement
and (ii) all out-of-pocket expenses incurred by the Collateral Agent and the
Secured Parties, including the fees, charges and disbursements of counsel to any
of the foregoing, in connection with the enforcement or protection of any rights
under this Agreement.

10.9    Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of each of the parties hereto and each of the Secured Parties and
their respective successors and assigns, and nothing herein is intended, or
shall be construed to give, any other Person any right, remedy or claim under,
to or in respect of this Agreement or any Common Collateral.

10.10.  Headings. Section headings used herein are for convenience of reference
only, are not part of this Agreement and shall not affect the construction of,
or be taken into consideration in interpreting, this Agreement.

10.11.  Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

10.12.  Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto on different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually

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executed counterpart of this Agreement. This Agreement shall become effective
when it shall have been executed by each party hereto.

10.13.  Additional Parties to this Agreement; Conditions to Agreement.

(a)      Each Person that becomes a Loan Party after the date hereof shall
become a party to this Agreement upon execution and delivery by such Person or
the Additional Facilities Representative, of an Assumption Agreement
substantially in the form of Annex 1 to this Agreement.

(b)      The Additional Facilities Representative shall not become a party to
this Agreement, and this Agreement shall not be effective, until the following
conditions have been satisfied:

(i)      the Additional Facilities Representative shall deliver to the Existing
Facilities Representative true and correct copies of each of the Additional
Facilities Security Documents, certified by a Responsible Officer of the
Additional Facilities Representative;

(ii)      the Additional Facilities Representative shall provide evidence, in a
form satisfactory to the Existing Facilities Representative, that it has taken
all steps necessary to perfect any and all Additional Facilities Liens on the
Common Collateral on a pari passu basis with the Existing Facilities Liens on
such Common Collateral; and

(iii)      if requested by the Administrative Agent, the Borrower shall have
provided an increase in title insurance coverage provided under the Existing
Facilities Credit Agreement in an amount equal to the initial amount of the
Additional Facilities Obligations (or such lesser amount agreed to by the
Existing Facilities Representative).

(c)      Any provisions of this Agreement relating to the Additional Facilities
Representative shall not create any rights or benefits in favor of the
Additional Facilities Representative unless and until the Additional Facilities
Representative shall become party to this Agreement and, in any event, only
until the Additional Facilities Representative Obligations Payment Date.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

JPMORGAN CHASE BANK, N.A., as Collateral Agent By:  

 

Name: Title: Address for Notices: Attention: Telecopy No.: JPMORGAN CHASE BANK,
N.A., as Existing Facilities Representative for and on behalf of the Existing
Facilities Secured Parties By:  

 

Name: Title: Address for Notices: Attention: Telecopy No.: MIRANT NORTH AMERICA,
LLC By:  

 

Name: Title: Address for Notices: Attention: Telecopy No.:
[                                ], as Additional Facilities Representative for
and on behalf of the Additional Facilities Secured Parties By:  

 

Name: Title: Address for Notices: Attention: Telecopy No.:

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[NAME OF EACH LOAN PARTY]9 By:  

 

Name: Title: Address for Notices: Attention: Telecopy No.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9 All Guarantors shall be Loan Parties hereunder.