Exhibit 10.9

Execution Version

 

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$50,000,000

SECOND LIEN CREDIT AGREEMENT

dated as of May 5, 2006

among

ONTELAUNEE POWER OPERATING COMPANY, LLC,

as Borrower

THE LENDERS PARTY HERETO

and

GSO CAPITAL PARTNERS LP,

as Bookrunner, Lead Arranger, Administrative Agent, Collateral Agent and
Syndication Agent

 

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ARTICLE I. Definitions

   1         SECTION 1.01.   Defined Terms    1         SECTION 1.02.   Terms
Generally    22         SECTION 1.03.   Classification of Loans and Borrowings
   23 ARTICLE II. The Loans    23         SECTION 2.01.   Commitments    23
        SECTION 2.02.   Loans    23         SECTION 2.03.   Borrowing Procedure
   24         SECTION 2.04.   Repayment of Term Loans; Evidence of Debt    24
        SECTION 2.05.   Fees    25         SECTION 2.06.   Interest on Term
Loans    25         SECTION 2.07.   Default Interest    26         SECTION 2.08.
  Alternate Rate of Interest    26         SECTION 2.09.   Termination of Term
Loan Commitments    26         SECTION 2.10.   Conversion and Continuation of
Borrowings    26         SECTION 2.11.   Prepayment    28         SECTION 2.12.
  Mandatory Prepayments; Change of Control Prepayments    28
        SECTION 2.13.   Reserve Requirements; Change in Circumstances    30
        SECTION 2.14.   Change in Legality    32         SECTION 2.15.  
Indemnity    32         SECTION 2.16.   Pro Rata Treatment    33
        SECTION 2.17.   Sharing of Setoffs    33         SECTION 2.18.  
Payments    34         SECTION 2.19.   Taxes    34         SECTION 2.20.  
Assignment of Term Loans Under Certain Circumstances; Non-Consenting Lenders;
Duty to Mitigate.    36 ARTICLE III. Representations and Warranties    37
        SECTION 3.01.   Organization; Powers    37         SECTION 3.02.  
Authorization; No Conflicts    37         SECTION 3.03.   Enforceability    38
        SECTION 3.04.   Governmental Approvals    38         SECTION 3.05.  
Financial Statements    38         SECTION 3.06.   No Material Adverse Change   
38         SECTION 3.07.   Location and Title to Properties.    38
        SECTION 3.08.   Subsidiaries    39         SECTION 3.09.   Litigation;
Compliance with Laws    39         SECTION 3.10.   Agreements    40
        SECTION 3.11.   Federal Reserve Regulations    40

 

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        SECTION 3.12.   Investment Company Act    40         SECTION 3.13.   Use
of Proceeds    40         SECTION 3.14.   Tax Returns    40
        SECTION 3.15.   No Material Misstatements    40         SECTION 3.16.  
Employee Benefit Plans    41         SECTION 3.17.   Environmental Matters    41
        SECTION 3.18.   Insurance    42         SECTION 3.19.   Security
Documents    42         SECTION 3.20.   Labor Matters    43
        SECTION 3.21.   Liens    43         SECTION 3.22.   Intellectual
Property    43         SECTION 3.23.   Solvency    43         SECTION 3.24.  
Energy Regulation    44         SECTION 3.25.   Sufficiency of Material
Agreements    45         SECTION 3.26.   Utilities    45         SECTION 3.27.  
Other Facilities    45         SECTION 3.28.   Subdivision    45 ARTICLE IV.
Conditions of Lending    46         SECTION 4.01.   Conditions    46 ARTICLE V.
Affirmative Covenants    49         SECTION 5.01.   Existence; Businesses And
Properties    49         SECTION 5.02.   Insurance    49         SECTION 5.03.  
Obligations and Taxes    50         SECTION 5.04.   Financial Statements,
Reports, etc    50         SECTION 5.05.   Litigation and Other Notices    51
        SECTION 5.06.   Information Regarding Collateral    51
        SECTION 5.07.   Maintaining Records; Access to Properties and
Inspections; Environmental Assessments    52         SECTION 5.08.   Use of
Proceeds    53         SECTION 5.09.   Additional Collateral, etc    53
        SECTION 5.10.   Further Assurances    54         SECTION 5.11.  
Miscellaneous Business Covenants    54         SECTION 5.12.   Material
Agreements    54         SECTION 5.13.   Collateral Assignment    55
        SECTION 5.14.   Payments Under Gas Supply Contract    55
        SECTION 5.15.   Compliance with FPA and PUHCA 2005    55 ARTICLE VI.
Negative Covenants    55         SECTION 6.01.   Indebtedness; Preferred Stock
   55         SECTION 6.02.   Liens    56

 

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        SECTION 6.03.   Sale and Lease-Back Transactions    58
        SECTION 6.04.   Investments, Loans and Advances    58
        SECTION 6.05.   Mergers, Consolidations, Sales of Assets and
Acquisitions    59         SECTION 6.06.   Restricted Payments; Restrictive
Agreements    59         SECTION 6.07.   Transactions with Affiliates    60
        SECTION 6.08.   Business of the Borrower and Subsidiaries; Limitation on
Hedging Agreements    61         SECTION 6.09.   Other Indebtedness and
Agreements; Modifications of Certain Agreements    61         SECTION 6.10.  
Fiscal Year    62         SECTION 6.11.   Accounts    62         SECTION 6.12.  
Subsidiaries    62         SECTION 6.13.   Use of Site    62
        SECTION 6.14.   Hazardous Materials    62         SECTION 6.15.  
Payments For Asset Management Services    62         SECTION 6.16.   Payments of
Affiliate Credit Support Reimbursement Amounts    62 ARTICLE VII. Events of
Default    62 ARTICLE VIII. The Agents and the Arranger    65 ARTICLE IX.
Miscellaneous    67         SECTION 9.01.   Notices    67         SECTION 9.02.
  Survival of Agreement    68         SECTION 9.03.   Binding Effect    68
        SECTION 9.04.   Successors and Assigns    69         SECTION 9.05.  
Expenses; Indemnity    72         SECTION 9.06.   Right of Setoff    74
        SECTION 9.07.   Applicable Law    74         SECTION 9.08.   Waivers;
Amendment    74         SECTION 9.09.   Interest Rate Limitation    75
        SECTION 9.10.   Entire Agreement    75         SECTION 9.11.   WAIVER OF
JURY TRIAL    76         SECTION 9.12.   Severability    76
        SECTION 9.13.   Counterparts    76         SECTION 9.14.   Headings   
76         SECTION 9.15.   Jurisdiction; Consent to Service of Process    76
        SECTION 9.16.   Confidentiality    77         SECTION 9.17.   Delivery
of Lender Addenda    77         SECTION 9.18.   Separateness    77 Exhibits and
Schedules

 

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Exhibit A

  Form of Administrative Questionnaire

Exhibit B

  Form of Affiliate Subordination Agreement

Exhibit C

  Form of Assignment and Acceptance

Exhibit D

  Form of Borrowing Request

Exhibit E

  Form of Guarantee and Collateral Agreement

Exhibit F

  Form of Lender Addendum

Exhibit G

  Form of Mortgage

Exhibit H

  Form of Perfection Certificate

Exhibit I

  Form of Exemption Certificate

Exhibit J-1

  Form of Opinion of Dewey Ballantine LLP

Exhibit J-2

  Form of Opinion of Blank Rome LLP

Exhibit K

  Form of Pledge and Security Agreement

Exhibit L

  [Intentionally Omitted.]

Exhibit M

  Form of Intercreditor Agreement

Schedule 1.01(b)

  Subsidiary Guarantors

Schedule 3.07

  Owned Real Property

Schedule 3.08

  Subsidiaries

Schedule 3.09

  Litigation

Schedule 3.10

  Material Agreements

Schedule 3.13

  Use of Proceeds

Schedule 3.17

  Environmental Matters

Schedule 3.18

  Insurance

Schedule 3.19(a)

  UCC Filing Offices

Schedule 3.20

  Labor Matters

Schedule 6.01

  Existing Indebtedness

Schedule 6.01(e)

  Subordination Provisions

Schedule 6.02(a)

  Existing Liens

Schedule 6.04

  Existing Investments

 

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SECOND LIEN CREDIT AGREEMENT dated as of May 5, 2006 (this “Agreement”), among
ONTELAUNEE POWER OPERATING COMPANY, LLC. (the “Borrower”), the LENDERS from time
to time party hereto and GSO CAPITAL PARTNERS LP (“GSO”), as bookrunner and lead
arranger (in such capacities, the “Arranger”), as syndication agent (in such
capacity, the “Syndication Agent”), as administrative agent (in such capacity
and together with its successors, the “Administrative Agent”) and as collateral
agent (in such capacity and together with its successors, the “Collateral
Agent”).

The parties hereto agree as follows:

ARTICLE I.

Definitions

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:

“ABR”, when used in reference to any Term Loan or Borrowing, refers to whether
such Term Loan, or the Term Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.

“Adjusted LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum equal to the product of (a) the
LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.

“Administrative Agent” shall have the meaning assigned to such term in the
preamble.

“Administrative Agent Fees” shall have the meaning assigned to such term in
Section 2.05(a).

“Administrative Questionnaire” shall mean an Administrative Questionnaire in the
form of Exhibit A, or such other form as may be supplied from time to time by
the Administrative Agent.

“Affiliate” shall mean, when used with respect to a specified person, another
person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the person specified;
provided, however, that, for purposes of Section 6.07, the term “Affiliate”
shall also include any person that directly or indirectly owns 10% or more of
any class of Equity Interests having ordinary voting power in the election of
directors (or persons performing similar functions) of the person specified.

“Affiliate Credit Support” shall mean credit support provided in support of
obligations of the Borrower by (a) an Affiliate of the Borrower or (b) a third
party (other than the Borrower or its Affiliates), for which an Affiliate has an
obligation of payment or reimbursement (such credit support to include, for the
avoidance of doubt, any letter of credit under which an Affiliate of the
Borrower is “account party”, letter of credit reimbursement obligations in
connection therewith, a guaranty by such Affiliate of the Borrower’s obligations
or cash collateral provided by an Affiliate in support of the obligations of the
Borrower).

 

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“Affiliate Credit Support Reimbursement Amounts” shall mean the aggregate amount
up to the Affiliate Credit Support Reimbursement Limit of (a) fees, expenses and
other amounts payable by or to an Affiliate of the Borrower in respect of
Affiliate Credit Support and (b) without duplication, the fees, expenses, and
other amounts payable to an Affiliate as consideration for its agreement to
provide or cause to be provided Affiliate Credit Support.

“Affiliate Credit Support Reimbursement Limit” shall mean $5,000,000 in the
aggregate when combined with the First Lien Affiliate Credit Support
Reimbursement Limit unless otherwise agreed to by the Administrative Agent in
its sole discretion.

“Affiliate Subordination Agreement” shall mean an Affiliate Subordination
Agreement in the form of Exhibit B pursuant to which Affiliate Credit Support
Reimbursement Amounts owed by any Loan Party are subordinated to the
Obligations.

“Agents” shall have the meaning assigned to such term in Article VIII.

“Agreement” shall have the meaning assigned to such term in the preamble.

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective as of the opening of business on the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.

“Applicable Margin” shall mean, (a) with respect to the Eurodollar Term Loans,
4.00% per annum and, (b) with respect to ABR Term Loans, 3.00% per annum.

“Arranger” shall have the meaning assigned to such term in the preamble.

“Asset Management Payment Limit” shall mean $300,000 for any fiscal year.

“Asset Sale” shall mean the sale, capital lease, sale and leaseback, assignment,
conveyance, transfer, issuance or other disposition (by way of merger, casualty,
condemnation or otherwise) by the Borrower or any of the Subsidiaries to any
person other than the Borrower or any Subsidiary Guarantor of (a) any Equity
Interests of any of the Subsidiaries or (b) any other assets of the Borrower or
any of the Subsidiaries, including Equity Interests of any person that is not a
Subsidiary (other than sales of electric energy and capacity in the ordinary
course of business, or the disposition of obsolete, worn out or no longer useful
assets, scrap and Permitted Investments); provided that any asset sale or series
of related asset sales described in clause (b) above having a value not in
excess of $500,000 in any single transaction or series of related transactions
and $1,000,000 in the aggregate in any fiscal year of the Borrower shall be
deemed not to be an “Asset Sale” for purposes of this Agreement.

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any person whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit C or such other form as shall be approved by the Administrative
Agent.

 

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“Benefit Plan” shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Tax Code or Section 307 of ERISA, and in respect of which the
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States of America.

“Borrower” shall have the meaning assigned to such term in the preamble.

“Borrowing” shall mean Term Loans of the same Type made, converted or continued
on the same date and, in the case of Eurodollar Term Loans, as to which a single
Interest Period is in effect.

“Borrowing Request” shall mean a request by the Borrower in accordance with the
terms of Section 2.03 and substantially in the form of Exhibit D, or such other
form as shall be approved by the Administrative Agent.

“Breakage Event” shall have the meaning assigned to such term in Section 2.15.

“Business Day” shall mean any day other than a Saturday, Sunday or day on which
commercial banks in the State of New York are authorized or required by law to
close; provided, however, that when used in connection with a Eurodollar Term
Loan (including with respect to all notices and determinations in connection
therewith and any payments of principal, interest or other amounts thereon), the
term “Business Day” shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.

“Capital Lease Obligations” of any person shall mean 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 the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.

“Change in Law” shall mean (a) the adoption of any law, rule or regulation after
the Second Lien Closing Date, (b) any change in any law, rule or regulation or
in the interpretation or application thereof by any Governmental Authority after
the Second Lien Closing Date or (c) compliance by any Lender (or, for purposes
of Section 2.13, by any lending office of such Lender or by such Lender’s
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the Second Lien Closing Date.

“Change of Control” shall mean (a) at any time, the Permitted Holders shall fail
to own directly or indirectly, beneficially and of record, Equity Interests
representing at least 51% of the aggregate ordinary voting power and aggregate
equity value represented by the issued and outstanding Equity Interests in the
Borrower; (b) the Pledgor shall at any time fail to own directly or indirectly,
beneficially and of record, 100% of each class of issued and outstanding

 

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Equity Interests in the Borrower free and clear of all Liens (other than Liens
under the Pledge and Security Agreement and Liens under the First Lien Pledge
and Security Agreement); or (c) any “change of control” or similar event with
respect to the Borrower or any Subsidiary shall occur under the Second Lien
Credit Agreement or any indenture or agreement in respect of Material
Indebtedness to which the Borrower or any Subsidiary is a party.

“Change of Control Offer” shall have the meaning assigned to such term in
Section 2.12(g).

“Change of Control Payment Date” shall have the meaning assigned to such term in
Section 2.12(g).

“Change of Control Prepayment Price” shall have the meaning assigned to such
term in Section 2.12(g).

“Charges” shall have the meaning assigned to such term in Section 9.09.

“Cinergy” shall mean Cinergy Marketing & Trading, LP.

“Cinergy Account” shall mean the “Designated Account” as such term is defined in
the Gas Supply Security Agreement.

“Cinergy Gas Supply Contract” shall mean that certain Base Contract for Sale and
Purchase of Natural Gas dated October 6, 2005 by and between the Borrower and
Cinergy, as in effect on the First Lien Closing Date.

“Cinergy Gas Supply Security Agreement” shall mean that certain Security
Agreement dated October 6, 2005 by and between the Borrower, as grantor, and
Cinergy, as secured party, as in effect on the First Lien Closing Date.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Collateral” shall mean all property and assets of the Loan Parties, now owned
or hereafter acquired, upon which a Lien is purported to be created by any
Security Document, and shall include the Site and any other Mortgaged
Properties.

“Collateral Agent” shall have the meaning assigned to such term in the preamble.

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms “Controlling” and “Controlled” shall have meanings correlative thereto. It
is understood and agreed that the Administrative Agent, the Arranger and the
Lenders shall not, by virtue of their capacities as such under this Agreement,
be deemed to Control the Borrower or any of the Subsidiaries.

“Control Agreement” shall mean, with respect to each deposit account or
securities account of a Loan Party, an agreement among the Collateral Agent, the
applicable Loan Party and the person with whom such account is maintained, which
agreement shall establish the

 

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Collateral Agent’s “control” (in the case of a securities account, within the
meaning of Section 8-106 and 9-106 of the UCC or, in the case of a deposit
account, within the meaning of Section 9-104 of the UCC) over such account and
shall otherwise be in form and substance reasonably satisfactory to the
Collateral Agent.

“Controlled Group” shall mean all members of a controlled group of corporations
and all 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 414(c) of the Code.

“CS Heat Rate Call Option Agreement” shall mean that certain agreement evidenced
by the International Swaps and Derivatives Association, Inc. Schedule to the
Master Agreement dated as of November 22, 2005 between the Borrower, as “Party
A” and Credit Suisse Energy LLC (formerly known as Credit Suisse First Boston
International) as “Party B”, together with the Confirmation attached thereto as
Exhibit B and the Credit Support Annex attached thereto.

“Debt Service” shall mean, for any period, without duplication, the sum of
(a) Fees, (b) interest on and principal of the Obligations, (c) amounts required
to be paid in respect of Indebtedness permitted under this Agreement (including
under the First Lien Credit Agreement) and (d) liquidation costs, hedge breaking
expenses and other amounts payable by the Borrower in respect of any Hedging
Agreement intended to mitigate exposure to interest rate fluctuation payable
during such period, net of any amount payable to the Borrower under any such
Hedging Agreement, in each case, during such period.

“Default” shall mean any event which upon notice, lapse of time or both, unless
cured or waived, would constitute an Event of Default.

“deposit account” shall have the meaning assigned to such term in the UCC.

“dollars” or “$” shall mean lawful money of the United States of America.

“Easements” shall have the meaning given in the Mortgages.

“Effective Tax Rate” means, with respect to any Tax Fiscal Quarter, the
aggregate federal, state and local tax rate applicable to Borrower for such Tax
Fiscal Quarter, determined as if Borrower were a corporation and resident in the
city of New York at all times during such Tax Fiscal Quarter subject to the
highest composite U.S. federal, New York State and New York City tax rate
applicable to corporations then in effect, taking into account the character of
income earned by Borrower and the deductibility of state and local taxes for
federal and state tax purposes; provided, however, that the state and local tax
rate shall be taken into account only if Borrower is treated as a partnership or
a “disregarded entity” for such state and local tax purposes.

“Environmental Laws” shall mean all Federal, state, local and foreign laws
(including common law), treaties, regulations, rules, ordinances, codes,
decrees, judgments, directives and orders (including consent orders), in each
case, relating to protection of the environment, natural resources, human health
and safety (with respect to exposure to Hazardous Materials) or the presence,
Release of, threatened Release, or exposure to, Hazardous Materials, or the
generation, manufacture, processing, distribution, use, treatment, storage,
transport, recycling or handling of, or the arrangement for such activities with
respect to, Hazardous Materials.

 

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“Environmental Liability” shall mean all liabilities, obligations, damages,
losses, claims, actions, suits, judgments, orders, fines, penalties, fees,
expenses and costs (including administrative oversight costs, natural resource
damages and remediation costs) arising out of or relating to (a) compliance or
non-compliance with any Environmental Law, (b) exposure to any Hazardous
Materials, (c) the Release or threatened Release of any Hazardous Materials or
(d) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.

“Environmental Permit” shall mean any Permit required under Environmental Law.

“Equity Interests” shall mean shares of capital stock, partnership interests,
membership interests or other equivalents in a limited liability company,
partnership, corporation or equivalent entity, or any obligations convertible
into or exchangeable for, or giving any person a right, option or warrant to
acquire, such equity interests or such convertible or exchangeable obligations.

“Equity Issuance” shall mean any issuance or sale by the Borrower, or any
Subsidiary of any Equity Interests of the Borrower or such Subsidiary, as
applicable, or the receipt by the Borrower or any Subsidiary of any capital
contribution, as applicable.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Tax Code, or solely for purposes of Section 302 of
ERISA and Section 412 of the Tax Code, is treated as a single employer under
Section 414 of the Tax Code.

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043
of ERISA or the regulations issued thereunder, with respect to a Benefit Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Benefit Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Tax Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of the Tax Code
or Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Benefit Plan; (d) the incurrence by the Borrower or
any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Benefit Plan or the withdrawal or partial
withdrawal of the Borrower or any of its ERISA Affiliates from any Benefit Plan
or Multiemployer Plan; (e) the receipt by the Borrower or any of its ERISA
Affiliates from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Benefit Plan or Plans or to appoint a trustee to
administer any Benefit Plan; (f) the adoption of any amendment to a Benefit Plan
that would require the provision of security pursuant to Section 401(a)(29) of
the Tax Code or Section 307 of ERISA; (g) the receipt by the Borrower or any of
its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan
from the Borrower or any of its ERISA Affiliates of any notice, concerning

 

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the imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA; (h) the occurrence of a “prohibited transaction”
with respect to which the Borrower or any of the Subsidiaries is a “disqualified
person” (within the meaning of Section 4975 of the Tax Code) or with respect to
which the Borrower or any such Subsidiary could otherwise be liable; or (i) any
other event or condition with respect to a Benefit Plan or Multiemployer Plan
that could result in liability of the Borrower or any Subsidiary.

“Eurodollar”, when used in reference to any Term Loan or Borrowing, refers to
whether such Term Loan, or the Term Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” shall have the meaning assigned to such term in Article VII.

“Excess Cash Flow” shall mean for any period of determination, the amount by
which Operating Revenues for such period exceed the sum, without duplication, of
(a) O&M Costs for such period, (b) Debt Service for such period, (c) the Tax
Distribution Amount, if any, (d) Affiliate Credit Support Reimbursement Amounts,
if any, (e) fees, if any, paid under Section 2.11 in connection with an optional
prepayment thereunder, plus (f) prudent reserves, if any, established by the
Borrower in its reasonable discretion for major maintenance, necessary capital
expenditures and Debt Service.

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income or net profits as a result of a present or
former connection between such recipient and the jurisdiction imposing such tax
(or any political subdivision thereof), other than any such connection arising
solely from such recipient having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
other Loan Document and (b) in the case of a Foreign Lender, any United States
withholding tax that is imposed with respect to amounts payable to such Lender
to the extent that (i) the obligation to withhold existed on the date such
Lender became a party to this Agreement (or, in the case of an assignee that is
a participation holder, on the date such participation holder became an assignee
hereunder) or, with respect to payments to a new lending office, the date such
Lender designated such new lending office with respect to a Loan; provided,
however, that this subparagraph (b) shall not apply (x) to any assignee or new
lending office that becomes an assignee or new lending office as a result of an
assignment, participation, transfer or designation made at the request of the
Borrower pursuant to Section 2.20(a) and (y) to the extent the indemnity payment
or additional amounts any assignee, or any Lender acting through a new lending
office, would be entitled to receive under Section 2.19(a) without this
subparagraph (b) on the date such assignee becomes a party to this Agreement or
such lending office is so designated do not exceed the indemnity payment or
additional amounts that the person making the assignment, participation or
transfer to such assignee, or Lender making the designation of such new lending
office, would have been entitled to receive in the absence of such assignment,
participation, transfer or designation or (ii) such withholding tax is
attributable to such Lender’s failure to comply with the requirements of
Section 2.19(e), or (c) any United States backup withholding tax that is
attributable to a Lender’s failure to comply with the requirements of
Section 2.19(f).

 

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

“Fee Letter” shall mean the Fee Letter dated on or about May 5, 2006, between
the Borrower and GSO.

“Fees” shall mean the Administrative Agent Fees and any Prepayment Fees.

“FERC” shall mean, the Federal Energy Regulatory Commission, or any successor
agency or commission thereto.

“Financial Officer” of any person shall mean the chief financial officer,
principal accounting officer, treasurer or controller of such person.

“First Lien Administrative Agent” shall have the meaning given to the term
“Administrative Agent” in the First Lien Credit Agreement.

“First Lien Affiliate Credit Support Reimbursement Limit” shall have the meaning
given to the term “Affiliate Credit Support Reimbursement Limit” in the First
Lien Credit Agreement.

“First Lien Collateral Agent” shall have the meaning given to the term
“Collateral Agent” in the First Lien Credit Agreement.

“First Lien Closing Date” shall mean December 7, 2005.

“First Lien Credit Agreement” shall mean that certain First Lien Credit
Agreement dated as of the First Lien Closing Date, among the Borrower, the
lenders from time to time party thereto, and the agents from time to time party
thereto.

“First Lien Lenders” shall have the meaning given to the term “Lenders” in the
First Lien Credit Agreement.

“First Lien Loan Documents” shall have the meaning given to the term “Loan
Documents” in the First Lien Credit Agreement.

“First Lien Pledge and Security Agreement” shall mean that certain Pledge and
Security Agreement dated as of December 7, 2005 among the Pledgor, the Borrower
and the First Lien Collateral Agent.

“First Lien Term Loans” shall have the meaning given to the term “Term Loans” in
the First Lien Credit Agreement.

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

 

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“FPA” shall mean the Federal Power Act, as amended.

“Gas Supply Contract” shall mean the Cinergy Gas Supply Contract and any
replacement or additional agreement relating to gas supply for the Project on
terms and conditions reasonably satisfactory to the Administrative Agent.

“Gas Supply Security Agreement” shall mean the Cinergy Gas Supply Security
Agreement and any replacement or additional security agreement securing the
obligations of the Borrower under a replacement Gas Supply Contract (a) having
terms and conditions substantially similar to the Cinergy Gas Supply Security
Agreement, (b) requiring security not greater than amounts owed for 30 days’
supply of natural gas delivered to the Project, (c) providing a lien over no
collateral other than the collateral subject to the lien established pursuant to
the Cinergy Gas Supply Security Agreement and (d) otherwise on terms and
conditions reasonably satisfactory to the Administrative Agent.

“GAAP” shall mean generally accepted accounting principles in the United States.

“Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

“Granting Lender” shall have the meaning assigned to such term in
Section 9.04(j).

“GSO” shall have the meaning assigned to such term in the preamble.

“Guarantee” of or by any person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of (a) the guarantor or (b) another person (including
any bank under a letter of credit) to induce the creation of which the guarantor
has issued a reimbursement, counterindemnity or similar obligation, in either
case guaranteeing or having the economic effect of guaranteeing any Indebtedness
or other obligation of any other person (the “primary obligor”) in any manner,
whether directly or indirectly, and including any obligation, contingent or
otherwise, of the guarantor, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness or other obligation,
(ii) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment of
such Indebtedness or other obligation, (iii) to maintain working capital or
equity capital or otherwise maintain the net worth or solvency or any balance
sheet condition of the primary obligor so as to enable the primary obligor to
pay such Indebtedness or other obligation, (iv) as an account party in respect
of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation or (v) to otherwise assure or hold harmless the owner
of such Indebtedness or other obligation against loss in respect thereof;
provided, however, that the term “Guarantee” shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Guarantee at any time shall be deemed to be an amount equal to the lesser at
such time of (a) the stated or determinable amount of the applicable obligations
of the primary obligor in respect of

 

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which such Guarantee is incurred and (b) the maximum amount for which the
guarantor may be liable pursuant to the terms of the instrument embodying such
Guarantee or, if not stated or determinable, the maximum reasonably anticipated
liability (assuming full performance) in respect thereof.

“Guarantee and Collateral Agreement” shall mean the Second Lien Guarantee and
Collateral Agreement dated as of May 5, 2006, executed by the Borrower in favor
of the Collateral Agent.

“Guarantors” shall mean the Subsidiary Guarantors.

“Hazardous Materials” shall mean any petroleum (including crude oil or fraction
thereof) or petroleum products or byproducts, or any pollutant, contaminant,
chemical, compound, constituent, or hazardous, toxic or other substances,
materials or wastes regulated as hazardous by, or pursuant to, any Environmental
Law, or that requires removal, remediation or reporting under any Environmental
Law, including asbestos, or asbestos containing material, radon or other
radioactive material, polychlorinated biphenyls and urea formaldehyde
insulation.

“Heat Rate Call Option” means the CS Heat Rate Call Option Agreement or a heat
rate call option or similar contractual arrangement, in form and substance
substantially similar to the CS Heat Rate Call Option Agreement, pursuant to
which the Borrower grants a Heat Rate Call Option Counterparty the right, but
not the obligation, to call on the Borrower to supply a defined amount of energy
at an indexed fuel price multiplied times an agreed, or “strike”, heat rate,
which contract shall be settled financially by way of a net payment on a basis
not less frequently than every 30 days, and pursuant to which the Heat Rate Call
Option Counterparty shall not take physical delivery of energy.

“Heat Rate Call Option Counterparty” shall mean a party other than the Borrower
who is nationally recognized in purchasing and selling Heat Rate Call Options
and other energy product derivatives and whose (a) long-term unsecured senior
debt is rated (i) at least BBB by S&P and Baa by Moody’s or (ii) if such party
is a load serving utility, at least BBB- by S&P and Baa3 by Moody’s or
(b) obligations under the applicable Heat Rate Call Option to which it is a
party are either (i) guaranteed by an entity whose long-term unsecured senior
debt is rated at least BBB by S&P and Baa by Moody’s, (ii) cash collateralized
in a form and substance reasonably satisfactory to Administrative Agent, or
(iii) supported by a letter of credit from a bank or financial institution
having a rating of at least A- by S&P and A3 by Moody’s.

“Hedging Agreement” shall mean any agreement 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, fuel or other
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, including any
Heat Rate Call Option; provided, however, that no phantom stock or similar plan
providing for payments and on account of services provided by current or former
directors, officers, employees or consultants of the Borrower or any Subsidiary
shall be a Hedging Agreement.

 

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“Indebtedness” of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person under conditional sale or other title retention
agreements relating to property acquired by such person, (d) all obligations of
such person in respect of the deferred purchase price of property or payment
(other than current trade accounts payable incurred in the ordinary course of
business), (e) all obligations of such person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any Equity Interests in
such person, (f) Capital Lease Obligations of such person and the present value
(discounted at the Alternate Base Rate as in effect on the Second Lien Closing
Date) of future rental payments under synthetic leases, (g) all obligations,
contingent or otherwise, of such person as an account party in respect of
letters of credit and letters of guaranty, (h) all obligations, contingent or
otherwise, of such person in respect of bankers’ acceptances, (i) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such person, whether or not the Indebtedness
secured thereby has been assumed and (j) all Guarantees by such person of
Indebtedness of others. Notwithstanding the foregoing, Indebtedness shall not
include trade payables and accrued expenses incurred by any person in accordance
with customary practices and in the ordinary course of businesses of such
person.

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes and Other Taxes.

“Indemnitee” shall have the meaning assigned to such term in Section 9.05(b).

“Ineligible Assignee” shall mean a person who has been specifically identified
in writing by the Borrower to the Administrative Agent and the Arranger as a
person for whom consent of the Borrower shall be necessary to consummate an
assignment to such person pursuant to Section 9.04.

“Information” shall have the meaning assigned to such term in Section 9.16.

“Intellectual Property Collateral” shall have the meaning assigned to such term
in the Guarantee and Collateral Agreement.

“Intercreditor Agreement” shall mean that certain Intercreditor Agreement dated
as of the Second Lien Closing Date made by GSO, as First Lien Administrative
Agent, First Lien Collateral Agent, Administrative Agent and Collateral Agent
and the Borrower and in the form of Exhibit M hereto.

“Interest Payment Date” shall mean (a) with respect to any ABR Term Loan, the
last Business Day of each March, June, September and December and (b) with
respect to any Eurodollar Term Loan, the last day of the Interest Period
applicable to the Borrowing of which such Term Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months’ duration been applicable to such Borrowing.

“Interest Period” shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is 1, 2, 3 or 6 months thereafter
(or 9 or 12 months thereafter if, at the

 

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time of the relevant Borrowing, an interest period of such duration is available
to all Lenders participating therein), as the Borrower may elect; provided,
however, that (a) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (b) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period.
Interest shall accrue from and including the first day of an Interest Period to
but excluding the last day of such Interest Period. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

“Investments” shall have the meaning assigned to such term in Section 6.04.

“Lender Addendum” shall mean, with respect to any initial Lender, a Lender
Addendum in the form of Exhibit F, or such other form as may be supplied by the
Administrative Agent, to be executed and delivered by such Lender on the Second
Lien Closing Date.

“Lenders” shall mean (a) the persons that deliver a Lender Addendum (other than
any such person that has ceased to be a party hereto pursuant to an Assignment
and Acceptance) and (b) any person that becomes or has become a party hereto
pursuant to an Assignment and Acceptance.

“LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m., London time, on the date that is two Business Days
prior to the commencement of such Interest Period by reference to Telerate Page
3750 for deposits in dollars for a period equal to such Interest Period;
provided that, to the extent that an interest rate is not ascertainable pursuant
to the foregoing provisions of this definition, the “LIBO Rate” shall be the
interest rate per annum reasonably determined by the Administrative Agent to be
the average of the rates per annum at which deposits in dollars are offered for
such relevant Interest Period to major banks in the London interbank market in
London, England by the Administrative Agent at approximately 11:00 a.m. (London
time) on the date that is two Business Days prior to the beginning of such
Interest Period.

“Lien” shall mean, with respect to any property or asset, any mortgage, deed of
trust, lien, deposit arrangement, pledge, hypothecation, easement, encumbrance,
collateral assignment, charge, claim or security interest or preference,
priority or other security agreement of any kind or nature whatsoever in, on or
of such property or asset (including any lease or title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Uniform Commercial Code or comparable
law of any jurisdiction).

“Lien Subordination Agreement” shall mean that certain Subordination Agreement
dated November 22, 2005 by U.S. Bank National Association and, by joinder, the
First Lien Collateral Agent, the Collateral Agent and each person from time to
time party thereto.

 

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“Loan Documents” shall mean this Agreement, the Fee Letter and the Security
Documents.

“Loan Parties” shall mean the Borrower and each Subsidiary that is or becomes a
party to a Loan Document.

“Margin Stock” shall have the meaning assigned to such term in Regulation U.

“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, assets, liabilities, operations, financial condition or operating
results of the Borrower and the Subsidiaries, taken as a whole, or (b) the
validity or enforceability of any of the Loan Documents or the rights and
remedies of the Administrative Agent, the Collateral Agent or the Secured
Parties thereunder.

“Material Agreements” shall mean those agreements set forth in Schedule 3.10.

“Material Indebtedness” shall mean Indebtedness under the First Lien Loan
Documents and any other Indebtedness (other than the Term Loans), or obligations
in respect of one or more Hedging Agreements, of any one or more of the Borrower
and the Subsidiaries in an aggregate principal amount exceeding $2,500,000. For
purposes of determining Material Indebtedness, the “principal amount” of the
obligations of the Borrower, the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower, the Borrower for such
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.

“Maximum Rate” shall have the meaning assigned to such term in Section 9.09.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Mortgaged Properties” shall mean the Site and each parcel of real property and
improvements thereto acquired by a Loan Party after the Second Lien Closing Date
and with respect to which a Mortgage is granted pursuant to Section 5.09 or
5.10.

“Mortgages” shall mean the Second Lien Mortgage, Security Agreement, Assignment
of Rents and Leases and Fixture Filing dated as of May 5, 2006, by and from
Borrower to GSO as Collateral Agent and Administrative Agent, and fee mortgages
or deeds of trust and other security documents granting a Lien on any Mortgaged
Property to secure the Obligations, each in the form of Exhibit G, with such
changes as shall be advisable under the law of the jurisdiction in which such
Mortgage is to be recorded and as are reasonably satisfactory to the Collateral
Agent, as the same may be amended, supplemented, replaced or otherwise modified
from time to time in accordance with this Agreement.

“Multiemployer Plan” shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

“Net Cash Proceeds” shall mean (a) with respect to any Asset Sale or Recovery
Event, the proceeds thereof in the form of cash and Permitted Investments
(including any such proceeds subsequently received (as and when received) in
respect of noncash consideration initially

 

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received), net of (i) selling expenses (including (A) reasonable and customary
broker’s fees or commissions, legal fees, transfer and similar taxes incurred by
the Borrower and the Subsidiaries in connection therewith and (B) the Borrower’s
good faith estimate of income taxes paid or payable by the Borrower, if any, in
connection with such Asset Sale or Recovery Event, after taking into account any
tax credits or deductions available to Borrower and any tax sharing
arrangements, and including the Borrower’s good faith estimate of Tax
Distribution Amounts attributable to such Asset Sale or Recovery Event),
(ii) amounts provided as a reserve, in accordance with GAAP, against any
liabilities under any indemnification obligations or purchase price adjustment
associated with such Asset Sale (provided that, to the extent and at the time
any such amounts are released from such reserve, the net of such amounts shall
constitute Net Cash Proceeds) and (iii) the principal amount, premium or
penalty, if any, interest and other amounts on any Indebtedness for borrowed
money which is secured by the asset sold in such Asset Sale and which is
required to be repaid with such proceeds (other than any such Indebtedness
assumed by the purchaser of such asset); provided, however, that, if (x) the
Borrower shall deliver a certificate of a Financial Officer of the Borrower to
the Administrative Agent within ten Business Days of the time of receipt thereof
setting forth the Borrower’s intent to reinvest such proceeds in productive
assets of a kind then used or usable in the business of the Borrower and any
Subsidiaries within 180 days of receipt of such proceeds and (y) no Default or
Event of Default shall have occurred and shall be continuing at the time of such
certificate, such proceeds shall not constitute Net Cash Proceeds except to the
extent not so used at the end of such 180 day period, at which time such
proceeds shall be deemed to be Net Cash Proceeds (the “Permitted Reinvestment
Proceeds”); and (b) with respect to any issuance or disposition of Indebtedness
or any Equity Issuance, the cash proceeds thereof, net of all taxes and
reasonable and customary fees, commissions, costs and other expenses incurred by
the Borrower and any Subsidiaries in connection therewith.

“O&M Costs” shall mean, for any period, all actual cash operation and
maintenance costs incurred and paid by the Borrower and its Subsidiaries in such
period, including (a) payments made by the Borrower under or in respect of any
energy services agreement, any agreement for the sale of energy, capacity or
ancillary services, including a Heat Rate Call Option Agreement, (b) fuel costs,
additives or chemicals and transportation costs related thereto, (c) taxes
(other than those based upon the Borrower’s income), (d) costs of maintaining
insurance, (e) costs of consumables, (f) payments under any lease, (g) payments
pursuant to any operating and maintenance agreement, long term service agreement
or any parts or turbine services agreement, (h) legal fees and consulting fees
and expenses paid by the Borrower in connection with the management, maintenance
or operation of the Project, (i) amounts paid to LS Power Equity Advisors, LLC
or its Affiliates as cost reimbursement in respect of asset management services
relating to the Project in an amount not to exceed the Asset Management Payment
Limit, (j) payments for restoration or repair of the Project with Permitted
Reinvestment Proceeds, (k) fees paid in connection with obtaining, transferring,
maintaining or amending any Permits, (l) cash collateral provided in respect of
any project agreement, (k) letter of credit fees or expenses payable in respect
of any project agreement, (m) reasonable general and administrative expenses,
including all expenditures incurred to prevent the occurrence of any default
under any Loan Document or any Default or Event of Default hereunder, and/or to
keep the Collateral free and clear of all Liens (other than Permitted Liens).
O&M Costs shall not include (i) distributions of any kind to the Borrower or its
Affiliates (other than amounts paid to LS Power Equity Advisors, LLC or its
Affiliates as cost reimbursement in respect of asset management services
relating to

 

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the Project in an amount not to exceed the Asset Management Payment Limit,
payment of the Tax Distribution Amount and Affiliate Credit Support
Reimbursement Amounts), (ii) non-cash charges, including depreciation or
obsolescence charges or reserves therefore, amortization of intangibles or other
bookkeeping entries of a similar nature, and (iii) Debt Service.

“Obligations” shall mean all obligations defined as “Obligations” in the
Guarantee and Collateral Agreement and the other Security Documents.

“Operating Revenues” shall mean, for any period, all of the following, without
duplication, received by the Borrower or any Subsidiary: (a) payments under or
pursuant to any energy services agreement, power purchase agreement or similar
agreement, (b) income derived from the sale or use of electric capacity or
energy produced, transmitted or distributed by the Project or ancillary
services, (c) proceeds of any business interruption insurance, (d) investment
income on amounts in the deposit accounts of the Borrower, (e) all other
revenues from the operation of the Project, and (f) amounts received by the
Borrower in connection with Hedging Agreements, all as determined in conformity
with cash accounting principles.

“Original First Lien Credit Agreement” shall mean that certain Credit Agreement
dated as of December 7, 2005 among the Borrower, the lenders party thereto and
GSO, as bookrunner, lead arranger, administrative agent, collateral agent and
syndication agent.

“Other Taxes” shall mean any and all present or future stamp, documentary or
similar taxes, charges or levies (including interest, fines, penalties and
additions to such charges, taxes or levies) arising from any payment made under
any Loan Document or from the execution, delivery or enforcement of, or
otherwise with respect to, any Loan Document.

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.

“Perfection Certificate” shall mean the Pre-Closing UCC Diligence Certificate
substantially in the form of Exhibit H or any other form approved by the
Collateral Agent.

“Permits” shall mean any and all franchises, licenses, leases, permits,
approvals, notifications, certifications, registrations, authorizations,
exemptions, qualifications, easements, rights of way, Liens and other rights,
privileges and approvals required under any Requirement of Law.

“Permitted Holders” shall mean the Pledgor, LS Power Associates, L.P., LS Power
Equity Partners, LP, LS Power Equity Partners PIE I, L.P., LS Power Development,
LLC and any Affiliates, respectively.

“Permitted Holders Equity Issuance” shall mean (a) in the case of a Subsidiary,
any issuance or sale by the Borrower of any Equity Interests to, or any receipt
of any capital contribution from, the Borrower or any other Subsidiary, and
(b) any issuance or sale by the Borrower of any Equity Interests to, or any
receipt of any capital contribution from, the Permitted Holders.

“Permitted Investments” shall mean:

 

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(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s;

(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, the Administrative Agent or any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits of not
less than $500,000,000;

(d) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria of clause (c) above; and

(e) investments in “money market funds” within the meaning of Rule 2a-7 of the
Investment Company Act of 1940, as amended, substantially all of whose assets
are invested in investments of the type described in clauses (a) through
(d) above.

“Permitted Lien” shall have the meaning assigned to such term in Section 6.02.

“Permitted Prior Lien” shall have the meaning assigned to such term in
Section 3.19(b).

“Permitted Refinancing Indebtedness” shall mean Indebtedness issued or incurred
(including by means of the extension or renewal of existing Indebtedness) to
refinance, refund, extend, renew or replace existing Indebtedness (“Refinanced
Indebtedness”); provided that (a) the principal amount of such refinancing,
refunding, extending, renewing or replacing Indebtedness is not greater than the
principal amount of such Refinanced Indebtedness plus the amount of any premiums
or penalties and accrued and unpaid interest paid thereon and reasonable fees
and expenses, in each case associated with such refinancing, refunding,
extension, renewal or replacement, (b) such refinancing, refunding, extending,
renewing or replacing Indebtedness has a final maturity that is no sooner than,
and a weighted average life to maturity that is no shorter than, such Refinanced
Indebtedness, (c) if such Refinanced Indebtedness or any Guarantees thereof are
subordinated to the Obligations, such refinancing, refunding, extending,
renewing or replacing Indebtedness and any Guarantees thereof remain so
subordinated on terms no less favorable to the Lenders, (d) no persons other
than the obligors in respect of such Refinanced Indebtedness immediately prior
to such refinancing, refunding, extending, renewing or replacing shall be the
obligors on such refinancing, refunding extending, renewing or replacing
Indebtedness and (e) such refinancing, refunding, extending, renewing or
replacing Indebtedness contains covenants and events of default and is benefited
by Guarantees, if any, which, taken as a whole, are determined in good faith by
a Financial Officer of the

 

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Borrower to be no less favorable to the Borrower or any applicable Subsidiary
and the Lenders in any material respect than the covenants and events of default
or Guarantees, if any, in respect of such Refinanced Indebtedness.

“Permitted Reinvestment Proceeds” has the meaning specified for such term in the
definition of “Net Cash Proceeds.”

“Person” and “person” shall mean any natural person, institution, sole
proprietorship, unincorporated organization, public benefit corporation,
corporation, trust, business trust, joint venture, joint stock company,
association, company, limited liability company, partnership, Governmental
Authority or other entity.

“PJM Receivables” shall mean the amounts receivable by the Borrower from PJM
Interconnection, L.L.C. which are pledged as collateral under the terms of a Gas
Supply Security Agreement.

“Pledge and Security Agreement” shall mean the Pledge and Security Agreement
dated as of May 5, 2006 among the Pledgor, the Borrower and the Collateral
Agent.

“Pledged Collateral” shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement and the Pledge and Security Agreement.

“Pledgor” shall mean LSP Ontelaunee Holding, LLC, a limited liability company
duly organized under the laws of Delaware.

“Prepayment Fee” shall have the meaning assigned to such term in
Section 2.12(g).

“Pro Rata Portion” shall mean, when used in reference to a Lender, the Term
Loans held by such Lender as a percentage of the aggregate of all Term Loans and
First Lien Term Loans.

“Prime Rate” shall mean the rate of interest per annum publicly quoted from time
to time by The Wall Street Journal as the “base rate” on corporate loans posted
by at least 75% of the nation’s 30 largest banks (or, if The Wall Street Journal
ceases quoting a prime rate of the type described, the highest per annum rate of
interest published by the Board in Federal Reserve statistical release H.15
(519) entitled “Selected Internet Rates” as the bank prime loan rate or its
equivalent); each change in the Prime Rate shall be effective as of the opening
of business on the date such change is publicly announced as being effective.
The Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate actually available.

“Project” shall mean the 560 MW combined-cycle natural gas-fired power
generation plant located in Ontelaunee Township, Pennsylvania.

“PUHCA 2005” shall mean the public Utility Holding Company Act of 2005, as
amended from time to time.

“Real Property” shall mean all real property owned or leased from time to time
by the Borrower and any Subsidiaries.

 

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“Recovery Event” shall mean any settlement of or payment in respect of any
property or casualty insurance claim or any taking under power of eminent domain
or by condemnation or similar proceeding of or relating to any property or asset
of the Borrower, the Borrower or any Subsidiary (excluding, in each case,
business interruption insurance claims).

“Register” shall have the meaning assigned to such term in Section 9.04(d).

“Regulation T” shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Rejected Excess Cash Prepayment Amount” shall have the meaning assigned to such
term in Section 2.12(d).

“Related Fund” shall mean, with respect to any Lender that is a fund that
invests in bank or commercial loans and similar extensions of credit, any other
fund that invests in bank or commercial loans and similar extensions of credit
and is advised or managed by (a) such Lender, (b) an Affiliate of such Lender or
(c) an entity (or an Affiliate of such entity) that administers, advises or
manages such Lender.

“Related Parties” shall mean, with respect to any specified person, such
person’s Affiliates and the respective directors, officers, employees, agents
and advisors of such person and such person’s Affiliates.

“Release” shall mean any release, spill, seepage, emission, leaking, pumping,
injection, pouring, emptying, deposit, disposal, discharge, dispersal, dumping,
escaping, leaching, or migration into, onto or through the environment.

“Required Lenders” shall mean, at any time, Lenders having Term Loans and unused
Term Loan Commitments representing at least a majority of the sum of all Term
Loans and unused Term Loan Commitments outstanding at such time.

“Required Prepayment Percentage” shall mean (a) in the case of any Equity
Issuance, 50%; (b) in the case of prepayments from Excess Cash Flow pursuant to
Section 2.12(d) for the period from the date hereof through and including
December 31, 2008, 65%, and (c) in all other cases, 100%; provided however, that
pursuant to Section 2.12(b), the Required Prepayment Percentage shall not be
applicable to a Permitted Holders Equity Issuance; provided, further, that if,
on or before December 31, 2008, Borrower has (i) extended the CS Heat Rate Call
Option on substantially similar (or better in the aggregate) terms, as certified
by a Responsible Officer of the Borrower, and accepted by the Administrative
Agent, acting reasonably or (ii) entered into a Heat Rate Call Option on
substantially similar (or better in the aggregate) terms to the CS Heat Rate
Call Option, as certified by a Responsible Officer of the Borrower, and accepted
by the Administrative Agent, acting reasonably, with a Heat Rate Call
Counterparty, then such

 

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percentage in respect of prepayments from Excess Cash Flow pursuant to
Section 2.12(d) shall be, for the period from and after December 31, 2008 until
the termination of such CS Heat Rate Call Option or Heat Rate Call Option
respectively described in clause (i) or (ii) of this paragraph, 65%.

“Requirement of Law” shall mean as to any person, the governing documents of
such person, and 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 Real Property or personal property.

“Responsible Officer” of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof responsible for the administration of the obligations of such person in
respect of this Agreement.

“Restricted Payment” shall mean (a) any dividend or other distribution (whether
in cash, securities or other property) with respect to, the Equity Interests of
the Borrower or any Subsidiary, (b) any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, defeasance, retirement, acquisition, cancellation or
termination of the Equity Interests of the Borrower or any Subsidiary or (c) any
option, warrant or other right to acquire the Equity Interests of the Borrower
or any Subsidiary.

“Retained Distributable Cash” shall have the meaning assigned to such term in
Section 6.06.

“S&P” shall mean Standard & Poor’s Ratings Group, Inc.

“Second Lien Closing Date” shall mean May 5, 2006.

“Secured Parties” shall have the meaning assigned to such term in the Guarantee
and Collateral Agreement.

“securities account” shall have the meaning assigned to such term in the UCC.

“Securities Act” shall mean the Securities Act of 1933, as amended from time to
time.

“Security Documents” shall mean the Guarantee and Collateral Agreement, the Lien
Subordination Agreement, the Pledge and Security Agreement, the Mortgages, the
Control Agreement, the Intercreditor Agreement and each of the other security
agreements, pledges, mortgages, consents and other instruments and documents
executed and delivered pursuant to any of the foregoing or pursuant to
Section 5.09, 5.10, 6.01 or 6.02.

“Site” shall mean the real property on which the Project is located as more
fully described in the Mortgages.

“SPC” shall have the meaning assigned to such term in Section 9.04(j).

 

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“Statutory Reserves” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch, Affiliate
or other fronting office making or holding a Term Loan) is subject for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board). Eurodollar Term Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. Statutory Reserves shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.

“subsidiary” shall mean, with respect to any person (herein referred to as the
“parent”), any corporation, partnership, limited liability company, association
or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or more than 50% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held, or (b) that is, at the
time any determination is made, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.

“Subsidiary” or “Subsidiary Guarantor” shall mean any subsidiary of the Borrower
as set forth in Schedule 1.01(b).

“Survey” shall mean that certain ALTA/ACSM Land Title Survey prepared by
Stackhouse Bensinger Inc., at Filename 1284-001-ALTA, Reference Number 00-636,
dated September 8, 2005, as revised on September 21, 2005, and any supplement or
update thereto.

“Syndication Agent” shall have the meaning assigned to such term in the
preamble.

“Synthetic Purchase Agreement” shall mean any swap, derivative or other
agreement or combination of agreements pursuant to which the Borrower or any
Subsidiary is or may become obligated to make any payment (other than on account
of a permitted purchase by it of any Equity Interest or Restricted Indebtedness)
the amount of which is determined by reference to the price or value at any time
of any Equity Interest; provided that no phantom stock or similar plan providing
for payments only to current or former directors, officers or employees of the
Borrower or the Subsidiaries (or to their heirs or estates) shall be deemed to
be a Synthetic Purchase Agreement.

“Tax Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.

“Tax Distribution Amount” means, for the applicable Tax Fiscal Quarter in
respect of a Tax Payment Date, an amount that, when combined with all prior Tax
Distribution Amounts for all prior Tax Fiscal Quarters is equal to the sum of
the following calculations for the applicable Tax Fiscal Quarter in respect of
such Tax Payment Date (calculated on an estimated basis as certified by a
Financial Officer of the Borrower) and all prior Tax Fiscal Quarters (calculated
on

 

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an estimated basis as certified by a Financial Officer of the Borrower): (1) the
product of (i) the Effective Tax Rate for the relevant Tax Fiscal Quarter and
(ii) the excess, if any, of (A) the taxable income of Borrower for such Tax
Fiscal Quarter over (B) the tax losses, deductions and loss carryforwards of
Borrower for such Tax Fiscal Quarter or any prior Tax Fiscal Quarter, to the
extent such losses, deductions or loss carryforwards did not reduce the taxable
income of Borrower in a prior Tax Fiscal Quarter, minus (2) the refunds, savings
or tax credits of Borrower in such Tax Fiscal Quarter or any prior Tax Fiscal
Quarter, to the extent such refunds, savings or tax credits did not reduce the
Tax Distribution Amount in a prior Tax Fiscal Quarter, in each case of (1) and
(2) above, determined as if Borrower was a corporate entity separate from
Pledgor and its Affiliates and giving due regard to any limitations on the
carryforward of capital losses, net operating losses and other tax attributes
that would apply to Borrower if it were a corporation.

“Tax Fiscal Quarter” means, in respect of each Tax Payment Date in April, June,
September and December, the three (3) month period ending on the last day of
March, June, September or December, respectively.

“Tax Payment Date” shall mean, in respect of each April, June, September and
December, the 15th day of such month.

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges, liabilities or withholdings imposed by any Governmental
Authority.

“Term Loan Commitment” shall mean $50,000,000 and, with respect to each Lender,
the commitment, if any, of such Lender to make Term Loans hereunder as set forth
on the Lender Addendum delivered by such Lender, or in the Assignment and
Acceptance pursuant to which such Lender assumed its Term Loan Commitment, as
applicable, as the same may be reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04.

“Term Loan Maturity Date” shall mean the date that is three (3) years following
the Second Lien Closing Date.

“Term Loans” shall mean the term loans made by the Lenders to the Borrower
pursuant to Section 2.01.

“Title Exceptions” shall mean those exceptions and other matters listed in the
Title Policy, or in any unconditional and irrevocable commitment to issue such
Title Policy.

“Title Insurer” shall mean Fidelity National Title Insurance Company.

“Title Policy” means that certain policy of the title insurance issued by the
Title Insurer dated as of the [                    ], 2006, including all
amendments thereto, endorsements thereof and substitutions or replacements
therefor.

 

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“Transactions” shall mean, collectively, (a) the execution, delivery and
performance by the Loan Parties of the Loan Documents to which they are a party,
(b) the initial borrowings hereunder and the use of proceeds thereof, (c) the
granting of Liens pursuant to the Security Documents and (d) any other
transactions related to or entered into in connection with any of the foregoing.

“Type”, when used in respect of any Term Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Term Loan or on the Term Loans
comprising such Borrowing is determined. For purposes hereof, the term “Rate”
shall include the Adjusted LIBO Rate and the Alternate Base Rate.

“UCC” shall mean the Uniform Commercial Code.

“wholly owned subsidiary” of any person shall mean a subsidiary of such person
of which securities (except for directors’ qualifying shares) or other ownership
interests representing 100% of the Equity Interests are, at the time any
determination is being made, owned, controlled or held by such person or one or
more wholly owned subsidiaries of such person or by such person and one or more
wholly owned subsidiaries of such person; a “wholly owned Subsidiary” shall mean
any wholly owned subsidiary of the Borrower.

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including”, and
words of similar import, shall not be limiting and shall be deemed to be
followed by the phrase “without limitation”. The word “will” shall be construed
to have the same meaning and effect as the word “shall”. The words “asset” and
“property” shall be construed as having the same meaning and effect and to refer
to any and all rights and interests in tangible and intangible assets and
properties of any kind whatsoever, whether real, personal or mixed, including
cash, securities, Equity Interests, accounts and contract rights. The words
“herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision of this Agreement unless the context shall otherwise require. All
references herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any definition of, or reference to, any Loan
Document or any other agreement, instrument or document in this Agreement shall
mean such Loan Document or other agreement, instrument or document as amended,
restated, supplemented or otherwise modified from time to time (subject to any
restrictions on such amendments, restatements, supplements or modifications set
forth herein) and (b) all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided,
however, that if the Borrower notifies the Administrative Agent that the
Borrower wishes to amend any covenant in Article VI or any related definition to
eliminate the effect of any change in GAAP occurring after the Second Lien
Closing Date on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Lenders wish to amend Article VI or any
related definition for such purpose), then the Borrower’s compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders.

 

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SECTION 1.03. Classification of Loans and Borrowings. For purposes of this
Agreement, Term Loans may be classified and referred to by Type (e.g., a
“Eurodollar Term Loan”). Borrowings also may be classified and referred to by
Type (e.g., a “Eurodollar Borrowing”).

ARTICLE II.

The Loans

SECTION 2.01. Commitments. Subject to the terms and conditions hereof and
relying upon the representations and warranties set forth herein, each Lender
agrees, severally and not jointly, to make a Term Loan to the Borrower on the
Second Lien Closing Date in a principal amount requested by the Borrower in a
duly completed Borrowing Request delivered in accordance with Section 2.03,
which principal amount shall not exceed the Term Loan Commitment of such Lender.
Amounts repaid or prepaid in respect of Term Loans may not be reborrowed.

SECTION 2.02. Loans. (a) Each Term Loan shall be made as part of a Borrowing
consisting of Term Loans of the same Type made by the Lenders ratably in
accordance with their respective Term Loan Commitments; provided, however, that
the failure of any Lender to make any Term Loan required to be made by it shall
not in itself relieve any other Lender of its obligation to lend hereunder (it
being understood, however, that no Lender shall be responsible for the failure
of any other Lender to make any Term Loan required to be made by such other
Lender).

(b) Subject to Sections 2.08 and 2.14, each Borrowing shall be comprised
entirely of ABR Term Loans or Eurodollar Term Loans as the Borrower may request
pursuant to Section 2.03; provided that no Borrowings may be converted into or
continued as a Eurodollar Borrowing having an Interest Period in excess of one
month prior to the date which is 60 days after the Closing Date. Each Lender may
at its option make any Eurodollar Term Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Term Loan; provided that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Term Loan in accordance with the terms of this Agreement. Borrowings of
more than one Type may be outstanding at the same time; provided, however, that
the Borrower shall not be entitled to request any Borrowing that, if made, would
result in more than ten Eurodollar Borrowings outstanding hereunder at any time.
For purposes of the foregoing, Borrowings having different Interest Periods,
regardless of whether they commence on the same date, shall be considered
separate Borrowings.

(c) Each Lender shall make each Term Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to such
account in New York City as the Administrative Agent may designate not later
than 11:00 a.m., New York City time, and the Administrative Agent shall promptly
credit the amounts so received to an account in the name of the Borrower, which
account shall be designated by the Borrower in the

 

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applicable Borrowing Request and shall be maintained with a bank reasonably
acceptable to the Administrative Agent (and with respect to which a Control
Agreement shall have been executed and delivered) or, if a Borrowing shall not
occur on such date because any condition precedent herein specified shall not
have been met, return the amounts so received to the respective Lenders.

(d) Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender’s portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
paragraph (c) of this Section and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrower on such date a corresponding
amount. If the Administrative Agent shall have so made funds available then, to
the extent that such Lender shall not have made such portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower to but excluding the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, the interest rate
applicable at the time to the Term Loans comprising such Borrowing or (ii) in
the case of such Lender, a rate determined by the Administrative Agent to
represent its cost of overnight or short-term funds (which determination shall
be conclusive absent manifest error). If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender’s Term Loan as part of such Borrowing for purposes of this
Agreement.

SECTION 2.03. Borrowing Procedure. In order to request a Borrowing, the Borrower
shall hand deliver or fax or deliver via e-mail PDF to the Administrative Agent
a duly completed Borrowing Request (a) in the case of a Eurodollar Borrowing,
not later than 1:00 p.m., New York City time, three Business Days before a
proposed Borrowing and (b) in the case of an ABR Borrowing, not later than 1:00
p.m., New York City time, one Business Day before a proposed Borrowing. Each
Borrowing Request shall be irrevocable, shall be signed by or on behalf of the
Borrower and shall specify the following information: (i) whether the Borrowing
then being requested is to be a Eurodollar Borrowing or an ABR Borrowing; (ii)
the date of such Borrowing (which shall be a Business Day); (iii) the number and
location of the account to which funds are to be disbursed (which shall be an
account that complies with the requirements of Section 2.02(c)); (iv) the amount
of such Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing,
the initial Interest Period with respect thereto; provided, however, that,
notwithstanding any contrary specification in any Borrowing Request, each
requested Borrowing shall comply with the requirements set forth in Section
2.02. If no election as to the Type of Borrowing is specified in any such
notice, then the requested Borrowing shall be an ABR Borrowing. If no Interest
Period with respect to any Eurodollar Borrowing is specified in any such notice,
then the Borrower shall be deemed to have selected an Interest Period of one
month’s duration. The Administrative Agent shall promptly advise the applicable
Lenders of any notice given in accordance with this Section 2.03 (and the
contents thereof), and of each Lender’s portion of the requested Borrowing.

SECTION 2.04. Repayment of Term Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each

 

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Lender the principal amount of each Term Loan of such Lender made to the
Borrower on the Term Loan Maturity Date, together with accrued and unpaid
interest and Fees on the principal amount to be paid to but excluding the date
of prepayment.

(b) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Term Loan made by such Lender to the Borrower from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time under this Agreement.

(c) The Administrative Agent shall maintain accounts in which it will record
(i) the amount of each Term Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of the sum received by the Administrative Agent
hereunder from the Borrower or any Guarantor and each Lender’s share thereof.

(d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) of this Section shall be conclusive evidence of the existence and
amounts of the obligations therein recorded absent manifest error; provided,
however, that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the
obligations of the Borrower to repay the Term Loans made to the Borrower in
accordance with the terms of this Agreement. Promptly following the completion
of each month after the Second Lien Closing Date, the Administrative Agent shall
render to the Borrower a monthly accounting of transactions with respect to the
Term Loans setting forth the balance of the accounts for such immediately
preceding month.

(e) Any Lender may request that Term Loans made by it hereunder be evidenced by
a promissory note. In such event, the Borrower shall execute and deliver to such
Lender a promissory note payable to such Lender and its registered assigns and
in a form and substance reasonably acceptable to the Administrative Agent.
Notwithstanding any other provision of this Agreement, in the event any Lender
shall request and receive such a promissory note, the interests represented by
such note shall at all times (including after any assignment of all or part of
such interests pursuant to Section 9.04) be subject to the terms and conditions
of this Agreement.

SECTION 2.05. Fees. (a) The Borrower agrees to pay to the Administrative Agent,
for its own account, the fees in the amounts and at the times from time to time
agreed to in writing by the Borrower (or any Affiliate) and the Administrative
Agent, including pursuant to the Fee Letter (the “Administrative Agent Fees”).

(b) All Fees shall be paid on the dates due, in immediately available funds, to
the Administrative Agent for distribution, if and as appropriate, among the
Lenders. Once paid, none of the Fees shall be refundable under any
circumstances.

SECTION 2.06. Interest on Term Loans. (a) Subject to the provisions of
Section 2.07, the Term Loans comprising each ABR Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be, when the Alternate Base Rate is determined by
reference to the Prime Rate and over a year of 360 days at all other times) at a
rate per annum equal to the Alternate Base Rate plus the Applicable Margin.

 

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(b) Subject to the provisions of Section 2.07, the Term Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Margin.

(c) Interest on each Term Loan shall be payable on the Interest Payment Dates
applicable to such Term Loan except as otherwise provided in this Agreement. The
applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or
day within an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.

SECTION 2.07. Default Interest. Upon the occurrence and during the continuance
of an Event of Default, the Borrower shall on written demand from the
Administrative Agent (or the Administrative Agent acting at the direction of the
Required Lenders) pay interest, to the extent permitted by law, on all
Obligations at a rate per annum (computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as the case may be, when the
Alternate Base Rate is determined by reference to the Prime Rate, and over a
year of 360 days at all other times) equal to the rate that would be applicable
to such Obligations plus 2.00%.

SECTION 2.08. Alternate Rate of Interest. In the event, and on each occasion,
that prior to the commencement of any Interest Period for a Eurodollar Borrowing
(a) the Administrative Agent shall have determined that adequate and reasonable
means do not exist for determining the Adjusted LIBO Rate for such Interest
Period or (b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Term Loans
included in such Borrowing for such Interest Period, the Administrative Agent
shall, as soon as practicable thereafter, give written or fax notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing and
(ii) any Interest Period election that requests the conversion of any Borrowing
to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be
ineffective. Each determination by the Administrative Agent under this
Section 2.08 shall be conclusive absent manifest error.

SECTION 2.09. Termination of Term Loan Commitments. All Term Loan Commitments
shall automatically terminate on the Second Lien Closing Date.

SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower shall have
the right at any time upon prior irrevocable notice to the Administrative Agent
via hand delivery or fax or e-mail PDF delivery (a) not later than 1:00 p.m.,
New York City time, one Business Day prior to conversion, to convert any
Eurodollar Borrowing of the Borrower into an ABR Borrowing, (b) not later than
1:00 p.m., New York City time, three Business Days prior to conversion or
continuation, to convert any ABR Borrowing of the Borrower into a Eurodollar
Borrowing for an Interest Period designated by the Borrower, to provide that any
Term Loan be made as a Eurodollar Borrowing or to continue any Eurodollar

 

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Borrowing of the Borrower as a Eurodollar Borrowing for an additional Interest
Period designated by the Borrower and (c) not later than 10:00 a.m., New York
City time, three Business Days prior to conversion, to convert the Interest
Period with respect to any Eurodollar Borrowing of the Borrower to another
permissible Interest Period, subject in each case to the following:

(i) each conversion or continuation shall be made pro rata among the Lenders in
accordance with the respective principal amounts of the Term Loans comprising
the converted or continued Borrowing;

(ii) if less than all the outstanding principal amount of any Borrowing shall be
converted or continued, then each resulting Borrowing shall satisfy the
limitations specified in Sections 2.02(a) and 2.02(b) regarding the principal
amount and maximum number of Borrowings of the relevant Type;

(iii) each conversion shall be effected by each Lender and the Administrative
Agent by recording for the account of such Lender the new Term Loan of such
Lender resulting from such conversion and reducing the Term Loan (or portion
thereof) of such Lender being converted by an equivalent principal amount;
accrued interest on any Eurodollar Term Loan (or portion thereof) being
converted shall be paid by the Borrower at the time of conversion;

(iv) if any Eurodollar Borrowing is converted at a time other than the end of
the Interest Period applicable thereto, the Borrower shall pay, upon demand, any
amounts due to the Lenders pursuant to Section 2.15;

(v) any portion of a Borrowing maturing or required to be repaid in less than
one month may not be converted into or continued as a Eurodollar Borrowing;

(vi) any portion of a Eurodollar Borrowing that cannot be converted into or
continued as a Eurodollar Borrowing by reason of the immediately preceding
clause shall be automatically converted at the end of the Interest Period in
effect for such Borrowing into an ABR Borrowing; and

(vii) after the occurrence and during the continuance of a Default or Event of
Default, no outstanding Term Loan may be converted into, or continued as, a
Eurodollar Term Loan.

Each notice pursuant to this Section 2.10 shall be irrevocable and shall refer
to this Agreement and specify (A) the identity and amount of the Borrowing that
the Borrower requests be converted or continued, (B) whether such Borrowing is
to be converted to or continued as a Eurodollar Borrowing or an ABR Borrowing,
(C) if such notice requests a conversion, the date of such conversion (which
shall be a Business Day) and (D) if such Borrowing is to be converted to or
continued as a Eurodollar Borrowing, the Interest Period with respect thereto.
If no Interest Period is specified in any such notice with respect to any
conversion to or continuation as a Eurodollar Borrowing, the Borrower shall be
deemed to have selected an Interest Period of one month’s duration. The
Administrative Agent shall advise the Lenders of any notice given

 

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pursuant to this Section 2.10 and of each Lender’s portion of any converted or
continued Borrowing. If the Borrower shall not have given notice in accordance
with this Section 2.10 to continue any Borrowing into a subsequent Interest
Period (and shall not otherwise have given notice in accordance with this
Section 2.10 to convert such Borrowing), such Borrowing shall, at the end of the
Interest Period applicable thereto (unless repaid pursuant to the terms hereof),
automatically be converted or continued into an ABR Borrowing.

SECTION 2.11. Prepayment. (a) The Borrower shall have the right at any time and
from time to time to prepay any Borrowing, in whole or in part, upon at least
three Business Days’ prior written or fax or e-mail PDF notice (or telephone
notice promptly confirmed by written or fax or e-mail PDF notice) in the case of
Eurodollar Term Loans, or written or fax or e-mail PDF notice (or telephone
notice promptly confirmed by written or fax or e-mail PDF notice) at least one
Business Day prior to the date of prepayment in the case of ABR Term Loans, to
the Administrative Agent before 1:00 p.m., New York City time; provided,
however, that each partial prepayment shall be in an amount that is an integral
multiple of $100,000 and not less than $1,000,000.

(b) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid (or being
offered to be prepaid, as applicable), shall be irrevocable and shall commit the
Borrower to prepay such Borrowing by the amount stated therein on the date
stated therein; provided that a notice of prepayment may state that such notice
is conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified date) if such condition is not satisfied. All
prepayments under this Section 2.11 shall be subject to Section 2.15. All
principal payments under this Section 2.11 shall be without premium or penalty
and shall be accompanied by accrued and unpaid interest and Fees on such
principal amount to be prepaid to but excluding the date of payment.

SECTION 2.12. Mandatory Prepayments; Change of Control Prepayments. Subject to
the requirements of the First Lien Credit Agreement and the Intercreditor
Agreement:

(a) Not later than the fifth Business Day following the completion of any Asset
Sale or not later than the tenth Business Day following the occurrence of any
Recovery Event and, in each case, the receipt of Net Cash Proceeds resulting
therefrom, the Borrower shall, apply the Required Prepayment Percentage of such
Net Cash Proceeds received with respect thereto to prepay outstanding Term Loans
in accordance with Section 2.12(f).

(b) In the event and on each occasion that an Equity Issuance other than a
Permitted Holders Equity Issuance occurs, the Borrower shall, substantially
simultaneously with (and in any event not later than the fifth Business Day next
following) the occurrence of such Equity Issuance other than a Permitted Holders
Equity Issuance and the receipt of Net Cash Proceeds resulting therefrom, apply
the Required Prepayment Percentage of such Net Cash Proceeds therefrom to prepay
outstanding Term Loans in accordance with Section 2.12(f).

(c) In the event that any Loan Party or any subsidiary of a Loan Party shall
receive Net Cash Proceeds from the issuance or other incurrence of Indebtedness
of any Loan Party or any subsidiary of a Loan Party (other than Indebtedness
permitted pursuant to Section 6.01), the

 

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Borrower shall, substantially simultaneously with (an in any event not later
than the fifth Business Day next following) the receipt of such Net Cash
Proceeds by such Loan Party or such subsidiary subject to Section 2.11(b), apply
an amount equal to the Required Prepayment Percentage of such Net Cash Proceeds
to prepay outstanding Term Loans in accordance with Section 2.12(f); provided
that nothing in this Section 2.12(c) shall be construed as permitting the
issuance or other incurrence of Indebtedness except as otherwise permitted under
Section 6.01.

(d) No later than 45 days after the end of each fiscal quarter of the Borrower,
commencing on the fiscal quarter ending on September 30, 2006, the Borrower
shall:

(i) offer to each Lender to prepay such Lender’s outstanding Term Loans (on a
ratable basis with any offer required to be made to the First Lien Lenders
pursuant to the First Lien Credit Agreement) in accordance with Section 2.12(f),
in an aggregate principal amount offered that equals the Required Prepayment
Percentage of Excess Cash Flow for the fiscal quarter then ended (it being
understood and agreed that the calculation of Excess Cash Flow for the fiscal
quarter ending September 30, 2006 shall be measured for the period beginning
with the Second Lien Closing Date and ending on September 30, 2006) (the sum of
amounts offered for prepayment under this Section 2.12(d) but rejected, together
with amounts offered for prepayment under Section 2.12(d) of the First Lien
Credit Agreement but rejected, collectively, the “Rejected Excess Cash
Prepayment Amount”); and

(ii) prepay each Lender’s outstanding Term Loans in accordance with
Section 2.12(f), in an aggregate principal amount equal to Retained
Distributable Cash applicable to the first fiscal quarter of the period of four
fiscal quarters then ending; provided, however, that no prepayment shall be
required under this Section 2.12(d)(ii) until such time that four consecutive
fiscal quarters of the Borrower shall have elapsed and the Borrower shall have
failed to deliver to the Administrative Agent the certification in Section 6.06
permitting the Borrower to make a Restricted Payment of Retained Distributable
Cash.

(e) The Borrower shall deliver to the Administrative Agent, at the time of each
prepayment required under this Section 2.12, (i) a certificate signed by a
Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) to the extent practicable,
at least 5 Business Days’ prior written notice of such prepayment (and the
Administrative Agent shall promptly provide the same to each Lender). Each
notice of prepayment shall specify the prepayment date, the Type of each Term
Loan being prepaid (or being offered to be prepaid, as applicable) and the
principal amount of each Term Loan (or portion thereof) to be prepaid (or being
offered to be prepaid, as applicable). All prepayments of Borrowings pursuant to
this Section 2.12 shall be subject to Section 2.15, but shall otherwise be
without premium or penalty.

(f) Mandatory prepayments under paragraphs (a), (b), (c) and (d) of this Section
shall be applied to prepay outstanding Term Loans (and the corresponding accrued
and unpaid interest and Fees on the principal amount of Term Loans so prepaid),
with any remaining amounts following such application being retained by the
Borrower. Each offer to a Lender to prepay its

 

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Term Loans under paragraph (d)(i) of this Section 2.12 shall be in writing and
shall be in an amount that corresponds to such Lender’s Pro Rata Portion of the
total amount offered to be prepaid under such paragraph. Each Lender shall
respond to Borrower in writing to each such offer within ten (10) Business Days
of receipt thereof; provided, however, that if any Lender does not so respond,
such offer shall be deemed rejected. Each mandatory prepayment under paragraphs
(a), (b), (c) and (d)(ii) of this Section 2.12 shall be applied by the
Administrative Agent to reduce the Term Loans of each Lender in an amount that
corresponds to such Lender’s Pro Rata Portion of the total amount prepaid.

(g) If a Change of Control shall occur, the Borrower shall be obligated to make
an offer to prepay (the “Change of Control Offer”) each Lender’s outstanding
Term Loans at a prepayment price (the “Change of Control Prepayment Price”)
equal to such Lender’s outstanding Term Loans, without premium or penalty,
together accrued and unpaid interest, if any, on such principal amount to be
prepaid to but excluding the Change of Control Payment Date (as defined below)
in accordance with the procedures that follow. Within 30 days of the occurrence
of a Change of Control, the Borrower shall send by first-class mail, postage
prepaid, to the Administrative Agent a notice stating (i) that the Change of
Control Offer is being made pursuant to this Section 2.12(g) and that all Term
Loans offered for prepayment will be accepted for prepayment; (ii) the Change of
Control Prepayment Price and the prepayment date (which shall be a Business Day
no earlier than 30 days nor later than 45 days from the date such notice is
mailed (the “Change of Control Payment Date”)); (iii) that any Term Loan not
prepaid shall continue to accrue interest; (iv) that, unless the Borrower
defaults in the payment of the Change of Control Prepayment Price, any Term
Loans accepted for prepayment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date; and (v) any
other procedures that a Lender must follow to accept a Change of Control Offer
or effect withdrawal of such acceptance. On the Change of Control Payment Date,
the Borrower shall (A) accept for payment Term Loans or portions thereof prepaid
pursuant to the Change of Control Offer, (B) deposit with the Administrative
Agent an amount in dollars sufficient to pay the Change of Control Prepayment
Price of all Term Loans or portions thereof that have accepted the prepayment
and (C) deliver to the Administrative Agent an officers’ certificate stating the
amount of the Term Loans or portions thereof prepaid by the Borrower. The
Administrative Agent shall promptly mail to each Lender that has so accepted
payment in an amount equal to the principal amount for such Term Loans, and if
requested by any Lender, the Borrower shall execute and issue, and the
Administrative Agent shall promptly mail to such Lender, a new promissory
note equal in principal amount to any portion of the Term Loans held by such
Lenders that has not been so prepaid in accordance with this Section.

SECTION 2.13. Reserve Requirements; Change in Circumstances. (a) Notwithstanding
any other provision of this Agreement, if any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender or the Administrative Agent (except any such reserve
requirement which is reflected in the Adjusted LIBO Rate), or

 

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(ii) impose on any Lender, the Administrative Agent or the London interbank
market any other condition affecting this Agreement or Eurodollar Term Loans
made by such Lender,

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Term Loan (or of maintaining its
obligation to make any such Term Loan) or to reduce the amount of any sum
received or receivable by such Lender hereunder (whether of principal, interest
or otherwise) by an amount reasonably deemed by such Lender or the
Administrative Agent to be material, then the Borrower will pay to such Lender
or the Administrative Agent, as the case may be, upon demand such additional
amount or amounts as will compensate such Lender, as the case may be, for such
additional costs incurred or reduction suffered.

(b) If any Lender or the Administrative Agent shall have determined that any
Change in Law regarding capital adequacy has or would have the effect of
reducing the rate of return on such Lender’s or the Administrative Agent’s
capital or on the capital of such Lender’s or the Administrative Agent’s holding
company, if any, as a consequence of this Agreement or the Term Loans made by
such Lender to a level below that which such Lender or the Administrative Agent
or such Lender’s or the Administrative Agent’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s or
the Administrative Agent’s policies and the policies of such Lender’s or the
Administrative Agent’s holding company with respect to capital adequacy) by an
amount deemed by such Lender or the Administrative Agent to be material, then
from time to time the Borrower shall pay to such Lender or the Administrative
Agent, as the case may be, such additional amount or amounts as will compensate
such Lender or the Administrative Agent or such Lender’s or the Administrative
Agent’s holding company for any such reduction suffered.

(c) A certificate of the Lender or the Administrative Agent setting forth the
amount or amounts necessary to compensate such Lender or the Administrative
Agent or its holding company, as applicable, as specified in paragraph (a) or
(b) of this Section and showing the basis of the computation shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender or the Administrative Agent, as the case may be, the
amount or amounts shown as due on any such certificate delivered by it within 10
Business Days after its receipt of the same.

(d) Failure or delay on the part of any Lender or the Administrative Agent to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s or the Administrative Agent’s right to demand such compensation;
provided that the Borrower shall not be under any obligation to compensate any
Lender or the Administrative Agent under paragraph (a) or (b) above for
increased costs or reductions with respect to any period prior to the date that
is 180 days prior to such request if such Lender or the Administrative Agent
knew or could reasonably have been expected to know of the circumstances giving
rise to such increased costs or reductions and of the fact that such
circumstances would result in a claim for increased compensation by reason of
such increased costs or reductions; provided further that the foregoing
limitation shall not apply to any increased costs or reductions arising out of
the retroactive application of any Change in Law within such 180-day period. The
protection of this Section shall be available to each Lender and the
Administrative Agent regardless of any possible contention of the invalidity or
inapplicability of the Change in Law that shall have occurred or been imposed.

 

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SECTION 2.14. Change in Legality. (a) . Notwithstanding any other provision of
this Agreement, if any Change in Law shall make it unlawful for any Lender to
make or to continue to fund or maintain any Eurodollar Term Loan or to give
effect to its obligations as contemplated hereby with respect to any Eurodollar
Term Loan, then, unless such Lender is able to make or to continue to fund or to
maintain such Eurodollar Term Loan at another branch or office of such Lender
without, in such Lender’s reasonable opinion, adversely affecting it or its Term
Loans or the income obtained therefrom, by written notice to the Borrower and to
the Administrative Agent:

(i) such Lender may declare that Eurodollar Term Loans will not thereafter (for
the duration of such unlawfulness) be made by such Lender hereunder (or be
continued for additional Interest Periods and ABR Term Loans will not thereafter
(for such duration) be converted into Eurodollar Term Loans), whereupon any
request for a Eurodollar Borrowing (or to convert an ABR Borrowing to a
Eurodollar Borrowing or to continue a Eurodollar Borrowing for an additional
Interest Period) shall, as to such Lender only, be deemed a request for an ABR
Term Loan (or a request to continue an ABR Term Loan as such for an additional
Interest Period or to convert a Eurodollar Term Loan into an ABR Term Loan, as
the case may be), unless such declaration shall be subsequently withdrawn; and

(ii) such Lender may require that all outstanding Eurodollar Term Loans made by
it be converted to ABR Term Loans, in which event all such Eurodollar Term Loans
shall be automatically converted to ABR Term Loans as of the effective date of
such notice as provided in paragraph (b) below.

In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Term Loans that would have been made by such Lender or the
converted Eurodollar Term Loans of such Lender shall instead be applied to repay
the ABR Term Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Term Loans. Any such conversion of a Eurodollar
Term Loan under (i) above shall be subject to Section 2.15.

(b) For purposes of this Section 2.14, a notice to the Borrower by any Lender
shall be effective as to each Eurodollar Term Loan made by such Lender, if
lawful, on the last day of the Interest Period then applicable to such
Eurodollar Term Loan; in all other cases such notice shall be effective on the
date of receipt by the Borrower.

SECTION 2.15. Indemnity. The Borrower shall indemnify each Lender against any
loss or expense that such Lender may sustain or incur as a consequence of
(a) any event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Term
Loan prior to the end of the Interest Period in effect therefor, (ii) the
conversion of any Eurodollar Term Loan to an ABR Term Loan, or the conversion of
the Interest Period with respect to any Eurodollar Term Loan, in each case other
than on the last day of the Interest

 

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Period in effect therefor or (iii) any Eurodollar Term Loan to be made by such
Lender (including any Eurodollar Term Loan to be made pursuant to a conversion
or continuation under Section 2.10) not being made after notice of such Term
Loan shall have been given by the Borrower hereunder (any of the events referred
to in this clause (a) being called a “Breakage Event”) or (b) any default in the
making of any payment or prepayment required to be made hereunder. In the case
of any Breakage Event, such loss shall include an amount equal to the excess, as
reasonably determined by such Lender, of (A) its cost of obtaining funds for the
Eurodollar Term Loan that is the subject of such Breakage Event for the period
from the date of such Breakage Event to the last day of the Interest Period in
effect (or that would have been in effect) for such Term Loan over (B) the
amount of interest likely to be realized by such Lender in redeploying the funds
released or not utilized by reason of such Breakage Event for such period. A
certificate of any Lender setting forth any amount or amounts which such Lender
is entitled to receive pursuant to this Section 2.15 shall be delivered to the
Borrower and shall be conclusive absent manifest error.

SECTION 2.16. Pro Rata Treatment. Except as required under Section 2.14 and
under Section 2.12, each Borrowing, each payment or prepayment of principal of
any Borrowing, each payment of interest or Fees on the Term Loans, each
reduction of the Term Loan Commitments and each conversion of any Borrowing to
or continuation of any Borrowing as a Borrowing of any Type shall be allocated
pro rata among the Lenders in accordance with their respective applicable Term
Loan Commitments (or, if such Term Loan Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
outstanding Term Loans). Each Lender agrees that in computing such Lender’s
portion of any Borrowing to be made hereunder, the Administrative Agent may, in
its discretion, round each Lender’s percentage of such Borrowing to the next
higher or lower whole dollar amount.

SECTION 2.17. Sharing of Setoffs. Each Lender agrees that if it shall, through
the exercise of a right of banker’s lien, setoff or counterclaim against the
Borrower or any other Loan Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Term Loan as a result of which the unpaid principal portion of its Term Loans
shall be proportionately less than the unpaid principal portion of the Term
Loans of any other Lender, it shall be deemed simultaneously to have purchased
from such other Lender at face value, and shall promptly pay to such other
Lender the purchase price for, a participation in the Term Loans of such other
Lender, so that the aggregate unpaid principal amount of the Term Loans and
participations in Term Loans held by each Lender shall be in the same proportion
to the aggregate unpaid principal amount of all Term Loans then outstanding as
the principal amount of its Term Loans prior to such exercise of banker’s lien,
setoff or counterclaim or other event was to the principal amount of all Term
Loans outstanding prior to such exercise of banker’s lien, setoff or
counterclaim or other event; provided, however, that if any such purchase or
purchases or adjustments shall be made pursuant to this Section 2.17 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustment restored without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in a Term Loan deemed to have been so purchased
may exercise any and

 

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all rights of banker’s lien, setoff or counterclaim with respect to any and all
moneys owing by the Borrower to such Lender by reason thereof as fully as if
such Lender had made a Term Loan directly to the Borrower in the amount of such
participation.

SECTION 2.18. Payments. (a) The Borrower shall make each payment (including
principal of or interest on any Borrowing or any Fees or other amounts)
hereunder and under any other Loan Document not later than 12:00 (noon), New
York City time, on the date when due in immediately available dollars, without
setoff, defense or counterclaim. Each payment shall be made to the
Administrative Agent at its offices at 280 Park Avenue, New York, NY 10017.

(b) Except as otherwise expressly provided herein, whenever any payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.

SECTION 2.19. Taxes

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

(b) The Borrower shall indemnify the Administrative Agent and each Lender,
within 30 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, or any of their respective Affiliates, on or with
respect to any payment by or on account of any obligation of the Borrower or any
Loan Party hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability, showing
the basis and calculation thereof, delivered to the Borrower by a Lender, or by
the Administrative Agent on its behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

 

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(c) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
pursuant to Section 2.19(a), the Borrower shall deliver (or cause to be
delivered) to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

(d) If a Lender or the Administrative Agent receives a refund, which in its
reasonable discretion is attributable to any Indemnified Taxes or Other Taxes as
to which it has been indemnified by the Borrower or other Loan Party, it shall
within 30 days from the date of such receipt pay over such refund to the
relevant Borrower or Loan Party, net of all out-of-pocket expenses of such
Lender or the Administrative Agent and without interest (other than interest
paid by the relevant Governmental Authority with respect to such refund, so as
to leave such Lender or the Administrative Agent, as the case may be, in no
worse position as it would have been without the imposition of such Indemnified
Taxes or other Taxes).

(e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower or other
Loan Party is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the reasonable written request of the
Borrower, such properly completed and duly executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate; provided that such documentation is not unduly burdensome on
such Lender. In addition, each Foreign Lender shall furnish on or before it
becomes a party to the Agreement either (i) two accurate and complete duly
executed U.S. Internal Revenue Service Form W-8BEN (or successor form) or
(ii) an accurate and complete U.S. Internal Revenue Service Form W-8ECI (or
successor form), certifying, in either case, to such Foreign Lender’s legal
entitlement to an exemption from or reduction in U.S. federal withholding tax
with respect to all interest payments hereunder; provided that any Foreign
Lender that is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code and is relying on the so-called “portfolio interest exemption” shall also
furnish a “Non-Bank Certificate” in the form of Exhibit I together with a Form
W-8BEN. Any Lender providing forms or other documentation pursuant to
Section 2.19 shall provide new copies of the applicable forms on or before the
date such forms expire or become obsolete and shall promptly notify the Borrower
or the Administrative Agent if any form or other documentation previously
submitted becomes incorrect. Notwithstanding any other provision of this
paragraph, a Foreign Lender shall not be required to deliver any form pursuant
to this paragraph that such Foreign Lender is not legally able to deliver.

(f) Any Lender that is a United States person, as defined in Section 7701(a)(30)
of the Internal Revenue Code, shall deliver to the Borrower (with a copy to the
Administrative Agent) two accurate and complete original signed copies of
Internal Revenue Service Form W-9, or any successor form that such person is
entitled to provide at such time in order to comply with United States back-up
withholding requirements.

(g) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 2.19 shall survive the payment in full of all amounts due hereunder.

 

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SECTION 2.20. Assignment of Term Loans Under Certain Circumstances;
Non-Consenting Lenders; Duty to Mitigate. (a) In the event (i) any Lender
delivers a certificate requesting compensation pursuant to Section 2.13,
(ii) any Lender delivers a notice described in Section 2.14, (iii) the Borrower
is required to pay any additional amount to any Lender or to any Governmental
Authority or the Administrative Agent on account of any Lender pursuant to
Section 2.19 or (iv) any Lender refuses to execute a proposed amendment,
modification or waiver of this Agreement requested by the Borrower which
requires the consent of Lenders (other than the Required Lenders) to become
effective (and which is approved by at least the Required Lenders), the Borrower
may, at its sole expense and effort (including with respect to the processing
and recordation fee referred to in Section 9.04(b)), upon notice to such Lender
and the Administrative Agent, require such Lender to transfer and assign,
without recourse (in accordance with and subject to the restrictions contained
in Section 9.04), all of its interests, rights and obligations under this
Agreement to an assignee that shall assume such assigned obligations and, in the
case of replacements of Lenders pursuant to clause (iv) of this Section, that
shall agree to execute such proposed amendment, modification or waiver (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (A) such assignment shall not conflict with any law, rule or regulation or
order of any court or other Governmental Authority having jurisdiction,
(B) solely with respect to replacements of Lenders pursuant to clauses (i),
(ii) or (iii) of this Section, the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, and (C) the Borrower or such assignee shall have paid
to the affected Lender in immediately available funds an amount equal to the sum
of the principal of and interest accrued to the date of such payment on the
outstanding Term Loans of such Lender plus all Fees (including any applicable
Prepayment Fees) and other amounts accrued for the account of such Lender
hereunder (including any amounts under Section 2.13 and Section 2.15); provided,
further that, if prior to any such transfer and assignment the circumstances or
event that resulted in such Lender’s claim for compensation under Section 2.13
or notice under Section 2.14 or the amounts payable pursuant to Section 2.19, as
the case may be, cease to cause such Lender to suffer increased costs or
reductions in amounts received or receivable or reduction in return on capital,
or cease to have the consequences specified in Section 2.14, or cease to result
in amounts being payable under Section 2.19, as the case may be (including as a
result of any action taken by such Lender pursuant to paragraph (b) below), or
if such Lender shall waive its right to claim further compensation under
Section 2.13 in respect of such circumstances or event or shall withdraw its
notice under Section 2.14 or shall waive its right to further payments under
Section 2.19 in respect of such circumstances or event, as the case may be, then
such Lender shall not thereafter be required to make any such transfer and
assignment hereunder. Each Lender agrees that if the Borrower exercises its
rights of assignment under this paragraph, it shall promptly execute and deliver
all agreements and documentation necessary to effectuate such assignment as set
forth in Section 9.04. In connection with any such replacement, if the replaced
Lender does not execute and deliver to the Administrative Agent a duly completed
Assignment and Acceptance and/or any other documentation necessary to reflect
such replacement within five Business Days of the date on which the replacement
Lender executes and delivers such Assignment and Acceptance to the replaced
Lender, then such replaced Lender shall be deemed to have executed and delivered
such Assignment and Acceptance and the Borrower shall be entitled (but not
obligated) to execute and deliver such Assignment and Acceptance and/or other
documentation on behalf of such replaced Lender.

 

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(b) If (i) any Lender shall request compensation under Section 2.13, (ii) any
Lender delivers a notice described in Section 2.14 or (iii) the Borrower is
required to pay any additional amount to any Lender or to any Governmental
Authority or to the Administrative Agent on account of any Lender, pursuant to
Section 2.19, then such Lender shall use reasonable efforts (which shall not
require such Lender to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden deemed by
it to be significant) (A) to file any certificate or document reasonably
requested in writing by the Borrower or (B) to assign its rights and delegate
and transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.13 or enable it to withdraw its notice pursuant to
Section 2.14 or would reduce amounts payable pursuant to Section 2.19, as the
case may be, in the future. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such filing or
assignment, delegation and transfer.

ARTICLE III.

Representations and Warranties

The Borrower represents and warrants to the Arranger, the Administrative Agent,
the Collateral Agent, the Syndication Agent and each of the Lenders, as of the
Second Lien Closing Date, that:

SECTION 3.01. Organization; Powers. The Borrower and each of the Subsidiaries
listed on Schedule 3.08, if any, (a) is duly organized or formed, validly
existing and (to the extent such concept is applicable) in good standing under
the laws of the jurisdiction of its organization or formation, except, with
respect to any Subsidiaries, where the failure to be in good standing,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, (b) has all requisite power and authority, and the
legal right, to own and operate its property and assets, to lease the property
it operates as lessee and to carry on its business as now conducted and as
proposed to be conducted, (c) is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required, except
where the failure so to qualify, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect and (d) has the
power and authority, and the legal right, to execute, deliver and perform its
obligations under (in each case to the extent that it is a party thereto) this
Agreement, each of the other Loan Documents and each other agreement or
instrument contemplated hereby or thereby to which it is or will be a party,
including, in the case of the Borrower, to borrow hereunder, in the case of each
Loan Party, to grant the Liens contemplated to be granted by it under the
Security Documents and, in the case of each Subsidiary Guarantor, if any, to
Guarantee the Obligations as contemplated by the Guarantee and Collateral
Agreement, if any.

SECTION 3.02. Authorization; No Conflicts. The Transactions (a) have been duly
authorized by all requisite corporate, partnership or limited liability company
and, if required, stockholder, partner or member action and (b) will not
(i) violate (A) any provision of material law, statute, rule or regulation
applicable to it, (B) any provision of the certificate or articles of
incorporation or other constitutive documents or by-laws of the Borrower or any
Subsidiary,

 

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(C) any material order of any Governmental Authority or arbitrator applicable to
it or (D) after giving effect to the Transactions, any provision of any
indenture, material agreement or other material instrument to which the Borrower
or any Subsidiary is a party or by which any of them or any of their property is
or may be bound, (ii) be in conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default under, or give rise to
any right to accelerate or to require the prepayment, repurchase or redemption
of any obligation under any such indenture, material agreement or other material
instrument or (iii) result in the creation or imposition of any Lien upon or
with respect to any property or assets now owned or hereafter acquired by the
Borrower or any Subsidiary (other than Liens created under the Security
Documents and the Liens securing obligations under the First Lien Credit
Agreement, on a first priority basis).

SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by each Loan Party party thereto will constitute, a
legal, valid and binding obligation of such Loan Party enforceable against such
Loan Party in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

SECTION 3.04. Governmental Approvals. No action, consent or approval of,
registration or filing with, Permit from, notice to, or any other action by, any
Governmental Authority is required in connection with the Transactions, except
for such (a) as have been made or obtained and are in full force and effect, and
(b) that, if not obtained and kept in full force and effect, would not
reasonably be expected to cause a Material Adverse Effect.

SECTION 3.05. Financial Statements. The financial statements delivered by
Borrower pursuant to Section 4.10(h) (a) have been prepared in good faith by the
Borrower, in accordance with GAAP (but for the absence of footnotes), (b) are
based on the best information available to the Borrower after due inquiry as of
the date of delivery thereof, and (c) present fairly in all material respects
the financial position of the Borrower as of such date.

SECTION 3.06. No Material Adverse Change. No event, change or condition has
occurred since December 31, 2005 that has caused, or could reasonably be
expected to cause, a Material Adverse Effect.

SECTION 3.07. Location and Title to Properties.

(a) Schedule 3.07 lists all of the material Real Property owned by the Borrower
and its Subsidiaries as of the Second Lien Closing Date and such property is the
only property material to the ownership, conduct, use, maintenance and operation
of the Project by the Borrower and its Subsidiaries. None of the Real Property
set forth on Schedule 3.07 is leased.

(b) Each of the Borrower and its Subsidiaries, if any, has good and insurable
title to the Mortgaged Property, free and clear of all Liens except Permitted
Liens.

(c) Each parcel of Mortgaged Property has adequate rights of access to public
ways to permit the Mortgaged Property to be used for its intended purpose,
except where the failure to have such rights, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

 

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SECTION 3.08. Subsidiaries . As of the Second Lien Closing Date, the Borrower
has no Subsidiaries. Borrower has conducted no business other than the
acquisition, ownership and operation of the Project.

SECTION 3.09. Litigation; Compliance with Laws. (a) There are no actions, suits
or proceedings at law or in equity or by or before any arbitrator or
Governmental Authority now pending or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any Subsidiary, any business,
property or rights of any such person or the Project (i) that involve any Loan
Document or the Transactions, (ii) except as set forth on Schedule 3.09, or
(iii) as to which, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.

(b) None of the Borrower or any of the Subsidiaries or any of their respective
material properties or assets is in violation of, nor will the continued
operation of their material properties and assets as currently conducted
violate, any law, rule or regulation (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting the Mortgaged Property, or is in
default with respect to any judgment, writ, injunction, decree or order of any
Governmental Authority, where such violation or default, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
The Borrower has obtained each Environmental Permit and other material approval,
consent, waiver, exemption, variance, franchise, order, permit, authorization,
right or license of or from a Governmental Authority that must be obtained, and
FERC has accepted for filing each rate schedule, agreement or tariff that must
be filed, by or on behalf of the Borrower as of the Second Lien Closing Date to
operate, maintain, repair, own or use the Project, to sell electricity from the
Project or deliver fuel to the Project, and for Borrower to enter into each Loan
Document and to consummate any transaction contemplated thereby, in each case in
accordance with all applicable laws; provided, however, that FERC has not yet
acted upon the Change in Status Notice, filed by Borrower on October 7, 2005, in
Docket No. ER05-1266-002

SECTION 3.10. Agreements. (a) Schedule 3.10 lists completely and correctly all
Material Agreements to which the Borrower is a party. As of the Second Lien
Closing Date, no event of force majeure or material default by a counterparty
thereto has occurred and is continuing under any Material Agreement.

(b) None of the Borrower or any of the Subsidiaries is a party to any agreement
or instrument, or subject to any corporate restriction, that, individually or in
the aggregate, has resulted or could reasonably be expected to result in a
Material Adverse Effect.

(c) None of the Borrower or any of the Subsidiaries is in default in any manner
under any provision of any indenture or other agreement or instrument evidencing
Indebtedness, or any other material agreement or instrument to which it is a
party or by which it or any of its properties or assets are or may be bound,
where such default, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.

 

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SECTION 3.11. Federal Reserve Regulations. (a) None of the Borrower or any of
the Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of buying or carrying Margin
Stock.

(b) No part of the proceeds of any Term Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, for purchasing
or carrying Margin Stock or for the purpose of purchasing, carrying or trading
in any securities under such circumstances as to involve the Borrower in a
violation of Regulation X or to involve any broker or dealer in a violation of
Regulation T. No Indebtedness being reduced or retired out of the proceeds of
any Term Loans was or will be incurred for the purpose of purchasing or carrying
any Margin Stock. Following the application of the proceeds of the Term Loans,
Margin Stock will not constitute more than 25% of the value of the assets of the
Borrower and any Subsidiaries. None of the transactions contemplated by this
Agreement will violate or result in the violation of any of the provisions of
the Regulations of the Board, including Regulation T, U or X.

SECTION 3.12. Investment Company Act. None of the Borrower or any of the
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended.

SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of the Term
Loans solely for the purposes set forth in Schedule 3.13.

SECTION 3.14. Tax Returns. The Borrower and each of the Subsidiaries has timely
filed or timely caused to be filed all material Federal, state, local and
foreign tax returns or materials required to have been filed by it and all such
tax returns are correct and complete in all material respects. The Borrower and
each of the Subsidiaries has timely paid or timely caused to be paid all
material Taxes due and payable by it and all assessments received by it, except
Taxes that are being contested in good faith by appropriate proceedings and for
which the Borrower or such Subsidiary, as applicable, shall have set aside on
its books adequate reserves to the extent required under GAAP. The Borrower and
each of the Subsidiaries has made adequate provision in accordance with GAAP for
all material Taxes not yet due and payable. No material Lien has been filed, and
to the knowledge of the Borrower and each of the Subsidiaries, no claim is being
asserted, with respect to any Tax other than Permitted Liens.

SECTION 3.15. No Material Misstatements. The Borrower has disclosed to the
Arranger, the Administrative Agent and the Lenders all material agreements,
instruments and corporate or other restrictions to which the Borrower or any of
the Subsidiaries is subject, and all other matters known to any of them, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. No other written information, report, financial
statement, exhibit or schedule furnished by or on behalf of the Borrower or any
Subsidiary to the Arranger, the Administrative Agent or any Lender for use in
connection with the transactions contemplated by the Loan Documents or in
connection with the negotiation of any Loan Document or included therein or
delivered pursuant to such transactions contained or contains (in each case as
of the date of its delivery to the Arranger, the Administrative Agent or any
Lender) any material misstatement of fact or omitted or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were or are

 

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made, not misleading; provided that to the extent any such information, report,
financial statement, exhibit or schedule was based upon or constitutes a
forecast or projection, the Borrower represents only that it acted in good faith
and utilized reasonable assumptions and due care in the preparation of such
information, report, financial statement, exhibit or schedule (it being
understood that any projections delivered by the Borrower are not to be viewed
as facts and do not constitute a warranty as to the future performance of the
Borrower and that actual results may vary from the projected results). For the
avoidance of doubt, all such information, reports, financial statements,
exhibits and schedules shall be deemed re-delivered on the Second Lien Closing
Date for purposes of this Section 3.15.

SECTION 3.16. Employee Benefit Plans. None of the Borrower or any member of its
Controlled Group has a Benefit Plan.

SECTION 3.17. Environmental Matters. Except as set forth in Schedule 3.17, as of
the Second Lien Closing Date, and except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, none of the Borrower or any of the Subsidiaries:

(a) has failed to comply with any applicable Environmental Law or to take, in a
timely manner, all actions necessary to obtain, maintain, renew and comply with
any Environmental Permit, and all such Environmental Permits are in full force
and effect and not subject to any administrative or judicial appeal;

(b) has become a party to any governmental, administrative or judicial
proceeding or possesses knowledge of any such proceeding that has been
threatened under applicable Environmental Law;

(c) has received written notice of or possesses knowledge of any facts or
circumstances that could form the basis for, any Environmental Liability other
than those which have been fully and finally resolved and for which no
obligations remain outstanding;

(d) possesses knowledge that the Site or any other Real Property (i) is subject
to any Lien, restriction on ownership, occupancy, or transferability imposed
pursuant to applicable Environmental Law or (ii) contains or previously
contained Hazardous Materials of a form or type or in a quantity or location
that could reasonably be expected to result in any Environmental Liability;

(e) possess knowledge that there has been a Release or threat of Release of
Hazardous Materials at or from the Site or any other Real Property in violation
of, or in amounts or in a manner that could result in an Environmental
Liability;

(f) possesses knowledge of any facts, circumstances, conditions or occurrences
in respect of the Project, the Site or any other Real Property that could
interfere with or prevent continued compliance with applicable Environmental
Laws by the Borrower or the Subsidiaries; or

(g) has assumed the Environmental Liability for any Person pursuant to any
order, decree or judgment by which it is bound.

 

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SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and correct
description of all insurance maintained by or on behalf of the Borrower and the
Subsidiaries as of the Second Lien Closing Date. As of the Second Lien Closing
Date, such insurance is in full force and effect and all premiums are current.
The Borrower and any Subsidiaries are insured by reputable insurers and such
insurance is in such amounts and covering such risks and liabilities (and with
such deductibles, retentions and exclusions) as are in accordance with normal
and prudent industry practice. None of the Borrower or any Subsidiary (a) has
received notice from any insurer (or any agent thereof) that substantial capital
improvements or other substantial expenditures will have to be made in order to
continue such insurance or (b) has any reason to believe that it will not be
able to renew its existing coverage as and when such coverage expires or to
obtain similar coverage from similar insurers at a substantially similar cost.

SECTION 3.19. Security Documents. (a) The Guarantee and Collateral Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, a legal, valid, binding and enforceable security interest
in the Collateral described therein and proceeds thereof and (i) in the case of
the Pledged Collateral, upon the earlier of (A) when such Pledged Collateral is
delivered to the Collateral Agent and (B) when financing statements in
appropriate form are filed in the offices specified on Schedule 3.19(a) and
(ii) in the case of all other Collateral described therein (other than
Intellectual Property Collateral (except to the extent that Article 9 of the UCC
is applicable to the perfection of Liens therein), deposit accounts and other
Collateral that may not be perfected solely by filing a financing statement),
when financing statements in appropriate form are filed in the offices specified
on Schedule 3.19(a), the Lien created under the Guarantee and Collateral
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Secured Parties in such Collateral and
proceeds thereof, as security for the Obligations, in each case prior and
superior to the rights of any other person (except, in the case of all
Collateral other than Pledged Collateral, for Permitted Liens and except, in the
case of Pledged Collateral, for non-consensual Permitted Liens).

(b) The Pledge and Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid, binding and enforceable security interest in the Collateral described
therein and proceeds thereof and in the case of the Pledged Equity Interest (as
such term is used in the Pledge and Security Agreement). Upon filing of a
financing statement in office of the Secretary of State of the State of
Delaware, the Lien created under the Pledge and Security Agreement shall
constitute a perfected Lien on, and security interest in that portion of the
Pledged Equity Interest (as such term is used in the Pledge and Security
Agreement) in which a security interest may be perfected by filing a financing
statement in such office in Delaware, and proceeds thereof, as security for the
Obligations, in each case prior and superior to the rights of any other person,
except Permitted Liens that are contractually or by operation of law pari passu
or prior to the security interest that may be perfected by the filing described
in this paragraph (“Permitted Prior Liens”).

(c) The Mortgage is effective to create in favor of the Collateral Agent, for
the ratable benefit of the Secured Parties, a legal, valid, binding and
enforceable Lien on, and security interest in, all of the Loan Parties’ right,
title and interest in and to the Site and the other Mortgaged Property
thereunder and proceeds thereof, and when such Mortgage is filed or recorded in
the applicable filing or recording office, such Mortgage shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the grantors thereof in such Mortgaged Property and proceeds thereof, as
security for the Obligations, in each case prior and superior in right to any
other person (except for Permitted Prior Liens).

 

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(d) The Control Agreements are effective to create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid, binding
and enforceable Lien on, and security interest in, all of the Loan Parties’
right, title and interest in and to each deposit account or securities account
of a Loan Party and proceeds thereof, as security for the Obligations, in each
case prior and superior to the rights of any other person (except, in the case
of all Collateral other than Pledged Collateral, for Permitted Liens and except,
in the case of Pledged Collateral, for non-consensual Permitted Prior Liens).

SECTION 3.20. Labor Matters. As of the Second Lien Closing Date, there are no
strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending
or, to the knowledge of the Borrower, threatened. Except as set forth on
Schedule 3.20, the hours worked by and payments made to employees of the
Borrower and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters. All payments due from the Borrower or any Subsidiary,
or for which any claim may be made against the Borrower or any Subsidiary, on
account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of the Borrower or such
Subsidiary. The consummation of the Transactions will not give rise to any right
of termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Borrower or any Subsidiary is
bound.

SECTION 3.21. Liens. As of the Second Lien Closing Date, there are no Liens of
any nature whatsoever on any of the properties or assets of the Borrower or any
of the Subsidiaries (other than, in the case of Equity Interests in the Borrower
and the Subsidiaries, the Liens in respect of the this Agreement and
non-consensual Permitted Liens and, in the case of all properties or assets
other than Equity Interests in the Borrower and the Subsidiaries, Permitted
Liens).

SECTION 3.22. Intellectual Property. The Borrower and each of the Subsidiaries
owns, or is licensed to use, all trademarks, trade names, copyrights, patents
and other intellectual property material to its business, and the use thereof by
the Borrower and the Subsidiaries does not infringe upon the rights of any other
person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

SECTION 3.23. Solvency. Immediately after the consummation of the Transactions
to occur on the Second Lien Closing Date and immediately following the making of
each Term Loan and after giving effect to the application of the proceeds of
each Term Loan, (a) the fair value of the assets of each Loan Party, at a fair
valuation, will exceed its debts and liabilities, subordinated, contingent or
otherwise; (b) the present fair saleable value of the property of each Loan
Party will be greater than the amount that will be required to pay the probable
liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute

 

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and matured; (c) each Loan Party will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) no Loan Party will have unreasonably small capital
with which to conduct the business in which it is engaged as such business is
now conducted and is proposed to be conducted following the Second Lien Closing
Date.

SECTION 3.24. Energy Regulation.

(a) The Borrower is not deemed by any Governmental Authority to be subject to
financial, organizational or rate regulation as an “electric utility,” “electric
corporation,” “electrical company,” “gas utility,” “steam company,” “steam
utility,” “public-utility company,” “public utility” or “holding company,”
“water utility,” “public service company” or similar entity under any law of the
United States, any state or any political subdivision of the United States or
any state, as such laws exist as of the Restatement Date, except that the
Borrower (i) is a “public utility” and an “electric utility” under the FPA that
has been granted market-based rate authorization by FERC under the FPA and an
Exempt Wholesale Generator as defined in PUHCA 2005, and is subject to
regulation under the FPA, and (ii) may be a “public-utility holding company” and
an “electric utility company” under PUHCA 2005, and (iii) is a “public utility”
under the Pennsylvania state public utility law, and may be subject to
regulation under the Pennsylvania state law as a “public utility”, except as to
the rates, terms and conditions of wholesale power sales from the Project which
rates, terms and conditions are not themselves subject to regulation under
Pennsylvania state public utility law (as such law is interpreted and applied by
applicable judicial and administrative bodies).

(b) None of the Lenders will be, solely by reason of (i) the making of any Term
Loan, (ii) the securing of the Obligations by Liens on the Collateral or
(iii) any other transaction contemplated by any Loan Document and without regard
to any other activity of such Lender, deemed by any Governmental Authority to
be, subject to regulation as, an “electric utility,” “electric corporation,”
“electrical company,” “gas utility,” “steam company,” “steam utility,”
“public-utility company,” “public utility” or “holding company,” “water
utility,” “public service company” or similar entity under any law of the United
States, any state or any political subdivision of the United States or any
state, as such laws exist as of the Second Lien Closing Date; provided that the
foregoing shall not apply upon the exercise by any Lender of its remedies under
any Loan Document.

(c) None of the Lenders will be, solely by reason of ownership or operation of
the Project upon the exercise of its remedies under any Loan Document, and
without regard to any other activity of any Lender, deemed by any Governmental
Authority to be subject to financial, organizational or rate regulation as an
“electric utility,” “electric corporation,” “electrical company,” “gas utility,”
“steam company,” “steam utility,” “public-utility company,” “public utility” or
“holding company,” “water utility,” “public service company” or similar entity
under any law of the United States, any state or any political subdivision of
the United States or any state, as such laws exist as of the Second Lien Closing
Date, except that (i) if a Lender assumes direct ownership or operation of the
Project the Lender would be (A) a “public utility” and an “electric utility”
under the FPA, subject to regulation under the FPA and required to demonstrate
its continuing qualification for market-based rate authorization by FERC under
the FPA and (B) a “public utility” under the Pennsylvania state public utility
law, and may be subject to regulation under the Pennsylvania state law as a
“public utility”, except as to the rates, terms and conditions of wholesale
power sales from the Project which rates, terms and conditions are not
themselves

 

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subject to regulation under Pennsylvania state public utility law (as such law
is interpreted and applied by applicable judicial and administrative bodies);
and (ii) if a Lender assumes ownership of the Borrower, the Lender may be
subject to regulation under certain sections of the FPA, including
Section 301(c), and the Borrower will be required to demonstrate its continuing
qualification for market-based rate authorization by FERC under the FPA.

SECTION 3.25. Sufficiency of Material Agreements. Other than those that can be
reasonably expected to be commercially available when and as required, the
services to be performed, the materials to be supplied and the real property
interests, the Easements and other rights granted, or to be granted, pursuant to
the Material Agreements in effect as of the Second Lien Closing Date:

(a) comprise all of the property interests necessary to secure any right
material to the ownership, operation and maintenance of the Project in
accordance with all legal requirements, all without reference to any proprietary
information not owned by or available to Borrower;

(b) are sufficient to enable the Project to be located and operated on the Site
and the Easements; and

(c) provide adequate ingress and egress from the Site for any reasonable purpose
in connection with the operation of the Project.

There are no services, materials or rights required for operation and
maintenance of the Project in accordance with the Material Agreements and the
assumptions that form the basis of projections delivered pursuant to
Section 4.01(l) hereof, other than those (i) to be provided under the Material
Agreements as in effect on the Second Lien Closing Date or (ii) that can
reasonably be expected to be commercially available at or for delivery to the
Site on commercially reasonable terms consistent with such projections.

SECTION 3.26. Utilities. All utility services necessary for the operation of the
Project consistent with the projections delivered pursuant to Section 4.01(l)
hereof are available at the Project or can reasonably be expected to be so
available as and when required upon commercially reasonable terms consistent
with such projections.

SECTION 3.27. Other Facilities. Borrower possesses, or the counterparties to the
Material Agreements in effect on the Second Lien Closing Date pursuant to which
interconnection facilities will be operated for the benefit of the Project,
possess and are obligated to provide or make available to Borrower, all
necessary easements, rights of way, licenses, agreements and other rights for
the construction, interconnection and utilization of the interconnection
facilities (including fuel, water, wastewater and electrical) except for such
that would not otherwise cause a Material Adverse Effect.

SECTION 3.28. Subdivision. The Site has been subdivided or entitled to exception
therefrom, and for all purposes the Site may be mortgaged, conveyed and
otherwise dealt with as separate legal lots or parcels.

 

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ARTICLE IV.

Conditions of Lending

The obligations of the Lenders to make Term Loans are subject to the
satisfaction of the following conditions:

SECTION 4.01. Conditions. On the Second Lien Closing Date:

(a) The Administrative Agent shall have received, on behalf of itself and the
Lenders, a favorable written opinion of (i) Dewey Ballantine LLP, counsel for
the Borrower and other Loan Parties, substantially to the effect set forth in
Exhibit J-1 and (ii) Blank Rome LLP Pennsylvania local counsel for the
Administrative Agent, substantially to the effect set forth in Exhibit J-2, each
(A) dated the Second Lien Closing Date, (B) addressed to the Administrative
Agent, the Arranger, the Syndication Agent and the Lenders and (C) covering such
matters relating to the Loan Documents and the Transactions as the Arranger or
the Administrative Agent shall reasonably request and which are customary for
transactions of the type contemplated herein, and the Borrower and the other
Loan Parties hereby request such counsel to deliver such opinion.

(b) The Administrative Agent shall have received (i) a copy of the certificate
or articles of incorporation or other formation documents, including all
amendments thereto, of the Pledgor and of each Loan Party, certified as of a
recent date by the Secretary of State of the state of its organization, and a
certificate as to the good standing of the Pledgor and of each Loan Party as of
a recent date, from such Secretary of State; (ii) a certificate of the Secretary
or Assistant Secretary of the Pledgor and of each Loan Party dated the Second
Lien Closing Date and certifying (A) that attached thereto is a true and
complete copy of the LLC Agreement of such Pledgor or Loan Party, as applicable,
as in effect on the Second Lien Closing Date and at all times since a date prior
to the date of the resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly adopted by the members
of such Pledgor or Loan Party, as applicable, authorizing the execution,
delivery and performance of the Loan Documents to which such person is a party,
in the case of the Borrower, the borrowings hereunder, in the case of each
Pledgor or Loan Party, as applicable, the granting of the Liens contemplated to
be granted by it under the Security Documents and, in the case of each
Subsidiary Guarantor, if any, the Guaranteeing of the Obligations as
contemplated by the Guarantee and Collateral Agreement, and that such
resolutions have not been modified, rescinded or amended and are in full force
and effect, (C) that the certificate or articles of incorporation or other
formation documents of such Pledgor or Loan Party, as applicable, have not been
amended since the date of the last amendment thereto shown on the certificate of
good standing furnished pursuant to clause (i) above and (D) as to the
incumbency and specimen signature of each officer executing any Loan Document or
any other document delivered in connection herewith on behalf of such Pledgor or
Loan Party, as applicable; (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to (ii), which shall be incorporated in the
certificate of the Secretary or Assistant Secretary noted above; and (iv) such
other documents as the Administrative Agent, the Arranger or the Lenders may
reasonably request.

 

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(c) The Administrative Agent shall have received a certificate, dated the Second
Lien Closing Date and signed by a Responsible Officer of the Borrower,
confirming compliance with the conditions precedent set forth in paragraphs (p)
and (q) of this Section.

(d) The Administrative Agent shall have received (i) this Agreement, executed
and delivered by a duly authorized officer of each of the Borrower, (ii) the
Guarantee and Collateral Agreement, executed and delivered by a duly authorized
officer of each of the Borrower and each Subsidiary Guarantor, (iii) the Pledge
and Security Agreement executed by the parties thereto, (iv) the Intercreditor
Agreement executed by the parties thereto, (v) the Lien Subordination Agreement
executed by the parties thereto (including a joinder thereto executed by U.S.
Bank National Association, the Collateral Agent and the First Lien Collateral
Agent), (vi) if requested by any Lender pursuant to Section 2.04, a promissory
note or notes conforming to the requirements of such Section and executed and
delivered by a duly authorized officer of the Borrower and (vii) a Lender
Addendum executed and delivered by each Lender and accepted by the Borrower.

(e) The Collateral Agent, for the ratable benefit of the Secured Parties, shall
have been granted on the Second Lien Closing Date second priority perfected
Liens on the Collateral (subject to, in the case of all Collateral other than
Pledged Collateral, only to Permitted Liens and, in the case of Pledged
Collateral other than the Equity Interests in the Borrower to non-consensual
Permitted Liens), subject, in each case, to any applicable filing or recording
requirements. The Pledged Collateral shall have been duly and validly pledged
under the Guarantee and Collateral Agreement or the Pledge and Security
Agreement, as applicable, to the Collateral Agent, for the ratable benefit of
the Secured Parties, and certificates representing such Pledged Collateral,
accompanied by instruments of transfer and stock powers endorsed in blank, shall
be in the actual possession of the Collateral Agent.

(f) The Collateral Agent shall have received a duly executed Perfection
Certificate dated on or prior to the Second Lien Closing Date. The Collateral
Agent shall have received the results of a recent Lien and judgment search in
each relevant jurisdiction with respect to the Pledgor, the Borrower and those
of the Subsidiaries that shall be Subsidiary Guarantors or shall otherwise have
assets that are included in the Collateral, and such search shall reveal no
Liens on any of the assets of the Borrower or any of such Subsidiaries except,
in the case of Collateral other than Pledged Collateral, for Permitted Liens and
except for Liens to be discharged on or prior to the Second Lien Closing Date
pursuant to documentation reasonably satisfactory to the Collateral Agent.

(g) After giving effect to the Transactions and the other transactions
contemplated hereby, the Borrower shall have outstanding no Indebtedness or
preferred stock other than (i) the Term Loans, (ii) the First Lien Term Loans
and (iii) other limited Indebtedness satisfactory to the Arranger and the
Administrative Agent and set forth on Schedule 6.01(a).

(h) The Arranger and the Administrative Agent shall have received unaudited
financial statements of the Borrower for the fiscal year ending December 31,
2005 and the fiscal quarter ending March 31, 2006.

 

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(i) The Arranger and the Administrative Agent shall have received projections of
the Borrower for the years 2006 through 2009, in form and substance reasonably
satisfactory to the Administrative Agent.

(j) The Arranger and the Administrative Agent shall have received a certificate
from a Responsible Officer of the Borrower certifying that the Borrower is
solvent, after giving effect to the Transactions and the other transactions
contemplated hereby (as measured by the tests described in Section 3.23).

(k) All governmental and (to the extent such consent could be material) third
party consents and approvals with respect to the Transactions to the extent
required shall have been obtained, all applicable appeal periods shall have
expired and there shall be no litigation, governmental, administrative or
judicial action, actual or threatened, that could reasonably be expected to
restrain, prevent or impose materially burdensome conditions on the Transactions
or the other transactions contemplated hereby.

(l) The Arranger and the Administrative Agent shall have received, at least
three Business Days prior to the Second Lien Closing Date, all documentation and
other information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the Patriot
Act.

(m) The Administrative Agent shall have received (and shall provide to each of
the Arranger and the Collateral Agent where appropriate) evidence that insurance
required by Section 5.02 is in effect including the receipt of the insurance
certificates required by the Guarantee and Collateral Agreement; such
certificates shall name the Collateral Agent as the loss payee for the benefit
of the Secured Parties, their successors and assigns.

(n) The Borrower shall have paid to the Arranger and the Administrative Agent
any and all fees and expenses thereof that are due and owing as of the Second
Lien Closing Date in connection with the Transactions.

(o) The Administrative Agent shall have received a notice of such Borrowing as
required by Section 2.03 (or such notice shall have been deemed given in
accordance with Section 2.03).

(p) The representations and warranties set forth in each Loan Document shall be
true and correct in all material respects on and as of the Second Lien Closing
Date, except to the extent such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall be
true and correct in all material respects on and as of such earlier date.

(q) At the time of and immediately after the Second Lien Closing Date, no
Default or Event of Default shall have occurred and be continuing.

(r) The Administrative Agent shall have received the Title Policy, which shall
provide for insurance, effective as of the Second Lien Closing Date, and shall
otherwise be in form and substance satisfactory to the Administrative Agent.

 

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(s) The Administrative Agent shall have received a copy of an order issued by
FERC authorizing Borrower to sell electricity at market-based rates.

(t) The Administrative Agent shall have received reasonably satisfactory
evidence that all potable water, sewer, telephone, electric and all other
utility services necessary for the ownership, operation and maintenance of the
Project are either contracted for, or readily available on commercially
reasonable terms, at the Project.

(u) The Administrative Agent shall have received a copy of the Survey and such
Survey shall be in form and substance reasonably satisfactory to the
Administrative Agent.

(v) The Borrower shall have received proceeds of the First Lien Term Loans in
the amount of $100,000,000.

ARTICLE V.

Affirmative Covenants

The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Term Loan Commitments have been
terminated and the principal of and interest on each Term Loan, all Fees and all
other expenses or amounts payable under any Loan Document shall have been paid
in full, the Borrower will, and will cause each of the Subsidiaries to:

SECTION 5.01. Existence; Businesses And Properties. (a) Do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
legal existence and its rights and material franchises, except as otherwise
expressly permitted under Section 6.05.

(b) Continue to conduct its business in substantially the manner in which it is
presently conducted or as otherwise permitted hereunder, comply in all material
respects with all applicable laws, rules, regulations and decrees and orders of
any Governmental Authority, whether now in effect or hereafter enacted, except
to the extent that the failure to comply, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect; comply in
all material respects with the terms of, and enforce its rights under, each
Material Agreement so as to not permit any material uncured default on its part
to exist thereunder; and at all times maintain and preserve the Project and all
other property used or useful in the conduct of such business and keep such
property in good repair, working order and condition in all material respects
(taking into consideration ordinary wear and tear) and from time to time make,
or cause to be made, all needful and proper repairs, improvements and
replacements thereto consistent with industry practices.

SECTION 5.02. Insurance. (a) . Keep the Project adequately insured at all times
by reputable insurers; maintain such other insurance, to such extent and against
such risks (and with such deductibles, retentions and exclusions), as is
customary with companies in the same or similar businesses; maintain such other
insurance as may be required by law; at the request of the Collateral Agent,
name the Collateral Agent as a “loss payee” in respect of property insurance and
an “additional insured” in respect of other insurances; and maintain all
insurance in effect as of the Second Lien Closing Date as set forth in Schedule
3.18.

 

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SECTION 5.03. Obligations And Taxes. Pay its Material Indebtedness and other
material obligations promptly and in accordance with their terms and pay and
discharge promptly when due all material taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or in respect of
its property, before the same shall become delinquent or in default; provided,
however, that such payment and discharge shall not be required with respect to
any such material tax, assessment, charge, levy or claim so long as the validity
or amount thereof shall be contested in good faith by appropriate proceedings
and the Borrower or the applicable Subsidiary shall have set aside on its books
adequate reserves with respect thereto to the extent required under GAAP.

SECTION 5.04. Financial Statements, Reports, etc. In the case of the Borrower,
furnish to the Administrative Agent for distribution to each Lender:

(a) within 120 days after the end of each fiscal year through the Term Loan
Maturity Date, its consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows showing the financial condition of the
Borrower and its consolidated subsidiaries as of the close of such fiscal year
and the results of its operations during such year, together with comparative
figures for the immediately preceding fiscal year, if applicable, all audited by
independent public accountants of recognized national standing (or as otherwise
approved by the Administrative Agent in its reasonable discretion) and
accompanied by an opinion of such accountants (which shall not be qualified in
any material respect) to the effect that such consolidated financial statements
fairly present the financial condition and results of operations of the Borrower
and its consolidated subsidiaries on a consolidated basis in accordance with
GAAP consistently applied;

(b) within 60 days after the end of each of the first three fiscal quarters of
each fiscal year through the Term Loan Maturity Date, its consolidated balance
sheet and related statements of income, stockholders’ equity and cash flows
showing the financial condition of the Borrower and its consolidated
subsidiaries as of the close of such fiscal quarter and the results of its
operations and the operations of such subsidiaries during such fiscal quarter
and the then elapsed portion of the fiscal year, and, in each case, comparative
figures for the same periods in the immediately preceding fiscal year, all
certified by one of its Financial Officers as fairly presenting the financial
condition and results of operations of the Borrower and its consolidated
subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;

(c) (i) concurrently with any delivery of financial statements under paragraph
(a) above, a certificate of a Financial Officer certifying that no Default or
Event of Default has occurred or, if such a 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, in the case of a
certificate delivered with the financial statements required by paragraph (a)
above, setting forth the Borrower’s calculation of Excess Cash Flow and
(ii) concurrently with any delivery of the annual financial statements with
respect to the preceding fiscal year pursuant to paragraph (a) above, deliver to
the Administrative Agent a certificate of a Financial Officer setting forth the
information required pursuant to Section I of the Perfection Certificate or
confirming that there has been no change in such information since the date of
the Perfection Certificate delivered on the Second Lien Closing Date or the date
of the most recent certificate delivered pursuant to this Section;

 

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(d) promptly, but in no event later than ten (10) Business Days after the
existence of any of the following conditions, a duly executed certificate of a
Responsible Officer of Borrower specifying in detail the nature of such
condition and Borrower’s proposed response thereto: (a) the receipt by Borrower
of any written communication from a Governmental Authority that alleges that
Borrower is not in compliance in any material respect with any material
Environmental Law; or (b) Borrower shall obtain knowledge of any event that
could form the basis of an Environmental Liability that could reasonably be
expected to have a Material Adverse Effect;

(e) copies of all notices of material breach or violation given or received by
Borrower pursuant to any of the Material Agreements other than routine
correspondences, given or received in the ordinary course of business relating
to routine aspects of financing, operating, maintaining or using the Project;

(f) promptly after the receipt thereof by the Borrower, copies of any Permit
obtained by Borrower or any other Person after the Second Lien Closing Date; and

(g) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent, the Arranger or any Lender may reasonably request,
including with respect to applicable “know your customer” and anti-money
laundering rules and regulations (including the Patriot Act).

SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative Agent
(for distribution to each Lender) written notice of the following promptly after
any Responsible Officer obtains knowledge thereof:

(a) any Default or Event of Default, specifying the nature and extent thereof
and the corrective action (if any) taken or proposed to be taken with respect
thereto;

(b) the filing or commencement of, or any written threat or notice of intention
of any person to file or commence, any action, suit or proceeding, whether at
law or in equity or by or before any arbitrator or Governmental Authority,
against the Borrower or any Subsidiary that could reasonably be expected to
result in a Material Adverse Effect;

(c) the occurrence of any ERISA Event described in clause (b) of the definition
thereof or any other ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Borrower and the Subsidiaries in an aggregate amount exceeding
$2,500,000; and

(d) any development that has resulted in, or could reasonably be expected to
result in, a Material Adverse Effect.

SECTION 5.06. Information Regarding Collateral. Furnish to each of the
Administrative Agent and the Collateral Agent prompt written notice of any
change (a) in any

 

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Loan Party’s corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (b) in the
location of any Loan Party’s chief executive office or, if different, its
principal place of business, any office in which it maintains books or records
relating to material Collateral owned by it or any office or facility at which
material Collateral owned by it is located (including the establishment of any
such new office or facility), (c) in any Loan Party’s identity or corporate
structure or (d) in any Loan Party’s Federal Taxpayer Identification Number. The
Borrower also agrees promptly to notify each of the Administrative Agent and the
Collateral Agent if any material portion of the Collateral is damaged or
destroyed.

SECTION 5.07. Maintaining Records; Access to Properties and Inspections;
Environmental Assessments. (a) Keep proper books of record and account with
respect to its business activities in which proper entries in conformity with
GAAP are made of all financial transactions. The Borrower will, and will cause
each of the Subsidiaries to, during normal business hours, from time to time
upon three Business Days’ prior notice, unless a Default or Event of Default
shall be continuing, and as frequently as the Administrative Agent reasonably
determines to be appropriate, permit the Administrative Agent or any Lender, in
each case, at the expense of the Administrative Agent or such Lender,
respectively, to visit and inspect the financial records and the properties of
the Borrower, as the case may be, or any of the Subsidiaries and to make
extracts from and copies of such financial records, and permit any
representatives designated by the Administrative Agent or any Lender (acting
through the Administrative Agent), in each case, at the expense of the
Administrative Agent or such Lender, respectively, to discuss the affairs,
finances and condition of the Borrower, as the case may be, or any of the
Subsidiaries with the officers thereof and independent accountants therefor.

(b) In the event that the Administrative Agent or any Lender reasonably believes
that Hazardous Materials have been Released or are threatened to be Released on
or from any Real Property or other facility of the Borrower or the Subsidiaries
or that any such property or facility is not being operated in material
compliance with applicable Environmental Law, the Administrative Agent may, at
its election and after reasonable notice to the Borrower, retain an independent
engineer or other qualified environmental consultant to evaluate whether
Hazardous Materials are present in the soil, groundwater, or surface water at
such Real Property or facility or whether the facilities or properties are being
operated and maintained in compliance with applicable Environmental Laws. Such
environmental assessments may include detailed visual inspections of the Real
Property or facility, including any and all storage areas, storage tanks,
drains, dry wells and leaching areas, and the taking of soil samples, surface
water samples and groundwater samples as well as such other reasonable
investigations or analyses as are necessary. The scope of any such environmental
assessments under this paragraph shall be determined in the reasonable
discretion of the Administrative Agent. The Borrower shall, and shall cause each
of the Subsidiaries to, cooperate in the performance of any such environmental
assessment and permit any such engineer or consultant designated by the
Administrative Agent to have full access to each property or facility at
reasonable times and after reasonable notice to the Borrower of the plans to
conduct such an environmental assessment. All environmental assessments
conducted pursuant to this paragraph shall be at the Borrower’s sole cost and
expense.

 

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SECTION 5.08. Use of Proceeds. Use the proceeds of the Term Loans for the
purposes set forth in Section 3.13.

SECTION 5.09. Additional Collateral, etc. (a) With respect to any Collateral
acquired after the Second Lien Closing Date by the Borrower or any other Loan
Party (other than any Collateral described in paragraphs (b), (c) or (d) of this
Section and other than the PJM Receivables) as to which the Collateral Agent,
for the benefit of the Secured Parties, does not have a first priority perfected
security interest (subject to any Permitted Liens), promptly (and, in any event,
within 10 days following the date of such acquisition or such latter date
approved by the Administrative Agent), (i) execute and deliver to the
Administrative Agent and the Collateral Agent such amendments to the Guarantee
and Collateral Agreement or such other Security Documents as the Collateral
Agent deems necessary or advisable to grant to the Collateral Agent, for the
benefit of the Secured Parties, a security interest in such Collateral and
(ii) take all actions necessary or advisable to grant to, or continue on behalf
of, the Collateral Agent, for the benefit of the Secured Parties, a perfected
first priority security interest in such Collateral (subject to Permitted
Liens), including the execution and delivery of a Control Agreement with respect
to each deposit account or securities account that is established by a Loan
Party after the Second Lien Closing Date.

(b) With respect to any fee interest in any Collateral consisting of material
Real Property (as reasonably determined by the Administrative Agent) acquired
after the Second Lien Closing Date by the Borrower or any other Loan Party,
promptly (and, in any event, within 30 days following the date of such
acquisition or such latter date approved by the Administrative Agent) (i) if and
to the extent reasonably requested by the Administrative Agent, execute and
deliver a first priority Mortgage or amendments or modifications to Mortgages
(in each case, subject to Permitted Liens) in favor of the Collateral Agent, for
the benefit of the Secured Parties, covering such real property and complying
with the provisions herein and in the Security Documents along with any related
financing statements so requested, (ii) if and to the extent reasonably
requested by the Administrative Agent, provide the Secured Parties with title
insurance or comparable endorsements or supplements to the Title Policy, in an
amount at least equal to the purchase price of such Real Property (or such
lesser amount as reasonably agreed to by the Administrative Agent), which may be
subject, in each case, to Permitted Liens (which, in the case of Permitted Liens
described in clause (c) of Section 6.02, shall be reasonably acceptable to the
Administrative Agent), (iii) if requested by the Administrative Agent, deliver
to the Administrative Agent and the Collateral 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 and the
Collateral Agent and (iv) deliver to the Administrative Agent a notice
identifying, and upon the Administrative Agent’s request, provide a copy of, the
consultant’s reports, environmental site assessments or other documents, in each
case, to the extent available to, and relied upon by, the Borrower or any other
Loan Party to determine that any such real property included in such Collateral
does not contain Hazardous Materials of a form or type or in a quantity or
location that could reasonably be expected to result in a material Environmental
Liability.

(c) With respect to any Subsidiary created or acquired after the Second Lien
Closing Date by the Borrower or any of the Subsidiaries in accordance with
Section 6.12, promptly (and, in any event, within 20 days following such
creation or the date of such acquisition or such latter

 

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date approved by the Administrative Agent) (i) execute and deliver to the
Administrative Agent and the Collateral Agent such amendments to the Guarantee
and Collateral Agreement as the Administrative Agent or the Collateral Agent
deems necessary or advisable to grant to the Collateral Agent, for the benefit
of the Secured Parties, a valid, perfected first priority security interest in
the Equity Interests in such new Subsidiary that are owned by the Borrower or
any of the Subsidiaries, (ii) deliver to the Collateral Agent the certificates,
if any, representing such Equity Interests, together with undated stock powers,
in blank, executed and delivered by a duly authorized officer of the Borrower or
such Subsidiary, as the case may be and (iii) cause such new Subsidiary (A) to
become a party to the Guarantee and Collateral Agreement (and provide Guarantees
of the Obligations) and (B) to take such actions necessary or advisable to grant
to the Collateral Agent, for the benefit of the Secured Parties, a perfected
first priority security interest (subject to Permitted Liens) in the Collateral
described in the Guarantee and Collateral Agreement with respect to such new
Subsidiary, including the recording of instruments in the United States Patent
and Trademark Office and the United States Copyright Office and the filing of
UCC financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent or the Collateral Agent.

SECTION 5.10. Further Assurances. From time to time duly authorize, execute and
deliver, or cause to be duly authorized, executed and delivered, such additional
instruments, certificates, financing statements, agreements or documents, and
take all such actions (including filing UCC and other financing statements), as
the Administrative Agent or the Collateral Agent may reasonably request, for the
purposes of implementing or effectuating the provisions of this Agreement and
the other Loan Documents, or of more fully perfecting or renewing the rights of
the Administrative Agent, the Collateral Agent and the Secured Parties with
respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds or products thereof or with respect to any other
property or assets hereafter acquired by the Borrower, the Borrower or any
Subsidiary which may be deemed to be part of the Collateral) pursuant hereto or
thereto. Upon the exercise by the Administrative Agent, the Collateral Agent or
any Lender of any power, right, privilege or remedy pursuant to this Agreement
or the other Loan Documents which requires any consent, approval, recording,
qualification or authorization of any Governmental Authority, the Borrower will
execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that
the Administrative Agent, the Collateral Agent or such Lender may be required to
obtain from the Borrower or any of the Subsidiaries for such governmental
consent, approval, recording, qualification or authorization.

SECTION 5.11. Miscellaneous Business Covenants. The Borrower shall and shall
cause each of the Subsidiaries to: (a) maintain entity records and books of
account separate from those of any other entity; (b) not commingle its funds or
assets with those of any other entity, and (c) provide that the board of
directors or other analogous governing body of such entity will hold all
appropriate meetings to authorize and approve such entity’s actions.

SECTION 5.12. Material agreements. Furnish to the Administrative Agent a copy of
any material agreement entered into after the Second Lien Closing Date.

 

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SECTION 5.13. Collateral assignment. With respect to any material agreement
entered into after the Second Lien Closing Date, use commercially reasonable
efforts to include in each such material agreement a provision allowing for the
collateral assignment of the agreement to the Administrative Agent.

SECTION 5.14. Payments Under Gas Supply Contract. Furnish to the Administrative
Agent on or prior to the last calendar day of each month, a certificate of a
Responsible Officer setting forth (a) amounts invoiced under all Gas Supply
Contracts for the prior calendar month and (b) the aggregate PJM Receivable for
the prior calendar month.

SECTION 5.15. Compliance with FPA AND PUHCA 2005. The Borrower shall take or
cause to be taken all necessary or appropriate actions so that Borrower and the
Project remain in compliance with the requirements of the FPA and the Public
Utility Holding Company Act of 2005, and all regulations thereunder, except to
the extent any such non-compliance would not result in a Material Adverse
Effect.

ARTICLE VI.

Negative Covenants

The Borrower covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Term Loan Commitments have been
terminated and the principal of and interest on each Term Loan, all Fees and all
other expenses or amounts payable under any Loan Document have been paid in
full, the Borrower will not, nor will it cause or permit any of the Subsidiaries
to:

SECTION 6.01. Indebtedness; Preferred Stock. Incur, create, issue, assume or
permit to exist any preferred stock or any Indebtedness, except:

(a) Indebtedness existing on the Second Lien Closing Date and set forth in
Schedule 6.01(a);

(b) Indebtedness created hereunder and under the other Loan Documents;

(c) Indebtedness of the Borrower or any Subsidiary incurred to finance the
improvement of the Project, and any Permitted Refinancing Indebtedness in
respect of any such Indebtedness; provided that (i) such original Indebtedness
is incurred prior to or within 90 days after the completion of such improvement
and (ii) the aggregate principal amount of Indebtedness permitted by this
Section 6.01(c), when combined with the aggregate principal amount of all
Capital Lease Obligations incurred pursuant to Section 6.01(d), shall not exceed
$2,500,000 at any time outstanding;

(d) purchase money Indebtedness and Capital Lease Obligations of the Borrower or
any Subsidiary in an aggregate principal amount, when combined with the
aggregate principal amount of all Indebtedness incurred pursuant to
Section 6.01(c), not exceeding $2,500,000 at any time outstanding;

 

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(e) Indebtedness in respect of the First Lien Credit Agreement in an aggregate
principal amount of up to $100,000,000 at any time outstanding, less the amount
of any principal payments made thereon after the date of initial funding which
are accompanied by a permanent reduction in the commitments thereunder, and any
Permitted Refinancing Indebtedness in respect of such Indebtedness (which shall
be limited to the then outstanding principal amount thereof);

(f) Indebtedness under performance bonds or with respect to workers’
compensation claims, in each case incurred in the ordinary course of business;

(g) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn against
insufficient funds in the ordinary course of business; provided that such
Indebtedness is promptly covered by the Borrower or any Subsidiary;

(h) Indebtedness secured by Liens permitted under Section 6.02(q);

(i) unsecured Indebtedness of the Borrower arising from obligations to pay
Affiliate Credit Support Reimbursement Amounts so long as such Indebtedness is
subordinated to the Obligations pursuant to an Affiliate Subordination
Agreement; and

(j) other unsecured Indebtedness of the Borrower or the Subsidiaries in an
aggregate principal amount not exceeding $2,500,000 at any time outstanding.

SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on any
property or assets (including Equity Interests or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, except the following
(each a “Permitted Lien”):

(a) Liens on property or assets of the Borrower and the Subsidiaries existing on
the Second Lien Closing Date and set forth in Schedule 6.02; provided that such
Liens shall secure only those obligations which they secure on the Second Lien
Closing Date and refinancings, extensions, renewals and replacements thereof
permitted hereunder;

(b) any Lien created under the Loan Documents;

(c) Title Exceptions, easements, rights of way, zoning restrictions,
restrictions on use of real property and other similar encumbrances incurred in
the ordinary course of business and other minor defects as irregularities in
title (including leasehold title) existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary; provided that (i) such
Lien is not created in contemplation of or in connection with such acquisition
and (ii) such Lien does not materially interfere with the ordinary conduct of
the business of the Borrower and the Subsidiaries;

(d) Liens for taxes or assessments or other governmental charges (including
sewer and water charges) not yet delinquent or which are being contested in
compliance with Section 5.03;

 

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(e) inchoate and unperfected workers’, suppliers’, carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s or other similar liens or possessory
liens arising in the ordinary course of business and securing obligations that
are not due and payable or which are being contested in compliance with
Section 5.03;

(f) pledges or deposits securing statutory obligations under workmen’s
compensation, unemployment insurance, social security laws or regulations or
public liability laws or similar legislation (excluding Liens under ERISA);

(g) pledges or deposits to secure the performance of bids, tenders, contracts
(other than for the payment of money), leases (other than Capital Lease
Obligations), statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business in an aggregate amount not in excess of $2,500,000;

(h) deposits securing, or in lieu of, surety, appeal or customs bonds in
proceedings to which any Loan Party is a party in an aggregate amount not in
excess of $2,500,000;

(i) purchase money security interests (including in connection with Capital
Lease Obligations) in real property, improvements thereto or other fixed or
capital assets hereafter acquired (or, in the case of improvements, constructed)
by the Borrower or any Subsidiary; provided that (i) such security interests
secure Indebtedness permitted by Section 6.01, (ii) such security interests are
incurred, and the Indebtedness secured thereby is created, within 90 days after
such acquisition (or construction) and (iii) such security interests do not
apply to any other property or assets of the Borrower or any Subsidiary;

(j) any attachment or judgment Liens not constituting an Event of Default under
Article VII;

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

(l) Liens on the Collateral securing obligations in an aggregate amount not in
excess of $100,000,000 under the First Lien Credit Agreement or any refinancing
thereof permitted hereunder and having the same priority of Liens afforded
thereto;

(m) Liens arising from precautionary UCC financing statement filings regarding
operating leases which do not constitute Indebtedness;

(n) Liens securing any Heat Rate Call Option; provided that all such Liens have
a priority no higher than pari passu with the Liens securing the Obligations in
accordance with, and otherwise subject to, the terms of the Lien Subordination
Agreement; provided that such Liens do not secure such obligations at any time,
whether contingent or otherwise, on a marked to market basis, in excess of
$55,000,000;

 

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(o) the Lien established pursuant to the Gas Supply Security Agreement;

(p) Liens securing the Obligations (as defined in the First Lien Credit
Agreement), to the extent securing Borrower’s obligations under a Heat Rate Call
Option Agreement, power purchase agreements, agreements for the sale of energy
and/or capacity, tolling arrangements or similar arrangements; provided that
(a) the outstanding amount secured thereby does not exceed in the aggregate
$30,000,000 at any one time, and (b) the creditor holding such Liens has entered
into a modification to the Lien Subordination Agreement and the Intercreditor
Agreement with the parties to such agreements to allow such pari passu priority
treatment of such Liens;

(q) Liens not otherwise permitted by this Section 6.02 in favor of Persons who
are not Affiliates of the Borrower so long as the aggregate outstanding
principal amount of the obligations secured thereby does not exceed $1,000,000
at any one time; and

(r) Liens securing any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedging agreement or
other similar agreement or arrangement, each of which is for the purpose of
hedging interest rate exposure and not for speculative purposes.

SECTION 6.03. Sale and Lease-back Transactions. Enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal or mixed, used or useful in its business, whether now
owned or hereafter acquired, and thereafter rent or lease such property or other
property which it intends to use for substantially the same purpose or purposes
as the property being sold or transferred unless (a) the sale of such property
is permitted by Section 6.05 and (b) any Capital Lease Obligations or Liens
arising in connection therewith are permitted by Sections 6.01 and 6.02,
respectively.

SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire any
Equity Interests, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances or capital contributions to, or make or
permit to exist any investment or any other interest in, any other person (all
of the foregoing, “Investments”), except:

(a) Investments after the Second Lien Closing Date by the Borrower in the Equity
Interests of the Subsidiaries; provided that (A) any such Equity Interests shall
be pledged pursuant to the Guarantee and Collateral Agreement;

(b) Permitted Investments;

(c) Investments received in connection with the bankruptcy or reorganization of,
or settlement of delinquent accounts and disputes with, customers and suppliers,
in each case in accordance with customary practices;

(d) Investments existing on the Second Lien Closing Date and set forth on
Schedule 6.04;

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

 

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(f) Investments made as a result of the receipt of non-cash consideration from a
sale, transfer or other disposition of any asset in compliance with
Section 6.05;

(g) the Borrower and its Subsidiaries may acquire and hold accounts receivables
owing to any of them, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms of the
Borrower or such Subsidiary; and

(h) the Borrower and its Subsidiaries may acquire and hold cash.

SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions
(a) Merge into or consolidate with any other person, or permit any other person
to merge into or consolidate with it, or liquidate or dissolve, or sell,
transfer, lease, issue or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all the assets (whether now owned
or hereafter acquired) of the Borrower or less than all the Equity Interests of
any Subsidiary, or purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any other
person, except for (i) sales, transfers, leases, issuances and other
dispositions of assets not constituting an Asset Sale pursuant to the definition
thereof and Asset Sales permitted under the terms and conditions of
Section 6.05(b), (ii) the purchase and sale by the Borrower or any Subsidiary of
capacity and energy in the ordinary course of business, (iii) the sale or
discount by the Borrower or any Subsidiary in each case without recourse and in
accordance with customary practices of overdue accounts receivable arising in
accordance with customary practices, but only in connection with the compromise
or collection thereof consistent with customary industry practice (and not as
part of any bulk sale or financing transaction) and (iv) if at the time thereof
and immediately after giving effect thereto no Event of Default or Default shall
have occurred and be continuing, (x) the merger or consolidation of any wholly
owned Subsidiary into or with the Borrower in a transaction in which the
Borrower is the surviving corporation, (y) the merger or consolidation of any
wholly owned Subsidiary into or with any other wholly owned Subsidiary in a
transaction in which the surviving entity is a wholly owned Subsidiary and no
person other than the Borrower or a wholly owned Subsidiary receives any
consideration, or (z) the conveyance of all or substantially all of the assets
of any Subsidiary to the Borrower.

(b) Engage in any Asset Sale otherwise permitted under paragraph (a) above
unless in the ordinary course of business and where (i) such Asset Sale is for
consideration at least 75% of which is cash (and no portion of the remaining
consideration shall be in the form of Indebtedness of the Borrower or any
Subsidiary), (ii) such consideration is at least equal to the fair market value
of the assets being sold, transferred, leased or disposed of (as determined in
good faith by the Borrower), (iii) the fair market value of all assets sold,
transferred, leased or disposed of pursuant to this paragraph (b) shall not
exceed (A) $1,000,000 individually or (B) $5,000,000 in the aggregate for any
fiscal year and (iv) the Net Cash Proceeds of such Asset Sale are applied in
accordance with Section 2.13 if and to the extent required thereby.

SECTION 6.06. Restricted payments; restrictive agreements. (a) Declare or make,
or agree to declare or make, directly or indirectly, any Restricted Payment
(including pursuant to any Synthetic Purchase Agreement), or incur any
obligation (contingent or otherwise) to do so; provided, however, so long as the
Borrower is treated as a partnership or a “disregarded entity”

 

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for federal income tax purposes, that the Borrower may, on any Tax Distribution
Date, distribute the Tax Distribution Amount to the Pledgor after payment of
interest due and payable on the Obligations as of such date and payment of O&M
Costs due and payable on or prior to such date; provided, further, that the
Borrower may distribute up to $25,000,000, less transaction fees, of the
proceeds of the Second Lien Term Loans to one or more Affiliates on or within
five Business Days following the Second Lien Closing Date; provided, finally,
that if (i) immediately before and after giving effect thereto, no Default or
Event of Default has occurred and is continuing and (ii) except in respect of
Restricted Payments made or declared on the Second Lien Closing Date, the
Borrower shall have delivered to the Administrative Agent a certificate of a
Responsible Officer of the Borrower demonstrating to the reasonable satisfaction
of the Administrative Agent that the ratio of (A) Operating Revenues less O&M
Costs during the prior four fiscal quarters of the Borrower, to (B) interest
payable on the Term Loans and the Second Lien Term Loans during such period, was
at least 1.30/1.00, then, within ninety (90) Business Days following the end of
the most recent fiscal quarter of the Borrower, the Borrower may make Restricted
Payments in an amount not to exceed the sum of (I) 35% of Excess Cash Flow of
the Borrower during such fiscal quarter, together with the Rejected Excess Cash
Prepayment Amount, if any, for such fiscal quarter and (II) all Retained
Distributable Cash not previously distributed under this Section 6.06 or applied
to prepayment of Term Loans pursuant to Section 2.12(d)(ii). For purposes of
this Section 6.06, “Retained Distributable Cash” shall mean the sum of (a) for
each fiscal quarter, 35% of Excess Cash Flow of the Borrower for such fiscal
quarter plus the Rejected Excess Cash Prepayment Amount, if any, for such fiscal
quarter, plus interest, if any, received by the Borrower on such amounts and
(b) the sum of such amounts in this clause (a) for previous fiscal quarters
which amounts were not distributed under Section 6.06 or prepaid under
Section 2.12(d)(ii).

(b) Enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (i) the ability of the
Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any
of its property or assets, or (ii) the ability of any Subsidiary to pay
dividends or other distributions with respect to any of its Equity Interests or
to make or repay loans or advances to the Borrower or any other Subsidiary or to
Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that
(A) the foregoing shall not apply to restrictions and conditions imposed by law
or by any Loan Document or First Lien Loan Document as in effect on the Second
Lien Closing Date or related documents, (B) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale; provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (C) clause (i) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and
(D) clause (i) of the foregoing shall not apply to customary provisions in
leases and other contracts restricting the assignment thereof.

SECTION 6.07. Transactions with Affiliates. Sell or transfer any property or
assets to, or purchase or acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except that
(a) the Borrower or any Subsidiary may engage in any of the foregoing
transactions in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an

 

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arm’s-length basis from unrelated third parties, (b) customary fees may be paid
to non-officer directors of the Borrower and its subsidiaries, (c) Borrower may
reimburse LS Equity Advisors, LLC or its Affiliates for amounts incurred in
respect of asset management services relating to the Project in an aggregate
amount not to exceed the Asset Management Payment Limit and (d) so long as no
Event of Default or Default shall have occurred and be continuing or would
result therefrom, fees may be paid to the Permitted Holders in an aggregate
amount not to exceed $1,000,000 in any one fiscal year plus all out-of-pocket
costs and expenses incurred by the Permitted Holders, in each case in connection
with their performance of management, consulting, monitoring, financial advisory
or other services with respect to the Borrower and the Subsidiaries.

SECTION 6.08. Business of the Borrower and Subsidiaries; Limitation on Hedging
Agreements. (a) Engage at any time in any business other than the businesses
conducted by it as of the Second Lien Closing Date and business activities
related thereto.

(b) Enter into any Hedging Agreement other than (i) any such agreement or
arrangement entered into in the ordinary course of business and consistent with
prudent business practice to hedge or mitigate risks to which the Borrower or
any Subsidiary is exposed in the conduct of its business or the management of
its liabilities, (ii) any such agreement entered into to hedge against
fluctuations in the process of commodities owned or purchased by it and
fluctuations in interest rates or currency incurred in a manner consistent with
prudent business practice, and (iii) Heat Rate Call Options; provided that in
each case such arrangements or arrangements shall not have been entered into for
speculation purposes.

SECTION 6.09. Other Indebtedness and Agreements; Modifications of Certain
Agreements. (a) Except in each case for changes to the First Lien Credit
Agreement that are permitted by the provisions of the Schedule 6.01(e), amend,
restate, supplement, modify or otherwise change the terms of the First Lien
Credit Agreement or any other indenture, instrument or agreement pursuant to
which any Material Indebtedness of the Borrower or any of its subsidiaries is
outstanding or make any payment consistent with an amendment, restatement,
supplement or modification thereof or other change thereto, if the effect of
such amendment, restatement, supplement, modification or change is to increase
the interest rate on the applicable Indebtedness or increase the cash portion of
any interest required to be paid thereon, change (to earlier dates) any dates
upon which payments of principal or interest are due thereon, change any event
of default or condition to an event of default with respect thereto (other than
to eliminate any such event of default or increase any grace period or threshold
related thereto), change the redemption, prepayment or defeasance provisions
thereof (other than (i) to reduce any premium payable or (ii) to provide for or
increase any prepayment premium in exchange for an equivalent decrease in the
applicable interest rate thereon), change any subordination provisions thereof
(or any guaranty thereof), or change any collateral therefor (other than to
release such collateral), or if the effect of such amendment, restatement,
supplement, modification or change, together with all other amendments,
restatements, supplements, modifications or changes made, is to increase the
obligations of the obligor thereunder or to confer any additional rights on the
holders of such Indebtedness (or trustee or other representative on their
behalf) which would be materially adverse to the Borrower, any of its
subsidiaries, the Agents or the Lenders.

 

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(b) (i) Make any distribution, whether in cash, property, securities or a
combination thereof, other than regular scheduled payments of principal and
interest as and when due (to the extent not prohibited by applicable
subordination provisions), in respect of, or pay, or directly or indirectly
(including pursuant to any Synthetic Purchase Agreement) redeem, repurchase,
retire or otherwise acquire for consideration, or set apart any sum for the
aforesaid purposes, any Indebtedness, except (A) the payment of the Indebtedness
created hereunder, (B) refinancings of Indebtedness permitted by Section 6.01 or
(C) the payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness.

SECTION 6.10. Fiscal Year. Change its fiscal year-end to a date other than
December 31 without the prior written consent of the Administrative Agent.

SECTION 6.11. Accounts. Maintain, establish or use any deposit account or
securities account other than accounts subject to the Control Agreement and
other than the Cinergy Account.

SECTION 6.12. Subsidiaries. Form any Subsidiary without the prior written
consent of the Required Lenders.

SECTION 6.13. Use of Site. Use, or permit to be used, the Site for any purpose
other than for the operation and maintenance of the Project.

SECTION 6.14. Hazardous Materials. Release into the environment any Hazardous
Materials in violation of any applicable Environmental Laws, legal requirements
or applicable Permits, except for any Release that could not reasonably be
expected to materially impair the value of the Site and the Collateral, taken as
a whole, and could not otherwise reasonably be expected to have a Material
Adverse Effect.

SECTION 6.15. Payments for Asset Management Services. Pay amounts to LS Equity
Advisors, LLC as cost reimbursement in respect of asset management services
relating to the Project in excess of the Asset Management Payment Limit.

SECTION 6.16. Payments of Affiliate Credit Support Reimbursement Amounts. Pay
Affiliate Credit Support Reimbursement Amounts on an annual basis in excess of
the Affiliate Credit Support Reimbursement Limit.

ARTICLE VII.

Events of Default

In case of the happening of any of the following events (“Events of Default”):

(a) any representation or warranty made or deemed made in or in connection with
any Loan Document or the Borrowings hereunder, or any representation or warranty
in any report, certificate, financial statement or other instrument furnished in
connection with or pursuant to any Loan Document, shall prove to have been false
or misleading in any material respect when so made or deemed made;

 

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(b) default shall be made in the payment of any principal of any Term Loan when
and as the same shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof or by acceleration thereof or otherwise;

(c) default shall be made in (i) the payment of any interest on any Term Loan or
any Fee or (ii) any other amount (other than an amount referred to in (b) above)
due under any Loan Document, in the case of clause (i) or (ii), when and as the
same shall become due and payable, and, in the case of clause (i) or (ii), such
default shall continue unremedied for a period of five Business Days and, in the
case of clause (ii), following the Administrative Agent’s demand for such
payment;

(d) default shall be made in the due observance or performance by the Borrower
or any Subsidiary of any covenant, condition or agreement contained in
Section 5.01(a), 5.05 or 5.08 or in Article VI (other than Sections 6.14, 6.15
and 6.16);

(e) default shall be made in the due observance or performance by the Borrower
or any Subsidiary of any covenant, condition or agreement contained in any Loan
Document (other than those specified in clauses (b), (c) or (d) above) and such
default shall continue unremedied for a period of 30 days following the earlier
of a Responsible Officer becoming aware of the same or written notice of the
same having been given to the Borrower by the Administrative Agent or any
Lender;

(f) (i) the Borrower or any Subsidiary shall (i) fail to pay any principal or
interest, regardless of amount, due in respect of any Material Indebtedness,
when and as the same shall become due and payable and such failure to pay shall
result in an event of default under such Material Indebtedness, or (ii) any
other event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (ii) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;

(g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of the Borrower or any Subsidiary, or of a substantial part of the
property or assets of the Borrower or a Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or other similar law,
(ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or for a
substantial part of the property or assets of the Borrower or a Subsidiary or
(iii) the winding-up or liquidation of the Borrower or any Subsidiary; and such
proceeding or petition shall continue undismissed or unstayed for 60 days or
more or an order or decree approving or ordering any of the foregoing shall be
entered;

(h) the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking relief under Title 11 of the United States Code, as
now constituted or

 

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hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or other similar law, (ii) consent to the institution
of, or fail to contest in a timely and appropriate manner, any proceeding or the
filing of any petition described in (g) above, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
the property or assets of the Borrower or any Subsidiary, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors,
(vi) admit in writing its inability or fail generally to pay its debts as they
become due or (vii) take any action for the purpose of effecting any of the
foregoing;

(i) one or more judgments for the payment of money in an aggregate amount in
excess of $5,000,000 or other judgments that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect shall be
rendered against the Borrower, any Subsidiary or any combination thereof and the
same shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to levy upon assets or properties of the Borrower or any
Subsidiary to enforce any such judgment;

(j) an ERISA Event described in clause (b) of the definition thereof shall have
occurred or any other ERISA Event shall have occurred that, when taken together
with all other such ERISA Events, could reasonably be expected to result in
liability of the Borrower and its ERISA Affiliates in an aggregate amount
exceeding $5,000,000;

(k) any Guarantee under the Guarantee and Collateral Agreement for any reason
shall cease to be in full force and effect (other than in accordance with its
terms), or any Guarantor shall deny that it has any further liability under its
Guarantee (other than as a result of the discharge of such Guarantor in
accordance with the terms of the Loan Documents);

(l) any Lien purported to be created under any Security Document shall cease to
be, or shall be asserted by the Borrower or any other Loan Party not to be, a
valid, perfected and, with respect to the Secured Parties, first priority
(except as otherwise expressly provided in this Agreement or such Security
Document) Lien on any material Collateral covered thereby, except to the extent
that any such loss of perfection or priority results from a disposition of
Collateral otherwise permitted by the Loan Documents;

(m) [Intentionally Omitted.];

(n) Borrower shall become subject to, or not exempt from rate regulation as a
public utility under the laws of the State of Pennsylvania as presently
constituted and as construed by the courts of Pennsylvania; or

(o) Any “event of default” (howsoever defined) shall occur under the CS Heat
Rate Call Option Agreement or any successor or replacement Heat Rate Call Option
and shall not be cured within 90 days of the occurrence thereof;

then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event the following actions may be taken, but subject to the
terms and conditions of the Intercreditor

 

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Agreement: the Administrative Agent may, and at the request of the Required
Lenders shall, declare the Term Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Term Loans so
declared to be due and payable, together with accrued interest thereon, any
Prepayment Fee payable pursuant to Section 2.11(b) any other unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder and under any other
Term Loan Document, shall become forthwith due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other Loan
Document to the contrary notwithstanding, and the Administrative Agent and the
Collateral Agent shall have the right to take all or any actions and exercise
any remedies available to a secured party under the Security Documents or
applicable law or in equity; and in any event with respect to the Borrower
described in paragraph (g) or (h) above, the principal of the Term Loans then
outstanding, together with accrued interest thereon and any other unpaid accrued
Fees and all other liabilities of the Borrower accrued hereunder and under any
other Loan Document, shall automatically become due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding, and the Administrative
Agent and the Collateral Agent shall have the right to take all or any actions
and exercise any remedies available to a secured party under the Security
Documents or applicable law or in equity.

ARTICLE VIII.

The Agents and the Arranger

Each of the Lenders hereby irrevocably appoints each of the Administrative Agent
and the Collateral Agent (for purposes of this Article VIII, the Administrative
Agent and the Collateral Agent are referred to collectively as the “Agents”) its
agent and authorizes the Agents to take such actions on its behalf and to
exercise such powers as are delegated to such Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. Without limiting the generality of the foregoing, the Agents are hereby
expressly authorized by the Lenders to execute any and all documents (including
releases and the Security Documents) with respect to the Collateral and the
rights of the Secured Parties with respect thereto, as contemplated by and in
accordance with the provisions of this Agreement and the Security Documents.

Each financial institution serving as an Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent, and such financial institution
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or any of their
respective Affiliates as if it were not an Agent hereunder.

No Agent shall have any duties or obligations except those expressly set forth
in the Loan Documents. Without limiting the generality of the foregoing, (a) no
Agent shall be subject to any fiduciary or other implied duties, regardless of
whether a Default or Event of Default has occurred and is continuing, (b) no
Agent shall have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby that the Administrative Agent or the Collateral Agent is
required to

 

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exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.08), and (c) except as expressly set forth in the Loan Documents, no
Agent shall have any duty to disclose, nor shall it be liable for the failure to
disclose, any information relating to the Borrower or any of the Subsidiaries
that is communicated to or obtained by the bank serving as any Agent or any of
its Affiliates in any capacity. The Administrative Agent and the Collateral
Agent shall not be liable for any action taken or not taken by it with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.08). No Agent or any of its Related Parties shall be
liable for any action taken or not taken by it hereunder or under any other Loan
Document or in connection herewith or therewith, except for any liability that
is determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted primarily from the gross negligence or willful
misconduct of such Agent. No Agent shall be deemed to have knowledge of any
Default unless and until written notice thereof is given to such Agent by the
Borrower or a Lender, and no Agent shall be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered thereunder or in connection therewith,
(iii) the performance or observance of any of the covenants, agreements or other
terms or conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article IV or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to such Agent.

Each Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing believed by it to be genuine and to have been signed
or sent by the proper person. Each Agent may also rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper
person, and shall not incur any liability for relying thereon. Each Agent may
consult with legal counsel (who may be counsel for the Borrower or any
Subsidiary), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

Each Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by it. Each Agent and any
such sub-agent may perform any and all its duties and exercise its rights and
powers by or through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of each Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.

Subject to the appointment and acceptance of a successor Agent as provided
below, each Agent may (and at any time if demanded by the Required Lenders
shall) resign at any time by notifying the Lenders and the Borrower. Upon any
such resignation of the Administrative Agent or the Collateral Agent, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Required

 

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Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After an Agent’s
resignation hereunder, the provisions of this Article and Section 9.05 shall
continue in effect for the benefit of such retiring Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while acting as Agent.

Each Arranger and the Syndication Agent, in its capacity as such, shall have no
duties or responsibilities, and shall incur no liability, under this Agreement
or any other Loan Document.

Each Lender acknowledges that it has, independently and without reliance upon
the Agents, the Arranger, the Syndication Agent or any Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agents,
the Arranger, the Syndication Agent or any Lender and based on such documents
and information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement or any other Loan Document, any related agreement or any document
furnished hereunder or thereunder.

To the extent required by any applicable law, the Administrative Agent may
withhold from any interest payment to any Lender an amount equivalent to any
applicable withholding tax. If the Internal Revenue Service or any other
Governmental Authority asserts a claim that the Administrative Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
because the appropriate form was not delivered or was not properly executed or
because such Lender failed to notify the Administrative Agent of a change in
circumstance which rendered the exemption from, or reduction of, withholding tax
ineffective or for any other reason, such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax or otherwise, including any penalties or interest
and together with all expenses (including legal expenses, allocated internal
costs and out-of-pocket expenses) incurred.

ARTICLE IX.

Miscellaneous

SECTION 9.01. Notices. Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by fax, as follows:

(a) if to the Borrower, to:

Ontelaunee Power Operating Company

c/o LS Power Development, LLC

Two Tower Center, 20th Floor

East Brunswick, NJ 08816

Attn: Corporate Counsel

Telephone: (732) 249-6750

Facsimile: (732) 249-7290

 

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(b) if to the Administrative Agent or the Collateral Agent, to:

GSO Capital Partners LP

280 Park Avenue

New York, NY 10017

Attn: Chris Sullivan

Telephone: (212) 503-2117

Facsimile: (212) 503-6930

(c) if to a Lender, to it at its address (or fax number) set forth in the Lender
Addendum or the Assignment and Acceptance pursuant to which such Lender shall
have become a party hereto.

All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by fax
or on the date five Business Days after dispatch by certified or registered mail
if mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 9.01.

SECTION 9.02. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Borrower herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied
upon by the Lenders and shall survive the making by the Lenders of the Term
Loans, regardless of any investigation made by the Lenders or on their behalf,
and shall continue in full force and effect as long as the principal of or any
accrued interest on any Term Loan or any Fee or any other amount payable under
this Agreement or any other Loan Document is outstanding and unpaid and so long
as the Term Loan Commitments have not been terminated. The provisions of
Sections 2.13, 2.15, 2.19 and 9.05 shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Term Loans, the expiration of the Term Loan Commitments, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document or any investigation made by or on behalf of the Administrative Agent,
the Collateral Agent, the Arranger, the Syndication Agent or any Lender.

SECTION 9.03. Binding Effect. This Agreement shall become effective when it
shall have been executed by each of the parties hereto and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto.

 

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SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of the Borrower, the Administrative Agent, the
Collateral Agent or the Lenders that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and assigns.

(b) Each Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Term Loan Commitment and the Term Loans at the time owing to it);
provided, however, that (i) except in the case of an assignment to a Lender or
an Affiliate or Related Fund of a Lender, the Administrative Agent must give its
prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed) and notice of such assignment shall be
provided to the Borrower, (ii) in the case of any assignment to a person
designated as an Ineligible Assignee at the time of such assignment, the
Borrower must give its prior written consent to such assignment (which consent
shall not be unreasonably withheld or delayed); provided that such consent of
the Borrower in the case of clause (b)(ii) above shall not be required to any
such assignment (A) made to a Lender or an Affiliate or Related Fund of a
Lender, (B) during the continuance of any Default or (C) in connection with the
initial syndication of the facility, (iii) the amount of the Term Loan
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $1,000,000 (or, if
less, the entire remaining amount of such Lender’s Term Loan Commitment) and
shall be in an amount that is an integral multiple of $1,000,000 (or the entire
remaining amount of such Lender’s Term Loan Commitment), (iv) the parties to
each such assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance (such Assignment and Acceptance to be
(A) electronically executed and delivered to the Administrative Agent via an
electronic settlement system then acceptable to the Administrative Agent, or
(B) manually executed and, in the case of each of clause (A) and (B), delivered
together with, except in the case of an assignment by or to either of the
Arranger or any Affiliate of either of the Arranger, a processing and
recordation fee of $3,500) and (v) the assignee, if it shall not be a Lender
immediately prior to the assignment, shall deliver to the Administrative Agent
an Administrative Questionnaire. Upon acceptance and recording pursuant to
paragraph (e) of this Section 9.04, from and after the effective date specified
in each Assignment and Acceptance, (A) the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement and
(B) the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.13, 2.15, 2.19 and 9.05,
as well as to any Fees accrued for its account and not yet paid).

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other

 

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and the other parties hereto as follows: (i) such assigning Lender warrants that
it is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim and that its Term Loan Commitment and the
outstanding balances of its Term Loans, without giving effect to assignments
thereof which have not become effective, are as set forth in such Assignment and
Acceptance, (ii) except as set forth in (i) above, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto, or the financial condition of
the Borrower or any Subsidiary or the performance or observance by the Borrower
or any Subsidiary of any of its obligations under this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto;
(iii) such assignee represents and warrants that it is legally authorized to
enter into such Assignment and Acceptance; (iv) such assignee confirms that it
has received a copy of this Agreement, together with copies of the most recent
financial statements referred to in Section 3.05 or delivered pursuant to
Section 5.04 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, the Collateral Agent, the Arranger, the
Syndication Agent, such assigning Lender or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (vi) such assignee appoints and authorizes the Administrative Agent
and the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Administrative
Agent and the Collateral Agent, respectively, by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.

(d) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in the City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Term Loan
Commitment of, and principal amount of the Term Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive and the Borrower, the Administrative Agent, the
Collateral Agent and the Lenders may treat each person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Collateral Agent and any Lender
(with respect to any entry relating to such Lender’s Term Loans), at any
reasonable time and from time to time upon reasonable prior notice.

(e) Upon its receipt of a duly completed Assignment and Acceptance executed by
an assigning Lender and an assignee, an Administrative Questionnaire completed
in respect of the assignee (unless the assignee shall already be a Lender
hereunder) and the written consent of the Administrative Agent and (to the
extent required hereby) the Borrower to such assignment, the Administrative
Agent shall (i) accept such Assignment and Acceptance and (ii) record the
information contained therein in the Register. No assignment shall be effective
unless it has been recorded in the Register as provided in this paragraph (e).

 

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(f) Each Lender may without the consent of the Borrower or the Administrative
Agent sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Term Loan Commitment and the Term Loans); provided, however, that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participating banks or other
entities shall be entitled to the benefit of the cost protection provisions
contained in Sections 2.13, 2.15 and 2.19 to the same extent as if they were
Lenders (but, with respect to any particular participant, to no greater extent
than the Lender that sold the participation to such participant), (iv) the
Borrower, the Administrative Agent and the Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrower relating to the Term Loans and to
approve any amendment, modification or waiver of any provision of this Agreement
(other than amendments, modifications or waivers decreasing any Fees payable
hereunder or the amount of principal of or the rate at which interest is payable
on the Term Loans, extending any scheduled principal payment date or date fixed
for the payment of interest on the Term Loans, increasing or extending the Term
Loan Commitments or releasing any material Guarantor (other than in connection
with Asset Sales permitted by Section 6.05) or all or substantially all of the
Collateral) and (v) the Borrower and any Loan Party shall have no obligations or
duty to any participant except as provided herein.

(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; provided that, prior to any such disclosure of any
Information (as defined in Section 9.16), each such assignee or participant or
proposed assignee or participant shall execute an agreement whereby such
assignee or participant shall agree (subject to customary exceptions) to
preserve the confidentiality of such confidential information on terms no less
restrictive than those applicable to the Lenders pursuant to Section 9.16.

(h) Except as provided in this Section 9.04, no Lender shall, as between the
Borrower and that Lender, or Administrative Agent and that Lender, be relieved
of any of its obligations hereunder as a result of any sale, assignment,
transfer or negotiation of, or granting of participation in, all or any part of
the Term Loans or other Obligations owed to such Lender.

(i) Any Lender may at any time assign all or any portion of its rights under
this Agreement to secure extensions of credit to such Lender or in support of
obligations owed by such Lender; provided that no such assignment shall release
a Lender from any of its obligations hereunder or substitute any such assignee
for such Lender as a party hereto.

(j) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Term Loan that such Granting Lender would otherwise be
obligated to make to the Borrower pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to make

 

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any Term Loan and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Term Loan, the Granting Lender shall be
obligated to make such Term Loan pursuant to the terms hereof. The making of a
Term Loan by an SPC hereunder shall utilize the Term Loan Commitment of the
Granting Lender to the same extent, and as if, such Term Loan were made by such
Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for
any indemnity or similar payment obligation under this Agreement (all liability
for which shall remain with the Granting Lender). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. In addition, notwithstanding anything to the
contrary contained in this Section 9.04, any SPC may (i) with notice to, but
without the prior written consent of, the Borrower and the Administrative Agent
and without paying any processing fee therefor, assign all or a portion of its
interests in any Term Loans to the Granting Lender or to any financial
institutions (consented to by the Borrower and Administrative Agent) providing
liquidity and/or credit support to or for the account of such SPC to support the
funding or maintenance of Term Loans and (ii) disclose on a confidential basis
any non-public information relating to its Term Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC.

(k) The Borrower shall not assign or delegate any of its rights or duties
hereunder without the prior written consent of the Administrative Agent and each
Lender, and any attempted assignment without such consent shall be null and
void.

SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay all reasonable
out-of-pocket costs and expenses incurred by the Administrative Agent, the
Collateral Agent, the Syndication Agent and the Arranger in connection with the
syndication of the credit facilities provided for herein (including any
assignment fees payable in connection with the initial syndication of the
facility pursuant to an electronic settlement system) and the preparation
(provided that such fees, disbursements and other charges of Latham & Watkins
LLP in connection with such preparation of this Agreement, the First Lien Credit
Agreement, the Loan Documents and the First Lien Loan Documents, together with
associated local counsel fees, title insurance, real estate costs, disbursements
and out-of-pocket expenses shall not in the aggregate exceed $220,000) and
administration of this Agreement and the other Loan Documents or in connection
with any amendments, modifications or waivers of the provisions hereof or
thereof or incurred by the Administrative Agent, the Collateral Agent, the
Syndication Agent, the Arranger or any Lender in connection with the enforcement
or protection of its rights in connection with this Agreement and the other Loan
Documents or in connection with the Term Loans made hereunder, including in each
case the reasonable fees, disbursements and other charges of Latham & Watkins
LLP, counsel for the Administrative Agent and the Collateral Agent, and, in
connection with any such enforcement or protection, the reasonable fees,
disbursements and other charges of any counsel for the Administrative Agent, the
Collateral Agent, the Syndication Agent, the Arranger or any Lender.

 

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(b) The Borrower agrees to indemnify the Administrative Agent, the Collateral
Agent, the Syndication Agent, the Arranger, each Lender and each Related Party
of any of the foregoing persons (each such person being called an “Indemnitee”)
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related costs and reasonable out-of-pocket expenses,
including reasonable counsel fees, disbursements and other charges (“Losses”)
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
contemplated thereby, (ii) the use of the proceeds of the Term Loans, (iii) any
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, or (iv) to the extent such
Losses arise out of or relate to the Transactions, any actual or alleged
presence or Release of Hazardous Materials on any property owned or operated by
the Borrower or any of the Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of the Subsidiaries; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related costs and expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted primarily from the gross negligence or willful
misconduct of such Indemnitee.

(c) To the extent that the Borrower fails to pay any amount required to be paid
by them to the Administrative Agent, the Collateral Agent, the Syndication Agent
or the Arranger under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, the Collateral Agent, the
Syndication Agent or the Arranger, as the case may be, such Lender’s pro rata
share (determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent, the Collateral Agent, the Syndication Agent or the
Arranger in its capacity as such. For purposes hereof, a Lender’s “pro rata
share” shall be determined based upon its share of the sum of the outstanding
Term Loans and unused Term Loan Commitments at the time.

(d) To the extent permitted by applicable law, no Indemnified Party or the
Borrower shall assert, and each hereby waives, any claim against any Indemnitee
or other party hereto, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions or any Term Loan
or the use of the proceeds thereof.

(e) The provisions of this Section 9.05 shall remain operative and in full force
and effect regardless of the expiration of the term of this Agreement, the
consummation of the Transactions or the other transactions contemplated hereby,
the repayment of any of the Term Loans, the expiration of the Term Loan
Commitments, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Administrative Agent, the Collateral Agent, the Syndication Agent, the
Arranger or any Lender. All amounts due under this Section 9.05 shall be payable
on written demand therefor.

 

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SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
except to the extent prohibited by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement and other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured. The rights of each Lender under this
Section 9.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have. Each Lender agrees to promptly
notify the Borrower and the Administrative Agent in writing following any such
set off; provided that the failure to give such notice shall not affect the
validity of such set off and application.

SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER
THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the Administrative
Agent, the Collateral Agent or any Lender in exercising any power or right
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower or any other Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice or demand
on the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified (other than amendments made to correct typographical errors which shall
only require the written agreement of the Borrower and the Administrative Agent)
except pursuant to an agreement or agreements in writing entered into by the
Borrower and the Required Lenders; provided, however, that no such agreement
shall (i) decrease the principal amount of, or extend the maturity of or date
for the payment of any interest on any Term Loan, or waive or excuse any such
payment or any part thereof, or decrease the rate of interest on any Term Loan
(except in connection with the waiver of applicability of any post-default
increase in interest rates and except for any waiver with respect to mandatory
prepayments under Section 2.13, which waiver in each case shall be effective
with the consent of the Required Lenders), without the prior written consent of
each Lender affected thereby, (ii) increase or extend the Term Loan Commitment
or decrease or extend the date for payment of any Fees of any Lender without the
prior written consent of such Lender, (iii) amend or modify the pro rata
requirements of Section 2.17, the provisions of Section 9.04(k), the provisions
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the term “Required Lenders” insofar as such definition affects the substance of
this Section, or release any material Guarantor, without the prior written
consent of each Lender, (iv) release all or substantially all of the Collateral
without the prior written consent of each Lender, or (v) modify the protections
afforded to an SPC pursuant to the provisions of Section 9.04(j) without the
written consent of such SPC; provided, further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent or the Collateral Agent hereunder or under any other Loan Document without
the prior written consent of the Administrative Agent or the Collateral Agent.

SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Term Loan, together
with all Fees, charges and other amounts which are treated as interest on such
Term Loan under applicable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged,
taken, received or reserved by the Lender holding such Term Loan with applicable
law, the rate of interest payable in respect of such Term Loan, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate
and, to the extent lawful, the interest and Charges that would have been payable
in respect of such Term Loan but were not payable as a result of the operation
of this Section 9.09 shall be cumulated and the interest and Charges payable to
such Lender in respect of other Term Loans or periods shall be increased (but
not above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such Lender. Thereafter, interest hereunder shall be
paid at the rate(s) of interest and in the manner provided in this Agreement,
unless and until the rate of interest again exceeds the Maximum Rate, and at
that time this paragraph shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Rate. If the Maximum Rate is
calculated pursuant to this paragraph, such interest shall be calculated at a
daily rate equal to the Maximum Rate divided by the number of days in the year
in which such calculation is made. If, notwithstanding the provisions of this
Section 9.09, a court of competent jurisdiction shall finally determine that a
Lender has received interest hereunder in excess of the Maximum Rate, the
Administrative Agent shall, to the extent permitted by applicable law, promptly
apply such excess in the order specified in this Agreement and thereafter shall
refund any excess to the Borrower or as a court of competent jurisdiction may
otherwise order.

SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter and the other
Loan Documents constitute the entire contract between the parties relative to
the subject matter hereof and may not be modified, amended or waived except as
set forth in Section 9.08. Any other previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement and the
other Loan Documents. Nothing in this Agreement or in the other Loan Documents,
expressed or implied, is intended to confer upon any person (other than the
parties hereto and thereto, their respective successors and assigns permitted
hereunder and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent, the Collateral Agent, the Syndication
Agent, the Arranger and the Lenders ) any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the other Loan Documents.

 

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SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

SECTION 9.12. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

SECTION 9.13. Counterparts. This Agreement may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement or of a Lender Addendum
by facsimile transmission or e-mail PDF delivery shall be as effective as
delivery of a manually signed counterpart of this Agreement.

SECTION 9.14. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) The Borrower
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent,
the Collateral Agent, the Syndication Agent, the Arranger or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against the Borrower or its properties in the courts of
any jurisdiction.

 

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(b) The Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the other Loan Documents in any New York
State or Federal court. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

SECTION 9.16. Confidentiality. Each of the Administrative Agent, the Collateral
Agent and the Lenders agree to use commercially reasonable efforts (equivalent
to the efforts each such person applies to maintain the confidentiality of its
own confidential information) to maintain the confidentiality of all Information
(defined below) for a period of two years following the receipt thereof, except
that Information may be disclosed (a) to its and its Affiliates’ officers,
directors, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority or quasi-regulatory authority (such as the National
Association of Insurance Commissioners), (c) as on the advice of counsel, to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process and, to the extent practicable, with prior notice to the Borrower
so as to afford the Borrower the opportunity to seek a protective order or other
remedy aimed at protecting confidentiality, (d) in connection with the exercise
of any remedies hereunder or under the other Loan Documents or any suit, action
or proceeding relating to the enforcement of its rights hereunder or thereunder,
(e) subject to an agreement containing provisions substantially the same as
those of this Section 9.16, to (i) any actual or prospective assignee of or
participant in any of its rights or obligations under this Agreement and the
other Loan Documents or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower or any
Subsidiary or any of their respective obligations, (f) with the consent of the
Borrower or (g) to the extent such Information becomes publicly available other
than as a result of a breach of this Section 9.16. For the purposes of this
Section, “Information” shall mean all information received from the Borrower and
related to the Borrower or its business, other than any such information that
was available to the Administrative Agent, the Collateral Agent or any Lender on
a nonconfidential basis prior to its disclosure by the Borrower.

SECTION 9.17. Delivery of Lender Addenda. Each initial Lender shall become a
party to this Agreement by delivering to the Administrative Agent a Lender
Addendum duly executed by such Lender, the Borrower and the Administrative
Agent.

SECTION 9.18. Separateness. The Lenders acknowledge (a) the separateness of the
Borrower and the Subsidiaries from each other and from other persons, (b) that
each of the Borrower and the Subsidiaries have assets and liabilities that are
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other and from those of other persons, (c) that the obligations of the Borrower
and Guarantors under this Agreement and the other Loan Documents, and any
certificate, notice, instrument or document delivered pursuant hereto or thereto
are special obligations of the Borrower and Guarantors only and do not
constitute a debt or obligation of (and no recourse shall be had with respect
thereto, other than with respect to any Collateral, whether now owned or
hereafter acquired) any other person and (d) that the Lenders shall look solely
to the Borrower and Guarantors and the Collateral for the repayment of any
amounts payable pursuant to the Loan Documents and for satisfaction of any
obligations owing to the Lenders under the Loan Documents and that no other
person shall be personally liable to the Lenders for any amounts payable or any
liability under the Loan Documents.

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

[Signature Pages Omitted]

 

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