exv10w19





Exhibit 10.19


EXECUTION VERSION




 





CREDIT AGREEMENT




dated as of December 23, 2008




among




ENEXUS ENERGY CORPORATION,

as Borrower,




THE LENDERS AND ISSUERS PARTY HERETO,




CITIGROUP GLOBAL MARKETS INC.




and




GOLDMAN SACHS LENDING PARTNERS LLC,

as Joint Book Runners and Joint Lead Arrangers,




BNP PARIBAS,

as Administrative Agent,




THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,

as Collateral Agent,




and




MIZUHO CORPORATE BANK, LTD.,

as Syndication Agent




 















 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I Definitions
	 	 	1	 
	Section 1.01. Defined Terms
	 	 	1	 
	Section 1.02. Terms Generally
	 	 	36	 
	Section 1.03. Classification of Loans and Borrowings
	 	 	37	 
	Section 1.04. Pro Forma Calculations
	 	 	37	 
	Section 1.05. Exchange Rates
	 	 	37	 
	ARTICLE II The Credits
	 	 	38	 
	Section 2.01. Commitments
	 	 	38	 
	Section 2.02. Borrowing Procedures
	 	 	38	 
	Section 2.03. Letters of Credit
	 	 	39	 
	Section 2.04. Repayment of Loans; Evidence of Debt
	 	 	44	 
	Section 2.05. Fees
	 	 	45	 
	Section 2.06. Interest on Loans
	 	 	46	 
	Section 2.07. Default Interest
	 	 	46	 
	Section 2.08. Interest Rate Unascertainable, Inadequate or Unfair
	 	 	47	 
	Section 2.09. Voluntary Termination and Reduction of Commitments
	 	 	47	 
	Section 2.10. Conversion and Continuation of Borrowings
	 	 	48	 
	Section 2.11. Optional Prepayments
	 	 	49	 
	Section 2.12. Mandatory Prepayments and Commitment Reduction
	 	 	49	 
	Section 2.13. Payments and Computations
	 	 	52	 
	Section 2.14. Reserve Requirements; Change in Circumstances
	 	 	54	 
	Section 2.15. Change in Legality
	 	 	55	 
	Section 2.16. Indemnity
	 	 	56	 
	Section 2.17. Pro Rata Treatment
	 	 	56	 
	Section 2.18. Sharing of Setoffs
	 	 	57	 
	Section 2.19. Taxes
	 	 	57	 
	Section 2.20. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate
	 	 	60	 
	Section 2.21. Incremental Facilities
	 	 	61	 
	ARTICLE III Representations and Warranties
	 	 	63	 
	Section 3.01. Organization; Powers
	 	 	63	 
	Section 3.02. Authorization; No Conflicts
	 	 	63	 
	Section 3.03. Enforceability
	 	 	63	 






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TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page
	Section 3.04. Approvals
	 	 	64	 
	Section 3.05. Financial Statements
	 	 	64	 
	Section 3.06. No Material Adverse Effect
	 	 	65	 
	Section 3.07. Title to Properties; Possession Under Leases
	 	 	65	 
	Section 3.08. Subsidiaries
	 	 	65	 
	Section 3.09. Litigation; Compliance with Laws
	 	 	66	 
	Section 3.10. Contractual Obligations
	 	 	66	 
	Section 3.11. Federal Reserve Regulations
	 	 	67	 
	Section 3.12. Investment Company Act
	 	 	67	 
	Section 3.13. Use of Proceeds
	 	 	67	 
	Section 3.14. Tax Returns
	 	 	67	 
	Section 3.15. Disclosure
	 	 	68	 
	Section 3.16. Employee Benefit Plans
	 	 	68	 
	Section 3.17. Environmental Matters
	 	 	68	 
	Section 3.18. Insurance
	 	 	69	 
	Section 3.19. Security Documents
	 	 	69	 
	Section 3.20. Location of Real Property
	 	 	70	 
	Section 3.21. Labor Matters
	 	 	71	 
	Section 3.22. Intellectual Property
	 	 	71	 
	Section 3.23. Energy Regulation
	 	 	71	 
	Section 3.24. Solvency
	 	 	72	 
	Section 3.25. Nuclear Operations Compliance
	 	 	73	 
	Section 3.26. Separation Transactions
	 	 	73	 
	Section 3.27. Segregation of Cash Management and Business Operations
	 	 	73	 
	Section 3.28. Patriot Act
	 	 	74	 
	ARTICLE IV Conditions Precedent
	 	 	74	 
	Section 4.01. All Credit Events
	 	 	74	 
	Section 4.02. Conditions Precedent to Signing Date
	 	 	75	 
	Section 4.03. Conditions Precedent to Funds Availability Date
	 	 	77	 
	ARTICLE V Affirmative Covenants
	 	 	84	 
	Section 5.01. Corporate Existence
	 	 	84	 
	Section 5.02. Compliance with Laws
	 	 	84	 
	Section 5.03. Insurance
	 	 	84	 






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TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page
	Section 5.04. Payment of Obligations
	 	 	85	 
	Section 5.05. Financial Statements, Reports, etc
	 	 	85	 
	Section 5.06. Litigation and Other Notices
	 	 	88	 
	Section 5.07. Information Regarding Collateral
	 	 	88	 
	Section 5.08. Maintaining Records; Access to Properties and Inspections;
Environmental Assessments
	 	 	89	 
	Section 5.09. Use of Proceeds
	 	 	90	 
	Section 5.10. Additional Collateral, etc
	 	 	90	 
	Section 5.11. Further Assurances
	 	 	92	 
	Section 5.12. Maintenance of Properties
	 	 	93	 
	Section 5.13. Corporate Separateness
	 	 	93	 
	Section 5.14. Maintenance of Ratings
	 	 	94	 
	Section 5.15. Key Contracts and Joint Venture Agreements
	 	 	94	 
	ARTICLE VI Negative Covenants
	 	 	94	 
	Section 6.01. Indebtedness and Preferred Stock
	 	 	94	 
	Section 6.02. Liens
	 	 	98	 
	Section 6.03. Limitation on Sale and Leaseback Transactions
	 	 	102	 
	Section 6.04. Mergers, Consolidations and Sales of Assets
	 	 	102	 
	Section 6.05. Limitation on Investments
	 	 	103	 
	Section 6.06. Limitation on Dividends
	 	 	105	 
	Section 6.07. Limitations on Debt Payments; Restrictive Agreements
	 	 	107	 
	Section 6.08. Transactions with Affiliates
	 	 	110	 
	Section 6.09. Business Activities
	 	 	111	 
	Section 6.10. Other Indebtedness and Agreements
	 	 	111	 
	Section 6.11. Designation of Restricted, Unrestricted and Immaterial
Subsidiaries
	 	 	111	 
	Section 6.12. Consolidated Interest Coverage Ratio
	 	 	112	 
	Section 6.13. Consolidated Total Leverage Ratio
	 	 	112	 
	Section 6.14. Fiscal Year
	 	 	112	 
	Section 6.15. No Speculative Hedging Transactions
	 	 	112	 
	Section 6.16. Specified Commodity Hedging Transactions
	 	 	113	 
	ARTICLE VII Events of Default
	 	 	113	 
	Section 7.01. Signing Date Events of Default
	 	 	113	 






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TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page
	Section 7.02. Funds Availability Date Events of Default
	 	 	114	 
	Section 7.03. Remedies
	 	 	116	 
	Section 7.04. Application of Funds
	 	 	116	 
	ARTICLE VIII The Agents and the Arrangers
	 	 	117	 
	Section 8.01. Authorization and Action
	 	 	117	 
	Section 8.02. Obligation of Arrangers
	 	 	118	 
	Section 8.03. Agents’ Reliance, Etc
	 	 	118	 
	Section 8.04. Posting of Approved Electronic Communications
	 	 	119	 
	Section 8.05. The Agents Individually
	 	 	120	 
	Section 8.06. Lender Credit Decision
	 	 	120	 
	Section 8.07. Indemnification
	 	 	121	 
	Section 8.08. Successor Administrative Agent
	 	 	121	 
	Section 8.09. Withholding of Taxes
	 	 	122	 
	ARTICLE IX Miscellaneous
	 	 	122	 
	Section 9.01. Notices
	 	 	122	 
	Section 9.02. Survival of Agreement
	 	 	123	 
	Section 9.03. Binding Effect
	 	 	124	 
	Section 9.04. Successors and Assigns
	 	 	124	 
	Section 9.05. Expenses; Indemnity
	 	 	128	 
	Section 9.06. Right of Setoff
	 	 	129	 
	Section 9.07. Applicable Law
	 	 	129	 
	Section 9.08. Waivers; Amendment; Replacement of Non-Consenting
Lenders
	 	 	129	 
	Section 9.09. Interest Rate Limitation
	 	 	131	 
	Section 9.10. Entire Agreement
	 	 	131	 
	Section 9.11. WAIVER OF JURY TRIAL
	 	 	131	 
	Section 9.12. Severability
	 	 	132	 
	Section 9.13. Counterparts
	 	 	132	 
	Section 9.14. Headings
	 	 	132	 
	Section 9.15. Jurisdiction; Consent to Service of Process
	 	 	132	 
	Section 9.16. Confidentiality
	 	 	133	 
	Section 9.17. Mortgage Modifications
	 	 	133	 
	Section 9.18. Patriot Act Notice
	 	 	134	 






iv









 






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(continued)




	 	 	 	 	 
	 	 	Page
	Section 9.19. No Fiduciary Duty
	 	 	134	 
	Section 9.20. Termination
	 	 	135	 






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TABLE OF CONTENTS

(continued)




Exhibits, Schedules and Annexes




	 	 	 
	Exhibit A

	 	Form of Administrative Questionnaire
	Exhibit B

	 	Form of Intercompany Debt Subordination Agreement
	Exhibit C

	 	Form of Assignment and Acceptance
	Exhibit D

	 	Form of Borrowing Request
	Exhibit E

	 	Form of Letter of Credit Request
	Exhibit F

	 	Form of Notice of Continuation or Conversion
	Exhibit G

	 	Form of Non-Bank Certificate
	Exhibit H

	 	Form of Note
	Exhibit I

	 	Joinder Agreement
	Exhibit I-1-A

	 	Signing Date Legal Opinion of Skadden, Arps
	Exhibit I-1-B

	 	Signing Date Opinion of Internal Counsel
	Exhibit I-2-A

	 	Funds Availability Date Opinions of Skadden, Arps (including
UCC and FERC Opinions)
	Exhibit I-2-B

	 	Funds Availability Date Opinion of Internal Counsel
	Exhibit J

	 	Vermont Local Counsel Opinion (Regulatory and Real Estate)
	Exhibit K

	 	Massachusetts Local Counsel Opinion (Corporate, Regulatory
and Real Estate)
	Exhibit L

	 	New York Local Counsel Opinion (Regulatory)
	Exhibit M

	 	Michigan Local Counsel Opinion (Regulatory and Real Estate)
	Exhibit N

	 	Arkansas Local Counsel Opinion (Corporate)
	Exhibit O

	 	Form of Guarantee and Collateral Agreement
	Exhibit P

	 	Form of Mortgage
	Exhibit P-1

	 	Michigan Form of Mortgage
	Exhibit P-2

	 	Massachusetts Form of Mortgage
	Exhibit P-3

	 	Vermont Form of Mortgage
	Exhibit Q

	 	Form of Compliance Certificate
	Exhibit R

	 	Form of Separation and Distribution Agreement
	Exhibit S

	 	Form of Limited Liability Company Agreement of EquaGen
	Exhibit T

	 	Description of Senior Notes
	 
	 	 
	Schedule 1.01(a)

	 	Core Assets and Core Asset Subsidiaries
	Schedule 1.01(b)

	 	Key Contracts
	Schedule 1.01(c)

	 	Permitted Dispositions
	Schedule 1.01(d)

	 	Material Contracts
	Schedule 2.01

	 	Commitments
	Schedule 3.07

	 	Mortgaged Property
	Schedule 3.08

	 	Subsidiaries
	Schedule 3.09(a) (Signing)

	 	Litigation
	Schedule 3.09(a) (Funding)

	 	Litigation
	Schedule 3.09(b) (Signing)

	 	Violations
	Schedule 3.09(b) (Funding)

	 	Violations
	Schedule 3.14

	 	Material Tax Claims
	Schedule 3.17

	 	Environmental Matters
	Schedule 3.18

	 	Insurance
	Schedule 3.19(a)

	 	UCC Filing Offices
	Schedule 3.19(c)

	 	Mortgage Filing Offices






vi









 






TABLE OF CONTENTS

(continued)




	 	 	 
	Schedule 3.20

	 	Owned and Leased Real Property and Title to Properties
	Schedule 3.23(b)

	 	Rate Proceedings
	Schedule 3.23(d)

	 	FERC Matters
	Schedule 3.23(f)

	 	“QF” and “EWG” Facilities
	Schedule 5.10(b)

	 	Title Insurance and Survey Requirements
	Schedule 6.01(c) (Signing)

	 	Existing Indebtedness
	Schedule 6.01(c) (Funding)

	 	Existing Indebtedness
	Schedule 6.02(d) (Signing)

	 	Existing Liens
	Schedule 6.02(d) (Funding)

	 	Existing Liens
	Schedule 6.05(d) (Funding)

	 	Existing Investments on Funds Availability Date
	Schedule 6.07(c)

	 	Restrictions on Liens
	Schedule 6.08(b)

	 	Affiliate Transactions
	 
	 	 
	Annex III

	 	Signing Date Representations and Warranties
	Annex V

	 	Signing Date Affirmative Covenants
	Annex VI

	 	Signing Date Negative Covenants






vii









 






     CREDIT AGREEMENT dated as of December 23, 2008, among ENEXUS ENERGY CORPORATION, a
Delaware corporation (the “Borrower”), the Lenders and Issuers from time to
time party hereto, CITIGROUP GLOBAL MARKETS INC. and GOLDMAN SACHS LENDING PARTNERS
LLC, as joint book runners and joint lead arrangers (in such capacities, collectively,
the “Arrangers”), BNP PARIBAS, as administrative agent (in such capacity and
together with its successors, the “Administrative Agent”) and THE BANK OF NOVA
SCOTIA TRUST COMPANY OF NEW YORK, as collateral agent (in such capacity and together
with its successors, the “Collateral Agent”) and MIZUHO CORPORATE BANK, LTD.,
as Syndication Agent (in such capacity, the “Syndication Agent”).



     A. WHEREAS, following the Signing Date and on or prior to the Funds Availability
Date (in each case, as defined below), Entergy Corporation, a Delaware corporation
(together with its successors and assigns, “Entergy”) intends, among other
things, to transfer all the assets and certain associated liabilities it attributes to
its non-utility nuclear business (the “Contributed Business”) to the Borrower
(the “Reorganization”);



     B. WHEREAS, on or prior to the Funds Availability Date, Entergy intends to
distribute 100% of the Borrower’s common stock to Entergy’s stockholders (the transfer
of the Contributed Business and such distribution being herein called the
“Separation”);



     C. WHEREAS, on and after the Funds Availability Date, the Borrower intends to
utilize the proceeds of the Loans and the Letters of Credit issued hereunder for its
working capital needs and for other general corporate purposes; and



     D. WHEREAS, the Lenders and the Issuers are willing, on the terms and subject to
the conditions hereinafter set forth, to extend the Commitments, make Loans and Issue
(or participate in) Letters of Credit.



     E. NOW THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby 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 Loan or Borrowing, shall refer to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Base Rate.



     “Accession Agreement” shall have the meaning given such term in the
Guarantee and Collateral Agreement.



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



     “Additional Intercreditor Indebtedness” shall mean, as of any date and
at any time outstanding, Indebtedness in a maximum aggregate principal amount not
to exceed (a) $2,300,000,000 minus (b) the aggregate principal amount of
the Commitments hereunder;



 









 




provided that no more than $250,000,000 of such Additional Intercreditor
Indebtedness may take the form of Specified Credit Support Facilities.




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



     “Affiliate” of any specified Person shall mean any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition and the definition of the term “subsidiary”,
“control,” as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of
voting securities, by agreement or otherwise; provided that, for
purposes of this definition of “Affiliate” only, beneficial ownership of 10%
or more of the voting stock of a Person will be deemed to be control. For
purposes of this definition, the terms “controlling,”
“controlled by” and “under common control with” have
correlative meanings.



     “Affiliate Transaction” shall have the meaning assigned to such term in
Section 6.08.



     “Agents” shall mean the Administrative Agent and the Collateral Agent.



     “Aggregate Revolving Credit Outstandings” shall mean the
aggregate amount of the Lenders’ Revolving Credit Outstandings.



     “Agreement” shall mean this Credit Agreement, dated as of the
Signing Date, as the same may thereafter from time to time be further
amended, restated, supplemented or otherwise modified and in effect from
time to time.



     “Allocated Net Cash Proceeds”, with respect to any Recovery
Event, shall mean the lesser of (a) Net Cash Proceeds in respect of such
Recovery Event, and (b) the product of (i) the amount of Secured Obligations
that are the subject of Section 2.8 of the Intercreditor Agreement
outstanding as of the date the Borrower receives the applicable Recovery
Event Appraisal, and (ii) the Diminution Percentage.



     “Applicable Laws” shall mean, as to any Person, any law, rule,
regulation, ordinance or treaty, or any determination, ruling or other
directive by or from a court, arbitrator or other Governmental Authority, in
each case applicable to or binding on such Person or any of its property or
assets or to which such Person or any of its property or assets is subject.



     “Applicable Margin” shall mean (a) during the period commencing
on the Funds Availability Date and ending one Business Day after the receipt
by the Administrative Agent of the financial statements for the first full
fiscal quarter ending after the Funds Availability Date required to be
delivered pursuant to Section 5.05(a) or (b), as applicable, with respect to
(i) Loans maintained as ABR Loans, a rate equal to 2.00% per annum and (ii)
Loans maintained as



2









 




Eurodollar Loans, a rate equal to 3.00% per annum and (b) thereafter, as
of any date of determination, a per annum rate equal to the rate set
forth below opposite the applicable type of Loan and the then applicable
Consolidated Total Leverage Ratio (determined on the last day of the most
recent fiscal quarter for which financial statements have been delivered
pursuant to Section 5.05(a) or 5.05(b)) set forth below:




	 	 	 	 	 	 	 	 	 
	Consolidated Total Leverage Ratio	 	ABR Loans	 	Eurodollar Loans
	Greater than or equal to 4.0 to 1
	 	 	2.25	%	 	 	3.25	%
	 
	 	 	 	 	 	 	 	 
	Less than 4.0 to 1 and equal to or greater than 3.0 to 1
	 	 	2.00	%	 	 	3.00	%
	 
	 	 	 	 	 	 	 	 
	Less than 3.0 to 1
	 	 	1.75	%	 	 	2.75	%






     Changes in the Applicable Margin resulting from a change in the
Consolidated Total Leverage Ratio on the last day of any subsequent fiscal
quarter shall become effective as to all Loans upon delivery by the Borrower
to the Administrative Agent of new financial statements pursuant to Section
5.05 (a) or (b), as applicable. Notwithstanding anything to the contrary set
forth in this Agreement (including the then effective Consolidated Total
Leverage Ratio), (i) if the Borrower shall fail to deliver such financial
statements at the time specified in Section 5.05(a) or (b), as the case may
be (such date, the “Financial Statement Delivery Failure Date”), the
Applicable Margin from and including the first day following the Financial
Statement Delivery Failure Date to, but not including, the date the Borrower
delivers to the Administrative Agent such financial statements shall equal
the highest possible Applicable Margin provided for by this definition and
(ii) in the event that the financial statements or compliance certificate
delivered pursuant to Section 5.05 are shown to be inaccurate (regardless of
whether this Agreement or the Commitments are in effect when such inaccuracy
is discovered), and such inaccuracy, if corrected, would have led to a
higher Applicable Margin for any period (an “Applicable Period”)
than the Applicable Margin that was applied for such Applicable Period, then
(i) the Borrower shall promptly deliver to the Administrative Agent a
correct Compliance Certificate for such Applicable Period, (ii) the
Applicable Percentage shall be determined by reference to the corrected
Compliance Certificate (but in no event shall the Lenders owe any amounts to
the Borrower) and (iii) the Borrower shall promptly pay to the
Administrative Agent the additional interest owing as a result of such
increased Applicable Margin for such Applicable Period, which payment shall
be promptly applied by the Administrative Agent in accordance with the terms
hereof. This paragraph shall not limit the rights of the Administrative
Agent and the Lenders hereunder.



     “Approved Electronic Communications” shall mean each notice,
demand, communication, information, document and other material that any
Loan Party is obligated to, or otherwise chooses to, provide to the Agents
pursuant to any Loan Document or the transactions contemplated therein,
including (a) any supplement or joinder to the Guarantee and Collateral
Agreement or Intercreditor Agreement and any other written Contractual
Obligation delivered or required to be delivered in respect of any Loan
Document or the transactions contemplated therein, (b) any financial
statement, financial and other report, notice, request, certificate and
other information material and (c) information for prospective assignees,
participants or other transferees; provided, however, that,
“Approved Electronic Communications” shall exclude (i) any Borrowing
Request, Letter of Credit Request, Notice of Continuation or Conversion and
any other notice, demand, communication, information, document and other
material relating to a



3









 




request for a new, or a conversion of an existing, Borrowing, (ii) any
notice pursuant to Sections 2.11 and 2.12 and any other notice relating to
the payment of any principal or other amount due under any Loan Document
prior to the scheduled date therefor, (iii) all notices of any Default or
Event of Default and (iv) any notice, demand, communication, information,
document and other material required to be delivered to satisfy any of the
conditions set forth in Article IV or Section 2.03 or any other condition to
any Borrowing or other extension of credit hereunder or any condition
precedent to the effectiveness of this Agreement.




     “Approved Electronic Platform” shall have the meaning specified in
Section 8.04(a).



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



     “Asset Sale” shall mean the direct or indirect (a) sale, lease
(other than an operating lease), sale and leaseback, lease and leaseback,
assignment (other than a collateral assignment), conveyance, transfer or
other disposition (by way of merger, consolidation or otherwise) by the
Borrower or any Restricted Subsidiary to any Person other than the Borrower
or any Subsidiary Guarantor of (1) any Equity Interests of any of the
Subsidiaries (other than directors’ qualifying shares or investments by
foreign nationals required by Applicable Laws) or (2) any other assets of
the Borrower or any Restricted Subsidiary, including Equity Interests of any
Person that is not the Borrower or a Subsidiary or (b) issuance of Equity
Interests in any of the Restricted Subsidiaries to any Person other than the
Borrower or any Subsidiary Guarantor; provided that (i) any asset
sale or series of related asset sales described in clause (a) or (b) above
of assets having a value not in excess of $15,000,000 shall be deemed not to
be an “Asset Sale” for purposes of this Agreement; and (ii) each of
the following transactions shall be deemed not to be an “Asset Sale”
for purposes of this Agreement: (A) the sale, transfer, contribution or
other disposition by the Borrower or any Restricted Subsidiary of (x)
damaged, worn-out, obsolete assets and scrap and (y) cash or Cash
Equivalents, (B) the sale by the Borrower or any Restricted Subsidiary of
power, capacity, energy, ancillary services, and other products or services
or the sale of any other inventory or contracts related to any of the
foregoing, (C) the sale, lease, conveyance or other disposition for value by
the Borrower or any Restricted Subsidiary of fuel, emission credits or
renewable energy credits, in each case in the ordinary course of the
Permitted Business, (D) the sale, transfer or other disposition of any
assets (other than the disposition of Collateral pursuant to the
Intercreditor Agreement) subject to a Permitted Lien in connection with a
foreclosure, transfer or deed in lieu of foreclosure or other remedial
action, (E) the sale, lease, transfer, contribution or other disposition by
any Restricted Subsidiary that is not a Loan Party of any of its assets or
the issuance or transfer of Equity Interests by any Restricted Subsidiary
that is not a Loan Party, in each case to the Borrower or any other
Restricted Subsidiary, (F) the licensing of Intellectual Property (as
defined in the Guarantee and Collateral Agreement), (G) the sale or
discount, in each case without recourse, of accounts receivable arising in
the ordinary course of business, but only in connection with the compromise
or collection thereof, (H) the sale, lease, transfer, contribution or other
disposition of spare parts and spare parts inventory in the ordinary course
of the Permitted Business so long as such spare parts and spare parts
inventory are required by such transferee in the ordinary course of such
transferee’s business or operations at the time of such disposition, (I)
Permitted Dispositions, (J) the granting of Liens permitted by Section 6.02,
(K) the making of Investments permitted by Section 6.05, (L) any mergers,
consolidations, liquidations or dissolutions permitted by Section 6.04(a),
(M) Dividends permitted by Section 6.06 and (N) assignment, conveyance,
transfer or other disposition pursuant to casualty, condemnation or
operation of law.



4









 





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



     “Assumption Agreement” shall have the meaning given such
term in the Guarantee and Collateral Agreement.



     “Attributable Debt” in respect of a sale and leaseback
transaction shall mean, at the time of determination, the present value of
the obligation of the lessee for net rental payments during the remaining
term of the lease included in such sale and leaseback transaction, including
any period for which such lease has been extended or may, at the option of
the lessor, be extended. Such present value shall be calculated using a
discount rate equal to the rate of interest implicit in such transaction,
determined in accordance with GAAP; provided, however, that
if such sale and leaseback transaction results in a Capital Lease
Obligation, the amount of Indebtedness represented thereby will be
determined in accordance with the definition of “Capital Lease
Obligation”, and shall not be deemed to be Attributable Debt.



     “Available Amount” shall mean, on any date (the “Reference
Date”), an amount equal on such Reference Date to (a) the greater of (i)
zero and (ii) (A) 50% of the Consolidated Net Income (excluding, to the
extent included in Consolidated Net Income, insurance proceeds other than
proceeds of business interruption insurance) of the Borrower and its
Restricted Subsidiaries for the period (on a cumulative basis, taken as one
accounting period) from the Funds Availability Date to the end of the
Borrower’s most recently ended fiscal quarter for which financial statements
are publicly available (or, if such Consolidated Net Income for such period
is a deficit, less 100% of such deficit), plus (B) 100% of the
aggregate proceeds received by the Borrower since the Funds Availability
Date (1) as a contribution to its Capital Stock or (2) from the issue or
sale of its Capital Stock; plus (b) $500,000,000; minus (c)
on such Reference Date, the sum of (i) the aggregate amount of outstanding
Investments made pursuant to Section 6.05(j) since the Funds Availability
Date in excess of the $150,000,000 allowance for such Investments set forth
in clause (A) of Section 6.05(j), plus (ii) the aggregate amount of
Dividends made since the Funds Availability Date pursuant to Section 6.06(c)
plus (iii) the aggregate amount of any distributions or payments
made since the Funds Availability Date pursuant to Section 6.07(a).



     “Bankruptcy Code” shall mean Title 11 of United States Code, 11
U.S.C. §§ 101, et seq., as amended from time to time.



     “Bankruptcy Law” shall mean the Bankruptcy Code or any
similar federal or state or other law for the relief of debtors.



     “Base Rate” shall mean, for any period, a fluctuating
interest rate per annum as shall be in effect from time to time, which
rate per annum shall be equal at all times to the highest of the
following:



          (a) the rate of interest announced publicly by BNP Paribas in New York,
New York, from time to time, as BNP Paribas’s prime rate; and




          (b) 0.5% per annum plus the Federal Funds Rate;




5









 




provided, however, that, except during a Eurodollar
Unavailability Period and except as set forth in Section 2.15(c), (i) at
no time shall the Base Rate on any day be less than the sum of (A) the
Adjusted LIBO Rate for a one-month Interest Period that would commence
on such day and (B) 1.0% and (ii) to the extent the Base Rate would be
less than the amount specified in clause (i) of this proviso, the
Applicable Margin for ABR Loans at such time shall be increased in an
amount sufficient to eliminate such difference.




     “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 or 430 of the Tax Code or Sections 302 or 303 of ERISA,
and which is maintained, sponsored or contributed to by the Borrower or any
ERISA Affiliate.



     “Board” shall mean the Board of Governors of the Federal
Reserve System of the United States of America (or any successor thereto).



     “Board of Directors” shall mean (a) with respect to a
corporation, the board of directors of the corporation or any committee
thereof duly authorized to act on behalf of such board; (b) with respect to
a partnership, the Board of Directors of the general partner of the
partnership; (c) with respect to a limited liability company, the managing
member or members or any controlling committee or board of managing members
or managers thereof; and (d) with respect to any other Person, the board or
committee of such Person serving a similar function.



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



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



     “Borrowing Request” shall have the meaning assigned to such term in
Section 2.02(a).



     “Breakage Event” shall have the meaning assigned to such term in Section
2.16.



     “Business Day” shall mean any day other than a Saturday, Sunday
or day on which commercial banks in New York City are authorized or required
by law to close; provided, however, that when used in
connection with a Eurodollar Loan (including with respect to all notices and
determinations in connection therewith and any payments of principal,
interest or 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 Obligation” shall mean, at the time any
determination is to be made, the amount of the liability in respect of a
capital lease that would at that time be required to be capitalized on a
balance sheet in accordance with GAAP, the maturity of which shall be the
date of the last payment of rent or any other amount due under such lease
prior to the first date upon which such lease may be prepaid by the lessee
without payment of a penalty.



     “Capital Stock” shall mean shares of capital stock (whether
denominated as common stock or preferred stock), beneficial, partnership or
membership interests, participations or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company
or equivalent entity, whether voting or non-voting, but excluding from all
of the foregoing any debt securities convertible into Capital Stock, whether
or not such debt securities include any right of participation with Capital
Stock.



6









 





     “Capital Stock Equivalents” shall mean all securities
convertible into or exchangeable for Capital Stock and all warrants,
options, stock appreciation rights or other rights to purchase or subscribe
for any Capital Stock, whether or not presently convertible, exchangeable or
exercisable.



     “Cash Equivalents” shall mean




     (i) United States dollars or, in the case of any Foreign
Subsidiary, any local currencies held by it readily convertible
into United States dollars;




     (ii) securities issued or directly and fully unconditionally
guaranteed or insured by the United States government or any agency of
the United States government having in each case maturities and/or
reset dates of not more than 12 months from the date of acquisition;




     (iii) securities issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof having maturities of not more than 24 months
from the date of acquisition thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody’s;




     (iv) certificates of deposit, Eurodollar time deposits, and
bankers’ acceptances maturing not more than 6 months after such date
and issued or accepted by any Lender or by any commercial bank
organized under the laws of the United States of America or any state
thereof or the District of Columbia that (a) is at least “adequately
capitalized” (as defined in the regulations of its primary federal
banking regulator) and (b) has Tier 1 capital (as defined in such
regulations) of not less than $500,000,000;




     (v) overnight bank deposits;




     (vi) repurchase agreements with a term of not more than 120 days;




     (vii) commercial paper maturing not more than 120 days from the
date of acquisition and having a rating of at least A-1 from S&P or at
least P-1 from Moody’s; and




     (viii) shares of any money market mutual fund that (a) has
substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net
assets of not less than $5,000,000,000 and (c) has the highest rating
obtainable from either S&P or Moody’s.



     “Cash Management Document” shall mean any certificate,
agreement or other document executed by any Loan Party in respect of Cash
Management Services provided to any Loan Party.



     “Cash Management Obligation” shall mean, as applied to any Loan
Party, any direct or indirect liability, contingent or otherwise, of such
Loan Party owing pursuant to the applicable Cash Management Documents in
respect of Cash Management Services provided to such Loan Party, including
any obligations for the payment of fees, interest, charges, expenses,
reasonable attorneys’ fees and disbursements in connection therewith.



7









 





     “Cash Management Services” shall mean treasury, depository,
overdraft, credit or debit card, electronic funds transfer and other cash
management arrangements.



     “Change in Law” shall mean (a) the adoption of any law, rule or
regulation by any Governmental Authority after the Signing Date, (b) any
change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the Signing Date or
(c) compliance by any Lender or any Issuer (or, for purposes of Section
2.14, by any lending office of such Lender or by such Lender’s or Issuer’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 Signing Date.



     “Change of Control” shall mean, from and after the Separation,
(a) the acquisition of beneficial ownership, directly or indirectly,
including by merger or consolidation by any Person or group (within the
meaning of the Exchange Act and the rules of the SEC thereunder as in effect
on the date hereof) of shares representing more than 40% of the aggregate
ordinary voting power represented by the issued and outstanding Capital
Stock of the Borrower, (b) the occupation of a majority of seats on the
Board of Directors of the Borrower by Persons who were neither (i) members
of the Board of Directors of the Borrower on the Funds Availability Date
(the “Funding Date Board”), (ii) nominated by the Funding Date Board
or (iii) appointed or nominated by directors so nominated or (c) the
occurrence of a “change of control” (or any other defined term
having a similar purpose) as defined in any contract, indenture or other
agreement with respect to Material Indebtedness of the Borrower or any of
its Restricted Subsidiaries.



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



     “Collateral” shall mean all property and interests in property
and proceeds thereof now owned or hereafter acquired by any Loan Party in or
upon which a Lien is granted under any Security Document; provided,
however, that “Collateral” shall not include Excluded
Assets.



     “Collateral Agent” shall have the meaning assigned to such term
in the preamble, or its successors appointed in accordance with the terms of
this Agreement and the Intercreditor Agreement.



     “Commencement Notice” shall mean, in respect of any Recovery
Event, notice to the Agents that the Borrower has formally begun seeking
regulatory approval or begun contracting to utilize the Allocated Net Cash
Proceeds for one or more Permitted Reinvestments.



     “Commitment” shall mean, with respect to each Lender, the
commitment of such Lender to make Loans and acquire interests in other
Revolving Credit Outstandings in the aggregate principal amount outstanding
not to exceed the amount set forth opposite such Lender’s name on
Schedule 2.01 under the caption “Commitment”, as amended to
reflect each Assignment and Acceptance executed by such Lender and as such
amount may be (a) reduced from time to time pursuant to Sections 2.09 or
2.12 and (b) reduced or increased from time to time pursuant to assignments
by or to such Lender in accordance with Sections 2.21 or 9.04.



     “Commodities Account” shall have the meaning assigned to such term in the
UCC.



     “Commodity Contract” shall have the meaning assigned to such term in the
UCC.



8









 





     “Commodity Hedging Obligations” shall mean, with respect to any
specified Person, the obligations of such Person under Commodity Hedging
Transactions.



     “Commodity Hedging Transaction” shall mean any swaps (including
without limitation heat rate swaps), caps, collars, puts, calls, floors,
futures, options, spots, forwards, power purchase, tolling or sale
agreements, fuel purchase or sale agreements (including any and all fuels
used for power generation, whether or not used by the Borrower and its
Restricted Subsidiaries), weather risk management transactions, emissions or
renewable energy credit or allowance purchase or sales agreements, power
transmission agreements, fuel enrichment, processing, fabrication,
transportation or storage agreements, netting agreements, or commercial or
trading agreements, each with respect to, or involving the purchase,
transmission, distribution, sale, lease or hedge of, energy, generation
capacity or fuel (including any and all fuels used for power generation,
whether or not used by the Borrower and its Restricted Subsidiaries), or any
other energy related commodity or service, price or price indices for any
such commodities or services or any other similar derivative agreements, and
any other similar agreements from time to time entered into by the Borrower
or any Restricted Subsidiary in the ordinary course of its business as a
merchant power generator (as its risk management practices and methods may
evolve from time to time, consistent with all requirements of law and
applicable regulation) in order to manage fluctuations in the price or
availability of any energy commodity or to manage any regulatory or other
risk of the Borrower or such Restricted Subsidiary in connection with its
business as a merchant power generator (and in any case not for speculative
purposes).



     “Confidential Information Memorandum” shall mean the
Confidential Information Memorandum of the Borrower dated August 29,
2008.



     “Consolidated EBITDA” shall mean (a) Consolidated Net Income of
the Borrower and its consolidated Subsidiaries for such period plus
(b) the sum of, in each case to the extent reducing Consolidated Net Income
for such period but without duplication, (i) Consolidated Interest Expense,
(ii) any provision for income taxes, (iii) depreciation, depletion and
amortization expenses, (iv) losses from extraordinary items (including from
Commodity Hedging Transactions), (v) costs, expenses or charges (including
any professional or underwriting fees) related to the Transactions, and (vi)
all other non-cash charges and non-cash losses (including (A) the amount of
any compensation deduction as the result of any grant of Capital Stock or
Capital Stock Equivalents to employees, officers, directors or consultants,
(B) losses from early extinguishment of Indebtedness and (C) decommissioning
costs) minus (c) the sum of, in each case to the extent increasing
Consolidated Net Income for such period but without duplication, (i) any
credit for income taxes, (ii) gains from extraordinary items (including from
Commodity Hedging Transactions), (iii) any other non-cash gains or other
items which have been added in determining Consolidated Net Income,
(including (A) any reversal of a charge referred to in clause (b)(vi) above
by reason of a decrease in the value of any such Capital Stock or Capital
Stock Equivalent and (B) gains from early extinguishment of Indebtedness);
provided, however, that (i) Consolidated EBITDA of the
Borrower and its consolidated Subsidiaries will exclude the Consolidated
EBITDA attributable to Unrestricted Subsidiaries unless (and solely to the
extent) actually distributed in cash to the Borrower or any Restricted
Subsidiary, and (ii) for purposes of calculating Consolidated EBITDA of the
Borrower and its consolidated Subsidiaries for any period for purposes of
the Financial Covenants, (A) the Consolidated EBITDA of any Person or line
of business acquired by the Borrower or any Restricted Subsidiary pursuant
to a Permitted Acquisition made in accordance with the terms of this
Agreement during such period shall be included on a pro forma basis for such
period (assuming the consummation of such acquisition



9









 




and the incurrence or assumption of any Indebtedness in connection therewith
occurred as of the first day of such period) and (B) the Consolidated EBITDA
of any Person or line of business sold or otherwise disposed of by the
Borrower or any Restricted Subsidiary during such period shall be excluded
for such period (assuming the consummation of such sale or other disposition
and the repayment of any Indebtedness in connection therewith occurred as of
the first day of such period).




     “Consolidated Interest Coverage Ratio” shall mean, on any date,
the ratio of (a) Consolidated EBITDA for the period of the most recent four
consecutive fiscal quarters ended on or prior to such date to (b)
Consolidated Interest Expense for the period of the most recent four
consecutive fiscal quarters ended on or prior to such date.



     “Consolidated Interest Expense” shall mean, for the Borrower
and its consolidated Subsidiaries for any period, consolidated total cash
interest expense of the Borrower and its consolidated Subsidiaries for such
period; provided, however, that Consolidated Interest
Expense of the Borrower and its consolidated Subsidiaries will (a) exclude
cash interest expense of Unrestricted Subsidiaries and (b) be net of cash
interest income. Notwithstanding anything to the contrary contained herein,
for purposes of calculating Consolidated Interest Expense, (a) for the
period of four consecutive fiscal quarters ending December 31, 2008,
Consolidated Interest Expense for such period shall be deemed to be an
amount equal to Consolidated Interest Expense for the period beginning on
the Funds Availability Date and ending December 31, 2009, divided by the
number of days in such period and multiplied by 365, (b) for the period of
four consecutive fiscal quarters ending March 31, 2010, Consolidated
Interest Expense for such period shall be deemed to be an amount equal to
Consolidated Interest Expense for the period beginning on the Funds
Availability Date and ending March 31, 2010, divided by the number of days
in such period and multiplied by 365 and (c) for the period of four
consecutive fiscal quarters ending June 30, 2010, Consolidated Interest
Expense for such period shall be deemed to be an amount equal to
Consolidated Interest Expense for the period beginning on the Funds
Availability Date and ending June 30, 2010, divided by the number of days in
such period and multiplied by 365.



     “Consolidated Net Income” shall mean, for any period, the
consolidated net income (or loss) of the Borrower and its consolidated
Subsidiaries for such period; provided, however, that (a)
the net income (or loss) from any Minority Investment (including in EquaGen)
shall be excluded from the net income of the Borrower and its consolidated
Subsidiaries, (b) the amount of dividends or distributions from any Minority
Investment (including in EquaGen) paid to the Borrower or its consolidated
Subsidiaries shall be included in the net income of the Borrower and its
consolidated Subsidiaries, (c) the cumulative effect of a change in
accounting principles during such period shall be excluded, (d) gains and
losses from Asset Sales during such period shall be excluded and (e) the net
income of any Subsidiary of such Person that is subject to any restriction
or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or
limitation.



     “Consolidated Total Leverage Ratio” shall mean, on any date,
the ratio of (a) Consolidated Total Net Debt on such date to (b)
Consolidated EBITDA for the period of the most recent four consecutive
fiscal quarters most recently ended on or prior to such date.



     “Consolidated Total Net Debt” shall mean, without duplication,
all liabilities, obligations and indebtedness (whether contingent or
otherwise) (i) of the type specified in clauses (a), (b), (d) and (e) of the
definition of “Indebtedness” (in the case of indebtedness specified
in such clause (d), as reported over time in accordance with GAAP), (ii) in
respect of Capital Lease Obligations



10









 




permitted under Section 6.01(f), (iii) for reimbursement obligations in
respect of drawn letters of credit (including, with respect to any Loan
Party, Letters of Credit issued hereunder), (iv) under any Guarantee of
obligations of the type described in clauses (i) through (iii) of this
definition; and (v) in respect of unfunded vested benefits under plans
covered by Title IV of ERISA, in each case actually owing by the Borrower
and the Restricted Subsidiaries on such date and to the extent appearing on
the balance sheet of the Borrower determined on a consolidated basis in
accordance with GAAP (provided that the amount of any Capital Lease
Obligations or any such Indebtedness issued at a discount to its face value
shall be determined in accordance with GAAP); provided,
however, that notwithstanding the foregoing, “Consolidated Total
Net Debt” shall not include the unfunded portion of any Credit Support
Facilities or any Guarantees of the obligations thereof and shall be net of
(x) Unrestricted Cash and (y) cash or Cash Equivalents posted as collateral
in respect of Credit Support Facilities not secured by the Collateral (but
only to the extent of any Indebtedness in respect of the Credit Support
Facility for which such cash or Cash Equivalents have been posted).




     “Constituent Documents” shall mean, with respect to any Person,
(a) the articles of incorporation, certificate of incorporation,
constitution or certificate of formation (or the equivalent organizational
documents) of such Person, (b) the by-laws or operating agreement (or the
equivalent governing documents) of such Person and (c) any document setting
forth the manner of election or duties of the directors or managing members
of such Person (if any) and the designation, amount or relative rights,
limitations and preferences of any class or series of such Person’s Capital
Stock.



     “Contractual Obligation” of any Person shall mean any
obligation, agreement, undertaking or similar provision of any Security
issued by such Person or of any agreement, undertaking, contract, lease,
indenture, mortgage, deed of trust or other instrument (excluding a Loan
Document) to which such Person is a party or by which it or any of its
property is bound or to which any of its property is subject.



     “Control Agreement” shall mean each Deposit Account Control
Agreement, Securities Account Control Agreement or Commodities Account
Control Agreement to be executed and delivered by each Loan Party and the
other parties thereto as required by the applicable Loan Documents, as the
same may be amended, restated, supplemented or otherwise modified from time
to time in accordance with the terms hereof and thereof.



     “Core Assets” shall mean the power generating facilities owned
by the Loan Parties and set forth on Schedule 1.01(a), as such
schedule is updated from time to time in accordance with Section 5.07(c).



     “Core Asset Subsidiary” shall mean any Subsidiary that directly
owns Core Assets. The Core Asset Subsidiaries as of the Funds Availability
Date are set forth on Schedule 1.01(a).



     “Corporate Chart” shall mean a corporate organizational chart,
list or other similar document, in each case in form reasonably acceptable
(i) on the Funds Availability Date, to the Arrangers and (ii) thereafter, to
the Administrative Agent, setting forth each Person that is a Loan Party and
each Person that is a Subsidiary or Minority Investment of any of them
(together with an indication of which such Persons have assets encumbered by
the Lien of the Collateral Agent), including (a) the full legal name of such
Person and (b) the jurisdiction of organization, the organizational number
(if any) and the tax identification number (if any) of such Person.



11









 





     “Credit Event” shall have the meaning assigned to such term in
Section 4.01.



     “Credit Support Facilities” shall mean any commodity credit
revolver, credit commodity posting facility, novation, guaranty or other
third-party credit support with respect to a Commodity Hedging Transaction;
provided, that “Credit Support Facilities” shall not include funded
indebtedness, the proceeds of which are used as collateral or credit support
for a facility which is used to provide credit support for Commodity Hedging
Transactions.



     “Currency Hedging Transactions” shall mean all contracts,
agreements or arrangements designed to protect against fluctuations in
currency exchange rates entered into in the ordinary course of the Permitted
Business and, in any case, not for speculative purposes.



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



     “Default Excess” means, with respect to any Defaulting Lender,
the excess, if any, of such Defaulting Lender’s Ratable Portion of the
Revolving Credit Outstandings (calculated as if all Defaulting Lenders
(including such Defaulting Lender) had funded their respective Defaulted
Loans) over the aggregate outstanding principal amount of all Loans of such
Defaulting Lender.



     “Defaulting Lender” shall mean, at any time, any Lender that,
at such time, (a) fails to make available its portion of any Borrowing or to
pay (other than as a result of a good faith dispute) any amount required to
be paid by such Lender to any Issuer under this Agreement (beyond any
applicable cure period), (b) has otherwise failed to pay (other than as a
result of a good faith dispute) any other amount required to be paid by such
Lender to the Administrative Agent or any other Lender under this Agreement
(beyond any applicable cure period), (c) shall take any action or be the
subject of any action or proceeding of a type described in clause (g) or (h)
of Section 7.02 (without giving effect to any cure period referenced
therein) or (d) has notified the Administrative Agent, any Issuer and/or the
Borrower in writing or publicly stated any of the foregoing (including any
written notification by such Lender that it does not intend to comply with
its funding obligations described in preceding clause (a)) other than as a
result of a good faith dispute; provided, however, that for purposes
of Section 2.03(g) only, the term “Defaulting Lender” shall also include (i)
any Lender with an Affiliate that (x) “controls” (within the meaning
provided therefor in the definition of Affiliate) such Lender and (y) has
been deemed insolvent or become the subject of a bankruptcy or insolvency
proceeding or a takeover by a regulatory authority (unless the
Administrative Agent has elected in its sole discretion not to treat such
Lender as a Defaulting Lender), (ii) any Lender that previously constituted
a “Defaulting Lender” under this Agreement, unless such Lender has ceased to
constitute a “Defaulting Lender” for a period of at least 60 consecutive
days and (iii) any Lender that the Administrative Agent or any Issuer
believes in good faith has failed to fund any portion of its loans or
otherwise defaulted in its obligations under any other credit facility to
which such Lender is a party (other than as a result of a good faith
dispute), for so long as such failure or default is continuing. The
determination as to whether a Lender is a Defaulting Lender shall be made in
good faith by the Administrative Agent in its sole discretion (except that
in the event that the Administrative Agent or an Affiliate thereof is the
Defaulting Lender, such determination shall be made by the Required
Lenders).



     “Defaulted Loan” means (i) any Loan required to be funded in
accordance with the terms of this Agreement with respect to which a
Defaulting Lender has failed to advance its Ratable Portion or (ii) a
Defaulting Lender’s portion of any payment required to be made by it in




12











 




accordance with the terms of this Agreement in respect of unreimbursed
payments under Section 2.03(h).




     “Deposit Account” shall have the meaning assigned to such term in the
UCC.



     “Deposit Account Bank” shall mean a financial institution
selected or approved by (i) on the Funds Availability Date, the Arrangers
and the Collateral Agent and (ii) thereafter, the Administrative Agent and
the Collateral Agent, in each case in their reasonable discretion.



     “Deposit Account Control Agreement” shall have the meaning
specified in the Guarantee and Collateral Agreement.



     “Description of Senior Notes” shall mean the description of
senior notes attached hereto as Exhibit T, as amended or modified
from time to time; provided that no such amendment or modification
shall be materially adverse to the Lenders unless the Arrangers and the
Required Lenders have consented to such amendment or waiver.



     “Diminution Percentage” shall mean, with respect to any
Recovery Event, (i) the Initial Appraised Value less the applicable
Post-Recovery Event Appraised Value divided by (ii) the Initial
Appraised Value.



     “Disqualified Stock” shall mean any Capital Stock (or Capital
Stock Equivalents convertible into Capital Stock) that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital
Stock), or upon the happening of any event, matures or is mandatorily
redeemable (other than for common stock), pursuant to a sinking fund
obligation or otherwise, or redeemable (other than for common stock) at the
option of the holder of the Capital Stock, in whole or in part, on or prior
to the date that is 91 days after the Revolving Credit Maturity Date.
Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders of the Capital
Stock have the right to require the Borrower or any Restricted Subsidiary to
repurchase such Capital Stock upon the occurrence of a change of control or
an asset sale will not constitute Disqualified Stock if the terms of such
Capital Stock provide that the Borrower or any Restricted Subsidiary may not
repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 6.06. The amount
of Disqualified Stock deemed to be outstanding at any time for purposes of
this Agreement will be the maximum amount that the Borrower and its
Restricted Subsidiaries may become obligated to pay upon the maturity of, or
pursuant to any mandatory redemption provisions of, such Disqualified Stock,
exclusive of accrued dividends.



     “Dividends” shall have the meaning provided in Section 6.06.



     “dollars” or “$” shall mean lawful money of the United
States of America, except when expressly used in reference to the lawful
money of another country.



     “Domestic Subsidiary” shall mean any Subsidiary that is not a Foreign
Subsidiary.



     “Easement” shall have the meaning assigned to such term in Section
3.07(a).



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



13









 





     “Environmental CapEx Debt” shall mean Indebtedness of the
Borrower or its Restricted Subsidiaries incurred for the purpose of
financing Environmental Capital Expenditures.



     “Environmental Capital Expenditures” shall mean capital
expenditures to the extent deemed reasonably necessary, as determined by the
Borrower or its Restricted Subsidiaries (as applicable) in good faith and
pursuant to prudent judgment, to comply with applicable Environmental Laws.



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



     “Environmental Liability” shall mean all liabilities,
obligations, damages, losses, claims, actions, suits, judgments, orders,
fines, penalties, fees, expenses and costs (including administrative
oversight costs, natural resource damages and remediation costs), whether
contingent or otherwise, arising out of or relating to (a) non-compliance
with any Environmental Law, (b) the generation, manufacture, processing,
distribution, recycling, use, handling, transportation, storage, treatment
or disposal of, or the arrangement of such activities with respect to, any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
Release of any Hazardous Materials at or from any location or (e) any
contract or agreement pursuant to which liability is assumed, imposed or
covered by an indemnity with respect to any of the foregoing;
provided, however, that “Environmental Liability”
shall not include any matter for which remediation will be funded through
any decommissioning fund as required by Nuclear Law.



     “EquaGen” shall mean EquaGen LLC, a Delaware limited liability company.



     “Equity Interests” shall mean all Capital Stock and Capital Stock
Equivalents.



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



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



     “ERISA Event” shall mean (a) any “reportable event”, as
defined in Section 4043 of ERISA or the regulations issued thereunder, with
respect to a Benefit Plan (other than an event for which the 30-day notice
period is waived); (b) the existence with respect to any Benefit Plan of an
“accumulated funding deficiency” (as defined in Section 412 of the
Tax Code or Section 302 of ERISA), whether or not waived; (c) the filing
pursuant to Section 412(d) of the Tax Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Benefit Plan; (d) the incurrence by the Borrower or any ERISA Affiliate of
any liability under Title IV of ERISA with respect to the termination of any
Benefit Plan or the withdrawal or partial withdrawal of the Borrower or any
ERISA Affiliate from any Benefit Plan



14









 




or Multiemployer Plan; (e) the receipt by the Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to
the intention to terminate any Benefit Plan or to appoint a trustee to
administer any Benefit Plan; (f) the adoption of any amendment to a Benefit
Plan that would require the provision of security pursuant to Section
401(a)(29) of the Tax Code or Section 307 of ERISA; or (g) the receipt by
the Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.




     “Eurodollar”, when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted LIBO
Rate; provided, however that this definition of “Eurodollar”
shall not include Base Rate Loans bearing interest at a rate specified in
the proviso to the definition of “Base Rate”.



     “Eurodollar Unavailability Period” means any period of
time during which a notice delivered to the Borrower in accordance
with Section 2.08 shall remain in force and effect.



     “Event
of Default” shall mean (i) from and after the
Signing Date until the Funds Availability Date, the events set forth
in Section 7.01 and (ii) from and after the Funds Availability Date,
the events set forth in Section 7.02.



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



     “Excluded Assets” shall mean




     (i) any lease, license, contract or agreement to which any Loan Party is a
party or any of such Loan Party’s rights or interests thereunder if and
only for so long as Applicable Law prohibits the creation of a
security interest therein or the grant of a security interest therein
under the Security Documents shall constitute or result in (A) a
breach, termination or default or invalidity under any such lease,
license, contract, property right or agreement or (B) the loss,
abandonment, termination or unenforceability of any right, title or
interest in or to such property, in each case, other than to the
extent that any such term would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant
jurisdiction or any other Applicable Law or principles of equity;
provided that such lease, license, contract, property right or
agreement shall be an Excluded Asset only to the extent and for so
long as the consequences specified above shall exist and shall cease
to be an Excluded Asset and shall become subject to the security
interest granted under the Security Documents, immediately and
automatically, at such time as such consequences shall no longer
exist;




     (ii) any goods, deposit accounts, general intangibles or
investment property (as each such term is used in the UCC) in which a
security interest therein is prohibited by Applicable Law, other than
to the extent that any such prohibition would be rendered ineffective
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any
relevant jurisdiction or any other Applicable Law or principles of
equity; provided that such goods, deposit accounts, general
intangibles or investment property shall be an Excluded Asset only to
the extent and for so long as the consequences specified above shall
exist and shall cease to be an Excluded Asset and shall become subject
to the security interest



15









 







granted under the Security Documents, immediately and
automatically, at such time as such consequences shall no longer
exist;




     (iii) (A) each fee-owned real property held by any Loan
Party with a Fair Market Value of less than $2,500,000, (B) leasehold
interests that do not constitute Material Leases, (C) fee-owned real
property and leasehold interests (but not personal property or
fixtures) owned or leased by any Loan Party that is located in the
State of New York, (D) any fee-owned real property or leasehold
interest (but not personal property or fixtures) acquired by any Loan
Party and located in the State of New York; and (E) the Charlevoix
County, Michigan parcel of real property and the improvements located
thereon constituting the facility known as the Big Rock Independent
Spent Fuel Storage Installation;




     (iv) any applications for trademarks or service marks filed
in the United States Patent and Trademark Office (the “PTO”)
pursuant to 15 U.S.C. §1051 Section 1(b) unless and until evidence of
use of the mark in interstate commerce is submitted to the PTO
pursuant to 15 U.S.C. §1051 Section 1(c) or Section 1(d);




     (v) shares of Capital Stock held by a Loan Party having
voting power in excess of 65% of the voting power of all classes of
Capital Stock of a Foreign Subsidiary;




     (vi) motor vehicles and other assets subject to certificates of
title;




     (vii) letter of credit rights (as defined in the UCC)
that do not constitute Supporting Obligations;




     (viii) Liens on cash and Cash Equivalents pledged pursuant to
Sections 6.02(n) and 6.02(z); and




     (ix) any cash collateral accounts maintained pursuant to
the Secured Obligations in connection with letters of credit issued
thereunder for the sole benefit of any of the applicable Senior
Secured Parties (which cash collateral accounts shall solely be for
the benefit of such applicable Senior Secured Parties and the issuing
bank that issued such letters of credit and not the other Senior
Secured Parties).



     “Excluded Perfection Assets” shall mean (i) any Deposit
Account, Securities Account or Commodities Account (and all cash, Cash
Equivalents and Commodity Contracts held therein) if and only for so long as
such Deposit Account, Securities Account or Commodities Account holds cash
or Cash Equivalents in an amount not exceeding $2,000,000 individually or
$15,000,000 in the aggregate for all such Deposit Accounts, Securities
Accounts and Commodities Accounts; (ii) any Deposit Account that is a
“zero-balance” account (as long as (x) the balance in such “zero
balance” account does not exceed at any time the applicable threshold
described in clause (i) above for a period of 24 consecutive hours or more
and (y) all amounts in such “zero-balance” account shall be swept on
a daily basis into another Deposit Account that does not constitute an
Excluded Perfection Asset); and (iii) those assets for which the Collateral
Agent has determined in its reasonable discretion that the costs of
perfecting a security interest in such assets are excessive in relation to
the value to be afforded to the Senior Secured Parties thereby.



     “Excluded Subsidiary” shall mean (i) any Unrestricted
Subsidiary, (ii) any Immaterial Subsidiary and (iii) any Foreign Subsidiary.



16









 





     “Excluded Taxes” shall mean, with respect to the Administrative
Agent, any Lender, any Issuer or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a)
income, profits, franchise, branch or similar Taxes imposed on (or measured
in whole or in part by) any Person’s net income, net profits or capital by
the United States of America (or any political subdivision thereof), or by
the jurisdiction under the laws of which such Person is organized, in which
its principal or applicable lending office is located or in which it is
otherwise doing business (other than a jurisdiction in which such Person
would not have been treated as doing business but for and solely as a result
of its execution or delivery of any Loan Document or its exercise of its
rights or performance of its obligations thereunder); (b) withholding Taxes,
imposed (i) on the date that such Person became a party to this Agreement,
or (ii) with respect to an assignment, acquisition, designation of a new
applicable lending office or the appointment of a successor Issuer, Lender,
or Administrative Agent, on the effective date of such assignment,
acquisition, designation or appointment, except (x) to the extent that such
Person’s predecessor was entitled to such amounts (or in the case of a
designation of a new applicable lending office, to the extent such Person
was entitled to such amounts with respect to its prior applicable lending
office), or (y) if the assignment, acquisition, designation of a new
applicable lending office or the appointment of a successor Issuer, Lender,
or Administrative Agent, occurs as a result of Borrower’s request pursuant
to Section 2.20(a) (for the avoidance of doubt, any withholding Tax imposed
as a result of a Change in Law after the date such Person becomes a party to
this Agreement will not be an Excluded Tax); (c) Taxes imposed by reason of
the failure of the Agent, Lender, Issuer, or any of their respective
affiliates to provide the forms required by Sections 2.19(e) and 2.19(f);
and (d) Taxes imposed as a result of the Administrative Agent’s, Lender’s,
Issuer’s or their respective affiliates’ gross negligence or willful
misconduct.



     “Fair Market Value” shall mean the value that would be paid by
a willing buyer to an unaffiliated willing seller in a transaction not
involving distress of either party, determined in good faith by (i) the
Board of Directors of the applicable Loan Party (or any committee thereof
expressly authorized by the Board of Directors) with respect to assets and
Investments having a Fair Market Value of $100,000,000 or more and (ii) a
Financial Officer of the applicable Loan Party with respect to assets and
Investments having a Fair Market Value less than $100,000,000.



     “Federal Funds Rate” means, for any period, a fluctuating
interest rate per annum equal for each day during such period to 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 for such day (or, if such day is not a Business Day, for the next
preceding 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 such day on such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.



     “Fee Letter” shall mean the letter, dated as of the Signing
Date, addressed to the Borrower from the Administrative Agent with respect
to certain fees to be paid from time to time to the Administrative Agent.



     “FERC” shall mean the Federal Energy Regulatory Commission or its
successor.



     “FERC 205 Contracts” shall mean power purchase and sale
agreements between the Borrower and the Subsidiary Guarantors under which
the parties enter into Commodity Hedging Transactions with each other, as
approved by FERC under Section 205 of the FPA, as amended.



17









 





     “Financial Covenants” shall mean the negative covenants set
forth in Sections 6.12 and 6.13.



     “Financial Institution” shall mean a bank, an investment bank
or an Affiliate of a bank or an investment bank.



     “Financial Officer” of any Person shall mean any of the chief
executive officer, chief financial officer, or treasurer (or if no
individual shall have such designation, the individual charged by the Board
of Directors of such Person with such powers and duties as are customarily
bestowed upon the individual with such designation) or the audit or finance
committee of the Board of Directors of such Person.



     “Financial Statement Delivery Failure Date” shall have
the meaning specified in the definition of “Applicable Margin”.



     “Fitch” shall mean Fitch Ratings, Ltd. or any successor entity.



     “Foreign Lender” shall mean any Lender that is organized under
the laws of a jurisdiction other than the laws of the United States of
America or any state or district thereof.



     “Foreign Pledge Agreement” means a pledge or charge agreement
with respect to the Collateral that constitutes Equity Interests of a
Foreign Subsidiary, in form and substance reasonably satisfactory to the
Collateral Agent.



     “Foreign Subsidiary” shall mean (a) any Subsidiary that is
organized under the laws of a jurisdiction other than the United States of
America, any state thereof or the District of Columbia, (b) any Subsidiary
if (i) for United States federal income tax purposes, substantially all of
the assets of such Subsidiary consist of stock of “controlled foreign
corporations,” as defined in Section 957(a) of the Tax Code (“CFC”)
and (ii) such Subsidiary does not have any material assets or Indebtedness
other than the stock of its Subsidiaries and any intercompany Indebtedness
owed to or from the Borrower or another Subsidiary and does not engage in
any operations other than the ownership of such assets and activities
incidental thereto, and (c) any Subsidiary of a CFC.



     “FPA” shall mean the Federal Power Act and the rules and
regulations promulgated thereunder, as amended from time to time.



     “Funds Availability Date” shall mean the date on which all
conditions precedent set forth in Section 4.03 shall have been satisfied (or
waived in accordance with Section 9.08).



     “Funds Availability Date Appraisal” shall mean an appraisal
performed on a cash flow basis (and, to the extent expressed in a range,
using the midpoint of such range), all costs of which shall be borne by the
Borrower, of all of the Core Assets conducted by Stone & Webster Management
Consultants, Inc., or at the Borrower’s request, another appraiser selected
by the Borrower with the consent of the Arrangers, which consent shall not
be unreasonably withheld.



     “Funds Availability Indebtedness” shall mean any unsecured
Indebtedness of the Borrower that may be issued, together with the Senior
Notes, on terms and conditions reasonably acceptable to the Arrangers and
the Required Lenders to satisfy the condition precedent set forth in Section
4.03(i); provided that (a) such Funds Availability Indebtedness
shall be on terms no



18









 




less favorable to the Lenders than the Senior Notes and is otherwise on
terms no more restrictive than the Senior Notes and (b) such Funds
Availability Indebtedness has its Stated Maturity at least 91 days later
than the Revolving Credit Maturity Date.




     “Funds Availability Indebtedness Documents” shall mean the
indenture or indentures (including any supplements thereto) or other
agreements under which any Funds Availability Indebtedness is issued or
incurred and all other instruments, agreements and other documents
evidencing or governing any Funds Availability Indebtedness and any related
Funds Availability Indebtedness Guarantees, in each case as the same may be
amended or supplemented from time to time in accordance with the terms
hereof and thereof.



     “Funds Availability Indebtedness Guarantees” shall mean the
documents evidencing the unsecured Guarantees by the Subsidiary Guarantors
of the Borrower’s obligations under any Funds Availability Indebtedness and
the related Funds Availability Indebtedness Documents, which Guarantees
shall be subordinated to the Secured Obligations hereunder on terms no less
favorable to the Lenders than the Senior Notes Guarantees and otherwise on
terms no more restrictive than the Senior Notes Guarantees.



     “GAAP” shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant
segment of the accounting profession, which are in effect from time to time;
provided, however, that if the Borrower notifies the
Administrative Agent that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the
Funds Availability Date in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given
before or after such change in GAAP or in the application thereof, then such
provision shall be interpreted on the basis of GAAP as in effect and applied
immediately before such change shall have become effective until such notice
shall have been withdrawn or such provision amended in accordance herewith.



     “General Intangibles” shall have the meaning assigned to such term in the
UCC.



     “Governmental Authority” shall mean the government of the
United States of America or any other nation, any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or
functions of government or any governmental or non-governmental authority
regulating the generation and/or transmission of energy.



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



     “Guarantee” shall mean a guarantee, other than by endorsement
of negotiable instruments for collection in the ordinary course of business,
direct or indirect, in any manner, including by way of a pledge of assets or
through letters of credit or reimbursement agreements in respect thereof, of
all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to



19









 




take or pay or to maintain financial statement conditions or otherwise);
provided that standard contractual indemnities which do not relate
to Indebtedness shall not be considered a Guarantee.




     “Guarantee and Collateral Agreement” shall mean the Guarantee
and Collateral Agreement, substantially in the form of Exhibit O,
executed and delivered by, inter alia, the Collateral Agent, the
Administrative Agent, the Borrower and each Subsidiary Guarantor on the
Funds Availability Date.



     “Guarantee Joinder and Assumption Agreement” shall have the
meaning given such term in the Guarantee and Collateral Agreement.



     “Hazardous Materials” shall mean (a) any petroleum products or
byproducts, coal ash, coal combustion by-products or waste, boiler slag,
scrubber residue, flue desulfurization material, radon gas, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorocarbons
and all other ozone-depleting substances and (b) any chemical, material,
substance or waste that is prohibited, limited or regulated by or pursuant
to any Environmental Law; provided, however, that
“Hazardous Materials” shall not include any Nuclear Materials or the
radioactive constituents of mixed waste.



     “Hedge Outstanding Amount” shall have the meaning
assigned to such term in the Intercreditor Agreement.



     “Hedging Obligations” shall mean, with respect to any specified
Person, the Interest Rate/Currency Hedging Obligations and the Commodity
Hedging Obligations of such Person.



     “Hedging Transactions” shall mean all Interest Rate Hedging
Transactions, Currency Hedging Transactions, Commodity Hedging Transactions
and all other similar agreements or arrangements designed to alter the risks
of any Person arising from fluctuations in interest rates, currency values
or commodity prices.



     “Immaterial Subsidiary” shall mean on any date, any Subsidiary
of the Borrower (other than any Core Asset Subsidiary or EquaGen (if EquaGen
becomes a Subsidiary)) that (i) had less than 2.5% of consolidated assets or
2.5% of consolidated revenues of the Borrower and its Restricted
Subsidiaries as reflected on the most recent financial statements delivered
in accordance with Section 5.05 prior to such date and (ii) has been
designated as such by the Borrower in a written notice delivered to the
Administrative Agent and the Collateral Agent (other than any Subsidiary as
to which the Borrower has revoked such designation by written notice to the
Administrative Agent and the Collateral Agent); provided,
however, that at no time shall all Immaterial Subsidiaries so
designated by the Borrower have in the aggregate consolidated assets or
annual consolidated revenues (as reflected on the most recent financial
statements delivered in accordance with Section 5.05 prior to such time) in
excess of 7.5% of consolidated assets or annual consolidated revenues,
respectively, of the Borrower and its Restricted Subsidiaries.



     “Increased Commitment Date” shall have the meaning provided in Section
2.21(a).



     “Indebtedness” of any Person shall mean, without duplication
and whether or not contingent, (a) all indebtedness of such Person for
borrowed money (including indebtedness with respect to any Credit Support
Facilities), (b) all obligations of such Person evidenced by notes, bonds,
debentures or similar instruments, (c) all reimbursement and all obligations
with respect to



20









 




letters of credit, bankers’ acceptances, surety bonds and performance bonds,
whether or not matured, (d) all indebtedness for the deferred purchase price
of property or services, other than trade payables incurred in the ordinary
course of the Permitted Business, (e) all indebtedness of such Person
created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), (f)
all Capital Lease Obligations of such Person and all Attributable Debt in
respect of sale and leaseback transactions, (g) all Guarantee obligations of
such Person, (h) unfunded vested benefits under plans covered by Title IV of
ERISA, (i) Hedging Obligations if and to the extent they would appear as a
liability on a balance sheet prepared in accordance with GAAP, (j) all
Indebtedness of the type referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien upon or in property (including Accounts and
General Intangibles) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, (k) unfunded
amounts in respect of Indebtedness incurred by the Borrower and its
Restricted Subsidiaries in good faith to invest in nuclear decommissioning
trusts or to comply with decommissioning agreements, and (l) contingent
adjustments or earn-outs when they are required to be recognized as a
liability on the balance sheet in accordance with GAAP.




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



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



     “Ineligible Assignee” means (i) a natural Person, (ii) the
Borrower, any Affiliate of the Borrower or any other Person taking direction
from, or working in concert with, the Borrower or any of the Borrower’s
Affiliates, (iii) Entergy (whether or not an Affiliate of the Borrower) and
(iv) a Person that has taken any action or is the subject of any bankruptcy
or insolvency proceeding under any Bankruptcy Law.



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



     “Initial Appraised Value” shall mean the appraised value
determined on a cash flow basis (and, to the extent expressed in a range,
using the midpoint of such range) of all of the Core Assets as set forth in
the Funds Availability Date Appraisal.



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



     “Intellectual Property Security Agreements” shall mean all
Intellectual Property Security Agreements executed and delivered by the Loan
Parties, each substantially in the applicable form required by the Guarantee
and Collateral Agreement, as the same may be amended, restated, supplemented
or otherwise modified from time to time in accordance with the terms hereof
and thereof.



     “Intercompany Debt Subordination Agreement” shall mean an
Intercompany Debt Subordination Agreement substantially in the form of
Exhibit B pursuant to which intercompany obligations and advances
owed by any Loan Party to a Person that is not a Loan Party are required to
be subordinated to the Secured Obligations pursuant to Section 6.01(h).



21









 





     “Intercreditor Agreement” shall mean that certain Collateral
Agency and Intercreditor Agreement dated as of the Signing Date, executed
and delivered by, inter alia, the Collateral Agent, the Administrative
Agent, and the Borrower.



     “Interest Payment Date” shall mean (a) with respect to any ABR
Loan, the last Business Day of each March, June, September and December and
the Revolving Credit Termination Date and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of
which such Loan is a part; provided, however, that (i) in
the case of a Eurodollar Borrowing with an Interest Period of more than
three months’ duration, Interest Payment Date shall mean each day that would
have been an Interest Payment Date had successive Interest Periods of three
months’ duration been applicable to such Borrowing and (ii) with respect to
ABR Loans, for interest accrued for the period between the Funds
Availability Date and the end of the first fiscal quarter thereafter, the
Interest Payment Date for such interest shall be the last Business Day of
the next following fiscal quarter.



     “Interest Period” shall mean with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending
seven days thereafter or on the numerically corresponding day in the
calendar month that is 1, 2, 3 or 6 months thereafter (or 9 or 12 months
thereafter if, at the time of the relevant Borrowing, an interest period of
such duration is available to all Lenders participating therein), in each
case as the Borrower may elect; provided, however, that (i)
if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business
Day, (ii) any Interest Period (other than an Interest Period of seven days)
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month
of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period and (iii) the Borrower may not select
an Interest Period that ends after the Revolving Credit Maturity Date.
Interest shall accrue from and including the first day of an Interest Period
to but excluding the last day of such Interest Period. For purposes hereof,
the date of a Borrowing initially shall be the date on which such Borrowing
is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.



     “Interest Rate Hedging Transactions” shall mean all interest
rate swap agreements, interest rate cap agreements, interest rate collar
agreements, interest rate insurance and other agreements or arrangements
designed to manage interest rates or interest rate risk.



     “Interest Rate/Currency Hedging Obligations” shall mean, with
respect to any specified Person, the obligations of such Person under
Interest Rate Hedging Transactions and Currency Hedging Transactions.



     “Investment Company Act” shall have the meaning assigned to
such term in Section 3.12.



     “Investments” shall mean, with respect to any Person, all
direct or indirect investments by such Person in other Persons (including
Affiliates) in the forms of loans (including Guarantees or other
obligations), advances or capital contributions, purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the
Borrower or any Subsidiary sells or otherwise disposes of any Equity
Interests of any direct or



22









 




indirect Subsidiary such that, after giving effect to any such sale or
disposition, such Person is no longer a Subsidiary, the Borrower will be
deemed to have made an Investment on the date of any such sale or
disposition equal to the Fair Market Value of the Borrower’s Investments in
such Subsidiary that were not sold or disposed of. The acquisition by the
Borrower, or by any Restricted Subsidiary, of a Person that holds an
Investment in a third Person will be deemed to be an Investment by the
Borrower or such Subsidiary in such third Person in an amount equal to the
Fair Market Value of the Investments held by the acquired Person in such
third Person. Except as otherwise provided in this Agreement, the amount of
an Investment will be determined at the time the Investment is made and
without giving effect to subsequent changes in value.




     “Issue” shall mean, with respect to any Letter of Credit, to
issue, amend, extend the expiry of, renew or increase the maximum face
amount (including by deleting or reducing any scheduled decrease in such
maximum face amount) of, such Letter of Credit. The terms “Issued”,
“Issuance” and “Issuing” shall have a corresponding meaning.



     “Issuer” shall mean each Lender or Affiliate of a Lender that
(a) is listed on the signature pages hereof as an “Issuer” and that
has entered into the Letter of Credit Fee Letter or (b) hereafter becomes an
Issuer with the approval of the Administrative Agent and the Borrower by
agreeing, pursuant to an agreement with and in form and substance
satisfactory to the Administrative Agent and the Borrower, to be bound by
the terms hereof applicable to Issuers and by becoming party to the Letter
of Credit Fee Letter, in each case so long as such Issuer shall not have
tendered notice of its resignation in accordance with Section 2.03(l) or
Section 8.08.



     “Joinder Agreement” shall mean an agreement substantially in the form of
Exhibit I.



     “Key Contracts” shall mean those contracts set forth on
Schedule 1.01(b) that evidence Contractual Obligations of EquaGen or
its subsidiaries owing to any Core Asset Subsidiary for the maintenance and
operation of nuclear power facilities owned by such Core Asset Subsidiary,
as such schedule shall be updated from time to time in accordance with
Section 5.05(c).



     “L/C Cash Collateral Account” shall mean any interest-bearing
Deposit Account or Securities Account that is (a) established by the
Administrative Agent from time to time in its sole discretion to receive
cash and Cash Equivalents (or purchase cash or Cash Equivalents with funds
received) from the Loan Parties or Persons acting on their behalf pursuant
to the Loan Documents, (b) with such depositaries and securities
intermediaries as the Administrative Agent may determine in its sole
discretion, (c) in the name of the Administrative Agent for the benefit of
the Senior Secured Parties (although such account may also have words
referring to the Borrower and the account’s purpose), (d) under the control
of the Administrative Agent and (e) in the case of a Securities Account,
with respect to which the Administrative Agent shall be the entitlement
holder and the only Person authorized to give entitlement orders with
respect thereto. For the avoidance of doubt, any such L/C Cash Collateral
Account will be a “Designated Asset” for purposes of and as defined in the
Intercreditor Agreement.



     “Lenders” shall mean each financial institution or other entity
that (a) is listed on the signature pages hereof as a “Lender” or (b) from
time to time becomes a party hereto by execution of an Assignment and
Acceptance (other than any such Person that has ceased to be a party hereto
pursuant to an Assignment and Acceptance). Unless the context otherwise
requires, the term “Lenders” shall include the Issuers.



     “Letter of Credit” shall mean any letter of credit Issued pursuant to
Section 2.03.



23









 





     “Letter of Credit Fee Letter” shall mean a fee letter among the
Borrower and all the Issuers setting forth the fronting fees payable to all
Issuers in respect of Letters of Credit pursuant to Section 2.05(b)(i).



     “Letter of Credit Issuer Agreements” shall mean an agreement
setting forth the Letter of Credit Sublimit for such Issuer (as determined
by such Issuer in its sole discretion) and any other applications,
agreements or other documentation, in form and substance reasonably
acceptable to the relevant Issuer of a Letter of Credit, which an Issuer
generally employs in the ordinary course of its business for the Issuance of
a Letter of Credit.



     “Letter of Credit Obligations” shall mean, at any time, the
dollar amount of the aggregate Reimbursement Obligations at such time
together with the aggregate Letter of Credit Undrawn Amounts for each Issuer
at such time.



     “Letter of Credit Request” shall have the meaning specified in Section
2.03(c).



     “Letter of Credit Sublimit” shall mean, with respect to
any Issuer, the maximum aggregate principal amount of Letter of
Credit Obligations of such Issuer.



     “Letter of Credit Undrawn Amounts” shall mean, with respect to
any Issuer at any time, the aggregate undrawn face amount of all Letters of
Credit Issued by such Issuer and outstanding at such time.



     “LIBO Rate” shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate per annum determined by the
Administrative Agent at approximately 11:00 a.m., London time, on the date
that is two Business Days prior to the commencement of such Interest Period
by reference to the British Bankers’ Association Interest Settlement Rates
for deposits in dollars (as set forth by the Bloomberg Information Service
or any successor thereto or any other service selected by the Administrative
Agent which has been nominated by the British Bankers’ Association as an
authorized information vendor for the purpose of displaying such rates) for
a period equal to such Interest Period; provided that, to the extent
that an interest rate is not ascertainable pursuant to the foregoing
provisions of this definition, the “LIBO Rate” shall be the interest
rate per annum determined by the Administrative Agent to be the average of
the rates per annum at which deposits in dollars are offered for such
relevant Interest Period to major banks in the London interbank market in
London, England by the Administrative Agent at approximately 11:00 a.m.
(London time) on the date that is two Business Days prior to the beginning
of such Interest Period.



     “Lien” shall mean, with respect to any asset (a) any mortgage,
deed of trust, deed to secure debt, lien (statutory or otherwise), pledge,
hypothecation, encumbrance, restriction, collateral assignment, charge or
security interest in, on or of such asset; (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to such asset; and (c) in
the case of Equity Interests, any purchase option, call or similar right of
a third party with respect to such Equity Interests. For the avoidance of
doubt, “Lien” shall not be deemed to include licenses of
Intellectual Property (as defined in the Guarantee and Collateral
Agreement).



     “Loan Documents” shall mean this Agreement, any Notes
delivered hereunder, the Security Documents, the Fee Letter, the
Letter of Credit Fee Letter, any Intercompany Debt



24









 




Subordination Agreement and each certificate, agreement or document executed
by a Loan Party and delivered to the Arrangers, the Administrative Agent,
the Collateral Agent or any Lender in connection with or pursuant to any of
the foregoing.




     “Loan Party” shall mean the Borrower and each Subsidiary Guarantor.



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



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



     “Material Adverse Effect” shall mean any material adverse
change in or material adverse effect on (i) the business, financial
condition, results of operations, performance, assets or liabilities, or
prospects of the Borrower and its Restricted Subsidiaries, taken as a whole,
(ii) the ability of the Borrower and the Subsidiary Guarantors, taken as a
whole, to perform their payment obligations under this Agreement or the
other Loan Documents or (iii) the rights and remedies of the Arrangers, the
Administrative Agent, the Collateral Agent or the Lenders hereunder or
thereunder.



     “Material Contract” shall mean those contracts to which the
Borrower or any Restricted Subsidiary is party, the breach or termination
(other than at the expiration of its term) of which could reasonably be
expected to have a Material Adverse Effect, in each case listed on
Schedule 1.01(d), as such schedule shall be updated from time to
time in accordance with section 5.05(c).



     “Material Indebtedness” shall mean (i) Indebtedness for money
borrowed (other than the Loans, Letters of Credit and Hedging Obligations)
of any one or more of the Borrower or any of the Restricted Subsidiaries in
an aggregate principal amount at any given time equal to or exceeding
$50,000,000, or (ii) Hedging Obligations with Hedge Outstanding Amounts
(including, for purposes of this definition, the method of calculation of
“Hedge Outstanding Amount” specified in the proviso to such definition) in
the aggregate at any given time equal to or exceeding $50,000,000.



     “Material Lease” shall mean a lease with respect to real
property with annual payments in excess of $1,500,000.



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



     “Minority Investment” shall mean any Person (other than a
Subsidiary) in which the Borrower or any Restricted Subsidiary owns
Capital Stock.



     “Modification” shall have the meaning assigned to such term in Section
9.17(a).



     “Modification Endorsement” shall have the meaning
assigned to such term in Section 9.17(c).



     “Moody’s” shall mean Moody’s Investors Service, Inc. or any successor
entity.



     “Mortgaged Properties” shall mean on the Funds
Availability Date, each parcel of real property and the improvements
located thereon and appurtenants thereto owned or leased by a Loan
Party and specified on Schedule 3.07 (and shall include each
other parcel of real property



25









 




and improvements located thereon with respect to which a Mortgage is
granted pursuant to Section 5.10 or 5.11).




     “Mortgages” shall mean the mortgages, deeds of trust, leasehold
mortgages, assignments of leases and rents, modifications, amendments and
restatements of the foregoing and other security documents granting a Lien
on any Mortgaged Property to secure the Secured Obligations, each
substantially in the form of Exhibit P (subject to changes in form
and additions or omissions of provisions as appropriate for the applicable
jurisdiction in which such real property is located) with such changes as
are reasonably satisfactory to the Borrower (which shall be evidenced by the
signature thereof by the applicable Loan Party) and the Collateral Agent, in
each case, as the same may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof.



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



     “Necessary CapEx Debt” shall mean Indebtedness of the
Borrower or its Restricted Subsidiaries incurred for the purpose of
financing Necessary Capital Expenditures.



     “Necessary Capital Expenditures” shall mean capital
expenditures (other than Environmental Capital Expenditures) that are (i)
required by Applicable Law, (ii) undertaken for health and safety reasons,
or (iii) undertaken to increase the reliability of or to re-power any power
generation facility.



     “Net Cash Proceeds” shall mean the proceeds received by the
Borrower or any of its Restricted Subsidiaries after the Funds Availability
Date in cash or Cash Equivalents from any Recovery Event, net of (i) all
fees and expenses related to such Recovery Event (including fees and
expenses paid or reasonably estimated by the Borrower to be payable) and
taxes paid or payable by the Borrower and the Restricted Subsidiaries in
connection therewith and the Borrower’s good faith estimate of any other
taxes to be paid or payable in connection with such Recovery Event and (ii)
the principal amount, premium or penalty, if any, interest and other amounts
on any Indebtedness (other than Indebtedness secured by Collateral) which is
secured by the Core Asset transferred, taken or sold in such Recovery Event
and which is required to be repaid with such proceeds.



     “New Commitments” shall have the meaning assigned to such term in Section
2.21(a).



     “New Lender” shall have the meaning assigned to such term in Section
2.21(b).



     “Non-Consenting Lender” shall have the meaning assigned
to such term in Section 9.08(c).



     “Non-Public Information” shall mean information that has not
been disseminated in a manner making it available to investors generally,
within the meaning of Regulation FD.



     “Note” shall mean a promissory note of the Borrower payable to
the order of any Lender requesting a promissory note in a principal amount
equal to the amount of such Lender’s Commitments evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from the Loans owing
to such Lender.



26









 





     “Notice of Continuation or Conversion” shall have the meaning
assigned to such term in Section 2.10.



     “Nuclear Laws” shall mean the Atomic Energy Act of 1954 (as
amended), the Energy Reorganization Act of 1974 (as amended), and the
Nuclear Waste Policy Act of 1982 (as amended), and any related rules,
regulations or administrative decisions of the U.S. Nuclear Regulatory
Commission or any State that has entered into an agreement with the U.S.
Nuclear Regulatory Commission under Section 274 of the Atomic Energy Act of
1954 (as amended) (“Agreement State”).



     “Nuclear Materials” shall mean source, by product, or special
nuclear material and radioactive waste material, or other similar material,
regulated under the Nuclear Laws, including the radioactive constituents of
mixed waste.



     “Nuclear Stations” shall have the meaning assigned to such term in
Section 3.25.



     “NY Real Property Subsidiary” shall mean any Restricted
Subsidiary that at any time owns, or holds a leasehold estate in (i) the
generation and related real property and personal property assets with
respect to the Indian Point 2 and Indian Point 3 nuclear power facilities
located in Westchester County, New York, (ii) the generation and related
real property and personal property assets with respect to the FitzPatrick
nuclear power facility located in Oswego County, New York and (iii) any
other real property located in the State of New York with a Fair Market
Value in excess of $20,000,000. The NY Real Property Subsidiaries as of the
Funds Availability Date are set forth on Schedule 3.08.



     “NYPA” shall mean the New York Power Authority (f/k/a the Power
Authority of the State of New York).



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



     “Outside Date” shall mean October 1, 2009.



     “Patriot Act” shall mean the USA Patriot Act of 2001 (31 U.S.C. 5318 et
seq.).



     “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 Perfection Certificate
dated as of the Funds Availability Date, executed and delivered by the
Borrower on behalf of itself and each Subsidiary Guarantor, as the same may
be amended, restated, supplemented or otherwise modified from time to time.



     “Permit” shall mean any permit, approval, authorization,
license, variance or permission required from a Governmental Authority under
any Applicable Law.



     “Permitted Acquisition” shall mean a Proposed
Acquisition; provided that (a) such acquisition and all
transactions related thereto shall be consummated in accordance with
all



27









 




Applicable Laws; (b) if such Proposed Acquisition is effected pursuant to an
acquisition of Capital Stock, the issuer of such Capital Stock shall become
a Restricted Subsidiary and, to the extent required by Section 5.10, a
Subsidiary Guarantor; (c) such Proposed Acquisition shall result in the
Collateral Agent, for the benefit of the Senior Secured Parties, being
granted a security interest in any Capital Stock and/or any assets so
acquired to the extent required by Sections 5.10 and/or 5.11; (d) after
giving effect to such Proposed Acquisition, no Default or Event of Default
shall have occurred and be continuing and the representations and warranties
made by the Loan Parties in any Loan Document shall be true and correct in
all material respects (except to the extent such representations are
qualified as to materiality, in which case they shall be true and correct in
all respects) as of the date of such acquisition (except to the extent that
such representations and warranties relate to an earlier date, in which case
they shall be true and correct as of such earlier date); and (e) the
Borrower shall be in compliance, on a pro forma basis after giving effect to
such Proposed Acquisition (including any Indebtedness assumed or permitted
to exist or incurred pursuant to Sections 6.01(o) and 6.01(p),
respectively), with the Financial Covenants, as such covenants are
recomputed as of the last day of the most recently ended fiscal quarter for
which financial statements are required to be delivered pursuant to Sections
5.05(a) or 5.05(b) as if such Proposed Acquisition had occurred on the first
day of the applicable Test Period.




     “Permitted
Business” shall mean (i) the generation, production,
transmission, transportation, storage, processing and distribution of energy
and fuels for the production of energy, (ii) the marketing and sales and
other transactions (excluding trading) of energy and energy-related products
in the wholesale and retail markets and financial and derivative energy and
energy-related products and instruments, in each case except as prohibited
by Section 6.15, (iii) development of new energy sources, facilities and
related technologies and (iv) activities reasonably related, ancillary,
incidental or complementary to the foregoing activities.



     “Permitted Disposition” shall mean the transactions
described on Schedule 1.01(c) hereto.



     “Permitted Liens” shall mean Liens permitted by Section 6.02.



     “Permitted Refinancing Indebtedness” shall mean any
Indebtedness of the Borrower or any of its Restricted Subsidiaries issued in
exchange for, or the net proceeds of which are used to refund, refinance,
replace, defease or discharge, other Indebtedness of the Borrower or any of
its Restricted Subsidiaries (other than intercompany Indebtedness);
provided that (a) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the Indebtedness
extended, refinanced, renewed, replaced, defeased or refunded (plus
all accrued and unpaid interest on such Indebtedness and the amount of all
expenses and premiums incurred in connection therewith); (b) such Permitted
Refinancing Indebtedness has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (c) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Secured Obligations
hereunder, such Permitted Refinancing Indebtedness is subordinated in right
of payment to the Secured Obligations hereunder on terms at least as
favorable to the Lenders as those contained in the documentation governing
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (d) such Indebtedness is incurred either by the Borrower or by the
Restricted Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded (and may be guaranteed
by any Subsidiary



28









 




Guarantor to the extent permitted by Section 6.01(k)); and (e)(i) if the
Stated Maturity of the Indebtedness being refinanced is earlier than the
Revolving Credit Maturity Date, the Permitted Refinancing Indebtedness has
its Stated Maturity no earlier than the Stated Maturity of the Indebtedness
being refinanced or (ii) if the Stated Maturity of the Indebtedness being
refinanced is later than the Revolving Credit Maturity Date, the Permitted
Refinancing Indebtedness has its Stated Maturity at least 91 days later than
the Revolving Credit Maturity Date.




     “Permitted Reinvestment”, with respect to any Recovery Event,
shall mean (i) the acquisition by any Loan Party of replacement assets
useful in the Permitted Business and that shall (after giving effect to any
time periods provided for that type of asset in Section 5.10) constitute
Collateral, (ii) reinvesting in the Permitted Business in assets and that
shall (after giving effect to any time periods provided for that type of
asset in Section 5.10) constitute Collateral, and/or (iii) the repair of the
assets that were damaged or destroyed as a result of the applicable Recovery
Event; provided, however, that any such replacement or
reinvestment assets may take the form of real property located in the State
of New York (which would otherwise be an Excluded Asset) if such replacement
or reinvestment asset is directly owned by a Subsidiary Guarantor.



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



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



     “Post-Recovery Event Appraised Value” shall mean the appraised
value determined on a cash flow basis (and, to the extent expressed in a
range, using the midpoint of such range) of all of the Core Assets as set
forth in the Recovery Event Appraisal.



     “Proposed Acquisition” shall mean an acquisition (whether
pursuant to an acquisition of Capital Stock, assets or otherwise) by the
Borrower or any of its Restricted Subsidiaries from any Person of all or
substantially all of the assets of a Person or a line of business of a
Person.



     “PUHCA” shall mean the Public Utility Holding Company Act of
2005 and the rules and regulations promulgated thereunder, effective
February 8, 2006.



     “PURPA” shall mean the Public Utility Regulatory Policies
Act of 1978 and the rules and regulations promulgated thereunder, as
amended from time to time.



     “QF” shall mean a “qualifying facility” under PURPA.



     “Qualified Counterparty” shall have the meaning
assigned to such term in the Intercreditor Agreement.



     “Ratable Portion” or (other than in the expression “equally and
ratably”) “ratably” shall mean, with respect to any Lender, the percentage
obtained by dividing (i) the Commitments of such Lender by (ii) the
aggregate Commitments of all Lenders (or, at any time after the Revolving
Credit Termination Date, the percentage obtained by dividing the aggregate
outstanding principal balance of the Revolving Credit Outstandings owing to
such Lender by the



29









 




aggregate outstanding principal balance of the Revolving Credit
Outstandings owing to all Lenders).




     “Rate” shall have the meaning set forth in the definition of Type.



     “Recovery Event” shall mean an event or series of related
events resulting in (a) the loss of or damage to the Core Assets for which
the greater of (i) the value of the impaired portion of the asset or (ii)
the value of the claim, in each case as determined by the insurance
appraiser, exceeds $500,000,000 or (b) a taking under power of eminent
domain or by condemnation or similar proceeding of or relating to the Core
Assets for which the compensation payments exceed $500,000,000.



     “Recovery Event Appraisal” shall mean an appraisal performed on
a cash flow basis (and, to the extent expressed in a range, using the
midpoint of such range), all costs of which shall be borne by the Borrower,
of all of the Core Assets conducted by Stone & Webster Management
Consultants, Inc., or at the Borrower’s request, another appraiser selected
by the Borrower with the consent of the Administrative Agent, which consent
shall not be unreasonably withheld.



     “Reference Date” shall have the meaning set forth in the definition of
Available Amount.



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



     “Registration Statement” shall mean the Registration Statement
on Form 10, Amendment No. 3, under the Exchange Act, of the Borrower filed
with the SEC on November 21, 2008, including the exhibits filed therewith,
and the information statement contained therein, including any amendment or
modification of the terms thereof (except to the extent that such amendment
or modification is materially adverse to the Lenders, in which case the
Arrangers and the Required Lenders shall have given their prior written
consent to such amendment or modification).



     “Regulation FD” shall mean Regulation FD as promulgated
by the SEC under the Securities Act and Exchange Act as in effect
from time to time.



     “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



     “Reimbursement Date” shall have the meaning specified in Section 2.03(h).



     “Reimbursement Obligations” shall mean, as and when matured,
the obligation of the Borrower to pay all reimbursement or repayment
obligations of the Borrower to any Issuer with respect to amounts drawn
under Letters of Credit.



     “Reinvestment Cash Collateral Account” shall mean any
interest-bearing Deposit Account or Securities Account that is established
by the Collateral Agent from time to time in accordance with Section 2.12(c)
to receive insurance proceeds from the Loan Parties or Persons



30









 




acting on their behalf pursuant to the Loan Documents (a) with such
depositaries and securities intermediaries as the Collateral Agent may
determine in its sole discretion, (b) in the name of the Collateral Agent
for the benefit of the Senior Secured Parties (although such account may
also have words referring to the Borrower and the account’s purpose), (c)
under the control of the Collateral Agent and (d) in the case of a
Securities Account, with respect to which the Collateral Agent shall be the
entitlement holder and the only Person authorized to give Entitlement Orders
(as defined in the UCC) with respect thereto.




     “Reinvestment Commitment Reduction Date” shall mean the earlier
of (i) unless the Reinvestment Decision Date shall have first occurred, the
366th day following a Reinvestment Event and (ii) the date that is 5
Business Days after the date on which the Borrower shall have notified the
Administrative Agent of the Borrower’s determination (a) not to acquire
replacement assets useful in the Permitted Business that shall constitute
Collateral, (b) not to reinvest in the Permitted Business that shall
constitute Collateral and (c) not to effect repairs to the assets damaged or
destroyed, in each case with all or any portion of the relevant Reinvestment
Deferred Amount.



     “Reinvestment Decision Date” shall mean the date upon which the
Borrower notifies the Agents that it has formally begun seeking regulatory
approval or begun contracting to (a) acquire replacement assets useful in
the Permitted Business that shall constitute Collateral, (b) reinvest in the
Permitted Business that shall constitute Collateral or (c) effect repairs to
the assets damaged or destroyed, in each case with the Net Cash Proceeds.



     “Reinvestment Deferred Amount” shall mean, with respect to any
Net Cash Proceeds of any Reinvestment Event, the portion of such Net Cash
Proceeds subject to a Reinvestment Notice.



     “Reinvestment Event” shall mean any Recovery Event in respect
of which the Borrower has delivered a Reinvestment Notice; provided
that such Reinvestment Notice is delivered to the Administrative Agent and
the Collateral Agent no later than 5 Business Days following the completion
and delivery to the Borrower of the Recovery Event Appraisal.



     “Reinvestment Notice” shall mean a written notice to the
Administrative Agent and Collateral Agent executed by a Responsible Officer
of the Borrower relating to a Recovery Event stating that the Borrower
(directly or indirectly through one of its Subsidiaries) intends and expects
to utilize the Allocated Net Cash Proceeds from such Recovery Event for
Permitted Reinvestments.



     “Related Agreements” shall have the meaning assigned to such
term in the Intercreditor Agreement.



     “Related Fund” shall mean, with respect to any Lender that is a
fund that invests in bank loans, any other fund that invests in bank loans
and is advised or managed by such Lender, an Affiliate of such Lender, the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.



     “Related Parties” shall mean, with respect to any specified
Person, such Person’s Affiliates and the respective directors, officers,
partners, members, trustees, employees, agents, sub-agents and advisors of
such Person and such Person’s Affiliates.



31









 





     “Release” shall mean any release, spill, emission, leaking,
pumping, injection, pouring, emptying, deposit, disposal, discharge,
dispersal, dumping, escaping, leaching or migration into or through the
environment or within or upon any building, structure, facility or fixture.
The term “Released” shall have a corresponding meaning.



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



     “Required Lenders” shall mean, collectively, (a) from and after
the Signing Date and on and prior to the earlier of (i) the Revolving Credit
Termination Date and (ii) the date of the termination of the Commitments
pursuant to Section 9.20, more than fifty percent (50%) of the aggregate
outstanding amount of the Commitments and (b) after the Revolving Credit
Termination Date, more than fifty percent (50%) of the aggregate Revolving
Credit Outstandings. No Defaulting Lender shall be included in the
calculation of “Required Lenders.”



     “Responsible Officer” shall mean a Financial Officer,
president, vice president, executive vice president, senior vice president,
treasurer, general counsel or controller of a Loan Party and any other
officer or employee of the applicable Loan Party so designated by any of the
foregoing officers in a notice to the Administrative Agent and/or the
Arrangers, as applicable. Any document delivered hereunder that is signed by
a Responsible Officer of a Loan Party shall be conclusively presumed to have
been authorized by all necessary corporate, partnership and/or other action
on the part of such Loan Party and such Responsible Officer shall be
conclusively presumed to have acted on behalf of such Loan Party.



     “Restricted Subsidiary” shall mean each wholly-owned
Subsidiary that is not an Unrestricted Subsidiary.



     “Revolving Credit Borrowing” shall mean a Borrowing comprised of Loans.



     “Revolving Credit Maturity Date” shall mean the date occurring
on the third anniversary of the Signing Date.



     “Revolving Credit Outstandings” shall mean, at any particular
time, the sum of (a) the principal amount of the Loans outstanding at such
time and (b) the Letter of Credit Obligations outstanding at such time.



     “Revolving Credit Termination Date” shall mean the earliest of
(a) the Revolving Credit Maturity Date, (b) the date of termination of all
of the Commitments pursuant to Section 2.09 and (c) the date on which the
Secured Obligations arising hereunder become due and payable pursuant to
Section 7.03.



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



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



     “Secured Obligations” shall have the meaning specified in the
Intercreditor Agreement.



     “Secured Obligations Representative” shall have the
meaning specified in the Intercreditor Agreement.



32









 





     “Securities Account” shall have the meaning assigned to such term in the
UCC.



     “Securities Account Control Agreement” has the meaning
specified in the Guarantee and Collateral Agreement.



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



     “Security” shall mean any Capital Stock, Capital Stock
Equivalents, voting trust certificate, bond, debenture, note or other
evidence of Indebtedness, whether secured, unsecured, convertible or
subordinated, or any certificate of interest, share or participation in, any
temporary or interim certificate for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing, but shall
not include any evidence of the Secured Obligations.



     “Security Documents” shall mean the Guarantee and Collateral
Agreement, the Mortgages, the Control Agreements, the Intellectual Property
Security Agreements, the Intercreditor Agreement, the Perfection Certificate
and each of the other security agreements, pledges, mortgages, assignments
(collateral or otherwise), consents and other instruments and documents
executed and delivered pursuant to any of the foregoing or pursuant to
Section 5.10 or 5.11 or otherwise pursuant to the Intercreditor Agreement.



     “Senior Note Documents” shall mean the indenture or indentures
(including any supplements thereto) under which the Senior Notes are issued
and all other instruments, agreements and other documents evidencing or
governing the Senior Notes and the related Senior Note Guarantees, in each
case as the same may be amended or supplemented from time to time in
accordance with the terms hereof and thereof.



     “Senior Note Guarantees” shall mean the documents evidencing
the unsecured Guarantees by the Subsidiary Guarantors of the Borrower’s
obligations under the Senior Notes and the other Senior Note Documents,
which Guarantee shall be subordinated to the Secured Obligations hereunder
on terms reasonably satisfactory to the Arrangers and the Required Lenders.



     “Senior Notes” shall mean the Senior Notes issued by the
Borrower in connection with the Separation Transactions as described in the
Description of Senior Notes.



     “Senior Secured Parties” shall have the meaning
assigned to such term in the Intercreditor Agreement.



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



     “Separation Documents” shall mean (i) the Separation and
Distribution Agreement by and between Entergy and the Borrower, and (ii) the
Amended and Restated Operating Agreement by and among Entergy, the Borrower
and EquaGen, each as in effect on the Funds Availability Date.



     “Separation Financing Documents” shall mean (i) the Senior Note
Documents and (ii) any Funds Availability Indebtedness Documents.



33









 





     “Separation Transactions” shall mean the series of
transactions pursuant to which Entergy intends to effect the
Separation.



     “Signing Date” shall mean the date on which all conditions
precedent set forth in Section 4.02 shall have been satisfied (or waived in
accordance with Section 9.08).



     “Specified Commodity Hedging Transaction” shall have the
meaning assigned to such term in the Intercreditor Agreement.



     “Specified Credit Support Facility” shall have the meaning
assigned to such term in the Intercreditor Agreement.



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



     “Stated Maturity” shall mean, with respect to any installment
of principal on any series of Indebtedness, the date on which the payment of
principal was scheduled to be paid in the documentation governing such
Indebtedness as of the date of its original incurrence or, if incurred
before the Signing Date, as of the Signing Date, and will not include any
contingent obligations to repay, redeem or repurchase any such principal
prior to the date originally scheduled for the payment thereof.



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



     “Subordinated Indebtedness” shall mean any Indebtedness
incurred pursuant to Section 6.01(w) that is subordinated to the Secured
Obligations on terms reasonably acceptable to the Administrative Agent.



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



     “Subsidiary” shall mean any subsidiary (direct or indirect) of the
Borrower.



     “Subsidiary Guarantor” shall mean each wholly-owned Subsidiary
that is not an Excluded Subsidiary. For the avoidance of doubt, if at any
time any Subsidiary Guarantor is designated as an Excluded Subsidiary
pursuant to and in accordance with Section 6.11, thereafter,



34









 




such Subsidiary shall be deemed not to be a Subsidiary Guarantor. The
Subsidiary Guarantors as of the Funds Availability Date are specified on
Schedule 3.08.




     “Supporting Obligation” shall have the meaning assigned to such term in
the UCC.



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



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



     “Taxes” shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges, liabilities or withholdings (including
interest, fines, penalties or additions to tax) imposed by any Governmental
Authority.



     “Test Period” shall mean, for any determination under
this Agreement, the four consecutive fiscal quarters of the
Borrower then last ended.



     “Total Commitments” shall mean, at any time, the
aggregate amount of the Commitments, as in effect at such time. The
Total Commitments on the Signing Date is $1,175,000,000.



     “Transaction Documents” shall mean the Loan Documents
and the Separation Documents.



     “Transactions” shall mean, collectively, (i) the Separation,
(ii) the execution, delivery and performance by the Loan Parties of the
Transaction Documents to which they are a party, including the Borrowings
hereunder, the issuance of the Senior Notes, the issuance of Letters of
Credit and the use of proceeds of each of the foregoing, and (iii) the
granting of Liens pursuant to the Security Documents.



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



     “UCC” shall mean the Uniform Commercial Code as in effect in
the State of New York or any other applicable jurisdiction.



     “Uniform Customs” shall have the meaning assigned to such term in Section
9.07.



     “Unrestricted Cash” shall mean all cash or Cash Equivalents (in
each case, free and clear of all Liens except nonconsensual Liens permitted
by Section 6.02 and Liens of the Collateral Agent pursuant to the Security
Documents) included in the cash and cash equivalents accounts listed on the
consolidated balance sheet of the Borrower and its consolidated Subsidiaries
as of such date, but excluding cash or Cash Equivalents of any Unrestricted
Subsidiary or any Foreign Subsidiary.



     “Unrestricted Subsidiary” shall mean any Subsidiary (other than
any Core Asset Subsidiary or EquaGen (to the extent EquaGen becomes a
Subsidiary)) that is designated by the Board of Directors (or any committee
thereof) of the Borrower as an Unrestricted Subsidiary



35









 




pursuant to a board or committee resolution, but only to the extent that (a)
such Subsidiary has no Indebtedness other than Indebtedness that is
non-recourse to the Borrower and its Restricted Subsidiaries; (b) except as
permitted by Section 6.08 hereof, such Subsidiary is not party to any
agreement, contract, arrangement or understanding with the Borrower or any
Restricted Subsidiary unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Borrower or such
Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Borrower; (c) such Subsidiary is a
Person with respect to which neither the Borrower nor any of its Restricted
Subsidiaries has any direct or indirect obligation to maintain or preserve
such Person’s financial condition or to cause such Person to achieve any
specified levels of operating results except as otherwise permitted by this
Agreement; (d) such Subsidiary has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Borrower or
any of its Restricted Subsidiaries except as otherwise permitted by this
Agreement; and (e) such designation complies with Section 6.05 and Section
6.11. Any designation of a Subsidiary as an Unrestricted Subsidiary will be
evidenced to the Administrative Agent by filing with the Administrative
Agent a certified copy of the board or committee resolution giving effect to
such designation as required by Section 6.11 and an officers’ certificate
certifying that such designation complied with the conditions set forth
above. If, at any time, any Unrestricted Subsidiary fails to meet the above
requirements as an Unrestricted Subsidiary, it will cease to be an
Unrestricted Subsidiary for purposes of this Agreement and will be deemed to
be a Restricted Subsidiary as of such date (even if deeming such
Unrestricted Subsidiary a Restricted Subsidiary results in a Default or
Event of Default hereunder). The Board of Directors (or any committee
thereof) of the Borrower may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary.




     “Unused Commitment Fee” shall have the meaning specified in Section
2.05(a).



     “Unused Commitment Fee Rate” shall mean a rate per annum equal to 0.625%.



     “Weighted Average Life to Maturity” shall mean, when applied to
any Indebtedness at any date, the number of years obtained by dividing (a)
the sum of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect of
the Indebtedness, by (ii) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment; by (b) the then outstanding principal amount of such Indebtedness.



     “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 word “control”,
when used in connection with the Collateral Agent’s rights with




36









 




respect to, or security interest in, any Collateral, shall have the meaning
specified in the UCC with respect to that type of Collateral. The words
“herein”, “hereof” and “hereunder”, and words of
similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision of this Agreement unless the
context shall otherwise require. All references herein to Articles,
Sections, Exhibits, Schedules and Annexes shall be deemed references to
Articles and Sections of, and Exhibits, Schedules and Annexes to, this
Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any definition of, or reference to, any
Transaction Document or any other agreement, instrument or document in this
Agreement shall mean such Transaction 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), (b) references
to any statute or regulation are to be construed as including all statutory
and regulatory provisions related thereto or consolidating, amending,
replacing, supplementing or interpreting the statute or regulation and (c)
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
Signing Date on the operation of such covenant (or if the Administrative
Agent notifies the Borrower that the Required Lenders wish to amend Article
VI or any related definition for such purpose), then the Borrower’s
compliance with such covenant shall be determined on the basis of GAAP in
effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a
manner satisfactory to the Borrower and the Required Lenders.




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




          SECTION 1.04. Pro Forma Calculations. All pro forma
calculations permitted or required to be made by the Borrower or any
Subsidiary pursuant to this Agreement shall (a) include only (i) those
adjustments that would be permitted or required by Regulation S-X under the
Securities Act, as amended, or (ii) reductions in costs and related
adjustments that have been actually realized or are projected by a Financial
Officer of the Borrower in good faith to result from reasonably identifiable
and factually supportable actions or events, but only if such reductions in
costs and related adjustments are so projected by the Borrower to be
realized during the consecutive four-quarter period commencing after the
transaction giving rise to such calculation and (b) be certified to by a
Financial Officer of the Borrower as having been prepared in good faith
based upon assumptions believed by the Borrower to be reasonable at the time
made in light of circumstances at the time made.




          SECTION 1.05. Exchange Rates. For purposes of determining
compliance under Article VI with respect to any amount in a foreign
currency, the U.S. dollar-equivalent amount thereof will be calculated based
on the relevant currency exchange rate in effect at the time of such
incurrence. The maximum amount of Indebtedness, Liens, Investments and other
basket amounts that the Borrower and its Subsidiaries may incur under
Article VI shall not be deemed to be exceeded, with respect to any
outstanding Indebtedness, Liens, Investments and other basket amounts,
solely as a result of fluctuations in the exchange rate of currencies, if as
of the initial date of calculation the Borrower determined that each such
maximum amount had not been exceeded. When calculating capacity for the
incurrence of additional Indebtedness, Liens,




37









 




Investments and other basket amounts by the Borrower and its Subsidiaries
under Article VI the exchange rate of currencies shall be measured as of the
date of calculation.




ARTICLE II




The Credits




          SECTION 2.01. Commitments. Subject to the terms and conditions
hereof and relying upon the representations and warranties set forth herein,
each Lender agrees, severally and not jointly, to fund Loans to the
Borrower, at any time and from time to time on and after the Funds
Availability Date and until the Revolving Credit Termination Date, in an
aggregate principal amount at any time outstanding that will not result in
such Lender’s Revolving Credit Outstandings exceeding such Lender’s
Commitments. Subject to the terms, conditions and limitations set forth
herein, the Borrower may borrow, pay or prepay and reborrow Loans.




          SECTION 2.02. Borrowing Procedures. (a) Each Borrowing shall be
made on notice given by the Borrower to the Administrative Agent not later
than 12:00 p.m. (New York time) (i) one Business Day, in the case of an ABR
Borrowing and (ii) three Business Days, in the case of a Eurodollar
Borrowing, prior to the date of the proposed Borrowing. Each such notice
shall be in substantially the form of Exhibit D (a “Borrowing
Request”), specifying, (A) the date of such proposed Borrowing, (B) the
aggregate amount of such proposed Borrowing, (C) whether any portion of the
proposed Borrowing will be an ABR Borrowing or Eurodollar Borrowing and (D)
for each Eurodollar Borrowing, the initial Interest Period or Interest
Periods thereof. Loans shall be made as ABR Loans unless, subject to Section
2.08, the Borrowing Request specifies that all or a portion thereof shall be
a Eurodollar Borrowing. Each Borrowing shall be in an aggregate amount of
(i) not less than $10,000,000 or an integral multiple of $1,000,000 in
excess thereof, or (ii) equal to the remaining available balance.




          (b) The Administrative Agent shall give to each Lender prompt notice of
the Administrative Agent’s receipt of a Borrowing Request and, if Eurodollar
Loans are properly requested in such Borrowing Request, the applicable
interest rate determined pursuant to Section 2.06. Each Lender shall, prior
to 12:00 p.m. (New York time) on the date of the proposed Borrowing, make
available to the Administrative Agent at its address referred to in Section
9.01, in immediately available funds, such Lender’s Ratable Portion of such
proposed Borrowing. Upon fulfillment (or due waiver in accordance with
Section 9.08) (i) on the Funds Availability Date, of the applicable
conditions set forth in Section 4.03 and (ii) at any time (including the
Funds Availability Date), of the applicable conditions set forth in Section
4.01, and after the Administrative Agent’s receipt of such funds, the
Administrative Agent shall make such funds available to the Borrower.




          (c) Unless, prior to the date of any proposed Borrowing, the
Administrative Agent shall have received notice from a Lender that such
Lender will not make available to the Administrative Agent such Lender’s
Ratable Portion of such Borrowing (or any portion thereof), the
Administrative Agent may assume that such Lender has made such Ratable
Portion available to the Administrative Agent on the date of such Borrowing
in accordance with this Section 2.02 and the Administrative Agent may (but
shall not be obligated to), in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If and to the extent
that such Lender shall not have so made such Ratable 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




38









 




thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent,
at (i) in the case of the Borrower, the interest rate applicable at the time
to the Loans comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate for the first Business Day and thereafter at the
interest rate applicable at the time to the Loans comprising such Borrowing.
If such Lender shall repay to the Administrative Agent such corresponding
amount, such corresponding amount so repaid shall constitute such Lender’s
Loan as part of such Borrowing for purposes of this Agreement. If the
Borrower shall repay to the Administrative Agent such corresponding amount,
such payment shall not relieve such Lender of any obligation it may have
hereunder to the Borrower.




          (d) The failure of any Defaulting Lender to make, on the date
specified, any Loan or any payment required by it, including any payment in
respect of its participation in Letter of Credit Obligations, shall not
relieve any other Lender of its obligations to make such Loan or payment on
such date but no such other Lender shall be responsible for the failure of
any Defaulting Lender to make a Loan or payment required under this
Agreement.




          SECTION 2.03. Letters of Credit. (a) On the terms and subject
to the conditions contained in this Agreement, each Issuer agrees to Issue
at the request of the Borrower and for the account of the Borrower one or
more Letters of Credit from time to time on any Business Day during the
period commencing on the Funds Availability Date and ending on the earlier
of the Revolving Credit Termination Date and 30 days prior to the Revolving
Credit Maturity Date; provided, however, that no Issuer
shall be under any obligation to Issue (and, upon the occurrence of any of
the events described in clauses (ii), (iii), (iv), (v), and (vi)(A) below,
shall not Issue) any Letter of Credit upon the occurrence of any of the
following:





     (i) any order, judgment or decree of any Governmental Authority or
arbitrator shall purport by its terms to enjoin or restrain such
Issuer from Issuing such Letter of Credit or any Applicable Law
applicable to such Issuer or any request or directive (whether or not
having the force of law) from any Governmental Authority with
jurisdiction over such Issuer shall prohibit, or request that such
Issuer refrain from, the Issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such Issuer
with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuer is not otherwise
compensated) not in effect on the Signing Date or result in any
unreimbursed loss, cost or expense that was not applicable, in effect
or known to such Issuer as of the Signing Date and that such Issuer in
good faith deems material to it;




     (ii) such Issuer shall have received any written notice of
the type described in clause (d) below (until such time as such Issuer
shall have received written notice of rescission of such previous
notice from the party or parties originally delivering such notice);




     (iii) after giving effect to the Issuance of such Letter of
Credit, the aggregate Revolving Credit Outstandings would exceed the
aggregate Commitments in effect at such time;




     (iv) after giving effect to the Issuance of such Letter of
Credit, the Letter of Credit Obligations at such time for such Issuer
would exceed its commitment under its Letter of Credit Issuer
Agreements;



39









 






     (v) such Letter of Credit is requested to be
denominated in any currency other than dollars; or




     (vi) (A) any fees due in connection with a requested
Issuance have not been paid, (B) the terms and conditions of such
Letter of Credit are not commercially customary or (C) the Issuer for
such Letter of Credit shall not have received its respective Letter of
Credit Issuer Agreements.



     None of the Lenders (other than the Issuers in their capacity as
such) shall have any obligation to Issue any Letter of Credit.



          (b) In no event shall the expiration date of any Letter of Credit be
(i) more than one year after the date of issuance thereof or (ii) less than
five days prior to the Revolving Credit Maturity Date; provided,
however, that if cash collateral in an amount equal to the
outstanding amount of such Letter of Credit shall have been duly deposited
with respect to such Letter of Credit in an L/C Cash Collateral Account for
the benefit of the applicable Issuer with the Administrative Agent prior to
the date set forth in clause (ii), such expiration date may be extended to a
date no later than a date that is 180 days after the Revolving Credit
Maturity Date; provided further, however, that any Letter of
Credit with a term less than or equal to one year may provide for the
automatic renewal thereof for additional periods less than or equal to one
year, as long as, (x) on or before the expiration of each such term and each
such period (subject to a customary notice period to be agreed), each of the
Borrower and the Issuer of such Letter of Credit may at its option prevent
such renewal and (y) neither the Issuer of such Letter of Credit nor the
Borrower shall permit any such renewal to extend the expiration date of any
Letter of Credit beyond the date set forth in clause (ii) above subject to
the proviso to such clause (ii).




          (c) Other than with respect to the renewal of any Letter of Credit
subject to automatic renewal pursuant to the terms thereof, in connection
with the Issuance of each Letter of Credit, the Borrower shall give the
relevant Issuer and the Administrative Agent at least two Business Days’
prior written notice, in substantially the form of Exhibit E (or in
such other written or electronic form as is acceptable to such Issuer), of
the requested Issuance of such Letter of Credit (a “Letter of Credit
Request”). Such notice shall be irrevocable and shall specify the Issuer
of such Letter of Credit and face amount of the Letter of Credit requested
(which shall not be for a face amount less than a minimum face amount
determined by such Issuer (which minimum amount shall not be greater than
$5,000,000)), the date of Issuance of such requested Letter of Credit, the
date on which such Letter of Credit is to expire (which date shall be a
Business Day) and, in the case of an issuance, the Person for whose benefit
the requested Letter of Credit is to be issued. Such notice, to be
effective, must be received by the relevant Issuer and the Administrative
Agent no later than 12:00 p.m. (New York time) on the second Business Day
prior to the requested Issuance of such Letter of Credit.




          (d) Subject to the satisfaction of the conditions set forth in this
Section 2.03, the relevant Issuer shall, on the requested date, Issue a
Letter of Credit on behalf of the Borrower in accordance with such Issuer’s
usual and customary business practices. No Issuer shall Issue any Letter of
Credit in the period commencing on the first Business Day after it receives
written notice from any Lender that one or more of the conditions precedent
contained in Section 4.01 or clause (a) above (other than those conditions
set forth in clauses (a)(i), (a)(vi)(B) and (C) above and, to the extent
such clause relates to fees owing to the Issuer of such Letter of Credit and
its Affiliates, clause (a)(vi)(A) above) are not on such date satisfied or
duly waived and ending when such conditions are satisfied or duly waived. No
Issuer shall otherwise be required to determine




40









 




that, or take notice whether, the conditions precedent set forth in Section
4.01 have been satisfied in connection with the Issuance of any Letter of
Credit.




          (e) In the event of any conflict between the terms of any Letter of
Credit Issuer Agreements and this Agreement, the terms of this Agreement
shall govern.




          (f) Each Issuer shall comply with the following:





     (i) give the Administrative Agent written notice (or telephonic notice
confirmed promptly thereafter in writing), which writing may be a
telecopy or electronic mail, of the Issuance of any Letter of Credit
Issued by it, of all drawings under any Letter of Credit Issued by it
and of the payment (or the failure to pay when due) by the Borrower of
any Reimbursement Obligation when due (which notice the Administrative
Agent shall promptly transmit by telecopy, electronic mail or similar
transmission to each Lender);




     (ii) upon the request of any Lender, furnish to such
Lender copies of any Letter of Credit Issuer Agreements to which such
Issuer is a party and such other documentation as may reasonably be
requested by such Lender; and




     (iii) no later than 10 Business Days following the last day
of each calendar month, provide to the Administrative Agent (and the
Administrative Agent shall provide a copy to each Lender requesting
the same) and the Borrower separate schedules for Letters of Credit
issued by it, in form and substance reasonably satisfactory to the
Administrative Agent, setting forth the aggregate Letter of Credit
Obligations, in each case outstanding at the end of each month and any
information reasonably requested by the Borrower or the Administrative
Agent relating thereto.



          (g) Immediately upon the issuance by an Issuer of a Letter of Credit in
accordance with the terms and conditions of this Agreement, such Issuer
shall be deemed to have
sold and transferred to each Lender, and each Lender shall be deemed
irrevocably and
unconditionally to have purchased and received from such Issuer,
without recourse or warranty,
an undivided interest and participation, to the extent of such Lender’s
Ratable Portion of the
Commitments, in such Letter of Credit and the obligations of the
Borrower with respect thereto
(including all Letter of Credit Obligations with respect thereto) and
any security therefor and
guaranty pertaining thereto. Notwithstanding anything to the contrary
contained in this
Agreement, any Issuer may require as a condition precedent to Issuing a
Letter of Credit, and any
Issuer may at any time require with respect to any outstanding Letter
of Credit, that the Borrower
(i) deposit cash collateral to an L/C Cash Collateral Account
sufficient to cover any Defaulting
Lender’s Ratable Portion of the face amount of such Letter of Credit or
(ii) put such other
arrangements reasonably satisfactory to such Issuer in place with
respect to such Defaulting
Lender to eliminate its risk with respect to the participation in
Letters of Credit by such
Defaulting Lender. Upon the replacement of such Defaulting Lender, or
such Lender ceasing to
be a Defaulting Lender, any cash or other collateral pledged by the
Borrower shall be promptly
returned to the Borrower and such other arrangements entered into shall
terminate (and, at the
request of the Borrower, the relevant Issuer will use reasonable
efforts to evidence such
termination).




          (h) The Borrower agrees to pay to the Issuer of any Letter of
Credit the amount of all Reimbursement Obligations owing to such Issuer
under any Letter of Credit issued




41









 




for its account no later than the date that is the next succeeding Business
Day after the Borrower receives written notice (which notice shall be
delivered within 1 Business Day of the draw giving rise to such
Reimbursement Obligation, provided, however, that the
failure to give such notice shall in no way impair, diminish, or otherwise
affect the Borrower’s obligation to pay such Reimbursement Obligations) from
such Issuer that payment has been made under such Letter of Credit (the
“Reimbursement Date”), irrespective of any claim, set-off, defense
or other right that the Borrower may have at any time against such Issuer or
any other Person. In the event that any Issuer makes any payment under any
Letter of Credit and the Borrower shall not have repaid such amount to such
Issuer pursuant to this clause (h) or any such payment by the Borrower is
rescinded or set aside for any reason, such Reimbursement Obligation shall
be payable on demand with interest thereon computed (i) from the date on
which such Reimbursement Obligation arose to the Reimbursement Date, at the
rate of interest applicable during such period to Loans that are ABR Loans
and (ii) from the Reimbursement Date until the date of repayment in full, at
the rate of interest applicable during such period to past due Loans that
are ABR Loans, and such Issuer shall promptly notify the Administrative
Agent, which shall promptly notify each Lender of such failure, and each
Lender shall promptly and unconditionally pay to the Administrative Agent
for the account of such Issuer the amount of such Lender’s Ratable Portion
of such payment in immediately available funds. If the Administrative Agent
so notifies such Lender prior to 12:00 p.m. (New York time) on any Business
Day, such Lender shall make available to the Administrative Agent for the
account of such Issuer its Ratable Portion of the amount of such payment on
such Business Day in immediately available funds. Upon such payment by a
Lender, such Lender shall, except during the continuance of a Default or
Event of Default under Sections 7.02(g) or 7.02(h) and notwithstanding
whether or not the conditions precedent set forth in Section 4.01 shall have
been satisfied (which conditions precedent the Lenders hereby irrevocably
waive), be deemed to have made a Loan to the Borrower in the principal
amount of such payment. In furtherance of the foregoing, each Issuer is
hereby authorized by the Borrower (which authorization is irrevocable and
coupled with an interest) to give, through the Administrative Agent,
Borrowing Requests pursuant to this Section 2.03(h) in such amounts and at
such times as may be required to reimburse an outstanding Reimbursement
Obligation. Whenever any Issuer receives from the Borrower a payment of a
Reimbursement Obligation as to which the Administrative Agent has received
for the account of such Issuer any payment from a Lender pursuant to this
clause (h), such Issuer shall pay over to the Administrative Agent any
amount received in excess of such Reimbursement Obligation and, upon receipt
of such amount, the Administrative Agent shall promptly pay over to each
Lender, in immediately available funds, an amount equal to such Lender’s
Ratable Portion of the amount of such payment adjusted, if necessary, to
reflect the respective amounts the Lenders have paid in respect of such
Reimbursement Obligation. Upon receipt by the Administrative Agent of all
amounts owing from the Lenders (including any Defaulting Lenders) pursuant
to this clause (h), any cash or other collateral pledged by the Borrower in
accordance with clause (g) above shall be promptly returned to the Borrower
and any such other arrangement entered into pursuant to clause (g)(ii) shall
terminate (and, at the request of the Borrower, the relevant Issuer will use
reasonable efforts to evidence such termination).




          (i) If and to the extent such Lender shall not have so made its Ratable
Portion of the amount of any payment required by clause (h) above available
to the Administrative Agent for the account of such Issuer, such Lender
agrees to pay to the Administrative Agent for the account of such Issuer
forthwith on demand any such unpaid amount together with interest thereon,
for the first Business Day after payment was first due at the Federal Funds
Rate and, thereafter, until such amount is repaid to the Administrative
Agent




42









 




for the account of such Issuer, at a rate per annum equal to the rate
applicable to ABR Loans hereunder.




          (j) The Borrower’s obligation to pay each Reimbursement Obligation and
the obligations of the Lenders to make payments to the Administrative Agent
for the account of the Issuers with respect to Letters of Credit shall be
absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of this Agreement, under any and all circumstances
whatsoever, including the occurrence of any Default or Event of Default, and
irrespective of any of the following:





     (i) any lack of validity or enforceability of any Letter of Credit or any
Loan
Document, or any term or provision therein;




     (ii) any amendment or waiver of or any consent to
departure from all or any of the provisions of any Letter of Credit or
any Loan Document;




     (iii) the existence of any claim, set-off, defense or other
right that the Borrower, any other party guaranteeing, or otherwise
obligated in addition to, the Borrower, any Restricted Subsidiary or
other Affiliate thereof or any other Person may at any time have
against the beneficiary under any Letter of Credit, any Issuer, the
Administrative Agent or any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other
related or unrelated agreement or transaction;




     (iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in
any respect;




     (v) payment by the relevant Issuer under a Letter of
Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit; and




     (vi) any other act or omission to act or delay of any kind
of or by any Issuer, the Lenders, the Administrative Agent or any
other Person or any other event or circumstance whatsoever, whether or
not similar to any of the foregoing, that might, but for the
provisions of this Section 2.03, constitute a legal or equitable
discharge of the Borrower’s obligations hereunder;


provided, however, that the Borrower shall not be obligated
to reimburse any Issuer for any wrongful payment made by such Issuer under
the Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such
Issuer.




     Any action taken or omitted to be taken by the relevant Issuer under or
in connection with any Letter of Credit, if taken or omitted in the absence
of gross negligence or willful misconduct, shall not result in any liability
of such Issuer to the Borrower or any Lender. In determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof, any Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit, such Issuer may rely exclusively on the documents
presented to it under such Letter of Credit as to any and all matters set
forth therein,



43









 




including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals
the amount of such draft and whether or not any document presented pursuant
to such Letter of Credit proves to be insufficient in any respect, if such
document on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be
inaccurate or untrue in any respect whatsoever, and any noncompliance in any
immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute
willful misconduct or gross negligence of such Issuer.




          (k) At any time (i) upon the Revolving Credit Termination Date,
(ii) after the Revolving Credit Termination Date when the aggregate funds on
deposit in L/C Cash Collateral Accounts shall be less than 100% of the
Letter of Credit Obligations, (iii) as may be required by Section 2.12(a) or
(iv) as may be required by Section 2.03(g), the Borrower shall pay to the
Administrative Agent in immediately available funds at the Administrative
Agent’s office referred to in Section 9.01, for deposit in an L/C Cash
Collateral Account, (x) in the case of clauses (i) and (ii) above, the
amount required so that, after such payment, the aggregate funds on deposit
in the L/C Cash Collateral Accounts equals or exceeds 100% of the sum of all
outstanding Letter of Credit Obligations and (y) in the case of clauses
(iii) and (iv) above, the amount required by Section 2.12(a) and Section
2.03(g), respectively. The Administrative Agent may, from time to time after
funds are deposited in any L/C Cash Collateral Account, apply funds then
held in such L/C Cash Collateral Account to the payment of any amounts, in
accordance with Sections 2.12(a) and 2.12(d), as shall have become or shall
become due and payable by the Borrower to the Issuers or Lenders in respect
of the Letter of Credit Obligations. The Administrative Agent shall promptly
give written notice of any such application; provided,
however, that the failure to give such written notice shall not
invalidate any such application. Upon termination or cancellation of any
Letter of Credit, the Administrative Agent shall promptly return to Borrower
such cash collateral held by it in an amount equal to the Letter of Credit
Obligations attributable to such Letter of Credit together with any interest
accrued thereon.




          (l) Any Issuer may resign as an Issuer hereunder upon 30 days’ written
notice to the Borrower and the Administrative Agent; provided that
during such 30-day notice period the resigning Issuer shall not be required
to honor new requests for Issuances of Letters of Credit. After the
resignation or replacement of an Issuer hereunder, the resigning or replaced
Issuer shall remain a party hereto and shall continue to have all the rights
and obligations of an Issuer under this Agreement and the other Loan
Documents with respect to Letters of Credit issued by it prior to such
resignation or replacement, but shall not be required to issue additional
Letters of Credit.




          SECTION 2.04. Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent
for the account of each Lender the entire unpaid principal amount of each
Loan of such Lender made to the Borrower on the Revolving Credit Maturity
Date.




          (b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Borrower
to such Lender resulting from each Loan made by such Lender to the Borrower
from time to time, including the amounts of principal and interest payable
and paid to such Lender from time to time under this Agreement, and shall
provide copies of such accounts to the Borrower upon its reasonable request
(at the Borrower’s sole cost and expense).




44









 





          (c) The Administrative Agent shall maintain accounts in which it will
record (in accordance with Section 9.04 (d)) (i) the amount of each 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 any sum received by the Administrative Agent hereunder from the
Borrower or any Subsidiary Guarantor and each Lender’s share thereof, and
shall provide copies of such accounts to the Borrower upon its reasonable
request (at the Borrower’s sole cost and expense).




          (d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) of this Section shall be conclusive evidence of the existence
and amounts of the obligations therein recorded absent clearly demonstrable
error; provided, however, that the failure of any Lender or
the Administrative Agent to maintain such accounts or any error therein
shall not in any manner affect the obligations of the Borrower to repay the
Loans in accordance with the terms of this Agreement.




          (e) Any Lender may request that Loans made by it hereunder be evidenced
by a Note. In such event, the Borrower shall execute and deliver to such
Lender a Note payable to such Lender and its registered assigns
substantially in the form of Exhibit H or in any other form
reasonably acceptable to the Administrative Agent.




          SECTION 2.05. Fees. (a) Unused Commitment Fee. The
Borrower agrees to pay, in immediately available dollars, to each Lender a
commitment fee on the average daily amount by which the Commitments of such
Lender exceeds such Lender’s Ratable Portion of the sum of (i) the aggregate
outstanding principal amount of Loans and (ii) the outstanding amount of the
aggregate Letter of Credit Obligations (the “Unused Commitment Fee”)
from the Signing Date through the Revolving Credit Termination Date at the
Unused Commitment Fee Rate, payable in arrears (x) on the last Business Day
of each March, June, September and December, commencing on the first such
Business Day following the Signing Date and (y) on the Revolving Credit
Termination Date. Notwithstanding anything to the contrary provided in this
clause (a), no Defaulting Lender shall be entitled to receive any Unused
Commitment Fees for so long as it remains a Defaulting Lender and the amount
of any Unused Commitment Fee that otherwise would have been payable to such
Lender shall be retained by the Borrower. For the avoidance of doubt, from
the date that any such Defaulting Lender ceases to be a Defaulting Lender,
the accrual of Unused Commitment Fees shall resume but the Borrower shall
not be required to pay a “cure” amount or any arrearage with respect to the
period during which such Lender was a Defaulting Lender.




          (b) Letter of Credit Fees. The Borrower agrees to
pay the following amounts with respect to Letters of Credit issued by
any Issuer:





     (i) to the Administrative Agent for the account of each Issuer of a Letter
of
Credit, with respect to each Letter of Credit issued by such Issuer, a
fronting fee specified in the Letter of Credit Fee Letter, payable in
arrears (A) on the last Business Day of each March, June, September
and December, commencing on the first such Business Day following the
issuance of such Letter of Credit and (B) on the Revolving Credit
Termination Date;




     (ii) to the Administrative Agent for the ratable benefit
of the Lenders, with respect to each Letter of Credit, a fee accruing
in dollars at a rate per annum equal to the Applicable Margin for
Loans that are Eurodollar Loans on the dollar equivalent of the



45









 







maximum undrawn face amount of such Letter of Credit, payable in
arrears (A) on the last Business Day of each March, June, September
and December, commencing on the first such Business Day following the
issuance of such Letter of Credit and (B) on the Revolving Credit
Termination Date; provided, that (x) no Defaulting Lender
shall be entitled to receive a fee pursuant to this clause (b)(ii) for
so long as it remains a Defaulting Lender and the amount of any fee
that otherwise would have been payable to such Defaulting Lender
hereunder shall be paid (1) initially, to the Issuer of the applicable
Letter of Credit and (2) effective upon the Borrower’s posting of cash
collateral or making of another arrangement pursuant to Section
2.03(g), retained by the Borrower and (y) for the avoidance of doubt,
from the date that any such Defaulting Lender ceases to be a
Defaulting Lender, the accrual of fees under this clause (b)(ii) shall
resume but the Borrower shall not be required to pay a “cure” amount
or any arrearage with respect to the period during which such Lender
was a Defaulting Lender; and




     (iii) to the Issuer of any Letter of Credit, with respect
to the issuance, amendment or transfer of each Letter of Credit and
each drawing made thereunder, documentary and processing charges in
accordance with such Issuer’s standard schedule for such charges in
effect at the time of issuance, amendment, transfer or drawing, as the
case may be.



          (c) Administrative Agent Fee. The Borrower has agreed to
pay to the Administrative Agent an annual administrative agent’s fee as set
forth in the Fee Letter, for the Administrative Agent’s own account, payable
in advance on the Signing Date and thereafter annually in advance on each
successive anniversary thereof for so long as any Secured Obligation shall
be outstanding or any Lender shall have any Commitment hereunder.




          SECTION 2.06. Interest on Loans. (a) Subject to the provisions
of Section 2.07, the outstanding Loans comprising each ABR Borrowing shall
bear interest (computed on the basis of the actual number of days elapsed
(i) for ABR Loans based on the Base Rate (other than with respect to the
Federal Funds Rate), over a year of 365/366 days and (ii) for ABR Loans
based on the Federal Funds Rate, over a year of 360 days) at a rate per
annum equal to the Base Rate plus the Applicable Margin.




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




          (c) Interest on each Loan shall be payable on the Interest Payment
Dates applicable to such Loan except as otherwise provided in this
Agreement. Subject to Section 2.07, the applicable Base Rate or Adjusted
LIBO Rate for each Interest Period, as the case may be, shall be determined
by the Administrative Agent, and such determination shall, absent (clearly
demonstrable) error, be final and conclusive and binding on all parties
hereto.




          SECTION 2.07. Default Interest. If the Borrower shall default
in the payment of the principal of or interest on any Loan or any other
amount becoming due and payable hereunder or under any other Loan Document,
by acceleration or otherwise, and such default continues past any applicable
grace period, the Borrower shall on demand from time to time pay interest,
to the extent permitted by law, on such defaulted amount to, but excluding
the date of actual payment (after as well as before judgment), (a) in the
case of principal, at the rate otherwise applicable to




46









 




such Loan pursuant to Section 2.06 plus 2.00% per annum and (b)
in all other cases, at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 365/366 days) equal to the
rate that would be applicable to an ABR Loan plus 2.00%.




          SECTION 2.08. Interest Rate Unascertainable, Inadequate or
Unfair. In the event, and on each occasion, that prior to the
commencement of any Interest Period for a Eurodollar Borrowing or the
determination of the LIBO Rate on any day (a) the Administrative Agent shall
have determined that by reasons of circumstances affecting the relevant
market adequate and reasonable means do not exist for determining the
Adjusted LIBO Rate for such Interest Period or the LIBO Rate for such day or
(b) the Administrative Agent is advised by the Required Lenders reasonably
and in good faith (as conclusively certified by such Lenders) that the
Adjusted LIBO Rate for such Interest Period or the LIBO Rate for such day
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period,
then the Administrative Agent shall, as soon as practicable thereafter, give
written or fax notice of such determination to the Borrower and the Lenders,
provided that if the circumstances giving rise to such notice shall cease or
otherwise become inapplicable to such Required Lenders, then such Required
Lenders shall promptly give notice of such change in circumstances to the
Administrative Agent and the Borrower, and the Administrative Agent shall,
as soon as practicable thereafter, give notice to the Borrowers and Lenders
of such changed circumstances. In the event of any such notice, until the
Administrative Agent shall have advised the Borrower and the Lenders that
the circumstances giving rise to such written or fax notice no longer exist,
(i) any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.02 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, absent clearly demonstrable error, be final and
conclusive and binding on all parties hereto.




          SECTION 2.09. Voluntary Termination and Reduction of
Commitments. (a) Unless previously terminated in accordance with the
terms hereof, the Commitments shall automatically terminate on the Revolving
Credit Maturity Date.




          (b) Upon at least three Business Days’ prior irrevocable written or fax
notice to the Administrative Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, in
each case without premium or penalty, the Commitments; provided,
however, that (i) each partial reduction of the Commitments shall be
in an integral multiple of $1,000,000 and in a minimum amount of $5,000,000
and (ii) the Total Commitment shall not be reduced to an amount that is less
than the Aggregate Revolving Credit Outstandings then in effect;
provided further that a notice of termination may state that such
termination is conditioned upon the effectiveness of other credit facilities
or any other event, in which case such notice may be revoked by the Borrower
(by notice to the Administrative Agent on or prior to the specified
termination date) if such condition is not satisfied.




          (c) Each reduction in the Commitments hereunder shall be made ratably
among the Lenders in accordance with their Ratable Portion. The Borrower
shall pay to the Administrative Agent for the account of the Lenders, on the
date of each termination or reduction, any unpaid Unused Commitment Fees on
the amount of the Commitments so terminated or reduced accrued to but
excluding the date of such termination or reduction.




47









 





          SECTION 2.10. Conversion and Continuation of Borrowings. The
Borrower shall have the right at any time upon prior irrevocable notice to
the Administrative Agent (a) no later than 12:00 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) no later than 12:00 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 or to
continue any Eurodollar Borrowing of the Borrower as a Eurodollar Borrowing
for an additional Interest Period and (c) no later than 12:00 p.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. Each such notice shall be in substantially the
form of Exhibit F (a “Notice of Continuation or
Conversion”), and shall be subject in each case to the following:





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




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




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




     (iv) if any Eurodollar Borrowing is converted at a time
other than the end of the Interest Period applicable thereto, the
Borrower shall pay, upon demand, any amounts due to the Lenders
pursuant to Section 2.16;




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




     (vi) any portion of a Eurodollar Borrowing that cannot be
converted into or continued as a Eurodollar Borrowing by reason of the
immediately preceding or immediately succeeding 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 an
Event of Default, no outstanding Loan may be converted into, or
continued past the then-current Interest Period as, a Eurodollar Loan.



     Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be converted or continued, (ii) whether
such Borrowing is to be converted to or continued as a Eurodollar Borrowing
or an ABR Borrowing, (iii) if such notice requests a conversion, the date of
such conversion (which shall be a Business Day) and (iv) if such Borrowing
is to be converted to or continued as a Eurodollar Borrowing, the Interest
Period with respect thereto. If no Interest




48











 




Period is specified in any such notice with respect to any conversion to or continuation as a
Eurodollar Borrowing, the Borrower shall be deemed to have selected an Interest Period of one
month’s duration. The Administrative Agent shall advise the Lenders of any notice given pursuant to
this Section 2.10 and of each Lender’s portion of any converted or continued Borrowing. If the
Borrower shall not have given notice in accordance with this Section 2.10 to continue any Borrowing
into a subsequent Interest Period (and shall not otherwise have given notice in accordance with
this Section 2.10 to convert such Borrowing), such Borrowing shall, at the end of the Interest
Period applicable thereto (unless repaid pursuant to the terms hereof), automatically be converted
or continued into an ABR Borrowing.




          SECTION 2.11. Optional Prepayments. (a) The Borrower shall have the right at any time
and from time to time to prepay any Borrowing, in whole or in part, without premium or penalty,
subject to the provisions of paragraph (b) below, upon at least three Business Days’ prior written
or fax notice (or telephone notice promptly confirmed by written or fax notice) in the case of
Eurodollar Loans, or written or fax notice (or telephone notice promptly confirmed by written or
fax notice) on the date of prepayment in the case of ABR Loans, to the Administrative Agent prior
to 12:00 p.m., New York City time; provided, however, that each partial prepayment
shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000.



          (b) Each notice of prepayment shall specify the prepayment date and the principal
amount of each Loan (or portion thereof) to be prepaid (which prepayment shall be made at the
direction of the Borrower, shall be irrevocable and shall commit the Borrower to prepay such Loan
by the amount stated therein on the date stated therein. All prepayments and failures to prepay
under this Section 2.11 shall be subject to Section 2.16. All prepayments under this Section 2.11
shall be accompanied by accrued and unpaid interest on the principal amount to be prepaid to but
excluding the date of payment. Notwithstanding the foregoing, to the extent permitted by Applicable
Law, until such time as the Default Excess with respect to such Defaulting Lender shall have been
reduced to zero, any optional prepayment of the Loans made under this Section 2.11(b) and applied
pursuant to this clause (b) shall be applied first to the Loans of other Lenders as if such
Defaulting Lender had no Loans outstanding and the Revolving Credit Outstandings of such Defaulting
Lender were zero.



          SECTION 2.12. Mandatory Prepayments and Commitment Reduction. (a) In the event of any
termination in full of all the Commitments, the Borrower shall, on the date of such termination,
repay or prepay all of its outstanding Revolving Credit Borrowings and replace all its outstanding
Letters of Credit or provide cash collateral for the Letter of Credit Obligations in the manner set
forth in Section 2.03(k).



          (b) If at any time, the aggregate principal amount of Revolving Credit
Outstandings exceeds the aggregate Commitments at such time, the Borrower shall forthwith
repay or prepay Revolving Credit Borrowings and/or cash collateralize Letters of Credit in an
amount sufficient to eliminate such excess.




	 	(c)	 	(i) As promptly as practicable following the occurrence of a
Recovery Event, the Borrower shall deliver a Recovery Event Appraisal
to the Agents. If the Post-Recovery Event Appraised Value set forth in
such Recovery Event Appraisal is equal to or greater than the Initial
Appraised Value, no further action by the Borrower shall be necessary
under this clause (c). If the Post-Recovery Event Appraised Value is
less than the Initial Appraised Value, then:




49









 












	 	(1)	 	if the Borrower delivers to the Agents a Reinvestment Notice no later than 5
Business Days following the Borrower’s receipt of the Recovery Event Appraisal, then (A)
the Borrower shall deliver the applicable Allocated Net Cash Proceeds to the Collateral
Agent, provided that if the Borrower has not yet received Net Cash Proceeds from such
Recovery Event, it shall deliver such Allocated Net Cash Proceeds to the Collateral
Agent within 5 Business Days following the receipt thereof, (B) the Collateral Agent
shall deposit such proceeds in the Reinvestment Cash Collateral Account, and (C) such
proceeds shall be held in the Reinvestment Cash Collateral Account until they are
released to or at the direction of the Borrower in accordance with clause (ii)(1) below
or applied toward prepayment or cash collateralization of the Secured Obligations and/or
toward reduction of the related commitments in accordance with clause (ii)(2), clause
(ii)(3) or clause (iii) below;
	 
	 	(2)	 	if the Borrower fails to deliver a Reinvestment Notice in accordance with clause (i)(1), then
(A) the Borrower shall deliver the applicable Allocated Net Cash Proceeds to the Collateral
Agent within 5 Business Days; provided that if the Borrower has not yet received Net
Cash Proceeds from such Recovery Event, it shall deliver such Net Cash Proceeds to the
Collateral Agent within 5 Business Days following receipt thereof, and (B) the Collateral
Agent shall apply such proceeds toward repayment or cash collateralization of the Secured
Obligations and/or toward reduction of any commitments relating thereto pro rata pursuant to
and in accordance with Section 2.7 of the Intercreditor Agreement.






	 	 	 	(ii) If the Borrower has (A) delivered a Reinvestment Notice to the Agents and the applicable
Allocated Net Cash Proceeds to the Collateral Agent in accordance with clause (i)(1), then






	 	(1)	 	if the Borrower delivers a Commencement Notice to the Agents within 365 days following
delivery of such Reinvestment Notice, then the Collateral Agent shall, from time to time at
the request of the Borrower, disburse to or at the direction of the Borrower Allocated Net
Cash Proceeds in such amounts as the Borrower shall request, provided that the Borrower has
provided to the Collateral Agent a certification by a Responsible Officer of the Borrower (A)
attaching invoices or other documentation to substantiate the use of such proceeds for
Permitted Reinvestments, (B) that such amounts are reasonably necessary or advisable to make
such Permitted Reinvestments and (C) that no Event of Default has occurred and is continuing.
If the Borrower provides evidence reasonably satisfactory to the Agents that the applicable
Permitted Reinvestments have been completed, then the Collateral Agent shall release to or at
the




50









 






	 	 	 	direction of the Borrower any remaining Allocated Net Cash Proceeds in respect of such
Recovery Event;
	 
	 	(2)	 	if the Borrower does not deliver a Commencement Notice to the Agents within 365 days
following the delivery of such Reinvestment Notice, then the Collateral Agent shall apply such
Allocated Net Cash Proceeds toward repayment or cash collateralization of the Secured
Obligations and/or toward reduction of any commitments relating thereto pro rata pursuant to
and in accordance with Section 2.7 of the Intercreditor Agreement; and
	 
	 	(3)	 	if the Borrower at any time notifies the Agents that it no longer intends to utilize the
Allocated Net Cash Proceeds for Permitted Reinvestments, then the Collateral Agent shall apply
such Allocated Net Cash Proceeds (less any amounts that have been released to or at the
direction of the Borrower in accordance with clause (ii)(1) above) toward repayment or cash
collateralization of the Secured Obligations and/or toward reduction of any commitments
relating thereto pro rata pursuant to and in accordance with Section 2.7 of the Intercreditor
Agreement.






	 	 	 	(iii) Notwithstanding anything in this clause (c) to the contrary and subject to the
Intercreditor Agreement, upon the occurrence and during the continuation of any Event of Default,
if and to the extent so directed by the Required Lenders, the Collateral Agent will apply any
Allocated Net Cash Proceeds then on deposit in the Reinvestment Cash Collateral Account toward
repayment or cash collateralization of the Secured Obligations and/or toward reduction of any
commitments relating thereto pro rata pursuant to and in accordance with Section 2.7 of the
Intercreditor Agreement.
	 
	 	 	 	(iv) With respect to the Lenders’ portion of the Allocated Net Cash Proceeds on deposit in the
Reinvestment Cash Collateral Account, if at any time the Collateral Agent shall apply such
Allocated Net Cash Proceeds toward repayment or cash collateralization of the Secured Obligations
and/or toward reduction of any commitments relating thereto in accordance with Section 2.7 of the
Intercreditor Agreement and this clause (c), then the pro rata portion of such Allocated Net Cash
Proceeds that are to be applied toward the Secured Obligations hereunder shall be applied as
follows:






	 	(1)	 	first, the Commitments of the Lenders shall be reduced pro rata in an amount equal to the
amount of such proceeds;
	 
	 	(2)	 	second, if following such reduction of Commitments, any prepayment of the Loans shall be
required pursuant to clause (b) of this Section 2.12, then the Collateral Agent shall apply
such proceeds to the extent required to make such required prepayment; and




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	 	(3)	 	third, any remaining proceeds shall be released to
or at the direction of the Borrower.





          (d) The Borrower shall deliver to the Administrative Agent at the time of each
prepayment, return, reduction or cash collateralization required under this Section 2.12, (i) a
certificate signed by a Responsible Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment, return, reduction or cash collateralization and (ii)
to the extent practicable, prior written notice of such prepayment, return, reduction or cash
collateralization (and the Administrative Agent shall promptly provide the same to each Lender).
Each notice of prepayment, return, reduction or cash collateralization shall specify the
prepayment, return, reduction or cash collateralization date, the Type of each Loan being prepaid
and the principal amount of each Loan (or portion thereof) to be prepaid and the amount of any
reduction of Commitments. All prepayments of Borrowings or reductions of the Commitments pursuant
to this Section 2.12 shall (i) include any unpaid amount of the Unused Commitment Fee on the amount
of the Commitments so reduced, accrued to but excluding the date of such reduction, (ii) be subject
to Section 2.16, but shall otherwise be without premium or penalty and (iii) shall be at the
direction of the Borrower. Notwithstanding anything in this Section 2.12 to the contrary, to the
extent that no Default or Event of Default shall have occurred and be continuing at such time and
that any such prepayment would be applied to a Eurodollar Loan prior to the end of the applicable
Eurodollar Interest Period, the Borrower may request the Administrative Agent that the amount
required to be applied to prepay the Loans pursuant to clause (c) of this Section 2.12 shall be
placed (or remain) in the Reinvestment Cash Collateral Account and be applied to prepay the
applicable Loans on the last date of the applicable Eurodollar Interest Period instead of making
such prepayment within the time period otherwise required. Notwithstanding the foregoing, to the
extent permitted by Applicable Law, until such time as the Default Excess with respect to such
Defaulting Lender shall have been reduced to zero, any mandatory prepayment of the Loans made under
this Section 2.12 and applied pursuant to this clause (d) shall be applied first to the Loans of
other Lenders as if such Defaulting Lender had no Loans outstanding and the Revolving Credit
Outstandings of such Defaulting Lender were zero.



          SECTION 2.13. Payments and Computations. (a) The Borrower shall make each payment
hereunder (including fees and expenses) not later than 12:00 p.m. (New York time) on the day when
due, in dollars, to the Administrative Agent at its address referred to in Section 9.01 in
immediately available funds without set-off or counterclaim. The Administrative Agent shall
promptly thereafter cause to be distributed immediately available funds relating to the payment of
principal, interest or fees to the Lenders, in accordance with the application of payments set
forth in clause (f) or (g) below, as applicable, for the account of their respective applicable
lending offices; provided, however, that amounts payable pursuant to Section 2.14,
Section 2.16 or Section 2.19 shall be paid only to the affected Lender or Lenders. Payments
received by the Administrative Agent after 12:00 p.m. (New York time) shall be deemed to be
received on the next Business Day.



          (b) All computations of interest and of fees shall be made by the Administrative Agent
on the basis of the actual number of days elapsed in the period for which such interest and fees
are payable (including the first day but excluding the last day) (i) for ABR Loans based on the
Base Rate (other than with respect to the Federal Funds Rate), over a year of 365/366 days, and
(ii) for Eurodollar Loans, ABR Loans based on the Federal Funds Rate and all



52









 




fees, over a year of 360 days. Each determination by the Administrative Agent of a rate of
interest hereunder shall be conclusive and binding for all purposes, absent manifest error.




          (c) Each payment by the Borrower of any Loan, Reimbursement Obligation (including interest or
fees in respect thereof) and each reimbursement of various costs, expenses or other Secured
Obligation shall be made in dollars; provided, however, that other than for
payments in respect of a Loan or Reimbursement Obligation, Loan Documents duly executed by the
Administrative Agent or any hedging contract governing the applicable Interest Rate Hedging
Transaction or Currency Hedging Transaction may specify other currencies of payment for Secured
Obligations created by or directly related to such Loan Document or such hedging contract.



          (d) Whenever any payment hereunder shall be stated to be due on a day other than a Business
Day, the due date for such payment shall be extended to the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment of interest or fees,
as the case may be; provided, however, that if such extension would cause payment
of interest on or principal of any Eurodollar Loan to be made in the next calendar month, such
payment shall be made on the immediately preceding Business Day.



          (e) Unless the Administrative Agent shall have received notice from the Borrower to the
Lenders prior to the date on which any payment is due hereunder that the Borrower will not make
such payment in full, the Administrative Agent may assume that the Borrower has made such payment
in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon
such assumption, cause to be distributed to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent that the Borrower shall not have made such
payment in full to the Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with interest thereon (at the
Federal Funds Rate for the first Business Day and, thereafter, at the rate applicable to ABR Loans)
for each day from the date such amount is distributed to such Lender until the date such Lender
repays such amount to the Administrative Agent.



          (f) Except for payments and other amounts received by the Administrative Agent and applied in
accordance with the provisions of clause (g) below (or required to be applied in accordance with
Section 2.12(d)), all payments and any other amounts received by the Administrative Agent from or
for the benefit of the Borrower shall be applied as follows: first, to pay principal of, and
interest on, any portion of the Loans the Administrative Agent may have advanced pursuant to the
express provisions of this Agreement on behalf of any Lender, for which the Administrative Agent
has not then been reimbursed by such Lender or the Borrower, second, to pay all other Secured
Obligations then due and payable and third, as the Borrower so designates. Payments in respect of
Loans received by the Administrative Agent shall be distributed to each Lender in accordance with
such Lender’s Ratable Portion of the Commitments and all payments of fees and all other payments in
respect of any other Secured Obligation shall be allocated among such of the Lenders and Issuers as
are entitled thereto and, for such payments allocated to the Lenders, in proportion to their
respective Ratable Portions. Notwithstanding the foregoing, to the extent permitted by Applicable
Law, until such time as the Default Excess with respect to such Defaulting Lender shall have been
reduced to zero, any payment of the Loans made under this Section 2.13 and applied pursuant to this
clause (f) shall be applied first to the



53









 







Loans of other Lenders as if such Defaulting Lender had no Loans outstanding and the Revolving
Credit Outstandings of such Defaulting Lender were zero.



          (g) The Borrower hereby irrevocably waives the right to direct the application of any
and all payments in respect of the Secured Obligations under any Loan Document and any proceeds of
Collateral after the occurrence and during the continuance of an Event of Default and agrees that,
notwithstanding the provisions of Section 2.12(d) and clause (f) above, the Collateral Agent shall
apply the proceeds of any collection, sale, foreclosure or other realization upon any Collateral
received by it in accordance with the Intercreditor Agreement and all other proceeds of Collateral
constituting the applicable Designated Assets (as such term is defined in the Intercreditor
Agreement) in the order set forth in Section 3.5 of the Intercreditor Agreement.



          SECTION 2.14. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if any Change in Law shall:




     (i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or credit
extended by any Lender or Issuer, or




     (ii) impose on any Lender or Issuer or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of
Credit or participation therein (except, in the case of both clause (i) and this clause
(ii), any such reserve requirement which is reflected in the Adjusted LIBO Rate),


and, such Change in Law becomes effective after the date hereof and the result of any of the
foregoing shall be to increase the cost to such Lender or such Issuer of making or maintaining any
Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to
such Lender or such Issuer of issuing or maintaining any Letter of Credit or purchasing or
maintaining a participation therein or to reduce the amount of any sum received or receivable by
such Lender or such Issuer hereunder (whether of principal, interest or otherwise) by an amount
reasonably deemed by such Lender or such Issuer to be material, then the Borrower will pay to such
Lender or such Issuer, as the case may be, such additional amount or amounts as will compensate
such Lender or such Issuer, as the case may be, for such additional costs incurred or reduction
suffered. This Section 2.14(a) shall not apply to Taxes, which shall be governed by Section 2.19
and related definitions.




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



54









 





          (c) Any Lender or Issuer requesting compensation pursuant to paragraph (a) or (b) of this
Section 2.14 shall deliver a written statement to Borrower setting forth the amount or amounts
reasonably determined by such Lender or such Issuer to be necessary to compensate such Lender or
such Issuer or such Lender’s or such Issuer’s holding company, as applicable, as specified in
paragraph (a) or (b) of this Section 2.14, which written statement shall, absent clearly
demonstrable error, be final and conclusive and binding. The Borrower shall pay such Lender or such
Issuer, as the case may be, the amount or amounts shown as due on any such written statement
delivered by it within 10 days after its receipt of the same.



          (d) Failure or delay on the part of any Lender or any Issuer to demand compensation pursuant
to this Section shall not constitute a waiver of such Lender’s, the Administrative Agent’s or such
Issuer’s right to demand such compensation; provided, that the Borrower shall not be under
any obligation to compensate any Lender, the Administrative Agent or an Issuer under paragraph (a)
or (b) above for increased costs or reductions suffered more than 180 days prior to the date of
delivery of the written statement required by paragraph (c); provided further, that if the
circumstances giving rise to such demand have retroactive application, such 180-day period shall be
extended to include the period of such retroactive effect. The protection of this Section 2.14(d)
shall be available to each Lender and Issuer regardless of any possible contention of the
invalidity or inapplicability of the Change in Law that shall have occurred or been imposed.



          SECTION 2.15. Change in Legality. (a) Notwithstanding any other provision of this
Agreement, if any Change in Law shall make it unlawful for any Lender to make or maintain any
Eurodollar Loan or to give effect to its obligations as contemplated hereby with respect to any
Eurodollar Loan, then, by written notice to the Borrower (which notice shall include documentation
or information in reasonable detail supporting the conclusions in such notice) and to the
Administrative Agent:




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




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


In the event any Lender shall exercise its rights under (i) or (ii) above, all payments and
prepayments of principal that would otherwise have been applied to repay the Eurodollar Loans that
would have been made by such Lender or the converted Eurodollar Loans of such Lender shall instead
be applied to repay the ABR Loans made by such Lender in lieu of, or resulting from the conversion
of, such Eurodollar Loans. Any such conversion of a Eurodollar Loan under clause (i) above shall be
subject to Section 2.16.




55









 








          (b) For purposes of this Section 2.15, a notice to the Borrower by any Lender shall be
effective as to each Eurodollar Loan made by such Lender, if lawful, on the last day of the
Interest Period then applicable to such Eurodollar Loan; in all other cases such notice shall be
effective on the date of receipt by the Borrower.



          (c) With respect to each Lender that has delivered a notice pursuant to this Section 2.15, the
Base Rate with respect to Loans made by such Lender shall be calculated as if the proviso to the
definition of “Base Rate” were not included in the definition of “Base Rate” during the period such
notice remains in force and effect.



          SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender (and in the case of
clause (c) below, also including the Administrative Agent) against any loss or expense that such
Lender may sustain or incur as a consequence of (a) any event, other than a default by such Lender
in the performance of its obligations hereunder, which results in (i) such Lender receiving or
being deemed to receive any amount on account of the principal of any Eurodollar Loan prior to the
end of the Interest Period in effect therefor, (ii) the conversion of any Eurodollar Loan to an ABR
Loan, or the conversion of the Interest Period with respect to any Eurodollar Loan, in each case
other than on the last day of the Interest Period in effect therefor and (iii) any Eurodollar Loan
to be made by such Lender (including any Eurodollar Loan to be made pursuant to a conversion or
continuation under Section 2.10) not being made after notice of such Loan shall have been given by
the Borrower hereunder (any of the events referred to in this clause (a) being called a
“Breakage Event”); (b) any default in the making of any payment or prepayment required to
be made hereunder or (c) without duplication under this Agreement, any amount withheld pursuant to
Section 2.19 hereof. In the case of any Breakage Event, such loss shall include, in the case of a
Lender, an amount equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage Event for the period
from the date of such Breakage Event to the last day of the Interest Period in effect (or that
would have been in effect) for such Loan, as the case may be, over (ii) the amount of interest
likely to be realized by such Lender in redeploying the funds released or not utilized by reason of
such Breakage Event for such period. A certificate of any Lender setting forth any amount or
amounts which such Lender believes it is entitled to receive pursuant to this Section 2.16,
including the calculations and criteria applied to determine such amount or amounts, and other
documentation or information reasonably supporting the conclusions in such certificate, shall be
delivered to the Borrower and shall, absent clearly demonstrable error, be final and conclusive and
binding. Notwithstanding anything to the contrary in this Section 2.16, Borrower shall not be under
any obligation to compensate any Lender or Issuer under this Section 2.16 for any amounts incurred
more than 180 days prior to the date of delivery of such certificate, documentation and
information; provided, that if the circumstances giving rise to such demand have
retroactive application, such 180-day period shall be extended to include the period of such
retroactive effect.



          SECTION 2.17. Pro Rata Treatment. (a) Except as required under Section 2.05, 2.11,
2.12, 2.13, 2.15, 2.16, 2.19 and paragraph (b) of this Section 2.17, each Borrowing, each payment
or prepayment of principal of any Borrowing, each payment of Reimbursement Obligations, each
payment of interest on the Loans, each payment of the Unused Commitment Fees, each reduction of the
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 the case of payments, to each Lender
entitled to receive such payments) in accordance with their respective Commitments (or, if such
Commitments shall have expired or



56









 




been terminated, in accordance with the respective principal amounts of their outstanding 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.




          (b) Notwithstanding anything to the contrary contained in this Agreement, if any Lender
constitutes a Defaulting Lender as a result of its failure to make available its Ratable Portion of
any Borrowing pursuant to Section 2.02 or to pay (other than as a result of a good faith dispute)
any amount required to be paid by such Lender to any Issuer pursuant to Section 2.03, then the
Administrative Agent may, it its discretion (and subject to the terms of the Intercreditor
Agreement), apply any amounts thereafter received by the Administrative Agent for the account of
such Defaulting Lender from or on behalf of the Borrower or any Loan Party or otherwise in respect
of any amounts owed hereunder or under any other Loan Document to the satisfaction of its
obligations under such Sections until all such unsatisfied obligations are paid in full.



          SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall, through the
exercise of a right of banker’s lien, setoff or counterclaim against the Borrower or any other Loan
Party, or pursuant to a secured claim under Section 506 of the Bankruptcy Code or other security or
interest arising from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Loan or Loans as a result of which the unpaid
principal portion of its Loans shall be proportionately less than the unpaid principal portion of
the 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 Loans of such other Lender, so that the aggregate unpaid principal amount of
the Loans and participations in Loans held by each Lender shall be in the same proportion to the
aggregate unpaid principal amount of all Loans then outstanding as the principal amount of its
Loans prior to such exercise of banker’s lien, setoff or counterclaim or other event was to the
principal amount of all 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 2.18 and the payment giving rise
thereto shall thereafter be recovered, such purchase or purchases or adjustments shall be rescinded
to the extent of such recovery and the purchase price or prices or adjustment restored without
interest.



          SECTION 2.19. Taxes. (a) Except as otherwise provided herein and as required by
Applicable Law, any and all payments by or on account of any obligation of the Borrower or any
other Loan Party hereunder or under any other Loan Document shall be made free and clear of and
without deduction or withholding for any Indemnified Taxes; provided that if the Borrower
or any other Loan Party shall be required to deduct or withhold any Indemnified Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after making all
required deductions and withholdings (including deductions and withholdings applicable to
additional sums payable under this Section) the Administrative Agent or such Lender (as the case
may be) receives an amount equal to the sum it would have received had no such deductions and
withholdings been made; (ii) the Borrower or such other Loan Party shall make (or cause to be made)
such deductions and withholdings and (iii) the Borrower or such other Loan Party shall pay (or
cause to be paid) the full amount deducted or withheld to the relevant Governmental Authority in
accordance with Applicable Law.



57









 





          (b) In addition, the Borrower or any other Loan Party hereunder shall pay (or cause to be
paid) any Other Taxes imposed other than by deduction or withholding to the relevant Governmental
Authority in accordance with Applicable Laws.



          (c) The Borrower shall indemnify the Administrative Agent and each Lender, within 10 days
after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent 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 2.19) and any
penalties, interest and reasonable expenses arising therefrom or with respect thereto whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A written statement as to the amount of such payment or liability
shall be delivered to the Borrower by a Lender, or by the Administrative Agent on its behalf or on
behalf of the Lender, promptly upon such party’s determination of an indemnifiable event and such
written statement shall be conclusive absent demonstrable error; provided that the failure
to deliver such written statement shall not affect the obligations of the Borrower under this
Section 2.19(c) except to the extent the Borrower is actually prejudiced thereby. The written
statement shall include (i) in the event of a payment by the Lender or the Administrative Agent of
an Indemnified Tax or Other Tax, the original or a copy of a receipt issued by such Governmental
Authority evidencing such payment or other evidence of such payment together with a written
statement setting forth the amount of such Indemnified Taxes or Other Taxes or (ii) in the event of
payment to be made by the Borrower, the amount of such Taxes, in each case, delivered to Borrower
by a Lender or by the Administrative Agent. A payment under this Section 2.19(c) shall be made
within 15 days from the date of delivery of such written statement; provided that the
Borrower shall not be obligated to make any such payment to the Administrative Agent or the Lender
(as the case may be) in respect of penalties, interest and other liabilities attributable to any
Indemnified Taxes or Other Taxes if and to the extent that such penalties, interest and other
liabilities are attributable to the gross negligence or willful misconduct of the Administrative
Agent or such Lender or to the failure of the Administrative Agent or a Lender to deliver a timely
written statement as to the amount of an indemnifiable liability.



          (d) As soon as reasonably practicable after any payment of Indemnified Taxes or Other Taxes by
the Borrower or any other Loan Party to a Governmental Authority, and in any event within 60 days
of such payment being due, the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.



          (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the reasonable request of the Borrower, such
properly completed and executed documentation prescribed by Applicable Law as will permit such
payments to be made without withholding or at a reduced rate of withholding; provided that
such Lender is legally entitled to complete, execute and deliver such documentation, and in such
Lender’s judgment such completion, execution or delivery would not materially prejudice the legal
position of such Lender.



58









 





     In addition, each Foreign Lender (and, if applicable, the Administrative Agent) shall (i)
furnish on or before it becomes a party to this Agreement and when reasonably requested by the
Borrower or the Administrative Agent (as applicable) either (a) two accurate and complete
originally executed U.S. Internal Revenue Service Form W-8BEN and/or Form W-8IMY, as applicable (or
successor form) or (b) an accurate and complete U.S. Internal Revenue Service Form W-8ECI (or
successor form), certifying, in either case, to such Foreign Lender’s legal entitlement to an
exemption or reduction from U.S. federal withholding tax with respect to all interest payments
hereunder, and (ii) provide a new Form W-8BEN and/or Form W-8IMY, as applicable (or successor form)
or Form W-8ECI (or successor form) upon the expiration or obsolescence of any previously delivered
form to reconfirm any complete exemption from, or any entitlement to a reduction in, U.S. federal
withholding tax with respect to any interest payment hereunder; provided that any Foreign
Lender that is not a “bank” within the meaning of Section 881(c)(3)(A) of the Tax Code and
is relying on the so-called “portfolio interest exemption” shall also furnish a
“Non-Bank Certificate” in the form of Exhibit G hereto together with an accurate
and complete originally executed Form W-8BEN (or successor form). Notwithstanding any other
provision of this paragraph, a Foreign Lender shall not be required to deliver any form pursuant to
this paragraph that such Foreign Lender is not legally able to deliver.



          (f) Any Lender that is a United States person, as defined in Section 7701(a)(30) of the Tax
Code, and is not an exempt recipient within the meaning of Treasury Regulations Section 1.6049-4(c)
shall deliver to the Borrower (with a copy to the Administrative Agent) two accurate and complete
original signed copies of Internal Revenue Service Form W-9, or any successor form that such person
is entitled to provide at such time in order to comply with United States back-up withholding
requirements.



          (g) For purposes of this Section 2.19, in the case of any Lender that is treated as a
partnership for U.S. federal income tax purposes, any Taxes required to be deducted and withheld by
such Lender with respect to payments made by the Borrower under any Loan Document shall be treated
as Taxes required to be deducted by the Borrower, but only to the extent such Taxes would have been
required to be deducted and withheld by the Lender if it were treated as a corporation for U.S.
federal income tax purposes making such payments under the Loan Documents on behalf of the Borrower
and Excluded Taxes were defined by reference to the partner (treating the partner as a Foreign
Lender) to whom payments are made.



          (h) If the Administrative Agent or any Lender requests, or the Borrower is required to
make, any indemnification or payment (excluding Other Taxes) under this Section 2.19, then the
Administrative Agent or the relevant Lender shall use reasonable efforts to designate a different
applicable lending office or to assign its rights and obligations under the Loan Documents to
another of its branches or such other Person as the Borrower may reasonably request if (i) such
designation or assignment could reasonably be expected to reduce or eliminate amounts payable
pursuant to this Section 2.19, and (ii) in the sole discretion of the Administrative Agent or such
Lender (as applicable) such designation or assignment would not subject it to any unreimbursed cost
or expense or would not otherwise be disadvantageous to it. The Borrower agrees to pay all costs
and expenses incurred by the Administrative Agent or such Lender in connection with such
designations or assignment.



          (i) If the Administrative Agent or any Lender determines in its sole
discretion that it has received a refund in respect of Indemnified Taxes or Other Taxes to which it
has been indemnified by Borrower pursuant to this Section 2.19, it shall within 20 days of such
receipt pay over such refund to Borrower (but only to the extent of indemnity payments made by



59









 




such Borrower under this Section 2.19 with respect to Indemnified Taxes or Other Taxes giving rise
to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and
without interest (other than any interest paid by the relevant Governmental Authority with respect
to such refund); provided, however, that such Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to the relevant Borrower
(plus the interest received by such Borrower that was originally paid by the relevant Governmental
Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such
Lender is required to repay such refund to such Governmental Authority. Nothing in this Section
2.19 shall be construed to require the Administrative Agent or any Lender to make available its tax
returns (or any other Tax-related information that it deems confidential) to Borrower or any other
Person.




          (j) The Administrative Agent and each Lender shall take all reasonable
actions (consistent with legal and regulatory restrictions) requested by a Borrower to assist such
Borrower or any other Loan Party to recover from the relevant Governmental Authority any
Indemnified Taxes or Other Taxes in respect of which amounts were paid by such Borrower or any
other Loan Party pursuant to this Section 2.19. However, no Lender will be required to take any
action that, in the judgment of such Lender, would be legally inadvisable or commercially
disadvantageous to such Lender. Any Loan Party who requests such assistance from the Administrative
Agent or a Lender will bear all reasonable costs and expenses associated with recovering such
amounts from the relevant Governmental Authority. For the avoidance of doubt, this section 2.19(j)
shall not affect any Borrower’s indemnity obligations under Section 2.19(a).



          (k) 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.



          SECTION 2.20. Assignment of Commitments Under Certain Circumstances; Duty to Mitigate.
(a) In the event that (i) any Lender or any Issuer delivers a written statement requesting
compensation pursuant to Section 2.14, (ii) any Lender or any Issuer delivers a notice described in
Section 2.15, (iii) the Borrower is required to pay any additional amount to any Lender or any
Issuer or any Governmental Authority on account of any Lender or any Issuer pursuant to Section
2.19, (iv) any Lender does not consent to any proposed amendment, supplement, modification, consent
or waiver of any provision of this Agreement or any other Loan Document that requires the consent
of each of the Lenders or each of the Lenders affected (so long as the consent of the Required
Lenders has been obtained) in accordance with Section 9.08(c) or (v) any Lender is a Defaulting
Lender, the Borrower may, at its sole expense and effort (including with respect to any applicable
processing and recordation fee referred to in Section 9.04(e)), upon notice to such Lender or such
Issuer and the Administrative Agent, require such Lender or such Issuer to transfer and assign,
without recourse (in accordance with and subject to the restrictions contained in Section 9.04),
all of its interests, rights and obligations under this Agreement to an assignee that shall assume
such assigned obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (x) such assignment shall not conflict with any law, rule or
regulation or order of any court or other Governmental Authority having jurisdiction, (y) the
Borrower shall have received the prior written consent of the Administrative Agent and each Issuer,
which consent shall not unreasonably be withheld or delayed, and (z) the Borrower or such assignee
shall have paid to the affected Lender or Issuer 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
Loans of such Lender or Issuer, respectively, plus



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all fees and other amounts accrued for the account of such Lender or Issuer hereunder (including
any amounts under Section 2.14 and Section 2.16); provided further that, if prior to any
such transfer and assignment the circumstances or event that resulted in such Lender’s or Issuer’s
claim for compensation under Section 2.14 or notice under Section 2.15 or the amounts paid pursuant
to Section 2.19, as the case may be, cease to cause such Lender or Issuer to suffer increased costs
or reductions in amounts received or receivable or reduction in return on capital, or cease to have
the consequences specified in Section 2.15, or cease to result in amounts being payable under
Section 2.19, as the case may be (including as a result of any action taken by such Lender or
Issuer pursuant to paragraph (b) below), or if such Lender or Issuer shall waive its right to claim
further compensation under Section 2.14 in respect of such circumstances or event or shall withdraw
its notice under Section 2.15 or shall waive its right to further payments under Section 2.19 in
respect of such circumstances or event, as the case may be, then such Lender or Issuer shall not
thereafter be required to make any such transfer and assignment hereunder.




          (b) If any Lender or Issuer becomes aware of the occurrence of an event that would (i)
entitle such Lender or Issuer to request compensation under Section 2.14, (ii) entitle such Lender
or Issuer to deliver a notice described in Section 2.15 or (iii) trigger the requirement for the
Borrower to pay any additional amount to any Lender or Issuer or any Governmental Authority on
account of any Lender or Issuer, pursuant to Section 2.19, then such Lender or Issuer shall as
promptly as practicable use reasonable efforts (which shall not require such Lender or Issuer to
incur an unreimbursed loss or unreimbursed cost or expense or otherwise take any action
inconsistent with its internal policies or legal or regulatory restrictions or suffer any
disadvantage or burden reasonably deemed by it to be significant) (x) to file any certificate or
document reasonably requested in writing by the Borrower, (y) to assign its rights and delegate and
transfer its obligations hereunder to another of its offices, branches or Affiliates, or (z)
designate another of its offices, branches or Affiliates for funding or booking its Loans
hereunder, if such filing or assignment would avoid, reduce or eliminate any claims for
compensation under Section 2.14 or enable it to avoid or withdraw any notice pursuant to Section
2.15 or would avoid, reduce or eliminate amounts payable pursuant to Section 2.19, as the case may
be, at such time or in the future. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender or Issuer in connection with any such filing or assignment,
delegation and transfer.



          SECTION 2.21. Incremental Facilities. (a) The Borrower may, by written notice to the
Administrative Agent prior to the Revolving Credit Termination Date, elect to request, an increase
to the existing Commitments (any such increase, the “New Commitments”) to effect the
incurrence of secured Indebtedness permitted to be incurred pursuant to Section 6.01(d) in an
amount not to exceed $500,000,000 in the aggregate. New Commitments shall be secured pari passu
with the existing Secured Obligations pursuant to the Intercreditor Agreement and shall not be less
than $10,000,000 individually (or such lesser amount which shall be approved by the Administrative
Agent or such lesser amount which shall constitute the difference between the amount of secured
Indebtedness permitted to be incurred pursuant to (i) Section 6.01(c) and this Section 2.21 and
(ii) all New Commitments obtained prior to such date) and integral multiples of $1,000,000 in
excess of such amount. Each such notice shall specify the date (each, an “Increased Commitment
Date”) on which the Borrower proposes that the New Commitments shall be effective, which shall
be a date not less than 10 Business Days after the date on which such notice is delivered to the
Administrative Agent; provided that the Borrower shall first offer the Lenders, on a pro
rata basis, the opportunity to provide all of the New Commitments prior to offering such
opportunity to any other Person that is an eligible assignee pursuant to Section 9.04(b);
provided, further, that any Lender offered or approached to provide all or a
portion of the



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New Commitments may elect or decline, in its sole discretion, to provide a New Commitment. Such New
Commitments shall become effective as of such Increased Commitment Date; provided that (i)
no Default or Event of Default shall exist on such Increased Commitment Date before or after giving
effect to such New Commitments, as applicable; (ii) the Borrower and its Subsidiaries shall be in
pro forma compliance with each of the Financial Covenants as of the last day of the most recently
ended fiscal quarter for which financial statements are required to be delivered pursuant to
Section 5.05(a) and 5.05(b) after giving effect to such New Commitments and any Investment to be
consummated in connection therewith; (iii) the New Commitments shall be subject to the same terms
and conditions as the existing Commitments under this Agreement (except that upfront fees paid to
Lenders providing New Commitments may be less than the upfront fees that were paid to the existing
Lenders on the Signing Date); (iv) the New Commitments shall be effected pursuant to one or more
Joinder Agreements executed and delivered by the Borrower and the Administrative Agent, and each of
which shall be recorded in the Register; (v) the Borrower shall make any payments required pursuant
to Section 2.16 in connection with the New Commitments, as applicable; (vi) the Borrower shall
deliver or cause to be delivered any legal opinions or other documents reasonably requested by the
Administrative Agent in connection with any such transaction; (vii) the requirements set forth in
Section 9.17 shall have been satisfied; and (viii) the representations and warranties set forth in
each Loan Document shall be true and correct in all material respects (except to the extent that
such representations and warranties are qualified as to materiality, in which case they shall be
true and correct in all respects) on and as of such Increased Commitment Date with the same effect
as though made on and as of such date, except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and warranties shall be
true and correct in all material respects (or true and correct in all respects, as provided in the
parenthetical above) on and as of such earlier date.




          (b) On any Increased Commitment Date on which New Commitments are effected, subject to the
satisfaction of the foregoing terms and conditions, (i) each of the Lenders with Commitments shall
assign to each Lender with a New Commitment (each, a “New Lender”) and each of the New
Lenders shall purchase from each of the Lenders with Commitments, at the principal amount thereof
(together with accrued interest), such interests in the Loans outstanding on such Increased
Commitment Date as shall be necessary in order that, after giving effect to all such assignments
and purchases, such Loans will be held by existing Lenders with Loans and New Lenders ratably in
accordance with their Commitments after giving effect to the addition of such New Commitments to
the Commitments, (ii) each New Commitment shall be deemed for all purposes a Commitment and each
loan made thereunder shall be deemed, for all purposes, a Loan and (iii) each New Lender shall
become a Lender with respect to its New Commitment and all matters relating thereto.



          (c) The Administrative Agent shall notify the Lenders promptly upon receipt of the Borrower’s
notice of each Increased Commitment Date and in respect thereof the New Commitments and New Lenders
and the respective interests in such Lender’s Loans subject to the assignments contemplated by
clause (b) of this Section 2.21.



          (d) Each Joinder Agreement may, without the consent of any other Lenders, effect such
amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in
the opinion of the Administrative Agent and the Collateral Agent, to effect the provisions of this
Section 2.21.



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ARTICLE III




Representations and Warranties




     To induce the Administrative Agent, the Collateral Agent, the Issuers and each of the Lenders
(i) to enter into this Agreement, the Borrower hereby represents and warrants to the Arrangers, the
Administrative Agent, the Collateral Agent, each Issuer and each of the Lenders on the Signing Date
(immediately before and immediately after giving effect to this Agreement) that the representations
and warranties set forth in Annex III hereto are true and correct in all material respects
(except to the extent that such representations and warranties are qualified as to materiality, in
which case they shall be true and correct in all respects) and (ii) to make the Loans and issue or
participate in the Letters of Credit, the Borrower hereby represents and warrants to the Arrangers,
the Administrative Agent, the Collateral Agent, each Issuer and each of the Lenders on the Funds
Availability Date (immediately before and immediately after giving effect to the Transactions) and
on the date of each Borrowing of Loans or Issuance of a Letter of Credit hereunder, that:



          SECTION 3.01. Organization; Powers. The Borrower and each of its Subsidiaries (a) is
duly organized or formed, validly existing and in good standing under the laws of the jurisdiction
of its organization or formation, (b) has all requisite corporate, limited liability or partnership
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 those aspects of the Permitted Business that it now
conducts, (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
corporate, limited liability or partnership power and authority, and the legal right, to execute,
deliver and perform its obligations under this Agreement, each of the other Loan Documents and the
Separation Financing Documents, including, in the case of the Borrower, to borrow hereunder and to
issue the Senior Notes and the Funds Availability Indebtedness under the applicable Separation
Financing Documents, in the case of each Loan Party, to grant the Liens contemplated to be granted
by it under the Security Documents and, in the case of each Subsidiary Guarantor, to Guarantee the
Secured Obligations arising hereunder as contemplated by the Guarantee and Collateral Agreement.



          SECTION 3.02. Authorization; No Conflicts. The Transactions (a) have been duly
authorized by all requisite corporate, partnership or limited liability company and, if required,
stockholder, partner or member action and (b) do not (i) violate, 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, (A) any applicable provision of any material law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents or by-laws of the Borrower
or any Subsidiary, (B) any order of any Governmental Authority or arbitrator or (C) any provision
of any indenture or any material agreement or other material instrument to which the Borrower or
any Subsidiary is a party or by which any of them or any of their property is or may be bound; or
(ii) result in the creation or imposition of any Lien upon or with respect to any property or
assets now owned or hereafter acquired by the Borrower or any other Loan Party (other than Liens
created under the Security Documents).



          SECTION 3.03. Enforceability. Each Loan Party has duly executed and delivered each
Loan Document to which it is a party and each such Loan Document constitutes a



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legal, valid and binding obligation of such Loan Party enforceable against such Loan Party in
accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other laws now or hereafter in effect relating to creditors’
rights generally and (including with respect to specific performance) subject to general principles
of equity, regardless of whether considered in a proceeding in equity or at law, and to the
discretion of the court before which any proceeding therefor may be brought.




          SECTION 3.04. Approvals. No action, consent or approval of, registration or filing
with, notice to, or any other action by, any Governmental Authority or in respect of any Material
Contract or Key Contract is required in connection with the Transactions, except for (a) the filing
of UCC financing statements and filings with the United States Patent and Trademark Office and the
United States Copyright Office and filings in any other applicable jurisdiction outside of the
United States, (b) recordation of the Mortgages, (c) such other actions specifically described in
Section 3.19, (d) any immaterial actions, consents, approvals, registrations or filings, or (e)
such as have been made or obtained and are in full force and effect.



          SECTION 3.05. Financial Statements. (a) The Borrower has, on or prior to the Funds
Availability Date, furnished to the Lenders (i) the most recent audited historical combined
financial statements for the non-utility nuclear business of Entergy and its consolidated
subsidiaries (together, “Entergy Nuclear”) included in the Registration Statement, which
audited historical combined financial statements have been audited by and are accompanied by the
unqualified opinion of Deloitte & Touche LLP, independent public accountants, and (ii) the most
recent unaudited interim combined financial statements of Entergy Nuclear included in the
Registration Statement. Such financial statements present fairly in all material respects the
financial condition, results of operations and cash flows of Entergy Nuclear on a combined basis as
of and for their respective periods and have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except, with respect to such financial statements
referred to in clause (ii) above, for normal year-end adjustments and the omission of certain
information and footnote disclosures as permitted by SEC rules and regulations).



          (b) The Borrower also has, on or prior to the Funds Availability Date, furnished to the
Lenders (i) the most recent unaudited pro forma combined financial statements for Entergy Nuclear
included in the Registration Statement, which have been derived from Entergy Nuclear’s audited
historical combined financial statements as of and for the fiscal year ended December 31, 2007 (or
such later date as may be specified in the Registration Statement), and (ii) the most recent
unaudited pro forma combined financial statements of Entergy Nuclear included in the Registration
Statement, which have been derived from the most recent unaudited interim combined financial
statements of Entergy Nuclear included in the Registration Statement. Such unaudited pro forma
combined financial statements have been prepared on a basis consistent with the historical combined
financial statements of Entergy Nuclear from which they are derived (except for the pro forma
adjustments specified therein) and include assumptions that provide a reasonable basis for
presenting the significant effects directly attributable to the Separation Transactions and the
events described therein, the related pro forma adjustments give appropriate effect to those
assumptions and the pro forma adjustments reflect the proper application of those adjustments to
the historical combined financial statements from which they are derived and comply as to form in
all material respects with the applicable accounting requirements of Regulations S-X under the
Securities Act of 1933, as amended.



          (c) The financial statements delivered to the Lenders pursuant to Sections 5.05(a) and
5.05(b), if any, (i) have been prepared in accordance with GAAP (except as may



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otherwise be permitted under Sections 5.05(a) and 5.05(b)) and (ii) present fairly (on the basis
disclosed in the footnotes to such financial statements, if any) in all material respects the
consolidated financial condition, results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of the respective dates thereof and for the respective periods covered
thereby.




          SECTION 3.06. No Material Adverse Effect. Since December 31, 2007, there has been no
event, development or circumstance that has had or could reasonably be expected to have a Material
Adverse Effect.



          SECTION 3.07. Title to Properties; Possession Under Leases. (a) The Borrower and the
other Loan Parties have good and marketable fee simple title to, valid leasehold interests in, or a
license or other right to use, all their respective real property assets that are included in the
Collateral including all of the real property listed on Schedule 3.20 and all of the
Mortgaged Property listed on Schedule 3.07, and including valid rights, title and interests
in or rights to control or occupy easements or rights of way used in connection with such
properties and assets (“Easements”), free and clear of all Liens or other exceptions to
title other than Liens expressly permitted by clauses (a), (f) and (g) of Section 6.02.



          (b) Except as set forth in Schedule 3.20 or where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect, (i) each of the Loan Parties has
complied with all material obligations under all Material Leases to which it is a party and all
such Material Leases are in full force and effect and (ii) each of the Loan Parties enjoys peaceful
and undisturbed possession under all such Material Leases.



          (c) Except as set forth in Schedule 3.07, none of the Borrower or any of the other
Loan Parties has received any notice of, nor has any knowledge of, any pending or contemplated
condemnation proceeding affecting the Mortgaged Properties or any sale or disposition thereof in
lieu of condemnation as of the Funds Availability Date which would reasonably be expected to have a
Material Adverse Effect.



          (d) Except as set forth on Schedule 3.07, as of the Funds Availability Date, none of
the Borrower or any of the Subsidiaries is obligated under any right of first refusal, option or
other contractual right to sell, assign or otherwise dispose of any Mortgaged Property or any
interest therein.



          (e) Except with respect to (i) any Recovery Event for which a Reinvestment Commitment
Reduction Date shall have not yet occurred and (ii) those events occurring after the Funds
Availability Date that have been disclosed to the Collateral Agent, no material portion of any
Mortgaged Property has suffered any damage by fire or other casualty that has not been repaired and
restored to its original condition. With respect to each Mortgaged Property, the Borrower has
obtained and is maintaining in full force and effect flood insurance in compliance with Section
5.03.



          SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Funds
Availability Date a list of all Subsidiaries, including each Subsidiary’s exact legal name (as
reflected in such Subsidiary’s certificate or articles of incorporation or other constitutive
documents) and jurisdiction of incorporation or formation and the percentage ownership interest of
the Borrower (direct or indirect) therein, and identifies each Subsidiary that is a Loan Party. On
the Funds Availability Date, all of the Subsidiaries of the Borrower are Restricted



65









 




Subsidiaries, except as set forth on Schedule 3.08 hereto. As of the Funds Availability
Date, the shares of Capital Stock or other Equity Interests so indicated on Schedule 3.08
are owned by the Borrower, directly or indirectly, free and clear of all Liens (other than Liens
created under the Security Documents and, in the case of Equity Interests (other than Pledged
Securities), Permitted Liens, and in respect of Pledged Securities, the Permitted Liens set forth
in clause (e) of the definition thereof) and all such shares of capital stock are fully paid, and
to the extent issued by a corporation, non-assessable.




          SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth on
Schedule 3.09(a) (Funding), there are no actions, suits, investigations or proceedings at
law or in equity or by or before any arbitrator or Governmental Authority now pending or, to the
knowledge of the Borrower, threatened against the Borrower or any Subsidiary or any business,
property or material rights of the Borrower or any Subsidiary (i) that, as of the Funds
Availability Date, involve any Transaction Document or the Transactions or, at any time thereafter,
involve any Transaction Document or the Transactions and which could reasonably be expected to be
material and adverse to the interests of the Lenders, or (ii) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse Effect.



          (b) Except as set forth on Schedule 3.09(b) (Funding), none of the Borrower or any of
the Restricted Subsidiaries or any of their respective material properties or assets is in
violation of any law, rule or regulation (including any zoning, building, ordinance, code or
approval or any building permits), or is in default with respect to any judgment, writ, injunction,
decree or order of any Governmental Authority, where such violation or default, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse Effect (but not
including, in each case, any Environmental Law which is the subject of Section 3.17 or any energy
regulation matter which is the subject of Section 3.23).



          (c) The Borrower and all of its Subsidiaries are in possession of all Permits necessary to
own, lease and operate their properties and to lawfully carry on their businesses as they are now
being conducted, except where the failure to be in possession of such Permit would not,
individually or in the aggregate, have a Material Adverse Effect (but not including Permits
required under applicable Environmental Laws which are the subject of Section 3.17). There is no
action, proceeding or investigation pending or, to the knowledge of the Borrower and each of its
Subsidiaries, threatened regarding any material Permit which would have a Material Adverse Effect.
None of the Borrower or any of its Subsidiaries is in material conflict with, or in default of, or
in material violation of, any material Permit.



          SECTION 3.10. Contractual Obligations. (a) None of the Borrower or any of the
Subsidiaries is in default under any provision of any Contractual Obligations in respect of
Indebtedness, or any other material Contractual Obligations 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.



          (b) No Key Contract contains any restriction on the pledge, collateral assignment or
transfer of such Key Contract to the Collateral Agent for the benefit of the Senior Secured
Parties, and there are no restrictions in any Key Contract that would prevent the Collateral Agent
or its designee from enforcing such Key Contract following an exercise of remedies as contemplated
in Section 7.03 of this Agreement or as provided in any Security Document.



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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 material activities, in the
business of extending credit for the purpose of buying or carrying Margin Stock. Neither the
Borrower nor any of its Subsidiaries owns any Margin Stock.



          (b) No part of the proceeds of any Loan or any Letter of Credit will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, for purchasing or
carrying Margin Stock or for the purpose of purchasing, carrying or trading in any securities under
such circumstances as to involve the Borrower in a violation of Regulation X or to involve any
broker or dealer in a violation of Regulation T. No Indebtedness being reduced or retired out of
the proceeds of any Loans or Letters of Credit was or will be incurred for the purpose of
purchasing or carrying any Margin Stock. None of the Transactions (including as 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, Regulation U or Regulation X. If requested by any Lender or
the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1
referred to in Regulation U.



          SECTION 3.12. Investment Company Act. Neither the Borrower nor any of its Subsidiaries
is subject to regulation under the Investment Company Act of 1940, as amended from time to time
(the “Investment Company Act”). Neither the Borrower nor any of its Subsidiaries is subject
to regulation under any other federal or state statute or rule that may limit its ability to incur
Indebtedness under this Agreement or that may otherwise render all or any portion of the Secured
Obligations unenforceable, or to the extent that the Borrower or any of its Subsidiaries is subject
to such regulation, it has obtained all authorizations necessary for the incurrence of Indebtedness
under this Agreement and as necessary to ensure that the Secured Obligations hereunder will not be
rendered unenforceable by reason of such regulation. Neither the Borrower nor any of its
Subsidiaries is a “registered investment company” or a company “controlled” by a “registered
investment company” or a “principal underwriter” of a “registered investment company”, as such
terms are defined in the Investment Company Act.



          SECTION 3.13. Use of Proceeds. Subject to Section 6.07(a), after the Funds
Availability Date, the Borrower will use the proceeds of the Loans for the ongoing working capital
requirements, the payment of fees and expenses related to the Transactions and general corporate
purposes of the Borrower and the Subsidiaries. The Borrower will request the issuance of Letters of
Credit solely for the working capital requirements and general corporate purposes of the Borrower,
its Subsidiaries and EquaGen and its subsidiaries (solely, in the case of EquaGen, its subsidiaries
and subsidiaries of the Borrower that are not Subsidiary Guarantors, to the extent permitted by
Section 6.05(j)).



          SECTION 3.14. Tax Returns. The Borrower and each of the Subsidiaries has timely filed
or timely caused to be filed all Federal and all material state, local and foreign tax returns or
materials required to have been filed by it, and all such tax returns are correct and complete in
all material respects. The Borrower and each of the Subsidiaries has timely paid or caused to be
timely paid all Taxes due and payable by it (other than an immaterial amount of Tax) and all
assessments received by it, except Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, shall have set aside on
its books adequate reserves in accordance with GAAP and except where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect. The Borrower has made adequate
provision in accordance with GAAP for all Taxes accrued and not yet due and



67









 




payable. Except as permitted in clause (e) of the definition of “Permitted Liens”, no Lien
for Taxes has been filed (except for Taxes not yet delinquent or that are being contested in good
faith by appropriate proceedings), and to the knowledge of the Borrower and each of the
Subsidiaries based on the receipt of written notice, except as set forth on Schedule 3.14,
no claim is being asserted with respect to any material Tax. Neither the Borrower nor any of the
Subsidiaries (a) intends to treat the Loans or any of the transactions contemplated by any Loan
Document as being a “reportable transaction” (within the meaning of Treasury Regulation
Section 1.6011-4) or (b) is aware of any facts or events that would result in such treatment.




          SECTION 3.15. Disclosure. The written information relating to the Borrower and its
Subsidiaries and the Separation (including, without limitation, the Confidential Information
Memorandum and the Registration Statement) furnished by or on behalf of the Borrower, and their
respective Affiliates to the Arrangers, Administrative Agent, Collateral Agent or any Lender in
connection with the Transactions or the negotiation of this Agreement or delivered hereunder, taken
as a whole (as modified or supplemented by other information so furnished prior to the relevant
measurement date for this representation and warranty), does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading; provided that, with
respect to projected financial information or other forward-looking statements, the Borrower
represents only that such information was prepared in good faith based upon assumptions believed to
be reasonable at the time; it being recognized by the Lenders that such projections are as to
future events and are not to be viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the projected results and such differences
may be material.



          SECTION 3.16. Employee Benefit Plans. Except as could not reasonably be expected to
result in a Material Adverse Effect, the Borrower and each ERISA Affiliate are in compliance with
the applicable provisions of ERISA, the Tax Code and the regulations and published interpretations
thereunder with respect to the Benefit Plans and Multiemployer Plans. No ERISA Event has occurred
or is reasonably expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in a Material Adverse Effect.



          SECTION 3.17. Environmental Matters. Except as set forth in Schedule 3.17 or
except with respect to any matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect:



     (i) none of the Borrower or any of the Restricted Subsidiaries has failed to
comply with any Environmental Law or to take all actions necessary to obtain, maintain,
renew and comply with any Permit required under Environmental Law;



     (ii) none of the Borrower or any of the Restricted Subsidiaries has become a
party to any administrative or judicial proceeding, or possesses knowledge of any such
proceeding that has been threatened, that could result in the termination, revocation or
modification of any Permit required under Environmental Law;



     (iii) neither the Borrower nor any of the Restricted Subsidiaries has become
subject to any Environmental Liability with respect to any Mortgaged Property, and no
Mortgaged Property is (A) subject to any Lien imposed pursuant to Environmental Law or (B)
contains Hazardous Materials of a form or type or in a quantity or location that could
reasonably be expected to result in the imposition of such Lien;



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     (iv) there has been no Release of Hazardous Materials at any property or
facility currently or formerly owned or operated by the Borrower or any of the Restricted
Subsidiaries or, to the knowledge of the Borrower or the Restricted Subsidiaries, at any
facility owned or operated by a third party to which any of the Borrower or any of the
Restricted Subsidiaries shipped or transferred Hazardous Materials for treatment or
disposal;



     (v) none of the Borrower or any of the Restricted Subsidiaries has received
written notice of any claim or threatened claim with respect to any Environmental Liability
other than those which have been fully and finally resolved and for which no obligations
remain outstanding; and



     (vi) none of the Borrower or any of the Restricted Subsidiaries possesses
knowledge of any facts or circumstances that could reasonably be expected to result in any
Environmental Liability or could reasonably be expected to materially interfere with or
prevent continued material compliance with Environmental Laws in effect as of the Funds
Availability Date and the date of each Credit Event by the Borrower or the Subsidiaries.



          SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and correct
description of all material insurance coverage maintained by or on behalf of the Borrower and the
Restricted Subsidiaries as of the Funds Availability Date. As of the Funds Availability Date, such
insurance is in full force and effect and all premiums that are due and owed have been duly paid.
The Borrower and the Restricted Subsidiaries are in compliance with Section 5.03. Insurance
coverage maintained for the Nuclear Stations complies in all material respects with applicable
Nuclear Laws and the requirements of the licenses held by the Nuclear Stations.



          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 Senior Secured
Parties, a legal, valid, binding and enforceable security interest in the Collateral described
therein and proceeds thereof, subject to applicable insolvency, bankruptcy, reorganization,
moratorium, fraudulent transfer and other laws now or hereafter in effect generally affecting
rights of creditors and (including with respect to specific performance) principles of equity,
whether considered in a proceeding in equity or in law and to the discretion of the court before
which any proceeding therefor may be brought, and (i) in the case of the Pledged Securities, upon
the earlier of (A) when such Pledged Securities are delivered to the Collateral Agent and (B) when
financing statements in appropriate form are filed in the offices specified on Schedule
3.19(a); (ii) in the case of Deposit Accounts not constituting Excluded Perfection Assets, by
the execution and delivery of Control Agreements providing for “control” as described in
Section 9-104 of the UCC; (iii) in the case of Securities Accounts not constituting Excluded
Perfection Assets, upon the earlier of (A) the filing of financing statements in the offices
specified on Schedule 3.19(a) and (B) the execution and delivery of Control Agreements
providing for “control” as described in Section 9-106 of the UCC; and (iv) in the case of
all other Collateral described therein (other than Mortgaged Properties, Excluded Perfection
Assets, Intellectual Property Collateral, money not credited to a Deposit Account or letter of
credit rights not constituting supporting obligations), when financing statements in appropriate
form are filed in the offices specified on Schedule 3.19(a), the Guarantee and Collateral
Agreement shall constitute a fully perfected Lien on, all right, title and interest of the Senior
Secured Parties in such Collateral and proceeds thereof, as security for the Secured Obligations
arising hereunder, in each case prior and superior to the rights of any other Person (except, in
the case of all Collateral



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other than Pledged Securities, with respect to Permitted Liens, and in respect of Pledged
Securities, the Permitted Liens set forth in clause (e) of Section 6.02).




          (b) Each Intellectual Property Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Senior Secured Parties, a legal, valid, binding
and enforceable security interest in the Intellectual Property Collateral described therein and
proceeds thereof, subject to applicable insolvency, bankruptcy, reorganization, moratorium,
fraudulent transfer and other laws now or hereafter in effect generally affecting rights of
creditors and (including with respect to specific performance) principles of equity, whether
considered in a proceeding in equity or in law and to the discretion of the court before which any
proceeding therefor may be brought. When each Intellectual Property Security Agreement is filed in
the United States Patent and Trademark Office and the United States Copyright Office, respectively,
together with financing statements in appropriate form filed in the offices specified in
Schedule 3.19(a), in each case within the time period prescribed by Applicable Law, such
Intellectual Property Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in the Intellectual Property
Collateral, as security for the Secured Obligations arising hereunder, in each case prior and
superior in right to any other Person (except with respect to Permitted Liens) (it being understood
that subsequent recordings in the United States Patent and Trademark Office and the United States
Copyright Office may be necessary to perfect a Lien on registered trademarks, trademark
applications, patents, patent applications and registered copyrights acquired by the grantors after
the Funds Availability Date and additional filings and/or other actions may be necessary to perfect
the Collateral Agent’s security interest in Intellectual Property Collateral that is created under
the laws of a jurisdiction outside the United States. Any such additional filings and/or other
actions that may be necessary to perfect the Collateral Agent’s security interest in registrations
and applications for registration of Intellectual Property (as defined in the Guarantee and
Collateral Agreement) included in the Intellectual Property Collateral that is created under the
laws of a jurisdiction outside the United States shall be described in writing to the Collateral
Agent and its legal counsel by the Borrower or its legal counsel).



          (c) Each of the Mortgages is effective to create in favor of the Collateral Agent, for the
ratable benefit of the Senior Secured Parties, a legal, valid, binding, subsisting and enforceable
Lien on, and security interest in, all of the Loan Parties’ right, title and interest in and to the
Mortgaged Property thereunder and proceeds thereof, subject to applicable insolvency, bankruptcy,
reorganization, moratorium, fraudulent transfer and other laws now or hereafter in effect generally
affecting rights of creditors and (including with respect to specific performance) principles of
equity, whether considered in a proceeding in equity or in law, and to the discretion of the court
before which any proceeding therefor may be brought, and when the Mortgages are recorded in the
offices specified on Schedule 3.19(c), each such Mortgage shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of the grantors thereof
in such Mortgaged Property and proceeds thereof, as security for the Secured Obligations hereunder,
in each case prior and superior in right to any other Person (except Liens expressly permitted by
clause (a), (f) and (g) of Section 6.02.



          SECTION 3.20. Location of Real Property. Schedule 3.20 lists completely and
correctly as of the Funds Availability Date all real property owned or subject to a Material Lease
by the Borrower and the other Loan Parties and, in each case, the addresses thereof, indicating for
each parcel whether it is owned or leased.



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          SECTION 3.21. Labor Matters. As of the Funds Availability Date,
(i) there are no strikes, lockouts or slowdowns against the Borrower or any
Subsidiary pending or, to the knowledge of the Borrower, threatened; (ii)
the hours worked by and payments made to employees of the Borrower and the
Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable Federal, state, material local or material foreign law
applicable to such matters in any material respect; and (iii) all payments
due from the Borrower or any Subsidiary, or for which any claim may be made
against the Borrower or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued
as a liability on the books of the Borrower or such Subsidiary, except with
respect to clauses (i) through (iii) as could not reasonably be expected to
have a Material Adverse Effect. The consummation of the Transactions will
not give rise to any right of termination or right of renegotiation on the
part of any union under any collective bargaining agreement to which the
Borrower or any Subsidiary is bound.



          SECTION 3.22. Intellectual Property. Except as could not
reasonably be expected to result in a Material Adverse Effect, the Borrower
and each of the Subsidiaries owns, or is licensed or otherwise has the right
to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and the Subsidiaries does not infringe upon the rights of any other
Person.



          SECTION 3.23. Energy Regulation. (a) Immediately following the
Separation and thereafter the Borrower and any Restricted Subsidiary that is
a holding company as such term is defined in PUHCA is exempt in accordance
with 18 CFR § 366.3 from the accounting, record-retention and reporting
requirements of PUHCA.



          (b) The Borrower is not subject to regulation as a “public
utility” as such term is defined in the FPA. Each Restricted Subsidiary
that is subject to regulation as a “public utility” as such term is
defined in the FPA and that makes sales of energy or capacity that are not
pursuant to a state regulatory authority’s implementation of PURPA has an
order from the FERC, which order is not subject to any pending challenge,
investigation, complaint, or other proceeding, except as could not
reasonably be expected to result in a Material Adverse Effect and other than
generic proceedings generally applicable in the industry, (x) authorizing
such Restricted Subsidiary to engage in wholesale sales of electricity and,
to the extent permitted under its market-based rate tariff, other
transactions at market-based rates and (y) granting such waivers and blanket
authorizations as are customarily granted to entities with market-based rate
authority, including blanket authorizations to issue securities and to
assume liabilities pursuant to Section 204 of the FPA. With respect to each
Restricted Subsidiary described in the preceding sentence, except as could
not reasonably be expected to result in a Material Adverse Effect and except
as set forth on Schedule 3.23(b), the FERC has not imposed any rate
caps, mitigation measures, or other limits on market-based sales of power by
that Restricted Subsidiary, other than rate caps and mitigation measures
generally applicable to similarly situated marketers or generators selling
electricity, ancillary services or other services at wholesale at
market-based rates in the geographic market where such Restricted Subsidiary
conducts its business.



          (c) Each Restricted Subsidiary of the Borrower participating in the
wholesale power market in state or regional transmission organizations has
registered with the relevant state or regional body to sell electricity at
wholesale at market-based rates, and, except as could not reasonably be
expected to result in a Material Adverse Effect, such state or regional body
has not imposed any specific rate cap or mitigation measure (other than
pursuant to generic



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proceedings generally applicable in the industry). The rates charged by
each such Restricted Subsidiary are not subject to any pending challenge
or investigation.




          (d) Except as could not reasonably be expected to result in a Material
Adverse Effect and except as set forth on Schedule 3.23(d), there
are no complaint proceedings pending with the FERC, any other Governmental
Authority or any state or regional transmission organizations seeking
abrogation or modification, or otherwise investigating the terms, of a
contract for the sale of power by Borrower or its Restricted Subsidiaries.



          (e) Except as could not reasonably be expected to result in a Material
Adverse Effect, (i) each of the Borrower and each Restricted Subsidiary, as
applicable, has filed or caused to be filed with the FERC, all other
relevant Governmental Authorities and any state or regional transmission
organizations all forms, applications, notices, statements, reports and
documents (including all exhibits and amendments thereto) required to be
filed by it under all Applicable Laws, including PUHCA, the FPA and state
utility laws and the respective rules thereunder and (ii) all of such
filings complied with the applicable requirements of the appropriate act and
rules, regulations and orders thereunder in effect on the date each was
filed.



          (f) Each power facility identified as a “QF” in Schedule
3.23(f) is a qualifying facility under PURPA and the current rules and
regulations promulgated thereunder. Each person identified as an “EWG” in
Schedule 3.23(f) is an “exempt wholesale generator” within the
meaning of PUHCA and the Energy Policy Act of 2005, as amended. None of the
Restricted Subsidiaries is a “foreign utility company” within the meaning of
PUHCA.



          (g) Neither the Borrower nor any Restricted Subsidiary is subject to
any material state laws or material regulations respecting rates or the
financial or organizational regulation of utilities, other than (i) with
respect to those Restricted Subsidiaries that are QFs, such state
regulations contemplated by 18 C.F.R. Section 292.602(c) and (ii)
“lightened regulation” by the New York State Public Service
Commission and material financial and organizational regulation by the
Vermont Public Service Board. Except for such approvals that have been
obtained, no approval is required to be obtained in connection with the
Transactions from the FERC or any other state or federal Governmental
Authority with jurisdiction over the energy sales or financing arrangements
of the Borrower and its Restricted Subsidiaries.



          SECTION 3.24. Solvency. Immediately after the consummation of
the Transactions on the Funds Availability Date, and to the extent a Credit
Event is being made, immediately following such Credit Event and the
application of the proceeds therefrom, (a) the fair value of the assets of
the Loan Parties, taken as a whole, at a fair valuation, taking into account
the effect of any indemnities, contribution or subrogation rights, exceeds
their debts and liabilities, subordinated, contingent or otherwise; (b) the
present fair saleable value of the property of the Loan Parties, taken as a
whole, taking into account the effect of any indemnities, contribution or
subrogation rights, is greater than the amount required to pay the probable
liability of their debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured;
(c) the Loan Parties, taken as a whole, are able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) the Loan Parties, taken as
a whole, do not have unreasonably small capital with which to conduct the
business in which they are engaged as such business is conducted and is
proposed to be conducted following the Funds Availability Date.



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          SECTION 3.25. Nuclear Operations Compliance. The operations of
the Restricted Subsidiaries’ nuclear steam generating stations (“Nuclear
Stations”) are and have at all times been conducted in material
compliance with Nuclear Laws. No investigation or review by any Governmental
Authority with respect to the Nuclear Stations is pending or, to the
knowledge of the Borrower or the Restricted Subsidiaries, is threatened, nor
has any Governmental Authority indicated in writing an intention to conduct
the same, other than those the outcome of which would not have a Material
Adverse Effect. The Nuclear Stations maintain emergency plans designed to
respond to an unplanned release therefrom of Nuclear Materials into the
environment, liability insurance to the extent required by Applicable Law
(including, but not limited to, the Price-Anderson Act), and such further
insurance as is consistent with the risks inherent in the operation of a
nuclear power facility. Plans for the decommissioning of each of the Nuclear
Stations and for the short-term storage of spent nuclear fuel conform in all
material respects with applicable regulatory or other legal requirements.
The Borrower and its Restricted Subsidiaries have established and have
adequately maintained trust funds or other financial mechanisms to provide
for decontamination and decommissioning of each Nuclear Station in
accordance with Applicable Law. Borrower and its Subsidiaries have made all
contributions required by Applicable Laws to pay the U.S. Department of
Energy for decontamination and decommissioning of federal uranium enrichment
facilities and for long-term disposition of spent fuel.



          SECTION 3.26. Separation Transactions. As of the Funds Availability
Date:




     (a) The Separation Transactions have been consummated in all
material respects in accordance with each of the Separation Documents
and substantially in the manner described in the Registration
Statement.




     (b) Each of the Separation Documents has been duly executed and
delivered by each Loan Party thereto and constitutes a legal, valid
and binding obligation of such Loan Party, enforceable 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.




     (c) None of the Separation Documents has been amended, waived or
otherwise modified from the form of the drafts attached hereto as
Exhibit R and Exhibit S, respectively, in a way that
is materially adverse to the Lenders without the prior consent of the
Arrangers and the Required Lenders and no condition precedent therein
to the obligations of the Borrower waived, altered, amended or
otherwise changed or supplemented, in each case in a manner materially
adverse to the interests of the Lenders, without the prior written
consent of the Arrangers and the Required Lenders.



          SECTION 3.27. Segregation of Cash Management and Business
Operations. The Borrower and its Restricted Subsidiaries have at all
times following consummation of the Separation Transactions (i) maintained
books, financial records and bank accounts that are separate and distinct
from the books, financial records and bank accounts of Entergy and its
subsidiaries, (ii) held themselves out as an entity separate and distinct
from Entergy and any of its subsidiaries (including their Affiliates), (iii)
conducted their own business in their own name, (iv) held all of their
assets in their own name and (v) not identified itself as a division or
department of Entergy or any of its subsidiaries.



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          SECTION 3.28. Patriot Act. To the extent applicable, each Loan
Party is in compliance, in all material respects, with (i) the Trading with
the Enemy Act, as amended, and each of the foreign assets control
regulations of the Untied States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (ii) the Patriot Act. No part of the proceeds of the
Loans will be used, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any
improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended.



ARTICLE IV




Conditions Precedent




     The obligations of the Lenders and the obligations of the Issuers
hereunder are subject to the satisfaction (or waiver in accordance with
Section 9.08) of the following conditions:



          SECTION 4.01. All Credit Events. On the date of each Borrowing
on or after the Funds Availability Date and on the date of each issuance,
amendment, extension or renewal of a Letter of Credit on or after the Funds
Availability Date (each such event being called a “Credit Event”):




     (a) Borrowing Request. The Administrative Agent shall
have received a Borrowing Request in respect of such Borrowing as
required by Section 2.02 (or such notice shall have been deemed given
in accordance with Section 2.02) or, in the case of the issuance,
amendment, extension or renewal of a Letter of Credit, the applicable
Issuer and the Administrative Agent shall have received a notice
requesting the issuance, amendment, extension or renewal of such
Letter of Credit if and as required by Section 2.03;




     (b) Representations and Warranties. The representations
and warranties set forth in each Loan Document shall be true and
correct in all material respects (except to the extent that such
representations and warranties are qualified as to materiality, in
which case they shall be true and correct in all respects) on and as
of the date of such Credit Event with the same effect as though made
on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties shall be true and correct in all
material respects (or true and correct in all respects, as provided in
the parenthetical above) on and as of such earlier date;




     (c) No Material Adverse Effect. There shall have been
no event, development or circumstance that has had or could
reasonably be expected to have a Material Adverse Effect since
December 31, 2007;




     (d) No Default or Event of Default. The Borrower and each
Restricted Subsidiary shall be in compliance with all the terms and
provisions set forth in each Loan Document on its part to be observed
or performed, and, at the time of and immediately after such Credit
Event, no Default or Event of Default shall have occurred and be
continuing;



74









 






     (e) Outstanding Amount. Immediately after giving effect
to such Credit Event, the Aggregate Revolving Credit Outstandings
shall not exceed the Total Commitments at such time; and




     (f) Posting of Cash Collateral. In the case of an
Issuance of a Letter of Credit, the Borrower has (i) posted any cash
collateral required by any Issuer or (ii) entered into some other
arrangement satisfactory to such Issuer, in each case as provided for
in Section 2.03(g).



          Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrower on the date of such Credit Event as to the matters
specified in paragraphs (b), (c), (d), (e) and (f) of this Section 4.01.



          SECTION 4.02. Conditions Precedent to Signing Date. On the Signing
Date:



          (a) Deliverables. The Arrangers’ receipt of the
following, each of which shall be originals, telecopies or PDF files
(followed promptly by originals) unless otherwise specified, each executed
(as applicable) by a Responsible Officer of the signing Loan Party, each
dated the Signing Date (or, in the case of certificates of governmental
officials, a recent date before the Signing Date) and each in form and
substance reasonably satisfactory to the Arrangers and the Collateral Agent:




     (i) executed counterparts of this Agreement in sufficient quantity for the
Administrative Agent, each Arranger and each Lender requesting original
counterparts;




     (ii) completed schedules to this Agreement as of the
Signing Date in form reasonably satisfactory to the Arrangers and each
Lender;




     (iii) exhibits to this Agreement in form satisfactory to
the Arrangers and each Lender;




     (iv) executed counterparts of the Intercreditor
Agreement in sufficient quantity for the Administrative Agent,
the Collateral Agent, and the Borrower;




     (v) a copy of the Constituent Documents of the Borrower as
of the Signing Date, including all amendments thereto as of the
Signing Date (and each certificate of incorporation, formation or
limited partnership shall be certified as of a recent date by the
Secretary of State or other applicable Governmental Authority of its
respective jurisdiction of organization), together with:




     (A) a certificate as to the good standing of the Borrower,
as of a recent date, from the Secretary of State or other
applicable authority of its jurisdiction of organization and
from each other jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires
such qualification, together in each case with a certificate or
other evidence of good standing as to payment of any applicable
franchise or similar Taxes from the appropriate taxing authority
of each such jurisdiction;




     (B) a certificate of the Secretary or Assistant
Secretary of the Borrower dated the Signing Date and
certifying (1) that the Constituent



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Documents of the Borrower have not been amended since the date
of the last amendment thereto shown on the certificate of good
standing from its jurisdiction of organization furnished
pursuant to clause (A) above; (2) that attached thereto is a
true and complete copy of the agreement of limited partnership,
operating agreement or by-laws as in effect on the Signing Date
and at all times since a date prior to the date of the
resolutions described in clause (3) below; (3) that attached
thereto is a true and complete copy of resolutions duly adopted
by the board of directors or other governing body of the
Borrower authorizing the execution, delivery and performance of
this Agreement, the Intercreditor Agreement and each other Loan
Document to which it is a party on the Signing Date and that
such resolutions have not been modified, rescinded or amended
and are in full force and effect; and (4) 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 the Borrower; and




     (C) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant
to clause (B) above;




     (vi) a favorable written opinion of Skadden, Arps, Slate,
Meagher & Flom LLP, counsel to the Loan Parties, addressed to the
Arrangers, the Administrative Agent, the Collateral Agent and each
Lender, dated the Signing Date, substantially in the form of
Exhibit I-1-A hereto and covering such additional matters
incident to the transactions contemplated hereby as the Arrangers or
the Required Lenders may reasonably request, together with a favorable
written opinion of an internal counsel to the Borrower with respect to
Section 3.09(a), addressed to the Arrangers, the Administrative Agent,
the Collateral Agent and each Lender, dated the Signing Date,
substantially in the form of Exhibit I-1-B hereto;




     (vii) a certificate signed by a Responsible Officer of the
Borrower certifying that the conditions specified in this Section 4.02
have been satisfied; and




     (viii) such other certificates or documents as the Arrangers,
the Issuers or the Collateral Agent may have reasonably required not
less than three days before the Signing Date.



          (b) Certain Fees. All fees required to be paid on or before the
Signing Date to the Administrative Agent, the Arrangers and to the Lenders
shall, in each case, have been paid.



          (c) Counsel Fees. The Borrower shall have paid all reasonable,
documented, out-of-pocket fees, charges and disbursements of (i) counsel to
the Arrangers (directly to such counsel if requested by them) to the extent
invoiced at least seven Business Day prior to the Signing Date and (ii)
counsel to the Administrative Agent, plus such additional amounts of such
fees, charges and disbursements as shall constitute its reasonable estimate
of such fees, charges and disbursements incurred or to be incurred by it
through the Signing Date (provided that such estimate shall not thereafter
preclude a final settling of accounts between the Borrower and the
Arrangers).



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          (d) Financial Information. The Borrower has, on or prior to
the Signing Date, furnished to the Arrangers and the Administrative Agent
the financial information described in Section 1.05 of Annex
III for Entergy Nuclear (as such term is defined therein).



          (e) Patriot Act Information. The Administrative Agent and the
Arrangers shall have received all information requested by itself or any
Lender of the type described in Section 9.18 hereof that is required for it
to comply with its ongoing obligations under applicable “know your
customer”, and anti-money laundering rules and regulations, including the
Patriot Act.



          (f) Delivery of Reports. The Administrative Agent and the
Arrangers shall have received copies of the final independent engineering,
insurance and market consultants’ reports prepared by a consultant
reasonably acceptable to the Arrangers and in a form and scope satisfactory
to the Arrangers.



          (g) Representations and Warranties. The representations and
warranties set forth in Annex III and in each other Loan Document
executed on the Signing Date shall be true and correct in all material
respects (except to the extent that such representations and warranties are
qualified as to materiality, in which case they shall be true and correct in
all respects) on and as of the Signing 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 (or true and correct in all respects, as provided in the
parenthetical above) on and as of such earlier date.



          (h) No Material Adverse Effect. There shall have been no
event, development or circumstance that has had or could reasonably be
expected to have a Material Adverse Effect since December 31, 2007.



          (i) No Default or Event of Default. The Borrower and, to the extent
there
are any on the Signing Date, each Restricted Subsidiary, shall be in
compliance with all the terms and provisions set forth in each Loan Document
on its part to be observed or performed, and, on and as of the Signing Date,
no Default or Event of Default shall have occurred and be continuing.



          (j) Date. The Signing Date shall have occurred on or before
December 31,
2008.



          For purposes of determining compliance with the conditions specified in
this Section 4.02, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to a Lender.



          SECTION 4.03. Conditions Precedent to Funds Availability Date.
On the Funds Availability Date:




     (a) Deliverables. The Arrangers’ receipt of the
following, each of which shall be originals, telecopies or PDF files
(followed promptly by originals) unless otherwise specified, each
executed (as applicable) by a Responsible Officer of the signing Loan
Party, each dated the Funds Availability Date (or, in the case of
certificates of governmental officials, a recent date before the Funds
Availability Date) and each in form and substance reasonably
satisfactory to the Arrangers:



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     (i) any modifications or updates to any schedule to this Agreement (other
than Schedules 3.09(a) (Signing), 3.09(b) (Signing), 6.01(c) (Signing)
and 6.02(d) (Signing), which shall not be modified or updated) made
since the Signing Date, in form reasonably satisfactory to the
Arrangers and each Lender;




     (ii) a Note executed by the Borrower in favor of each
Lender that has requested such Note at least three Business Days in
advance of the Funds Availability Date;




     (iii) an executed Guarantee Joinder and Assumption
Agreement in respect of the Intercreditor Agreement for each
Subsidiary Guarantor;




     (iv) an executed Accession Agreement to the Intercreditor
Agreement for each Secured Obligations Representative that will be
party to the Guarantee and Collateral Agreement (other than the
Administrative Agent) on the Funds Availability Date (if any);




     (v) executed counterparts of the Guarantee and Collateral
Agreement, duly executed by each Loan Party that is a party thereto,
together with:




     (A) a duly executed Perfection Certificate;




     (B) a Corporate Chart current as of the Funds Availability Date;




     (C) appropriate Form UCC-1 financing statements authorized
for filing under the UCC of each jurisdiction in which the
filing of a financing statement or giving of notice may be
required, or reasonably requested by the Collateral Agent, to
perfect the security interests intended to be created by the
Security Documents;




     (D) upon the written request of the Arrangers searches of
ownership of intellectual property in the appropriate
governmental offices and such patent, trademark and/or copyright
filings as may be requested by the Collateral Agent to the
extent necessary or reasonably advisable to perfect the
Collateral Agent’s security interest in intellectual property
Collateral;




     (E) all of the Pledged Securities, which Pledged Securities
shall be
in suitable form for transfer by delivery, or shall be
accompanied by duly
executed instruments of transfer or assignment in blank,
with signatures
appropriately guaranteed, accompanied in each case by any
required transfer tax
stamps, all in form and substance reasonably satisfactory
to the Collateral Agent;




     (F) all Deposit Account Control Agreements, duly executed
by the
corresponding Deposit Account Bank and Loan Party, that, in
the reasonable
judgment of the Arrangers, shall be required for the Loan
Parties to comply with
Sections 5.10 and 5.11;




     (G) Securities Account Control Agreements duly executed by
the
appropriate Loan Party and all “securities intermediaries”
(as defined in the



78









 







UCC) with respect to all Securities Accounts and securities
entitlements of each Loan Party;




     (H) Commodities Account Control Agreements duly
executed by the appropriate Loan Party and all “commodities
intermediaries” (as defined in the UCC) with respect to all
commodities contracts and Commodities Accounts held by each Loan
Party; and




     (I) evidence of the completion of all other filings and recordings of
or with respect to the Security Documents and of all other
actions as may be necessary or, in the opinion of the
Collateral Agent, desirable to perfect the security interests
intended to be created by the Security Documents;




     (vi) one or more Intellectual Property Security Agreements,
as applicable, duly executed by each Loan Party to the extent required
by the Guarantee and Collateral Agreement;




     (vii) fully executed and notarized Mortgages encumbering the
fee interest of the Loan Parties in each real property asset owned by
a Loan Party identified to be a Mortgaged Property on or prior to the
Funds Availability Date on Schedule 3.07, substantially in the
form of Exhibits P-1, P-2 and P-3, with such
changes, if any, as are reasonably satisfactory to the Borrower (which
shall be evidenced by the signature thereof by the applicable Loan
Party) and the Collateral Agent, together with such UCC-1 financing
statements or similar notices as the Collateral Agent shall reasonably
deem appropriate with respect to each such Mortgaged Property,
together with:




     (A) evidence that counterparts of the Mortgages have been
duly executed, acknowledged and delivered to the title insurance
company for filing and recordation in suitable form in all
filing or recording offices that the Collateral Agent may deem
necessary or desirable in order to create a valid first and
subsisting Lien on the property described therein in favor of
the Collateral Agent for the benefit of the Senior Secured
Parties and that provision has been made for the payment of all
filing, documentary, stamp, intangible and recording Taxes and
fees;




     (B) fully paid American Land Title Association Lender’s
Extended Coverage title insurance policies (the “Mortgage
Policies”) in form and substance, with endorsements and in
amounts, reasonably acceptable to the Collateral Agent, issued
by title insurers acceptable to the Collateral Agent, insuring
the Mortgages to be valid first and subsisting Liens on the
property described therein, free and clear of all defects
(including, but not limited to, mechanics’ and material men’s
Liens) and encumbrances, excepting only clause (g) in the
definition of Permitted Liens, and providing for such other
affirmative insurance (including endorsements for future
advances under the Loan Documents, for mechanics’ and material
men’s Liens) as the Collateral Agent may deem reasonably
necessary or desirable;




     (C) American Land Title Association form surveys, for which
all necessary fees (where applicable) have been paid, and dated
no more than 120 days before the day of the initial Credit
Event, certified to the Administrative



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Agent, the Arrangers, the Collateral Agent and the issuer of the
Mortgage Policies in a manner satisfactory to the Arrangers and
the Collateral Agent by a land surveyor duly registered and
licensed in the jurisdictions in which the property described in
such surveys is located and acceptable to the Collateral Agent,
showing all buildings and other improvements, any off-site
improvements, the location of any Easements, parking spaces,
rights of way, building set-back lines and other dimensional
regulations;




     (D) opinions of local counsel for the Loan Parties in
states in which
the Mortgaged Properties are located with respect to the
enforceability and
perfection of the Mortgages and any related fixture filings
in form and substance
reasonably satisfactory to the Arrangers and the Collateral
Agent;




     (E) an appraisal of all or parts of the Mortgaged
Properties as
designated by the Collateral Agent that is prepared by a
member of the Appraisal
Institute selected by the Collateral Agent, in form and
substance acceptable to the
Arrangers and the Collateral Agent, and in compliance with
the Uniform
Standards of Professional Appraisal Practice (USPAP);




     (F) a Standard Flood Hazard Determination Form
(“SFHDF”) with
respect to each Mortgaged Property. To the extent that the
SFHDF indicates that
any of the Mortgaged Properties is in a Special Flood
Hazard Area, then adequate
flood insurance, as and to the extent required under the
National Flood Insurance
Program, shall have been obtained by the Borrower in
compliance with the
requirements set forth in Section 5.03, and proof of such
insurance shall have
been delivered to the Collateral Agent;




     (G) evidence of the insurance required by the
terms of the
Mortgages;




     (H) such evidence of zoning compliance as may be
required by the Arrangers or the Collateral Agent; and




     (I) such other evidence that all other actions that the Collateral
Agent may reasonably deem necessary or desirable in order
to create valid and subsisting Liens on the Mortgaged
Properties described in the Mortgages have been taken;




     (viii) a copy of the Constituent Documents, including all
amendments thereto as of the Funds Availability Date, of each
Restricted Subsidiary, and, with respect to certificates of
incorporation, formation or limited partnership, certified as of a
recent date by the Secretary of State or other applicable Governmental
Authority of its respective jurisdiction of organization, together
with:




     (A) a certificate as to the good standing of the
Borrower and each Restricted Subsidiary, as of a recent date,
from the Secretary of State or other applicable authority of its
respective jurisdiction of organization and from each other
jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such
qualification, together in each case with a certificate or other
evidence of good standing as to payment of any applicable



80









 







franchise or similar Taxes from the appropriate taxing
authority of each such jurisdiction;




     (B) a certificate of the Secretary or Assistant Secretary
of the Borrower and each Restricted Subsidiary dated the Funds
Availability Date and certifying (1) that the Constituent
Documents (x) of the Borrower have not been amended since the
Signing Date and (y) of such Restricted Subsidiary have not been
amended since the date of the last amendment thereto shown on
the certificate of good standing from its jurisdiction of
organization furnished pursuant to clause (A) above; (2) that
attached thereto is a true and complete copy of the agreement of
limited partnership, operating agreement or by-laws of the
Borrower and each Restricted Subsidiary, as in effect on the
Funds Availability Date and at all times since a date prior to
the date of the resolutions described in clause (3) below, (3)
that attached thereto is a true and complete copy of resolutions
duly adopted by the board of directors or other governing body
of the Borrower and each Restricted Subsidiary authorizing the
Transactions and the execution, delivery and performance of the
Transaction Documents to which it is to be a party and, in the
case of the Borrower, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are
in full force and effect; and (4) 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 the Borrower and each Restricted Subsidiary; and




     (C) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant
to clause (B) above;




     (ix) a favorable written opinion of Skadden, Arps, Slate,
Meagher & Flom LLP, counsel to the Loan Parties, addressed to the
Arrangers, the Administrative Agent, the Collateral Agent and each
Lender, dated the Funds Availability Date, substantially in the form
of Exhibit I-2-A hereto and covering such additional matters
incident to the transactions contemplated hereby as the Arrangers or
the Required Lenders may reasonably request, together with a favorable
written opinion of an internal counsel to the Borrower with respect to
Section 3.09(a), addressed to the Arrangers, the Administrative Agent,
the Collateral Agent and each Lender, dated the Funds Availability
Date, substantially in the form of Exhibit I-2-B hereto;




     (x) favorable written opinions from special Michigan,
Vermont, Arkansas, New York and Massachusetts counsel to the Borrower
and the other Loan Parties (which counsel shall be reasonably
satisfactory to the Collateral Agent) to the Arrangers, the
Administrative Agent, the Collateral Agent and each Lender, dated the
Funds Availability Date, substantially in the form of Exhibit
J, Exhibit K, Exhibit L Exhibit M and Exhibit
N hereto and covering such additional matters incident to the
transactions contemplated hereby as the Arrangers or the Required
Lenders may reasonably request;




     (xi) a certificate signed by a Responsible Officer of the
Borrower certifying that the conditions specified in Section 4.01 have
been satisfied to the extent that any Credit Event is requested to be
made on the Funds Availability Date;



81









 







     (xii) a certificate signed by the chief financial
officer of the Borrower attesting to the solvency on the Funds
Availability Date of the Loan Parties on a consolidated basis
after giving effect to the Transactions;




     (xiii) evidence that all insurance required to be maintained
pursuant to the Loan Documents has been obtained and is in effect,
together with (i) the certificates of insurance, naming the Collateral
Agent, on behalf of the Senior Secured Parties, as an additional
insured or loss payee (as its interests may appear), as the case may
be, under all insurance policies maintained with respect to the assets
and properties of the Loan Parties that constitutes Collateral and
(ii) related endorsements to such insurance policies contemplated by
Section 5.03; and




     (xiv) such other certificates or documents as the Arrangers
or the Collateral Agent may have reasonably required not less than
three days before the Funds Availability Date.



          (b) Certain Fees. All fees required to be paid on or before the
Funds Availability Date (i) to the Administrative Agent and the Arrangers
and (ii) to the Lenders shall in each case have been paid.



          (c) Counsel Fees. The Borrower shall have paid all reasonable,
documented out-of-pocket fees, charges and disbursements of counsel to the
Arrangers (directly to such counsel if requested by them) and of counsel to
the Administrative Agent, in each case to the extent invoiced at least seven
Business Day prior to the Funds Availability Date, plus such additional
amounts of such fees, charges and disbursements as shall constitute its
reasonable estimate of such fees, charges and disbursements incurred or to
be incurred by it through the Funds Availability Date (provided that
such estimate shall not thereafter preclude a final settling of accounts
between the Borrower and the Arrangers).



          (d) Date. The Signing Date shall have occurred. The Funds
Availability Date shall have occurred on or prior to the Outside Date.



          (e) Financial Information. The Borrower shall, on or prior to
the Funds Availability Date, furnish to the Arrangers and the Administrative
Agent updated projections.



          (f) Consummation of the Separation Transactions. On or prior to
the Funds Availability Date, there shall have been delivered to the
Arrangers true and correct copies of the Separation Documents, certified as
such by a Responsible Officer of the Borrower. The Separation, including all
of the terms and conditions thereof, shall have been duly approved by the
board of directors and (if required by Applicable Laws) the shareholders of
each of Entergy and the Borrower, and all Separation Documents shall have
been duly executed and delivered by the parties thereto and shall be in full
force and effect. The Separation Documents shall not have been amended,
waived or otherwise modified from the form of the drafts attached hereto as
Exhibit R and Exhibit S respectively, in a way that is
materially adverse to the Lenders without the prior consent of the Arrangers
and no condition precedent therein to the obligations of the Borrower
waived, altered, amended or otherwise changed or supplemented, in each case
in a manner materially adverse to the interests of the Lenders, without the
prior written consent of the Arrangers. On or prior to the Funds
Availability Date, the Separation shall have been consummated in accordance
with the Separation Documents and the Registration Statement and in
accordance with all Applicable Laws.



82









 





          (g) Debt and Corporate Ratings. The Borrower shall have
(i) obtained corporate ratings and ratings for its senior secured
Indebtedness from Moody’s and S&P and (ii) shall have achieved either (A) a
credit rating of no less than Ba3 by Moody’s or (B) a credit rating of no
less than BB- by S&P.



          (h) Patriot Act Information. The Administrative Agent
and the Arrangers shall have received all information requested by itself or
any Lender of the type described in Section 9.18 hereof that is required for
it to comply with its ongoing obligations under applicable “know your
customer”, and anti-money laundering rules and regulations, including the
Patriot Act.



          (i) Senior Note Issuance. The Borrower shall have issued Senior
Notes pursuant to Rule 144A or another exemption from the registration
requirements of the Securities Act and, if applicable, any Funds
Availability Indebtedness, in a combined aggregate principal amount of not
less than $4,000,000,000; provided that at least $3,000,000,000 of
such aggregate principal amount shall constitute Indebtedness in respect of
the Senior Notes. The Borrower shall cause a Responsible Officer to deliver
a certificate to the Arrangers attaching true and correct copies of the
Senior Note Documents and, if applicable, the Funds Availability
Indebtedness Documents, as in effect on the Funds Availability Date.



          (j) Pro Forma Financial Covenant Compliance. The Borrower shall
have delivered to the Arrangers satisfactory evidence that the Borrower and its
Restricted Subsidiaries are in pro forma compliance with the Financial
Covenants on and as of the Funds Availability Date, including after giving
effect to any Credit Event requested to be made on the Funds Availability
Date.



          (k) Representations and Warranties. The representations
and warranties set forth in Article III of this Agreement and in each other
Loan Document shall be true and correct in all material respects (except to
the extent that such representations and warranties are qualified as to
materiality, in which case they shall be true and correct in all respects)
on and as of the Funds Availability 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 (or true and correct in all respects, as provided in the
parenthetical above) on and as of such earlier date.



          (l) No Material Adverse Effect. There shall have been no event,
development or circumstance that has had or could reasonably be expected to
have a Material Adverse Effect since December 31, 2007.



          (m) No Default or Event of Default. The Borrower and each
Restricted Subsidiary shall be in compliance with all the terms and
provisions set forth in each Loan Document on its part to be observed or
performed, and, on and as of the Funds Availability Date, no Default or
Event of Default shall have occurred and be continuing.



          (n) Appraisals. The Borrower shall have delivered the
Funds Availability Date Appraisals.



     For purposes of determining compliance with the conditions specified in
this Section 4.03, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder



83









 




to be consented to or approved by or acceptable or satisfactory to a
Lender unless the Arrangers shall have received notice from such Lender
prior to the closing on the Funds Availability Date specifying its
objection thereto.




ARTICLE V




Affirmative Covenants




     The Borrower covenants and agrees with each Lender that, (i) from and
after the Signing Date, so long as this Agreement shall remain in effect and
until the earlier of (A) the Funds Availability Date and (B) the Outside
Date, the Borrower will, and will cause each of the Restricted Subsidiaries
to comply with the affirmative covenants set forth in Annex V and
(ii) from and after the Funds Availability Date, so long as this Agreement
shall remain in effect and until the Commitments have been terminated and
the principal of and interest on each Loan, all fees and all other expenses
or amounts payable under any Loan Document (other than indemnification and
other contingent obligations in each case not then due and payable) shall
have been paid in full and all Letters of Credit have been canceled or have
expired and all amounts drawn thereunder have been reimbursed in full or
reimbursement thereof shall have been cash-collateralized in an amount equal
to 100% of the Letter of Credit Obligations as of such time, the Borrower
will, and will cause each of the Restricted Subsidiaries to:



          SECTION 5.01. Corporate Existence. Subject to Section 6.04
hereof, do or cause to be done all things necessary to preserve and keep in
full force and effect (a) its corporate existence, and the corporate,
partnership or other existence of each of its subsidiaries, in accordance
with the respective Constituent Documents (as the same may be amended from
time to time) of the Borrower or any such Subsidiary; and (b) the rights
(charter and statutory), licenses and franchises of the Borrower and its
Subsidiaries, except where the failure to so preserve and keep could not
reasonably be expected to have a Material Adverse Effect; provided,
however, that neither the Borrower nor any Restricted Subsidiary
shall be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of itself or any of its
Subsidiaries, if the Borrower or such Restricted Subsidiary shall determine
that the preservation thereof is no longer desirable in the conduct of the
Permitted Businesses of the Borrower and its Subsidiaries, taken as a whole,
and that the loss thereof could not reasonably be expected to result in a
Material Adverse Effect.



          SECTION 5.02. Compliance with Laws. Comply with all
Applicable Laws, Contractual Obligations and Permits, except where the
failure so to comply would not, in the aggregate, have a Material
Adverse Effect.



          SECTION 5.03. Insurance. The Borrower will, and will cause each
Subsidiary that is a Restricted Subsidiary to, at all times maintain in full
force and effect, pursuant to self-insurance arrangements or with insurance
companies that the Borrower believes (in the good faith judgment of the
management of the Borrower, as applicable) are financially sound and
responsible at the time the relevant coverage is placed or renewed,
insurance in at least such amounts (after giving effect to any
self-insurance which the Borrower believes (in the good faith judgment of
management of the Borrower, as applicable) is reasonable and prudent in
light of the size and nature of its business) and against at least such
risks (and with such risk retentions) as the Borrower believes (in the good
faith judgment of management of the Borrower, as applicable) is reasonable
and prudent in light of the size and nature of its business; and will
furnish to the Agents, upon written reasonable request from either Agent,
information presented in reasonable



84









 




detail as to the insurance so carried. With respect to each Mortgaged
Property, obtain flood insurance in such total amount as the Agents may from
time to time reasonably require, if at any time the area in which any
improvements located on any Mortgaged Property is designated a “flood hazard
area” in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), and otherwise comply with the
National Flood Insurance Program as set forth in the Flood Disaster
Protection Act of 1973, as amended from time to time.




          SECTION 5.04. Payment of Obligations. Pay and discharge as the
same shall become due and payable, all its obligations and liabilities,
including (i) Taxes (other than an immaterial amount of Tax), assessments,
and governmental levies except such as are contested in good faith and by
appropriate proceedings and where the Borrower or the relevant Subsidiary
shall have set aside on its books adequate reserves with respect thereto in
accordance with GAAP and such contest operates to suspend collection of the
contested obligation, tax, assessment or charge and enforcement of a Lien,
(ii) all lawful claims which, if unpaid, would by Applicable Laws become a
Lien upon its property other than a Permitted Lien and (iii) all
Indebtedness, as and when the same shall become due and payable, but subject
to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.



          SECTION 5.05. Financial Statements, Reports, etc. In the case
of the Borrower, furnish to the Administrative Agent for distribution to
each Lender:




     (a) Annual Reports. As soon as available and in any event
on or before the date on which such financial statements are required
to be filed with the SEC (after giving effect to any permitted
extensions) (or, if such financial statements are not required to be
filed with the SEC, on or before the date that is 90 days after the
end of each fiscal year), its consolidated balance sheet and related
statements of income, stockholders’ equity and cash flows showing the
financial condition as of the close of such fiscal year of the
Borrower and its consolidated Subsidiaries at such time and the
results of its operations and the operations of such consolidated
Subsidiaries during such year, together with comparative figures for
the immediately preceding fiscal year (or, in the case of the fiscal
year ending December 31, 2008, the comparable twelve month period
ending December 31, 2007), all audited by Deloitte & Touche LLP or
other independent public accountants of recognized national standing
reasonably satisfactory to the Administrative Agent 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) Quarterly Reports. As soon as available and in any
event on or before the date on which such financial statements are
required to be filed with the SEC (after giving effect to any
permitted extensions) with respect to each of the first three fiscal
quarters of each fiscal year (or, if such financial statements are not
required to be filed with the SEC, on or before the date that is 45
days after the end of each such fiscal quarter), its unaudited
consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows showing the financial condition as
of the close of such fiscal quarter of the Borrower and its
consolidated Subsidiaries at such time and the results of its
operations and the operations of such consolidated Subsidiaries during
such fiscal quarter and the then elapsed portion of the fiscal year,
and comparative figures for



85









 







the same periods in the immediately preceding fiscal year, all
certified by one of its Financial Officers to the effect that such
financial statements, while not examined by independent public
accountants, reflect in the opinion of the Borrower all adjustments
necessary to present fairly in all material respects the financial
condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis as of the end of and
for such periods in accordance with GAAP consistently applied, subject
to normal year-end audit adjustments;




     (c) Certifications with Financial Reports. (i)
Concurrently with any delivery of financial statements under paragraph
(a) above, a letter from the accounting firm rendering the opinion on
such statements stating whether, in connection with their audit
examination, such accounting firm has obtained any knowledge of any
Default or Event of Default in respect of the Financial Covenants that
existed on the date of such financial statements and (ii) concurrently
with any delivery of financial statements under paragraph (a) or (b)
above for the first full fiscal quarter ended after the Funds
Availability Date and each quarter and/or year thereafter, a
certificate of a Financial Officer of the Borrower (A) certifying that
(x) no condition or event has occurred that would cause them to
believe that a Default or Event of Default has occurred and (y) no
Event of Default or Default has occurred or, if an Event of Default or
Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto,
(B) setting forth computations in reasonable detail as is reasonably
satisfactory to the Administrative Agent demonstrating compliance with
the Financial Covenants and setting forth the Borrower’s calculation
of the Available Amount as at the end of such period, (C) disclosing
any Reinvestment Event that was consummated in the preceding fiscal
quarter and specifying the nature thereof and the use of proceeds with
respect thereto, (D) summarizing the outstanding balance of all
material, long-term intercompany Indebtedness as of the last day of
the fiscal quarter covered by such financial statements, (E)
supplementing the list of Key Contracts on Schedule 1.01(b)
and the list of Material Contracts on Schedule 1.01(d) and/or
updating such schedules to reflect amendments or supplements to or
replacements of such Key Contracts or Material Contracts that occurred
in the preceding fiscal quarter and (F) to the extent that (x) a
Reinvestment Notice has been given but no Reinvestment Decision Date
has occurred with respect to such Reinvestment Notice or (y) a
Reinvestment Decision Date has occurred but no corresponding
reinvestment expenditure or Reinvestment Commitment Reduction Date has
occurred with respect to the proposed reinvestment specified on such
Reinvestment Decision Date, a written status report setting forth
developments to date and an expected timeline for making such proposed
reinvestment specified on the Reinvestment Decision Date;




     (d) Insurance Report. As soon as is practicable and in
any event within 90 days after the end of each fiscal year, the
Borrower shall furnish the Administrative Agent and the Collateral
Agent (in sufficient copies for each of the Lenders) with (a) a report
in form and substance satisfactory to the Administrative Agent, the
Collateral Agent and the Lenders outlining all material insurance
coverage maintained as of the date of such report by the Borrower and
its Restricted Subsidiaries and the duration of such coverage and (b)
an insurance broker’s statement that all premiums then due and payable
with respect to such coverage have been paid and confirming, with
respect to any such insurance maintained by the Borrower and its
Restricted Subsidiaries, that the Administrative Agent has been named
as loss payee or additional insured, as applicable;



86









 







     (e) SEC Filings. Promptly after the same become publicly
available, notice to the Administrative Agent for posting on the
Approved Electronic Platform that a filing has been made with the SEC.




     (f) Management Letters. Promptly after the receipt
thereof by the Borrower or any of the Subsidiaries, a copy of any
“management letter” received by any such Person from its
certified public accountants and the management’s response thereto;




     (g) Notices of Default. Promptly after the sending or
filing thereof, the Borrower shall notify the Administrative Agent
of all notices of default or breach delivered pursuant to, or in
connection with, any Material Indebtedness or Separation Document;




     (h) Termination of Contractual Obligations.
Promptly after the Borrower or any Restricted Subsidiary becoming
aware of the same, the Borrower shall give the Administrative Agent
written notice of any cancellation, termination or loss of any
Material Contract or Key Contract;




     (i) Labor Disputes. Promptly after becoming aware of the same, the
Borrower shall give the Administrative Agent written notice of (a) any
material labor dispute (including any strikes, lockouts or slow downs)
with respect to the Core Assets and (b) any Worker Adjustment and
Retraining Notification Act or related liability incurred with respect
to the closing of any Core Asset;




     (j) Certification of Public Information. Concurrently with the
delivery of
any document or notice required to be delivered pursuant to this
Section 5.05, the Borrower shall indicate in writing whether such
document or notice contains Non-Public Information. Each Loan Party
and each Lender acknowledge that certain of the Lenders may be
“public-side” Lenders (Lenders that do not wish to receive material
non-public information with respect to the Borrower, its Subsidiaries
or their securities) and, if documents or notices required to be
delivered pursuant to this Section 5.05 or otherwise are being
distributed through the Approved Electronic Platform, any document or
notice that the Borrower has indicated contains Non-Public Information
shall not be posted on that portion of the Approved Electronic
Platform designated for such public-side Lenders. The Borrower agrees
to clearly designate all Information provided to Administrative Agent
by or on behalf of the Borrower that is suitable to make available to
public-side Lenders. If the Borrower has not indicated whether a
document or notice delivered pursuant to this Agreement or the other
Loan Documents contains Non-Public Information, Administrative Agent
reserves the right to post such document or notice solely on that
portion of the Approved Electronic Platform designated for Lenders who
wish to receive material non-public information with respect to the
Borrower, its Subsidiaries and their securities; and




     (k) Other Reports. 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 or
any Lender (acting through the Administrative Agent) may reasonably
request.



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          SECTION 5.06. Litigation and Other Notices. Furnish to the
Administrative Agent written notice of the following promptly after the
Borrower or any of its Restricted Subsidiaries obtains knowledge thereof:




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




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




     (c) the occurrence of any ERISA Event that could reasonably be
expected to result in a Material Adverse Effect; and




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



          SECTION 5.07. Information Regarding Collateral. (a) Furnish,
and will cause each Loan Party to furnish, to each of the Administrative
Agent, and the Collateral Agent prompt written notice of (i) any change (A)
in any Restricted Subsidiary’s corporate name as set forth in its
certificate of incorporation, certificate of formation or other relevant
Constituent Documents, (B) in any office or facility (other than any
location within the control of the Administrative Agent or the Collateral
Agent) at which material portions of Collateral owned by it is located
(including the establishment of any such new office or facility), (C) in any
Restricted Subsidiary’s corporate structure or (D) in any Restricted
Subsidiary’s Federal Taxpayer Identification Number; (ii) any formation or
acquisition after the Funds Availability Date of any Subsidiary that is not
an Unrestricted Subsidiary; (iii) any sale, transfer, lease, issuance or
other disposition (by way of merger, consolidation, operation of law or
otherwise) after the Funds Availability Date of any Equity Interests of any
Subsidiary that is not an Excluded Subsidiary to any Person other than the
Borrower or another Subsidiary Guarantor; and (iv) any Excluded Subsidiary
that ceases to be an Excluded Subsidiary. The Borrower agrees not to effect
or permit any change referred to in the preceding sentence with respect to a
Loan Party unless it has given notice to the Administrative Agent and the
Collateral Agent at least 5 Business Days before the change, so that a
reasonable period has been provided for making all filings under the UCC or
otherwise and taking all other actions, in each case that are required in
order for the Collateral Agent to continue at all times following such
change to have a valid, legal and perfected (subject to the limitations set
forth in Section 3.19) security interest in all the Collateral (other than
any Excluded Perfection Assets). The Borrower also agrees promptly to notify
each of the Administrative Agent and the Collateral Agent if any material
portion of the Collateral is damaged or destroyed.



          (b) In the case of the Borrower, each year, at the time of
delivery of the annual financial statements with respect to the preceding
fiscal year pursuant to Section 5.05(a), deliver to the Administrative Agent
a certificate of a Financial Officer of the Borrower setting forth (i) the
information required pursuant to Section I of the Perfection Certificate or
confirming that there has been no change in such information since the date
of the Perfection Certificate delivered on the Funds Availability Date (or
the date of the most recent certificate delivered pursuant to this Section
5.07(b)), (ii) any liquidation or dissolution during such preceding fiscal



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year of any Subsidiary other than an Excluded Subsidiary and (iii) a copy of
the Corporate Chart that is true, correct, complete and current as of the
date of such certificate.




          (c) Promptly following the acquisition of (i) any new power generating
facility by the Borrower or any Subsidiary Guarantor or (ii) the acquisition
of any Subsidiary that owns a power generating facility and becomes a
Subsidiary Guarantor pursuant to Section 5.10, the Borrower shall update the
“Core Assets” schedule attached as Schedule 1.01(a) to include such
newly acquired power generating facility.



          (d) To the extent incurred in reliance on the exception set forth in
Section 6.02(aa), provide written notice of the imposition of any Liens,
restrictions, regulations, Easements, exceptions or reservations of any
Governmental Authority on any Mortgaged Property or Core Asset.



          SECTION 5.08. Maintaining Records; Access to Properties and
Inspections; Environmental Assessments. (a) Keep, and cause each
Restricted Subsidiary to keep, proper books of record and account as are
necessary to (i) prepare the financial statements of the Borrower and its
Subsidiaries in accordance with GAAP and (ii) comply with Section 5.13. No
more than once in any fiscal year (except if an Event of Default has
occurred and is continuing) the Borrower will, and will cause each of its
Restricted Subsidiaries to, permit, if requested by the Administrative
Agent, any representatives designated by the Administrative Agent or any
Lender to visit and inspect the financial records and the properties of the
Borrower or any of its Restricted Subsidiaries at reasonable times and as
reasonably requested and to make extracts from and copies of such financial
records, and permit any representatives designated by the Administrative
Agent or any Lender to discuss the affairs, finances and condition of the
Borrower or any of its Restricted Subsidiaries with the officers thereof and
independent accountants therefor.



          (b) At its election, the Administrative Agent may retain, or
require the Borrower to retain, an independent engineer or environmental
consultant to conduct an environmental assessment of any Mortgaged Property
or Core Asset (including, without limitation, the Facilities) of the
Borrower or any Restricted Subsidiary. Any such environmental assessments
conducted pursuant to this paragraph (b) shall be at the Borrower’s sole
cost and expense only if conducted following the occurrence and continuation
of (i) an Event of Default or (ii) any event, circumstance or condition that
could reasonably be expected to result in an Event of Default, in the case
of each of clause (i) and (ii) that concerns or relates to any Environmental
Liabilities of the Borrower or any Restricted Subsidiary; provided
that the Borrower shall only be responsible for such costs and expenses to
the extent that such environmental assessment is limited to that which is
reasonably necessary to assess the subject matter of such Event of Default
or such event, circumstance or condition that could reasonably be expected
to result in an Event of Default. In addition, environmental assessments
conducted pursuant to this paragraph (b) shall not be conducted more than
once every 12 months with respect to any parcel of Mortgaged Property or any
Core Asset of the Borrower or any Restricted Subsidiary unless such
environmental assessments are conducted following the occurrence of (i) an
Event of Default or (ii) any event, circumstance or condition that could
reasonably be expected to result in an Event of Default, in the case of each
of clause (i) and (ii) that concerns or relates to any Environmental
Liabilities of the Borrower or any Restricted Subsidiary. The Borrower
shall, and shall cause each of the Restricted Subsidiaries to, reasonably
cooperate in the performance of any such environmental assessment and permit
any such engineer or consultant designated by the Administrative Agent to
have reasonable access to each Mortgaged Property or Core Asset at



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reasonable times and after reasonable notice to the Borrower of the plans to
conduct such an environmental assessment. Environmental assessments
conducted under this paragraph (b) shall be limited to visual inspections of
the Mortgaged Property or Core Asset, interviews with representatives of the
Borrower or facility personnel, and review of applicable records and
documents pertaining to the Mortgaged Property or Core Asset.




          (c) In the event that the Administrative Agent reasonably
believes that Hazardous Materials have been Released or are threatened to be
Released on any Mortgaged Property or Core Asset of the Borrower or any
Restricted Subsidiary or that any such Mortgaged Property or Core Asset is
not being operated in compliance with applicable Environmental Law, in each
case where the Release, threatened Release or failure to comply has resulted
in, or could reasonably be expected to result in, a material Environmental
Liability of the Borrower any of the Restricted Subsidiaries, the
Administrative Agent may, at its election and after reasonable notice to the
Borrower, retain, or require the Borrower to retain, an independent engineer
or other qualified environmental consultant to reasonably assess the subject
matter of such Release, threatened Release or failure to comply with
applicable Environmental Law. Such environmental assessments may include
detailed visual inspections of the Mortgaged Property or Core Asset,
including any and all storage areas, storage tanks, drains, dry wells and
leaching areas, and the taking of soil samples, surface water samples and
groundwater samples as well as such other reasonable investigations or
analyses in each case as are reasonable and necessary to assess the subject
matter of the Release, threatened Release or failure to comply. The Borrower
shall, and shall cause each of the Restricted Subsidiaries to, reasonably
cooperate in the performance of any such environmental assessment and permit
any such engineer or consultant designated by the Administrative Agent to
have reasonable access to each property or facility at reasonable times and
after reasonable notice to the Borrower of the plans to conduct such an
environmental assessment. All environmental assessments conducted pursuant
to this paragraph (c) shall be at the Borrower’s sole cost and expense.



          SECTION 5.09. Use of Proceeds. Use the proceeds of the Loans
and request the issuance of Letters of Credit only for the purposes set
forth in Section 3.13.



          SECTION 5.10. Additional Collateral, etc. (a) With respect to
any property acquired after the Funds Availability Date by any Loan Party
(other than Excluded Assets, Excluded Perfection Assets and any property
described in paragraph (b), (c) or (d) below) as to which the Collateral
Agent, for the benefit of the Senior Secured Parties, does not have a
perfected Lien, promptly (and, in any event within 20 Business Days
following the date of such acquisition) (i) execute and deliver to the
Administrative Agent and the Collateral Agent such amendments to the
Guarantee and Collateral Agreement or such other documents as the Collateral
Agent deems necessary or reasonably advisable to grant to the Collateral
Agent, for the benefit of the Senior Secured Parties, a security interest in
such property and (ii) take all actions necessary or reasonably advisable to
grant to the Collateral Agent, for the benefit of the Senior Secured
Parties, a perfected first priority security interest in such property
(subject, in the case of property not constituting Pledged Securities, to
Permitted Liens, and in the case of Pledged Securities, to Liens permitted
by Section 6.02(e)), including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be reasonably
requested by the Collateral Agent.



          (b) With respect to any fee interest in any real property or any
lease consisting of real property acquired or leased after the Funds
Availability Date by any Loan Party (other than any Excluded Assets and
Excluded Perfection Assets) within ninety (90) days after



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the acquisition or leasing thereof (i) execute and deliver a first priority
Mortgage (subject only to Liens permitted by clauses (a), (f) and (g) of
Section 6.02) or where appropriate under the circumstances, an amendment to
an existing Mortgage, in each case in favor of the Collateral Agent, for the
benefit of the Senior Secured Parties, covering such real property, (ii) if
requested by the Administrative Agent, provide the Senior Secured Parties
with (x) either (1) (A) title insurance covering such real property in an
amount at least equal to the purchase price of such real property (or such
other amount as shall be reasonably specified by the Administrative Agent)
in form and substance reasonably satisfactory to the Administrative Agent;
and (B) a current ALTA survey thereof, complying with the requirements set
forth in Schedule 5.10(b) together with a surveyor’s certificate (only with
respect to (i) any power plant, (ii) any improved real property, and (iii)
any other real property for which an ALTA survey was obtained when such
property was acquired. Notwithstanding the foregoing, such Loan Party shall
obtain or cause to be obtained an ALTA survey complying with the
requirements set forth in Schedule 5.10(b) together with a surveyor’s
certificate for any real property that becomes Collateral pursuant to this
section to the extent that the title company will not remove the survey
exception (or endorse over such exception) without an ALTA survey) or (2)
where an amendment to an existing Mortgage has been delivered pursuant to
clause (i) instead of a Mortgage, an endorsement to the existing title
policy adding such property as an insured parcel, or a new title policy if
the requirements in the state in which the real property is located do not
allow for such an endorsement, and (y) any consents or estoppels reasonably
deemed necessary or advisable by the Administrative Agent or the Collateral
Agent in connection with such Mortgage or Mortgage amendment (to the extent
obtainable using commercially reasonable efforts), each of the foregoing in
form and substance reasonably satisfactory to the Collateral 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, (iv) if requested by the Administrative Agent or the Collateral
Agent, deliver to the Administrative Agent and the Collateral Agent a
current appraisal of such real property or other valuation of such Loan
Party’s interest therein in a form and by an appraiser reasonably acceptable
to the Administrative Agent, (v) deliver to the Administrative Agent and the
Collateral Agent a SFHDF with respect to such real property and, to the
extent that the SFHDF indicates that such real property is in a Special
Flood Hazard Area as designated by the Federal Emergency Management Agency,
proof that adequate flood insurance, as required under the National Flood
Insurance Program, has been obtained with respect to such real property and
(vi) deliver evidence of zoning compliance satisfactory to the Collateral
Agent or Administrative Agent.




          (c) With respect to (i) any new Subsidiary (other than an
Excluded Subsidiary) created or acquired by the Borrower or any of the
Restricted Subsidiaries or (ii) any domestic Immaterial Subsidiary or
domestic Unrestricted Subsidiary that is designated as a Restricted
Subsidiary in accordance with Section 6.11, in each case, after the Funds
Availability Date, within twenty (20) days of such creation, acquisition or
designation the Borrower or the applicable Restricted Subsidiary shall (i)
execute and deliver to the Administrative Agent and the Collateral Agent
such amendments to the Guarantee and Collateral Agreement as the
Administrative Agent and the Collateral Agent deem necessary or reasonably
advisable to grant to the Collateral Agent, for the benefit of the Senior
Secured Parties, a perfected first priority security interest in the Capital
Stock of such new Subsidiary that is owned by any Loan Party (subject only
to the Liens permitted by clause (e) of Section 6.02), (ii) deliver to the
Collateral Agent any certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Borrower or such Restricted



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Subsidiary, (iii) cause such Subsidiary that is a wholly-owned Subsidiary
(A) to become a party to the Guarantee and Collateral Agreement, and (B) to
take such actions necessary or advisable to grant to the Collateral Agent
for the benefit of the Senior Secured Parties a perfected first priority
security interest (subject, in the case of property not constituting Pledged
Securities, to Permitted Liens, and in the case of Pledged Securities, to
Liens permitted by Section 6.02(e)) in the Collateral described in the
Guarantee and Collateral Agreement with respect to such new Subsidiary,
including the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement
or by Applicable Law or as may be reasonably requested by the Administrative
Agent and (iv) 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.




          (d) With respect to (i) any Foreign Subsidiary created or
acquired after the Funds Availability Date and directly owned by any Loan
Party or (ii) any foreign Immaterial Subsidiary or foreign Unrestricted
Subsidiary that is designated as a Restricted Subsidiary in accordance with
Section 6.11 and directly owned by any Loan Party, in each case, after the
Funds Availability Date , promptly (and, in any event, within 30 days of the
creation or acquisition thereof) (A) execute and deliver to the
Administrative Agent and the Collateral Agent (x) such amendments to the
Guarantee and Collateral Agreement as the Collateral Agent deems necessary
or reasonably advisable and/or (y) a Foreign Pledge Agreement, in each case
to grant to the Collateral Agent, for the benefit of the Senior Secured
Parties, a perfected first priority security interest in the Capital Stock
of such Foreign Subsidiary that is owned by any such Loan Party (subject
only to the Liens permitted by clause (e) of Section 6.02 and
provided that in no event shall more than 65% of the total
outstanding voting Capital Stock of any such Foreign Subsidiary be required
to be so pledged), (B) if commercially reasonable, deliver to the Collateral
Agent the certificates representing such Capital Stock, together with
undated stock power, in blank, executed and delivered by a duly authorized
officer of the relevant Loan Party, and take such other action as may be
necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Collateral Agent’s security interest therein, and (C) 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.



          SECTION 5.11. Further Assurances. (a) From time to time duly authorize, execute and
deliver, or cause to be duly authorized, executed and delivered, such additional instruments,
certificates, financing statements, agreements or documents, and take all such actions (including
filing UCC and other financing statements), as the Administrative Agent 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 perfecting or renewing the rights of the Administrative
Agent, the Collateral Agent and the Senior Secured Parties with respect to the Collateral (or with
respect to any additions thereto or replacements or proceeds or products thereof or with respect to
any other property or assets hereafter acquired by the Borrower or any Restricted Subsidiary which
assets or property 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




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papers that the Administrative Agent, the Collateral Agent or such Lender may be required to obtain
from the Borrower or any of the Restricted Subsidiaries for such governmental consent, approval,
recording, qualification or authorization.




          (b) For any additional Deposit Account, Securities Account or Commodities Account opened after
the Funds Availability Date (except to the extent any such account is an Excluded Asset or an
Excluded Perfection Asset), at its sole expense, with respect to any such Deposit Account,
Securities Account or Commodities Account, each applicable Subsidiary Guarantor shall take any
actions required for the Collateral Agent to obtain “control” (within the meaning of the
applicable UCC) with respect thereto, as set forth in greater detail in the Guarantee and
Collateral Agreement.



          (c) The Administrative Agent may establish one or more L/C Cash Collateral Accounts with such
depositaries and Securities Intermediaries (as defined in the UCC) as it in its sole discretion
shall determine. The Borrower agrees that each such L/C Cash Collateral Account shall meet the
requirements of the definition of “L/C Cash Collateral Account”. Without limiting the
foregoing, funds on deposit in any L/C Cash Collateral Account may be invested (but the
Administrative Agent shall be under no obligation to make any such investment) in Cash Equivalents
at the direction of the Administrative Agent and, except during the continuance of an Event of
Default, the Administrative Agent agrees with the Borrower to issue Entitlement Orders (as defined
in the UCC) for such investments in Cash Equivalents as requested by the Borrower;
provided, however, that the Administrative Agent shall not have any responsibility
for, or bear any risk of loss of, any such investment or income thereon. Neither the Borrower nor
any Restricted Subsidiary and no Person claiming on behalf of or through the Borrower or such
Restricted Subsidiary shall have any right to demand payment of any funds held in any L/C Cash
Collateral Account at any time prior to the termination of all outstanding Letters of Credit and
the payment in full of all then outstanding and payable monetary Secured Obligations. The
Administrative Agent shall apply all funds on deposit in an L/C Cash Collateral Account as provided
in Section 2.03(k) and Section 2.13(g).



          SECTION 5.12. Maintenance of Properties. (i) Maintain and preserve all of its material
properties and equipment necessary in the operation of its business in working order and condition
sufficient for the continued operation of its business, ordinary wear and tear and obsolescence
excepted; (ii) make all necessary repairs thereto and renewals and replacements thereof except
where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and
(iii) use the standard of care typical in the industry in the operation and maintenance of its
facilities.



          SECTION 5.13. Corporate Separateness. (i) Maintain books, financial records and bank
accounts that are separate and distinct from the books, financial records and bank accounts of each
other Loan Party and its Subsidiaries (for purposes of this Section 5.13, the “Other Loan
Parties”); (ii) observe appropriate corporate, limited liability company or partnership, as
applicable, procedures and formalities; (iii) except with respect to an intercompany merger
permitted by Section 6.04, hold itself out as an entity separate and distinct from any other Person
(including its Affiliates) (except that nothing herein shall prohibit the filing of a consolidated
tax return for the Borrower and its Subsidiaries or the entry by Borrower or any of its
Subsidiaries into one or more tax sharing agreements permitted by this Agreement or the tax
indemnification agreement with Entergy for prior periods); (iv) except with respect to an
intercompany merger permitted by Section 6.04, conduct its own business in its own name; (v) except
with respect to an intercompany merger permitted by Section 6.04, hold all of its assets in




93









 







its own name; (vi) except with respect to an intercompany merger permitted by Section 6.04, not
identify itself as a division or department of any other Loan Party, except for tax purposes; and
(vii) except with respect to an intercompany merger permitted by Section 6.04, conduct transactions
between such Subsidiaries and third parties only in the name of such Subsidiary and as an entity
separate and independent from its Affiliates.




          SECTION 5.14. Maintenance of Ratings. Maintain from each of S&P and Moody’s (i)
ratings of the Indebtedness evidenced by this Agreement and (ii) corporate credit and corporate
family ratings of the Borrower.



          SECTION 5.15. Key Contracts and Joint Venture Agreements. (a) Shall (i) not permit any
Key Contracts and (ii) use commercially reasonable efforts to prevent joint venture agreements
entered into after the Funds Availability Date in each case to contain any restriction on the
pledge, collateral assignment or transfer of such Key Contract or such joint venture agreement (or
ownership or Equity Interests in respect thereof) to the Collateral Agent for the benefit of the
Senior Secured Parties.



          (b) Shall (i) not permit restrictions in any Key Contracts and (ii) use commercially
reasonable efforts to prevent joint venture agreements entered into or after the Funds Availability
Date that would prevent the Collateral Agent or its designee from enforcing such Key Contract or
foreclosing on such Loan Party’s ownership or Equity Interests in respect of such joint venture
following an exercise of remedies as contemplated in Section 7.03 of this Agreement or as provided
in any Security Document.



ARTICLE VI




Negative Covenants




     The Borrower covenants and agrees with each Lender that, (i) from and after the Signing Date,
so long as this Agreement shall remain in effect and until the earlier of (A) the Funds
Availability Date and (B) the Outside Date, the Borrower will, and will cause each of the
Restricted Subsidiaries to comply with the negative covenants set forth in Annex VI and
(ii) from and after the Funds Availability Date, so long as this Agreement shall remain in effect
and until the Commitments have been terminated and the principal of and interest on each Loan, all
fees and all other expenses or amounts payable under any Loan Document (other than indemnification
and other contingent obligations in each case not then due and payable) shall have been paid in
full and all Letters of Credit have been cancelled or have expired and all amounts drawn thereunder
have been reimbursed in full or reimbursement thereof shall have been cash-collateralized in an
amount equal to 100% of the Letter of Credit Obligations as of such time, the Borrower will not,
nor will it cause or permit any of its Restricted Subsidiaries to:



          SECTION 6.01. Indebtedness and Preferred Stock. Directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to any Indebtedness, and the Borrower will not issue any Disqualified Stock
and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock
except for:




     (a) the incurrence by the Borrower (and the Guarantee thereof by the Subsidiary
Guarantors) of the Indebtedness created (and the Reimbursement Obligations with respect to
Letters of Credit issued) under the Loan Documents;



94









 






     (b) Indebtedness of the Borrower or any Subsidiary pursuant to a Credit Support Facility;




     (c) Indebtedness of the Borrower and its Restricted Subsidiaries set forth on Schedule
6.01(c) (Funding);




     (d) the incurrence by the Borrower and its Restricted Subsidiaries (other than the NY Real
Property Subsidiaries) of Additional Intercreditor Indebtedness; provided that (i) no
Default or Event of Default exists immediately prior to, or would exist immediately after giving
effect to, the incurrence of any such Indebtedness and (ii) the Borrower shall be in compliance
with the Financial Covenants for the Borrower’s most recently ended Test Period for which financial
statements are publicly available immediately preceding the date on which any such Indebtedness is
incurred on a pro forma basis (including a pro forma application of the net proceeds therefrom), as
if such additional Indebtedness (and any other Indebtedness incurred during such Test Period or
from the end of such Test Period through the date on which such calculation is made) had been
incurred at the beginning of the applicable Test Period and was outstanding on such calculation
date; provided, further that if such Additional Intercreditor Indebtedness takes
the form of a revolving credit facility, the tests in the proviso above shall be met on the date
such revolving loan commitments become effective, assuming the incurrence of the full committed
amount of such revolving credit facility;




     (e) the incurrence by (i) the Borrower of Indebtedness in respect of the Senior Notes, and if
applicable, any Funds Availability Indebtedness and (ii) the Subsidiary Guarantors of Indebtedness
in respect of the Senior Note Guarantees and if applicable, any Funds Availability Indebtedness
Guarantees;




     (f) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness
represented by Attributable Debt, Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of financing all or any part of the purchase
price or cost of design, construction, installation, repair, restoration, expansion or improvement
or lease of property (real or personal), plant or equipment used in the business of the Borrower or
any of its Restricted Subsidiaries or incurred within 270 days after any of the foregoing, in an
aggregate principal amount, including (without duplication) all Permitted Refinancing Indebtedness
incurred to refund, modify, extend, renew, refinance, replace, defease or discharge any
Indebtedness incurred pursuant to this clause (f), not to exceed $600,000,000 at any time
outstanding;




     (g) the incurrence by the Borrower or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund,
refinance, replace, defease, modify, extend, renew or discharge Indebtedness (other than
intercompany Indebtedness) that was permitted by this Agreement to be incurred under clauses (b),
(c), (e), (f), (o), (p) and (x) of this Section 6.01; provided, however, that with
respect to the NY Real Property Subsidiaries, such Permitted Refinancing Indebtedness shall be
permitted only with respect to clauses (b), (c), (e), (f), (o) and (x) of this Section 6.01;




     (h) the incurrence by the Borrower and the Restricted Subsidiaries of unsecured
intercompany Indebtedness that constitutes an Investment permitted under



95









 






Sections 6.05(g) or 6.05(j); provided, however, that (i) if the Borrower or any
Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Borrower or a
Subsidiary that is a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the
prior payment in full in cash of all Secured Obligations (which subordination may be pursuant to an
Intercompany Debt Subordination Agreement or any other agreement containing terms satisfactory to
the Administrative Agent and the Collateral Agent executed and delivered by both the applicable
borrower and lender); and (ii)(A) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness being held by a Person other than the Borrower or a Restricted
Subsidiary and (B) any sale or other transfer of any such Indebtedness to a Person that is not
either the Borrower or a Restricted Subsidiary will be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Borrower or such Restricted Subsidiary, as the case may be,
that was not permitted by this clause (h);




     (i) the issuance by any of the Borrower’s Restricted Subsidiaries to the Borrower or to
any of its other Restricted Subsidiaries of shares of preferred stock; provided,
however, that (i) any subsequent issuance or transfer of Equity Interests that results in
any such preferred stock being held by a Person other than the Borrower or a Restricted Subsidiary
and (ii) any sale or other transfer of any such preferred stock to a Person that is not either the
Borrower or a Restricted Subsidiary will be deemed, in each case, to constitute an issuance of such
preferred stock by such Restricted Subsidiary that was not permitted by this clause (i);




     (j) the incurrence by the Borrower or any of its Restricted Subsidiaries of
 Commodity Hedging Obligations and Interest Rate/Currency Hedging Obligations, provided,
however, that the NY Real Property Subsidiaries shall not incur Commodity Hedging
Obligations or Interest Rate/Currency Hedging Obligations other than pursuant to FERC 205
Contracts;




     (k) the Guarantee by the Borrower or any of the Subsidiary Guarantors of Indebtedness
of the Borrower or a Restricted Subsidiary that was permitted to be incurred by another provision
of this Section 6.01 (other than in respect of self insurance); provided that, (i) in each
such case, if the Indebtedness being guaranteed is subordinated to the Secured Obligations
hereunder, then the Guarantee shall be subordinated to the same extent as the Indebtedness
guaranteed and (ii) in the case of Guarantees of Indebtedness incurred pursuant to Section 6.01(w),
such Guarantees shall be subordinated on terms at least as restrictive as the subordination terms
of the Senior Note Guarantees;




     (l) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Indebtedness arising from the honoring by a bank or other Financial Institution of a check, draft
or similar instrument (except in the case of daylight overdrafts) inadvertently drawn against
insufficient funds, so long as such Indebtedness is discharged within five Business Days;




     (m) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness
in respect of, bankers’ acceptances and performance bonds, bid bonds, appeal bonds, completion
guarantees, bank guarantees, letters of credit, warehouse receipts and surety bonds provided by the
Borrower or a Restricted Subsidiary in the ordinary course of business;



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     (n) the incurrence of Indebtedness that may be deemed to arise as a result of
agreements of the Borrower or any Restricted Subsidiary providing for indemnification, adjustment
of purchase price (including earn outs) or any similar obligations, in each case, incurred in
connection with any Permitted Acquisition or Investment permitted pursuant to Sections 6.05(g),
6.05(h) and 6.05(j) or Asset Sale or other disposition not prohibited hereunder; provided
that (i) in the case of any such Asset Sale or disposition, the aggregate maximum liability
associated with such provisions may not exceed the gross proceeds (including non-cash proceeds) of
such disposition and (ii) this clause (n) shall only apply to NY Real Property Subsidiaries in
respect of Indebtedness constituting indemnification obligations arising from Asset Sales permitted
under Section 6.04(b);




     (o) the incurrence of Indebtedness of a Person or Indebtedness attaching to assets of a
Person that, in either case, becomes a Restricted Subsidiary or Indebtedness attaching to assets
that are acquired by the Borrower or any Restricted Subsidiary, in each case after the Funds
Availability Date as the result of a Permitted Acquisition; provided that (i) such
Indebtedness existed at the time such Person became a Restricted Subsidiary or at the time such
assets were acquired and, in each case, was not created in anticipation thereof, (ii) such
Indebtedness is not guaranteed in any respect by the Borrower or any Restricted Subsidiary (other
than any such Person that so becomes a Restricted Subsidiary) and (iii)(A) the Capital Stock of
such Person are pledged to the Collateral Agent to the extent required under Section 5.10 and (B)
such Person executes a supplement to each of the Security Documents (or alternative guarantee and
security arrangements in relation to the Secured Obligations) to the extent required under Section
5.10;




     (p) the incurrence by the Borrower (other than the NY Real Property Subsidiaries) of
Indebtedness to finance a Permitted Acquisition; provided that (i) such Indebtedness is not
guaranteed in any respect by any Person other than the Person acquired (the “acquired
Person”) as a result of such Permitted Acquisition, and (ii)(A) the Borrower pledges the
Capital Stock of such acquired Person to the Collateral Agent to the extent required under Section
5.10 and (B) such acquired Person executes a supplement to the Security Documents (or alternative
guarantee and security arrangements in relation to the Secured Obligations) to the extent required
under Section 5.10;




     (q) the incurrence by the Borrower or any Restricted Subsidiary of Indebtedness
consisting of (i) obligations to pay insurance premiums, (ii) self-insurance obligations or (iii)
take-or-pay obligations contained in supply agreements, in each case arising in the ordinary course
of business and not in connection with the borrowing of money or Hedging Obligations.




     (r) [Intentionally omitted]




     (s) Guarantee obligations in respect of any Investment permitted pursuant to
Sections 6.05(a), 6.05(c), 6.05(d) (to the extent existing on the Funds Availability Date),
6.05(e), 6.05(g), 6.05(h), 6.05(j), 6.05(o), 6.05(p) and 6.05(q);




     (t) Cash Management Obligations;




     (u) Indebtedness representing (i) workers compensation claims, (ii) health, disability
or other employee benefits and (iii) deferred compensation to employees,



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consultants or independent contractors of the Borrower and the Restricted Subsidiaries
incurred in the ordinary course of business;




     (v) Indebtedness consisting of promissory notes issued by the Borrower or any
Restricted Subsidiary to current or former officers, managers, consultants, directors and
employees (or their respective spouses, former spouses, successors, executors,
administrators, heirs, legatees or distributees) to finance the purchase or redemption of
Capital Stock or Capital Stock Equivalents of the Borrower permitted by Section 6.06(b);




     (w) additional unsecured Indebtedness; provided that (i) such Indebtedness
matures after, and does not require any scheduled amortization or other scheduled payments of
principal prior to, the Revolving Credit Maturity Date; (ii) such Indebtedness is incurred by
the Borrower; (iii) both immediately prior and after giving effect to the incurrence thereof,
(A) no Default or Event of Default shall exist or result therefrom and (B) the Borrower and
its Restricted Subsidiaries shall be in pro forma compliance with the Financial Covenants and
(iv) to the extent that such incurrence of additional unsecured Indebtedness exceeds an
aggregate principal amount of $20,000,000, the Borrower delivers a certificate of a Financial
Officer to the Administrative Agent at least 2 Business Days prior to the incurrence of such
unsecured Indebtedness stating that the Borrower has determined in good faith that such terms
and conditions satisfy the requirements of this clause (w);




     (x) the incurrence by the Borrower or any Restricted Subsidiary of Environmental
CapEx Debt or Necessary CapEx Debt (which Indebtedness may be secured to the extent provided
in Section 6.02(bb)); provided that, prior to the incurrence of any such
Environmental CapEx Debt or Necessary CapEx Debt, the Borrower shall deliver to the
Administrative Agent an officers’ certificate by a Financial Officer designating such
Indebtedness as Environmental CapEx Debt or Necessary CapEx Debt, as applicable;




     (y) Indebtedness incurred by the Borrower and its Restricted Subsidiaries in good
faith to invest in nuclear decommissioning trusts or to comply with decommissioning
agreements; and




     (z) all premiums (if any), interest (including post-petition interest), fees,
expenses, charges, and additional or contingent interest on obligations described in clauses
(a) through (y) above.



     For purposes of determining compliance with this Section 6.01, in the event that an item of
Indebtedness meets the criteria of more than one of the categories of Indebtedness described in
clauses (a) through (z) above, the Borrower shall, in its reasonable discretion, classify and
reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion
thereof) and will only be required to include the amount and type of such Indebtedness in one or
more of the above clauses.



          SECTION 6.02. Liens. Directly or indirectly, create, incur, assume or suffer to exist
any Lien of any kind on, or assign any right to receive income or profits on, any property or asset
now owned or hereafter acquired, except:



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     (a) Liens held by the Collateral Agent pursuant to the Loan Documents on assets of the
Borrower or any Subsidiary Guarantor securing the Secured Obligations of the Borrower or such
Subsidiary Guarantor (including Liens securing Specified Commodity Hedging Transactions, Specified
Credit Support Facilities and Additional Intercreditor Indebtedness and Related Agreements);




     (b) Liens to secure the performance of statutory obligations, surety or appeal bonds,
performance bonds, bid bonds, completion guarantees or other obligations of a like nature incurred
in the ordinary course of business;




     (c) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by Section
6.01(f), (o) and (p) hereof covering only the assets acquired with or financed by such
Indebtedness;




     (d) Liens existing on the Funds Availability Date and set forth on Schedule 6.02(d)
(Funding);




     (e) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent
or that are being contested in good faith by appropriate proceedings promptly instituted and
diligently concluded; provided that any reserve or other appropriate provision has been
made to the extent required by GAAP;




     (f) Liens of landlords arising by statute and liens of suppliers, mechanics, repairmen,
carriers, materialmen, bailees, warehousemen or workmen and other similar Liens, in each case (i)
imposed by law or arising in the ordinary course of business, (ii) for amounts not yet due or that
are not overdue for a period of more than sixty (60) days or which are being contested in good
faith by appropriate proceedings and (iii) with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent required by GAAP;




     (g) any exception, minor defect or irregularity (i) listed on the title policies or on the
surveys issued in connection with any Mortgaged Property and (ii) in respect of any Mortgaged
Properties following the Funds Availability Date and other real property, other properly recorded
easements, rights of way, licenses, reservations, servitudes, permits, conditions, covenants,
rights of others, restrictions, oil, gas and other mineral interests, royalty interests and leases,
encroachments, protrusions, zoning or land use rights and other similar charges or encumbrances,
and with respect to (i) and (ii) that do not interfere in any material respect with the Permitted
Business conducted at such Mortgaged Property or such other real property;




     (h) Liens to secure any Permitted Refinancing Indebtedness permitted under Section
6.01; provided that such Lien shall be limited to all or part of the same property and
assets that secured or, under the written agreements pursuant to which the original Lien arose,
could secure the original Lien (plus improvements and accessions to such property or proceeds or
distributions thereof);




     (i) Liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of social security
benefits;



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     (j) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty requirements of the Borrower or any of its
Restricted Subsidiaries, including rights of offset and set-off, in each case made in the ordinary
conduct of the Permitted Business;




     (k) Liens arising under leases or subleases of real property that do not, in the
aggregate, materially detract from the value of such real property or interfere with the ordinary
conduct of the Permitted Business as proposed to be conducted at such real property;




     (l) statutory Liens arising under ERISA incurred in the ordinary conduct of
the Permitted Business;




     (m) Liens existing on the assets of any Person that becomes a Restricted Subsidiary or
existing on assets acquired, in each case pursuant to a Permitted Acquisition, to the extent the
Liens on such assets secure Indebtedness permitted by Section 6.01(o); provided that such
Liens attach at all times only to the same assets that such Liens attached to, and secure only the
same Indebtedness that such Liens secured, immediately prior to such Permitted Acquisition;




     (n) Liens on cash and Cash Equivalents (i) deposited by the Borrower or any of the
Restricted Subsidiaries in margin accounts with or on behalf of futures contract brokers or paid
over to other counterparties, or (ii) pledged or deposited as collateral to a contract counterparty
or issuer of surety bonds or issuer of letters of credit by the Borrower or any of the Restricted
Subsidiaries, in each case incurred in the ordinary course of the Permitted Business to secure
Interest Rate/Currency Hedging Obligations that are not secured by the Lien of the Collateral
Agent, Commodity Hedging Transactions (other than Specified Commodity Hedging Transactions) and
Credit Support Facilities (other than Specified Credit Support Facilities); provided, that
at the time such Lien is incurred, the Borrower would be in pro forma compliance with its Financial
Covenants as calculated with the most recent financial information delivered pursuant to Section
5.05(a) or (b) (as applicable) assuming that such cash and Cash Equivalents were no longer netted
for purposes of the definition of Consolidated Total Net Debt;




     (o) set-off or netting rights granted by the Borrower or any Restricted Subsidiary of
the Borrower pursuant to any Hedging Transactions, solely in respect of amounts owing under such
agreements;




     (p) Liens arising from UCC financing statements filed on a precautionary basis in respect
of operating leases intended by the parties to be true leases (other than any such leases
entered into in violation of this Agreement);




     (q) Liens on cash deposits and other funds maintained with a depositary institution, in
each case arising in the ordinary course of business by virtue of any statutory or common law
provision relating to banker’s liens, including Section 4-210 of the UCC;




     (r) Liens on assets or securities granted or deemed to arise in connection with and
solely as a result of the execution, delivery or performance of contracts to




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purchase or sell such assets or securities if such purchase or sale is otherwise permitted
hereunder;




     (s) Liens on assets of the Borrower or any Restricted Subsidiary with respect
to Indebtedness in an aggregate principal amount not to exceed $200,000,000 at any time
outstanding; provided, however, that the assets of the NY Real Property
Subsidiaries shall not be encumbered by Liens in respect of Indebtedness in an aggregate principal
amount exceeding $50,000,000 at any time outstanding;




     (t) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for sale or purchase of goods entered into by the Borrower or any Restricted
Subsidiary in the ordinary course of the Permitted Business;




     (u) Liens deemed to exist in connection with Investments in repurchase agreements
permitted under Section 6.05;




     (v) Liens in respect of Cash Management Obligations;




     (w) Liens solely on any cash earnest money deposits made by the Borrower or any
Restricted Subsidiary in connection with any letter of intent or purchase agreement for Permitted
Acquisitions made under Section 6.05(h);




     (x) restrictions contained in joint venture agreements triggering a default upon the
Borrower or a Restricted Subsidiary’s pledge of its Equity Interests or other ownership interests
in such joint venture; provided that the Loan Parties shall be in compliance with Section
5.15 when such Liens arise;




     (y) rights reserved to or vested in others to take or receive any part of, or royalties
related to, the power, gas, oil, coal, lignite, nuclear fuel or other minerals or timber generated,
developed, manufactured or produced by, or grown on, or acquired with, any property of the Borrower
and the Restricted Subsidiaries and Liens upon the production from property of power, gas, oil,
coal, lignite, nuclear fuel or other minerals or timber, and the by-products and proceeds thereof,
to secure the obligations to pay all or a part of the expenses of exploration, drilling, mining or
development of such property only out of such production or proceeds;




     (z) Liens on cash and Cash Equivalents deposited by the Borrower or any Restricted
Subsidiary in margin accounts with or on behalf of credit clearing organizations, independent
system operators, regional transmission organizations, state agencies or federal agencies;




     (aa) Liens, restrictions, regulations, Easements, exceptions or reservations of any
Governmental Authority;




     (bb) Liens to secure Environmental CapEx Debt or Necessary CapEx Debt permitted by
Section 6.01(x) that encumber only the assets purchased, installed or otherwise acquired with the
proceeds of such Environmental CapEx Debt or Necessary CapEx Debt; provided, that the Liens
securing such Indebtedness must be pari passu with, or junior to, the Liens on such assets securing
the Secured Obligations; and



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     (cc) Liens on Indebtedness permitted by Sections 6.01(k) or 6.01(z), to the extent
that Liens are permitted on the underlying Indebtedness with respect thereto.



          SECTION 6.03. Limitation on Sale and Leaseback Transactions. Enter into any sale and
leaseback transaction; provided that the Borrower or any Restricted Subsidiary may enter
into a sale and leaseback transaction if (a) the Borrower or such Restricted Subsidiary, as
applicable, could have (i) incurred Indebtedness in an amount equal to the Attributable Debt (if
any) relating to such sale and leaseback transaction under Section 6.01(f) hereof and (ii) incurred
a Lien to secure such Indebtedness (if any) or other obligations associated with such transaction
pursuant to Section 6.02(c); (b) the gross cash proceeds of that sale and leaseback transaction are
at least equal to the Fair Market Value of the property that is subject of that sale and leaseback
transaction; and (c) in the event that such sale and leaseback transaction constitutes an Asset
Sale, the transfer of assets in that sale and leaseback transaction is permitted by Section 6.04.



          SECTION 6.04. Mergers, Consolidations and Sales of Assets. (a)(x) Merge into or
consolidate with any other Person, or permit any other Person to merge into or consolidate with it,
or liquidate or dissolve, or (y) sell, transfer, lease, issue or otherwise dispose of (in one
transaction or in a series of transactions) all or substantially all of the assets (whether now
owned or hereafter acquired) of the Borrower, except that if at the time thereof and immediately
after giving effect thereto no Event of Default or Default shall have occurred and be continuing
(i) any Restricted Subsidiary (other than a NY Real Property Subsidiary) may merge into the
Borrower in a transaction in which the Borrower is the surviving corporation, (ii) any Restricted
Subsidiary (other than a NY Real Property Subsidiary) may merge into or consolidate with any other
Restricted Subsidiary in a transaction in which the surviving entity is a Restricted Subsidiary and
no Person other than the Borrower or a Restricted Subsidiary receives any consideration
(provided that if any party to any such transaction is (A) a Loan Party, the surviving
entity of such transaction shall be a Loan Party and (B) a Domestic Subsidiary, the surviving
entity of such transaction shall be a Domestic Subsidiary), (iii) any merger or consolidation of a
Restricted Subsidiary (other than a NY Real Property Subsidiary) will be permitted in connection
with an Investment permitted by Sections 6.05(h) or 6.05(j) and (iv) any Restricted Subsidiary
(other than a NY Real Property Subsidiary) may liquidate or dissolve or, solely for purposes of
reincorporating in a different jurisdiction, merge if the Borrower determines in good faith that
such liquidation or dissolution or merger is in the best interests of the Borrower and could not
reasonably be expected to result in a Material Adverse Effect;



          (b) Consummate any Asset Sale (notwithstanding that it may be otherwise permitted under
paragraph (a) above) unless (i) the Borrower (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the
assets or Equity Interests issued or sold or otherwise disposed of; (ii) at least 75% of the
consideration received in the Asset Sale by the Borrower or such Restricted Subsidiary is in the
form of cash (for purposes of this provision, any securities, notes or other obligations received
by the Borrower or any such Restricted Subsidiary from such transferee that are converted by the
Borrower or such Restricted Subsidiary into cash within 180 days of the receipt of such securities,
notes or other obligations, to the extent of the cash received in that conversion will be deemed to
be cash); (iii) any consideration received by the Borrower or any Subsidiary Guarantor in
connection with such Asset Sale pursuant to this paragraph (b) that is in the form of Indebtedness
shall be pledged to the Collateral Agent pursuant to Section 5.10; (iv) with respect to any such
Asset Sale, the Borrower shall be in compliance, on a pro forma basis after giving effect to such
Asset Sale, with the Financial Covenants as if such Asset Sale had occurred on the first day of the




102









 







applicable Test Period; and (v) after giving effect to any such Asset Sale, no Default or Event of
Default shall have occurred and be continuing; provided that with respect to any such Asset
Sale pursuant to this clause (b), the aggregate amount of consideration received from and after the
Funds Availability Date shall not exceed 5% of net property, plant and equipment of the Borrower
and its Restricted Subsidiaries, calculated on a cumulative basis; provided that no more
than $50,000,000 of such aggregate consideration received from and after the Funds Availability
Date may be from Asset Sales of the assets of the NY Real Property Subsidiaries.




          SECTION 6.05. Limitation on Investments. Make any Investment except for:




     (a) extensions of trade credit, asset purchases (including purchases of inventory,
supplies and materials) and the licensing or contribution of intellectual property pursuant
to joint marketing arrangements with other Persons, in each case in the ordinary conduct of
the Permitted Business;




     (b) Cash Equivalents;




     (c) loans and advances to officers, directors and employees of the Borrower or any of
its Restricted Subsidiaries (i) to finance the purchase of Capital Stock of the Borrower
(provided that the amount of such loans and advances used to acquire such Capital
Stock shall be contributed to the Borrower in cash as common equity), (ii) for reasonable and
customary business related travel expenses, relocation expenses and similar expenses, and
(iii) for additional purposes not contemplated by subclause (i) or (ii) above in an aggregate
principal amount at any time outstanding with respect to this clause (iii) not exceeding
$5,000,000 in any fiscal year (with unused amounts in any such period being carried-forward
to any succeeding fiscal year);




     (d) Investments existing on the Funds Availability Date that are set forth in
Schedule 6.05(d) and any extensions, renewals or reinvestments thereof, so long as
the aggregate amount of all Investments pursuant to this clause (d) is not increased at any
time above the amount of such Investments existing on the Funds Availability Date;




     (e) Investments (i) consisting of the purchase or acquisition of Commodity Hedging
Transactions, Interest Rate Hedging Transactions and Currency Hedging Transactions or (ii)
resulting from mark to market exposure in respect of Commodity Hedging Transactions, Interest
Rate Hedging Transactions and Currency Hedging Transactions, in each case to the extent not
prohibited by Sections 6.01(j) or 6.15;




     (f) Investments received in connection with the bankruptcy or reorganization of
trade creditors, trade counterparties, suppliers or customers and in settlement of
delinquent obligations of, and other disputes with, customers;




     (g) Investments (including in the form of loans) by (i) any Loan Party in another
Loan Party, (ii) any Restricted Subsidiary that is not a Loan Party in (A) any Loan Party
or (B) another Restricted Subsidiary that is not a Loan Party;




     (h) Investments constituting Permitted Acquisitions;



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     (i) Investments made to repurchase or retire common stock of the Borrower
owned by any employee stock ownership plan or key employee, directors and officers, or other stock
ownership plans of the Borrower;




     (j) additional Investments by the Borrower and its Restricted Subsidiaries in
entities that are not Loan Parties (including (i) Investments in Unrestricted Subsidiaries, (ii)
Minority Investments and (iii) Letters of Credit Issued on behalf of (x) EquaGen or any subsidiary
of EquaGen, if EquaGen or such subsidiary is not a Subsidiary Guarantor at such time, or (y) any
Subsidiary that is not a Subsidiary Guarantor), but excluding any Proposed Acquisition, in each
case as valued at the Fair Market Value of such Investment at the time each such Investment is
made, in an aggregate amount that, at the time such Investment is made, would not exceed the sum of
(A) $150,000,000 plus (B) the Available Amount at such time plus (C) to the extent
such amounts do not increase the Available Amount, an amount equal to any repayments, interest,
returns, profits, distributions, income and similar amounts actually received in cash in respect of
any such Investment (which amount shall not exceed the amount of such Investment valued at the Fair
Market Value of such Investment at the time such Investment was made) plus (D) the face
amount of any expired, cancelled or terminated Letter of Credit described in clause (iii) above;
provided, that after giving effect to such additional Investment (i) such Investment shall
result in the Collateral Agent, for the benefit of the Senior Secured Parties, being granted a
security interest in any Equity Interests and/or any assets acquired to the extent required by
Sections 5.10 and/or 5.11; (ii) no Default or Event of Default shall have occurred and be
continuing and (iii) the Borrower shall be in compliance, on a pro forma basis after giving effect
to such Investment, with the Financial Covenants, as such covenants are recomputed as of the last
day of the most recently ended fiscal quarter for which financial statements are required to be
delivered pursuant to Sections 5.05(a) or 5.05(b) as if such Investment had occurred on the first
day of the applicable Test Period.



     (k) Investments permitted under Section 6.06;



     (l) Investments constituting Guarantees permitted under Section 6.01;



     (m) Investments consisting of non-cash consideration permitted to be received under
Section 6.04(b);



     (n) in connection with an Asset Sale or other disposition not prohibited by this
Agreement, investments of property or assets of the Borrower or any of its Restricted Subsidiaries
to the extent reasonably necessary to consummate any disposition of such property or assets (or of
the Capital Stock of the Person holding such property or assets) permitted hereunder or to optimize
the tax benefits or minimize the adverse tax consequences of any such disposition;



     (o) Investments made by the Borrower and its Restricted Subsidiaries in good faith
to invest in nuclear decommissioning trusts or to comply with decommissioning agreements;



     (p) the acquisition by the Borrower of any Equity Interests of EquaGen not owned by the
Borrower as of the Funds Availability Date, provided that the Collateral Agent shall be granted a
security interest in such Equity Interests pursuant to Section



104









 






5.10, and if EquaGen shall thereafter be a wholly-owned Subsidiary, then EquaGen shall become
a Restricted Subsidiary and a Subsidiary Guarantor; and




     (q) additional Investments by the Borrower or any of its Restricted Subsidiaries
in an aggregate amount not to exceed $150,000,000 at any time outstanding (without giving
effect to any write downs or write offs thereof);



     provided, however that no intercompany Investments or advances may be made by
the Borrower and its Restricted Subsidiaries for the purpose of making payments prohibited by the
proviso at the end of Section 6.06 during any period when the restrictions set forth in such
proviso are in effect.



          SECTION 6.06. Limitation on Dividends. Declare or pay any dividends (other than
dividends payable solely in its Capital Stock or Capital Stock Equivalents) or return any capital
to its shareholders or make any other distribution, payment or delivery of property or cash to its
shareholders as such, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for
consideration, any shares of any class of its Capital Stock now or hereafter outstanding (or any
Capital Stock Equivalents), or permit any of the Restricted Subsidiaries to purchase or otherwise
acquire for consideration (other than in connection with an Investment permitted by Section 6.05
(except for any such Investment involving the purchase of Capital Stock of the Borrower from
shareholders of the Borrower)) any shares of any class of the Capital Stock of the Borrower, now or
hereafter outstanding (or any Capital Stock Equivalents) (all of the foregoing,
“Dividends”); provided, that so long as no Default or Event of Default exists or
would exist after giving effect thereto:




     (a) the Borrower may redeem in whole or in part any of its Capital Stock for another
class of Capital Stock or rights to acquire its Capital Stock or with proceeds from
substantially concurrent equity contributions or issuances of new shares of its Capital
Stock; provided that such other class of Capital Stock contains terms and provisions
at least as advantageous to the Lenders in all material respects as those contained in the
Capital Stock redeemed thereby;




     (b) the Borrower may repurchase shares of its Capital Stock (or any Capital Stock
Equivalents) held by current or former officers, directors and employees of the Borrower and
its Subsidiaries in an aggregate amount not to exceed $30,000,000 in the aggregate from and
after the Separation, so long as such repurchase is pursuant to, and in accordance with the
terms of, management and/or employee stock plans, stock subscription agreements, employment
agreements or shareholder agreements or termination agreements;




     (c) in addition to clause (d) below, the Borrower or any Restricted Subsidiary may
declare and make distributions or Dividends on its Capital Stock at any time or pay other
Dividends; provided that (i) the aggregate amount of all such distributions or
Dividends paid by the Borrower pursuant to this clause (c) shall not exceed the Available
Amount at the time of such distribution or Dividend and (ii) the Borrower and its Restricted
Subsidiaries would be in pro forma compliance with all Financial Covenants for the most
recent Test Period for which financial statements are publicly available after giving effect
to such distribution or Dividend;



105









 






     (d) any Restricted Subsidiary may pay any Dividend (or, in the case of any partnership
or limited liability company, any similar distribution) to (i) any Loan Party or (ii) the
holders of its Equity Interests on a pro rata basis;




     (e) the Borrower may (i) make payments to holders of the Borrower’s Capital Stock in
lieu of the issuance of fractional shares of its Capital Stock; and (ii) honor any conversion
request by a holder of convertible Indebtedness and make cash payments in lieu of fractional
shares in connection with any such conversion and may make payments on convertible
Indebtedness in accordance with its terms;




     (f) the Borrower may enter into transactions for the purchase, redemption, acquisition,
cancellation or other retirement for a nominal value per right of any rights granted to all
the holders of Capital Stock of the Borrower pursuant to any shareholders’ rights plan
adopted for the purpose of protecting shareholders from takeover tactics; provided
that any such purchase, redemption, acquisition, cancellation or other retirement of such
rights is not for the purpose of evading the limitations of this covenant (all as determined
in good faith by the Board of Directors of the Borrower);




     (g) the Borrower or any Restricted Subsidiary may pay any Dividend or distribution
within 60 days after the date of declaration thereof, if at the date of declaration such
payment would have complied with the provisions of this Agreement;




     (h) the Borrower or any Restricted Subsidiary may pay Dividends in an amount
equal to withholding or similar Taxes payable by any present or former employee,
director, manager or consultant (or their respective Affiliates, estates or immediate
family members);




     (i) the Borrower or any Restricted Subsidiary may make payments,
advances or loans (or cancellation of loans), pursuant to employment and severance
arrangements and health and benefit plans or agreements between the Borrower and its
Subsidiaries and their respective officers, employees or consultants (including management
and employee benefit plans or agreements, stock option plans and other compensatory
arrangements) in the ordinary course of business;




     (j) the Borrower or any Restricted Subsidiary may make payments pursuant
to tax sharing agreements among the Borrower and/or its Subsidiaries on customary terms to
the extent attributable to the ownership or operation of the Borrower and/or its
Subsidiaries; and




     (k) the Borrower may redeem in whole or in part any of its preferred stock with
proceeds from substantially concurrent equity contributions or issuances of new shares of its
Capital Stock (other than Disqualified Stock);



     provided, however that (i) following the delivery of a blockage notice to the
Subsidiary Guarantors under the Senior Note Guarantees and any Funds Availability Indebtedness
Guarantees as provided in the Intercreditor Agreement and until such notice terminates as set forth
in the Intercreditor Agreement or has otherwise been rescinded or (ii) after the occurrence and
during the continuation of any payment default under any Designated Senior Indebtedness (as such
term is defined in the Senior Note Documents as in effect on the Funds Availability Date), no
dividend or distribution of any kind may be made pursuant to this Section 6.06 or otherwise,



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the proceeds of which would be used by the Borrower or any Restricted Subsidiary to pay any
obligations owing under the Senior Notes, any Funds Availability Indebtedness or any Senior
Note Guarantees or Funds Availability Indebtedness Guarantees.




          SECTION 6.07. Limitations on Debt Payments; Restrictive Agreements. (a) Make any
distribution, whether in cash, property, securities or a combination thereof, other than regularly
scheduled payments of principal, fees and interest as and when due (to the extent not prohibited by
applicable subordination provisions and whether or not such regularly scheduled payments may at the
obligor’s option be paid in kind or in other securities), in respect of, or pay, or offer or commit
to pay, or directly or indirectly redeem, repurchase, retire or otherwise acquire for
consideration, any Subordinated Indebtedness (other than intercompany Indebtedness of the Borrower
and the Subsidiaries), except (i) the incurrence of Permitted Refinancing Indebtedness (and the
payment of any interest, fees and premiums payable in respect of the principal being refinanced in
connection therewith), and (ii) any such payment or distribution in an aggregate amount not in
excess of the Available Amount at the time of such payment or distribution; or



          (b) Utilize the proceeds of the Loans to pay, redeem, repurchase, retire or otherwise acquire
for consideration any senior unsecured Indebtedness,



          (c) Enter into, incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon the ability of the Borrower or any Restricted Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets in favor of the
Collateral Agent securing the Secured Obligations (it being understood that any agreement that
contains general prohibitions or restrictions on the existence of Liens but expressly permits Liens
in favor of the Collateral Agent securing the Secured Obligations shall not be prohibited or
otherwise limited by the covenant contained in this Section 6.07(c)); provided that the
foregoing shall not apply to:




     (i) restrictions and conditions imposed by Applicable Laws;




     (ii) customary restrictions and conditions contained in (A) agreements relating
to the purchase or sale of a Restricted Subsidiary or asset pending such purchase or sale and
(B) purchase money obligations for property acquired and Capital Lease Obligations that
impose restrictions on the property purchased or leased, in each case to the extent that such
restrictions and conditions apply only to the Restricted Subsidiary or asset that is to be
purchased or sold and such purchase or sale is permitted under this Agreement;




     (iii) restrictions or conditions in agreements or arrangements existing on the
Funds Availability Date and listed on Schedule 6.07(c), and any extensions, renewals,
amendments or modifications of such agreements or arrangements to the extent that such
restrictions or conditions are not expanded or otherwise made more restrictive than such
existing restrictions or conditions, in each case in any material respect;




     (iv) restrictions or conditions imposed by any agreement relating to any
Indebtedness incurred by a Restricted Subsidiary or otherwise encumbering property at the
time of its purchase and prior to the date on which such Restricted Subsidiary or such
property was acquired by the Borrower or another Restricted Subsidiary if such conditions or
restrictions relate only to the property or assets of such Restricted Subsidiary and its
subsidiaries or such acquired property (provided that such restrictions



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or conditions are not created in contemplation of or in connection with such Person becoming
a Restricted Subsidiary or such property being acquired), and any extensions, renewals,
amendments or modifications thereto that do not expand or otherwise make such existing
restrictions or conditions more restrictive, in each case in any material respect;




     (v) restrictions in connection with sale and leaseback transactions permitted by
Section 6.03, but only with respect to the assets subject to such transactions;




     (vi) customary provisions in joint venture, stockholder, membership, limited
liability company or partnership agreements or organizational documents relating to joint
ventures or partnerships or owners and customary provisions (including negative pledges) in
leases, licenses, permits and other contracts restricting the assignment, disposition or
distribution thereof (whether for collateral purposes or otherwise) or otherwise restricting
or affecting the property subject thereto (provided that the Borrower or applicable
Restricted Subsidiary has complied with its obligation under Section 5.15 to use commercially
reasonable efforts to eliminate such restriction);




     (vii) any negative pledge in favor of the holder of a Permitted Lien on the
property subject to such Permitted Lien and any negative pledge on any accounts receivable,
payment intangibles, instruments or other similar rights to payment from a counterparty;




     (viii) customary non-assignment provisions in contracts, agreements, leases, permits
and licenses;




     (ix) restrictions on cash or other deposits imposed by customers under
contracts entered into in connection with the Permitted Business; and




     (x) customary restrictions or conditions contained in any netting, operating,
construction, service, supply, purchase or sale agreements to which the Borrower or any
Restricted Subsidiary enters into in connection with the Permitted Business; provided
that such agreement prohibits the encumbrance or transfer of solely the property or assets of
the Borrower or such Restricted Subsidiary that are the subject of that agreement, the
payment rights arising thereunder and/or the proceeds thereof and not of any other asset or
property of the Borrower or such Restricted Subsidiary or the assets or property of any other
Restricted Subsidiary.



          (d) Directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted Subsidiary to (i) pay
dividends or make any other distributions on its Capital Stock to the Borrower or any of its
Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by,
its profits, or pay any Indebtedness owed to the Borrower or any of its Restricted Subsidiaries;
(ii) make loans or advances to the Borrower or any of its Restricted Subsidiaries; or (iii)
transfer any of its properties or assets to the Borrower or any of its Restricted Subsidiaries
(except restrictions encumbering property at the time such property was acquired by the Borrower or
any of its Restricted Subsidiaries, so long as such restriction relates solely to the property so
acquired and was not created in connection with or in anticipation of such acquisition). The
restrictions in this Section 6.07(d) will not apply to encumbrances or restrictions existing under
or by reason of:



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     (A) any Indebtedness permitted under Section 6.01, including, without limitation, (x) the
Senior Notes and Funds Availability Indebtedness (in each case, as in effect on the Funds
Availability Date) and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of those agreements permitted under this
Agreement; provided that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are no more restrictive, taken as a whole,
with respect to restrictions described in clauses (d)(i) through (iii) above than those contained
in the applicable Separation Financing Documents on the Funds Availability Date, (y) purchase money
obligations for property acquired and Capital Lease Obligations that impose restrictions on the
property purchased or leased and any agreement for the sale or other disposition of the stock or
assets of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary
pending the sale or other disposition; provided, in each case, to the extent that such
restrictions apply only to the property or Restricted Subsidiary that is to be purchased or sold,
and that such purchase or sale or other disposition is otherwise permitted under this Agreement and
(z) Permitted Refinancing Indebtedness; provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are no more restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness being refinanced;




     (B) any Loan Document;




     (C) restrictions and conditions imposed by Applicable Laws;




     (D) customary non-assignment provisions in contracts, agreements, leases, permits and
licenses;




     (E) Liens permitted to be incurred under the provisions of Section
6.02 that limit the right of the debtor to dispose of the assets subject to such
Liens;




     (F) asset sale agreements, sale-leaseback agreements, stock sale
agreements and other similar agreements, which limitation is applicable only to
the assets that are the subject of such agreements;




     (G) any instrument governing Capital Stock of (x) a Restricted
Subsidiary existing at the time it became a Restricted Subsidiary or (y) a Person
acquired by the Borrower or any of its Restricted Subsidiaries as in effect at the
time of such acquisition (except, in each case, to the extent such Capital Stock
was incurred in connection with or in contemplation of such acquisition or
transaction or series of transactions pursuant to which the Restricted Subsidiary
became a Restricted Subsidiary), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than the
Person, or the property or assets of the Person, so acquired;




     (H) restrictions on cash or other deposits imposed by customers under contracts
entered into in connection with the Permitted Business; and



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     (I) customary restrictions or conditions contained in any netting,
operating, construction, service, supply, purchase or sale agreements to which the
Borrower or any Restricted Subsidiary enters into in connection with the Permitted
Business; provided that such agreement prohibits the encumbrance or transfer
of solely the property or assets of the Borrower or such Restricted Subsidiary that
are the subject of that agreement, the payment rights arising thereunder and/or the
proceeds thereof and not of any other asset or property of the Borrower or such
Restricted Subsidiary or the assets or property of any other Restricted Subsidiary;




     (J) any encumbrance or restriction of the type referred to in clauses
(i), (ii) or (iii) of this Section 6.07(d) (except to the extent that any of clauses
(A) through (I) of this Section 6.07(d) refers or applies only to certain of such
clauses (i), (ii) or (iii), and, in such case, only to such applicable clause),
imposed by any amendments, modifications, restatements, renewals, increases,
supplements, or replacements of the contracts, instruments or obligations referred to
in clauses (A) through (I) of this Section 6.07(d); provided that such
amendments, modifications, restatements, renewals, increases, supplements,
replacements or refinancings are, when taken as a whole, in the good faith judgment of
a Financial Officer of the Borrower, no more restrictive with respect to such dividend
and other payment restrictions than those contained in the dividend or other payment
restrictions prior to such amendment, modification, restatement, renewal, increase,
supplement or replacement.



          SECTION 6.08. Transactions with Affiliates. (a) Make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract, agreement, understanding,
loan, advance or guarantee with, or for the benefit of, any Affiliate of the Borrower other than as
excluded pursuant to Section 6.08(b) (each, an “Affiliate Transaction”), unless (i) the
Affiliate Transaction is on terms that are no less favorable to the Borrower (as reasonably
determined by the Borrower) or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Borrower or such Restricted Subsidiary with an
unrelated Person; and (ii) the Borrower delivers to the Administrative Agent with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration
in excess of $50,000,000, a resolution of the Board of Directors of the Borrower attached to an
officers’ certificate certifying that such Affiliate Transaction complies with clause (i) of this
Section and that such Affiliate Transaction has been approved by a majority of the disinterested
members of such Board of Directors.



          (b) The following items shall not constitute Affiliate Transactions and, therefore,
will not be subject to the provisions of this Section:




     (i) any employment agreement or director’s engagement agreement,
employee benefit plan, officer and director indemnification agreement or any similar
arrangement entered into by the Borrower or any of its Restricted Subsidiaries in the
ordinary course of business or approved by the Board of Directors of the Borrower in good
faith;




     (ii) transactions between or among the Loan Parties;



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     (iii) payment of reasonable fees and other compensation to directors who are not
otherwise Affiliates of the Borrower;




     (iv) Investments or Dividends that do not violate Section 6.05 or 6.06 hereof;




     (v) transactions permitted by, and complying with, the provisions of Section
6.04(a);




     (vi) agreements in effect as of the Funds Availability Date that are set forth on
Schedule 6.08(b) and amendments thereto or replacements thereof, so long as any such
amendment or replacement agreement taken as a whole is not materially more disadvantageous to
the Borrowers and its Restricted Subsidiaries than such existing agreement as determined in
good faith by the Borrower; provided, however, that any amendments to a Key
Contract shall comply with Section 5.15;




     (vii) posting of Letters of Credit issued hereunder (subject, where applicable, to
Section 6.05(j)), or letters of credit issued pursuant to other financing facilities to
support the obligations of any Excluded Subsidiary or of EquaGen or any of its subsidiaries;




     (viii) any tax sharing agreement between or among the Borrower and its Subsidiaries
so long as such tax sharing agreement is on fair and reasonable terms with respect to each
participant therein (as determined in good faith by senior management of the Borrower at the
time such agreement is entered into); and




     (ix) any agreement to do any of the foregoing.



          SECTION 6.09. Business Activities. Enter into any business, either directly or through
any Restricted Subsidiary, except for the Permitted Business. Notwithstanding the foregoing, the NY
Real Property Subsidiaries shall engage solely in the business such NY Real Property Subsidiaries
were engaged in on the Funds Availability Date.



          SECTION 6.10. Other Indebtedness and Agreements. (a) Effect any waiver, supplement,
modification, amendment, termination or release of any indenture, instrument or agreement in
respect of any Material Indebtedness to effectively refinance such Material Indebtedness if such
refinancing would have been prohibited by the definition of Permitted Refinancing Indebtedness or
otherwise prohibited under this Agreement;



          (b) Amend its Constituent Documents, except for changes and amendments that do not
materially adversely affect the interests of the Senior Secured Parties under the Loan Documents
or in the Collateral; and



          (c) Modify, alter, amend, extend, renew, replace, knowingly waive strict and timely
performance of any compliance with (including waiving any default under), terminate, cancel,
suspend or assign any Material Contract or any term, agreement, provision, item, obligation or
covenant contained in any Material Contract, if to do so could reasonably be expected to have a
Material Adverse Effect.



          SECTION 6.11. Designation of Restricted, Unrestricted and Immaterial
Subsidiaries. The Board of Directors of the Borrower (or any committee expressly authorized by




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the Board of Directors of the Borrower) may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary or an Immaterial Subsidiary, in accordance with the definitions thereof, if
such designation would not cause a Default or Event of Default. If a Restricted Subsidiary, newly
acquired Subsidiary or newly formed Subsidiary is designated as an Unrestricted Subsidiary or an
Immaterial Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by the
Borrower and its Restricted Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary
or an Immaterial Subsidiary will be deemed to be an Investment made as of the time of the
designation and will reduce the amount available for Investments under Section 6.05(j). Such
designation will only be permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary or Immaterial
Subsidiary, as applicable. The Board of Directors of the Borrower may redesignate any Unrestricted
Subsidiary or Immaterial Subsidiary to be a Restricted Subsidiary if such redesignation would not
cause a Default or Event of Default.




          SECTION 6.12. Consolidated Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio as of the last day of any Test Period ending during any period set forth below to be
less than the ratio set forth opposite such period below:



	 	 	 
	Period	 	Ratio
	Funds Availability Date to the Revolving Credit
Maturity Date

	 	1.5 to 1.0






          SECTION 6.13. Consolidated Total Leverage Ratio. Permit the Consolidated Total
Leverage Ratio as of the last day of any Test Period ending during any period set forth below to be
greater than the ratio set forth opposite such period below:



	 	 	 
	Period	 	Ratio
	Funds Availability Date to the Revolving Credit
Maturity Date

	 	5.0 to 1.0 






          SECTION 6.14. Fiscal Year. With respect to the Borrower, change its fiscal year-end to
a date other than December 31; provided, however, that the Borrower may, upon
written notice to the Administrative Agent, change the financial reporting convention specified
above to any other financial reporting convention reasonably acceptable to the Administrative
Agent, in which case the Borrower and the Administrative Agent will, and are hereby authorized by
the Lenders to, make any adjustments to this Agreement that are necessary in order to reflect such
change in financial reporting, provided, that with respect to any such change that delays
the fiscal year-end, the Borrower shall deliver financial information required by Section 5.05(b)
for all intervening fiscal quarters, including the fiscal quarter that was formerly the year-end.



          SECTION 6.15. No Speculative Hedging Transactions. Neither the Borrower nor any
Restricted Subsidiary shall engage in any speculative Hedging Transactions except (i) as set forth
in the definition of Commodity Hedging Transactions and (ii) Interest Rate Hedging Transactions and
Currency Hedging Transactions for the sole purpose of hedging in the normal course of the Permitted
Business. For the avoidance of doubt, the determination as to whether or not a Hedging Transaction
is speculative shall be made as of the date such Hedging Transaction is entered into by the
Borrower or the applicable Restricted Subsidiary.



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          SECTION 6.16. Specified Commodity Hedging Transactions. (a) So long as any Specified
Commodity Hedging Transaction is secured by the Collateral Agent’s Lien on the Collateral, provide
any Credit Support Facilities or arrange for Credit Support Facilities with respect to such
Specified Commodity Hedging Transaction.



          (b) For so long as the Intercreditor Agreement is in effect, following the occurrence
and during the continuation of a payment “Default” or an “Event of Default” under one or more
“Series of Secured Obligations” that constitute “Material Indebtedness” (as each such term is
defined in the Intercreditor Agreement), make any payment (other than Ordinary Course Settlement
Payments (as such term is defined in the Intercreditor Agreement)) under any Specified Commodity
Hedging Transaction, which payment is prohibited under the Intercreditor Agreement.



ARTICLE VII




Events of Default




          SECTION 7.01. Signing Date Events of Default. From and after the Signing Date and
until the earlier of (i) the Funds Availability Date and (ii) the Outside Date, each of the
following shall be an Event of Default hereunder:




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




     (b) default in the payment of any interest or any fee or any other amount due under any
Loan Document, when and as the same shall become due and payable, and such default shall
continue unremedied for a period of five (5) Business Days;




     (c) default in the due observance or performance by the Borrower or any Restricted
Subsidiary of any covenant, condition or agreement contained in (i) Section 1.01 of Annex V
or (ii) Sections 1.03, 1.04 and 1.06 of Annex VI;




     (d) default in the due observance or performance by the Borrower or any Restricted
Subsidiary of any covenant, condition or agreement contained in any Loan Document (other than
those specified in clauses (b) or (c) above) and such default shall continue unremedied for a
period of 30 days after the earlier of (a) notice thereof from the Administrative Agent, the
Collateral Agent or any Lender to the Borrower and (b) the date when a Responsible Officer of
the Borrower becomes aware of such default;




     (e) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law
that (i) is for relief against the Borrower or any of its Restricted Subsidiaries in an
involuntary case; (ii) appoints a custodian of the Borrower or any of its Restricted
Subsidiaries or for all or substantially all of the property of the Borrower or any of its
Restricted Subsidiaries; or (iii) orders the liquidation of the Borrower or any of



113









 






its Restricted Subsidiaries; and, in each of clauses (i), (ii) or (iii), the order or
decree remains unstayed and in effect for 60 consecutive days; or




     (f) the Borrower or any of its Restricted Subsidiaries, pursuant to or within
the meaning of Bankruptcy Law (i) commences a voluntary case; (ii) consents to the entry of
an order for relief against it in an involuntary case; (iii) consents to the appointment of a
custodian of it or for all or substantially all of its property; (iv) makes a general
assignment for the benefit of its creditors; or (v) generally is not paying its debts as they
become due.



          SECTION 7.02. Funds Availability Date Events of Default. From and after the Funds
Availability Date, each of the following shall be an Event of Default hereunder:




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




     (b) default in the payment of any principal of any 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 in the payment of any interest on any Loan or any Fee or any other amount
(other than an amount referred to in clause (b) above) due under any Loan Document, when and
as the same shall become due and payable, and such default shall continue unremedied for a
period of five (5) Business Days;




     (d) default in the due observance or performance by the Borrower or any Restricted
Subsidiary of any covenant, condition or agreement contained in Sections 5.01, (solely with
respect to the Borrower or Core Asset Subsidiaries, EquaGen (to the extent it is a Subsidiary
of the Borrower) and Enexus Power Marketing, LLC), 5.06 or 5.09 or in Article VI;




     (e) default in the due observance or performance by the Borrower or any Restricted
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 after the earlier of (a) notice thereof from the Administrative
Agent, the Collateral Agent or any Lender to the Borrower and (b) the date when a Responsible
Officer of the Borrower becomes aware of such default;




     (f) the Borrower or any Restricted Subsidiary shall in respect of any Material
Indebtedness: (i) fail to pay any principal or interest (regardless of amount due) when and
as the same shall become due and payable (after giving effect to any applicable grace period)
or (ii) suffer the occurrence of any other event (including an Early Termination Event (as
defined in the Intercreditor Agreement)) or condition that results in such 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 such
Indebtedness or any trustee or agent on its or their behalf to



114









 






cause such Indebtedness to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity; provided that this sub-clause (ii)
shall not apply to secured Indebtedness that becomes due as a result of a sale or transfer of the
property or assets securing such Indebtedness that is permitted under this Agreement;




     (g) a court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that (i) is for relief against the Borrower or any of its Restricted Subsidiaries in an
involuntary case; (ii) appoints a custodian of the Borrower or any of its Restricted Subsidiaries
or for all or substantially all of the property of the Borrower or any of its Restricted
Subsidiaries; or (iii) orders the liquidation of the Borrower or any of its Restricted
Subsidiaries; and, in each of clauses (i), (ii) or (iii) above, the order or decree remains
unstayed and in effect for 60 consecutive days;




     (h) the Borrower or any of its Restricted Subsidiaries, pursuant to or within the
meaning of Bankruptcy Law (i) commences a voluntary case; (ii) consents to the entry of an order
for relief against it in an involuntary case; (iii) consents to the appointment of a custodian of
it or for all or substantially all of its property; (iv) makes a general assignment for the benefit
of its creditors; or (v) generally is not paying its debts as they become due;




     (i) one or more judgments for the payment of money in an aggregate
amount in excess of $100,000,000 (excluding therefrom any amount covered by insurance) shall be
rendered against the Borrower or any Restricted Subsidiary or any combination thereof and the same
shall remain undischarged for a period of 60 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon assets
or properties of the Borrower or any of its Restricted Subsidiaries to enforce any such judgment;




     (j) an ERISA Event shall have occurred that, when taken together with all
other such ERISA Events, could reasonably be expected to result in liability of the Borrower
and its ERISA Affiliates in an aggregate amount exceeding $100,000,000;




     (k) except as permitted by this Agreement or as a result of the discharge of such Loan
Party in accordance with the terms of the Loan Documents, (i) any Guarantee under the Guarantee and
Collateral Agreement shall be held by a final decision issued in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and effect, (ii) any
Loan Party shall assert in writing that any provision of any Loan Document after delivery thereof
for any reason fails or ceases to be valid and binding on, or enforceable against, any Loan Party
party thereto or (iii) any Security Document shall for any reason (other than pursuant to a failure
of any Agent, Lender or any agent appointed thereby to take any action within the sole control of
such Persons) fail or cease to create a valid and enforceable Lien on any Collateral with a value
greater than $50,000,000 purported to be covered thereby or, except as permitted by the Loan
Documents, such Lien shall fail or cease to be a perfected and first priority Lien (subject to any
prior Permitted Liens), or any Loan Party shall so state in writing; or




     (l) there shall have occurred a Change of Control.



115









 





          SECTION 7.03. Remedies. (a) From and after the Signing Date and prior to the Funds
Availability Date, during the continuance of any Event of Default, the Administrative Agent may,
and, at the request of the Required Lenders, shall, by notice to the Borrower (i) declare that all
or any portion of the Commitments be terminated and (ii) declare fees or other amounts that have
accrued to be forthwith due and payable, whereupon such accrued fees and other amounts shall become
and be forthwith due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower; provided, however,
that upon the occurrence of the Events of Default with respect to the Borrower or any Restricted
Subsidiary specified in Sections 7.01(e) or 7.01(f), (A) the Commitments of each Lender shall each
automatically be terminated and (B) all such accrued fees and other amounts shall automatically
become and be due and payable, without presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrower. In addition to the remedies set forth above,
the Administrative Agent may exercise any remedies provided for by Applicable Law.



          (b) From and after the Funds Availability Date, during the continuance of any Event of
Default, the Administrative Agent (i) with the consent of the Required Lenders may, and, at the
request of the Required Lenders, shall, by notice to the Borrower declare that all or any portion
of the Commitments be terminated, whereupon the obligation of each Lender to make any Loan and each
Issuer to Issue any Letter of Credit shall immediately terminate and (ii) with the consent of the
Required Lenders may and, at the request of the Required Lenders, shall, by notice to the Borrower,
declare the Loans, all interest thereon and all other amounts and Secured Obligations payable under
this Agreement to be forthwith due and payable, whereupon the Loans, all such interest and all such
amounts and such Secured Obligations shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that upon the occurrence of the Events
of Default specified in Sections 7.02(g) or 7.02(h), with respect to the Borrower or any other Loan
Party (A) the Commitments of each Lender to make Loans and the commitments of each Lender and
Issuer to Issue or participate in Letters of Credit shall each automatically be terminated and (B)
the Loans, all such interest and all such amounts and such Secured Obligations shall automatically
become and be due and payable, without presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrower. In addition to the remedies set forth above,
the Administrative Agent may exercise any remedies provided for by the Security Documents in
accordance with the terms thereof or any other remedies provided for by Applicable Law.



          SECTION 7.04. Application of Funds. Without limitation of, and after giving effect to,
Section 6.7 of the Guarantee and Collateral Agreement and Section 3.5 of the Intercreditor
Agreement, all proceeds received by the Administrative Agent or the Collateral Agent or any other
Person in respect of any sale of, collection from, or other realization upon all or any part of the
Collateral under any Security Document shall be held by the Administrative Agent or the Collateral
Agent as Collateral for, and applied in full or in part by the Administrative Agent or the
Collateral Agent against, the applicable Secured Obligations arising hereunder then due and owing
as set forth in Section 2.13(g).




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ARTICLE VIII




The Agents and the Arrangers




          SECTION 8.01. Authorization and Action. (a) Each Lender and each Issuer hereby
irrevocably (and each holder of any Note by its acceptance of such Note shall be deemed to) appoint
the Administrative Agent as its agent and authorize the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms
of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.
The Administrative Agent hereby accepts such appointment and hereby agrees to act in such capacity.
Without limiting the generality of the foregoing, the Administrative Agent is hereby expressly
authorized by the Lenders, the Issuers and each holder of each Note to execute any and all
documents (including releases and the Intercreditor Agreement) with respect to the Collateral and
the rights of the Senior Secured Parties with respect thereto, and to appoint the Collateral Agent
as their agents in respect of the Intercreditor Agreement and the other Security Documents, in each
case as contemplated by and in accordance with the provisions of this Agreement and the Security
Documents. Each Lender, each Issuer and each holder of each Note hereby agrees to be bound by the
priority of the security interests and allocation of the benefits of the Collateral and proceeds
thereof set forth in the Security Documents. Each Lender, each Issuer and each holder of each Note
hereby authorizes the Administrative Agent in its capacity as such to act as its Secured
Obligations Representative for purposes of the Intercreditor Agreement. The Administrative Agent in
its capacity as Secured Obligations Representative is hereby expressly authorized and directed by
each Lender, each Issuer and each holder of each Note to execute the Intercreditor Agreement and
the other Security Documents (and any other documents contemplated thereby) on behalf of the
Lenders, the Issuers and the holders of Notes on the Signing Date and from and after the Funds
Availability Date, as applicable.



          (b) As to any matters not expressly provided for by this Agreement and the other Loan
Documents (including enforcement or collection), neither the Agents nor the Arrangers shall be
required to exercise any discretion or take any action, but shall be entitled to act or to refrain
from acting (and shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall be binding upon all Lenders, each
Issuer and each holder of each Note; provided, however, that neither Agent nor
either Arranger shall be required to take any action that it in good faith believes exposes it to
personal liability unless such Agent or such Arranger receives an indemnification satisfactory to
it from the Lenders and the Issuers with respect to such action or (ii) is contrary to this
Agreement or Applicable Law. If the Administrative Agent or the Arrangers request instructions from
the Required Lenders with respect to any act or action (including failure to act) in connection
with this Agreement or any other Loan Document, the Administrative Agent and the Arrangers shall be
entitled to refrain from such act or taking such action unless and until the Administrative Agent
and the Arrangers shall have received instructions from the Required Lenders; and the
Administrative Agent shall not incur liability to any Lender by reason of so refraining. Without
limiting the foregoing, no Lender, Issuer or the holder of any Note shall have any right of action
whatsoever against the Administrative Agent or either Arranger as a result of the Administrative
Agent or such Arranger acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Lenders. The Agents agree to give to
each Lender and each Issuer prompt notice of each notice given to it by the other Agent, the



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Arrangers or any Loan Party pursuant to the terms of this Agreement or the other Loan
Documents.




          (c) In performing its functions and duties hereunder and under the other Loan Documents, the
Administrative Agent and the Arrangers are acting solely on behalf of the Lenders and the Issuers,
except in the case of the Administrative Agent with respect to the limited extent it acts as an
agent of the Borrower in maintaining the Register provided for in Section 9.04(d), and its duties
are entirely administrative in nature. Neither the Administrative Agent nor the Arrangers assume,
and none of them shall be deemed to have assumed, any obligation other than as expressly set forth
herein and in the other Loan Documents or any other relationship as the agent, fiduciary or trustee
of or for any Lender, Issuer, holder of any Note or holder of any other Secured Obligation. The
Administrative Agent and the Arrangers may perform any of its duties under any Loan Document by or
through its agents or employees.



          (d) Each Agent and each Arranger may perform any and all of its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by it. Each Agent, each Arranger and
any such sub-agent may perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this Article VIII shall
apply to any such sub-agent and to the Related Parties of each Agent, each Arranger 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 their activities as Agent or Arranger.



          (e) The Syndication Agent shall not have obligations or duties whatsoever in such capacity
under this Agreement or any other Loan Document and shall incur no liability hereunder or
thereunder in such capacity.



          SECTION 8.02. Obligation of Arrangers. Notwithstanding anything to the contrary
contained in this Agreement or in any other Loan Document, it is understood and agreed that, with
respect to any agreement, instrument, certificate or any other document or information delivered or
required to be delivered to the Arrangers and/or the Administrative Agent on or prior to the Funds
Availability Date (other than any Borrowing Request required pursuant to Section 2.02(a) or any
Letter of Credit Request required pursuant to Section 2.03(c)) and any action taken or required to
be taken by the Borrower or any of its Subsidiaries prior to or on the Funds Availability Date (i)
each Lender irrevocably authorizes the Arrangers to determine the conformity of any such document
or action (or the failure to take such action) with the requirements of this Agreement or such Loan
Document, and the Administrative Agent shall have no obligations or duties hereunder or under any
other Loan Document (and shall incur no liability) with respect thereto and (ii) the provisions of
this Section 8 (other than Section 8.01(a)) shall apply, mutatis mutandis, to each of the Arrangers
acting in such capacity; provided, that prior to and on the Funds Availability Date neither
Arranger shall have any liability except as expressly set forth in the first sentence of Section
8.03 below, and provided, further that after the Funds Availability Date (x)
neither Arranger shall have any obligations or duties whatsoever in such capacity under this
Agreement or any other Loan Document and (y) neither Arranger shall incur any liability hereunder
or thereunder in such capacity.



          SECTION 8.03. Agents’ Reliance, Etc. (a) None of the Agents, the Arrangers or any of
their Affiliates or any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it, him, her or them under or in connection
with this Agreement or the other Loan Documents, except for its, his, her or their own gross




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negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and
non-appealable decision). Without limiting the foregoing, (i) the Agents may treat the payee of any
Note as its holder until such Note has been assigned in accordance with Section 9.04 (and any
request, authority or consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent
holder, transferee, assignee or endorsee, as the case may be, of such Note or of any Note or Notes
issued in exchange therefor), (ii) the Agents may rely on the Register to the extent set forth in
Section 9.04, (iii) the Agents and the Arrangers may consult with legal counsel (including counsel
to the Borrower or any other Loan Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts, (iv) neither the Agents nor the
Arrangers make any warranty or representation to any Lender or Issuer and none of them shall be
responsible to any Lender or Issuer for any statements, recitals, information, warranties or
representations made by or on behalf of any Loan Party in, or in connection with, this Agreement,
any other Loan Document or in any document, certificate or other writing delivered in connection
herewith or therewith, (v) neither the Agents nor the Arrangers shall be deemed to have knowledge
of any Default or Event of Default unless and until written notice thereof is given to such Agent
or such Arranger by a Borrower or a Lender, (vi) neither Agent nor the Arranger shall have any duty
to ascertain or to inquire either as to the performance or observance of any term, covenant or
condition of this Agreement or any other Loan Document, as to the financial condition of any Loan
Party or as to the existence, or possible existence, of any Default or Event of Default, (vii)
neither Agent nor the Arrangers shall be responsible to any Lender, Issuer, holder of any Note or
holder of any other Secured Obligation for the due execution, legality, validity, enforceability,
genuineness, collectibility, sufficiency or value of, or the attachment, perfection or priority of
any Lien created or purported to be created under or in connection with, this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto or thereto, (viii)
neither Agent nor the Arrangers shall have a duty to confirm 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 and (ix) neither Agent nor the Arrangers shall
incur any liability under or in respect of this Agreement or any other Loan Document by acting upon
any notice, consent, certificate or other instrument or writing (which writing may be a telecopy or
electronic mail) or any telephone message believed by it to be genuine and signed or sent by the
proper party or parties.




          (b) Each Agent and each Arranger 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 and each Arranger 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 and each Arranger may consult with legal counsel (who may
be counsel for the Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.



          SECTION 8.04. Posting of Approved Electronic Communications. (a) Each of the Lenders,
the Issuers and each Loan Party agree that the Agents (and, if applicable, the Arrangers) may, but
shall not be obligated to, make the Approved Electronic Communications available to the Lenders,
Issuers and prospective assignees, participants or other transferees by posting such Approved
Electronic Communications on IntraLinksTM or a substantially similar




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electronic platform chosen by the Administrative Agent to be its electronic transmission system
(the “Approved Electronic Platform”).




          (b) Although the Approved Electronic Platform and its primary web portal are secured with
generally-applicable security procedures and policies implemented or modified by the Administrative
Agent from time to time (including, as of the Funds Availability Date, a dual firewall and a User
ID/Password Authorization System) and the Approved Electronic Platform is secured through a
single-user-per-deal authorization method whereby each user may access the Approved Electronic
Platform only on a deal-by-deal basis, each of the Lenders, the Issuers and each Loan Party
acknowledges and agrees that the distribution of material through an electronic medium is not
necessarily secure and that there are confidentiality and other risks associated with such
distribution. In consideration for the convenience and other benefits afforded by such distribution
and for the other consideration provided hereunder, the receipt and sufficiency of which is hereby
acknowledged, each of the Lenders, the Issuers and each Loan Party hereby approves distribution of
the Approved Electronic Communications through the Approved Electronic Platform and understands and
assumes the risks of such distribution.



          (c) The Approved Electronic Platform and the Approved Electronic Communications
are provided “as is” and “as available”. None of the
Administrative Agent or any of its affiliates or any of their respective officers,
directors, employees, agents, advisors or representatives
(the “Agent Affiliates”) warrant the accuracy, adequacy
or completeness of the Approved Electronic
Communications or the Approved Electronic Platform and each expressly
disclaims liability for errors or omissions in the Approved Electronic Platform
and the Approved Electronic Communications. No warranty of any kind, express,
implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose, non-infringement of
third party rights or freedom from viruses or other code defects, is made by the
Agent
Affiliates in connection with the approved electronic platform or the Approved Electronic
Communications.



          (d) Each of the Lenders, the Issuers and each Loan Party agree that the
Administrative Agent (and, if applicable, the Arrangers) may, but (except as may be required
by
Applicable Law) shall not be obligated to, store the Approved Electronic Communications on the
Approved Electronic Platform in accordance with the Administrative Agent’s (or such
Arranger’s) generally-applicable document retention procedures and policies.



          SECTION 8.05. The Agents Individually. Each bank serving as an Agent or
Arranger hereunder shall have the same rights and powers in its capacity as a Lender or Issuer as
any other Lender or Issuer and may exercise the same as though it were not an Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage in any kind of
business with the Borrower or any Subsidiary or any Affiliate thereof as if it were not an Agent or
Arranger hereunder, and may accept fees from the Borrower or any Subsidiary or Affiliate thereof
for services in connection with this Agreement and otherwise without having to account for the same
to the Lenders. The terms “Lenders”, “Required Lenders” and any similar terms shall, unless the
context clearly otherwise indicates, include, without limitation, each Agent and each Arranger in
its individual capacity as a Lender or as one of the Required Lenders.



          SECTION 8.06. Lender Credit Decision. Each Lender, each Issuer and the
holder of each Note acknowledges that it has, independently and without reliance upon the




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Agents, the Arrangers or any other Lender, conducted its own independent investigation of the
financial condition and affairs of the Borrower and each other Loan Party in connection with the
making and continuance of the Loans and with the issuance of the Letters of Credit and has made its
own credit analysis and decision to enter into this Agreement. Each Lender, each Issuer and the
holder of each Note also acknowledges that it shall, independently and without reliance upon the
Agents, the Arrangers 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 and other Loan Documents. Except for the documents expressly required
by any Loan Document to be transmitted by the Agents or the Arrangers to the Lenders or the
Issuers, neither the Agents nor the Arrangers shall have any duty or responsibility (either
initially or on a continuing basis) to provide any Lender, any Issuer or the holder of any Note
with any credit or other information concerning the business, prospects, operations, property,
financial or other condition or creditworthiness of any Loan Party or any Affiliate of any Loan
Party that may come into the possession of the Agents, the Arrangers or any of their respective
Affiliates or any employee or agent of any of the foregoing.




          SECTION 8.07. Indemnification. Each Lender agrees to indemnify each Arranger, each
Agent and each of its Affiliates and agents and their respective directors, officers, employees,
agents and advisors (collectively, “Indemnified Persons”) from and against such Lender’s
aggregate Ratable Portion (determined at the time such indemnity is sought, it being understood and
agreed that if the Revolving Credit Termination Date shall have occurred, such determination shall
be made immediately prior to giving effect thereto) of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements (including
fees, expenses and disbursements of financial and legal advisors) of any kind or nature whatsoever
that may be imposed on, incurred by, or asserted against, such Indemnified Persons in any way
relating to, or arising out of, this Agreement or the other Loan Documents or any action taken or
omitted by such Indemnified Persons under this Agreement or the other Loan Documents;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from any Indemnified Persons’ gross negligence or willful misconduct.
Without limiting the foregoing, each Lender agrees to reimburse the applicable Indemnified Person
promptly upon demand for its Ratable Portion (determined at the time such reimbursement is sought,
it being understood and agreed that if the Revolving Credit Termination Date shall have occurred,
such determination shall be made immediately prior to giving effect thereto) of any out-of-pocket
expenses (including reasonable fees, expenses and disbursements of financial and legal advisors)
incurred by Indemnified Person in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of its rights or responsibilities under,
this Agreement or the other Loan Documents, to the extent that such Agent or such Arranger is not
reimbursed for such expenses by the Borrower or another Loan Party pursuant to Section 9.05 or
other indemnity provisions in any Loan Document.



          SECTION 8.08. Successor Administrative Agent. The Administrative Agent may resign at
any time by giving 30 days’ prior written notice thereof to the Lenders and the Borrower (and may
be removed by Required Lenders if it is a Defaulting Lender). Unless otherwise agreed by the
resigning Administrative Agent, any such resignation by the Administrative Agent hereunder shall
also constitute its resignation as an Issuer in accordance with the provisions Section 2.03(l).
Upon any such resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative




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Agent shall have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 20 days after such retiring Administrative Agent’s giving of notice of
resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, selected from among the Lenders. In either case, such appointment
shall be subject to the prior written approval of the Borrower (which approval may not be
unreasonably withheld and shall not be required upon the occurrence and during the continuance of
an Event of Default). If no successor Administrative Agent has been appointed pursuant to the
preceding sentences by the 30th day after the date of such retiring Administrative Agent’s notice
of resignation, the Administrative Agent’s resignation shall become effective and the Required
Lenders shall thereafter perform all the duties of the Administrative Agent hereunder and/or under
any other Credit Document until such time, if any, as the Required Lenders appoint a successor
Administrative Agent (which appointment shall be subject to the prior written approval of the
Borrower (such approval not to be unreasonably withheld) unless an Event of Default has occurred
and is continuing). Upon the acceptance of any appointment as Administrative Agent by a successor
Administrative Agent, respectively, such successor Administrative Agent shall succeed to, and
become vested with, all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations
under this Agreement and the other Loan Documents. Prior to any retiring Administrative Agent’s
resignation or removal hereunder as Administrative Agent, the retiring Administrative Agent shall
take such action as may be reasonably necessary to assign to the successor Agent its rights as
Administrative Agent under the Loan Documents. After such resignation or removal, the retiring
Administrative Agent, its sub-agents and their Related Parties shall continue to have the benefit
of this Article VIII and Section 9.05 as to any actions taken or omitted to be taken by it while it
was Administrative Agent under this Agreement and the other Loan Documents.




          SECTION 8.09. Withholding of Taxes. 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 it at 1018 Highland Colony Parkway, Suite 800, Ridgeland,
Mississippi 39157, Attention of the Treasurer (Tel. No. 601-790-3200; Fax No. (601)
790-3171); with a copy to Enexus Energy Corporation at 1018 Highland



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Colony Parkway, Ridgeland, MS 39157, Attention of the General Counsel (Tel. No. 601-790-3200;
Fax No. (601) 790-3166);




     (b) if to the Administrative agent, to BNP Paribas at 525 Washington Boulevard , Jersey
City, NJ, 07310, Attention of Socorro Lantin (Tel. No. (201) 850-6577; Fax No. (201)
850-4020; Email: nyls.agency.support@americas.bnpparibas.com); with a copy to White &
Case LLP at 1155 Avenue of the Americas, New York, NY 10036-2787, Attention of Scott M.
Zemser (Tel. No. (212) 819-8960; Fax No. (212) 354-811; Email:
szemser@whitecase.com).




     (c) if to the Collateral Agent, to The Bank of Nova Scotia Trust Company of New York at
One Liberty Plaza, New York, NY 10006, Attention of John Neylan (Tel. No. (212) 225-5065; Fax
No. (212) 225-5436; Email: john_neylan@scotiacapital.com); with copies to Shearman &
Sterling LLP, at 599 Lexington Avenue, New York, NY 10022-6069, Attention of Christopher
Poggi (Tel. No. (212) 848 7538; Email: cpoggi@shearman.com); and to Shearman &
Sterling LLP, at 599 Lexington Avenue, New York, NY 10022-6069, Attention of Ji Hong (Tel.
No. (212) 848 7417; Email: jhong@shearman.com); and




     (d) if to a Lender or Arranger, to it at its address (or fax number) set forth on
Schedule 2.01 hereto or in the Assignment and Acceptance pursuant to which such
Lender shall have become a party hereto, or otherwise as indicated in writing to the
Administrative Agent and the Borrower.


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 (5) 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 the Issuers and shall survive the making by
the Lenders of the Loans and the issuance of Letters of Credit by the Issuers, regardless of any
investigation made by the Lenders or the Issuers or on their behalf, and shall continue in full
force and effect (but such representations and warranties shall be deemed made by the Borrower only
at such times and as of such dates as set forth in Section 4.01) as long as the principal of or any
accrued interest on any Loan or any Fee or any other amount payable (other than indemnification and
other contingent obligations that are not then due and payable) under this Agreement or any other
Loan Document is outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not been terminated. The provisions of Sections 2.14, 2.16, 2.19, 8.07 and 9.05
shall remain operative and in full force and effect regardless of the expiration of the term of
this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Agents, the Arrangers, any Lender or any
Issuer.



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          SECTION 9.03. Binding Effect. This Agreement shall become effective when it shall have
been executed by the Borrower and the Administrative Agent and the Arrangers and when the
Administrative Agent shall have been notified by each Lender and Issuer that such Lender or Issuer
has executed it. This Agreement may be executed in any number of counterparts and by different
parties in separate counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement. Signature pages may be
detached from multiple separate counterparts and attached to a single counterpart so that all
signature pages are attached to the same document. Delivery of an executed signature page of this
Agreement by facsimile transmission, electronic mail or by posting on the Approved Electronic
Platform shall be as effective as delivery of a manually executed counterpart hereof. A set of the
copies of this Agreement signed by all parties shall be lodged with the Borrower and the
Administrative Agent.



          SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the permitted successors
and assigns of such party; and all covenants, promises and agreements by or on behalf of the
Borrower, the Administrative Agent, the Collateral Agent, the Arrangers, the Issuers 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 (other than an Ineligible Assignee)
all or a portion of its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided,
however, that (i) the Borrower, the Administrative Agent and each Issuer must give its
prior written consent to such assignment (which consent shall not be unreasonably withheld or
delayed (in the case of the Borrower, following the Funds Availability Date)); provided
further that (x) the Borrower shall not be required to consent to any such assignment (1) during
the continuance of any Event of Default, (2) to a Lender or an Affiliate or Related Fund of a
Lender or (3) made pursuant to Section 2.21(b) and (y) except in the case of an assignment to a
Lender or an Affiliate or Related Fund of a Lender, the amount of the Commitment or Loan 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 $5,000,000 (or, if less, the entire remaining amount of such Lender’s Commitment or Loans
and those of its Related Funds shall be aggregated for this purpose), (ii) the parties to each such
assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance (such
Assignment and Acceptance to be (x) electronically executed and delivered to the Administrative
Agent via an electronic settlement system then acceptable to the Administrative Agent, or (y)
manually executed and delivered) and (iii) the assignee, if it shall not be a Lender immediately
prior to the assignment, shall deliver to the Administrative Agent an Administrative Questionnaire.
No Lender is permitted to assign all or any portion of its interests, rights or obligations under
this Agreement (including all or a portion of its Commitment and the Loans at any time owing to it)
except as specifically set forth in the immediately preceding sentence and any purported assignment
not in conformity therewith shall be null and void. Upon acceptance and recording pursuant to
paragraph (e) of this Section 9.04, from and after the effective date specified in each Assignment
and Acceptance, (A) the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement (including the obligations under Sections 2.19(e) and 2.19(f)) 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




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Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be
a party hereto but shall continue to be entitled to the benefits and obligations of Sections 2.14,
2.16, 2.19 and 9.05 as well as to any fees accrued for its account and not yet paid).
Notwithstanding the foregoing (but subject to the consent rights set forth in the first sentence of
this Section 9.04(b)), an assignment by a Lender to one of its Affiliates or Related Funds will be
effective, valid, legal and binding without regard to whether the assignor has delivered an
Assignment and Acceptance or Administrative Questionnaire to the Administrative Agent (and the
acceptance and recordation thereof under paragraph (e) of this Section 9.04 shall not be required);
provided that the Administrative Agent and the Borrower shall be entitled to deal solely
with the assignor unless and until the date that an Assignment and Acceptance and Administrative
Questionnaire have been delivered to the Administrative Agent with respect to the applicable
assignee.




          (c) By executing and delivering (to the Administrative Agent or the assigning Lender in the
case of an assignment by a Lender to one of its Affiliates or Related Funds pursuant to the last
sentence of paragraph (b) of this Section) an Assignment and Acceptance, the assigning Lender
thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and
the other parties hereto as follows: (i) such assigning Lender warrants that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any adverse claim made by
it and that its Commitment and the outstanding balances of its Loans and Issued Letters of Credit,
in each case without giving effect to assignments thereof which have not become effective, are as
set forth in such Assignment and Acceptance, (ii) except as set forth in (i) above, such assigning
Lender makes no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in, or in connection with, this Agreement, or the
execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant hereto, or the
financial condition of the Borrower or any Restricted Subsidiary or the performance or observance
by the Borrower or any Restricted 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 and that, as of the effective date of such assignment, it is not a Defaulting Lender;
(iv) such assignee confirms that it has received a copy of this Agreement, together with copies of
the most recent financial statements referred to in Section 3.05(a) or delivered pursuant to
Section 5.05 and such other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (v) such assignee will
independently and without reliance upon the Administrative Agent, the Collateral Agent, the
Syndication Agent, the Arrangers, such assigning Lender or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (vi) such assignee appoints and
authorizes the Administrative Agent and the Collateral Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the Administrative
Agent and the Collateral Agent, respectively, by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance
with their terms all the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.



          (d) The Administrative Agent, acting for the purpose of this Section 9.04(d), and for tax
purposes, as an agent of the Borrower, shall maintain at one of its offices in the City



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of New York a copy of each Assignment and Acceptance delivered to it and one or more registers for
the recordation of the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive absent manifest error and the
Borrower, the Administrative Agent, the Issuers, the Collateral Agent and the Lenders shall treat
each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower, the Issuers, the Collateral Agent and any
Lender, at any reasonable time and from time to time upon reasonable prior notice. In the case of
any assignment made in accordance with the last sentence of paragraph (b) of this Section 9.04 that
is not reflected in the Register, the assigning Lender shall maintain a comparable register
reflecting such assignment.




          (e) Upon its receipt of (i) a duly completed Assignment and Acceptance executed by an
assigning Lender and an assignee, (ii) an Administrative Questionnaire completed in respect of the
assignee (unless the assignee shall already be a Lender hereunder), (iii) a processing and
recordation fee of $3500, (iv) any Note, if requested by the assignee and (v) if required, the
written consent of the applicable Issuer and the Administrative Agent to such assignment, the
Administrative Agent shall (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the Lenders, the Issuers
and the Borrower. No assignment shall be effective unless it has been recorded in the Register as
provided in this paragraph (e). Notwithstanding the foregoing, an assignment by a Lender to an
Affiliate or Related Fund pursuant to the last sentence of paragraph (b) of this Section 9.04 shall
not be required to be recorded in the Register to be effective; provided that (i) such
assignment is recorded in a comparable register maintained by the assignor as provided in paragraph
(b) of this Section and (ii) the Administrative Agent and the Borrower shall be entitled to deal
solely and directly with the assignor unless and until the date that an Assignment and Acceptance
and Administrative Questionnaire have been delivered to the Administrative Agent with respect to
the applicable assignee.



          (f) Each Lender may without the consent of the Borrower, the Issuers or the Administrative
Agent sell participations to any Person (other than an Ineligible Assignee; provided that
for purposes of this Section 9.04(f), clause (iii) of the definition of “Ineligible Assignee” shall
be disregarded for purposes of determining who is an Ineligible Assignee) in all or a portion of
its rights and obligations under this Agreement (including all or a portion of its Commitment and
the Loans owing to it); provided, however, that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the participating banks or
other entities shall be entitled to the benefit of the cost protection provisions contained in
Sections 2.14, 2.16 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), if and to the extent that such participating banks or other entities agree to be
bound by any obligations under Sections 2.14, 2.16 and 2.19 and (iv) the Borrower, the
Administrative Agent, the Issuers and the Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this Agreement, and such
Lender shall retain the sole right to enforce the obligations of the Borrower relating to the Loans
and to approve any amendment, modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers decreasing any fees payable hereunder or the amount of
principal of or the rate at which interest is payable on the Loans, extending any scheduled



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principal payment date or date fixed for the payment of interest on the Loans or of any fees,
increasing or extending the Commitments or releasing any Subsidiary Guarantor or all or
substantially all of the Collateral).




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



          (h) Any Lender may, without the consent of the Borrower or the Administrative Agent, at
any time pledge or 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, including any
pledge or assignment to secure obligations to any Federal Reserve Bank, and, in the case of any
Lender that is a fund that invests in bank loans, such Lender may collaterally assign all or any
portion of its rights under this Agreement to any holder of, trustee for, or other representative
of any holders of, obligations owed or securities issued by such fund as security for such
obligations or securities; provided that no such assignment described in this clause (h)
shall release a Lender from any of its obligations hereunder or substitute any such assignee for
such Lender as a party hereto.



          (i) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle (an “SPV”),
identified as such in writing from time to time by the Granting Lender to the Administrative Agent
and the Borrower, the option to provide to the Borrower all or any part of any Loan that such
Granting Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPV to make any Loan
and (ii) if an SPV elects not to exercise such option or otherwise fails to provide all or any part
of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPV hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPV 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 SPV, it
will not institute against, or join any other Person in instituting against, such SPV 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 SPV may (i) with notice to, but without the prior written
consent of, the Borrower and the Administrative Agent, and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting Lender or to any
financial institutions (consented to by the Borrower and Administrative Agent) providing liquidity
and/or credit support to or for the account of such SPV to support the funding or maintenance of
Loans and (ii) disclose on a confidential basis any non-public information relating




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to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPV.




          (j) No Borrower shall assign or delegate any of its rights or duties hereunder
without the prior written consent of the Administrative Agent, each Issuer and each Lender, and any
attempted assignment without such consent shall be null and void.



          SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay all reasonable and
documented out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent, the
Arrangers, the Syndication Agent, the Issuers and the Lenders (including the reasonable fees,
charges and disbursements of Weil, Gotshal & Manges LLP (counsel to the Arrangers), counsel to the
Administrative Agent, and other reasonable local and special counsel to the Administrative Agent,
the Collateral Agent, the Arrangers, the Syndication Agent, the Issuers and the Lenders and charges
of Intralinks) in connection with the syndication of the credit facilities provided for herein and
the preparation and administration of this Agreement and the other Loan Documents or in connection
with any amendments, modifications or waivers of the provisions hereof or thereof and any
transactions hereby or thereby contemplated (whether or not such transactions are consummated)
including, without limitation, the Transactions. The Borrower also agrees to pay all documented
out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent, the Syndication
Agent, the Arrangers, any Issuer or any Lender in connection with the enforcement or protection of
its rights in connection with this Agreement and the other Loan Documents or in connection with the
Loans made or Letters of Credit issued hereunder (including in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the nature of a
“work-out” or pursuant to any bankruptcy or insolvency proceeding), including the fees, charges and
disbursements of Weil, Gotshal & Manges LLP and other reasonable local and special counsel
(including special workout counsel) to the Administrative Agent, the Collateral Agent, the
Syndication Agent, the Arrangers, any Issuer or any Lender.



          (b) The Borrower agrees to indemnify the Administrative Agent, the Collateral Agent,
the Syndication Agent, the Arrangers, each Lender, each Issuer and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable and documented counsel fees, charges and disbursements, incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or as a result of (i)
the execution or delivery of this Agreement 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 Loans or issuance of Letters of Credit,
(iii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether
or not any Indemnitee is a party thereto, or (iv) any actual or alleged presence or Release of
Hazardous Materials, or any non-compliance with Environmental Law, on any property owned or
operated by the Borrower or any of the Subsidiaries, or any Environmental Liability related in any
way to the Borrower or any of the Subsidiaries; provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.



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          (c) To the extent permitted by Applicable Law, the Borrower shall not assert, and each hereby
waives, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter
of Credit or the use of the proceeds thereof.



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



          SECTION
9.06. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time, except to the
extent prohibited by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any time owing by such
Lender or any Qualified Counterparty that has designated a Related Agreement with respect to this
Agreement (as provided in the Intercreditor Agreement) 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.



          SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN
LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH
THE PARTIES HERETO AGREE APPLY HERETO). EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH
LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS MOST
RECENTLY PUBLISHED AND IN EFFECT, ON THE DATE SUCH LETTER OF CREDIT WAS ISSUED, BY THE
INTERNATIONAL CHAMBER OF COMMERCE (THE “UNIFORM CUSTOMS”) AND, AS TO MATTERS NOT GOVERNED
BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.



          SECTION 9.08. Waivers; Amendment; Replacement of Non-Consenting Lenders. (a) No
failure or delay of the Agents, the Arrangers, any Lender or any Issuer 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 Agents, the Arrangers, the
Issuers and the Lenders hereunder and under the other Loan




129









 







Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise
have. No waiver of any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower or any other Loan Party therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No notice or demand on
the Borrower in any case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.




          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower and the Required
Lenders; provided, however, that no such agreement shall (i) decrease or forgive
the principal amount of, or extend the maturity of or any date for the payment of any interest on
any Loan or waive or excuse any such payment or any part thereof, or decrease the rate of interest
on any Loan, without the prior written consent of each Lender directly affected thereby, (ii)
increase or extend the Commitment or decrease or extend the date for payment of or decrease the
amount or rate of any fees (other than fees payable to Issuers pursuant to the Letter of Credit Fee
Letter) of any Lender without the prior written consent of such Lender, (iii) (A) amend or modify
the pro rata requirements of Section 2.17, (B) amend or modify the provisions of Sections 2.09,
2.13 and 2.17 requiring ratable reduction, distribution or sharing or ratable funding, (C) amend or
modify the provisions of Section 9.04(j), (D) amend or modify the provisions of this Section 9.08,
(E) amend or modify the definition of the term “Required Lenders”, (F) release any
Subsidiary Guarantor (except in connection with a release expressly permitted under the Loan
Documents), (G) amend, modify or waive the ratings conditions set forth in Section 4.03(g) or (H)
amend, modify or waive the condition set forth in Section 4.03(f), in each case in this clause
(iii) without the prior written consent of each Lender, (iv) except upon payment in full of the
Secured Obligations arising hereunder (except for contingent obligations or indemnities not yet
accrued as of such time), release all or substantially all of the Collateral, except in connection
with a disposition expressly permitted under the Loan Documents, without the prior written consent
of each Lender or (v) modify the protections afforded to an SPV pursuant to the provisions of
Section 9.04(i) without the written consent of such SPV; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent,
the Collateral Agent or any Issuer hereunder or under any other Loan Document without the prior
written consent of the Administrative Agent, the Collateral Agent or such Issuer, as applicable.
The Administrative Agent may, with the consent of the Borrower, amend, modify or supplement this
Agreement to cure any ambiguity, omission, defect or inconsistency, so long as such amendment,
modification or supplement does not adversely affect the rights of any Lender or any Issuer. With
respect to any Issuer chosen after the Signing Date, the Administrative Agent may, with the consent
of the Borrower, amend, modify or supplement Section 2.03 of this Agreement prior to the Funds
Availability Date to incorporate terms and conditions requested by such Issuer so long as such
amendment, modification or supplement does not adversely affect the rights of any Lender or any
other Issuer.



          (c) Each Lender grants (i) to the Administrative Agent the right (with the prior written
consent of the Borrower) to purchase all of such Lender’s Commitments and Loans owing to it and any
related Notes held by it and all its rights and obligations hereunder and under the other Loan
Documents and (ii) to the Borrower the right to cause an assignment of all of such Lender’s
Commitments and Loans owing to it and any related Notes held by it and all its rights and
obligations hereunder and under the other Loan Documents to one or more eligible assignees pursuant
to Section 9.04, which right may be exercised by the Administrative Agent or the



130









 




Borrower, as the case may be, if such Lender (a “Non-Consenting Lender”) refuses to execute
any amendment, modification, termination, waiver or consent which requires the written consent of
Lenders other than the Required Lenders and to which the Required Lenders and the Borrower have
otherwise agreed; provided that such Non-Consenting Lender shall receive in connection with
such purchase or assignment, payment equal to the aggregate amount of outstanding Loans owed to
such Lender, together with all accrued and unpaid interest, fees and other amounts (other than
indemnification and other contingent obligations not yet due and payable) owed to such Lender under
the Loan Documents at such time; and provided, further, that any such assignee
shall agree to such amendment, modification, termination, waiver or consent. Each Lender agrees
that if the Administrative Agent or the Borrower, as the case may be, exercises its option under
this paragraph it shall promptly execute and deliver all agreements and documentation necessary to
effectuate such assignment as set forth in Section 9.04. The Borrower shall be entitled (but not
obligated) to execute and deliver such agreements and documentation on behalf of such
Non-Consenting Lender and any such agreements or documentation so executed by the Borrower shall be
effective for all purposes of documenting an assignment pursuant to Section 9.04.




          SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges
and other amounts which are treated as interest on such 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 Loan in accordance
with Applicable Law, the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent
lawful, the interest and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section 9.09 shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Rate to the date of repayment, shall have been received by such Lender.



          SECTION 9.10. Entire Agreement. This Agreement and the other Loan Documents constitute
the entire contract between the parties relative to the subject matter hereof. Any other previous
agreement among the parties with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents. Nothing in this Agreement or in the other Loan Documents,
expressed or implied, is intended to confer upon any Person (other than the parties hereto and
thereto, their respective successors and assigns permitted hereunder (including any Affiliate of an
Issuer that issues any Letter of Credit) and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent, the Collateral Agent, the Syndication Agent,
the Arrangers, any Issuer and the Lenders) any rights, remedies, obligations or liabilities under
or by reason of this Agreement or the other Loan Documents.



          SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH




131









 







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.



          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 Arrangers, any Issuer or any Lender may otherwise have to bring any action
or proceeding relating to this Agreement or the other Loan Documents against the Borrower or its
properties in the courts of any jurisdiction.



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



132









 





          (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 Agents, the Arrangers, the Issuers and the
Lenders agrees to maintain the confidentiality of the Information, except that Information may be
disclosed (a) to its and its Affiliates’ officers, directors, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any regulatory authority or
quasi-regulatory authority (such as the National Association of Insurance Commissioners), (c) to
the extent required by Applicable Laws or by any subpoena or similar legal process, (d) in
connection with the exercise of any remedies hereunder or under the other Loan Documents or any
suit, action or proceeding relating to the enforcement of its rights hereunder or thereunder, (e)
to (i) any actual or prospective assignee of or participant in any of its rights or obligations
under this Agreement and the other Loan Documents, (ii) any pledgee referred to in Section 9.04(g)
or (iii) any actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower or any Subsidiary or any of their respective obligations, in
each case subject to agreement by such party to hold such confidential information in accordance
with its customary procedures and in any case no less restrictive than those of this Section 9.16,
(f) to market data collectors, similar service providers to the lending industry and service
providers to the Arrangers, the Agents or Lenders in connection with the administration or
management of this Agreement or the other Loan Documents, (g) to any rating agency, (h) with the
consent of the Borrower or (i) to the extent such Information becomes publicly available other than
as a result of a breach of this Section 9.16. For the purposes of this Section,
“Information” shall mean all financial statements, certificates, reports, agreements and
other information received from the Borrower or its Restricted Subsidiaries and related to the
Borrower or its business, other than any such financial statements, certificates, reports,
agreements and other information that was available to the Agents, the Arrangers, any Issuer or any
Lender on a nonconfidential basis prior to its disclosure by the Borrower; provided that,
in the case of Information received from the Borrower after the Funds Availability Date, such
information is clearly identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section 9.16 shall be considered to
have complied with its obligation to do so if such Person has maintained the confidentiality of
such Information in accordance with its customary procedures. Notwithstanding any other express or
implied agreement, arrangement or understanding to the contrary, each of the parties hereto agrees
that each other party hereto (and each of its employees, representatives or agents) are permitted
to disclose to any Persons, without limitation, the tax treatment and tax structure of the Loans
and the other transactions contemplated by the Loan Documents and all materials of any kind
(including opinions and tax analyses) that are provided to the Loan Parties, the Lenders, the
Arrangers or any Agent related to such tax treatment and tax aspects. To the extent not
inconsistent with the immediately preceding sentence, this authorization does not extend to
disclosure of any other information or any other term or detail not related to the tax treatment or
tax aspects of the Loans or the transactions contemplated by the Loan Documents.



          SECTION 9.17. Mortgage Modifications. As a condition precedent to the Borrower’s
incurrence of Additional Intercreditor Indebtedness pursuant to Section 6.01(c) and/or Section 2.21
as provided for herein, the Borrower shall satisfy the following requirements:



133









 






     (a) the Subsidiary Guarantors shall enter into, and deliver to the Administrative Agent
and the Collateral Agent, at the direction and in the sole discretion of the Administrative
Agent and the Collateral Agent, a mortgage modification or new Mortgage in proper form for
recording in the relevant jurisdiction and in a form reasonably satisfactory to the
Administrative Agent and the Collateral Agent (such Mortgage or mortgage modification of, the
“Modification”);




     (b) the Borrower shall deliver a local counsel opinion in form and substance as set
forth in Section 4.03(a)(vii)(D) of this Agreement;




     (c) the Borrower shall have caused a title company approved by the Administrative Agent
to have delivered to the Administrative Agent and the Collateral Agent (A) evidence that the
title insurance policy delivered pursuant to Section 4.03(a)(vii)(B) insures an amount equal
to the lesser of (x) the Secured Obligations including any title insurance “cushion”
reasonably requested by Collateral Agent and (y) the value of the Mortgaged Property as
reasonably determined by the Collateral Agent and (B) an endorsement to the title insurance
policy delivered pursuant to Section 4.03(a)(vii)(B), date down(s) and/or other evidence
reasonably satisfactory to the Administrative Agent and/or the Collateral Agent insuring that
(i) the priority of the liens evidenced by insuring the continuing priority of the Lien of
the Mortgage as security for such Indebtedness has not changed and (ii) confirming and/or
insuring that (a) since the immediately prior incurrence of such additional Indebtedness,
there has been no change in the condition of title and (b) there are no intervening liens or
encumbrances which may then or thereafter take priority over the Lien of the Mortgage, other
than the Permitted Liens (without adding any additional exclusions or exceptions to coverage;
a “Modification Endorsement”);




     (d) the Borrower shall, upon the request of the Administrative Agent and/or the
Collateral Agent, deliver to the approved title company, the Collateral Agent and/or all
other relevant third parties all other items reasonably necessary to maintain the continuing
priority of the Lien of the Mortgage as security for such Indebtedness; and




     (e) any other items reasonably requested by the Collateral Agent and the Administrative
Agent in connection with the incurrence of such Additional Intercreditor Indebtedness.



          SECTION 9.18. Patriot Act Notice. Each Lender subject to the Patriot Act hereby
notifies the Borrower that, pursuant to Section 326 of the Patriot Act, it is required to obtain,
verify and record information that identifies the Borrower and each Subsidiary Guarantor, including
the name and address of the Borrower and each Subsidiary Guarantor and other information that will
allow such Lender to identify the Borrower and each Subsidiary Guarantor in accordance with the
Patriot Act.



          SECTION 9.19. No Fiduciary Duty. Each Agent, each Arranger, each Lender, each Issuer
and their respective Affiliates (collectively, solely for purposes of this paragraph, the
“Lenders”), may have economic interests that conflict with those of the Borrower and its
Subsidiaries. The Borrower agrees that nothing in the Loan Documents or otherwise will be deemed to
create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the
Lenders and Borrower, its stockholders or its Affiliates. The Borrower (for itself and on behalf of
its Subsidiaries and Affiliates) acknowledges and agrees that (i) the transactions




134









 







contemplated by the Loan Documents are arm’s-length commercial transactions between the Lenders, on
the one hand, and Borrower and its Subsidiaries, on the other, (ii) in connection therewith and
with the process leading to such transactions each Lender is acting solely as a principal and not
the agent or fiduciary of Borrower, its management, stockholders, creditors or any other person,
(iii) no Lender has assumed an advisory or fiduciary responsibility in favor of Borrower with
respect to the transactions contemplated hereby or the process leading thereto (irrespective of
whether any Lender or any of its Affiliates has advised or is currently advising Borrower or any of
its Affiliates or Subsidiaries on other matters) or any other obligation to the Borrower except the
obligations expressly set forth in the Loan Documents and (iv) the Borrower has consulted its own
legal and financial advisors to the extent it deemed appropriate. The Borrower (for itself and on
behalf of its Subsidiaries and Affiliates) further acknowledges and agrees that it is responsible
for making its own independent judgment with respect to such transactions and the process leading
thereto. The Borrower (for itself and on behalf of its Subsidiaries and Affiliates) agrees that it
will not claim that any Lender has rendered advisory services of any nature or respect, or owes a
fiduciary or similar duty to the Borrower or any of its Subsidiaries or Affiliates in connection
with such transaction or the process leading thereto.




          SECTION 9.20. Termination. Notwithstanding anything to the contrary herein, if the
Funds Availability Date shall not have occurred on or prior to the Outside Date, the Commitments
hereunder shall terminate automatically on such date and this Agreement shall be of no further
force and effect except for those provisions herein that by their terms expressly survive
termination of this Agreement.



135









 





     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.



	 	 	 	 	 
	 	ENEXUS ENERGY CORPORATION

 	 
	 	By:  	/s/ Paul A. Staonikia
 	 
	 	 	Name:  	Paul A. Staonikia 	 
	 	 	Title:  	Vice President And Treasurer 	 
	 



[Signature Page to Credit Agreement]




 









 








	 	 	 	 	 
	 	CITIGROUP GLOBAL MARKETS INC.,

as Joint Book Runner and Joint Lead Arranger

 	 
	 	By:  	/s/ Timothy P. Dilworth
 	 
	 	 	Name:  	Timothy P. Dilworth 	 
	 	 	Title:  	Director 	 
	 



[Signature Page to Credit Agreement]





 









 








	 	 	 	 	 
	 	GOLDMAN SACHS LENDING PARTNERS LLC,

as Joint Book Runner and Joint Lead Arranger and

as Lender

 	 
	 	By:  	/s/ Teri Streusand
 	 
	 	 	Name:  	Teri Streusand 	 
	 	 	Title:  	Vice President 	 
	 



[Signature Page to Credit Agreement]





 









 








	 	 	 	 	 
	 	BNP PARIBAS, as Administrative

Agent and as Lender

 	 
	 	By:  	/s/
DENIS O’ MEARA
 	 
	 	 	Name:  	DENIS O’ MEARA 	 
	 	 	Title:  	Managing Director 	 
	 
	 	By:  	                   /s/ Ravina Advani
 	 
	 	 	Name:  	Ravina Advani 	 
	 	 	Title:  	Vice President 	 
	 



[Signature Page to Credit Agreement]





 









 








	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA TRUST

COMPANY OF NEW YORK,

as Collateral Agent

 	 
	 	By:  	/s/ John F. Neylan
 	 
	 	 	Name:  	John F. Neylan 	 
	 	 	Title:  	Trust Officer 	 
	 



[Signature Page to Credit Agreement]




 









 








	 	 	 	 	 
	 	MIZUHO CORPORATE BANK, LTD.,

as Syndication Agent and as Lender

 	 
	 	By:  	/s/ Hidekatsu Take
 	 
	 	 	Name:  	Hidekatsu Take 	 
	 	 	Title:  	Deputy General Manager 	 
	 



[Signature Page to Credit Agreement]




 









 








	 	 	 	 	 
	 	CITIBANK, N.A., as Lender

 	 
	 	By:  	/s/ Timothy P. Dilworth
 	 
	 	 	Name:  	Timothy P. Dilworth 	 
	 	 	Title:  	Vice President 	 
	 



[Signature Page to Credit Agreement]





 









 








	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA, as Lender

 	 
	 	By:  	/s/ Thane Rattew
 	 
	 	 	Name:  	THANE RATTEW 	 
	 	 	Title: MANAGING DIRECTOR 	 
	 



[Signature Page to Credit Agreement]




 









 








	 	 	 	 	 
	 	CALYON NEW YORK BRANCH, as Lender

 	 
	 	By:  	/s/ Tom Byargeon
 	 
	 	 	Name:  	Tom Byargeon 	 
	 	 	Title:  	Managing Director 	 
	 	 	 
	 	By:  	                  /s/ Sharada Manne
 	 
	 	 	Name:  	Sharada Manne 	 
	 	 	Title:      Director 	 
	 



[Signature Page to Credit Agreement]




 









 








	 	 	 	 	 
	 	NATIXIS NEW YORK BRANCH,

as Lender

 	 
	 	By:  	/s/ Stephane Leroy
 	 
	 	 	Name:  	Stephane Leroy 	 
	 	 	Title:  	Director 	 
	 	 	 
	 	By:  	                        /s/  Pierre Audrain
 	 
	 	 	Name:  	Pierre Audrain 	 
	 	 	Title:  	Director 	 
	 



[Signature Page to Credit Agreement]




 









 








	 	 	 	 	 
	 	UNION BANK OF CALIFORNIA, N.A.,

as Lender

 	 
	 	By:  	/s/ John Gullds
 	 
	 	 	Name:  	John Gullds 	 
	 	 	Title:  	Vice President 	 
	 



[Signature Page to Credit Agreement]





 









 








	 	 	 	 	 
	 	MORGAN STANLEY BANK, N.A.,

as Lender

 	 
	 	By:  	/s/ Melissa James
 	 
	 	 	Name:  	Melissa James 	 
	 	 	Title:  	Authorized Signatory 	 
	 



[Signature Page to Credit Agreement]




 









 








	 	 	 	 	 
	 	BARCLAYS BANK PLC, as Lender

 	 
	 	By:  	/s/ Douglas Bernegger
 	 
	 	 	Name:  	DOUGLAS BERNEGGER 	 
	 	 	Title:  	DIRECTOR 	 
	 



[Signature Page to Credit Agreement]




 









 








	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,
as Lender

 	 
	 	By:  	/s/ Jacob Dowden
 	 
	 	 	Name:  	Jacob Dowden 	 
	 	 	Title:  	Vice President 	 
	 



[Signature Page to Credit Agreement]





 









 








	 	 	 	 	 
	 	KEYBANK NATIONAL ASSOCIATION,

as Lender

 	 
	 	By:  	/s/ Paul J. Pace
 	 
	 	 	Name:  	Paul J. Pace 	 
	 	 	Title:  	Vice President 	 
	 



[Signature Page to Credit Agreement]




 









 








	 	 	 	 	 
	 	REGIONS BANK, as Lender

 	 
	 	By:  	/s/ W.A. Philipp
 	 
	 	 	Name:  	W.A. Philipp 	 
	 	 	Title:  	Vice President 	 
	 



[Signature Page to Credit Agreement]




 









 








	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY 

AMERICAS, as Lender

 	 
	 	By:  	/s/ Marcus M. Tarkington
 	 
	 	 	Name:  	Marcus M. Tarkington 	 
	 	 	Title:  	Director 	 
	 	 	 
	 	By:  	                 /s/ Keith C. Braun
 	 
	 	 	Name:  	Keith C. Braun 	 
	 	 	Title:  	Managing Director 	 
	 



[Signature Page to Credit Agreement]





 











 





EXHIBIT A





     ADMINISTRATIVE QUESTIONNAIRE





	I.	 	Borrower Name: Enexus Energy Corporation
	 
	II.	 	Legal Name of Lender for Signature
Page:                                                                    
	 
	III.	 	Number of signature blocks required for Signature Page:
                                
	 
	IV.	 	Name of Lender for any eventual tombstone:                                                                 
	 
	V.	 	Legal Address:
	 


	 


	 
	VI.	 	Contact Information:





	 	 	 	 	 	 	 
	 	 	Credit Contact	 	Operations Contact	 	Legal Counsel
	Name:
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	Title:
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	Address:
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	Telephone:
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	Facsimile:
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	Email
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 






	VII.	 	Lender’s Wire Payment Instructions:





	 	 	 	 	 	 	 
	Pay to:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	     (Name of Lender)	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	     (ABA#)
	 	(City/State)	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	     (Account #)
	 	(Account Name)	 	 





Please return this form, by fax, to the attention of [ ], no later than 5.00 p.m. New York
time, on [ ].




A-1









 





          ADMINISTRATIVE QUESTIONNAIRE




Borrower Name: Enexus Energy Corporation




	 	 	 	 	 	 	 
	VIII.

	 	Organizational Structure:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Foreign Branch, organized under which laws,	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Lender’s Tax ID:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Tax withholding Form Attached (For Foreign Buyers)	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	[   ] Form W-9	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	[   ] Form W-8	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	[   ] Form 4224 effective:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	[   ] Form 1001	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	[   ] W/Hold                % Effective	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	[   ] Form 4224 on file with Administrative Agent from previous current year’s transaction	 	 






	 	 	 	 	 	 	 
	IX.	 	[       ] Payment Instructions:	 	 
	 
	 	 	 	 	 	 
	 

	 	Servicing Site:
	 	[	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	]	 	 
	 
	 	 	 	 	 	 
	 

	 	Pay To:
	 	[	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	]	 	 
	 
	 	 	 	 	 	 
	X.	 	Name of Authorized Officer:	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Signature:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 





A-2









 





     ADMINISTRATIVE QUESTIONNAIRE




	XI.	 	Institutional Investor Sub-Allocations





	 	 	 	 	 
	Institution Legal
	 	 	 	 
	 

	 	 

	 	 
	Fund Manager:
	 	 	 	 
	 

	 	 	 	 
	Sub-Allocations:
	 	 	 	 
	 

	 	 	 	 





	 	 	 	 	 	 	 	 	 
	Exact Legal	 	 	 	 	 	 	 	 
	Name (for 	 	 	 	Direct Signer to	 	Purchase by	 	Date of Post
	documentation	 	Sub-Allocation	 	Credit Agreement	 	Assignment	 	Closing
	purposes	 	(Indicate US$)	 	(Yes / No)	 	(Yes / No)	 	Assignment
	1.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	2.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	3.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	4.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	5.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	6.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	7.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	Total
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 
	Special Instructions

	 	      	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 
	 





A-3









 






EXHIBIT B




FORM OF INTERCOMPANY DEBT SUBORDINATION AGREEMENT



     INTERCOMPANY DEBT SUBORDINATION AGREEMENT dated as of [                     ], 2008 (this
“Agreement”), among the subordinated lenders listed on Schedule 1 hereto (each a
“Subordinated Lender” and collectively, the “Subordinated Lenders”), Enexus Energy
Corporation (the “Company”), and each Restricted Subsidiary (as defined in the Credit
Agreement referred to below) listed on Schedule 2 hereto (together with Company, each a
“Subordinated Borrower” and collectively, the “Subordinated Borrowers”), BNP
Paribas, in its capacity as administrative agent (the “Administrative Agent”) under the
Credit Agreement (as defined below), for the benefit of the Lenders (as defined in the Credit
Agreement referred to below) and The Bank of Nova Scotia Trust Company of New York, as collateral
agent (in such capacity, the “Collateral Agent”) for the Senior Secured Parties.



     Reference is made to (i) the Credit Agreement dated as of December 23, 2008 (the “Credit
Agreement”), among the Company, the Lenders from time to time party thereto, Citigroup Global
Markets Inc. and Goldman Sachs Lending Partners LLC, as joint book runners and joint lead
arrangers (in such capacities, collectively, the “Arrangers”), the Administrative Agent
and Collateral Agent, (ii) the
Guarantee and Collateral Agreement dated as of [                     ], 2008 (the “Guarantee and Collateral
Agreement”), by the Company and each of the Grantors signatories thereto (together with
any other entity that may become a party thereto as provided therein, the “Grantors”), in
favor of the Collateral Agent, the Administrative Agent, and the other Senior Secured Parties from
time to time party thereto, as applicable and (iii) the Collateral Agency and Intercreditor
Agreement dated as of December 23, 2008 (the “Intercreditor Agreement”), among the
Company, the grantors from time to time party thereto, the Administrative Agent, the hedge
counterparty lienholders from time to time party thereto, the secured obligations representatives
from time to time party thereto and the Collateral Agent.



     Terms used herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Intercreditor Agreement. All references 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.



     The ability under the Credit Agreement of any Subordinated Borrower to incur Indebtedness to
any Subordinated Lender is conditioned upon the execution and delivery by such Subordinated Lender
and each Subordinated Borrower of an agreement in the form hereof (or another agreement containing
terms with respect to the subordination of obligations referred to therein that are substantially
the same as this Agreement or that is otherwise reasonably acceptable to the Administrative Agent)
pursuant to which such Subordinated Lender agrees to subordinate its rights with respect to the
Subordinated Obligations (as defined below) to the rights of the Senior Secured Parties under the
Senior Secured Documents, all on the terms set forth herein.



     Accordingly, each Subordinated Lender, each Subordinated Borrower and the Administrative
Agent, on behalf of itself and each Lender and the Collateral Agent, on behalf of itself and each
Senior Secured Party and each of their respective successors or assigns, hereby agrees as follows:




	A.	 	Subordination. 1. Each Subordinated Lender hereby agrees that all its right, title
and interest in and to the Subordinated Obligations shall be subordinate and junior in right
of payment to the rights of the Administrative Agent, the Collateral Agent and the other
Senior Secured Parties in respect of the Secured Obligations arising under the Guarantee and
Collateral Agreement or any other Senior Secured Document (collectively, the “Senior
Obligations”). For purposes hereof, “Subordinated





B-1









 






	 	 	Obligations” means all obligations of each Subordinated Borrower to each Subordinated
Lender in respect of loans, advances, extensions of credit or other Indebtedness, including in
respect of principal, premium (if any), interest, fees, charges, expenses, indemnities,
reimbursement obligations and other amounts payable in respect thereof.






	 	2.	 	Each Subordinated Borrower and each Subordinated Lender agrees (in each case solely
with respect to the Subordinated Obligations in respect of which it is the obligor or
obligee, as the case may be, and solely with respect to each Subordinated Borrower or
Subordinated Lender that is its counterparty with respect to such Subordinated
Obligations) that no payment (whether directly, by purchase, redemption or exercise of
any right of setoff or otherwise) in respect of the Subordinated Obligations, whether as
principal, interest or otherwise, and whether in cash, securities or other property,
shall be made by or on behalf of any Subordinated Borrower or received, accepted or
demanded, directly or indirectly, by or on behalf of any Subordinated Lender at any time
when an Event of Default exists.
	 
	 	3.	 	Upon any distribution of the assets of any Subordinated Borrower or upon any
dissolution, winding up, liquidation or reorganization of any Subordinated Borrower,
whether in bankruptcy, insolvency, reorganization, arrangement or receivership
proceedings or otherwise, or upon any assignment for the benefit of creditors or any
other marshalling of the assets and liabilities of any Subordinated Borrower, or
otherwise:






	 	a.	 	the Collateral Agent (on behalf of the Senior Secured Parties) shall
first be entitled to receive payment in full in cash of the Senior Obligations
(whenever arising) (other than indemnification obligations and other contingent
obligations not then due and payable) before any Subordinated Lender shall be
entitled to receive any payment on account of the Subordinated Obligations of such
Subordinated Borrower, whether of principal, interest or otherwise; and
	 
	 	b.	 	any payment by, or on behalf of, or distribution of the assets of, such
Subordinated Borrower of any kind or character, whether in cash, securities or
other property, to which any Subordinated Lender would be entitled except for the
provisions of this Section 1 shall be paid or delivered by the Person making such
payment or distribution (whether a trustee in bankruptcy, a receiver, custodian or
liquidating trustee or otherwise) directly to the Collateral Agent, for the benefit
of the Senior Secured Parties (in accordance with the terms of the Intercreditor
Agreement), until the payment in full of all Senior Obligations (other than
indemnification obligations and other contingent obligations not then due and
payable).




At any time when an Event of Default exists, each Subordinated Lender agrees not to ask, demand,
sue for or take or receive from any Subordinated Borrower in cash, securities or other property or
by setoff, purchase or redemption (including, without limitation, from or by way of collateral),
payment of all or any part of the Subordinated Obligations and agrees that in connection with any
proceeding involving any Subordinated Borrower under any bankruptcy, insolvency, reorganization,
arrangement, receivership or similar law (i) the Collateral Agent is irrevocably authorized and
empowered (in its own name or in the name of such Subordinated Lender or otherwise), but shall
have no obligation, to demand, sue for, collect and receive every payment or distribution referred
to in the preceding sentence and give acquittance therefor and to file claims and proofs of claim
and take such other action (including, without limitation, voting the applicable Subordinated
Obligations and enforcing any security interest or other lien securing payment of such
Subordinated Obligations) as the Collateral Agent may deem necessary or advisable for the exercise
or enforcement of any of the rights or interest of the Senior Secured Parties and (ii) such





B-2









 







Subordinated Lender shall duly and promptly take such action as the Collateral Agent may request
to (A) collect amounts in respect of the applicable Subordinated Obligations for the account of
the Senior Secured Parties and to file appropriate claims or proofs of claim in respect of such
Subordinated Obligations, (B) execute and deliver to the Collateral Agent such irrevocable powers
of attorney, assignments or other instruments as the Collateral Agent may request in order to
enable the Collateral Agent to enforce any and all claims with respect to, and any security
interests and other liens securing payment of, the applicable Subordinated Obligations and (C)
collect and receive any and all payments or distributions which may be payable or deliverable upon
or with respect to the applicable Subordinated Obligations. A copy of this Agreement may be filed
with any court as evidence of the Senior Secured Parties’ right, power and authority hereunder.





	 	4.	 	In the event that any payment by, or on behalf of, or distribution of the assets of,
any Subordinated Borrower of any kind or character, whether in cash, securities or other
property, and whether directly, by purchase, redemption, exercise of any right of setoff
or otherwise, shall be received by or on behalf of any Subordinated Lender or any
Affiliate thereof at a time when such payment is prohibited by this Agreement, such
payment or distribution shall be held by such Subordinated Lender or Affiliate in trust
(segregated from other property of such Subordinated Lender or Affiliate) for the benefit
of, and shall forthwith be paid over to, the Collateral Agent, for the benefit of the
Senior Secured Parties (in accordance with the terms of the Intercreditor Agreement),
until the indefeasible payment in full in cash of all Senior Obligations.
	 
	 	5.	 	Each applicable Subordinated Lender shall be subrogated to the rights of the Senior
Secured Parties to receive payments or distributions in cash, securities or other
property of each applicable Subordinated Borrower applicable to the Senior Obligations
until all amounts owing on the Senior Obligations shall be paid in full in cash (other
than indemnification obligations and other contingent obligations not then due and
payable), and, as between and among a Subordinated Borrower, its creditors (other than
the Senior Secured Parties) and the applicable Subordinated Lenders, no such payment or
distribution made to the Senior Secured Parties by virtue of this Agreement that
otherwise would have been made to any applicable Subordinated Lender shall be deemed to
be a payment by the applicable Subordinated Borrower on account of the Subordinated
Obligations, it being understood that the provisions of this paragraph (e) are intended
solely for the purpose of defining the relative rights of the Subordinated Lenders and
the Senior Secured Parties.
	 
	 	6.	 	Without the prior written consent of the Collateral Agent, no Subordinated Borrower
shall give, or permit to be given, and no Subordinated Lender shall receive, accept or
demand, (i) any security of any nature whatsoever for any Subordinated Obligations on any
property or assets, whether now existing or hereafter acquired, of any Subordinated
Borrower or any subsidiary of any Subordinated Borrower, unless such security shall by its
terms be subject to enforcement and collection by the Collateral Agent in connection with
any action in respect of enforcement or collection taken under paragraph (c) above or (ii)
any Guarantee, of any nature whatsoever, by any Subordinated Borrower or any subsidiary of
any Subordinated Borrower, of any Subordinated Obligations other than any Guarantee
subordinated to the Senior Obligations on terms substantially identical to (and no less
favorable in any significant respect to the Senior Secured Parties than) those hereof.
Each Subordinated Lender agrees that all the proceeds of any such security or Guarantee
shall be subject to the provisions hereof with respect to payments and other distributions
in respect of the Subordinated Obligations.










B-3









 












	 	7.	 	Each Subordinated Lender and each Subordinated Borrower agrees that all Subordinated
Obligations will be evidenced solely by a single promissory note in the form attached
hereto as Annex 1, and that such promissory note and any and all instruments or
records now or hereafter creating or evidencing the Subordinated Obligations, whether
upon refunding, extension, renewal, refinancing, replacement or otherwise, shall contain
the following legend:
	 
	 	 	 	“Notwithstanding anything contained herein to the contrary, neither the principal
of nor the interest on, nor any other amounts payable in respect of, the
indebtedness created or evidenced by this instrument or record shall become due
or be paid or payable, except to the extent permitted under the Intercompany Debt
Subordination
Agreement dated as of [                    ], 2008, among the Subordinated Lenders, the
Subordinated Borrowers and [                    ], in its capacity as Administrative Agent, and
[                    ], in its capacity as Collateral Agent, which Intercompany Debt Subordination
Agreement is incorporated herein with the same effect as if fully set forth herein.”
	 
	 	8.	 	Each Subordinated Lender agrees that, except for claims submitted in any proceeding
contemplated by Section 1(c) hereof it will not take any action to cause any Subordinated
Obligations to become payable prior to their scheduled maturity (which, in the case of any
demand notes, shall be the date demand is made thereunder) or exercise any remedies or
take any action or proceeding to enforce any Subordinated Obligation if the payment of
such Subordinated Obligation is then prohibited by this Agreement, and each Subordinated
Lender further agrees not to file, or to join with any other creditors of any Subordinated
Borrower in filing, any petition commencing any bankruptcy, insolvency, reorganization,
arrangement or receivership proceeding or any assignment for the benefit of creditors
against or in respect of such Subordinated Borrower or any other marshalling of the assets
and liabilities of such Subordinated Borrower. Each Subordinated Lender further agrees, to
the fullest extent permitted under applicable law, that it will not cause any Subordinated
Borrower to file any such petition, commence any such proceeding or make any such
assignment referred to above until all Senior Obligations have been indefeasibly paid in
full in cash.






	B.	 	Waivers and Consents. 1. Each Subordinated Lender waives the right to compel that the
Collateral or any other assets of property of any Subordinated Borrower or the assets of
property of any guarantor of the Senior Obligations or any other Person be applied in any
particular order to discharge the Senior Obligations other than the order contemplated in the
Intercreditor Agreement. Each Subordinated Lender expressly waives the right to require the
Senior Secured Parties to proceed against any Subordinated Borrower, the Collateral or any
guarantor of the Senior Obligations or any other Person, or to pursue any other remedy in any
Senior Secured Party’s power which such Subordinated Lender cannot pursue and which would
lighten such Subordinated Lender’s burden, notwithstanding that the failure of any Senior
Secured Party to do so may thereby prejudice such Subordinated Lender. Each Subordinated
Lender agrees that it shall not be discharged, exonerated or have its obligations hereunder to
the Senior Secured Parties reduced by any Senior Secured Party’s delay in proceeding against
or enforcing any remedy against any Subordinated Borrower, the Collateral or any guarantor of
the Senior Obligations or any other Person; by any Senior Secured Party releasing any
Subordinated Borrower, the Collateral or any other guarantor of the Senior Obligations or any
other Person from all or any part of the Senior Obligations; or by the discharge of any
Subordinated Borrower, the Collateral or any guarantor of the Senior Obligations or any other
Person by an operation of law or otherwise, with or without the intervention or omission of a
Senior Secured Party. Any Senior Secured Party’s vote to accept or reject any plan of
reorganization relating to any Subordinated Borrower, the Collateral, or any





B-4









 






	 	 	guarantor of the Senior Obligations or any other Person, or any Senior Secured Party’s receipt
on account of all or part of the Senior Obligations of any cash, securities or other property
distributed in any bankruptcy, reorganization, or insolvency case, shall not discharge,
exonerate, or reduce the obligations of any Subordinated Lender hereunder to the Senior
Secured Parties.






	 	2.	 	Each Subordinated Lender waives all rights and defenses arising out of an election
of remedies by the Senior Secured Parties, even though that election of remedies,
including, without limitation, any nonjudicial foreclosure with respect to security for
the Senior Obligations, has impaired the value of such Subordinated Lender’s rights of
subrogation, reimbursement or contribution against any Subordinated Borrower or any other
guarantor of the Senior Obligations or any other Person. Each Subordinated Lender
expressly waives any rights or defenses it may have by reason of protection afforded to
any Subordinated Borrower or any other guarantor of the Senior Obligations or any other
Person with respect to the Senior Obligations pursuant to any anti-deficiency laws or
other laws of similar import which limit or discharge the principal debtor’s indebtedness
upon judicial or nonjudicial foreclosure of real property or Personal property Collateral
for the Senior Obligations.
	 
	 	3.	 	Each Subordinated Lender agrees that, without the necessity of any reservation of
rights against it, and without notice to or further assent by it, any demand for payment
of any Senior Obligations made by a Senior Secured Party may be rescinded in whole or in
part by the Senior Secured Party, and any Senior Obligation may be continued, and the
Senior Obligations, or the liability of the applicable Subordinated Borrower or any other
guarantor or any other party upon or for any part thereof, or any Collateral or Guarantee
therefor or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, modified, accelerated, compromised, waived, surrendered, or
released by the Senior Secured Parties, in each case without notice to or further assent
by any Subordinated Lender, which will remain bound under this Agreement and without
impairing, abridging, releasing or affecting the subordination and other agreements
provided for herein.
	 
	 	4.	 	Each Subordinated Lender waives any and all notice of the creation, renewal,
extension or accrual of any of the Senior Obligations and notice of or proof of reliance
by the Senior Secured Parties upon this Agreement. The Senior Obligations, and any of
them, shall be deemed conclusively to have been created, contracted or incurred and the
consent given to create the obligations of each Subordinated Borrower in respect of the
Subordinated Obligations in reliance upon this Agreement, and all dealings between each
Subordinated Borrower and the Senior Secured Parties shall be deemed to have been
consummated in reliance upon this Agreement. Each Subordinated Lender acknowledges and
agrees that the Senior Secured Parties have relied upon the subordination and other
agreements provided for herein in consenting to the Subordinated Obligations. Each
Subordinated Lender waives notice of or proof of reliance on this Agreement and protest,
demand for payment and notice of default.






	C.	 	Transfers. No Subordinated Lender shall sell, assign or otherwise transfer or
dispose of, in whole or in part, all or any part of the Subordinated Obligations or any
interest therein to any other Person (a “Transferee”) or create, incur or suffer to
exist any security interest, Lien, charge or other encumbrance whatsoever upon all or any
part of the Subordinated Obligations or any interest therein in favor of any Transferee
unless (A)(i) such action is made expressly subject to this Agreement and (ii) the
Transferee, expressly acknowledges to the Collateral Agent, by a writing in form and
substance satisfactory to the Collateral Agent, the subordination and other agreements
provided for herein and in such writing agrees to be bound by all of the terms of this
Agreement, including,




B-5









 






	 	 	without limitation, this Section 3, as if such Person were the Subordinated Lender or (B) such
action is not prohibited by any Senior Secured Document.






	D.	 	Senior Obligations Unconditional. All rights and interests of the Senior Secured
Parties hereunder, and all agreements and obligations of the Subordinated Lenders and the
Subordinated Borrowers hereunder, shall remain in full force and effect until payment in full
of the Senior Obligations (other than indemnification obligations and other contingent
obligations not then due and payable) irrespective of:






	 	1.	 	any lack of validity or enforceability of the Credit Agreement Documents or any
other Senior Secured Document;
	 
	 	2.	 	any change in the time, manner or place of payment of, or in any other term of, all
or any of the Senior Obligations, or any amendment or waiver or other modification,
whether by course of conduct or otherwise, of, or consent to departure from, the Credit
Agreement Documents or any other Senior Secured Document;
	 
	 	3.	 	any exchange, release or nonperfection of any Lien in any Collateral, or any
release, amendment, waiver or other modification, whether in writing or by course of
conduct or otherwise, of, or consent to departure from, any Guarantee of any of the
Senior Obligations; or
	 
	 	4.	 	any other circumstances that might otherwise constitute a defense available to, or a
discharge of, any Subordinated Borrower in respect of the Senior Obligations, or of the
Subordinated Lender or any Subordinated Borrower in respect of this Agreement.






	E.	 	Representations and Warranties. Each Subordinated Lender represents and warrants to
the Administrative Agent for the benefit of the Lenders and the Collateral Agent, for the
benefit of the Senior Secured Parties, that:






	 	1.	 	It has the power and authority and the legal right to execute and deliver and to
perform its obligations under this Agreement and has taken all necessary action to
authorize its execution, delivery and performance of this Agreement.
	 
	 	2.	 	This Agreement has been duly executed and delivered by such Subordinated Lender and
constitutes a legal, valid and binding obligation of such Subordinated Lender,
enforceable against it 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.
	 
	 	3.	 	The execution, delivery and performance of this Agreement will not violate any
provision of any requirement of law applicable to such Subordinated Lender or of any
material contractual obligation of such Subordinated Lender.
	 
	 	4.	 	No consent or authorization of filing with, or other act by or in respect of, any
arbitrator or regulatory body or Governmental Authority (as defined in the Credit
Agreement) and no consent of any other Person, is required in connection with the
execution, delivery, performance, validity or enforceability of this Agreement.





B-6









 






	F.	 	Waiver of Claims. 1. To the maximum extent permitted by law, each Subordinated
Lender waives any claim it might have against any Senior Secured Party with respect to, or
arising out of, any action or failure to act or any error of judgment, negligence, or mistake
or oversight whatsoever on the part of any Senior Secured Party or its directors, officers,
employees, agents or Affiliates with respect to any exercise of rights or remedies under the
Senior Secured Documents or any transaction relating to the Collateral; provided that
such waiver shall not be effective to the extent that such claim is determined by a court of
competent jurisdiction by a final and non-appealable order to have resulted from the gross
negligence or willful misconduct of such Senior Secured Party or any of its directors,
officers, employees, agents or Affiliates. Neither the Senior Secured Parties nor any of their
respective directors, officers, employees, agents or Affiliates shall be liable for failure to
demand, collect or realize upon any of the Collateral or any Guarantee or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon
the request of any Subordinated Borrower or any Subordinated Lender or any other Person or to
take any other action whatsoever with regard to the Senior Collateral Documents, including,
without limitation, the Guarantee and Collateral Agreement, or any part thereof.






	 	2.	 	Each Subordinated Lender, for itself and on behalf of its successors and assigns,
hereby waives any and all now existing or hereafter arising rights it may have to require
the Senior Secured Parties to marshal assets for the benefit of such Subordinated Lender,
or to otherwise direct the timing, order or manner of any sale, collection or other
enforcement of the Collateral or enforcement of the Senior Secured Documents. The Senior
Secured Parties are under no duty or obligation, and each Subordinated Lender hereby
waives any right it may have to compel the Senior Secured Parties, to pursue any
guarantor or other Person who may be liable for the Senior Obligations, or to enforce any
Lien or security interest in any Collateral.
	 
	 	3.	 	Each Subordinated Lender hereby waives and releases all rights which a guarantor or
surety with respect to the Senior Obligations could exercise.
	 
	 	4.	 	Each Subordinated Lender hereby waives any duty on the part of the Senior Secured
Parties to disclose to it any fact known or hereafter known by the Senior Secured Parties
relating to the operation or financial condition of any Subordinated Borrower or any
guarantor of the Senior Obligations, or their respective businesses. Each Subordinated
Lender enters into this Agreement based solely upon its independent knowledge of the
applicable Subordinated Borrower’s results of operations, financial condition and
business and the Subordinated Lender assumes full responsibility for obtaining any
further or future information with respect to the applicable Subordinated Borrower or its
results of operations, financial condition or business.






	G.	 	Further Assurances. Each Subordinated Lender and each Subordinated Borrower, at
their own expense and at any time from time to time, upon the written request of the
Collateral Agent shall promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Collateral Agent reasonably may request for
the purposes of obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted.
	 
	H.	 	Release of Subordinated Borrowers. In the event (i) of any sale or other disposition
of all of the Equity Interests in any Subordinated Borrower (other than the Company) to a
Person that is not (either before or after giving effect to such transactions) the Company or
a Subsidiary or (ii) any Subordinated Borrower (other than the Company) is no longer a
Restricted Subsidiary for purposes of any Senior Secured Document, then such Subordinated
Borrower will be released and relieved of any obligations under this Agreement;
provided that such sale or other disposition or release is not prohibited by any
Senior Secured Document and the proceeds, if any, of such sale or other




B-7









 






	 	 	disposition are applied in accordance with the applicable provisions of all applicable Senior
Secured Documents.






	I.	 	Provisions Define Relative Rights. This Agreement is intended solely for the purpose
of defining the relative rights of the Senior Secured Parties on the one hand and the
Subordinated Lenders and the Subordinated Borrowers on the other, and no other Person shall
have any right, benefit or other interest under this Agreement.
	 
	J.	 	Powers Coupled with an Interest. All powers, authorizations and agencies contained
in this Agreement are coupled with an interest and are irrevocable until the Senior
Obligations are indefeasibly paid in full in cash.
	 
	K.	 	Notices. All notices, requests and demands to or upon any party hereto shall be in
writing and shall be given in the manner provided in Section 7.5 of the Intercreditor
Agreement.
	 
	L.	 	Counterparts. This Agreement may be executed by one or more of the parties on any
number of separate counterparts, each of which shall constitute an original, but all of which
taken together shall be deemed to constitute but one instrument.
	 
	M.	 	Severability. Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
	 
	N.	 	Integration. This Agreement represents the agreement of the Subordinated Borrowers,
the Senior Secured Parties and the Subordinated Lenders with respect to the subject matter
hereof and there are no promises or representations by any Subordinated Borrower, the Senior
Secured Parties or any Subordinated Lender relative to the subject matter hereof not
reflected herein.
	 
	O.	 	Amendments in Writing; No Waiver; Cumulative Remedies. 1. None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by the Administrative Agent, the Collateral Agent, each
affected Subordinated Borrower and each affected Subordinated Lender, provided that
any provision of this Agreement may be waived by the Senior Secured Parties in a letter or
agreement executed by the Collateral Agent, the Administrative Agent and each affected
Subordinated Lender.






	 	2.	 	No failure to exercise, nor any delay in exercising, on the part of the Senior
Secured Parties, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other right, power
or privilege.
	 
	 	3.	 	The rights and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by law.






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










B-8









 












	Q.	 	Successors and Assigns. 1. This Agreement shall be binding upon the successors and
assigns of each of the Subordinated Borrowers and each of the Subordinated Lenders and shall
inure to the benefit of the Senior Secured Parties and their respective successors and assigns.






	 	2.	 	Notwithstanding the provisions of Section 17(a) above, nothing herein shall be
construed to limit or relieve the obligations of any Subordinated Lender pursuant to
Section 3 of this Agreement, and no Subordinated Lender shall assign its obligations
hereunder to any Person (except as otherwise specifically permitted under Section 3 of
this Agreement); any such assignment other than as specifically permitted under Section 3
shall be void.






	R.	 	Governing Law; Jurisdiction; Consent to Service of Process. 1. THIS AGREEMENT SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW WHICH THE PARTIES HERETO AGREE APPLY HERETO).






	 	2.	 	Each Subordinated Lender 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 Senior Secured 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 or any other Senior Secured Party may
otherwise have to bring any action or proceeding relating to this Agreement or the other
Senior Secured Documents against any Subordinated Lender or its properties in the courts
of any jurisdiction.
	 
	 	3.	 	Each Subordinated Lender 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 Senior Secured 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.
	 
	 	4.	 	Each Subordinated Lender hereby irrevocably consents to service of process in the
manner provided for notices in Section 18 hereof. Nothing in this Agreement, the Credit
Agreement Documents or any other Senior Secured Document will affect the right of any
party to this Agreement to serve process in any other manner permitted by law.






	S.	 	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





B-9









 






	 	 	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 19.
	 
	T.	 	Additional Subordinated Lenders. Upon execution and delivery by the Administrative
Agent, the Collateral Agent and a Subsidiary of an instrument in the form of Annex 2
attached hereto, such Subsidiary shall become a Subordinated Lender and a Subordinated
Borrower hereunder with the same force and effect as if originally named as a Subordinated
Lender and a Subordinated Borrower herein. The execution and delivery of any such instrument
shall not require the consent of any other Subordinated Lender or Subordinated Borrower
hereunder. The rights and obligations of each Subordinated Borrower and each Subordinated
Lender herein shall remain in full force and effect notwithstanding the addition of any
Subordinated Lender and Subordinated Borrower as a party to this Agreement.





[Remainder of page intentionally left blank]




B-10









 





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



	 	 	 	 	 	 	 
	 	 	[                                                             ],	 	 
	 	 	as Subordinated Lender and Subordinated Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	BNP Paribas, as Administrative Agent,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 
	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	The Bank of Nova Scotia Trust Company of New York, as
Collateral Agent,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 







B-11









 








Schedule 1 to

Intercompany Debt Subordination Agreement




SUBORDINATED LENDERS





B-12









 








Schedule 2 to

Intercompany Debt Subordination Agreement




SUBORDINATED BORROWERS





B-13









 








Annex 1 to

Intercompany Debt Subordination Agreement




INTERCOMPANY DEMAND PROMISSORY NOTE




			
	 	 	 
	Note Number: 1
	 	Dated: [     ], 200_






     FOR VALUE RECEIVED, Enexus Energy Corporation and each of its Subsidiaries (as defined in the
Collateral Agency and Intercreditor Agreement referred to below) (collectively, the “Group
Members” and each, a “Group Member”) that is a party to this intercompany demand
promissory note (this “Promissory Note”) in its capacity as Payor promises to pay to the
order of such other Group Member as makes loans to such Group Member (each Group Member which
borrows money pursuant to this Promissory Note is referred to herein as a “Payor” and each
Group Member which makes loans and advances pursuant to this Promissory Note is referred to herein
as a “Payee”), on demand, in lawful money of the United States of America, in immediately
available funds and at the appropriate office of the Payee, the aggregate unpaid principal amount
of all loans and advances heretofore and hereafter made by such Payee to such Payor and any other
indebtedness now or hereafter owing by such Payor to such Payee as shown either on Schedule
A attached hereto (and any continuation thereof) or in the books and records of such Payee. The
failure to show any such Indebtedness or any error in showing such Indebtedness shall not affect
the obligations of any Payor hereunder. Capitalized terms used herein but not otherwise defined
herein shall have the meanings given such terms in the Collateral Agency and Intercreditor
Agreement, dated as of December 23, 2008, among Enexus Energy Corporation, the grantors from time
to time party thereto, BNP Paribas, as administrative agent (in such capacity and together with its
successors, the “Administrative Agent”), the hedge counterparty lienholders from time to
time party thereto, the credit support facility lienholders from time to time party thereto and The
Bank of Nova Scotia Trust Company of New York, as collateral agent (in such capacity and together
with its successors, the “Collateral Agent”).



     The unpaid principal amount hereof from time to time outstanding shall bear interest at a
rate equal to the rate as may be agreed upon from time to time by the relevant Payor and Payee or,
at the Administrative Agent or the applicable Secured Obligations Representative’s option (as
applicable) following the occurrence and during the continuation of a Default, at the rate per
annum then applicable to default interest under the applicable Senior Secured Document. Interest
shall be due and payable on the last day of each month commencing after the date hereof or at such
other times as may be agreed upon from time to time by the relevant Payor and Payee. Upon demand
for payment of any principal amount hereof, accrued but unpaid interest on such principal amount
shall also be due and payable. Interest shall be paid in lawful money of the United States of
America and in immediately available funds. Interest shall be computed for the actual number of
days elapsed on the basis of a year consisting of 365 days.



     Each Payor and any endorser of this Promissory Note hereby waives presentment, demand,
protest and notice of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such rights.



     This Promissory Note has been pledged by each Payee to the Collateral Agent, for the benefit
of the Senior Secured Parties, as security for such Payee’s obligations, if any, under the
applicable Senior Secured Documents to which such Payee is a party. Each Payor acknowledges and
agrees that after the occurrence and during the continuance of an Event of Default the Collateral
Agent and the other Senior Secured Parties may exercise all the rights of the Payees under this
Promissory Note and will not be subject to any abatement, reduction, recoupment, defense, setoff
or counterclaim available to such Payor.



B-14









 





     Notwithstanding anything contained herein to the contrary, neither the principal of nor the
interest on, nor any other amounts payable in respect of, the indebtedness created or evidenced by
this instrument or record shall become due or be paid or payable, except to the extent permitted
under the Intercompany Debt Subordination Agreement dated as of [     ], 2008, among the Subordinated
Lenders, the Subordinated Borrowers, the Administrative Agent, and the Collateral Agent, which
Intercompany Debt Subordination Agreement is incorporated herein with the same effect as if fully
set forth herein.



     Notwithstanding anything to the contrary contained herein, in any other agreement or in any
such promissory note or other instrument, this Promissory Note (i) replaces and supersedes any and
all promissory notes or other instruments which create or evidence any loans or advances made on or
before the date hereof by any Group Member to any other Group Member which are governed by the
Intercompany Debt Subordination Agreement, and (ii) shall not be deemed replaced, superseded or in
any way modified by any promissory note or other instrument entered into on or after the date
hereof which purports to create or evidence any loan or advance by any Group Member to any other
Group Member which are governed by the Intercompany Debt Subordination Agreement.



     THIS PROMISSORY NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS PROMISSORY NOTE
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE
NEW YORK GENERAL OBLIGATIONS LAW WHICH THE PARTIES HERETO AGREE APPLY HERETO).



     From time to time after the date hereof, additional subsidiaries of the [Group Members] may
become parties hereto by executing a counterpart signature page to this Promissory Note (each
additional subsidiary, an “Additional Payor”). Upon delivery of such counterpart signature
page to the Payees, notice of which is hereby waived by the other Payors, each Additional Payor
shall be a Payor and shall be as fully a party hereto as if such Additional Payor were an original
signatory hereof. Each Payor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Payor hereunder. This Promissory
Note shall be fully effective as to any Payor that is or becomes a party hereto regardless of
whether any other Person becomes or fails to become or ceases to be a Payor hereunder.



     This Promissory Note may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.



[Remainder of page intentionally left blank]




B-15









 





     IN WITNESS WHEREOF, each Payor has caused this Promissory Note to be executed and delivered by
its proper and duly authorized officer as of the date set forth above.



	 	 	 	 	 
	 	[GROUP MEMBERS]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




B-16









 








SCHEDULE A




TRANSACTIONS

ON

INTERCOMPANY DEMAND PROMISSORY NOTE




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Outstanding	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Principal	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Amount of	 	Balance	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Amount of	 	Principal	 	from Payor	 	 
	 	 	 	 	Name of	 	Name of	 	Advance	 	Paid This	 	to Payee	 	Notation Made
	Date	 	Payor	 	Payee	 	This Date	 	Date	 	This Date	 	By






B-17









 








ENDORSEMENT




     FOR VALUE RECEIVED, each of the undersigned does hereby sell, assign and transfer to                                                    
         
all of its right, title and interest in and to the
Intercompany Demand Promissory Note, dated [                    ], 2008 (as amended, restated supplemented or
otherwise modified from time to time, the “Promissory Note”), made by Enexus Energy
Corporation (the “Company”), and each Subsidiary of the Company (as defined in the
Promissory Note) or any other Person that is or becomes a party thereto, and payable to the
undersigned. This endorsement is intended to be attached to the Promissory Note and, when so
attached, shall constitute an endorsement thereof.



     The initial undersigned shall be the Group Members (as defined in the Promissory Note) party
to the Intercompany Debt Subordination Agreement on the date of the Promissory Note. From time to
time after the date thereof, additional subsidiaries of the Group Members shall become parties to
the Promissory Note (each, an “Additional Payee”) and a signatory to this endorsement by
executing a counterpart signature page to the Promissory Note and to this endorsement. Upon
delivery of such counterpart signature page to the Payors, notice of which is hereby waived by the
other Payees, each Additional Payee shall be a Payee and shall be as fully a Payee under the
Promissory Note and a signatory to this endorsement as if such Additional Payee were an original
Payee under the Promissory Note and an original signatory hereof. Each Payee expressly agrees that
its obligations arising under the Promissory Note and hereunder shall not be affected or diminished
by the addition or release of any other Payee under the Promissory Note or hereunder. This
endorsement shall be fully effective as to any Payee that is or becomes a signatory hereto
regardless of whether any other Person becomes or fails to become or ceases to be a Payee to the
Promissory Note or hereunder.



     Dated:                                         



[Remainder of page intentionally left blank]





B-18









 








	 	 	 	 	 
	 	[GROUP MEMBERS]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




B-19









 








Annex 2 to the

Intercompany Debt Subordination Agreement




FORM OF SUPPLEMENT NO. [     ] TO INTERCOMPANY DEBT SUBORDINATION

AGREEMENT





     SUPPLEMENT NO. [  ] dated as of [ 
    ], to the Intercompany Debt Subordination Agreement
dated as of [     ], 2008 (the “Intercompany Debt Subordination Agreement”), among the
subordinated
lenders named therein (the “Subordinated Lenders”), the subordinated borrowers named
therein (the “Subordinated Borrowers”), BNP Paribas, in its capacity as administrative
agent (in such capacity, the “Administrative Agent”) and The Bank of Nova Scotia Trust
Company of New York, as collateral agent (in such capacity, the “Collateral Agent”) for
the Senior Secured Parties (this “Supplement”).



     A. Reference is made to the Intercompany Debt Subordination Agreement.



     B. Terms used herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Intercompany Debt Subordination Agreement.



     C. Each of the Subordinated Lenders and each of the Subordinated Borrowers have entered into
the Intercompany Debt Subordination Agreement in order to induce the Senior Secured Parties to
make loans and other extensions of credit under the Credit Agreement Documents and the other
Senior Secured Documents. Section 20 of the Intercompany Debt Subordination Agreement provides
that subsidiaries of Enexus Energy Corporation may become Subordinated Lenders and that Restricted
Subsidiaries may become Subordinated Borrowers under the Intercompany Debt Subordination Agreement
by execution and delivery of an instrument in the form of this Supplement. The undersigned
Subsidiary (the “New Subordinated Party”) is executing this Supplement to become a
Subordinated Lender and a Subordinated Borrower under the Intercompany Debt Subordination
Agreement in accordance with the terms of the Credit Agreement as consideration for loans and
letters of credit previously made or issued or to be made or issued under the Credit Agreement.



     Accordingly, the Administrative Agent and the New Subordinated Party agree as follows:



     SECTION 1. In accordance with Section 20 of the Intercompany Debt Subordination Agreement, the
New Subordinated Party by its signature below becomes a Subordinated Lender and a Subordinated
Borrower under the Intercompany Debt Subordination Agreement with the same force and effect as if
originally named therein as a Subordinated Lender and a Subordinated Borrower and the New
Subordinated Party hereby (a) agrees to all the terms and provisions of the Intercompany Debt
Subordination Agreement applicable to it as a Subordinated Lender and a Subordinated Borrower
thereunder and (b) represents and warrants that the representations and warranties made by it as a
Subordinated Lender and a Subordinated Borrower thereunder are true and correct on and as of the
date hereof except for representations and warranties which by their terms refer to a specific
date. Each reference to a “Subordinated Lender” or a “Subordinated Borrower” in the Intercompany
Debt Subordination Agreement shall be deemed to include the New Subordinated Party. The
Intercompany Debt Subordination Agreement is hereby incorporated herein by reference.



     SECTION 2. This Supplement 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. This Supplement shall become effective when the
Administrative Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Subordinated Party, the Collateral Agent and the
Administrative Agent. Delivery of an executed




B-20









 







signature page to this Supplement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Supplement.




     SECTION 3. Except as expressly supplemented hereby, the Intercompany Debt Subordination
Agreement shall remain in full force and effect.



     SECTION 4. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401
AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH THE PARTIES HERETO AGREE APPLY HERETO).



     SECTION 5. In case any one or more of the provisions contained in this Supplement should be
held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and in the Intercompany Debt Subordination Agreement
shall not in any way be affected or impaired thereby (it being understood that the invalidity of a
particular provision hereof in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto 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 6. All communications and notices hereunder shall be in writing and given as provided
in Section 11 of the Intercompany Debt Subordination Agreement. All communications and notices
hereunder to the New Subordinated Party shall be given to it at the address set forth under its
signature below, with a copy to the Company.



[Remainder of page intentionally left blank]




B-21









 





     IN WITNESS WHEREOF, the New Subordinated Party, the Administrative Agent and the Collateral
Agent have duly executed this Supplement to the Intercompany Debt Subordination Agreement as of the
day and year first above written.



	 	 	 	 	 
	 	[NAME OF NEW SUBORDINATED PARTY],

 as New Subordinated Party,

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	BNP Paribas, as Administrative Agent,

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	The Bank of Nova Scotia Trust Company of New York,

as Collateral Agent,

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Notice Address[es] for New Subordinated [Party]/[Parties]:




[     ]

Phone: [     ]

Facsimile: [     ]

Attention: [     ]





B-22









 








EXHIBIT C




FORM OF ASSIGNMENT AND ACCEPTANCE





     Reference is made to the Credit Agreement dated as of December 23, 2008 (the “Credit
Agreement”), among Enexus Energy Corporation (the “Borrower”), the LENDERS from time
to time party thereto, Citigroup Global Markets Inc. and Goldman Sachs Lending Partners LLC, as
joint book runners and joint lead arrangers (in such capacities, collectively, the
“Arrangers”), BNP Paribas, as administrative agent (in such capacity and together with its
successors, the “Administrative Agent”) and The Bank of Nova Scotia Trust Company of New
York, as collateral agent (in such capacity and together with its successors, the “Collateral
Agent”) and Mizuho Corporate Bank, Ltd., as Syndication Agent (in such capacity, the
“Syndication Agent”). Terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement.



     SECTION 1. The undersigned Assignor hereby sells and assigns, without recourse, to the
undersigned Assignee, and the Assignee hereby purchases and assumes, without recourse, from the
Assignor, effective as of the effective date (the “Effective Date”) set forth below (but
not prior to the registration of the information contained herein in the Register pursuant to
Section 9.04(d) of the Credit Agreement), the interests set forth below (the “Assigned
Interest”) in the Assignor’s rights and obligations under the Credit Agreement and the other
Loan Documents, including, without limitation, the amounts and percentages set forth below of (i)
the Commitment of the Assignor on the Effective Date, (ii) the Loans owing to the Assignor which
are outstanding on the Effective Date and (iii) participations of the Assignor in Letters of Credit
which are outstanding on the Effective Date. Each of the Assignor and the Assignee hereby makes and
agrees to be bound by all the representations, warranties and agreements set forth in Section
9.04(c) of the Credit Agreement, a copy of which has been received by each such party as evidenced
by such party’s signature below. From and after the Effective Date (i) the Assignee shall be a
party to and be bound by the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a Lender thereunder
and under the Loan Documents and (ii) the Assignor shall, to the extent of the interests assigned
by this Assignment and Acceptance, relinquish its rights and be released from its obligations under
the Credit Agreement.



     SECTION 2. This Assignment and Acceptance is being delivered to the Administrative Agent
together with (i) if the Assignee is organized under the laws of a jurisdiction outside the United
States, any forms referred to in Section 2.19(e) of the Credit Agreement, duly completed and
executed by such Assignee, (ii) if the Assignee is not already a Lender under the Credit
Agreement, a completed Administrative Questionnaire and (iii) the processing and recordation fee
of $3,500.



     SECTION 3. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS (OTHER THAN
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH THE PARTIES HERETO AGREE
APPLY HERETO).



C-1









 





Date of Assignment:




Legal Name of Assignor:




Legal Name of Assignee:




Assignee’s Address for Notices:




Effective Date of Assignment:




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage Assigned of	 
	 	 	 	 	 	 	Loan/Commitment	 
	 	 	 	 	 	 	(set forth, to at least 8 decimals, as a	 
	 	 	 	 	 	 	percentage of the Loan and the	 
	 	 	Principal Amount	 	 	aggregate Commitments of all Lenders	 
	Facility/Commitment	 	Assigned	 	 	thereunder)	 
	 
	Revolving Credit
	 	$	 	 	 	%	 	 
	 
	 	 	 	 	 	 	 	 
	[funded Letters of Credit]
	 	$	 	 	 	%	 	 






[Remainder of page intentionally left blank]




C-2









 





	 	 	 	 	 	 	 	 	 
	The terms set forth on the foregoing
pages are hereby agreed to:	 	Accepted*	 	 
	 
	 	 	, 	 	 	 	 	 
	  ,	 	 	 	 	 	 
	as Assignor
	 	BNP Paribas, as Administrative Agent,	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	By:

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name:

	 	 	 	Title:	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 
	 	 	 	 	[ENEXUS ENERGY CORPORATION]	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	, 	 	 	 

	 	 
	 
as Assignee	 	[Issuer]	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	By:

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name:

	 	 	 	Title:	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 








 




			
	*	 	To be completed to the extent consents are required under Section 9.04(b) of the Credit
Agreement.






C-3









 








EXHIBIT D




FORM OF BORROWING REQUEST




BNP Paribas,

     as Administrative Agent under the

     Credit Agreement referred to below

525 Washington Boulevard

Jersey City, NJ, 07310

Attention: Socorro Lantin

Tel.: (201) 850-6577

Fax: (201) 850-4020

Email: nyls.agency.support@americas.bnpparibas.com




[Date]




Attention:




    
      Re:      
Enexus Energy Corporation (the “Borrower”)





     Reference is made to the Credit Agreement dated as of December 23, 2008, among the Borrower,
the Lenders from time to time party thereto, Citigroup Global Markets Inc. and Goldman Sachs
Lending Partners LLC, as joint book runners and joint lead arrangers (in such capacities,
collectively, the “Arrangers”), BNP Paribas, as administrative agent (in such
capacity and together with its successors, the “Administrative Agent”) and The Bank of
Nova Scotia Trust Company of New York, as collateral agent (in such capacity and together with its
successors, the “Collateral Agent”) and Mizuho Corporate Bank, Ltd., as Syndication Agent
(in such capacity, the “Syndication Agent”). Capitalized terms used herein and not
otherwise defined in this Borrowing Request are used herein as defined in the Credit Agreement.



               The Borrower hereby gives you notice pursuant to Section 2.02 of the Credit Agreement that it
requests a Borrowing under the Credit Agreement, and in that connection sets forth below the terms
on which such Borrowing is requested to be made:



	 	 	 	 	 	 	 
	(A)

	 	Date of Borrowing	 	 	 	 
	 

	 	(which is a Business Day)	 	 	 	 
	 

	 	 	 	 

	 	 
	(B)

	 	Principal Amount of Borrowing1	 	 	 	 
	 

	 	 	 	 

	 	 
	(C)

	 	Type of Borrowing2
	 	 

	 	 
	 
	 	 	 	 	 	 
	(D)

	 	Interest Period and the last day
thereof3
	 	 

	 	 








 




			
	1	 	Not less than $10,000,000 and in an integral multiple of $1,000,000, but in any event
not exceeding, as applicable, the available Revolving Credit Commitment available at such time.
	 
	2	 	Specify Eurodollar Borrowing or ABR Borrowing.






D-1









 









	(E)	 	Funds are requested to be disbursed to the Company’s following account:




ABA Number:                                         

[name and address of Company’s bank]



Account Name:                                         

Account Number:                                         

Reference:                                         

Attn:                                                             




     The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that,
on the date of this Borrowing Request and on the date of the related Borrowing, the conditions to
lending specified in Section 4.01 of the Credit Agreement have been satisfied as of the date of the
relevant Borrowing.



	 	 	 	 	 
	 	ENEXUS ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 





 




			
	3	 	Which shall be subject to the definition of “Interest Period” and Section 2.02 of the
Credit Agreement and end not later than the Revolving Credit Maturity Date (applicable for
Eurodollar Borrowings only). The last day of the Interest Period shall be a Business Day in
accordance with the definition of Interest Period.






D-2









 








EXHIBIT E



FORM OF LETTER OF CREDIT REQUEST



                     ,        




[Name of Issuer], as an Issuer

    under the Credit Agreement referred to below




BNP Paribas,

     as Administrative Agent under the

     Credit Agreement referred to below

525 Washington Boulevard

Jersey City, NJ, 07310

Attention: Socorro Lantin

Tel.: (201) 850-6577

Fax: (201) 850-4020

Email: nyls.agency.support@americas.bnpparibas.com




Attention:




   
       Re:      
Enexus Energy Corporation  (the “Borrower”)





     Reference is made to the Credit Agreement dated as of December 23, 2008, among the Borrower,
the Lenders from time to time party thereto, Citigroup Global Markets Inc. and Goldman Sachs
Lending Partners LLC, as joint book runners and joint lead arrangers (in such capacities,
collectively, the “Arrangers”), BNP Paribas, as administrative agent (in such
capacity and together with its successors, the “Administrative Agent”) and The Bank of
Nova Scotia Trust Company of New York, as collateral agent (in such capacity and together with its
successors, the “Collateral Agent”) and Mizuho Corporate Bank, Ltd., as Syndication Agent
(in such capacity, the “Syndication Agent”). Capitalized terms used herein and not
otherwise defined in this Letter of Credit Request are used herein as defined in the Credit
Agreement.



     The Borrower hereby gives you notice, irrevocably, pursuant to Section 2.03(c) of the Credit
Agreement that the undersigned requests the issuance of a Letter of Credit by [name of Issuer] in
the form of a [standby] [documentary] letter of credit for the benefit of [name of beneficiary], in
the amount of $                     , to be issued on                      ___, ___  (the “Issue Date”) and having an expiration date of
                     ___, ___.



     The form of the requested Letter of Credit is attached hereto as Annex 1.



[Signature Page Follows]




E-1









 





     The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that,
on the date of this Letter of Credit Request and on the relevant Issuance Date of the related
issuance of a Letter of Credit, the conditions to lending specified in Section 4.01 of the Credit
Agreement have been satisfied.



	 	 	 	 	 
	 	Enexus Energy Corporation

 	 
	 	By:  	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 




E-2









 








Annex 1 to the

Letter of Credit Request




[ATTACH PROPOSED FORM OF LETTER OF CREDIT]





E-3









 








EXHIBIT F


FORM OF NOTICE OF CONTINUATION OR CONVERSION



                     ,        





BNP Paribas,

     as Administrative Agent under the

     Credit Agreement referred to below

525 Washington Boulevard

Jersey City, NJ, 07310

Attention: Socorro Lantin

Tel.: (201) 850-6577

Fax: (201) 850-4020

Email: nyls.agency.support@americas.bnpparibas.com




Attention:




   
       Re:      
Enexus Energy Corporation  (the “Borrower”)





     Reference is made to the Credit Agreement dated as of December 23, 2008, among the Borrower,
the LENDERS from time to time party thereto, Citigroup Global Markets Inc. and Goldman
Sachs Lending Partners LLC, as joint book runners and joint lead arrangers (in such
capacities, collectively, the “Arrangers”), BNP Paribas, as administrative agent
(in such capacity and together with its successors, the “Administrative Agent”) and The
Bank of Nova Scotia Trust Company of New York, as collateral agent (in such capacity and together
with its successors, the “Collateral Agent”) and Mizuho Corporate Bank, Ltd., as
Syndication Agent (in such capacity, the “Syndication Agent”). Capitalized terms used
herein and not otherwise defined herein are used herein as defined in the Credit Agreement.



     The Borrower hereby gives you notice, irrevocably, pursuant to Section 2.10 of the Credit
Agreement that the undersigned hereby requests a [conversion] [continuation] on                      ___,       (a
Business Day) of $                     in principal amount of presently outstanding Revolving Loans that are
[ABR Loans] [Eurodollar Loans having an Interest Period ending on                      ___,      ]
[to] [as] [ABR][Eurodollar] Loans. [The Interest Period for such amount requested to be converted
to or continued as Eurodollar Loans is seven days or [one] [two] [three] [six] [nine] [twelve]
month[s]].]



     [In connection herewith, the undersigned hereby certifies that no Default or Event of Default
has occurred and is continuing on the date hereof.]1



	 	 	 	 	 
	 	Enexus Energy Corporation

 	 
	 	By:  	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 





 




			
	1	 	To be included for requests to convert or continue as a Eurodollar Loan only.






F-1









 





EXHIBIT G




FORM OF NON-BANK CERTIFICATE




               Reference is made to the Credit Agreement dated as of December 23, 2008, among the Borrower,
the LENDERS from time to time party thereto, Citigroup Global Markets Inc. and Goldman Sachs
Lending Partners LLC, as joint book runners and joint lead arrangers (in such capacities,
collectively, the “Arrangers”), BNP Paribas, as administrative agent (in such capacity and
together with its successors, the “Administrative Agent”) and The Bank of Nova Scotia Trust
Company of New York, as collateral agent (in such capacity and together with its successors, the
“Collateral Agent”) and Mizuho Corporate Bank, Ltd., as Syndication Agent (in such
capacity, the “Syndication Agent”). Terms used herein which are defined in the Credit
Agreement shall have such defined meanings unless otherwise defined herein or unless the context
otherwise requires.




	 	1.	 	The undersigned is not (i) a bank (as such term is used in
Section 881(c)(3)(A) of the Code, (ii) a “10 percent shareholder” of Borrower
within the meaning of section 881(c)(3)(B) of the Code, or (iii) a “controlled
foreign corporation” that is related to Borrower as described in section
881(c)(3)(C) of the Code.
	 
	 	2.	 	Attached hereto is an accurate and complete originally executed
U.S. Internal Revenue Service Form W-8BEN (or successor form).





	 	 	 	 	 	 	 
	 	 	[NAME OF LENDER]	 	 
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	[ADDRESS] [     ]	 	 
	 	 	Phone: [     ]	 	 
	 	 	Facsimile: [     ]	 	 
	 	 	Attention: [     ]	 	 







Dated:                                                              , 200      .




G-1









 








EXHIBIT H




FORM OF NOTE



THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH
THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE AND THE
OBLIGATIONS REPRESENTED HEREBY MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE
AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.




			
	 	 	 
	$[                    ]
	 	New York, New York
	 
	 	[     ], 2008






     FOR VALUE RECEIVED, the undersigned, Enexus Energy Corporation, a Delaware corporation
(the “Borrower”), hereby unconditionally promises to pay to [                                        ] (the “Lender”) or
its
registered assigns at the office specified in the Credit Agreement (as hereinafter defined) in
lawful money of the United States and in immediately available funds, on the Revolving Credit
Maturity Date the
principal amount of (a) [AMOUNT IN WORDS] DOLLARS ($[                                        ]), or, if less, (b) the
aggregate unpaid principal amount of all Loans made by the Lender to the Borrower pursuant to the
Credit Agreement. Subject to Section 2.07, the Borrower further agrees to pay interest in like
money at such office specified in the Credit Agreement on the unpaid principal amount hereof from
time to time outstanding at the rates and on the dates specified in Section 2.06 of the Credit
Agreement.



     The holder of this Note is authorized to endorse on the schedules annexed hereto and made a
part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the
date, Type and amount of each Revolving Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation thereof, each
conversion of all or a portion thereof to another Type and, in the case of Eurodollar Loans, the
length of each Interest Period with respect thereto. Each such endorsement shall constitute
prima facie evidence of the accuracy of the information endorsed. The failure to make any
such endorsement or any error in any such endorsement shall not affect the obligations of the
Borrower in respect of any Loan.



     This Note (a) is one of the Notes relating to Revolving Credit Borrowings referred to in the
Credit Agreement dated as of
December 23, 2008, Enexus Energy Corporation (the “Borrower”),
the Lenders from time to time party thereto, Citigroup Global Markets Inc. and Goldman Sachs
Lending Partners LLC, as joint book runners and joint lead arrangers (in such capacities,
collectively, the “Arrangers”), BNP Paribas, as administrative agent (in such capacity and
together with its successors, the “Administrative Agent”) and The Bank of Nova Scotia Trust
Company of New York, as collateral agent (in such capacity and together with its successors, the
“Collateral Agent”) and Mizuho Corporate Bank, Ltd., as Syndication Agent (in such
capacity, the “Syndication Agent”), (b) is subject to the provisions of the Credit
Agreement, and (c) is subject to optional and mandatory prepayment in whole or in part as provided
in the Credit Agreement. This Note is secured and guaranteed as provided in the Loan Documents.
Reference is hereby made to the Loan Documents for a description of the properties and assets in
which a security interest has been granted, the nature and extent of the security and the
guarantees, the terms and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.



     Upon the occurrence of any one or more of the Events of Default, all principal and all
accrued interest then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.



H-1









 





     All parties now and hereafter liable with respect to this Note, whether maker, principal,
surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other
notices of any kind, except as expressly set forth in the Credit Agreement.



     Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall
have the meanings given to them in the Credit Agreement.



     NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT AGREEMENT, THIS
NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE WITH THE REGISTRATION AND OTHER
PROVISIONS OF SECTION 9.04 OF THE CREDIT AGREEMENT.



     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401
AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH THE PARTIES HERETO AGREE APPLY HERETO).



[SIGNATURE PAGE FOLLOWS]




H-2









 





     IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed and delivered by
their proper and duly authorized officers as of the date first written above.



	 	 	 	 	 
	 	ENEXUS ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 








H-3









 











Schedule A

to Note




LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Amount of ABR	 	 	 	 
	 	 	 	 	Amount of ABR	 	Amount Converted	 	Amount of Principal of	 	Loans Converted to	 	Unpaid Principal Balance	 	 
	Date	 	Loans	 	to ABR Loans	 	ABR Loans Repaid	 	Eurodollar Loans	 	of ABR Loans	 	Notation Made By






H-4









 








Schedule B

to Note




LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Amount Converted	 	Interest Period and	 	Amount of Principal	 	Amount of Eurodollar	 	Unpaid Principal	 	 
	 	 	 	 	Amount of	 	to Eurodollar	 	Eurodollar Rate with	 	of Eurodollar Loans	 	Loans Converted to	 	Balance of	 	Notation
	Date	 	Eurodollar Loans	 	Loans	 	Respect Thereto	 	Repaid	 	ABR Loans	 	Eurodollar Loans	 	Made By






H-5









 








EXHIBIT I




[JOINDER AGREEMENT]/[AGREEMENT TO INCREASE COMMITMENTS]




     [JOINDER AGREEMENT]/[AGREEMENT TO INCREASE COMMITMENTS] dated as of [•], among [           ] [(the
“New Lender”)/(the “Lender”)], ENEXUS ENERGY CORPORATION, a
Delaware corporation (the “Borrower”), and BNP PARIBAS, as administrative agent (the
“Administrative Agent”) for the Lenders and Issuers (as defined in the Credit
Agreement referred to below).



     A. Reference is made to the Credit Agreement dated as of December 23, 2008 (as amended from
time to time, the “Credit Agreement”), among the Borrower, the Lenders party thereto,
Citigroup Global Markets Inc. and Goldman Sachs Lending Partners LLC, as joint book runners and
joint lead arrangers (in such capacities, collectively, the “Arrangers”), the
Administrative Agent, The Bank of Nova Scotia Trust Company of New York, as collateral agent (in
such capacity and together with its successors, the “Collateral Agent”) and Mizuho
Corporate Bank, Ltd., as Syndication Agent (in such capacity, the “Syndication Agent”).



     B. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement.



     C. Pursuant to Section 2.21 of the Credit Agreement, [the Borrower has invited the New Lender,
and the New Lender desires, to become a party to the Credit Agreement and to assume the obligations
of a Lender thereunder. The New Lender is entering into this Agreement in accordance with the
provisions of the Credit Agreement in order to become a Lender thereunder]/[the Borrower has
invited the Lender to provide the New Commitment].



     Accordingly, the [New Lender]/[Lender], the Borrower and the Administrative Agent agree as
follows:



     [SECTION 1. Accession to the Credit Agreement. (a) The New Lender, as of the
Increased Commitment Date (as defined in Section 3 below), hereby accedes to the Credit Agreement
and shall thereafter have the rights and obligations of a Lender thereunder with respect to its New
Commitment and all matters relating thereto with the same force and effect as if originally named
therein as a Lender.



     (b) The New Commitment shall equal the amount set forth opposite the signature of the New
Lender hereto.



     (c) Schedule 2.01 of the Credit Agreement is hereby amended and restated in its entirety in
the form of the Annex attached hereto.]1



     or



     [SECTION 1. Increase in Commitment. (a) The Lender, as of the Increased Commitment
Date (as defined in Section 3 below), hereby agrees to increase its Commitment by the amount of the
New Commitment which shall equal the amount set forth opposite the signature of each Lender hereto.





 




			
	1	 	Insert for Joinder Agreement only





I-1









 





     (b) Schedule 2.01 of the Credit Agreement is hereby amended and restated in its
entirety in the form of the Annex attached hereto.]2



     SECTION 2. Representations and Warranties, Agreements of [New Lender]/[Lender] etc.
The [New Lender]/[Lender] (a) represents and warrants that it has full power and authority, and has
taken all action necessary, to execute and deliver this Agreement and to become a Lender under the
Credit Agreement; (b) confirms that it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to Section 5.05 of the Credit
Agreement and such other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Agreement independently and without reliance upon
the Administrative Agent, any other Agent or any Lender; (c) confirms that it will independently
and without reliance upon the Administrative Agent, any other Agent or any Lender, and based on
such documents and information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement; (d) agrees that it will
perform, in accordance with the terms of the Credit Agreement, all the obligations that by the
terms of the Credit Agreement are required to be performed by it as a Lender and (e) irrevocably
appoints BNP Paribas as Administrative Agent under the Credit Agreement. The New Lender authorizes
the Administrative Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of the Credit Agreement, together with such
actions and powers as are reasonably incidental thereto.



     SECTION 3. Effectiveness. (a) This Agreement shall become effective as of [•] (the
“Increased Commitment Date”), subject to the Administrative Agent’s receipt of (i) counterparts of
this Agreement duly executed on behalf of the [New Lender]/[Lender] and the Borrower and (ii) the
documents required to be delivered by the Borrower under Section 2.21 of the Credit Agreement.



     (b) Upon the effectiveness of this Agreement, the Administrative Agent shall give prompt
notice thereof to the Lenders.



     (c) On the Increased Commitment Date, (i) each of the Lenders with Commitments shall assign to
each Lender with a New Commitment, and each of the Lenders with New Commitments shall purchase from
each of the Lenders with Commitments, at the principal amount thereof (together with accrued
interest), such interests in the Loans outstanding on such Increased Commitment Date as shall be
necessary in order that, after giving effect to all such assignments and purchases, such Loans will
be held by existing Lenders with Loans and Lenders with New Commitments ratably in accordance with
their Commitments after giving effect to the addition of such New Commitments to the Commitments,
(ii) each New Commitment shall be deemed for all purposes a Commitment and each loan made
thereunder shall be deemed, for all purposes, a Loan and (iii) each Lender with New Commitments
shall become a Lender with respect to its New Commitment and all matters relating thereto.



     [SECTION 4. Foreign Lenders. If the New Lender is organized under the laws of a
jurisdiction outside the United States, it will provide, following the Increased Commitment Date,
the forms specified in Section 2.19 of the Credit Agreement, at the times specified therein, duly
completed and executed by the New Lender.] 3





 




			
	2	 	Insert for Agreement to Increase only
	 
	3	 	Insert for Joinder Agreement only





I-2









 





     SECTION 5. Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall constitute an original, but all of which, when taken together, shall constitute but
one instrument.



     SECTION 6. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS (OTHER
THAN SECTIONS

 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH THE PARTIES HERETO
AGREE APPLY HERETO).



     SECTION 7. Severability. In case any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, none of the parties
hereto shall be required to comply with such provision for so long as such provision is held to be
invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining
provisions contained herein and in the Credit Agreement shall not in any way be affected or
impaired. The parties hereto 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 8. Notices. All communications and notices hereunder shall be in writing and
given as provided in Section 9.01 of the Credit Agreement. All communications and notices hereunder
to the New Lender shall be given to it at the address set forth under its signature hereto.



[Signature page follows]




I-3









 





     IN WITNESS WHEREOF, the [New Lender/Lender], the Borrower and the Administrative Agent have
duly executed this Agreement as of the day and year first above written.



	 	 	 	 	 	 	 
	New Commitment
	 	 	 	 	 	 
	$[                     ]	 	[New Lender] / [Lender],	 	 
	 
	 	 	 	 	 	 
	 

	 	by	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	Address:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ENEXUS ENERGY CORPORATION,	 	 
	 
	 	 	 	 	 	 
	 

	 	by	 	 	 	 
	 

	 	Name:

	 	 

	 	 
	 

	 	
Title:
	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	BNP PARIBAS, as	 	 
	 	 	Administrative Agent,	 	 
	 
	 	 	 	 	 	 
	 

	 	by

	 	 

	 	 
	 

	 	
Name:

	 	 

	 	 
	 

	 	
Title:

	 	 

	 	 







I-4









 








EXHIBIT I-1-A




SIGNING DATE LEGAL OPINION OF SKADDEN, ARPS




See attached.




I-1-A-1









 





December 23, 2008




BNP Paribas,

as the Administrative Agent,

The Bank of Nova Scotia Trust Company of New York,

as the Collateral Agent,

and each Financial Institution identified on Schedule A hereto





			
	          Re:	 	Enexus Energy Corporation $1,175,000,000 Credit Agreement
dated December 23, 2008





Ladies and Gentlemen:




          We have acted as special counsel to Enexus Energy Corporation, a Delaware corporation (the
“Borrower”), in connection with the preparation, execution and delivery of the Credit
Agreement, dated as of the date hereof (the “Credit Agreement”),between the Borrower, the
financial institutions party thereto from time to time as a lender or issuer, Citigroup Global
Markets Inc. and Goldman Sachs Lending Partners LLC, as joint book runners and joint lead
arrangers, BNP Paribas, as administrative agent for the parties identified on Schedule A
hereto (in such capacity, the “Administrative Agent”) and The Bank of Nova Scotia Trust
Company of New York, as collateral agent (in such capacity and together with its successors, the
“Collateral Agent”) and Mizuho Corporate Bank, Ltd., as syndication agent. This opinion is
being delivered pursuant to Section 4.02(a)(vi) of the Credit Agreement.




          In our examination we have assumed the genuineness of all signatures including endorsements,
the legal capacity and competency of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents submitted to us as
facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of
such copies. As to any facts relevant to this opinion which we did not independently establish or
verify, we have relied upon statements and representations of the Borrower and its officers and
other representatives and of public officials, including the facts and conclusions set forth
therein.




          In rendering the opinions set forth herein, we have examined and relied on originals or copies
of the following:




          (a) the Credit Agreement;




          (b) the Collateral Agency and Intercreditor Agreement, dated as of the date hereof (the
“Intercreditor Agreement”), by and among the Borrower, the Collateral Agent, the
Administrative Agent, and the other secured parties from time to time party thereto;




 









 





          (c) the certificate of Chris Reitz, Associate General Counsel and Assistant Secretary of the
Borrower, dated the date hereof, a copy of which is attached as Exhibit A hereto (the
“Borrower’s Certificate”);




          (d) a certified copy of the Certificate of Incorporation of the Borrower;




          (e) a certified copy of the By-laws of the Borrower;




          (f) certified copies of certain resolutions of the Board of Directors of the Borrower;




          (g) the certificate, dated December 19, 2008 and a bringdown thereof, dated December 22, 2008,
from the Secretary of State of the State of Delaware, as to the existence and good standing of the
Borrower in the State of Delaware; and




          (h) such other documents as we have deemed necessary or appropriate as a basis for the
opinions set forth below.




          We express no opinion as to the laws of any jurisdiction (including without limitation, the
laws of Massachusetts and Arkansas and the effect thereof on the opinions herein stated) other than
(i) the Applicable Laws of the State of New York, (ii) the Applicable Laws of the United States of
America (including, without limitation, Regulations U and X of the Federal Reserve Board), (iii)
the General Corporation Law of the State of Delaware (the “DGCL”) and (iv) the Investment
Company Act of 1940 for purposes of our opinion in paragraph 8.




          Capitalized terms used herein and not otherwise defined herein shall have the same meanings
herein as ascribed thereto in the Credit Agreement. The Credit Agreement and the Intercreditor
Agreement shall hereinafter be referred to collectively as the “Transaction Agreements”.
“Applicable Contracts” mean those agreements or instruments set forth on Schedule I to the
Borrower’s Certificate and which have been identified to us as all the agreements and instruments
which are material to the business or financial condition of the Borrower, or that are relevant to
the transactions contemplated by the Transaction Agreements. “Applicable Laws” shall mean
those laws, rules and regulations which, in our experience, are normally applicable to transactions
of the type contemplated by the Transaction Agreements, without our having made any special
investigation as to the applicability of any specific law, rule or regulation, and which are not
the subject of a specific opinion herein referring expressly to a particular law or laws (it being
understood that we express no opinion on the Federal Power Act or the Public Utility Holding
Company Act of 2005 or the effect of such laws on the opinions set forth herein).
“Governmental Approval” means any consent, approval, waiver, license, authorization or
validation of, or filing, recording or registration with, any governmental authority pursuant to
the Applicable Laws of the State of Delaware, State of New York and the United States of America.
“Applicable Orders” means those judgments, writs, injunctions, rulings, orders or decrees
of courts or governmental authorities identified on Schedule II to the Borrower’s Certificate.




2









 








          Based upon the foregoing and subject to the limitations, qualifications, exceptions and
assumptions set forth herein, we are of the opinion that:




          1. The Borrower is validly existing and in good standing under the DGCL.




          2. The Borrower has the corporate power and authority to execute, deliver and perform all of
its obligations under each of the Transaction Agreements under the DGCL. The execution and delivery
of each of the Transaction Agreements and the consummation by the Borrower of the transactions
contemplated thereby have been duly authorized by all requisite corporate action on the part of the
Borrower under the DGCL. Each of the Transaction Agreements have been duly executed and delivered
by the Borrower under the Applicable Laws of the State of New York.




          3. Each of the Transaction Agreements constitute the valid and binding obligation of the
Borrower enforceable against the Borrower, each in accordance with its terms under the
Applicable Laws of the State of New York.




          4. The execution and delivery by the Borrower of each of the Transaction Agreements and the
performance by the Borrower of its obligations under each of the Transaction Agreements, each in
accordance with its terms, do not (i) conflict with the Certificate of Incorporation or By-laws of
the Borrower, (ii) constitute a violation of, or a default under, any Applicable Contract or (iii)
cause the creation of any security interest or lien upon any of the property of the Borrower
pursuant to any Applicable Contract. We do not express any opinion, however, as to whether the
execution, delivery or performance by the Borrower of the Transaction Agreements will constitute a
violation of, or a default under, any covenant, restriction or provision with respect to financial
ratios or tests or any aspect of the financial condition or results of operations of the Borrower.




          5. Neither the execution, delivery or performance by the Borrower of the Transaction
Agreements nor the compliance by the Borrower with the terms and provisions thereof will contravene
any provision of any Applicable Law of the State of New York or any Applicable Law of the United
States of America.




          6. No Governmental Approval, which has not been obtained or taken and is not in full force and
effect, is required to authorize, or is required in connection with, the execution or delivery of
any of the Transaction Agreements by the Borrower or the enforceability of any of the Transaction
Agreements against the Borrower.




          7. Neither the execution, delivery or performance by the Borrower of its obligations under
the Transaction Agreements nor compliance by the Borrower with the terms thereof will contravene
any Applicable Order to which the Borrower is subject.






3









 








          8. The Borrower is not and, solely after giving effect to the loans made pursuant to the
Transaction Agreements, will not be an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.




          Our opinions are subject to the following assumptions and qualifications:




          (a) Enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally and by general principles
of equity (regardless of whether enforcement is sought in equity or at law);




          (b) We have assumed that each of the Transaction Agreements constitutes the valid and binding
obligation of each party to such Transaction Agreement (other than the Borrower to the extent
expressly set forth herein) enforceable against such other party in accordance with its terms;




          (c) We express no opinion as to the effect on the opinions expressed herein of (i) the
compliance or non-compliance of any party (other than the Borrower to the extent expressly set
forth herein) to the Transaction Agreements with any state, federal or other laws or regulations
applicable to it or (ii) the legal or regulatory status or the nature of the business of any party
(other than the Borrower to the extent expressly set forth herein);




          (d) We express no opinion as to the enforceability of any rights to contribution or
indemnification provided for in the Transaction Agreements which are violative of the public policy
underlying any law, rule or regulation (including any federal or state securities law, rule or
regulation);




          (e) We express no opinion on the enforceability of any provision in the Transaction Agreements
purporting to prohibit, restrict or condition the assignment of rights under it to the extent such
restriction on assignability is ineffective pursuant to the Uniform Commercial Code as in effect on
the date hereof in the State of New York (without regard to laws referenced in Section 9-201
thereof) (“New York UCC”);




          (f) In the case of the Intercreditor Agreement certain of the provisions, including waivers,
with respect to the Intercreditor Agreement are or may be unenforceable in whole or in part, but
the inclusion of such provisions does not affect the validity of the Intercreditor Agreement, taken
as a whole;




          (g) We express no opinion as to the enforceability of any section of the Transaction
Agreements to the extent it purports to waive any objection a person may have that a suit, action
or proceeding has been brought in an inconvenient forum or a forum lacking subject matter
jurisdiction;




          (h) We have assumed that all conditions precedent contained in Section 4.03 of the Credit
Agreement, which conditions require the delivery of documents, evidence or other items satisfactory
in form, scope and/or substance to the Administrative Agent or the




4









 




satisfaction of which is otherwise in the discretion or control of the Administrative Agent have
been, or contemporaneously with the delivery hereof will be, fully satisfied or waived;




          (i) To the extent that any opinion relates to the enforceability of the choice of New York
law and choice of New York forum provisions of the Transaction Agreements, our opinion is rendered
in reliance upon N.Y. Gen. Oblig. Law §§ 5-1401, 5-1402 (McKinney 2001) and N.Y. CPLR 327(b)
(McKinney 2001) and is subject to the qualifications that such enforceability may be limited by
public policy considerations of any jurisdiction, other than the courts of the State of New York,
in which enforcement of such provisions, or of a judgment upon an agreement containing such
provisions, is sought;




          (j) We call to your attention that the choice of New York law on the basis of Section 5-1401
of the New York General Obligation Law is only relevant insofar as litigation is brought to enforce
the Transaction Agreements in the courts of the State of New York, and we have assumed that there
is a basis for jurisdiction in such courts;




          (k) We express no opinion with respect to any provision of the Transaction Agreements to the
extent it authorizes or permits any purchaser of a participation interest or any Affiliate of any
Lender of the Administrative Agent to set-off or apply any deposit, property or indebtedness or the
effect thereof on the opinions contained herein;




          (l) We express no opinion with respect to Section 2.03 of the Credit Agreement to the extent
it excuses the issuer of a letter of credit from liability to the extent such provision is
unenforceable pursuant to Section 5-103 of the New York UCC;




          (m) We express no opinion with respect to the enforceability of Section 9.07 of the Credit
Agreement to the extent such provision purports to select a governing law in conflict with
mandatory choice of law rules set forth in Section 5-116 of the New York UCC;




          In rendering the foregoing opinions, we have assumed, with your consent, that




          (a) The execution, delivery and performance by the Borrower of any of its obligations under
the Transaction Agreements does not and will not conflict with, contravene, violate or constitute a
default under (i) any lease, indenture, instrument or other agreement to which it or its property
is subject (other than the Applicable Contracts as to which we express our opinion in paragraph 4),
(ii) any rule, law or regulation to which the Borrower is subject (other than the Applicable Laws
as to which we express our opinion in paragraph 5), and (iii) any judicial or administrative order
or decree of any governmental authority (other than the Applicable Orders as to which we express
our opinion in paragraph 7); and




          (b) No authorization, consent or other approval of, notice to or filing with any court,
governmental authority or regulatory body (other than Governmental Approvals as to which we express
our opinion in paragraph 6 herein) is required to authorize or is required in connection with the
execution, delivery or performance by the Borrower of any Transaction Agreement or the transactions
contemplated thereby.





5









 








          This opinion is being furnished only to you in connection with the Transaction Agreements and
is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to for
any other purpose (except to the extent required by Applicable Laws or by any subpoena or similar
legal process) or relied upon by any other person or entity for any purpose without our prior
written consent except that any person who becomes an Agent, Lender or Issuer in accordance with
the provisions of the Credit Agreement may rely on this opinion as if it were specifically
addressed and delivered to such person on the date hereof.




Very truly yours,





6











 





Schedule A




1. Citibank, N.A.



2. BNP Paribas



3. Goldman Sachs Lending Partners LLC



4. Mizuho Corporate Bank, Ltd.



5. The Bank of Nova Scotia



6. Calyon New York Branch



7. Natixis New York Branch



8. Union Bank of California, N.A.



9. Bank of America, N.A.



10. Barclays Bank PLC



11. Keybank National Association



12. Morgan Stanley Bank, N.A.



13. Regions Bank



14. Deutsche Bank Trust Company Americas




 









 





Exhibit A to Opinion of

Special Counsel to Enexus 

Energy Corporation.




Officer’s Certificate




          I, Chris Reitz, am the duly elected, qualified and acting Associate General Counsel and
Assistant Secretary of Enexus Energy Corporation, a Delaware corporation (the “Company”). I
understand that pursuant to Section 4.02(a)(vi) of the Credit Agreement, dated as of December 23,
2008, between the Borrower, the financial institutions party thereto from time to time as a lender
or issuer, Citigroup Global Markets Inc. and Goldman Sachs Lending Partners LLC, as joint book
runners and joint lead arrangers (in such capacities, collectively, the “Arrangers”), BNP Paribas,
as administrative agent for the parties identified on Schedule A hereto (in such capacity,
the “Administrative Agent”) and The Bank of Nova Scotia Trust Company of New York, as
collateral agent (in such capacity and together with its successors, the “Collateral
Agent”) and Mizuho Corporate Bank, Ltd., as syndication agent (in such capacity, the
“Syndication Agent”) (the “Agreement”), Skadden, Arps, Slate, Meagher & Flom LLP
(“SASM&F”) is rendering an opinion (the “Opinion”) to BNP Paribas, as the
Administrative Agent, The Bank of Nova Scotia Trust Company of New York, as the Collateral Agent,
and each Financial Institution identified on Schedule A hereto with respect to the Agreement.
Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to
such terms as set forth in the Opinion. I further understand that SASM&F is relying on this
officer’s certificate and the statements made herein in rendering such Opinion.




          With regard to the foregoing, on behalf of the Company, I hereby certify that:




          1. I am familiar with the business of the Company and its subsidiaries, and due inquiry has
been made of all person deemed necessary or appropriate to verify or confirm the statements
contained herein.




          2. SASM&F may rely on the respective representations and warranties that the Company has made
in the Agreement and each of the certificates delivered pursuant thereto. I have made a careful
review of each of such representations and warranties and hereby confirm, to the best of my
knowledge and belief, that such representations and warranties are true, correct and complete on
and as of the date of this certificate.




          3. Set forth on Schedule I hereto is a complete and accurate list of the agreements
and instruments to which the Company is subject which are material to the business or financial
condition of the Company or that are relevant to the transactions contemplated by the Credit
Agreement.




          4. Set forth on Schedule II hereto is a complete and accurate list of those orders and
decrees of any governmental authority of the State of Delaware by which the Company is bound that
are material to the business or financial condition of the Company or that are relevant to the
transactions contemplated by the Credit Agreement or Intercreditor Agreement.




          5. Less than twenty-five percent (25%) of the assets of the Company and its subsidiaries on a
consolidated basis and on an unconsolidated basis consist of Margin Stock.




 









 





          6. The Company is primarily engaged directly, or indirectly through Majority-Owned
Subsidiaries, in the business of generating nuclear power; and the Company (i) is not and does not
hold itself out as being engaged primarily, nor does it propose to engage primarily, in the
business of investing, reinvesting or trading in Securities, (ii) has not and is not engaged in,
and does not propose to engage in, the business of issuing Face-Amount Certificates of the
Installment Type and has no such certificate outstanding and (iii) does not own or propose to
acquire Investment Securities having a Value exceeding forty percent (40%) of the Value of the
total assets of the Company (exclusive of Government Securities and cash items) on an
unconsolidated basis.




          7. As used in paragraph 5 of this certificate, the following term shall have the
following meaning:




          “Margin Stock” means: (i) any equity security registered or having unlisted trading
privileges on a national securities exchange; (ii) any OTC security designated as qualified for
trading in the National Market System under a designation plan approved by the Securities and
Exchange
Commission; (iii) any debt security convertible into a margin stock or carrying a warrant or
right to subscribe to or purchase a margin stock; (iv) any warrant or right to subscribe to or
purchase a margin stock; or (v) any security issued by an investment company registered under
Section 8 of the Investment Company Act of 1940.




          8. As used in paragraphs 6 and 8 of this certificate, the following terms shall have
the following meanings:




          “Exempt Fund” means a company that is excluded from treatment as an investment company
solely by section 3(c)(1) or 3(c)(7) of the Investment Company Act of 1940 (applicable to certain
privately offered investment funds).




          “Face-Amount Certificate of the Installment Type” means any certificate, investment
contract, or other Security that represents an obligation on the part of its issuer to pay a stated
or determinable sum or sums at a fixed or determinable date or dates more than 24 months after the
date of issuance, in consideration of the payment of periodic installments of a stated or
determinable amount.




          “Government Securities” means all Securities issued or guaranteed as to principal or
interest by the United States, or by a person controlled or supervised by and acting as an
instrumentality of the government of the United States pursuant to authority granted by the
Congress of the United States; or any certificate of deposit for any of the foregoing.




          “Investment Securities” includes all Securities except (A) Government Securities, (B)
Securities issued by companies the only shareholders in which are employees and former employees
of a company and its subsidiaries, members of the families of such persons and the company and its
subsidiaries and (C) Securities issued by Majority-Owned Subsidiaries of the Company which are not
engaged and do not propose to be engaged in activities within the scope of clause (i), (ii) or
(iii) of paragraph 6 of this Certificate or which are exempted or excepted from treatment as an
investment company by statute, rule or governmental order (other than Exempt Funds).




2









 





     “Majority-Owned Subsidiary” of a person means a company fifty percent (50%) or more of
the outstanding Voting Securities of which are owned by such person, or by a company which, within
the meaning of this paragraph, is a Majority-Owned Subsidiary of such person.



     “Security” means any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest or participation in any profit-sharing agreement,
collateral-trust certificate, preorganization certificate or subscription, transferable share,
investment contract, voting-trust certificate, certificate of deposit for a security, fractional
undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or
privilege on any security (including a certificate of deposit) or on any group or index of
securities (including any interest therein or based on the value thereof), or any put, call,
straddle, option, or privilege entered into on a national securities exchange relating to foreign
currency, or, in general, any interest or instrument commonly known as a “security,” or any
certificate of interest or participation in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.



     “Value” means (i) with respect to Securities owned at the end of the last preceding
fiscal quarter for which market quotations are readily available, the market value at the end of
such quarter; (ii) with respect to other Securities and assets owned at the end of the last
preceding fiscal quarter, fair value at the end of such quarter, as determined in good faith by or
under the direction of the board of directors; and (iii) with respect to securities and other
assets acquired after the end of the last preceding fiscal quarter, the cost thereof.



     “Voting Security” means any security presently entitling the owner or holder thereof
to vote for the election of directors of a company (or its equivalent, e.g., general partner or
manager of a limited liability company).



[Signature Page Follows]




3









 





          IN WITNESS THEREOF, I have executed this certificate this            day of December, 2008.




	 	 	 	 	 
	 	ENEXUS ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	Chris Reitz 	 
	 	 	Title:  	Associate General Counsel and 

Assistant Secretary 	 
	 



[Signature Page to Backup Certificate]





 









 





Schedule A




1. Citibank, N.A.



2. BNP Paribas


3. Goldman Sachs Lending Partners LLC


4. Mizuho Corporate Bank, Ltd.


5. The Bank of Nova Scotia


6. Calyon New York Branch


7. Natixis New York Branch


8. Union Bank of California, N.A.


9. Bank of America, N.A.


10. Barclays Bank PLC


11. Keybank National Association


12. Morgan Stanley Bank, N.A.


13. Regions Bank


14. Deutsche Bank Trust Company Americas




5









 





Schedule I




Material Contracts




None.




6









 





Schedule II




Applicable Orders




None.




7









 





EXHIBIT I-1-B




SIGNING DATE OPINION OF INTERNAL COUNSEL




See attached.




I-1-B-1









 





December 23, 2008




BNP Paribas,

as the Administrative Agent,

The Bank of Nova Scotia Trust Company of New York,

as the Collateral Agent,

and each Financial Institution identified on Schedule A hereto





			
	          Re:	 	Enexus Energy Corporation $1,175,000,000 Credit Agreement dated

December 23, 2008





Ladies and Gentlemen:




          I am Timothy A. Ngau, Associate General Counsel — Contracts, Claims and Disputes, of Enexus
Energy Corporation, a Delaware corporation (the “Borrower”), and in such capacity have
acted as internal counsel in connection with the preparation, execution and delivery of the Credit
Agreement, dated as of the date hereof (the “Credit Agreement”),between the Borrower, the
financial institutions party thereto from time to time as a lender or issuer, Citigroup Global
Markets Inc. and Goldman Sachs Lending Partners LLC, as joint book runners and joint lead
arrangers, BNP Paribas, as administrative agent for the parties identified on Schedule A
hereto (in such capacity, the “Administrative Agent”) and The Bank of Nova Scotia Trust
Company of New York, as collateral agent (in such capacity and together with its successors, the
“Collateral Agent”) and Mizuho Corporate Bank, Ltd., as syndication agent. This opinion is
being delivered pursuant to Section 4.02(a)(vi) of the Credit Agreement.




          I, or other attorneys in my office with whom I have consulted, have examined copies of the
Transaction Agreements. I have examined such records, certificates and other documents as I have
deemed relevant for purposes of this opinion. As to questions of fact material to this opinion, I
have, when relevant facts were not independently established by me, relied upon: (1) certificates
of public officials, (2) searches of public records and other documents and (3) representations as
to factual matters, made by the Borrower in response to my inquiries and in the Transaction
Agreements. I have (without any investigation or independent confirmation) relied upon, and assumed
the accuracy of, such representations and such certificates, corporate records, searches and other
documents with respect to factual matters. In addition, in rending the opinions expressed below, I
have made such investigations of law as I have deemed appropriate for the purposes of this opinion
letter.




          Capitalized terms used herein and not otherwise defined herein shall have the same meanings
herein as ascribed thereto in the Credit Agreement. The Credit Agreement and the Intercreditor
Agreement shall hereinafter be referred to collectively as the “Transaction Agreements”.




 









 





          Based upon the foregoing and subject to the limitations, qualifications, exceptions and
assumptions set forth herein, I am of the opinion that:




          Except for the matters described in Schedule 3.09(a) (Signing) to the Credit Agreement, there
are no actions, suits, investigations or proceedings at law or in equity or by or before any
arbitrator or Governmental Authority now pending or, to the knowledge of the Borrower, threatened
against the Borrower or any business, property or material rights of the Borrower (i) that, as of
the Signing Date, involve any Transaction Agreement or the transactions contemplated therein or, at
any time thereafter, involve any Transaction Agreement or the transactions contemplated therein and
which could reasonably be expected to be material and adverse to the interests of the Lenders, or
(ii) as to which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the aggregate, to result in
a Material Adverse Effect.




          This opinion is being furnished only to you in connection with the Transaction Agreements and
is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to for
any other purpose (except to the extent required by Applicable Laws or by any subpoena or similar
legal process) or relied upon by any other person or entity for any purpose without my prior
written consent, except that any person who becomes an Administrative Agent, Collateral Agent,
Lender, Issuer or participant in accordance with the provisions of the Credit Agreement may rely on
the legal opinions contained herein as if it were specifically addressed and delivered to such
persons on the date hereof.




Very truly yours,




 









 





Schedule A




1. Citibank, N.A.



2. BNP Paribas


3. Goldman Sachs Lending Partners LLC


4. Mizuho Corporate Bank, Ltd.


5. The Bank of Nova Scotia


6. Calyon New York Branch


7. Natixis New York Branch


8. Union Bank of California, N.A.


9. Bank of America, N.A.


10. Barclays Bank PLC


11. Keybank National Association


12. Morgan Stanley Bank, N.A.


13. Regions Bank


14. Deutsche Bank Trust Company Americas




 









 





EXHIBIT I-2-A




FUNDS AVAILABILITY DATE OPINION OF SKADDEN, ARPS (INCLUDING FERC

OPINION)




See attached.




I-2-A-1









 





[DATE]




BNP Paribas,

as the Administrative Agent,

The Bank of Nova Scotia Trust Company of New York,

as the Collateral Agent,

and each Financial Institution identified on Schedule A hereto





			
	          Re:	 	Enexus Energy Corporation $1,175,000,000 Credit Agreement dated

December 23, 2008





Ladies and Gentlemen:



We have acted as special counsel to (i) Enexus Energy Corporation, a Delaware corporation (the
“Borrower”), (ii) the subsidiaries of the Borrower listed on Part I of Schedule I hereto
and referred to herein as the “Delaware Limited Liability Company Opinion Parties”, and
(iii) the subsidiaries of the Borrower listed on Part II of Schedule I hereto and referred to
herein as the “Delaware Corporation Opinion Parties” (each of (i), (ii) and (iii), a
“Delaware Opinion Party” and collectively, the “Delaware Opinion Parties”), (iv)
Enexus Nuclear Pilgrim, LLC, a Massachusetts limited liability company, (v) Enexus Nuclear Finance
Holding, Inc., an Arkansas corporation ((ii)-(v) collectively, the “Subsidiary Guarantors”;
each of the Borrower and the Subsidiary Guarantors, an “Opinion Party” and, collectively,
the “Opinion Parties”), in connection with the preparation, execution and delivery of (A)
the Credit Agreement, dated as of December 23, 2008 (the “Credit Agreement”), between the
Borrower, each financial institution party thereto from time to time as a lender or issuer,
Citigroup Global Markets Inc. and Goldman Sachs Lending Partners LLC, as joint book runners and
joint lead arrangers, BNP Paribas, as administrative agent for the parties identified on
Schedule A hereto (in such capacity, the “Administrative Agent”) and The Bank of
Nova Scotia Trust Company of New York, as collateral agent (in such capacity and together with its
successors, the “Collateral Agent”) and Mizuho Corporate Bank, Ltd., as syndication agent,
(B) the Collateral Agreement (as hereinafter defined), and (C) the In-tercreditor Agreement (as
hereinafter defined). This opinion is being delivered pursuant to Section 4.03(a)(ix) of the Credit
Agreement.




          In our examination we have assumed the genuineness of all signatures including endorsements,
the legal capacity and competency of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents submitted to us as
facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of
such copies. As to any facts relevant to this opinion which we did not independently establish or
verify, we have relied upon statements and representations of the Borrower and its officers and
other representatives and of public officials, including the facts and conclusions set forth
therein.




 









 





          In rendering the opinions set forth herein, we have examined and relied on originals or copies
of the following:




          (a) the Credit Agreement;




          (b) the Collateral Agency and Intercreditor Agreement, dated as of December 23, 2008, by and
among the Borrower, the Collateral Agent , the Administrative Agent, and the other secured parties
from time to time party thereto, as amended by the Joinder Agreement [and the Accession Agreement]
(the “Amended Intercreditor Agreement”);




          (c) the Guarantee and Collateral Agreement, dated as of the date hereof (the “Collateral
Agreement”), by and among the Borrower, the Subsidiary Guarantors, the Collateral Agent , the
Administrative Agent, and the other secured parties from time to time party thereto;




          (d) the Deposit Account Control Agreement, dated as of [      ] (the “Deposit Account Control
Agreement”), by and among the Opinion Party party thereto, the Collateral Agent and [      ] (the
“Financial Institution”);1




          (e) the Securities Account Control Agreement, dated as of [      ] (the “Securities Account
Control Agreement”), by and among the Opinion Party party thereto, the Collateral Agent and the
Financial Institution;2




          (f) the Copyright Security Agreement, dated as of [      ] (the “Copyright Security
Agreement”), by and among [Enexus Nuclear Vermont Yankee LLC] and the Collateral Agent;




          (g) the Guarantee Joinder and Assumption Agreement, dated as of [      ], between [      ] (the
“Joinder Agreement”);




          (h) [the Accession Agreement dated as of [      ], between [      ] (the “Accession
Agreement”)];




          (i) the certificate of Timothy A. Ngau, Associate General Counsel — Contracts,
Claims and Disputes, of the Borrower, dated the date hereof, a copy of which is attached as
Exhibit A hereto (the “Opinion Parties’ Certificate”);




          (j) certified copies of the certificate of incorporation or certificate of formation, as
applicable, and the by-laws or limited liability company operating agreement, as applicable, of






 




			
	1	 	Skadden will opine on these agreements upon review to the extent they meet Opinion Committee standards.
	 
	2	 	Skadden will opine on these agreements upon review to the extent they meet Opinion Committee standards.





2









 




each Delaware Opinion Party (with respect to each Delaware Opinion Party, the “Organizational
Documents”);




          (k) certified copies of certain resolutions of the Board of Directors, the Members or the
Managers, as applicable, of each Delaware Opinion Party;




          (l) certificates, dated December ___, 2008, from the Secretary of State of the State of
Delaware, as to the existence and good standing of each Delaware Opinion Party in the State of
Delaware (the “Delaware Good Standing Certificates”); and




          (m) such other documents as we have deemed necessary or appropriate as a basis for the
opinions set forth below.




          We express no opinion as to the laws of any jurisdiction (including without limitation, the
laws of Massachusetts and Arkansas and the effect thereof on the opinions herein stated) other than
(i) the Applicable Laws of the State of New York, (ii) the Applicable Laws of the United States of
America (including, without limitation, Regulations U and X of the Federal Reserve Board), (iii)
the General Corporation Law of the State of Delaware (the “DGCL”), (iv) the Delaware Limited Liability Act
(the “DLLCA”) and (v) the Investment Company Act of 1940 for purposes of our opinion in
paragraph 9.




          Capitalized terms used herein and not otherwise defined herein shall have the same meanings
herein as ascribed thereto in the Credit Agreement. The documents identified in clauses (b) through
(h) shall hereinafter be referred to collectively as the “Transaction Agreements”.
“Applicable Contracts” mean those agreements or instruments set forth on Schedule I to the
Opinion Parties’ Certificate and which have been identified to us as all the agreements and
instruments which are material to the business or financial condition of the Opinion Parties, taken
as a whole, or that are relevant to the transactions contemplated by the Transaction Agreements.
“Applicable Laws” shall mean those laws, rules and regulations which, in our experience,
are normally applicable to transactions of the type contemplated by the Transaction Agreements,
without our having made any special investigation as to the applicability of any specific law, rule
or regulation, and which are not the subject of a specific opinion herein referring expressly to a
particular law or laws (it being understood that we express no opinion on the Federal Power Act or
the Public Utility Holding Company Act of 2005 or the effect of such laws on the opinions set forth
herein). “Governmental Approval” means any consent, approval, waiver, license,
authorization or validation of, or filing, recording or registration with, any governmental
authority pursuant to the Applicable Laws of the State of Delaware, State of New York and the
United States of America. “Applicable Orders” means those judgments, writs, injunctions,
rulings, orders or decrees of courts or governmental authorities identified on Schedule II to the
Opinion Parties’ Certificate.



          Based upon the foregoing and subject to the limitations, qualifications, exceptions and
assumptions set forth herein, we are of the opinion that:



3









 





          1. Each Delaware Opinion Party is validly existing and in good standing under the DGCL or the
DLLCA, as applicable.




          2. Each Delaware Opinion Party has the corporate or limited liability company power, as
applicable, and authority to execute, deliver and perform all of its obligations under each of the
Transaction Agreements to which it is a party under the DGCL or the DLLCA, as applicable. The
execution and delivery of each of the Transaction Agreements and the consummation by each Delaware
Opinion Party of the transactions contemplated thereby have been duly authorized by all requisite
corporate or limited liability company action on the part of the Delaware Opinion Party under the
DGCL or the DLLCA, as applicable. Each Delaware Opinion Party has duly executed and delivered each
of the Transaction Agreements to which it is a party under the DGCL or the DLLCA, as applicable.




          3. Each of the Transaction Agreements constitutes the valid and binding obligation of each
Opinion Party that is a party thereto, enforceable against such Opinion Party in accordance with
its terms under the Applicable Laws of the State New York.




          4. The execution and delivery by each Delaware Opinion Party of each of the Transaction
Agreements to which it is a party and the performance by such Delaware Opinion Party of its
obligations under such Transaction Agreements, each in accordance with its terms, do not conflict
with the Organizational Documents of such Delaware Opinion Party.




          5. The execution and delivery by each Opinion Party of each of the Transaction Agreements to
which it is a party and the performance by each Opinion Party of its obligations under such
Transaction Agreements, each in accordance with its terms, do not conflict with, constitute a violation of, or a default under any Applicable Contract3 or cause the creation of
any security interest or lien upon any of the property of the Opinion Parties pursuant to any
Applicable Contracts. We do not express any opinion, however, as to whether the execution, delivery
or performance by any Opinion Party of the Transaction Agreements to which such Opinion Party is a
party will constitute a violation of, or a default under, any covenant, restriction or provision
with respect to financial ratios or tests or any aspect of the financial condition or results of
operations of the Opinion Parties.




          6. Neither the execution, delivery nor performance by any Opinion Party of each of the
Transaction Agreements to which it is a party nor the compliance by such Opinion Party with the
terms and provisions thereof will contravene any provision of any Applicable Law of the State of
New York or any Applicable Law of the United States of America.




          7. No Governmental Approval, which has not been obtained or taken and is not in full force and
effect, is required to authorize, or is required in connection with, the execution






 




			
	3	 	We may have to qualify this opinion if there are
Applicable Contracts as of the date of delivery that are governed by laws other
than those laws as to which we express our opinion.





4









 




or delivery of any of the Transaction Agreements by any Opinion Party or the enforceability of any
of the Transaction Agreements against any Opinion Party.




          8. Neither the execution, delivery nor performance by any Opinion Party of its obligations
under the Transaction Agreements nor compliance by any Opinion Party with the terms thereof will
contravene any Applicable Order to which the Opinion Party is subject.




          9. No Opinion Party is and, solely after giving effect to the loans made pursuant to the
Credit Agreement, no Opinion Party will be an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.




          Our opinions are subject to the following assumptions and qualifications:




          (a) Enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally and by general principles
of equity (regardless of whether enforcement is sought in equity or at law);




          (b) We have assumed that each of the Transaction Agreements constitutes the valid and binding
obligation of each party to such Transaction Agreement (other than any Opinion Party to the extent
expressly set forth herein) enforceable against such other party in accordance with its terms;




          (c) We express no opinion as to the effect on the opinions expressed herein of (i) the
compliance or non-compliance of any party (other than any Opinion Party to the extent expressly set
forth herein) to the Transaction Agreements with any state, federal or other laws or regulations
applicable to it or (ii) the legal or regulatory status or the nature of the business of any party
(other than the Borrower to the extent expressly set forth herein);




          (d) We express no opinion as to the enforceability of any rights to contribution or
indemnification provided for in the Transaction Agreements which are violative of the public policy
underlying any law, rule or regulation (including any federal or state securities law, rule or
regulation);




          (e) We express no opinion on the enforceability of any provision in the Transaction Agreements
purporting to prohibit, restrict or condition the assignment of rights under such Transaction
Agreement to the extent such restriction on assignability is ineffective pursuant to the Uniform
Commercial Code;




          (f) We express no opinion as to the enforceability of any section of any Transaction Agreement
to the extent it purports to waive any objection a person may have that a suit, action or
proceeding has been brought in an inconvenient forum or a forum lacking subject matter
jurisdiction;




          (g) In the case of the Collateral Agreement certain of the provisions, including waivers, with
respect to the Collateral Agreement are or may be unenforceable in whole or in




5









 




part, but the inclusion of such provisions does not affect the validity of the Collateral
Agreement, taken as a whole;




          (h) We express no opinion as to the enforceability of Section 2.2 of the Collateral Agreement and Section 5.12 of the
Amended Intercreditor Agreement to the extent that the each provides that the obligations of each Opinion Party are absolute and unconditional
irrespective of the existence, genuineness, value, validity, legality, enforceability, collectibility
or sufficiency of either the Collateral Agreement or Amended Intercreditor Agreement or the effect
thereof on the opinions herein stated;




          (i) We have assumed that all conditions precedent contained in Section 4.03 of
the Credit Agreement, which conditions require the delivery of documents, evidence or other
items satisfactory in form, scope and/or substance to the Administrative Agent or the
satisfaction of which is otherwise in the discretion or control of the Administrative Agent have been,
or contemporaneously with the delivery hereof will be, fully satisfied or waived;




          (j) To the extent that any opinion relates to the enforceability of the choice of New York law
and choice of New York forum provisions of the Transaction Agreements, our opinion is rendered in
reliance upon N.Y. Gen. Oblig. Law §§ 5-1401, 5-1402 (McKinney 2001) and N.Y. CPLR 327(b) (McKinney
2001) and is subject to the qualifications that such enforceability may be limited by public policy
considerations of any jurisdiction, other than the courts of the State of New York, in which
enforcement of such provisions, or of a judgment upon an agreement containing such provisions, is
sought;




          (k) We call to your attention that the choice of New York law on the basis of Section 5-1401
of the New York General Obligation Law is only relevant insofar as litigation is brought to enforce
the Transaction Agreements in the courts of the State of New York, and we have assumed that there
is a basis for jurisdiction in such courts;




          (l) We express no opinion with respect to any provision of any Transaction Agreement to the
extent it authorizes or permits any purchaser of a participation interest or any Affiliate of any
Lender of the Administrative Agent to set-off or apply any deposit, property or indebtedness or the
effect thereof on the opinions contained herein;




          (m) We express no opinion with respect to any section of any Transaction Agreement to the
extent it excuses the issuer of a letter of credit from liability to the extent such provision is
unenforceable pursuant to Section 5-103 of the Uniform Commercial Code;




          (n) We express no opinion with respect to the enforceability of any section of any Transaction
Agreement to the extent such provision purports to select a governing law in conflict with
mandatory choice of law rules set forth in Section 5-116 of the Uniform Commercial Code;




          (o) Certain of the remedial provisions with respect to the security contained in each of the
Collateral Agreement, the Intercreditor Agreement, the Deposit Account Control




6









 




Agreement, the Securities Account Control Agreements and the Intellectual Property Security
Agreement(s) (collectively, the “Security Agreements”) may be unenforceable in whole or in
part, but the inclusion of such provisions does not affect the validity of the Security Agreements,
each taken as a whole, and each of the Security Agreements, each taken as a whole, together with
applicable law, contains adequate provisions for the practical realization of the benefits of the
security;




          (p) without in any way affecting any opinion previously delivered by us with respect to the
Original Agreement (as hereinafter defined), we have assumed that the Collateral Agency and
Intercreditor Agreement, dated as of December 23, 2008, by and among the Borrower, the Collateral
Agent , the Administrative Agent, and the other secured parties from time to time party thereto (as
amended, supplemented or otherwise modified prior to the amendment and the delivery of this opinion
to you, the “Original Agreement”) continues to constitute the valid and binding obligation
of each party thereto enforceable against each such party in accordance with its terms immediately
prior to the amendment thereof and our delivery of this opinion to you; and




          (q) we call to your attention that: (i) the opinion previously delivered by us with respect
to the Original Agreement contained qualifications, and that such qualifications continue to be
effective with respect to this opinion and (ii) such opinion was effective only as of the date
thereof and that such effectiveness is not brought forward by the delivery of this opinion.




          In rendering the foregoing opinions, we have assumed, with your consent, that:




          (a) each of Enexus Nuclear Pilgrim, LLC and Enexus Nuclear Finance Holding, Inc. is validly
existing and in good standing as a corporation under the laws of the Commonwealth of Massachusetts
or the State of Arkansas, as applicable.




          (b) each of Enexus Nuclear Pilgrim, LLC and Enexus Nuclear Finance Holding, Inc. has the power
and authority to execute, deliver and perform all of its obligations under each of the Transaction
Agreements to which it is a party and the execution and delivery of each of the Transaction
Agreements and the consummation by each of Enexus Nuclear Pilgrim, LLC and Enexus Nuclear Finance
Holding, Inc. of the transactions contemplated thereby have been duly authorized by all requisite
action on the part of each of Enexus Nuclear Pilgrim, LLC and Enexus Nuclear Finance Holding, Inc.
Each of the Transaction Agreements has been duly authorized, executed and delivered by each of
Enexus Nuclear Pilgrim, LLC and Enexus Nuclear Finance Holding, Inc.




          (c) the execution, delivery and performance by each of Enexus Nuclear Pilgrim, LLC and Enexus
Nuclear Finance Holding, Inc. of any of its obligations under the Transaction Agreements does not
and will not conflict with, contravene, violate or constitute a default under the Organizational
Documents of either Enexus Nuclear Pilgrim, LLC or Enexus Nuclear Finance Holding, Inc.




7









 





          (d) the execution, delivery and performance by each Opinion Party of any of its obligations
under the Transaction Agreements does not and will not conflict with, contravene, violate or
constitute a default under (i) any lease, indenture, instrument or other agreement to which any
Opinion Party or its property is subject (other than the Applicable Contracts as to which we
express our opinion in paragraph 5 herein), (ii) any rule, law or regulation to which any Opinion Party is subject
(other than Applicable Laws of the State of New York and Applicable Laws of the United States of
America as to which we express our opinion in paragraph 6 herein) or (iii) any judicial or
administrative order or decree of any governmental authority (other than Applicable Orders as to
which we express our opinion in paragraph 8 herein); and




          (e) no authorization, consent or other approval of, notice to or filing with any court,
governmental authority or regulatory body (other than Governmental Approvals as to which we express
our opinion in paragraph 7 herein) is required to authorize or is required in connection with the
execution and delivery by or enforceability against any Opinion Party of any Transaction Agreement
to which it is a party or the transactions contemplated thereby.




          We understand that you are separately receiving an opinion, with respect to certain of the
foregoing assumptions from Tim Ngau, Associate General Counsel — Litigation and Contracts, to
Enexus Energy Corporation, Dewey & LeBoeuf LLP, New York regulatory counsel for the Opinion
Parties, Dykema, Michigan regulatory counsel for the Opinion Parties, Downs Rachlin Martin PLLC,
Vermont regulatory counsel for the Opinion Parties, Goodwin Procter LLP, Massachusetts counsel for
the Opinion Parties, Friday, Eldredge & Clark, LLP, Arkansas counsel for the Opinion Parties and
William Conway, Jr., FERC counsel for the Opinion Parties; and we are advised that each such
opinion contains qualifications. Our opinions herein stated are based on the assumptions specified
above and we express no opinion as to the effect on the opinions herein stated of the
qualifications contained in such other opinion.




          This opinion is being furnished only to you in connection with the Transaction Agreements and
is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to for
any other purpose or relied upon by any other person or entity for any purpose (except to the
extent required by Applicable Laws or by any subpoena or similar legal process) without our prior
written consent except that any person who becomes an Agent, Lender or Issuer in accordance with
the provisions of the Credit Agreement may rely on this opinion as if it were specifically
addressed and delivered to such person on the date hereof.




Very truly yours,




8









 





Schedule A




1. Citibank, N.A.



2. BNP Paribas


3. Goldman Sachs Lending Partners LLC


4. Mizuho Corporate Bank, Ltd.


5. The Bank of Nova Scotia


6. Calyon New York Branch


7. Natixis New York Branch


8. Union Bank of California, N.A.


9. Bank of America, N.A.


10. Barclays Bank PLC


11. Keybank National Association


12. Morgan Stanley Bank, N.A.


13. Regions Bank


14. Deutsche Bank Trust Company Americas




 









 





Schedule I




Delaware Opinion Parties




Part I




Enexus Nuclear Indian Point 2, LLC, a Delaware limited liability company

Enexus Nuclear Vermont Yankee, LLC, a Delaware limited liability company

Enexus Nuclear Midwest Investment Company, LLC, a Delaware limited liability company

Enexus Nuclear Palisades, LLC, a Delaware limited liability company

Enexus Nuclear FitzPatrick, LLC, a Delaware limited liability company

Enexus Nuclear Indian Point 3, LLC, a Delaware limited liability company

Enexus Nuclear Finance, LLC, a Delaware limited liability company

Enexus Power Marketing, LLC, a Delaware limited liability company

Enexus Nuclear Nebraska, LLC, a Delaware limited liability company

Nuclear Services Company, LLC, a Delaware limited liability company

Enexus Retail Energy LLC, a Delaware limited liability company

Enexus Nuclear Holding Company, LLC, a Delaware limited liability company




Part II




Enexus Retail Holding Company, a Delaware corporation

Enexus Nuclear Fuels Company, a Delaware corporation




 









 





Exhibit A to Opinion of

Special Counsel




Officer’s Certificate




          I, Timothy A. Ngau, am the duly elected, qualified and acting Associate General Counsel —
Contracts, Claims and Disputes of (i) Enexus Energy Corporation, a Delaware corporation (the
“Borrower”), (ii) the subsidiaries of the Borrower listed on Schedule A hereto
(collectively, the “Subsidiary Guarantors”); each of Borrower and the Subsidiary
Guarantors, an “Opinion Party” and, collectively, the “Opinion Parties”). I
understand that pursuant to Section 4.03(a)(ix) of the Credit Agreement, dated as of December 23,
2008, between the Borrower, the financial institutions party thereto from time to time as a lender
or issuer, Citigroup Global Markets Inc. and Goldman Sachs Lending Partners LLC, as joint book
runners and joint lead arrangers, BNP Paribas, as administrative agent for the parties identified
on Schedule B hereto and The Bank of Nova Scotia Trust Company of New York, as collateral
agent and Mizuho Corporate Bank, Ltd., as syndication agent, (the “Agreement”), Skadden,
Arps, Slate, Meagher & Flom LLP (“SASM&F”) is rendering an opinion (the “Opinion”)
to the BNP Paribas, as the administrative agent, The Bank of Nova Scotia Trust Company of New York,
as the collateral agent, and each financial institution identified on Schedule B thereto
with respect to the Transaction Agreements (as defined in the Opinion). Capitalized terms used
herein but not otherwise defined herein shall have the meanings assigned to such terms as set forth
in the Opinion. I further understand that SASM&F is relying on this officer’s certificate and the
statements made herein in rendering such Opinion.




          With regard to the foregoing, on behalf of the Opinion Parties, I hereby certify that:





	 	1.	 	I am familiar with the business of each of the Opinion Parties and its
respective subsidiaries, if any, and due inquiry has been made of all person deemed
necessary or appropriate to verify or confirm the statements contained herein.
	 
	 	2.	 	SASM&F may rely on the respective representations and warranties that (i) the
Opinion Parties have made in the Agreement, (ii) each Opinion Party has made in each of
the other Transaction Agreements to which it is a party, and each of the certificates
delivered pursuant thereto. I have made a careful review of each of such
representations and warranties and hereby confirm, to the best of my knowledge and belief, that such representations and warranties are true, correct and complete on and as of the date of this certificate.
	 
	 	3.	 	Set forth on Schedule I hereto is a complete and accurate list of the
agreements and instruments to which each of the Opinion Parties is subject which are
material to the business or financial condition of the Opinion Parties, taken as a
whole, or that are relevant to the transactions contemplated by the Transaction
Agreements.
	 
	 	4.	 	Set forth on Schedule II hereto is a complete and accurate list of
those orders and decrees of any governmental authority of the State of Delaware by
which any Opinion Party is bound that are material to the business or financial
condition of such Opinion Party or that are relevant to the transactions contemplated
by the Transaction Agreements.




 









 






	 	5.	 	Less than twenty-five percent (25%) of the assets of each Opinion Parties and its
subsidiaries on a consolidated basis and on an unconsolidated basis consist of Margin
Stock.
	 
	 	6.	 	Each of the Opinion Parties is primarily engaged directly, or indirectly through
Majority-Owned Subsidiaries, in the business of generating nuclear power; and each of
the Opinion Parties (i) is not and does not hold itself out as being engaged primarily,
nor does it propose to engage primarily, in the business of investing, reinvesting or
trading in Securities, (ii) has not and is not engaged in, and does not propose to
engage in, the business of issuing Face-Amount Certificates of the Installment Type and
has no such certificate outstanding and (iii) does not own or propose to acquire
Investment Securities having a Value exceeding forty percent (40%) of the Value of the
total assets of the Company (exclusive of Government Securities and cash items) on an
unconsolidated basis.
	 
	 	7.	 	As used in paragraph 5 of this certificate, the following term shall have the
following meaning:





          “Margin Stock” means: (i) any equity security registered or having unlisted trading
privileges on a national securities exchange; (ii) any OTC security designated as qualified for
trading in the National Market System under a designation plan approved by the Securities and
Exchange Commission; (iii) any debt security convertible into a margin stock or carrying a warrant
or right to subscribe to or purchase a margin stock; (iv) any warrant or right to subscribe to or
purchase a margin stock; or (v) any security issued by an investment company registered under
Section 8 of the Investment Company Act of 1940.





	 	8.	 	As used in paragraphs 6 and 8 of this certificate, the following terms
shall have the following meanings:





          “Exempt Fund” means a company that is excluded from treatment as an investment company
solely by section 3(c)(1) or 3(c)(7) of the Investment Company Act of 1940 (applicable to certain
privately offered investment funds).




          “Face-Amount Certificate of the Installment Type” means any certificate, investment
contract, or other Security that represents an obligation on the part of its issuer to pay a stated
or determinable sum or sums at a fixed or determinable date or dates more than 24 months after the
date of issuance, in consideration of the payment of periodic installments of a stated or
determinable amount.




          “Government Securities” means all Securities issued or guaranteed as to principal or
interest by the United States, or by a person controlled or supervised by and acting as an
instrumentality of the government of the United States pursuant to authority granted by the
Congress of the United States; or any certificate of deposit for any of the foregoing.




          “Investment Securities” includes all Securities except (A) Government Securities, (B)
Securities issued by companies the only shareholders in which are employees and former employees of
a company and its subsidiaries, members of the families of such persons and the company and its
subsidiaries and (C) Securities issued by Majority-Owned Subsidiaries of the




2









 




Company which are not engaged and do not propose to be engaged in activities within the scope of
clause (i), (ii) or (iii) of paragraph 6 of this Certificate or which are exempted or
excepted from treatment as an investment company by statute, rule or governmental order (other
than Exempt Funds).




          “Majority-Owned Subsidiary” of a person means a company fifty percent (50%) or more of
the outstanding Voting Securities of which are owned by such person, or by a company which, within
the meaning of this paragraph, is a Majority-Owned Subsidiary of such person.




          “Security” means any note, stock, treasury stock, bond, debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing agreement, collateral-trust
certificate, preorganization certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security, fractional undivided interest in
oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security
(including a certificate of deposit) or on any group or index of securities (including any
interest therein or based on the value thereof), or any put, call, straddle, option, or privilege
entered into on a national securities exchange relating to foreign currency, or, in general, any
interest or instrument commonly known as a “security,” or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or
right to subscribe to or purchase, any of the foregoing.




          “Value” means (i) with respect to Securities owned at the end of the last preceding fiscal
quarter for which market quotations are readily available, the market value at the end of such
quarter; (ii) with respect to other Securities and assets owned at the end of the last preceding
fiscal quarter, fair value at the end of such quarter, as determined in good faith by or under the
direction of the board of directors; and (iii) with respect to securities and other assets
acquired after the end of the last preceding fiscal quarter, the cost thereof.




          “Voting Security” means any security presently entitling the owner or holder thereof
to vote for the election of directors of a company (or its equivalent, e.g., general partner or
manager of a limited liability company).





	 	9.	 	Borrower: (i) does not directly own or operate facilities used for the
distribution of natural or manufactured gas for heat, light, or power (“Gas Utility
Facilities”); and (ii) does not directly, or indirectly through one or more
intermediate entities, own, control, or hold with power to vote any Equity Interest in
any entity that owns or operates Gas Utility Facilities.
	 
	 	10.	 	Borrower does not directly own or operate facilities used for the generation,
transmission, or distribution of electric energy (“Electric Utility Facilities”) and
has not made any sales of electric energy. Other than Enexus Nuclear Generation
Company, Enexus Nuclear Indian Point 2, LLC, Enexus Nuclear Indian Point 3, LLC, Enexus
Nuclear FitzPatrick, LLC, Enexus Nuclear Vermont Yankee, LLC, Enexus Nuclear Palisades,
LLC (each an “Electric Generator”) and Enexus Power Marketing, LLC (“EPM”), Borrower
does not directly, or indirectly through one or more intermediate entities, own,
control, or hold with power to vote any Equity Interest in




3









 






	 	 	 	any entity that directly (i)
owns Electric Utility Facilities, (ii) operates and has decision-making power with
respect to sales of electric energy from Electric Utility Facilities, or (iii) is
engaged in making sales of electric energy.
	 
	 	11.	 	As used in paragraphs 9 and 10, an “Equity Interest” in an entity means any
security, stock, treasury stock, limited liability company interest, partnership interest,
certificate of interest, participation in any profit-sharing agreement or other interest
presently entitling the owner or holder thereof to vote in the direction or management of the
affairs of such entity.
	 
	 	12.	 	Each Electric Generator has previously self-certified its status, or otherwise received an
order or other authorization from FERC designating it, as an exempt wholesale generator
(“EWG”) as defined in the Public Utility Holding Company Act of 2005 (“PUHCA 2005”). As of the
date of this certificate each Electric Generator has complied in all material respects with
the regulations of the FERC under PUHCA 2005 so as to maintain such EWG status.
	 
	 	13.	 	Each Electric Generator and EPM has previously filed a market-based rate tariff with FERC and
received orders or other authorizations by FERC accepting such tariff for filing and granting
it: (i) the authority to make sales for resale of electric energy at market-based rates and,
to the extent permitted under its market-based rate tariff, other transactions at market-based
rates, and (ii) such waivers and blanket authorizations as are customarily granted to entities
with market-based rate authority, including blanket authorizations to issue securities and to
assume liabilities pursuant to Section 204 of the FPA. To the best of my knowledge, such
orders and authorizations are not subject to any pending challenge or investigation.





[Signature Page Follows]




4









 





          IN WITNESS THEREOF, I have executed this certificate this ___ day of December ___, 2008.




	 	 	 
	 

	 	ENEXUS ENERGY CORPORATION,
	 

	 	ENEXUS NUCLEAR HOLDING COMPANY, LLC,
	 

	 	ENEXUS NUCLEAR FINANCE, LLC,
	 

	 	ENEXUS NUCLEAR FINANCE HOLDING, INC.,
	 

	 	ENEXUS NUCLEAR FITZPATRICK, LLC,
	 

	 	ENEXUS NUCLEAR FUELS COMPANY,
	 

	 	ENEXUS NUCLEAR INDIAN POINT 2, LLC,
	 

	 	ENEXUS NUCLEAR INDIAN POINT 3, LLC,
	 

	 	ENEXUS NUCLEAR, MIDWEST INVESTMENT COMPANY, LLC
	 

	 	ENEXUS NUCLEAR NEBRASKA, LLC,
	 

	 	ENEXUS NUCLEAR PALISADES, LLC,
	 

	 	ENEXUS NUCLEAR PILGRIM, LLC,
	 

	 	ENEXUS NUCLEAR VERMONT YANKEE, LLC,
	 

	 	ENEXUS POWER MARKETING, LLC,
	 

	 	ENEXUS RETAIL HOLDING COMPANY,
	 

	 	ENEXUS RETAIL ENERGY, LLC, and
	 

	 	NUCLEAR SERVICES COMPANY, LLC






	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Timothy A. Ngau
	 	 
	 

	 	 	 	Title: Associate General Counsel	 	 






5









 





Schedule A




Enexus Nuclear Finance Holding, Inc., an Arkansas corporation

Enexus Nuclear Finance, LLC, a Delaware limited liability company

Enexus Nuclear FitzPatrick, LLC, a Delaware limited liability company

Enexus Nuclear Fuels Company, a Delaware corporation

Enexus Nuclear Indian Point 2, LLC, a Delaware limited liability company

Enexus Nuclear Indian Point 3, LLC, a Delaware limited liability company

Enexus Nuclear Nebraska, LLC, a Delaware limited liability company

Enexus Nuclear Palisades, LLC, a Delaware limited liability company

Enexus Nuclear Pilgrim, LLC, a Massachusetts limited liability company

Enexus Power Marketing, LLC, a Delaware limited liability company

Enexus Nuclear Holding Company, LLC, a Delaware limited liability company

Enexus Nuclear Midwest Investment Company, LLC, a Delaware limited liability company

Enexus Nuclear Vermont Yankee, LLC, a Delaware limited liability company

Enexus Retail Holding Company, a Delaware corporation

Enexus Retail Energy, LLC, a Delaware limited liability company

Nuclear Services Company, LLC, a Delaware limited liability company




6









 





Schedule B




1. Citibank, N.A.



2. BNP Paribas


3. Goldman Sachs Lending Partners LLC


4. Mizuho Corporate Bank, Ltd.


5. The Bank of Nova Scotia


6. Calyon New York Branch


7. Natixis New York Branch


8. Union Bank of California, N.A.


9. Bank of America, N.A.


10. Barclays Bank PLC


11. Keybank National Association


12. Morgan Stanley Bank, N.A.


13. Regions Bank


14. Deutsche Bank Trust Company Americas




7









 





Schedule I




Material Contracts





	1.	 	Separation and Distribution Agreement by and between Enexus Energy Corporation and Entergy
Corporation
	 
	2.	 	Senior Note Indenture by and among Enexus Energy Corporation and the other parties thereto
	 
	3.	 	Federal Income Tax Matters Agreement by and between Enexus Energy Corporation and Entergy
Corporation
	 
	4.	 	State Tax Matters Agreement by and between Enexus Energy Corporation and Entergy Corporation
	 
	5.	 	Transition Services Agreement by and between Enexus Energy Corporation and Entergy
Corporation
	 
	6.	 	Employee Matters Agreement by and among Enexus Energy Corporation, Entergy Corporation
and EquaGen LLC
	 
	7.	 	Joint Venture Formation Agreement by and among Enexus Energy Corporation, Entergy Corporation
and EquaGen LLC
	 
	8.	 	EquaGen LLC Limited Liability Company Agreement by and between Entergy
Corporation, Enexus Energy Corporation and EquaGen LLC
	 
	9.	 	Amended and Restated Operating Agreements by and between (i) EquaGen Nuclear LLC, and (ii)
Enexus Nuclear FitzPatrick, LLC, Enexus Nuclear Pilgrim, LLC, Enexus Indian Point 2, LLC,
Enexus Nuclear Indian Point 3, LLC, Enexus Nuclear Palisades, LLC and Enexus Nuclear Vermont
Yankee, LLC, respectively
	 
	10.	 	Shared Services Agreement by and between EquaGen LLC and Entergy Operations, Inc.
	 
	11.	 	Shared Services Agreement by and between EquaGen LLC and Entergy Services, Inc.
	 
	12.	 	Corporate Services Agreement by and between EquaGen LLC and Entergy Services, Inc.
	 
	13.	 	2008 Equity Ownership and Long Term Cash Incentive Plan of Enexus Energy
Corporation and Subsidiaries
	 
	14.	 	Credit Agreement by and among Enexus Energy Corporation and the other parties thereto
	 
	15.	 	Collateral Agency and Intercreditor Agreement by and among Enexus Energy
Corporation and the other parties thereto




8









 






	16.	 	Guarantee and Collateral Agreement by and among Enexus Energy Corporation and the other
parties thereto
	 
	17.	 	Support Agreement by and among Enexus Energy Corporation and the other parties thereto
	 
	18.	 	Nuclear Fuel and Fuel Services Purchase Agreement





9









 





Schedule II




Applicable Orders





	1.	 	Approval in connection with the distribution and related transactions (including the internal
reorganizations by Enexus and Entergy, the formation of EquaGen and debt financing
transactions preceding the distribution) by the Nuclear Regulatory Commission
	 
	2.	 	Approval in connection with the distribution and related transactions (including the
internal reorganizations by Enexus and Entergy, the formation of EquaGen and debt
financing transactions preceding the distribution) by the Federal Energy Regulatory
Commission
	 
	3.	 	Approval in connection with the distribution and related transactions (including the internal
reorganizations by Enexus and Entergy, the formation of EquaGen and debt financing
transactions preceding the distribution) by the New York State Public Service Commission
	 
	4.	 	Approval in connection with the distribution and related transactions (including the internal
reorganizations by Enexus and Entergy, the formation of EquaGen and debt financing
transactions preceding the distribution) by the Vermont Public Service Board.






 











 





[Date]




BNP Paribas,

as the Administrative Agent,

The Bank of Nova Scotia Trust Company of New York,

as the Collateral Agent,

and each Financial Institution identified on Schedule A hereto





			
	          Re:	 	Enexus Energy Corporation $1,175,000,000 Credit Agreement dated 

December 23, 2008





Ladies and Gentlemen:




     We have acted as special counsel to (i) Enexus Energy Corporation, a Delaware corporation (the
“Borrower”), (ii) the subsidiaries of the Borrower listed on Part I of Schedule I hereto
and referred to herein as the “Delaware Limited Liability Company Opinion Parties”, and
(iii) the subsidiaries of the Borrower listed on Part II of Schedule I hereto and referred to
herein as the “Delaware Corporation Opinion Parties” (each of (i), (ii) and (iii) a
“Delaware Opinion Party” and collectively, the “Delaware Opinion Parties”), (iv)
Enexus Nuclear Generation Company, a Massachusetts corporation, (v) Enexus Nuclear Finance Holding,
Inc., an Arkansas corporation ((ii)-(v) collectively, the “Subsidiary Guarantors”; each of
the Borrower and the Subsidiary Guarantors, an “Opinion Party” and, collectively, the
“Opinion Parties”), in connection with the preparation, execution and delivery of (A) the
Collateral Agreement (as hereinafter defined) and (B) the Intercreditor Agreement (as hereinafter
defined). This opinion is being delivered pursuant to Section 4.03(a)(x) of the Credit Agreement,
dated as of December 23, 2008 (the “Credit Agreement”), between the Borrower, each
financial institution party thereto from time to time as a lender or issuer, Citigroup Global
Markets Inc. and Goldman Sachs Lending Partners LLC, as joint book runners and joint lead
arrangers, BNP Paribas, as administrative agent for the parties identified on Schedule A
hereto (in such capacity, the “Administrative Agent”) and The Bank of Nova Scotia Trust
Company of New York, as collateral agent (in such capacity and together with its successors, the
“Collateral Agent”) and Mizuho Corporate Bank, Ltd., as syndication agent.



          In our examination we have assumed the genuineness of all signatures including endorsements,
the legal capacity and competency of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents submitted to us as
facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of
such copies. As to any facts relevant to this opinion which we did not independently establish or
verify, we have relied upon statements and representations of the Borrower and its officers and
other representatives and of public officials, including the facts and conclusions set forth
therein.




 









 





          In rendering the opinions set forth herein, we have examined and relied on originals or copies
of the following:




          (a) the Guarantee and Collateral Agreement, dated as of [     ] (the “Collateral
Agreement”), by and among the Borrower, the Subsidiary Guarantors, the Collateral Agent, the
Administrative Agent, and the other Senior Secured Parties (as defined therein) from time to time
party thereto;




          (b) the Deposit Account Control Agreement, dated as of [     ] (the “Deposit Account Control
Agreement”), by and among the Opinion Party party thereto, the Collateral Agent and [     ] (the
“Financial Institution”);1




          (c) the Securities Account Control Agreement, dated as of [     ] (the “Securities Account
Control Agreement”), by and among the Opinion Party party thereto, the Collateral Agent and the
Financial Institution;2




          (d) the Copyright Security Agreement, dated as of [     ] (the “Copyright Security
Agreement”), by and among [Enexus Nuclear Vermont Yankee LLC] and the Collateral Agent;




          (e) the Guarantee Joinder and Assumption Agreement, dated as of [     ], between [     ] (the
“Joinder Agreement”);




          (f) [the Accession Agreement dated as of [     ], between [     ] (the “Accession
Agreement”)];




          (g) the certificate of the Opinion Parties, dated the date hereof, a copy of which is attached
as Exhibit A hereto (the “Opinion Parties’ Certificate”);




          (h) certified copies of the certificate of incorporation or certificate of formation, as
applicable, and the by-laws or limited liability company operating agreement, as applicable, of
each of Delaware Opinion Party;




          (i) certified copies of certain resolutions of the Board of Directors, the Members or the
Managers, as applicable, of each Delaware Opinion Party;




          (j) certificates, dated [•], from the Secretary of State of the State of Delaware, as to the
existence and good standing of each Delaware Opinion Party in the State of Delaware (the
“Delaware Good Standing Certificates”);






 




			
	1	 	Skadden will opine on these agreements upon review to the extent they meet Opinion
Committee standards.
	 
	2	 	Skadden will opine on these agreements upon review to the extent they meet Opinion
Committee standards.





2









 





          (k) unfiled copies of a separate UCC-1 financing statement for each Delaware Opinion Party,
each identifying a separate Delaware Opinion Party as the debtor and The Bank of Nova Scotia Trust
Company of New York, as Collateral Agent” as the secured party, which we understand will be filed
in the office of the Secretary of State of the State of Delaware (the “Delaware Filing
Office”, and each such financing statement, a “Delaware Financing Statement”);




          (l) the certificates identified on Schedule II hereto and delivered on the date
hereof (the “Possessory Certificates”);




          (m) the instrument identified on Schedule III hereto and delivered on the date
hereof (the “Possessory Instrument”); and




          (n) such other documents as we have deemed necessary or appropriate as a basis for the
opinions set forth below.




          We express no opinion as to the laws of any jurisdiction other than the UCC (as defined
below).




          Capitalized terms used herein and not otherwise defined herein shall have the same meanings
herein as ascribed thereto in the Credit Agreement. The documents identified in clauses (a) through
(f) shall hereinafter be referred to collectively as the “Transaction Agreements”.




          “UCC” means the New York UCC or the Delaware UCC (in each case, as such term is
defined below), as applicable. “New York UCC” means the Uniform Commercial Code as in
effect on the date hereof in the State of New York (without regard to laws referenced in Section
9-201 thereof). “Delaware UCC” means the Uniform Commercial Code as in effect on the date
hereof in the State of Delaware (without regard to laws referenced in Section 9-201 thereof).
“UCC Collateral” means the GCA Collateral (as such term is defined in the Collateral
Agreement) to the extent the New York UCC governs a security interest in such collateral.




          “Deposit Account” means the account number [                    ] established at the
Financial Institution and identified by the name of [                    ].




          “Securities Account” means the account number [                    ] established at the
Financial Institution and identified by the name of [                    ].




          We have this date delivered to you our opinion with respect to the enforceability of the
Transaction Agreements and certain other transaction agreements. We call to your attention that
the opinions set forth herein with respect to the security interest of the Collateral Agent are
subject to the qualifications contained in such other opinion.




          Based upon the foregoing and subject to the limitations, qualifications, exceptions and
assumptions set forth herein, we are of the opinion that:




3









 





          1. Under the New York UCC, the provisions of the Collateral Agreement are effective to create
a valid security interest in each Opinion Party’s rights in the UCC Collateral in favor of the
Collateral Agent to secure the Guaranteed Obligations (as defined in the Collateral Agreement).




          2. Under the New York UCC, the provisions of the Deposit Account Control Agreement are
effective to perfect the security interest of the Collateral Agent in the rights of [insert
name of relevant Opinion Party] in the Deposit Account.3




          3. Under the New York UCC, the provisions of the Securities Account Control Agreement are
effective to perfect the security interest of the Collateral Agent in the rights of [insert name of
relevant Opinion Party] in the Securities Account.4




          4. Pursuant to the provisions of the Collateral Agreement, each Delaware Opinion Party has
authorized the filing of the Delaware Financing Statement identifying it as a debtor for purposes
of Section 9-509 of the Delaware UCC.




          5. Each of the Delaware Financing Statements includes not only all of the types of information
required by Section 9-502(a) of the Delaware UCC, but also the types of information without which
the Delaware Filing Office may refuse to accept such Delaware Financing Statement pursuant to
Section 9-516 of the Delaware UCC.




          6. The security interest of the Collateral Agent will be perfected in each Delaware Opinion
Party’s respective rights in the UCC Collateral upon the later of the attachment of the security
interest and the filing of the Delaware Financing Statement naming such Opinion Party as debtor in
the Delaware Filing Office; provided, however, we express no opinion in this paragraph 4(a) with
respect to (i) money, (ii) deposit accounts, (iii) letter of credit rights, (iv) goods covered by a
certificate of title statute, (v) as-extracted collateral or (vi) any property subject to a
statute, regulation or treaty of the United States whose requirements for a security interest’s
obtaining priority over the rights of a lien creditor with respect to the property preempt Section
9-310(a) of the Delaware UCC.




          7. Assuming that neither the Collateral Agent nor any Senior Secured Party (as defined in the
Collateral Agreement) has notice of any adverse claims with respect to the Possessory Certificates
then, upon the delivery of such Possessory Certificates to the Collateral Agent indorsed by an
effective indorsement, either in blank or to the Collateral Agent in the State of New York, the
Collateral Agent will acquire a perfected security interest in such Possessory Certificates






 




			
	3	 	Opinions on any control agreements are subject to satisfactory review by our opinion committee and
must be in an acceptable form.
	 
	4	 	Opinions on any control agreements are subject to satisfactory review by our opinion
committee and must be in an acceptable form.





4









 




 (and the shares represented thereby) free of any adverse claim under Section 8-303 of the
New York UCC. As used herein, “notice of adverse claim” has the meaning set forth in Section 8-105
of the New York UCC and includes, without limitation, any adverse claim that the Collateral Agent
or any Senior Secured Party (as defined in the Collateral Agreement) would discover upon any
investigation which such person has a duty, imposed by statute or regulation, to investigate.




          8. To the extent the Possessory Instrument constitutes an “instrument” (as defined in Section
9-102(a)(47) of the New York UCC) under the New York UCC, upon the Collateral Agent obtaining
possession of such Possessory Instrument in the State of New York, the security interest of the
Collateral Agent in the Possessory Instrument will be perfected.




          9. To the extent that the provisions of the Copyright Act of 1976 as in effect as of the date
hereof (the “Copyright Act”) pertaining to the transfer of copyright ownership are
applicable to security interest in copyrights, the recordation of the Copyright Security Agreement
in the United States Copyright Office (the “USCO”) against the U.S. registered copyright
set forth on Schedule I to such Copyright Security Agreement (the “Copyright”) within one
(1) month after its execution will render the Collateral Agent’s security interest, for the benefit
of itself and the Lender, in the applicable Opinion Party’s right, title and interest in the
Copyright effective against subsequent transfers (within the meaning of the Copyright Act) of such
Copyright, subject to the effects, if any, of the Intercreditor Agreement.




          Our opinions set forth in paragraphs 1-8 are subject to the following assumptions and
qualifications:




          (a) we have assumed that each Opinion Party owns, or with respect to after-acquired property
will own, the UCC Collateral, and we express no opinion as to the nature or extent of such Opinion
Party’s rights in any of the UCC Collateral and we note that with respect to any after-acquired
property, the security interest will not attach until such Opinion Party acquires ownership
thereof;




          (b) our opinion with respect to proceeds is subject to the limitations set forth in Section
9-315 of the UCC and, in addition, we call to your attention that in the case of certain types of
proceeds, other parties such as holders in due course, protected purchasers of securities, persons
who obtain control over securities entitlements and buyers in the ordinary course of business may
acquire a superior interest or may take their interest free of the security interest of a Secured
Party;




          (c) we have assumed that the Deposit Account is a “deposit account” (as defined in the UCC)
and the Financial Institution is an organization that is engaged in the business of banking and
that the Securities Account is a “securities account” (as defined in the UCC) and the Financial
Institution in the ordinary course of its business maintains securities accounts for customers and
is acting in that capacity;




5









 





          (d) we express no opinion with respect to any property or assets now or hereafter credited to
a securities account except to the extent that (i) a “securities entitlement” (as such term is
defined in Section 8-102(a)(17) of the UCC) has been created and (ii) such asset is a “financial
asset” (as such term is defined in Section 8-102(a)(9) of the UCC). Furthermore, we express no
opinion with respect to the nature or extent of the securities intermediary’s rights in, or title
to, the securities or other financial assets underlying any “security entitlement” now or hereafter
credited to a securities account. We note that to the extent the securities intermediary maintains
any financial asset in a “clearing corporation” (as defined in Section 8-102(5) of the UCC),
pursuant to Section 8-111 of the UCC, the rules of such clearing corporation may affect the rights
of the securities intermediary;




          (e) we express no opinion with respect to commercial tort claims, timber to be cut or
cooperative interests;




          (f) we express no opinion with respect to any goods that are accessions to, or commingled or
processed with, other goods to the extent that the security interest is limited by Section 9-335 or
9-336 of the UCC;




          (g) we express no opinion with respect to the choice of law governing (i) the authorization to
file any of the Financing Statements or (ii) perfection, the effect of perfection and
non-perfection or priority of the security interest;




          (h) we call to your attention that the right of the Collateral Agent to become a partner or
member in any portion of the UCC Collateral consisting of a partnership interest or interest in a
limited liability company may be limited by applicable law and the terms of the partnership
agreement or limited liability company agreement pursuant to which the partnership or limited
liability company was formed, as amended from time to time and that the only remedy may be the
right to receive distributions to which the applicable Opinion Party is otherwise entitled pursuant
to the partnership agreement or limited liability company agreement;




          (i) we advise you that with respect to that portion of the UCC Collateral in which the
Collateral Agent has been granted a security interest by more than one agreement, a court may limit
the Collateral Agent’s right to choose among the rights and remedies to which it may be entitled.




          (j) we express no opinion with respect to the security interest of the Collateral Agent for
the benefit of the Senior Secured Parties (as defined in the Collateral Agreement) to secure the
Guaranteed Obligations (as defined in the Collateral Agreement) owed to such Senior Secured Parties
except to the extent that the Collateral Agent has been duly appointed as agent by each of the
Senior Secured Parties (as defined in the Collateral Agreement);




          (k) except as set forth in paragraph 9 herein, we express no opinion regarding any
copyrights, patents, trademarks, service marks or other intellectual property, the proceeds
thereof or money due with respect to the lease, license or use thereof except to the extent
Article





6









 







9 of the UCC may be applicable to the foregoing and, without limiting the generality of the
foregoing, we express no opinion as to the effect of any federal laws relating to copyrights,
patents, trademarks, service marks or other intellectual property on the opinions expressed herein;




          (l) we express no opinion with respect to any collateral constituting claims against any
government or governmental agency (including without limitation the United States of America or any
state thereof or any agency or department of the United States of America or any state thereof);




          (m) we call to your attention that in the case of licenses or permits issued by governmental
authorities, the respective Opinion Party may not have sufficient rights therein for the security
interest of the Collateral Agent to attach and even if the relevant Opinion Party has sufficient
rights for the security interest to attach, exercise of remedies may be limited by the terms of the
license or permit or require the consent of the governmental authority issuing such license or
permit;




          (n) we express no opinion with respect to any Possessory Certificates which are not a
“certificated security” within the meaning of Article 8 of the UCC;




          (o) for purposes of Sections 9-108, 9-203, 9-502 and 9-504 of the UCC we express no opinion
regarding (i) the sufficiency of the descriptions of property (A) “all of the personal property of
such Grantor”, “similar items” and “all other property” contained in the definition of “Collateral”
in the Collateral Agreement, (B) the definition of “Investment Property” (as defined in the
Collateral Agreement) and (C) the definition of “Excluded Assets” (as defined in the Credit
Agreement) or (ii) the effect of any of the foregoing descriptions on the opinions stated herein or
the sufficiency of the description “Collateral” (as defined in the Collateral Agreement); and




          (p) we have assumed that the Possessory Instrument is represented by only one original
document.




     Our opinions set forth in paragraphs 9 above are subject to the following assumptions and
qualifications:



          (q) we have assumed that the Loan Party who is party to the Copyright Security Agreement
owns (both beneficially and of record) the Copyright, and we express no opinion as to the nature or
extent of any Opinion Party’s rights in, or title to, the Copyright, or as to the effect, if any,
of any gaps in the chain of title on the opinions expressed herein;




          (r) we call your attention to the fact that, under Section 10 of the United States Trademark
Act (the “Lanham Act”) (15 U.S.C. Section 1060), no application to register a mark based on
intent to use shall be assignable prior to the filing of an amendment to allege use or a verified
statement of use or amendment to allege use with the PTO pursuant to Section 1(c) or Section 1(d)
of the Lanham Act, except to a successor to the business of the applicant, or portion thereof, to
which the mark pertains, if that business is ongoing and existing;




7









 





          (s) we have assumed that the information contained on Schedule I to the Copyright Security
Agreement is accurate, and we express no opinion as to the effect of recording the security
interest of the Collateral Agent in the USCO with respect to the Copyright where the information
provided on such Schedule is not accurately reflected in the recordation cover sheet submitted to
the USCO or by the USCO in its internal records. We further assume that, after indexation of the
Grant of Copyright by the Register of Copyrights, the Copyright Security Agreement would be
revealed by a reasonable search of the records of the USCO under the title or registration number
of the Copyright;




          (t) we advise you that with respect to the Copyright in which the Collateral Agent has been
granted a security interest by more than one agreement, a court may limit the right of the
Collateral Agent to choose among the rights and remedies to which it may be entitled with respect
to such Copyrights;




          (u) we call to your attention that, under United States trademark law, it is generally held
that transfers of trademark rights are invalid unless accompanied by the related goodwill and the
trademarks are used on substantially the same goods as those previously represented by the
trademarks and we express no opinions as to the assets or goodwill that would have to accompany any
trademarks to ensure continuing validity and enforceability of such trademarks in the event of a
foreclosure and the ultimate disposition of the trademarks as a result of a default;




          (v) we express no opinion as to whether the federal trademark, patent and copyright laws are
applicable to security interests in trademarks, patents and copyrights, respectively;




          (w) we call your attention to the fact that the exercise of remedies with respect to the
Copyright may require additional filings with the USCO;




          (x) we assume that the Copyright exists and we express no opinion as to the validity or
enforceability of any of the Copyright.




          This opinion is being furnished only to you in connection with the Transaction Agreements and
is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to for
any other purpose (except to the extent required by Applicable Laws or by any subpoena or similar
legal process) or relied upon by any other person or entity for any purpose without our prior
written consent except that any person who becomes an Agent, Lender or Issuer in accordance with
the provisions of the Credit Agreement may rely on this opinion as if it were specifically
addressed and delivered to such person on the date hereof.




          Very truly yours,




8









 





Schedule A





	1.	 	Citibank, N.A.
	 
	2.	 	BNP Paribas
	 
	3.	 	Goldman Sachs Lending Partners LLC
	 
	4.	 	Mizuho Corporate Bank, Ltd.
	 
	5.	 	The Bank of Nova Scotia
	 
	6.	 	Calyon New York Branch
	 
	7.	 	Natixis New York Branch
	 
	8.	 	Union Bank of California, N.A.
	 
	9.	 	Bank of America, N.A.
	 
	10.	 	Barclays Bank PLC
	 
	11.	 	Keybank National Association
	 
	12.	 	Morgan Stanley Bank, N.A.
	 
	13.	 	Regions Bank
	 
	14.	 	Deutsche Bank Trust Company Americas





 









 





Schedule I




Delaware Opinion Parties




Part I




Enexus Nuclear Indian Point 2, LLC, a Delaware limited liability company

Enexus Nuclear Vermont Yankee, LLC, a Delaware limited liability company

Enexus Nuclear Midwest Investment Company, LLC, a Delaware limited liability company

Enexus Nuclear Palisades, LLC, a Delaware limited liability company

Enexus Nuclear FitzPatrick, LLC, a Delaware limited liability company

Enexus Nuclear Indian Point 3, LLC, a Delaware limited liability company

Enexus Nuclear Finance, LLC, a Delaware limited liability company

Enexus Power Marketing, LLC, a Delaware limited liability company

Enexus Nuclear Nebraska, LLC, a Delaware limited liability company

Nuclear Services Company, LLC, a Delaware limited liability company

Enexus Retail Energy LLC, a Delaware limited liability company

Enexus Nuclear Holding Company, LLC, a Delaware limited liability company




Part II




Enexus Retail Holding Company, a Delaware corporation

Enexus Nuclear Fuels Company, a Delaware corporation




 









 





Schedule II




Possessory Certificates




	 	 	 	 	 	 	 	 	 
	 	 	 	 	Certificate	 	Number of	 	Type or Class of
	Pledgor	 	Issuer	 	No.	 	Shares	 	Shares
	 	 	 	 	 	 	 	 	 





 









 





Schedule III




Possessory Instruments




	 	 	 	 	 	 	 
	 	 	 	 	 	 	Principal
	Pledgor	 	Issuer	 	Date	 	Amount
	 	 	 	 	 	 	 





 









 





[DATE]




BNP Paribas,

as the Administrative Agent,

The Bank of Nova Scotia Trust Company of New York,

as the Collateral Agent,

and each Financial Institution identified on Schedule A hereto





			
	          Re:	 	Enexus Energy Corporation $1,175,000,000 Credit Agreement dated 

December 23, 2008





Ladies and Gentlemen:




     We have acted as special counsel to (i) Enexus Energy Corporation, a Delaware corporation (the
“Borrower”), (ii) the subsidiaries of the Borrower listed on Part I of Schedule I hereto,
and (iii) the subsidiaries of the Borrower listed on Part II of Schedule I hereto, (iv) Enexus
Nuclear Pilgrim, LLC, a Massachusetts limited liability company, (v) Enexus Nuclear Finance
Holding, Inc., an Arkansas corporation, ((ii)-(v) collectively, the “Subsidiary
Guarantors”; each of the Borrower and the Subsidiary Guarantors, an “Opinion Party”
and, collectively, the “Opinion Parties”), in connection with the preparation, execution
and delivery of (A) the Credit Agreement, dated as of December 23, 2008 (the “Credit
Agreement”), between the Borrower, each financial institution party thereto from time to time
as a lender or issuer (such institutions collectively the “Lenders”), Citigroup Global
Markets Inc. and Goldman Sachs Lending Partners LLC, as joint book runners and joint lead arrangers
(in such capacities the Arrangers”), BNP Paribas, as administrative agent for the parties
identified on Schedule A hereto (in such capacity, the “Administrative Agent”) and
The Bank of Nova Scotia Trust Company of New York, as collateral agent (in such capacity and
together with its successors, the “Collateral Agent”) and Mi-zuho Corporate Bank, Ltd., as
syndication agent (in such capacity the “Syndication Agent”) , (B) the Collateral Agreement
(as hereinafter defined), and (C) the Intercreditor Agreement (as hereinafter defined). This
opinion is being delivered pursuant to Section 4.03(a)(ix) of the Credit Agreement.



          In our examination we have assumed the genuineness of all signatures including endorsements,
the legal capacity and competency of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents submitted to us as
facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of
such copies. As to any facts relevant to this opinion which we did not independently establish or
verify, we have relied upon statements and representations of the Borrower and its officers and
other representatives and of public officials, including the facts and conclusions set forth
therein.




 









 





          In rendering the opinions set forth herein, we have examined and relied on originals or
copies of the following:




          (a) the Credit Agreement;




          (b) the Guarantee and Collateral Agreement, dated as of [     ] (the “Collateral
Agreement”), by and among the Borrower, the Subsidiary Guarantors, the Collateral Agent, the
Administrative Agent, and the other secured parties from time to time party thereto;




          (c) the Collateral Agency and Intercreditor Agreement, dated as of December 23, 2008, by and
among the Borrower, the Collateral Agent, the Administrative Agent, and the other secured parties
from time to time party thereto, as amended by the Joinder Agreement [and the Accession Agreement]
(the “Amended Intercreditor Agreement”);




          (d) the Guarantee Joinder and Assumption Agreement, dated as of [     ], between [     ] (the
“Joinder Agreement”);




          (e) [the Accession Agreement dated as of [     ], between [     ] (the “Accession
Agreement”)];




          (f) The Deposit Account Control Agreement, dated as of [     ], by and among [the Borrower], the
Collateral Agent and [     ] (the “Financial Institution”);




          (g) The Securities Account Control Agreement, dated as of [     ], by and among [the Borrower],
the Collateral Agent and the Financial Institution;




          (h) the Copyright Security Agreement, dated as of [     ] (the “Copyright Security
Agreement”), by and among [Enexus Nuclear Vermont Yankee LLC] and the Collateral Agent;




          (i) the certificate of Timothy A. Ngau, Associate General Counsel — Contracts, Claims and
Disputes, of the Borrower, dated the date hereof, a copy of which is attached as Exhibit
A hereto (the “Opinion Parties’ Certificate”); and




          (j) such other documents as we have deemed necessary or appropriate as a basis for the
opinions set forth below




          Capitalized terms used herein and not otherwise defined herein shall have the same meanings
herein as ascribed thereto in the Credit Agreement. The documents identified in clauses (a) through
(h) shall hereinafter be referred to collectively as the “Transaction Agreements”.
“Applicable Laws” shall mean (i) the FPA and all rules and regulations thereunder, and (ii)
PUHCA and all rules and regulations thereunder. “FPA” means the Federal Power Act, as
amended. Governmental Approval” means any consent, approval, license, authorization or
validation of, or filing, recording or registration with, any governmental authority.
“PUHCA” means the Public Utility Holding Company Act of 2005.




2









 





          We express no opinion as to the laws of any jurisdiction other than the Applicable Laws of the
United States of America.




          Based upon the foregoing and subject to the limitations, qualifications, exceptions and
assumptions set forth herein, we are of the opinion that:




          (1) The Opinion Parties are exempt from regulation under PUHCA pursuant to 18 C.F.R. § 366.3;




          (2) No Governmental Approvals under the Applicable Laws are required in connection with the
Transactions, except those that already have been received and are in full force and effect;




          (3) The Transactions do not violate any provision of the Applicable Laws.




          (4) None of the Opinion Parties is subject to regulation as a “public utility,” as such term
is defined in the FPA, other than Subsidiary Guarantors that have market-based rate authority under
Section 205 of the FPA. Each Subsidiary Guarantor that is subject to regulation as a “public
utility,” as such term is defined in the FPA, has validly issued orders or other authorizations
from the FERC that (x) to the best of our knowledge are not subject to any pending challenge or
investigation (y) authorize such Subsidiary Guarantor to engage in wholesale sales of electricity
and, to the extent permitted under its market-based rate tariff, other transactions at market-based
rates and (z) grant such waivers and blanket authorizations as are customarily granted to entities
with market-based rate authority, including blanket authorizations to issue securities and to
assume liabilities pursuant to Section 204 of the FPA.




          (5) None of the Lenders, the Arrangers, the Administrative Agent, the Collateral Agent, the
Syndication Agent, or any affiliate of any of the foregoing shall, solely as a result of the
Transactions, become subject to, or not exempt from, regulation under the Applicable Laws; provided
however, that we express no opinion with respect to the Applicable Laws in connection with the
exercise or enforcement by any such party of its possessory rights or remedies under the
Transaction Agreements; and




          Our opinions are subject to the following qualifications:




          A. We express no opinion as to the effect on the opinions expressed herein of the compliance
or non-compliance by the Opinion Parties with any state, federal, or other laws or regulations
applicable to them, other than, with respect to each of the Opinion Parties, to the extent set
forth in our opinions expressed above;




          B. Our opinions do not apply to any Governmental Approvals that may be required under
Applicable Laws in connection with the curing of any default by any Opinion Party or the exercise
by any party of remedies under the Transaction Agreements.




          In rendering the foregoing opinions, we have assumed, with your consent, that:




3









 





          C. the execution, delivery, and performance by the Opinion Parties of the Transaction
Agreements do not and will not conflict with, contravene, violate, or constitute a default under
(i) any lease, indenture, instrument, or other agreement (other than the Transaction Agreements) to
which they or any of their affiliates are a party, (ii) any rule, law or regulation to which they
or their affiliates are subject, other than the Applicable Laws, or (iii) any Governmental
Approvals other than Governmental Approvals pursuant to Applicable Laws; and




          D. no Governmental Approval that has not already been obtained or made, and that is not in
full force and effect, final and non-appealable, is required to be made or obtained by any of the
Opinion Parties in connection with the execution, delivery, and performance of the Transaction
Agreements, other than those required pursuant to Applicable Laws, as to which we express our
opinion above.




          We undertake no obligation to amend or supplement this opinion in the event any laws change
after the date of this letter, nor in the event we become aware after the date of this letter of
any facts that might affect the opinions set forth herein. This opinion is being furnished only to
you in connection with the Transaction Agreements and is solely for your benefit and is not to be
used, circulated, quoted or otherwise referred to for any other purpose (except to the extent
required by Applicable Laws or by any subpoena or similar legal process) or relied upon by any
other person or entity for any purpose without our prior written consent except that any person who
becomes an Agent, Lender or Issuer in accordance with the provisions of the Credit Agreement may
rely on this opinion as if it were specifically addressed and delivered to such person on the date
hereof.




          Very truly yours,





4









 








Schedule A





	1.	 	Citibank, N.A.
	 
	2.	 	BNP Paribas
	 
	3.	 	Goldman Sachs Lending Partners LLC
	 
	4.	 	Mizuho Corporate Bank, Ltd.
	 
	5.	 	The Bank of Nova Scotia
	 
	6.	 	Calyon New York Branch
	 
	7.	 	Natixis New York Branch
	 
	8.	 	Union Bank of California, N.A.
	 
	9.	 	Bank of America, N.A.
	 
	10.	 	Barclays Bank PLC
	 
	11.	 	Keybank National Association
	 
	12.	 	Morgan Stanley Bank, N.A.
	 
	13.	 	Regions Bank
	 
	14.	 	Deutsche Bank Trust Company Americas





 









 





Schedule I




 Part I




Enexus Nuclear Indian Point 2, LLC, a Delaware limited liability company

Enexus Nuclear Vermont Yankee, LLC, a Delaware limited liability company

Enexus Nuclear Midwest Investment Company, LLC, a Delaware limited liability company

Enexus Nuclear Palisades, LLC, a Delaware limited liability company

Enexus Nuclear FitzPatrick, LLC, a Delaware limited liability company

Enexus Nuclear Indian Point 3, LLC, a Delaware limited liability company

Enexus Nuclear Finance, LLC, a Delaware limited liability company

Enexus Power Marketing, LLC, a Delaware limited liability company

Enexus Nuclear Nebraska, LLC, a Delaware limited liability company

Nuclear Services Company, LLC, a Delaware limited liability company

Enexus Retail Energy LLC, a Delaware limited liability company

Enexus Nuclear Holding Company, LLC, a Delaware limited liability company




Part II




Enexus Retail Holding Company, a Delaware corporation

Enexus Nuclear Fuels Company, a Delaware corporation




 









 





	 	 	 
	 

	 	Exhibit A to Opinion of

Special Counsel






Officer’s Certificate




          I, Timothy A. Ngau, am the duly elected, qualified and acting Associate General Counsel —
Contracts, Claims and Disputes of (i) Enexus Energy Corporation, a Delaware corporation (the
“Borrower”), (ii) the subsidiaries of the Borrower listed on Schedule A hereto
(collectively, the “Subsidiary Guarantors”); each of Borrower and the Subsidiary
Guarantors, an “Opinion Party” and, collectively, the “Opinion Parties”). I
understand that pursuant to Section 4.03(a)(ix) of the Credit Agreement, dated as of December 23,
2008, between the Borrower, the financial institutions party thereto from time to time as a lender
or issuer, Citigroup Global Markets Inc. and Goldman Sachs Lending Partners LLC, as joint book
runners and joint lead arrangers, BNP Paribas, as administrative agent for the parties identified
on Schedule B hereto and The Bank of Nova Scotia Trust Company of New York, as collateral
agent and Mizuho Corporate Bank, Ltd., as syndication agent, (the “Agreement”), Skadden,
Arps, Slate, Meagher & Flom LLP (“SASM&F”) is rendering an opinion (the “Opinion”)
to the BNP Paribas, as the administrative agent, The Bank of Nova Scotia Trust Company of New York,
as the collateral agent, and each financial institution identified on Schedule B thereto
with respect to the Transaction Agreements (as defined in the Opinion). Capitalized terms used
herein but not otherwise defined herein shall have the meanings assigned to such terms as set forth
in the Opinion. I further understand that SASM&F is relying on this officer’s certificate and the
statements made herein in rendering such Opinion.




          With regard to the foregoing, on behalf of the Opinion Parties, I hereby certify that:





	 	1.	 	I am familiar with the business of each of the Opinion Parties and its
respective subsidiaries, if any, and due inquiry has been made of all person deemed
necessary or appropriate to verify or confirm the statements contained herein.
	 
	 	2.	 	SASM&F may rely on the respective representations and warranties that (i) the
Opinion Parties have made in the Agreement, (ii) each Opinion Party has made in each
of the other Transaction Agreements to which it is a party, and each of the
certificates delivered pursuant thereto. I have made a careful review of each of such
representations and warranties and hereby confirm, to the best of my knowledge and
belief, that such representations and warranties are true, correct and complete on and
as of the date of this certificate.
	 
	 	3.	 	Set forth on Schedule I hereto is a complete and accurate list of the
agreements and instruments to which each of the Opinion Parties is subject which are
material to the business or financial condition of the Opinion Parties, taken as a
whole, or that are relevant to the transactions contemplated by the Transaction
Agreements.
	 
	 	4.	 	Set forth on Schedule II hereto is a complete and accurate list of
those orders and decrees of any governmental authority of the State of Delaware by
which any Opinion Party is bound that are material to the business or financial
condition of such Opinion Party or that are relevant to the transactions contemplated
by the Transaction Agreements.










 









 












	 	5.	 	Less than twenty-five percent (25%) of the assets of each Opinion Parties and its
subsidiaries on a consolidated basis and on an unconsolidated basis consist of Margin
Stock.
	 
	 	6.	 	Each of the Opinion Parties is primarily engaged directly, or indirectly
through Majority-Owned Subsidiaries, in the business of generating nuclear power; and
each of the Opinion Parties (i) is not and does not hold itself out as being engaged
primarily, nor does it propose to engage primarily, in the business of investing,
reinvesting or trading in Securities, (ii) has not and is not engaged in, and does not
propose to engage in, the business of issuing Face-Amount Certificates of the
Installment Type and has no such certificate outstanding and (iii) does not own or
propose to acquire Investment Securities having a Value exceeding forty percent (40%)
of the Value of the total assets of the Company (exclusive of Government Securities
and cash items) on an unconsolidated basis.
	 
	 	7.	 	As used in paragraph 5 of this certificate, the following term shall
have the following meaning:





          “Margin Stock” means: (i) any equity security registered or having unlisted trading
privileges on a national securities exchange; (ii) any OTC security designated as qualified for
trading in the National Market System under a designation plan approved by the Securities and
Exchange Commission; (iii) any debt security convertible into a margin stock or carrying a warrant
or right to subscribe to or purchase a margin stock; (iv) any warrant or right to subscribe to or
purchase a margin stock; or (v) any security issued by an investment company registered under
Section 8 of the Investment Company Act of 1940.





	 	8.	 	As used in paragraphs 6 and 8 of this certificate, the
following terms shall have the following meanings:





          “Exempt Fund” means a company that is excluded from treatment as an investment company
solely by section 3(c)(1) or 3(c)(7) of the Investment Company Act of 1940 (applicable to certain
privately offered investment funds).




          “Face-Amount Certificate of the Installment Type” means any certificate, investment
contract, or other Security that represents an obligation on the part of its issuer to pay a stated
or determinable sum or sums at a fixed or determinable date or dates more than 24 months after the
date of issuance, in consideration of the payment of periodic installments of a stated or
determinable amount.




          “Government Securities” means all Securities issued or guaranteed as to principal or
interest by the United States, or by a person controlled or supervised by and acting as an
instrumentality of the government of the United States pursuant to authority granted by the
Congress of the United States; or any certificate of deposit for any of the foregoing.




          “Investment Securities” includes all Securities except (A) Government Securities, (B)
Securities issued by companies the only shareholders in which are employees and former employees
of a company and its subsidiaries, members of the families of such persons and the company and its
subsidiaries and (C) Securities issued by Majority-Owned Subsidiaries of the





2









 







Company which are not engaged and do not propose to be engaged in activities within the scope of
clause (i), (ii) or (iii) of paragraph 6 of this Certificate or which are exempted or
excepted from treatment as an investment company by statute, rule or governmental order (other
than Exempt Funds).




          “Majority-Owned Subsidiary” of a person means a company fifty percent (50%) or more
of the outstanding Voting Securities of which are owned by such person, or by a company which,
within the meaning of this paragraph, is a Majority-Owned Subsidiary of such person.




          “Security” means any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest or participation in any profit-sharing agreement,
collateral-trust certificate, preorganization certificate or subscription, transferable share,
investment contract, voting-trust certificate, certificate of deposit for a security, fractional
undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or
privilege on any security (including a certificate of deposit) or on any group or index of
securities (including any interest therein or based on the value thereof), or any put, call,
straddle, option, or privilege entered into on a national securities exchange relating to foreign
currency, or, in general, any interest or instrument commonly known as a “security,” or any
certificate of interest or participation in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.




          “Value” means (i) with respect to Securities owned at the end of the last preceding
fiscal quarter for which market quotations are readily available, the market value at the end of
such quarter; (ii) with respect to other Securities and assets owned at the end of the last
preceding fiscal quarter, fair value at the end of such quarter, as determined in good faith by or
under the direction of the board of directors; and (iii) with respect to securities and other
assets acquired after the end of the last preceding fiscal quarter, the cost thereof.




          “Voting Security” means any security presently entitling the owner or holder thereof
to vote for the election of directors of a company (or its equivalent, e.g., general partner or
manager of a limited liability company).





	 	9.	 	Borrower: (i) does not directly own or operate facilities used for the
distribution of natural or manufactured gas for heat, light, or power (“Gas Utility
Facilities”); and (ii) does not directly, or indirectly through one or more
intermediate entities, own, control, or hold with power to vote any Equity Interest in
any entity that owns or operates Gas Utility Facilities.
	 
	 	10.	 	Borrower does not directly own or operate facilities used for the generation,
transmission, or distribution of electric energy (“Electric Utility Facilities”) and
has not made any sales of electric energy. Other than Enexus Nuclear Generation
Company, Enexus Nuclear Indian Point 2, LLC, Enexus Nuclear Indian Point 3, LLC,
Enexus Nuclear FitzPatrick, LLC, Enexus Nuclear Vermont Yankee, LLC, Enexus Nuclear
Palisades, LLC (each an “Electric Generator”) and Enexus Power Marketing, LLC (“EPM”),
Borrower does not directly, or indirectly through one or more intermediate entities,
own, control, or hold with power to vote any Equity Interest in





3









 






	 	 	 	any entity that directly (i) owns Electric Utility Facilities, (ii) operates and has
decision-making power with respect to sales of electric energy from Electric Utility
Facilities, or (iii) is engaged in making sales of electric energy.
	 
	 	11.	 	As used in paragraphs 9 and 10, an “Equity Interest” in an entity means any
security, stock, treasury stock, limited liability company interest, partnership interest,
certificate of interest, participation in any profit-sharing agreement or other interest
presently entitling the owner or holder thereof to vote in the direction or management of the
affairs of such entity.
	 
	 	12.	 	Each Electric Generator has previously self-certified its status, or otherwise received an
order or other authorization from FERC designating it, as an exempt wholesale generator
(“EWG”) as defined in the Public Utility Holding Company Act of 2005 (“PUHCA 2005”). As of the
date of this certificate each Electric Generator has complied in all material respects with
the regulations of the FERC under PUHCA 2005 so as to maintain such EWG status.
	 
	 	13.	 	Each Electric Generator and EPM has previously filed a market-based rate tariff with FERC and
received orders or other authorizations by FERC accepting such tariff for filing and granting
it: (i) the authority to make sales for resale of electric energy at market-based rates and,
to the extent permitted under its market-based rate tariff, other transactions at market-based
rates, and (ii) such waivers and blanket authorizations as are customarily granted to entities
with market-based rate authority, including blanket authorizations to issue securities and to
assume liabilities pursuant to Section 204 of the FPA. To the best of my knowledge, such
orders and authorizations are not subject to any pending challenge or investigation.





[Signature Page Follows]




4









 





          IN WITNESS THEREOF, I have executed this certificate this ___ day of December ___, 2008.




ENEXUS ENERGY CORPORATION,

ENEXUS NUCLEAR HOLDING COMPANY, LLC,

ENEXUS NUCLEAR FINANCE, LLC,

ENEXUS NUCLEAR FINANCE HOLDING, INC.,

ENEXUS NUCLEAR FITZPATRICK, LLC,

ENEXUS NUCLEAR FUELS COMPANY,

ENEXUS NUCLEAR INDIAN POINT 2, LLC,

ENEXUS NUCLEAR INDIAN POINT 3, LLC,

ENEXUS NUCLEAR, MIDWEST INVESTMENT COMPANY, LLC

ENEXUS NUCLEAR NEBRASKA, LLC,

ENEXUS NUCLEAR PALISADES, LLC,

ENEXUS NUCLEAR PILGRIM, LLC,

ENEXUS NUCLEAR VERMONT YANKEE, LLC,

ENEXUS POWER MARKETING, LLC,

ENEXUS RETAIL HOLDING COMPANY,

ENEXUS RETAIL ENERGY, LLC, and

NUCLEAR SERVICES COMPANY, LLC




	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Timothy A. Ngau
	 

	 	 	 	Title: Associate General Counsel







5









 








Schedule A




Enexus Nuclear Finance Holding, Inc., an Arkansas corporation

Enexus Nuclear Finance, LLC, a Delaware limited liability company

Enexus Nuclear FitzPatrick, LLC, a Delaware limited liability company

Enexus Nuclear Fuels Company, a Delaware corporation

Enexus Nuclear Indian Point 2, LLC, a Delaware limited liability company

Enexus Nuclear Indian Point 3, LLC, a Delaware limited liability company

Enexus Nuclear Nebraska, LLC, a Delaware limited liability company

Enexus Nuclear Palisades, LLC, a Delaware limited liability company

Enexus Nuclear Pilgrim, LLC, a Massachusetts limited liability company

Enexus Power Marketing, LLC, a Delaware limited liability company

Enexus Nuclear Holding Company, LLC, a Delaware limited liability company

Enexus Nuclear Midwest Investment Company, LLC, a Delaware limited liability company

Enexus Nuclear Vermont Yankee, LLC, a Delaware limited liability company

Enexus Retail Holding Company, a Delaware corporation

Enexus Retail Energy, LLC, a Delaware limited liability company

Nuclear Services Company, LLC, a Delaware limited liability company




6









 





Schedule B





	1.	 	Citibank, N.A.
	 
	2.	 	BNP Paribas
	 
	3.	 	Goldman Sachs Lending Partners LLC
	 
	4.	 	Mizuho Corporate Bank, Ltd.
	 
	5.	 	The Bank of Nova Scotia
	 
	6.	 	Calyon New York Branch
	 
	7.	 	Natixis New York Branch
	 
	8.	 	Union Bank of California, N.A.
	 
	9.	 	Bank of America, N.A.
	 
	10.	 	Barclays Bank PLC
	 
	11.	 	Keybank National Association
	 
	12.	 	Morgan Stanley Bank, N.A.
	 
	13.	 	Regions Bank
	 
	14.	 	Deutsche Bank Trust Company Americas





7









 





Schedule I




Material Contracts





	1.	 	Separation and Distribution Agreement by and between Enexus Energy Corporation and Entergy
Corporation






	2.	 	Senior Note Indenture by and among Enexus Energy Corporation and the other parties thereto






	3.	 	Federal Income Tax Matters Agreement by and between Enexus Energy Corporation and Entergy
Corporation






	4.	 	State Tax Matters Agreement by and between Enexus Energy Corporation and Entergy Corporation






	5.	 	Transition Services Agreement by and between Enexus Energy Corporation and Entergy
Corporation






	6.	 	Employee Matters Agreement by and among Enexus Energy Corporation, Entergy Corporation
and EquaGen LLC






	7.	 	Joint Venture Formation Agreement by and among Enexus Energy Corporation, Entergy Corporation
and EquaGen LLC






	8.	 	EquaGen LLC Limited Liability Company Agreement by and between Entergy
Corporation, Enexus Energy Corporation and EquaGen LLC






	9.	 	Amended and Restated Operating Agreements by and between (i) EquaGen Nuclear LLC, and (ii)
Enexus Nuclear FitzPatrick, LLC, Enexus Nuclear Pilgrim, LLC, Enexus Indian Point 2, LLC,
Enexus Nuclear Indian Point 3, LLC, Enexus Nuclear Palisades, LLC and Enexus Nuclear Vermont
Yankee, LLC, respectively






	10.	 	Shared Services Agreement by and between EquaGen LLC and Entergy Operations, Inc.
	 
	11.	 	Shared Services Agreement by and between EquaGen LLC and Entergy Services, Inc.
	 
	12.	 	Corporate Services Agreement by and between EquaGen LLC and Entergy Services, Inc.






	13.	 	2008 Equity Ownership and Long Term Cash Incentive Plan of Enexus Energy
Corporation and Subsidiaries






	14.	 	Credit Agreement by and among Enexus Energy Corporation and the other parties thereto






	15.	 	Collateral Agency and Intercreditor Agreement by and among Enexus Energy
Corporation and the other parties thereto










8









 












	16.	 	Guarantee and Collateral Agreement by and among Enexus Energy Corporation and the other
parties thereto






	17.	 	Support Agreement by and among Enexus Energy Corporation and the other parties thereto






	18.	 	Nuclear Fuel and Fuel Services Purchase Agreement





9









 





Schedule II




Applicable Orders





	1.	 	Approval in connection with the distribution and related transactions (including the internal
reorganizations by Enexus and Entergy, the formation of EquaGen and debt financing
transactions preceding the distribution) by the Nuclear Regulatory Commission






	2.	 	Approval in connection with the distribution and related transactions (including the
internal reorganizations by Enexus and Entergy, the formation of EquaGen and debt
financing transactions preceding the distribution) by the Federal Energy Regulatory
Commission






	3.	 	Approval in connection with the distribution and related transactions (including the internal
reorganizations by Enexus and Entergy, the formation of EquaGen and debt financing
transactions preceding the distribution) by the New York State Public Service Commission






	4.	 	Approval in connection with the distribution and related transactions (including the internal
reorganizations by Enexus and Entergy, the formation of EquaGen and debt financing
transactions preceding the distribution) by the Vermont Public Service Board.





 









 





EXHIBIT I-2-B




FUNDS AVAILABILITY DATE OPINION OF INTERNAL COUNSEL




See attached.




I-2-B-1




 









 





[DATE]




BNP Paribas,

as the Administrative Agent,

The Bank of Nova Scotia Trust Company of New York,

as the Collateral Agent,

and each Financial Institution identified on Schedule A hereto





			
	          Re:	 	Enexus Energy Corporation $1,175,000,000 Credit Agreement dated

December 23, 2008





Ladies and Gentlemen:



I am Timothy A. Ngau, Associate General Counsel — Contracts, Claims and Disputes, of (i) Enexus
Energy Corporation, a Delaware corporation (the “Borrower”), (ii) the subsidiaries of the
Borrower listed on Part I of Schedule I hereto and referred to herein as the “Delaware Limited
Liability Company Opinion Parties”, and (iii) the subsidiaries of the Borrower listed on Part
II of Schedule I hereto and referred to herein as the “Delaware Corporation Opinion
Parties” (each of (i), (ii) and (iii), a “Delaware Opinion Party” and collectively, the
“Delaware Opinion Parties”), (iv) Enexus Nuclear Pilgrim, LLC, a Massachusetts limited
liability company, (v) Enexus Nuclear Finance Holding, Inc., an Arkansas corporation ((ii)-(v)
collectively, the “Subsidiary Guarantors”; each of the Borrower and the Subsidiary
Guarantors, an “Opinion Party” and, collectively, the “Opinion Parties”), and in
such capacity have acted as internal counsel to the Opinion Parties in connection with the
preparation, execution and delivery of (A) the Credit Agreement, dated as of December 23, 2008 (the
“Credit Agreement”), between the Borrower, each financial institution party thereto from
time to time as a lender or issuer, Citigroup Global Markets Inc. and Goldman Sachs Lending
Partners LLC, as joint book runners and joint lead arrangers, BNP Paribas, as administrative agent
for the parties identified on Schedule A hereto (in such capacity, the “Administrative
Agent”) and The Bank of Nova Scotia Trust Company of New York, as collateral agent (in such
capacity and together with its successors, the “Collateral Agent”) and Mi-zuho Corporate
Bank, Ltd. as syndication agent, (B) the Collateral Agreement (as hereinafter defined), and (C) the
Intercreditor Agreement (as hereinafter defined). This opinion is being delivered pursuant to
Section 4.03(a)(ix) of the Credit Agreement.




          I, or other attorneys in my office with whom I have consulted, have examined copies of the
Transaction Documents. I have examined such records, certificates and other documents as I have
deemed relevant for purposes of this opinion. As to questions of fact material to this opinion, I
have, when relevant facts were not independently established by me, relied upon: (1) certificates
of public officials, (2) searches of public records and other documents and (3) representations as
to factual matters, made by the Opinion Parties in response to my inquiries





 









 







and in the Transaction Documents. I have (without any investigation or independent confirmation)
relied upon, and assumed the accuracy of, such representations and such certificates, corporate
records, searches and other documents with respect to factual matters. In addition, in rending the
opinions expressed below, I have made such investigations of law as I have deemed appropriate for
the purposes of this opinion letter. Capitalized terms used herein and not otherwise defined herein
shall have the same meanings herein as ascribed thereto in the Credit Agreement.




          Based upon the foregoing and subject to the limitations, qualifications, exceptions and
assumptions set forth herein, I am of the opinion that:




          Except for the matters described in Schedule 3.09(a) (Funding) to the Credit Agreement, there
are no actions, suits, investigations or proceedings at law or in equity or by or before any
arbitrator or Governmental Authority now pending or, to the knowledge of the Borrower, threatened
against the Borrower or any Subsidiary or any business, property or material rights of the Borrower
or any Subsidiary (i) that, as of the Funds Availability Date, involve any Transaction Document or
the Transactions or, at any time thereafter, involve any Transaction Document or the Transactions
and which could reasonably be expected to be material and adverse to the interests of the Lenders,
or (ii) as to which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the aggregate, to result in
a Material Adverse Effect.




          This opinion is being furnished only to you in connection with the Transaction Agreements and
is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to for
any other purpose (except to the extent required by Applicable Laws or by any subpoena or similar
legal process) or relied upon by any other person or entity for any purpose without my prior
written consent, except that any person who becomes an Administrative Agent, Collateral Agent,
Lender, Issuer or participant in accordance with the provisions of the Credit Agreement may rely on
the legal opinions contained herein as if it were specifically addressed and delivered to such
persons on the date hereof.




          Very truly yours,




2









 





Schedule A





	1.	 	Citibank, N.A.
	 
	2.	 	BNP Paribas
	 
	3.	 	Goldman Sachs Lending Partners LLC
	 
	4.	 	Mizuho Corporate Bank, Ltd.
	 
	5.	 	The Bank of Nova Scotia
	 
	6.	 	Calyon New York Branch
	 
	7.	 	Natixis New York Branch
	 
	8.	 	Union Bank of California, N.A.
	 
	9.	 	Bank of America, N.A.
	 
	10.	 	Barclays Bank PLC
	 
	11.	 	Keybank National Association
	 
	12.	 	Morgan Stanley Bank, N.A.
	 
	13.	 	Regions Bank
	 
	14.	 	Deutsche Bank Trust Company Americas





3









 





Schedule I




Delaware Opinion Parties




Part I




Enexus Nuclear Indian Point 2, LLC, a Delaware limited liability company

Enexus Nuclear Vermont Yankee, LLC, a Delaware limited liability company

Enexus Nuclear Midwest Investment Company, LLC, a Delaware limited liability company

Enexus Nuclear Palisades, LLC, a Delaware limited liability company

Enexus Nuclear FitzPatrick, LLC, a Delaware limited liability company

Enexus Nuclear Indian Point 3, LLC, a Delaware limited liability company

Enexus Nuclear Finance, LLC, a Delaware limited liability company

Enexus Power Marketing, LLC, a Delaware limited liability company

Enexus Nuclear Nebraska, LLC, a Delaware limited liability company

Nuclear Services Company, LLC, a Delaware limited liability company

Enexus Retail Energy, LLC, a Delaware limited liability company

Enexus Nuclear Holding Company, LLC, a Delaware limited liability company




Part II




Enexus Retail Holding Company, a Delaware corporation

Enexus Nuclear Fuels Company, a Delaware corporation





4









 








EXHIBIT J




VERMONT LOCAL COUNSEL OPINION

(REGULATORY AND REAL ESTATE)




See attached.




J-1









 




SUBJECT TO OPINION COMMITTEE REVIEW; SUBJECT TO CHANGE BASED ON DEVELOPMENTS, THE PUBLIC SERVICE
BOARD PROCEEDING AND FINAL DECISION AND ORDER AND CHANGES IN THE TRANSACTION DOCUMENTS.




John H. Marshall

jmarshall@drm.com




                    , 2009




	 	 	 	 	 
	BNP Paribas, as the

Administrative Agent

	 	Bank of Nova Scotia, as the

Collateral Agent
	 	The Lenders and Issuers under

the Credit Agreement







			
	SUBJ:	 	Enexus Energy Corporation

Enexus Nuclear Vermont Yankee, LLC





Ladies and Gentlemen:



We have acted as special regulatory counsel to Enexus Nuclear Vermont Yankee, LLC (the “Company ”),
which is an indirect subsidiary of Enexus Energy Corporation, a Delaware corporation (“Enexus”), in
connection with certain matters of Vermont public-utility law relating to the execution and
delivery of (A) the Guarantee and Collateral Agreement dated as of                     , 2009 (the “Collateral
Agreement”), among Enexus (as the “Borrower”), the Company and each of the other entities party
thereto as guarantors (together with the Company, the “Subsidiary Guarantors”), The Bank of Nova
Scotia as collateral agent (the “Collateral Agent”), BNP Parihas as administrative agent (the
“Administrative Agent”), and the other secured parties from time to time party thereto; and (B) the
Collateral Agency and Intercreditor Agreement, dated as of December ___, 2008 (the “Intercreditor
Agreement”), by and among the Borrower, the Subsidiary Guarantors, the Collateral Agent, the
Administrative Agent, and the other secured parties from time to time party thereto.



This opinion is being delivered pursuant to Section 4.03(a)(x) of the Credit Agreement, dated as of
December ___, 2008 (the “Credit Agreement”), among the Borrower, the financial institutions party
thereto from time to time as a lender or issuer, Citigroup Global Markets Inc. and Goldman Sachs
Credit Partners L.P., as joint book runners and joint lead arrangers, the Administrative Agent, the
Collateral Agent and                                          (in such capacity, Syndication Agent). Capitalized terms used but not
otherwise defined herein have the respective meanings set forth in the Credit Agreement.




90 PROSPECT STREET § PO BOX 99 § ST. JOHNSBURY, VT § 05819-0099 § T: +1.802.748.8324 § F: +1.802.748.4394 § WWW.DRM.COM

BRATTLEBORO, VT § BURLINGTON, VT § LEBANON, NH § LITTLETON, NH § MONTPELIER, VT § PLATTSBURGH, NY § ST. JOHNSBURY, VT





 









 








                    , 2009

Page 2




A. Documents Reviewed:



We have not conducted any factual investigation with respect to the Company and its affiliates for
purposes of rendering this opinion [other than as specifically stated below]. With your permission,
we have limited our review of documents to the following documents (the “Reviewed Documents”) upon
which we have relied:





	 	1.	 	the Collateral Agreement;
	 
	 	2.	 	the Intercreditor Agreement;
	 
	 	3.	 	the Credit Agreement;
	 
	 	4.	 	the Accession Agreement, dated                     , 200_, between the Company and [•];
	 
	 	5.	 	Order of the Vermont Public Service Board (“VPSB”) in Docket No.      , dated
                     
           
        , 200_; and
	 
	 	6.	 	[Copy of Certificate(s) of Public Good issued by the VPSB in Docket No.      ,
dated        
             , 200_ to                     ].




Documents 1 through 4 are referenced herein collectively as the “Transaction Documents.”
Documents 5 through 6 are referenced herein collectively as the “VPSB Authorizations.”



We have also examined and relied upon certificates of public officials, certificates of officers of
Enexus or the Company and such other documents and instruments as we have deemed necessary for
purposes of this opinion. With your permission, we have based the opinions stated herein solely on
our review of the Reviewed Documents.




B. Assumptions:



With your permission, we have made the following assumptions in rendering the opinions
hereinafter set forth:





1. The legal right and power of each of the parties to the Transaction Documents under all
applicable laws and regulations to execute, deliver and perform each party’s respective
obligations under the Transaction Documents, the due authorization, execution and delivery
of the Transaction Documents by all parties obligated thereunder, and the validity, binding
effect and enforceability of the Transaction Documents;




2. In our examination of all instruments, documents, and other writings, the genuineness of
all signatures, the completeness and conformity to original documents of writings submitted
to us as certified, conformed, electronic or photostatic copies, and the completeness and
authenticity of originals of such writings;



 









 





                    , 2009

Page 3





3. All certificates examined or upon which we have relied in connection with this opinion
have been validly issued and that the information set forth in such certificates is true,
complete and accurate in all respects on the date of this opinion;




4. That the factual representations made in the materials examined (including the
representations made in the Transaction Documents by the parties thereto) are true, complete
and accurate;




5. When executed, the final, original documents on which we have rendered opinions will
conform to the copies of the Transaction Documents that we have reviewed;




6. The execution and delivery of the Transaction Documents and the consummation of the
transactions contemplated thereby will not result in the direct or indirect acquisition by
any company, individual, partnership, association, corporation, group, syndicate, operating
division, joint stock company, trust, municipality or other entity of ten percent or more of
the outstanding voting securities of the Company or Enexus that will entitle such holder or
holders to cast ten percent or more of the aggregate votes that the holders of all of the
outstanding voting securities are entitled to cast in the direction or management of the
affairs of such company;




7. Neither Enexus nor any Subsidiary Guarantor (other limn the Company) is a company engaged
in the manufacture, transmission, distribution or sale of gas or electricity directly to the
public in Vermont or to be used ultimately by the public for lighting, heating or power in
Vermont and so far as relates to their use or occupancy of the public highways;




8. The Company has not issued any stocks, bonds, notes or other evidences of
indebtedness under and is not obligated to take any such action pursuant to the
Transaction Documents.




9. The execution, delivery, and performance by the Company and the Borrower of the
Transaction Documents to which they are a party do not and will not conflict with,
contravene, violate, or constitute a default under (i) any lease, indenture,
instrument, or other agreement to which they are a party, (ii) any rule, law or
regulation to which they are subject, other than the public-utility laws of the State
of Vermont codified in Title 30 of the Vermont Statutes (the “Applicable Utility
Laws”), or (iii) any governmental approvals, other than governmental approvals pursuant
to the Applicable Utility Laws; and




10. No governmental approval (from jurisdictions other than Vermont) that has not
already been obtained or made and that is not in full force and effect, final and
non-appealable is required to be made or obtained by any of the Company, Enexus or the other
Subsidiary Guarantors in connection with the execution and delivery of and the performance
of the transactions described in the Transaction Documents.



 









 





                    , 2009

Page 4



C. Opinions: Based upon the foregoing and subject to the comments and qualifications
below, we are of the opinion that:





1. Neither the execution and delivery of the Transaction Documents to which they are a party
by the Company or Enexus nor the consummation by the Company or Enexus of the transactions
contemplated thereby will conflict with or result in a violation of any public-utility laws
of the State of Vermont codified in Title 30 of the Vermont Statutes Annotated or rules of
the VPSB applicable to the Company or Enexus, except where the conflict with, or violation
of which, would not have a material adverse effect on the Company and Enexus.




2. The Company and Enexus have the consents, approvals, authorizations, licenses,
certificates, permits, or orders of the VPSB, if any, required for the execution, delivery
and performance by the Company and Enexus of the Transaction Documents, except where the
failure to obtain such consents, approvals, authorizations, licenses, certificates, permits
or orders would not have a material adverse effect on the Company mid Enexus and except as
qualified in paragraph D.2 below.


D. Qualifications:





1. This opinion covers only those matters explicitly set forth herein. Accordingly and
without limitation, in this opinion letter we express no opinion with respect to the
following: (a) compliance with any federal or stale securities laws or regulations; (b)
title to any assets that the parties to the Transaction Documents may purport to hold, the
existence of any liens, charges, or encumbrances thereon, the accuracy of the description of
the property contained in the Transaction Documents or the relative priority of any liens
created In the Transaction Documents; (c) any law, statute, rule, regulation, ordinance,
order, permit or decree of any court or governmental instrumentality relating to land use,
the environment. properly (including real property, personality and fixtures) of the Company
or Enexus; (d) the creation, perfection or priority of any security interest created under
the Transact ion Documents; or (e) the enforceability of any of the Transaction Documents.
We have provided separate opinion letters, dated on the date hereof, with respect to the
enforceability of certain provisions of certain agreements that are governed by the laws of
the State of Vermont, zoning and certain other questions of Vermont law.




2. We note that before any of the Administrative Agent, Lenders and Collateral Agent take
any action under the Collateral Agreement or other Transaction Documents to acquire, sell,
or exercise voting or other consensual rights with respect to ten percent or more of the
outstanding voting securities of the Company it or they must obtain the approval of the VPSB
as provided in Section 107 of Title 30 of the Vermont Statutes Annotated.




3. The opinions expressed in this letter are effective as of the date of this letter and are
limited to the public-utility laws of the State of Vermont codified in Title 30 of the
Vermont Statutes Annotated in effect on such date. We disclaim any responsibility to



 









 





                    , 2009

Page 5





notify you of changes. We express no opinion as to the laws of any other jurisdiction. This
opinion is an expression of professional opinion and not a guarantee of any result.


Without our prior written consent, this opinion is not to be (a) relied upon by any person or
entity other than you; (b) referenced or quoted in any document (other than any list of closing
documents related to the Credit Agreement), report or financial statement; or (c) filed with or
delivered to any governmental agency or other person or entity, except as such reference,
quotation, filing or delivery may be required by law; except that a copy of this opinion may be
delivered by the Administrative Agent to the Collateral Agent, Arrangers, Lenders, Issuers or their
assignees or participants, which institutions may rely hereon as if the same were addressed to
them.




Very truly yours,




DOWNS RACHLIN MARTIN PLLC




	 	 	 
	By:
	 	 
	 

	 	 






 









 







SUBJECT TO OPINION COMMITTEE REVIEW; SUBJECT TO CHANGE BASED ON DEVELOPMENTS AND CHANGES IN THE
TRANSACTION DOCUMENTS




                    , 2009




	 	 	 	 	 
	BNP Paribas, as the

Administrative Agent

	 	Bank of Nova Scotia, as the

Collateral Agent
	 	The Lenders and Issuers under

the Credit Agreement







			
	Re:	 	Guaranty and Mortgage Granted By Enexus Nuclear Vermont Yankee, LLC In

Connection With Loans To Enexus Energy Corporation





Ladies and Gentlemen:



We have acted as special Vermont counsel to Enexus Nuclear Vermont Yankee, LLC, a Delaware limited
liability company (the “Mortgagor”), which is an indirect subsidiary of Enexus Energy Corporation,
a Delaware corporation (the “Borrower”) in connection with (A) the Guarantee and Collateral
Agreement, dated as of                     , 2009 (the “Collateral Agreement”), among the Borrower, the Mortgagor, and
each of the other entities party thereto as guarantors (together with the Mortgagor, the
“Subsidiary Guarantors”), The Bank of Nova Scotia, as collateral agent (the “Collateral Agent”),
BNP Paribas, as administrative agent (the “Administrative Agent”), and the other secured parties
from time to time party thereto; and (B) the Collateral Agency and Intercreditor Agreement, dated
as of December ___, 2008 (the “Intercreditor Agreement”), by and among the Borrower, the Subsidiary
Guarantors, the Collateral Agent, the Administrative Agent, and the other secured parties from time
to time party thereto.



This opinion is being delivered pursuant to Sections 4.03(a)(vii)(D) and 4.03(a)(x) of the Credit
Agreement, dated as of December ___, 2008 (the “Credit Agreement”), among the Borrower, the financial
institutions party thereto from time to time as a lender or issuer, Citigroup Global Markets Inc.
and Goldman Sachs Credit Partners L.P. as joint book runners and joint lead arrangers (the
“Arrangers”), the Administrative Agent, the Collateral Agent and                                         (in such capacity, “Syndication
Agent”) (the Administrative Agent, Collateral Agent and Syndication Agent are hereinafter
collectively referred to as the “Agents”). Pursuant to the Collateral Agreement, the Mortgagor has
granted to the Collateral Agent that certain Mortgage, Assignment of Rents and Leases, Fixture
Filing, Financing Statement and Security Agreement, dated as of the date hereof (the “Mortgage”),
encumbering the Mortgagor’s




 









 





BNP Paribas et al.

                    , 2009

Page 2



interest in certain property located in Towns of Vernon and Brattleboro, Vermont, to secure the
Mortgagor’s obligations under the Collateral Agreement.



In such capacity, we have reviewed the following documents as executed in connection with the
aforementioned transaction:





	(a)	 	the Credit Agreement;
	 
	(b)	 	the Collateral Agreement;
	 
	(c)	 	the Intercreditor Agreement; and
	 
	(d)	 	the Mortgage.




Terms not defined herein shall have the meanings assigned thereto in the Credit Agreement. The
documents described in (a) through (e) above are hereinafter collectively referred to as the
“Documents.” The documents described in (b) through (e) above are hereinafter collectively referred
to as the “Mortgagor Documents.”



We have also examined such certificates of public officials, limited liability company documents
and records and other certificates and instruments as we have deemed necessary for the purposes of
the opinions herein expressed.



As to various questions of fact material to our opinions, we have relied upon certificates and
written statements of officers and members of the Borrower and the Mortgagor. As to all questions
of fact material to our opinions that have not been independently established, we have relied upon
certificates or comparable documents of officers and representatives of the Borrower and the
Mortgagor and upon the representations and warranties of the Borrower and the Mortgagor contained
in the Documents.



As used herein, “to our knowledge” and “of which we are aware” mean the conscious awareness of
facts or other information by any lawyer in our firm actively involved in the transactions
contemplated by the Documents.



We understand that with respect to title matters, you will be relying on the title insurance
commitment issued to you by Chicago Title Insurance Company bearing Title No. 2851-25220, Revision
1, dated as of November 14, 2008 and re-dated as of today. We have not made any investigation of
any matters of title to any property (whether real, personal or mixed). In rendering the opinions
expressed herein we have also assumed and relied upon, without independent investigation, the
following:




 









 








BNP Paribas et al.

                    , 2009

Page 3





	(i)	 	the legal right and power of each of the parties to the Documents other than the
Mortgagor under all applicable laws and regulations to execute, deliver and perform each
party’s respective obligations under the Documents, the due authorization, execution and
delivery of the Documents by all parties obligated thereunder including the Mortgagor, and the
validity, binding effect and enforceability against each of the parties of the Documents,
except for the validity, binding effect and enforceability against the Mortgagor of the
provisions of the Mortgage that are to be governed by Vermont law under the choice of law
provisions set forth in the Mortgage;
	 
	(ii)	 	the due organization and valid existence of the Mortgagor as a limited liability company
under the law of the State of Delaware, having the limited liability company power and
authority under such law to own, lease and operate the real property described in the Mortgage
and to execute and deliver, and perform Mortgagor’s obligations under the Mortgagor Documents;
	 
	(iii)	 	the genuineness of all signatures, the legal capacity of all natural persons, the
completeness and authenticity of all documents submitted to us as originals, the power and
authority of a person that is a natural person, the completeness and conformity to original
documents of all documents submitted to us as certified, conformed or photostatic copies and the
completeness and authenticity of the originals of such latter documents;
	 
	(iv)	 	the valid issuance of all certificates, records, instruments, statements and other
documents that we have examined or relied upon in rendering the opinions expressed herein, and
the truthfulness, completeness and accuracy of all information set forth in such documents;
	 
	(v)	 	the truthfulness, completeness and accuracy of all factual representations made in the
Documents, and no fraud with respect to the transactions or matters that are the subject of the
opinions herein;
	 
	(vi)	 	the conformity of the final, original Mortgagor Documents to the copies of the Mortgagor
Documents that we have reviewed in rendering the opinions expressed herein;
	 
	(vii)	 	the proper recording and indexing of the Mortgage in the Land Records of the Town Clerk’s
Office for the Towns of Vernon and Brattleboro, Vermont, the proper filing and indexing of the
Financing Statements in the filing offices indicated thereon, and the payment of all filing and
recording fees, taxes and similar charges relating to such filing and recording;
	 
	(viii)	 	the correctness, completeness and adequacy of the description of the real property and the
other collateral set forth in the Mortgage and the Financing Statements, and all exhibits and
schedules have been or will be properly attached to the Mortgage and the Financing Statements
prior to filing or recording;





 









 





BNP Paribas et al.

                    , 2009

Page 4





	(ix)	 	the Mortgagor has all right, title and interest in and to all real property, real
property interests, real property rights, fixtures, goods that are fixtures, personal
property, membership interests, and all other collateral which are purported to be encumbered
or pledged by the Mortgage;
	 
	(x)	 	the Lenders have made at least one of the Loans or issued at least one of the Letters of
Credits under the Credit Agreement;
	 
	(xi)	 	there are no documents, agreements, understandings or negotiations between the parties to
the Documents that would expand, modify or otherwise affect the respective rights and
obligations of the parties set forth in the Documents, and the Documents correctly and
completely set forth the intent of all parties thereto;
	 
	(xii)	 	the Arrangers, Lenders and Agents have had minimal contact with the State of Vermont,
other than the taking of real and personal property as collateral pursuant to the Mortgagor
Documents and inspection of such property by agents or employees of the Arrangers to evaluate
the collateral value;
	 
	(xiii)	 	the Arrangers, Lenders and Agents have not solicited any loan business or otherwise engaged
in any business in the State of Vermont, the Loans and Letters of Credit contemplated by the
Credit Agreement have been applied for, negotiated, closed and funded in the State of New York
or elsewhere outside the State of Vermont, and each of the Documents has been executed and
delivered by the Borrower or the Mortgagor outside the State of Vermont, and accepted by the
Arrangers and Agents in the State of New York or elsewhere outside the State of Vermont;
	 
	(xiv)	 	the Loans have been or will be made and the Letters of Credit have been or will be issued
to finance an income-producing business or activity, and all commitment fees, one-time fees,
or other such charges received by the Arrangers, Lenders and Agents with respect to the
transactions contemplated by the Documents reflect the reasonable value of services rendered
by such parties in connection with such transactions; and
	 
	(xv)	 	each of the Arrangers, Lenders and Agents is a “bank” or an “insurance company” as
those terms are defined in the Vermont licensed lender statute, 8 V.S.A. § 2200 et seq., or,
if any of such parties is not a “bank” or an “insurance company,” then except for commercial
loans of $1,000,000 or more, such party has not engaged in the business of making loans,
acted as a mortgage broker, or acted as a sales finance company in the State of Vermont, as
those terms are defined in Section 2201(a) of the Vermont licensed lender statute.




Based on the foregoing and upon such investigation as we have deemed necessary, and subject to the
qualifications and exceptions herein contained, we are of the opinion that:




 









 








BNP Paribas et al.

                    , 2009

Page 5





	1.	 	The Mortgagor is duly qualified to do business as a foreign limited liability company
under the law of the State of Vermont.






	2.	 	There is no restriction under Vermont law which would prohibit or prevent Mortgagor or its
sole member from owning or mortgaging the real property described in the Mortgage.






	3.	 	The provisions of the Mortgage that are to be governed by Vermont law under the choice of law
provisions set forth in the Mortgage are the valid and binding obligations of the Mortgagor,
enforceable against the Mortgagor in accordance with their respective terms, except as may be
limited by (i) bankruptcy, insolvency or other similar laws affecting the rights of creditors
generally, and (ii) general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including covenants implied by law to act reasonably and in
good faith. The aforesaid opinion as to enforceability of the Mortgage is also subject to the
qualification that certain provisions contained in the Mortgage may not be enforceable, but
(subject to the limitations set forth in the foregoing clauses (i) and (ii)) such
unenforceability will not render the Mortgage invalid as a whole or substantially interfere
with realization of the principal benefits and/or security provided thereby, and to the
qualification that the right to accelerate the maturity of payment obligations under Section
3.1 of the Mortgage may not be enforceable (a) upon the occurrence of an event of default or
breach under the Mortgage deemed by a court to be immaterial or (b) if deemed by a court to be
commercially unreasonable.
	 
	 	 	The enforceability of the Mortgage against the Mortgagor depends upon the enforceability of
the obligations secured by the Mortgage, i.e., the Mortgagor’s obligations under the
Collateral Agreement. As noted above, for purposes of this opinion we have assumed the
enforceability of the Collateral Agreement against the Mortgagor, and we therefore express
no opinion as to the enforceability of the Collateral Agreement. We note, however, with
respect to the Collateral Agreement that the validity and enforceability of a guaranty is
subject to the requirement that the party making the guaranty receive sufficiently valuable
consideration for that undertaking. The validity and enforceability of a guaranty may also
depend on the solvency of the parties. The value of consideration and the determination of
solvency are issues of fact upon which we do not as a matter of firm policy express an
opinion.






	4.	 	The Vermont Supreme Court has indicated that it will apply the rules set forth in Section
187 of the Restatement (Second) of Conflict of Laws in determining whether it will give
effect to the choice of law provisions contained in a contract, which are as follows:






	 	(a)	 	The law of the state chosen by the parties to govern their contractual
rights and duties will be applied if the particular issue is one which the parties
could have resolved by an explicit provision in their agreement directed to that
issue.





 









 





BNP Paribas et al.

                    , 2009

Page 6





	 	(b)	 	The law of the state chosen by the parties to govern their contractual rights
and duties will be applied, even if the particular issue is one which the parties could
not have resolved by an explicit provision in their agreement directed to that issue,
unless either (a) the chosen state has no substantial relationship to the parties or
the transaction and there is no other reasonable basis for the parties’ choice, or (b)
application of the law of the chosen state would be contrary to a fundamental policy of
a state which has materially greater interest than the chosen state in the
determination of the particular issue and which, under the rule of section 188 [of the
Restatement (Second) of Conflict of Laws], would be the state of the applicable law in
the absence of an effective choice of law by the parties.
	 
	 	(c)	 	In the absence of a contrary indication of intention, the reference is to the
local law of the chosen state.






	 	 	Assuming that the application of the law of the New York would not be contrary to a
fundamental policy of the State of Vermont, a Vermont state court or a United States
federal court sitting in the State of Vermont would give effect to the choice of law
provisions contained in Mortgagor Documents.
	 
	5.	 	The execution and delivery by the Mortgagor of the Mortgagor Documents do not (a) to our
actual knowledge, conflict with or violate any judgment, order, writ, injunction or decree
(identified by Mortgagor in writing delivered to us) binding on the Mortgagor, or (b) conflict
with or violate any Vermont law, rule, regulation or ordinance applicable to the Mortgagor.






	6.	 	Under the choice of law analysis set forth in Paragraph 4 above, a Vermont state court or a
United States federal court sitting in the State of Vermont, if properly presented with the
facts of the case, would apply the usury laws of the State of New York, or other applicable
laws of the State of New York regulating the interest rate and the interest, fees and other
charges that may be legally charged and/or collected, to the Credit Agreement and the
Mortgagor Documents. Accordingly, you have not requested and we offer no opinion as to whether
the provisions of the Credit Agreement or the Mortgagor Documents comply with the Vermont
usury statute, 9 V.S.A. § 41a et seq., or any other applicable laws of the State of Vermont
regulating the interest rate and the interest, fees and other charges that may be legally
charged and/or collected.






	7.	 	Neither the execution nor delivery of the Mortgagor Documents, nor the performance of the
Mortgagor thereunder, will require the Arrangers or the Lenders to obtain any license or
permit (including any “doing business” or similar qualification) or subject the Arrangers or
the Lenders to any taxation of income in State of Vermont.





 









 





BNP Paribas et al.

                    , 2009

Page 7





	8.	 	The recording of the Mortgage in the Lands Records of the Town Clerk’s Offices for the Towns
of Vernon or Brattleboro, Vermont, will perfect a security interest in all right, title and
interest of the Mortgagor in and to that portion of the Collateral described in the Mortgage
that constitutes fixtures under the Uniform Commercial Code in effect in the State of Vermont
(the “Vermont UCC”), without the need for the filing of a financing statement in those
Offices, but only to the extent that, under the Vermont UCC, a security interest in such
fixtures can be perfected by filing a financing statement.






	9.	 	Under the Vermont UCC, the Uniform Commercial Code in effect in the State of the debtor’s
organization governs the method of perfection of a secured party’s non-possessory security
interest in personal property that can be perfected pursuant to the Vermont UCC, except for
such personal property constituting fixtures, timber to be cut, as-extracted collateral, farm
products, goods covered by a certificate of title, deposit accounts, investment property or
letter-of-credit rights under the Vermont UCC.






	10.	 	Under 27 V.S.A. §410(b), all future advances made by the Lenders “pursuant to commitment”
under the Credit Agreement and guaranteed by the Mortgagor under the Collateral Agreement, to
the extent that such advances do not exceed the maximum amount stated in the Mortgage, and all
future advances made “to protect collateral,” will take priority as of the date that the
Mortgage is recorded in the Land Records in the Town Clerk’s Offices for the Towns of Vernon
and Brattleboro, Vermont. A future advance is made “pursuant to commitment” if the Lenders are
bound under the Credit Agreement at the time the Mortgage is created to advance funds to the
Borrower, whether or not an Event of Default or other event not within the Lenders’ control
have relieved them of the obligation to make the advance. A future advance made “pursuant to
commitment” also includes a readvance where the Borrower is entitled to prepay and then
reborrow. A future advance is made “to protect collateral” if the advance is made for the
reasonable protection of the Lenders’ interests in the collateral, such as the payment of real
property taxes or hazard insurance premiums.






	11.	 	No recording, filing, privilege, documentary stamp, intangibles or other tax must be paid in
connection with the execution, delivery, recordation or enforcement of the Mortgage, or the
repayment, readvance or reborrowing of the Loans, other than recording fees due upon the
recordation of the Mortgage and filing fees due upon filing of the Financing Statements.





We express no opinions as to





	A.	 	laws other than the laws of the State of Vermont;





 









 





BNP Paribas et al.

                    , 2009

Page 8





	B.	 	whether the after-acquired property clause set forth in Section 2.9 of the Mortgage is self-effectuating;






	C.	 	enforceability of the power of attorney set forth in Section 2.11 of the Mortgage or the
waiver of the right to trial by jury set forth in Section 3.19 of the Mortgage;






	D.	 	title to or descriptions of real property and other collateral subject to or set forth in the
Mortgagor Documents, or liens, security interests, leases, charges or encumbrances on or
affecting such real property or other collateral;






	E.	 	assignability of any of the Leases or other intangible personal property or the
enforceability by the Collateral Agent, as assignee, of the Leases and other contractual
obligations included in such intangible personal property;






	F.	 	attachment or perfection of the security interests granted by the Mortgagor Documents, except
for that portion of the collateral that constitutes fixtures under the Vermont UCC;






	G.	 	relative priority of the mortgage and security interest granted by the Mortgagor
Documents;






	H.	 	compliance with federal or state securities laws or regulations; or






	J.	 	any license, permit or other authorization required from a Vermont government entity
or agency if the Collateral Agent were to take possession of and operate the real property
subject to the Mortgage.




We have provided a separate opinion letters, dated on the date hereof, with respect to the
questions of whether the execution and delivery of the Documents will violate the public utility
law of the State of Vermont or will require a regulatory approval under that public utility law,
and with respect to Vermont land use regulations applicable to the real property subject to the
Mortgage. We express no opinions herein with respect to those questions of public utility law or
land use regulation.



The opinions expressed herein are made as of the date hereof and are limited to the laws in effect
and the circumstances existing on the date hereof. We disclaim any responsibility to notify you of
changes in the law or facts affecting the opinions expressed herein that occur or come to our
attention after the date hereof.



The opinions expressed herein may be relied upon by the Arrangers, Lenders and Agents, their
successors and/or assigns, any rating agency involved in the securitization of the Loans, and their
respective counsel, but may not be relied upon by any other party. Copies of this opinion letter




 









 





BNP Paribas et al.

                    , 2009

Page 9



may not be made available, and this opinion letter may not be quoted or referred to in any other
document made available, to any other person or entity, except to any governmental or other
regulatory authority and any rating agency auditing, monitoring or evaluating investments of the
Lenders or compliance by the Lenders with investment grading or evaluation and any accountant or
attorney for any person or entity entitled hereunder to rely hereon or to whom or which this
opinion letter may be disclosed as provided herein, or as otherwise required by law.




Very truly yours,




Downs Rachlin Martin PLLC




	 	 	 
	By
	 	 
	 

	 	 
	 

	 	      A Member of the Firm







 









 








EXHIBIT K




MASSACHUSETTS LOCAL COUNSEL OPINION

(CORPORATE, REGULATORY AND REAL ESTATE)




See attached.





K-1











 





FORM OF OPINION OF BORROWER’S

MASSACHUSETTS COUNSEL




[LETTERHEAD OF LAW FIRM]




                    , 2008




BNP Paribas,

as the Administrative Agent,

The Bank of Nova Scotia,

as the Collateral Agent,

and each Financial Institution identified on Schedule A hereto





			
	          Re:	 	$1,200,000,000 Loan from the Lenders under the Credit

Agreement (defined below) to Enexus Energy Corporation





Ladies and Gentlemen:



We have acted as special Massachusetts counsel to Enexus Energy Corporation, a Delaware corporation
(“Borrower”) and Enexus Nuclear Pilgrim, LLC, a Massachusetts limited liability company (the
“Mortgagor”) in connection with the preparation, execution and delivery of the Credit Agreement
(the “Credit Agreement”) dated as of December 23, 2008, among the Borrower, the Lenders (the
“Lenders”) and Issuers party thereto, Citigroup Global Markets Inc. (“Citigroup”) and Goldman Sachs
Credit Partners L.P. (“Goldman”), as Joint Book Runners and Joint Lead Arrangers, The Bank of Nova
Scotia, as Syndication Agent (in such capacity, “Syndication Agent”), BNP Paribas, as
Administrative Agent (“Administrative Agent”) and The Bank of Nova Scotia as Collateral Agent
(“Collateral Agent”, and collectively with the Lenders, Citigroup, Goldman, the Syndication Agent,
and the Administrative Agent, the “Lender Parties”), and in connection with that certain Mortgage,
Assignment of Rents and




 









 




Leases, Fixture Filing, Financing Statement and Security Agreement, dated as of the date hereof
(the “Mortgage”), made by the Mortgagor in favor of the Collateral Agent and encumbering the
Mortgagor’s interest in certain property located in Plymouth County, Massachusetts (the “County”).





	 	 	 	In such capacity, we have reviewed and rely upon the following documents:
	 
	 	(a)	 	[Limited Liability Company Agreement/Operating Agreement] of Mortgagor dated                      (“Operating Agreement”);
	 
	 	(b)	 	Certified copy of Certificate of Organization of Mortgagor dated                     ,
issued by the Secretary of the Commonwealth of Massachusetts (the “State Secretary”) on                     ;
	 
	 	(c)	 	Certificate of Legal Existence of Mortgagor issued by the State Secretary dated                     ;
	 
	 	(d)	 	Certificate of Good Standing of Mortgagor issued by the State Secretary dated                     ;
	 
	 	(e)	 	Certificate of Secretary of Mortgagor dated                     .
	 
	 	(f)	 	the Credit Agreement, as executed;
	 
	 	(g)	 	the Mortgage, as executed;
	 
	 	(h)	 	Guarantee and Collateral Agreement among Borrower, Mortgagor, Collateral
Agent and Administrative Agent and [other parties] dated                     , 2009, as
executed (the “Guaranty”);
	 
	 	(i)	 	Collateral Agency and Intercreditor Agreement among Borrower, Mortgagor,
Collateral Agent and Administrative Agent and [other parties] dated December 23, 2008,
as executed (the “Intercreditor Agreement”); and
	 
	 	(j)	 	UCC Financing Statements (the “Financing Statements”) naming Mortgagor,
as debtor, and the Collateral Agent, as secured party.





          Terms not defined herein shall have the meanings assigned thereto in the Credit Agreement. The
documents described in (f) through (j) above, together with all other documents, agreements or
certificates included within the definition of “Loan Documents” under the Credit Agreement, are
hereinafter collectively referred to as the “Loan Documents”. The Mortgage, Guaranty and
Intercreditor Agreement are hereinafter collectively referred to as the “Mortgage Documents”.




2









 





          In rendering our opinion we have also examined such certificates of public officials,
corporate and limited liability company documents and records and other certificates and
instruments as we have deemed necessary for the purposes of the opinion herein expressed. As to
various questions of fact material to our opinion, we have relied upon certificates and written
statements of officers and managers of Mortgagor and Borrower.




          In such examination, we have assumed the genuineness of all signatures, the legal capacity of
all natural persons, the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified, conformed or photostatic
copies, the authenticity of the originals of such latter documents and the accuracy and
completeness of all records made available to us by Mortgagor and Borrower. We have assumed,
without investigation, that any certificate or other document on which we have relied that was
given or dated earlier than the date of this letter continued to remain accurate insofar as
relevant to our opinions from such earlier date through and including the date of this letter. As
to all questions of fact material to these opinions that have not been independently established,
we have relied upon certificates or comparable documents of officers and representatives of
Mortgagor and Borrower and upon the representations and warranties of Borrower and Mortgagor
contained in the Loan Documents. As used herein, statements qualified as “to our knowledge” and “of
which we are aware” or any similar phrase are intended to be limited to the conscious awareness of
facts or other information by any lawyer in our firm actively involved in the transactions
contemplated by the Loan Documents and the accuracy and completeness of all records made available
to us by Mortgagor and Borrower, and we have not undertaken any independent investigation to
determine the accuracy of any such statement, and any limited inquiry undertaken by us during
preparation of this opinion letter should not be regarded as such an investigation; no inference as
to our knowledge of any matters bearing on the accuracy of any such statement should be drawn from
the fact of our representation of Borrower and Mortgagor.




          We understand that with respect to title matters, you (and, to the extent necessary to render
this opinion, we) will be relying on the title insurance commitment issued to you by
[Title Insurance Company] bearing Title No.                      dated as of                      and
re-dated as of today. We have not made or undertaken to make any investigation of and do not
express an opinion as to, any matters of title to any property (whether real, personal or mixed).
We express no opinion with respect to the priority of any mortgages, liens thereon or security
interests in or on any property (whether real, personal or mixed) intended to constitute collateral
for the Loan. We also do not express any opinion as to the adequacy of the description of the
property contained in the Financing Statements and the Mortgage or the filing or recordation of the
Financing Statements(s) and the Mortgage. As to all of the foregoing matters, we understand that
you are relying upon your own counsel and your own search of the appropriate records.




          We express no opinion with respect to the effect of any law other than the law of the
Commonwealth of Massachusetts and our opinion is limited to those matters customarily of





3









 







application to mortgage loan transactions. Without limiting the generality of the foregoing, we
express no opinion with respect to any matter arising by reason of the status of Borrower,
Mortgagor or any affiliate as a regulated generation company or the ownership, operation and
possession of a nuclear facility and the ownership and possession of nuclear materials relating to
the property affected by the Mortgage, including but not limited to the ability of the Collateral
Agent to take possession of any collateral pursuant to the Mortgage or to foreclose the same
(including any security interest thereunder) or exercise other remedies without having obtained any
applicable licenses or approvals from the United States Nuclear Regulatory Commission.




          In rendering the opinions expressed herein we have also assumed and relied upon, without
independent investigation, the following:




               (i) That each of the parties to the Loan Documents other than the Mortgagor
(collectively, the “Other Parties”) was in legal existence and had the power to enter into the Loan
transaction and perform its obligations under the Loan Documents; the due authorization by all
requisite action and the due execution and delivery of the Loan Documents by each of the Other
Parties and that any person acting on behalf of any of the Other Parties was duly authorized to act
in that capacity;



               (ii) That no fraud exists with respect to the transactions or matters which are the
subject of the opinions herein;



               (iii) The proper filing, recording or indexing, as appropriate, of the Mortgage in the
registry of deeds and the registry district of the Land Court, as applicable, of Plymouth County
(as applicable, the “Registry”) and the payment of all filing and recording fees, taxes and similar
charges relating to such filing and recording;



               (iv) That Mortgagor has all right, title and interest in and to all real property, real
property interests, real property rights, fixtures, goods which are fixtures, personal property,
membership interests, and all other collateral which is purported to be encumbered or pledged by
the Mortgage, and the description of the real property set forth in the Mortgage is correct,
complete and adequate;



               (v) That the Lenders have made the loan referenced in the Loan Documents (the
“Loan”);



               (vi) That all exhibits and schedules have been or will be properly attached to the
Mortgage prior to filing or recording and with respect to any legal description, it correctly
describes or will correctly describe the real estate intended to be affected thereby;



               (vii) That there are no documents, agreements, understandings or negotiations between
the parties to the Loan Documents which would expand, modify or




4









 







otherwise affect the respective rights and obligations of the parties set forth in the Loan
Documents, that the Loan Documents correctly and completely set forth the intent of all parties
thereto and that there is no usage of trade or course of prior dealing among the parties that
would, in either case, define, supplement or qualify the terms of the Loan Documents;




               (viii) That the Mortgage is valid, binding and enforceable against each party thereto other
than Mortgagor, and that the other Loan Documents are valid, binding and enforceable against each
of the parties thereto;



     For purposes of our opinion in paragraph 5 below, we have also made and relied upon, without
independent investigation, the following assumptions (ix) through (xii):



               (ix) that Citigroup, Goldman, the Administrative Agent, the Collateral Agent, and the
Syndication Agent maintain a principal place of business in New York;



               (x) that the Loan Documents were negotiated and finalized on behalf of and executed by
all parties in New York;



               (xi) that Borrower and Mortgagor delivered the Loan Documents to the Lender Parties in
New York; and



               (xii) that the Loan will be funded to Borrower from New York, that the repayment of the
Loan will be made to Administrative Agent’s office in New York, and that Administrative Agent will
service the Loan from New York.



     Our opinions in paragraphs 7 and 8 below are limited to Article 9 of the Uniform Commercial
Code of Massachusetts (the “Massachusetts UCC”) and to “UCC Property,” which means the property
described in both the Mortgage and also in the Financing Statements that is subject to the
Massachusetts UCC. For purposes of our opinion in paragraphs 7 and 8, we have also made and relied
upon, without independent investigation, the following assumptions (xiii) through (xvii):



               (xiii) the Mortgage and the Financing Statements accurately state the correct name of the
debtor and secured party named therein and a correct mailing address for the debtor and the secured
party named therein;



               (xiv) value will have been given to the Mortgagor within the meaning of Section 9-203 of
the Massachusetts UCC in connection with the execution and delivery of the Mortgage;



5









 





               (xv) the descriptions of the UCC Property in the Mortgage and the Financing Statements
accurately describe the UCC Property intended to be encumbered by the Mortgage and the Financing
Statements;



               (xvi) the Mortgagor has sufficient rights in the UCC Property to grant the security
interest in the UCC Property intended to be granted by the Mortgage; and



               (xvii) the real property to which all UCC Property that is fixtures is attached or to
be attached is accurately described in both the Mortgage and the Financing Statements.



     We express no opinion in paragraphs 7 and 8 as to farm products, as-extracted collateral,
timber to be cut or goods covered by a certificate of title.



     Based on the foregoing and upon such investigation as we have deemed necessary, and subject to
the qualifications and exceptions herein contained, we are of the opinion that:



          1. Mortgagor is a limited liability company validly existing and in good standing under
the laws of the Commonwealth of Massachusetts.




          2. Mortgagor has the limited liability company power and authority to own, lease and operate
real property and to execute and deliver, and perform Mortgagor’s obligations under, the Mortgage
Documents.




          3. The execution and delivery of the Mortgage Documents by Mortgagor and the performance of
Mortgagor’s obligations under the Mortgage Documents have been duly authorized by all requisite
limited liability company action of Mortgagor and the Mortgage Documents have been duly executed
and delivered by Mortgagor.




          4. The Mortgage is the legal, valid and binding obligation of Mortgagor, enforceable against
Mortgagor in accordance with its terms, except as may be limited by (i) bankruptcy, insolvency,
fraudulent transfer, reorganization, arrangement moratorium or other similar laws relating to or
affecting the rights of creditors generally, and (ii) general principles of equity (regardless of
whether considered in a proceeding in equity or at law). The aforesaid opinion as to enforceability
of the Mortgage is also subject to the qualification that certain provisions contained in the
Mortgage may not be enforceable, but (subject to the limitations set forth in the foregoing clauses
(i) and (ii)) such unenforceability will not render the Mortgage Documents invalid as a whole or
substantially interfere with realization of the principal benefits and/or security provided
thereby, which we understand to consist of the foreclosure of the Mortgage in accordance with
applicable law. In rendering the above opinion we have assumed that the internal laws of the
Commonwealth of Massachusetts would be applicable notwithstanding the choice of law provisions set
forth in the Mortgage Documents.




6









 





          5. The courts of the Commonwealth of Massachusetts, or a United States federal court located
in Massachusetts applying Massachusetts law, will give effect to the choice of law provisions of
the Mortgage Documents, except to the extent that any term of the Mortgage Documents (or any term
of the other Loan Documents relevant thereto), or any provision of the law of New York applicable
thereto, violates the public policy of the Commonwealth of Massachusetts, and except as the same
may be limited by general principles of equity.




          6. The execution and delivery by Mortgagor of the Mortgage Documents do not, and the payment
by Borrower of the indebtedness under the Loan will not, (a) conflict with or violate any provision
of the Operating Agreement, or (b) result in a breach of, or constitute a default under any of the
terms, conditions or provisions of any material document, agreement or other instrument to which
the Mortgagor is a party or by which it is bound and which is identified in Schedule B
hereto, (c) conflict with or violate any Massachusetts law, rule, regulation or ordinance
applicable to Mortgagor, or (d) violate any judgment, writ, injunction, decree, order or ruling of
any court or governmental authority binding on the Mortgagor and identified in Schedule C
hereto.




          7. The Mortgage is in proper form sufficient to constitute a valid and effective fixture
filing under Article 9 of the Massachusetts UCC for the property described in the Mortgage that is
subject to Article 9, naming Mortgagor as debtor and Collateral Agent as secured party.




          8. The Mortgage creates a valid security interest in the UCC Property in favor of the
Collateral Agent. Upon the recording and/or filing of the Mortgage and the Financing Statements
with the Registry and the State Secretary, Collateral Agent will have a perfected security interest
in the UCC Property in which a security interest can be perfected by filing a financing statement.




          9. There are no mortgage taxes payable to the Commonwealth of Massachusetts or to any
governmental authority or regulatory body located therein on account of the execution or delivery
of the Mortgage, or the creation of the liens and security interests thereunder, or the filing,
recordation or registration of the Mortgage, except for nominal filing or recording fees.




     We advise you, with the understanding that such matters are outside the scope of our opinion,
that the priority of the Mortgage as security for future advances or amounts advanced, repaid and
readvanced from time to time may be subject to the superior interest of intervening encumbrances,
including new encumbrances of record, and it may be necessary to examine title to the real and
personal property encumbered thereby prior to advancing or readvancing funds to determine the
priority of the Mortgage as security therefor.




7









 








     We also advise you that we are not representing Borrower or Mortgagor in any pending
litigation in which it is a named defendant that challenges the validity or enforceability of, or
seeks to enjoin the performance of, the Loan Documents.



     This opinion is furnished by us as counsel for the Borrower and Mortgagor solely in connection
with the Loan and may be relied upon only by you, your successors as Administrative Agent and
Collateral Agent, any purchaser of the Loan and subsequent holder of any Note and any national
statistical rating agency that assigns a rating to any securities issued in connection with the
Loan. Our opinion may not be used, quoted from, referred to or relied upon by you or by any other
person for any other purpose, nor may copies be delivered to any other person, without our prior
written consent in each instance; except that you may deliver copies of this opinion to prospective
purchasers of any Note and participants in the Loan, so long as such participants acquire their
interests through a private placement. We shall have no obligation to revise or reissue this
opinion with respect to any change in law or any event, fact, circumstance or transaction which
occurs after the date hereof. In addition, we express no opinion with respect to any issue arising
out of or related to (i) the identity or status of any transferee of any Note or participant in the
Loan, (ii) a securitization of the Loan, or (iii) any subsequent transaction.



Sincerely,




GOODWIN PROCTER LLP





8









 








Schedule A




Lenders





9









 








Schedule B




Agreements, Etc.





10









 








Schedule C




Judgments, Etc.





11









 








FORM OF OPINION OF BORROWER’S REGULATORY

MASSACHUSETTS COUNSEL




[LETTERHEAD OF LAW FIRM]




BNP Paribas, as the Administrative Agent,

The Bank of Nova Scotia, As the Collateral Agent,

And each Financial Institution identified on Schedule A hereto




                    , 2009





			
	     Re:	 	$2,300,000,000 Loan from the Lenders under the Credit

Agreement (defined below) to Enexus Energy Corporation





Ladies and Gentlemen:



We have acted as special Massachusetts counsel to Enexus Energy Corporation, a Delaware corporation
(the “Borrower”) and Enexus Nuclear Pilgrim, LLC, a Massachusetts limited liability company (the
“Company”) in connection with the preparation, execution and delivery of the Credit Agreement (the
“Credit Agreement”), dated as of December ___, 2008, among the Borrower, the Lenders and Issuers
party thereto, Citigroup Global Markets Inc. and Goldman
Sachs Credit Partners L.P., as Joint Book Runners and Joint Lead Arrangers, [                    ]
as Syndication Agent, BNP Paribas, as Administrative Agent (“Administrative Agent”) and The Bank of
Nova Scotia, as Collateral Agent (“Collateral Agent); the Guarantee and Collateral Agreement, dated
as of the date hereof (the “Collateral Agreement”), among the Borrower, the Company and each of the
other entities party thereto as grantors (together with the Company, the “Subsidiary Guarantors”),
the Collateral Agent and the Administrative Agent and the other parties thereto; and the Collateral
Agency and Intercreditor Agreement, dated as of the date hereof (the “Intercreditor Agreement”),
among the Borrower, the Subsidiary Guarantors, the Collateral Agent and the Administrative Agent
and the other parties thereto. The Credit Agreement, the Collateral Agreement and the Intercreditor
Agreement are hereinafter collectively referred to as the “Transaction Documents”.



We have reviewed such documents and made such examination of law as we have deemed appropriate to
give the opinions expressed below. We have relied, without independent verification, as to matters
of fact material to the opinions set for the below, on representations in




 









 







the Transaction Documents and certificates and other inquiries of officers of the Borrower and the
Company. In particular and without limiting the foregoing, we have relied on the representations
of the Company that it is engaged in production, manufacture and generation of electricity for
sale at wholesale only and that neither the Company nor any of its affiliates is engaged in the
delivery of electricity over lines which operate at a voltage level typically equal to or greater
than 110 volts and less than 69,000 volts to an end-use customer within Massachusetts.



The opinions set forth below are solely limited to the laws of the Commonwealth of Massachusetts
regulating entities engaged in the sale or distribution of electricity within Massachusetts
(“Applicable Laws”).



Based upon the foregoing and subject to the additional qualification set forth below, we are of
the opinion that:




     (a) the execution and delivery by each of the Company and the Borrower of the Transaction
Documents to which it is a party do not, and the performance by it of its obligations thereunder,
will not violate any Applicable Laws; and



     (b) no consent, approval, license or exemption by, order or authorization of any
Massachusetts governmental authority pursuant to Applicable Laws is required to be obtained or
made by the Company or the Borrower in connection with its execution and delivery of the
Transaction Documents to which it is a party or the performance by it of its obligations
thereunder.


This opinion letter and the opinions it contains shall be interpreted in accordance with the Legal
Opinion Principles issued by the Committee on Legal Opinions of the American Bar Association’s
Business Law Section as published in 53 Business Lawyer 831 (May 1998).



This opinion letter is being furnished only to you for your use solely in connection with the
Transaction Documents and the transactions contemplated thereby, and neither it nor the opinions
it contains may be relied upon for any other purpose or by anyone else, except that any person who
succeeds you in accordance with the provisions of the Credit Agreement may rely on this opinion as
if it were specifically addressed to such person on the date hereof.




Very truly yours,




GOODWIN PROCTER LLP





2









 








EXHIBIT L




NEW YORK LOCAL COUNSEL OPINION (REGULATORY)




See attached.




L-1









 





[Agents listed in the Credit Agreement and

Lenders listed in the Credit Agreement]

[Address]





			
	          Re:	 	Enexus Energy Corporation





Ladies and Gentlemen:




          We have acted as special state regulatory counsel to Entergy Nuclear FitzPatrick,
LLC, a Delaware limited liability company (“ENFP”), Entergy Nuclear Indian Point 2, LLC, a
Delaware limited liability company (“ENIP2”), and Entergy Nuclear Indian Point 3, LLC, a
Delaware limited liability company (“ENIP3”) ( collectively, the “Companies”), and Enexus
Energy Corporation, a Delaware corporation (“Enexus”), in connection with certain matters of
New York public utility law relating to the execution and delivery of (a) the Guarantee and
Collateral Agreement, dated as of December[   ], 2008 (the “Collateral Agreement”), by and
among Enexus (as the “Borrower”), and each of the other entities party thereto as guarantors
(together with the Company, the “Subsidiary Guarantors”), The Bank of Nova Scotia as
collateral agent (the “Collateral Agent”), BNP Paribas as administrative agent (the
“Administrative Agent”), and the other secured parties from time to time party thereto; and
(b) the Collateral Agency and Intercreditor Agreement, dated as of December [   ], 2008 (the
“Intercreditor Agreement”), by and among the Borrower, the Subsidiary Guarantors, the
Collateral Agent, the Administrative Agent, and the other secured parties from time to time
party thereto. This opinion is being furnished pursuant to Section 4.03(a)(x) of the Credit
Agreement, dated as of December [   ], 2008 (the “Credit Agreement”), by and among the Borrower, the
financial institutions party thereto from time to time as a lender or issuer, Citigroup Global
Markets Inc. and Goldman Sachs Credit Partners L.P., as joint book runners and joint lead
arrangers, the Administrative Agent, the Collateral Agent and [        ] as syndication agent.
Capitalized terms used but not otherwise defined herein have the respective meanings set forth in
the Credit Agreement.




          In connection therewith, we have examined (a) the Collateral Agreement, (b) the
Intercreditor Agreement, (c) the Creditor Agreement (collectively, the “Transaction
Documents”), and (d) the Order of the New York State Public Service Commission in Case 08-
E-0077 dated [        ] (the “Order”). In addition, we have examined originals (or copies
certified or otherwise identified to our satisfaction) of such other agreements, instruments,
certificates, documents and records, and we have made such investigations of law, as we have
deemed necessary or appropriate as a basis for the opinions expressed below.




          In such examination, we have assumed, with your approval and without independent
investigation, the legal capacity of all natural persons, the genuineness of all signatures on all
documents examined by us, the authenticity of all documents submitted to us as originals, the
conformity to the original documents of all such documents submitted to us as copies and the
authenticity of the originals of such latter documents. We have also assumed with your permission
that the factual representations made in the materials examined (including the representations made
in the Transaction Documents) are true, complete and accurate. We have





 









 







also assumed that the books and records of Enexus are maintained in accordance with proper
corporate procedures. As to any facts material to our opinions, we have, when relevant facts were
not independently established by us, relied upon the Transaction Documents and the aforesaid other
agreements, instruments, certificates, documents and records and upon statements and certificates
of officers and representatives of Enexus and/or the Companies and public officials as in our
judgment were necessary or appropriate to enable us to render the opinions expressed below.




          We have further assumed, with your consent, that the execution, delivery, and performance by
the Companies and the Borrower of the Transaction Documents do not and will not conflict with,
contravene, violate, or constitute a default under (a) any lease, indenture, instrument, or other
agreement to which they are a party, (b) any rule, law or regulation to which they are subject
(other than the New York State Public Service Law and any rule, regulation or order of the New York
State Public Service Commission applicable to ENFP, ENIP2, ENIP3 or Enexus (“New York Public
Utility Laws”) or (c) any governmental approvals, other than governmental approvals pursuant to the
New York Public Utility Laws.




          We have also assumed, with your consent, that no governmental approval (from entities other
than the New York State Public Service Commission) that has not already been obtained or made, and
that is not in full force and effect, final and non-appealable, is required to be made or obtained
by any of the Companies, the Borrower or the Subsidiary Guarantors in connection with the
execution, delivery, and performance of the transactions described in the Transaction Documents.




          Except to the extent expressly set forth herein, we have not been asked to nor have we
undertaken any independent investigation to determine the existence or absence of any fact, and no
inference as to our knowledge of the existence or absence of any fact should be drawn from our
representation of the Companies or Enexus or the rendering of the opinions set forth herein. We
have not rendered financial advice to you, or any other person, and do not represent by this
opinion letter, or otherwise, that we have reviewed or made any assessment about, nor do we offer
any opinions about, the economic or financial aspects of, and/or any other matter relating to, the
transactions contemplated in the Transaction Documents. Based upon and subject to the foregoing, and
subject to the further limitations, qualifications, exceptions and assumptions set forth below, we
are of the opinion that:




     1. Neither the execution and delivery by the Companies or Enexus of the Transaction Documents
to which they are a party nor the consummation by the Company or Enexus of the transactions
contemplated thereby in accordance with the terms thereof will violate the New York State Public
Service Law or any rule, regulation or order of the New York State Public Service Commission
applicable to ENFP, ENIP2, ENIP3 or Enexus, except where the violation would not have a material
adverse affect on the Company and Enexus; and



     2. No consent, approval, waiver, license, authorization or order of, or filing, registration
or qualification with the New York State Public Service Commission having jurisdiction over ENFP,
ENIP2, ENIP3 or Enexus is required under the New York State Public Service Law for the execution or
delivery by the Companies or Enexus of the Transaction Documents or the consummation of the
transactions contemplated thereby other than (a) such as



 









 




have been obtained with the issuance of the Order and (b) the conditions set forth in the Order
that [INSERT NOTICE PROVISIONS AND CONDITIONS], except where the failure to obtain such consent,
approval, waiver, license, authorization or order would not have a material adverse effect on the
Companies and Enexus.




          In addition, while no stay is applicable to the Order, such Order is subject to a 30-day
rehearing period pursuant to Section 22 of the New York Public Service Law, a four month appeal
period pursuant to Article 78 of the New York Civil Practice Law and Rules and possible
reconsideration by the New York State Public Service Commission at any time.




          This opinion covers only those matters explicitly set forth herein, relating to the New York
Public Utility Laws. Accordingly and without limitation, in this opinion letter we express no
opinion with respect to the following: (a) compliance with any federal or state securities laws or
regulations; (b) title to any assets that the parties to the Transaction Documents may purport to
hold, the existence of any liens, charges, or encumbrances thereon, the accuracy of the description
of the property contained in the Transaction Documents or the relative priority of any liens
created by the Transaction Documents; (c) any law, statute, rule, regulation, ordinance, order,
permit or decree of any court or governmental instrumentality relating to land use, the
environment, property (including real property, personalty and fixtures) of the Companies or
Enexus; (d) the creation, perfection or priority of any security interest created under the
Transaction Documents; or (e) the enforceability of any of the Transaction Documents.




          The opinions expressed in this letter are as of the date hereof. We assume no obligation to
update, revise, or supplement this letter, nor to communicate further with or advise you with
respect to any matter covered in this letter or any change, development, occurrence, circumstance,
or condition in respect of any such matter.




          The opinions expressed herein are limited to the New York State Public Service Law and the
regulations and orders of the New York State Public Service Commission and no opinion is expressed
herein with respect to any other type of law or regulation of the State of New York or the laws or
regulations of the United States of America. In addition, no opinion is expressed herein with
respect to the laws or regulations of any other state, country or jurisdiction.




          We are furnishing this letter to you solely for your benefit in connection with the
Transaction Documents. This letter is not to be used, circulated, quoted, referred to, delivered
to, or relied upon in any manner, for any other purpose, by any other person or entity, except that
any person who becomes an Agent, Lender, Issuer or participant in accordance with the provisions of
the Credit Agreement may rely on this opinion as if it were specifically addressed and delivered to
such person on the date hereof, or in connection with any other transaction, without our prior
express written consent.





 









 








EXHIBIT M




MICHIGAN LOCAL COUNSEL OPINION

(REGULATORY AND REAL ESTATE)




See attached.




M-1









 





[DYKEMA DRAFT MICHIGAN REGULATORY CREDIT OPINION]




December __, 2008




[Agents and Lenders under Credit Agreement]

                                                            

                                                            

                                                            





Re: Enexus Energy Corporation $                     Credit
Agreement dated                     , 2008 and related Transaction Documents



Ladies and Gentlemen:



We have been engaged to serve as Michigan regulatory counsel to Enexus Nuclear
Palisades, LLC, a Delaware corporation (“Palisades” or the “Company”), and to Enexus Energy Corporation, a Delaware corporation (“Enexus”), in connection with
(A) the Guarantee and Collateral Agreement, dated as of [•] (the “Collateral Agreement”), by and among Enexus (as the “Borrower”), the Company and each of the
other entities party thereto as grantors (together with the Borrower and the Company,
the “ Grantors”), The Bank of Nova Scotia as collateral agent (the “Collateral
Agent”), BNP Paribas as administrative agent (the “Administrative Agent”), and the
other secured parties from time to time party thereto; (B) the Collateral Agency and
Intercreditor Agreement, dated as of December ___, 2008 (the “Intercreditor Agreement”), by and among the Borrower, the Grantors, the Collateral Agent, the Administrative Agent, and the other secured parties from time to time party thereto; and (C)
the Accession Agreement, dated                     , 200_, between the Company and                     
(the “Accession Agreement”). This opinion is being delivered pursuant





 









 







 to Section                      of the Credit Agreement, dated as of December                    , 2008 (the
“Credit Agreement”), between the Borrower, the financial institutions party thereto
from time to time as a lender or issuer, Citigroup Global Markets Inc. and Goldman
Sachs Credit Partners L.P., as joint book runners and joint lead arrangers, the Administrative Agent, the Collateral Agent and                      as syndication agent.




          In rendering the opinions set forth herein, we rely on the Company’s representation that the
only electric generation assets in Michigan of the Borrower and the Company relate to the Company’s
direct or indirect ownership interest in and operation of the Palisades Nuclear Power Plant, and
that any electric transmission or distribution assets related thereto are not used for the benefit
of any third parties. As such, neither the Borrower nor the Company is an “electric utility” or a
“public utility” subject to regulation by the Michigan Public Service Commission or any other state
electric utility regulatory agency.




          Based upon the foregoing and subject to the limitations, qualifications, exceptions and
assumptions set forth herein, we are of the opinion that:




     1. The execution and delivery by the Company and the Borrower of the Collateral Agreement, the
Credit Agreement, the Accession Agreement and the Intercreditor Agreement (the “Transaction
Documents”), as applicable, and the performance by the Company and the Borrower of their
obligations thereunder, will not result in the violation of any applicable Michigan laws, or any
rules and regulations promulgated thereunder, regulating the generation, transmission or
distribution of electricity by “public utilities” or similarly designated entities located or doing
business in Michigan (the “Applicable Laws”); and



     2. No Michigan utility regulatory approval is required for the execution and delivery of the
applicable Transaction Documents by the Company and the Borrower, the consummation of the
transactions contemplated thereby or the performance of their obligations thereunder; and



          In rendering the foregoing opinions, we have assumed, with your consent, that:




          a. the execution, delivery, and performance by the Company and
the Borrower of the Transaction Documents do not and will not conflict with, contravene, violate,
or constitute a default under (i) any lease, indenture, instrument, or other agreement to which
they are a party, (ii) any rule, law or regulation to which they are subject, other than the
Applicable Laws, or (iii) any governmental approvals other than governmental approvals pursuant to
the Applicable Laws; and




          (b) no governmental approval (from jurisdictions other than Michigan) that has not
already been obtained or made, and that is not in full force and effect, final and non-appealable,
is required to be made or obtained by any of




 









 




Company, the Borrower or the Grantors in connection with the execution, delivery, and
performance of the transactions described in Transaction Documents.




          This opinion is based solely on and limited to the laws of the State of Michigan, and the
rules and regulations promulgated thereunder, regulating the generation, transmission or
distribution of electricity by “public utilities” or similarly designated entities located or
doing business in Michigan. We express no opinion on the laws of any other jurisdiction, or on
any other Michigan laws, including but not limited to laws relating to the issuance and
registration of securities, environmental regulation and taxation.




          This opinion is furnished only to you on the applicability of Michigan utility regulatory
law for your benefit as lenders in connection with the closing of the
transactions contemplated in the Transaction Documents. Without our prior written
consent, this opinion may not be used,
circulated, quoted or otherwise referred to for any
other purpose or relied upon by, or assigned to, any
other person for any purpose, except that any person
who becomes an Agent, Lender, Issuer or participant in
accordance with the provisions of the Credit Agreement
may rely on this opinion as
if it were specifically addressed and
delivered to such person the date hereof and other than
your successors in interest by means of merger,
consolidation, transfer of a business or other similar
transaction. This opinion is an expression of
professional opinion and not a guarantee of any result.




Very truly yours,




 









 





	 	 	 
	

	 	Dykema Gossett PLLC

Suite 700 

300 Ottawa Avenue, N.W.

Grand Rapids, Michigan 49503


WWW.DYKEMA.COM


Tel: (616) 776-7500

Fax: (616) 776-7573


Brian J. Page

Direct Dial: (616) 776-7509

Email: BPAGE@DYKEMA.COM






                                        , 2008




[Citigroup Global Markets Inc.]

[Goldman Sachs Credit Partners L.P.]





			
	Re:	 	$2,300,000,000.00 Loan (“Loan”) by the “Lenders” (defined below) to Enexus Energy

Corporation, a Delaware corporation (“Borrower”)





Ladies and Gentlemen:




     We have acted as special State of Michigan counsel to Enexus Nuclear Palisades, LLC, a
Delaware limited liability company (“Mortgagor”), f/k/a Entergy Nuclear Palisades, LLC, for limited
purposes related to the financing transaction described in (i) the Credit Agreement evidencing the
Loan (“Credit Agreement”) dated as of December 10, 2008, among Borrower, the Lenders and Issuers
identified therein (collectively “Lenders”, and individually a “Lender”), Citigroup Global Markets,
Inc. and Goldman Sachs Credit Partners, L.P., as joint book runners
and joint lead arrangers (in such capacities, collectively the “Arrangers”), [                    ],
as Syndication Agent (in such capacity, “Syndication Agent”), [                    ], as
Administrative Agent (in such capacity and together with its permitted
successors, “Administrative Agent”), and [                    ] as Collateral Agent (in such capacity
and together with its permitted successors, “Collateral Agent”), and (ii) the Mortgage, dated as of
December 10, 2008 (“Mortgage”), made by the Mortgagor in favor of the Collateral Agent, as
Mortgagee, and encumbering certain premises in Covert Township, Van Buren County (the “County”),
Michigan (the “State”). Although we have represented Entergy Nuclear Palisades, LLC in connection
with certain discrete matters, we are not generally familiar with the business records,
transactions or activities of Mortgagor, and our knowledge in these matters is limited to
information that was specifically brought to our attention by Entergy Nuclear Palisades LLC in
connection with such discrete matters.



     In such capacity, we have reviewed the following documents as executed in connection with the
aforementioned transaction, each of which has been provided to us by counsel to the Collateral
Agent:



California | Illinois | Michigan | Texas | Washington D.C.





 









 













[Citigroup Global Markets, Inc., et al.]

                                        , 2008

Page 2





(a) The Mortgage; and




(b) A UCC Financing Statement (the “Financing Statement”) naming Mortgagor, as
debtor, and Collateral Agent, as secured party, covering “fixtures” attached to the
land described in the Mortgage.



     Terms used in this letter but not defined in this letter shall have the meaning assigned in
the Mortgage. The Mortgage and the Financing Statement are hereinafter collectively referred to as
the “Documents”. For purposes of this opinion, Syndication Agent, Administrative Agent, and
Collateral Agent are sometimes collectively referred to as “Agents” and sometimes individually
referred to as an “Agent”.



     In rendering our opinion we have also examined and relied upon a copy (certified by the
Michigan Department of Labor & Economic Growth) of the Application for Certificate of Authority to
Transact Business in Michigan for Entergy Nuclear Palisades, LLC filed with the Michigan
Department of Labor & Economic Growth on February 7, 2007, together with a Certificate Amending
Application for Certificate of Authority to Transact Business in Michigan for Mortgagor filed with
the Michigan Department of Labor & Economic Growth on
                    , 2008 (collectively, the “Michigan Certificate of Authority”), and have
assumed that the Mortgage and the Financing Statement will each be duly recorded in and indexed by
the Office of the Register of Deeds of the County and that all applicable recording fees will be
paid at the time of recording.



     In such examination, we have assumed the genuineness of all signatures, the legal capacity of
all natural persons, the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified, conformed or copies and the
authenticity of the originals of such latter documents. As to all questions of fact material to
these opinions that have not been independently established, we have relied upon certificates or
comparable documents of officers and representatives of Mortgagor and Borrower and upon the
representations and warranties of Mortgagor contained in the Documents and the representations and
warranties of Borrower contained in the Credit Agreement. As used herein, “to our knowledge” and
“of which we are aware”, or similar words, mean the conscious awareness of facts or other
information by Brian J. Page or Catherine A. Brainerd in their capacity as attorneys of Dykema
Gossett PLLC acquired in the course of their involvement in the transactions contemplated by the
Documents.



     We have not reviewed any documents, instruments, terms or provisions incorporated into or
referred to in any of the Documents, and have assumed that such other documents, instruments,
terms and provisions are legal, valid and binding and enforceable in accordance with their terms
and do not affect any of the opinions given in this letter. We express no opinion with respect to
the enforceability or binding effect of any of the Documents to the extent the Documents are
rendered wholly or partially unenforceable or non-binding on account of any



California | Illinois | Michigan | Texas | Washington D.C.





 









 













[Citigroup Global Markets, Inc., et al.]

                                        , 2008

Page 3



document, instrument, term or provisions incorporated into or referred to in any of the Documents.




     We understand that with respect to title matters, you will be relying solely on various title
commitments and/or a title insurance policy. We have not made any investigation of and do not
express an opinion as to, any matters of title to any of the Mortgaged Property (whether real,
personal or mixed). We also do not express any opinion as to the adequacy of the description of the
Mortgaged Property contained in the Mortgage or the collateral description or real property legal
description in the Financing Statement.



     We express no opinion with respect to the effect of any law other than the law of the State.



     In rendering the opinions expressed herein we have also assumed and relied upon with your
permission, without independent investigation, the following:



     (i) No fraud, duress or undue influence exists with respect to the transactions or matters
which are the subject of the opinions herein;



     (ii) Mortgagor has all right, title and interest in and to all real property, real property
interests, real property rights, fixtures, goods which are fixtures, personal property, membership
interests, and all other collateral which is purported to be mortgaged, assigned, encumbered or
pledged by the Mortgage, and the description of the Real Property set forth in the Mortgage is
correct, complete and adequate;



     (iii) Lenders have made the Loan;



     (iv) All exhibits and schedules have been or will be properly attached to the Mortgage prior
to recording;



     (v) There are no documents, agreements, understandings or negotiations between the parties to
the Documents which would expand, modify or otherwise affect the respective rights and obligations
of the parties set forth in the Documents, and the Documents correctly and completely set forth the
agreements and intent of all parties thereto;



     (vi) The Documents are valid, binding and enforceable against each of the parties thereto
other than Mortgagor;



     (vii) All parties to the Documents have complied and will comply with any requirement of good
faith, fair dealing and commercial reasonableness;



California | Illinois | Michigan | Texas | Washington D.C.





 









 













[Citigroup Global Markets, Inc., et al.]

                                        , 2008

Page 4




     (viii) The parties to the Document will receive adequate consideration and reasonably
equivalent value in connection with the execution and delivery of the Documents;



     (ix) Each party to the Documents has been duly formed, is validly existing, and is in good
standing under the laws of its state of organization or incorporation;



     (x) Each party to the Documents has the power and authority to enter into and perform its
obligations under the Documents and has duly authorized, executed and delivered the Documents, and
all signatures on the Documents are genuine;



     (xi) To the extent the obligations of the Mortgagor, and the exercise of any remedies
thereunder or in connection therewith, may be dependent thereon, each of the parties to the
Mortgage other than Mortgagor is in compliance with all laws, rules and regulations applicable to
it, including the laws of any domicile in which it is or will be doing business, as well as with
all applicable orders, judgments and decrees of courts, arbitrators and governmental authorities
having jurisdiction over it, and each of them has taken and will take all steps necessary to comply
with all laws, rules and regulations applicable to it, as well as with all applicable orders,
judgments and decrees of courts, arbitrators and governmental authorities having jurisdiction over
it, with respect to its participation in the transactions contemplated by the Documents;



     (xii) All approvals, permits, licenses and authorizations necessary for Mortgagor to conduct
its business and operate its properties in the State have been issued and are in full force and
effect;



     (xiii) Mortgagor is not a “transmitting utility” as defined in the Uniform Commercial Code;



     (xiv) The consummation of the transactions contemplated by the Documents will not cause or
result in a breach of any instrument, agreement or document to which Mortgagor is a party or by
which it is, or any of its assets are, bound;



     (xv) All applicable rates of interest (computed by including all amounts under the Credit
Agreement or any other document or instrument related to the Loan deemed to be interest under
Michigan law whether or not denominated as interest) will not exceed the rate of twenty-five
percent (25%) simple interest per annum during the entire term of the Loan, and all rates of
interest on delinquent or overdue installments of interest will not exceed the rate of ten percent
(10%) simple interest per annum during the entire term of the Loan;



     (xvi) None of the Mortgaged Property is consumer goods, growing crops or crops to be grown,
equipment used in farming operations, farm products, accounts or general tangibles arising from or
relating to the sale of farm products by a farmer, or consumer goods, timber to be



California | Illinois | Michigan | Texas | Washington D.C.





 









 













[Citigroup Global Markets, Inc., et al.]

                                        , 2008

Page 5



cut, unextracted minerals or the like (including oil and gas), or accounts resulting from the sale
thereof (including oil and gas);




     (xvii) Borrower and each Agent and Lender maintains an office and engages in significant
business operations in the State of New York, the Credit Agreement, Guarantee and Collateral
Agreement and Documents were negotiated in the State of New York, the transactions contemplated by
the Credit Agreement, Guarantee and Collateral Agreement and Documents were closed in New York, and
payments on the indebtedness secured by the Mortgage will be received in New York;



     (xviii) New York state law is not violative of a fundamental policy of the State or of any
other state that (i) has a materially greater interest than the State of New York in the
determination of a particular issue and (ii) would be the state of applicable law in the absence of
an effective choice of law by the parties;



     (xix) The Credit Agreement has been duly authorized, executed and delivered by all parties
thereto and is the legal, valid and binding obligation of each such party, enforceable against them
in accordance with its terms;



     (xx) The Guarantee and Collateral Agreement has been duly authorized, executed and delivered
by Mortgagor and is the legal, valid and binding obligation of Mortgagor, enforceable against
Mortgagor in accordance with its terms;



     (xxi) Each Agent is either (i) organized as a national bank under the U.S. National Bank Act,
or (ii) organized as a banking corporation under the statutes of a U.S. state other than Michigan;
and



     (xxii) Each Agent that is organized as a national bank under the U.S. National Bank Act or
organized as a banking corporation under the statutes of a U.S. state other than Michigan is
authorized, under the law of its jurisdiction of organization, to exercise trust powers.



     We understand that all assumptions in this letter, as well as the qualifications and
limitations set forth below, are acceptable to you.



     Based on the foregoing, and subject to the qualifications and exceptions herein contained, we
are of the opinion that:



     1. Based solely upon the Michigan Certificate of Authority, Mortgagor is
qualified to transact business in the State as a foreign limited liability company.



California | Illinois | Michigan | Texas | Washington D.C.





 









 













[Citigroup Global Markets, Inc., et al.]

                                        , 2008

Page 6




     2. The laws of the State do not prohibit Mortgagor from owning the Real Property and
Improvements or mortgaging the Real Property and Improvements to Collateral Agent pursuant to the
Mortgage.



     3. To the extent governed by the laws of the State, the Mortgage is the valid and binding
obligation of Mortgagor, enforceable against Mortgagor in accordance with its terms.



     4. A court sitting in the State and applying the laws of the State, if properly presented with
the facts of the transactions contemplated by the Credit Agreement, the Guarantee and Collateral
Agreement and the Documents, would honor the choice of law provisions contained in the Mortgage.



     5. The Loan, as and if made pursuant to the Credit Agreement, will not violate any applicable
usury laws of the State, or other applicable laws of the State regulating the interest rate and the
interest, fees and other charges that may be charged and/or collected with respect to the Loan,
assuming for the purposes of this opinion that the internal laws of the State were applied.



     6. The Michigan Business Corporations Act (the “MBCA”), which requires corporations to
register to transact business in the State, specifically provides that it “does not apply to
insurance, surety, savings and loan associations . . . and banking corporations.” MCL 450.1123(2).
Accordingly, if an Agent is an insurance, surety, savings and loan association or banking
corporation, that Agent will not be required to register to do business under the MBCA.



     In addition, the MBCA provides that certain activities by a corporation organized under the
laws of a jurisdiction other than the State (a “foreign corporation”) do not, by themselves,
constitute the “transaction of business” within the State. The MBCA specifically provides:




     (1) Without excluding other activities which may not constitute transacting
business in this state, a foreign corporation is not considered to be transacting
business in this state, for purposes of this act, solely because it is carrying on
in this state any 1 or more of the following activities:



* * *





     (g) Creating or acquiring indebtedness, mortgages, and
security interests in real or personal property.




     (h) Securing or collecting debts or enforcing mortgages and
security interests in property securing the debts.




     (i) Owning, without more, real or personal property.



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[Citigroup Global Markets, Inc., et al.]

                                        , 2008

Page 7





     (j) Conducting an isolated transaction that is completed within
30 days and that is not one in the course of repeated transactions
of like nature.




     (k) Transacting business in interstate commerce.



     MCL 450.2012(1). Accordingly, even if an Agent does not qualify under the exception set forth
above for insurance, surety, savings and loan associations and banking corporations, an Agent may
be able to rely upon one of these exceptions to determine that its activities under the Credit
Agreement and the Documents do not constitute the transaction of business in the State.



     If it is determined that an Agent is required to qualify to transact business in the State and
that the Agent did not comply with such requirements, MCL 450.2051 provides that the validity of
the Documents would not be affected by such non-compliance and that the non-qualified Agent would
not be deemed to have waived any rights or remedies as a result of such non-compliance or (subject
to the effect of any applicable statute of limitations) pending such qualification. However, the
non-qualified Agent would be precluded from enforcing its rights in the courts of the State until
such time as the Agent complies with the requirement that it be qualified to transact business in
the State.



     7. Except for potential exposure to the Michigan Business Tax as discussed
below, neither the execution nor delivery of the Documents, nor the performance of the Mortgagor
thereunder, will subject the Agents or Lenders to taxation of income by the State.



     On July 12, 2007 Michigan enacted the Michigan Business Tax Act (the “MBT Act”), which
established a new business tax regime in Michigan, in the form of the Michigan Business Tax (the
“MBT”). The MBT was effective January 1, 2008, and replaced Michigan’s previously effective Single
Business Tax (the “SBT”).



     For taxpayers other than insurance companies, the MBT incorporates a new “substantial nexus”
standard for determining when a taxpayer is obligated to file an MBT tax return and pay MBT in
Michigan. A party has “substantial nexus” and is subject to the MBT if it either (1) has a
physical presence in Michigan for more than one day, or (2) has “Michigan receipts” of at least
$350,000 in a tax year1 and “actively solicits sales” in Michigan.



     The first nexus test requires a physical presence in Michigan and is similar to the nexus
standard applicable under Michigan’s previously effective SBT. Accordingly, based on the prior





 




			
	1	 	We note that gross receipts of an “agent” are excluded for purposes of the MBT,
and instead are allocated to the agent’s principals. MCL §208.1111(1)(a). This may provide a
separate basis on which an Agent could argue that it is not subject to the MBT.





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[Citigroup Global Markets, Inc., et al.]

                                        , 2008

Page 8



administrative position of the Michigan Department of Treasury (“Department”) with respect to
lenders whose sole activity is limited to making loans secured by property located in Michigan,
such activity will not without more create an MBT filing obligation under the physical presence
test.




     The second nexus test under the MBT is new and can create an MBT modified gross receipts tax
filing requirement for non-Michigan taxpayers. For purposes of this separate and independent nexus
test, the term “Michigan receipts” includes interest earned on mortgages secured by property
located in Michigan (i.e., mortgage income receipts are “sourced” to the location of the underlying
mortgaged property). The term “actively solicits sales” is not defined in the MBT Act; instead, the
MBT Act specifically authorized the Department to issue written guidance to define that term. The
Department issued the required written guidance to define the term “actively solicits sales” on
December 28, 2007 through the issuance of Revenue Administrative Bulletin (“RAB”) 2007-6. RAB
2007-6 states as follows:




     Purposeful solicitation of persons within this state [Michigan]. Solicitation
means (1) speech or conduct that explicitly or implicitly invites an order; and (2)
activities that neither explicitly nor implicitly invite an order, but are entirely
ancillary to requests for an order. Solicitation is purposeful when it is directed
at or intended to reach persons within Michigan or the Michigan market.




     Active solicitation includes, but is not limited to, solicitation through (1)
the use of mail, telephone, and e-mail; (2) advertising, including print, radio,
internet, television, and other media; and (3) maintenance of an internet site over
or through which sales transactions occur with persons within Michigan.




     In evaluating whether acts of solicitation are sufficient to establish “active
solicitation,” the Department looks to the quality, nature, and magnitude of the
activity on a facts and circumstances basis.



     Under the MBT, therefore, a “physical presence” (e.g., the presence of an office or agents in
the State of Michigan) is not the only determinant of nexus. The Department’s definition of the
term “actively solicits sales” for purposes of the MBT creates a separate “economic presence” test.
Economic presence is some presence that is less than a physical presence. As additional
administrative guidance with respect to nexus for non-Michigan lenders, the Department issued
Frequently Asked Questions No. F1 (“FAQ” F1), in which the Department provided:




     F1. Do nonresident financial institutions located outside Michigan whose only
activity in Michigan consists of an ownership interest in loans



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[Citigroup Global Markets, Inc., et al.]

                                        , 2008

Page 9





secured in whole or in part by real property located in Michigan have nexus under the
MBT?




     A nonresident financial institution located outside Michigan whose only
activity in Michigan consists of an ownership interest in loans secured in whole or
in part by mortgages on real property located in Michigan will not have physical
presence nexus under the MBT. However, nexus is determined by evaluating all facts
and circumstances. To the extent that the nonresident financial institution, or its
employee, agent, or independent contractor acting in a representative capacity, has
physical presence in Michigan for more than one day, nexus is established. In
addition, nexus also exists if the nonresident financial institution actively
solicits sales in Michigan as described under RAB 2007-6 and has Michigan gross
receipts of $350,000 or more.



     Solely making loans secured by property located in Michigan will not necessarily create nexus
in Michigan for purposes of the MBT. However, an MBT filing requirement may arise if other
activities of a lender or its agents in Michigan indicate that the lender (or any of its agents on
behalf of the lender) has engaged in purposeful solicitation of business in Michigan. Whether
purposeful solicitation has occurred is determined based on a facts and circumstances test.



     Given these considerations, and assuming that an Agent or Lender is not an insurance company,
then neither an Agent nor a Lender will be subject to income taxation by the State solely by reason
of making the extensions of credit contemplated by the Documents. However, it is possible that the
other activities of the Agent or Lender in Michigan, when coupled with the making of loans secured
by property located in Michigan, could create nexus, a filing requirement and a tax liability under
the MBT.



     Insurance companies are subject to a separate premiums tax under the MBT. Separate rules
apply to insurance companies and these separate insurance company rules are not addressed by or
covered in this opinion.



     8. The Documents will collectively, upon due recording with and indexing by the Office of the
Register of Deeds of the County, perfect Collateral Agent’s mortgage lien in those portions of the
Mortgaged Property that constitute real property.



     9. Based solely upon our review of the Michigan Certificate of Authority, the Mortgagor is a
“registered organization” under the Uniform Commercial Code as in effect in the State. Because
Mortgagor is organized under the laws of the State of Delaware, under MCL 450.301 the law of
Delaware governs perfection of a non-possessory security interest in collateral, other than
collateral that is timber to be cut, as-extracted collateral, goods covered by a certificate of
title, deposit accounts, letter-of-credit rights or, in certain cases, investment property, and
other than fixtures where a secured party seeks to perfect by filing a fixture filing. Under MCL
450.9301, the local law of the jurisdiction in which the relevant fixtures are located



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[Citigroup Global Markets, Inc., et al.]

                                        , 2008

Page 10



governs perfection by means of a fixture filing. Accordingly, the laws of the State will govern
perfection of a security interest in fixtures located in the State by means of a fixture filing.




     10. The priority of the lien of the Mortgage, as to those portions of the Mortgaged Property
that are real property, in respect of Loan advances secured by the Mortgage and made by the Lenders
under the Credit Agreement on, before or after the date the Mortgage is duly recorded with and
indexed by the Office of the Register of Deed of the County (the date of such recording and
indexing is hereinafter referred to as the “Filing Date”), shall be determined by the Filing Date;
provided that the priority thereof may be defeated (i) by certain statutory liens (including
without limitation construction liens and certain tax liens), certain possessory interests, and
knowledge of the mortgagee, and (ii) to the extent that another mortgage, lien or other interest in
the Mortgaged Property that was recorded with respect to all or any part of the Mortgaged Property
before April 1, 1991 would have had priority over the liens created by the Mortgage in the absence
of the Future Advance Mortgages Act, MCL 565.901 et seq.



     11. No mortgage tax, intangibles tax, documentary stamp tax or similar taxes are required to
be paid to the State or to any jurisdiction of the State as a condition to the legality or
enforceability of the Mortgage; provided, however, that (i) statutory recording fees will be due
and owing in connection with the recording of the Mortgage and the Financing Statement, and (ii)
statutory transfer taxes will be due and owing with respect to any transfer or conveyance, by
foreclosure or otherwise, of the Mortgaged Property or an interest therein.



     The opinions expressed herein are subject to the following further qualifications and
limitations:



     A. Our opinions with respect to the validity, enforceability and binding effect of the
Mortgage are subject to (i) the effect of bankruptcy, insolvency, fraudulent conveyance,
reorganization, arrangement, moratorium and other similar laws relating to or affecting the
rights of creditors generally; and (ii) limitations imposed by general principles of equity and
public policy upon the specific enforceability of any of the remedies, covenants or other provisions
of the Documents, and upon the availability of injunctive relief or other equitable remedies, and
the application of principles of equity (regardless of whether enforcement is considered in

proceedings in law or in equity).



     B. Certain rights and/or remedies contained in the Documents may be rendered
ineffective, or limited, by applicable laws or judicial decisions of the State, including
without limitation the following:




     (i) any provision in the Documents granting or otherwise dealing with the
assignment of leases and rents and the realization thereon, to the extent such
provision does not comply with the State’s assignment of rents statute (MCL



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[Citigroup Global Markets, Inc., et al.]

                                        , 2008

Page 11





554.231 et seq.), or to the extent that such provision purports to grant
greater rights than are granted to secured parties generally under such statute;




     (ii) any provision in the Documents pursuant to which the Agent or the Lender
purportedly has the right to take possession (directly, through a receiver or
otherwise) of the Mortgaged Property immediately upon the occurrence of an event of
default or before the expiration of the applicable redemption period or to take
possession or dispose of the Mortgaged Property in a manner not provided under
applicable statutes;




     (iii) any provision in the Documents that purports to provide for the
appointment of a receiver at the election of the mortgagee or in other specified
circumstances may not be enforceable because, under the law of the State, the right
to the appointment of a receiver is discretionary with the court;




     (iv) any provision in the Documents that allows an Agent or Lender to
accelerate the secured indebtedness in the event of a subsequent encumbrance of all
or a part of the Mortgaged Property;




     (v) any provision in the Documents pursuant to which jurisdiction is purported
to be vested in, or Mortgagor or any other party thereto is purported to consent to
the exercise of jurisdiction in, any court where the exercise of such jurisdiction
is within the discretion of such court or the court is not a court of general
jurisdiction;




     (vi) any provision in the Documents pursuant to which either Mortgagor or any
other party thereto purports to waive the right to trial by jury or to waive service
of process or the right to an appraisal of the Mortgaged Property or to request the
court to establish an upset price in connection with a judicial foreclosure of the
Mortgage;




     (vii) any provision in the Documents pursuant to which Mortgagor purports to
waive rights in violation of the Uniform Commercial Code, the constitution of the
State or the Constitution of the United States;




     (viii) any provision in the Documents that purports to permit an Agent or
Lender to exercise all remedies concurrently or in separate actions, to the extent
that such exercise may thereby violate any requirements of the law of the State that
preclude the separate and concurrent institution or maintenance of proceedings to
foreclose a mortgage and to recover the debt secured thereby or that may require the
consolidation of all cases to recover the debt;



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[Citigroup Global Markets, Inc., et al.]

                                        , 2008

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     (ix) any provision in the Documents that purports to grant the mortgagee the
right to seek a deficiency judgment in connection with a power of sale foreclosure
or foreclosure by advertisement, because MCL 600.3280 limits the right of a
mortgagee to seek a deficiency judgment in connection with a power of sale
foreclosure if the mortgagee purchases the property at the foreclosure sale and the
mortgagor establishes that the property was fairly worth the amount of the debt
secured or that the amount bid was substantially less than the mortgaged property’s
true value;




     (x) any provision in the Documents pursuant to which the Mortgagor purports to
waive any right of redemption that it may have at law or in equity, or any
provision in the Documents that otherwise constitutes a “clog” on the rights of
redemption of the Mortgagor;




     (xi) any provision in the Documents that purports to vest in an Agent or
Lender the right to consolidate in a single foreclosure action all foreclosure
proceedings against all collateral securing the indebtedness secured by the
Documents, regardless of where such collateral is located;




     (xii) any provision in the Documents that purports to permit the continuation
of the lien of the Mortgage as to unmatured indebtedness notwithstanding the sale
of the Mortgaged Property in the event of foreclosure of the Mortgage as to matured
but unpaid indebtedness;




     (xiii) any provision in the Documents pursuant to which the Mortgagor purports
to appoint an Agent or Lender as attorney-in-fact for the Mortgagor;




     (xiv) any provision in the Documents that purports to permit an Agent or
Lender to enforce its remedies without producing the original evidence of
indebtedness at any trial or proceeding relative thereto.



     Our exception in clause (iv) above as to the enforceability of any provision of the Documents
that purports to allow an Agent or Lender to accelerate the secured indebtedness in the event of a
subsequent encumbrance of the Mortgaged Property is based upon the ambiguity in subsection
341(c)(2)(d)(1) of the Garn-St. Germain Depository Institutions Act of 1982 (P.L. 97-320) as to
the enforceability of “due-on-encumbrance” clauses and upon the fact that no State case has upheld
the validity of a due-on-encumbrance clause. While we do not believe that there was Congressional
intent to invalidate such clauses, particularly in commercial transactions, a literal reading of
the statute could support a contrary conclusion. As to the absence of State case law with respect
to the validity of due-on-encumbrance clauses, we note that the Due-on-Sale Clauses Act, MCL
445.1621-.1629, does not specifically address due-on-encumbrance clauses or the enforcement of
due-on-encumbrance clauses. Therefore, in the absence of legislative history



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[Citigroup Global Markets, Inc., et al.]

                                        , 2008

Page 13



and judicial decisions on this point, we cannot express an opinion as to the enforceability of any
provision in the Documents that purports to prohibit Mortgagor from further encumbering the
Mortgaged Property.




     With respect to the matters set forth in this Subsection B, we nevertheless are of the opinion
that, to the extent that the law of the State applies and to the extent that the provisions of the
Documents may not be enforceable strictly in accordance with their terms as set forth in this
Subsection B:




     (y) the unenforceability of those provisions will not, solely in and of
itself, render the Documents invalid as a whole; and




     (z) there are adequate remedies to permit the practical realization upon the
security intended to be provided by the Mortgage, except for the economic
consequences of any procedural delay that may result from such laws and decisions.



     C. The exercise by an Agent or Lender of remedies under the Mortgage, including
foreclosure, may (i) require that all assignments of the Mortgage have first been duly
recorded in and indexed by the Office of the Register of Deeds of the County, (ii) require that no other
proceeding shall have been instituted to recover the debt secured by the Mortgage, or (iii)
delay other proceedings to recover such debt until foreclosure proceedings are completed.



     D. The enforcement by an Agent or Lender of the rights and remedies available to it
or them under the Documents must not under the circumstances violate any implied covenant of
good faith and fair dealing.



     E. Provisions in the Documents imposing penalties, forfeitures, prepayment penalties
or premiums, late payment charges or an increase in the interest rate upon delinquency in
payment or the occurrence of a default or event of default may be unenforceable under the law
of the State.



     F. We express no opinion as to the enforceability of the indemnification provisions
of the Documents to the extent such provisions may require indemnification as to any
litigation by an Agent or Lender against the Mortgagor determined adversely to the Agent or Lender or as
to any loss, cost or expense arising out of any violation by an Agent or Lender of statutory
duties, general principles of equity or public policy or as against any indemnitee’s own gross
negligence or willful misconduct. We express no opinion with respect to the legality, validity
or enforceability of any provision in the Documents that purports to limit the liability of an
Agent or Lender with respect to environmental matters notwithstanding that the Agent or Lender has
participated in the management of the Mortgaged Property, as determined pursuant to applicable
laws.



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[Citigroup Global Markets, Inc., et al.]

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     G. The rights and remedies of an Agent or Lender under the Documents in the event of default
by the Mortgagor are subject to the limitations set forth in the Uniform Commercial Code as in
effect in the State (the “Code”). There exist certain limitations in the Code with respect to the
perfection of the security interests created by the Documents in proceeds. Furthermore, the
opinions expressed herein are subject to Section 552 of Title 11 of the United States Code (the
“Bankruptcy Code”) with respect to any fixtures (as defined under State law) acquired by the
Mortgagor subsequent to the commencement of a case against or by the Mortgagor under the Bankruptcy
Code.



     H. Any assignment, pursuant to the Documents, of any agreement, license, permit or
governmental approval may be subject to restrictions upon assignment or transfer that must be
satisfied before an Agent, Lender or any third party will be treated as an assignee thereof.



     I. We express no opinion with respect to the validity and enforceability of the
Mortgage as to any real property located in the State and acquired by the Mortgagor after the date
of the Mortgage or with respect to whether the recording of the Mortgage is the only recording
necessary to give constructive notice to third persons of the lien of the Mortgage purported to be
created in any such after-acquired real property. Should the Mortgagor acquire any such additional
real property after the date of the Mortgage and should an Agent or Lender intend that the Mortgage
lien attach to such after-acquired real property, we advise Agents and Lenders to (i) cause the
Mortgagor to execute and deliver a new mortgage on such after-acquired real property or an
amendment to the Mortgage specifically describing (by legal description, tax parcel number and
street address) such after-acquired real property and (ii) record such mortgage or amendment to the
Mortgage with the Office of the Register of Deeds of the County (assuming that such after acquired
property is located in the County).



     J. Except to the extent expressly stated in our opinions above, we express no opinion
with respect to the creation, perfection or priority of any security interests purported to be
created pursuant to the Documents.



     K. Provisions in the Documents specifying that terms and/or conditions set forth in them may
be waived, altered, amended, modified, changes, discharged or terminated only in writing may not be
enforceable under the law of the State to the extent that an oral agreement has been entered into
modifying provisions of the Documents, or to the extent that the Documents are deemed to be waived
by trade practice or the course of conduct of the parties.



     L. We express no opinion with respect to any provision of the Mortgage that purports to set
forth the rights and obligations of an Agent or any trustee in relation to the Lenders. We further
express no opinion with respect to any provision of the Documents that purports to bind any party
other than the Mortgagor or affect any property located outside of the State.



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[Citigroup Global Markets, Inc., et al.]

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     M. Except as otherwise specifically set forth herein, we express no opinion with respect to
the interpretation of, or compliance with, any local, state or federal zoning, health, safety,
building, land use or subdivision, tax, securities, “blue sky”, banking, environmental, ERISA,
truth-in-lending or other credit laws, ordinances, rules or regulations.



     N. Michigan law prohibits any register of deeds from accepting for recording an instrument
that is executed after April 1, 1997 and purports to evidence more than one “recordable event.”
While our experience suggests that a register of deeds in Michigan would typically accept for
recording an instrument that includes multiple recordable events (e.g., a mortgage that includes an
assignment of rents and/or a fixture filing) if the caption and title of the instrument disclose
only one recordable event (e.g., “Mortgage”), we note that Michigan law does not define what
constitutes a “recordable event,” and a register of deeds could interpret that the Mortgage,
because it also includes an assignment of rents and a fixture filing, evidences more than one
“recordable event” and therefore is not acceptable for recording.



     This opinion is given as of the date hereof only, is limited to the matters expressly and
specifically set forth herein, and no opinions may be implied or inferred beyond those expressly
and specifically stated herein. In rendering this opinion we assume no obligation to revise or
supplement this opinion in any circumstance.



     The foregoing opinions may be relied upon by Agents and Lenders, their successors and/or
assigns, and any rating agency involved in the securitization of the Loan, and their respective
legal counsel, but may not be relied upon by any other party.



Cordially,




UNSIGNED AND UNDELIVERED




DRAFT FOR DISCUSSION PURPOSES ONLY




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EXHIBIT N




ARKANSAS LOCAL COUNSEL OPINION (CORPORATE)




N-1









 





[INSERT LETTERHEAD OF FRIDAY, ELDREDGE & CLARK, LLP]




[DATE]





			
	[Addressees:	 	Administrative Agent

Collateral Agent 

Each Lender]





     Re:



Ladies and Gentlemen:




     We have acted as special Arkansas counsel to Enexus Nuclear Finance Holding, Inc. (the
“Company”) in connection with (A) the Guarantee and Collateral Agreement, dated as of [•]
(the “Collateral Agreement”), by and among Enexus Energy Corporation, a Delaware
corporation (the “Borrower”), the Company, each of the other entities party thereto as
guarantors (together with the Company, the “Subsidiary Guarantors”), The Bank of Nova
Scotia, as collateral agent (the “Collateral Agent”), BNP Parbias, as administrative agent
(the “Administrative Agent”), and the other secured parties from time to time party
thereto; (B) the Collateral Agency and Intercreditor Agreement, dated as of December [•], 2008 (the
“Intercreditor Agreement”), by and among the Borrower, the Subsidiary Guarantors, the
Collateral Agent, the Administrative Agent, and the other secured parties from time to time party
thereto; and (C) the Accession Agreement, dated [•], between the Company and [•] (the
“Accession Agreement”). This opinion is being delivered pursuant to Section 4.03(a)(x) of
the Credit Agreement, dated as of December [•], 2008 (the “Credit Agreement”), between the
Borrower, the financial institutions party thereto from time to time as a lender or issuer,
Citigroup Global Markets Inc. and Goldman Sachs Credit Partners L.P., as joint book runners and
joint lead arrangers, the Administrative Agent, the Collateral Agent and [•] as syndication agent.



     In connection with this opinion letter, we have examined, or have caused to be examined, the
[Amended and Restated] Articles of Incorporation [, as amended,] and By-Laws of the Company, each as
in effect on this date; the corporate proceedings of the Company with respect to the matters which
are the subject of this opinion letter; a certificate as of a recent date of the Secretary of State
of Arkansas as to the legal existence and good standing of the Company in the State of Arkansas;
and executed counterparts of the [Accession Agreement and] the Collateral Agreement [(each a
“Transaction Document” and collectively, the “Transaction Documents)]. N.B.: We are
uncertain which documents we will review. If we only review the Collateral Agreement, we will use
that defined term. If we review additional documents, we will identify them and use the defined
term “Transactional Documents.” We have also examined such other agreements, papers, documents
and records, have made such examination of laws and have satisfied ourselves as to such other
matters as we have deemed relevant and necessary in order to enable us to express the opinions set
forth below.



1









 





     In such examination we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as certified copies and the authenticity of the originals of such latter
documents. As to any facts material to our opinion, we have relied upon factual representations
made in the [Credit] Agreement and in the documents related thereto by various parties thereto,
and, in addition, we have, when relevant facts were not independently established by us, relied, to
the extent we deemed such reliance proper, upon a certificate or certificates, telegrams or other
written or oral advice of an official, officer, authorized representative or general partner of the
particular Person concerned.



     Whenever our opinions herein with respect to the existence or absence of facts are stated to
be to our knowledge or awareness, it is intended to signify that no information has come to the
attention of any attorney in this firm giving substantive attention to legal matters affecting the
Company that would give such attorney actual knowledge that would contradict such opinions.
However, except to the extent necessary in order to give the opinions hereinafter expressed, we
have not undertaken any independent investigation to determine the existence or absence of such
facts, and no inference as to the knowledge of the existence or absence of such facts should be
assumed.



     Based on the foregoing, and subject to the further exceptions and qualifications set forth
herein, we are of the opinion that:



     1. The Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Arkansas.



     2. The Company has all requisite corporate power and authority to own, lease, and operate its
properties and its assets and to carry on its business as is now being conducted, and no AR utility
regulatory approvals are necessary



     3. The Company has all requisite corporate power and authority to execute and deliver the
[Transaction Documents] and to perform its obligations thereunder.



     4. The execution, delivery and performance of the [Transaction Documents] by the Company
have been duly authorized by all necessary corporate action on the part of the Company.



     5. The [Transaction Documents] have been duly and validly executed and delivered by the
Company.



     6. The [Transaction Documents] constitute the legal, valid, and binding obligations of the
Company, enforceable against it in accordance with their terms.



     7. The courts of the State of Arkansas, or a United States federal court located in Arkansas
applying Arkansas law, will give effect to the choice of law provision in the [Transaction
Documents], except to the extent that any term of the [Transaction Documents], or any provision of
the law of New York applicable thereto,



2









 




violates the public policy of the State of Arkansas, and except as the same may be limited by
general principles of equity.




     8. A judgment of a competent [New York] court against the Company for the payment of money in
connection with an action arising out of the [Transaction Documents] and instituted by service of
process on an authorized process agent of the Company in Arkansas, as provided in the [Transaction
Documents], would be recognized and enforced in the courts of the State of Arkansas, or a United
States federal court located in Arkansas.



     9. The execution and delivery by the Company of the [Transaction Documents] and the
performance by the Company of its obligations thereunder will not conflict with, constitute a
default under or violate: (i) any of the terms, conditions or provisions of the [Amended and
Restated] Articles of Incorporation[, as amended,] and By-Laws of the Company, each as in effect on
this date; (ii) any of the terms, conditions or provisions of any material document, agreement or
other instrument to which the Company is a party or by which it is bound of which we are aware;
(iii) Arkansas law or regulation; or (iv) any judgment, writ, injunction, decree, order or ruling
of any Arkansas court or governmental authority binding on the Company.



     10. No consent, approval, waiver, license or authorization or other action by or filing with
any Arkansas governmental authority is required in connection with the execution and delivery by
the Company of the [Transaction Documents], the consummation by the Company of the transactions
contemplated thereby or the performance by the Company of its obligations thereunder.



     11. Assuming the due filing with Arkansas Secretary of State of the financing statements on
Form UCC-1 attached hereto and reviewed by us (the “Financing Statements”), the security interest
in the GCA Collateral is perfected, to the extent a security interest in the GCA Collateral may be
perfected by the filing of a financing statement under the Uniform Commercial Code in effect in the
State of Arkansas.



     [12. The execution and delivery by the Company of the [Account Control Agreement] creates
a valid security interest in each Account (as defined in the Account Control Agreement) and all
Security Entitlements with respect to the Financial Assets credited to the Account.] N.B.: To be
included at Funds Availability Date if applicable.



     [13. Upon the execution and delivery of the [Account Control Agreement] by the Company,
the Collateral Agent and the Securities Intermediary maintaining the Account, the security interest
granted to the Collateral Agent in the Account and such Securities Entitlements will be perfected.
N.B.: To be included at Funds Availability Date if applicable.]



     14. The Company is not an “investment company” as defined in the Investment Company Act.



3









 





     In giving the opinions set forth above, we have assumed that each of the [Transaction
Documents] has been duly authorized, executed and delivered by each of the parties thereto other
than the Company, that each of such other parties had the power and the authority to execute and
deliver each of such documents, that each of such documents constitutes a legal, valid and binding
obligation of each of such other parties and that each of such other parties has complied, and will
comply, with all of its obligations and agreements under such documents.



     This opinion is being furnished as of the date hereof and we disclaim any obligation or duty
to update or supplement this opinion for events occurring after the date hereof. This opinion
letter is an expression of our professional opinions as to the matters addressed herein and is not
a guarantee of any result.



     The opinions stated herein are limited to the laws of the State of Arkansas. As to all
matters of New York law addressed herein, we have, with your consent and theirs, relied upon the
opinion of even date herewith addressed to you of Skadden, Arps, Slate, Meagher & Flom LLP, New
York counsel for the Company.



     This opinion is provided to you solely for your use and benefit in connection with the
transaction described herein and may not be relied upon by any person or entity without our prior
written consent; provided, however, Skadden, Arps, Slate, Meagher & Flom LLP may rely upon this
opinion as to all matters of Arkansas law in rendering their opinion required to be delivered
pursuant to the Credit Agreement; and provided, further, that any person who becomes an
Administrative Agent, Collateral Agent, Lender, Issuer or participant in accordance with the
provisions of the Credit Agreement may rely on this opinion as if it were specifically addressed
and delivered to such person on the date hereof.



Very truly yours,




Friday, Eldredge & Clark, LLP




PBB/pbb





4









 








EXHIBIT A




CERTIFICATE

OF

ENEXUS NUCLEAR FINANCE HOLDING, INC.




     This Certificate is being delivered to Friday, Eldredge & Clark LLP by Enexus Nuclear Finance
Holding, Inc. (the “Company”) in order to assist them in providing the opinions requested of them
pursuant to the Credit Agreement, dated as of December [•], 2008, between Enexus Energy
Corporation, the financial institutions party thereto from time to time as a lender or issuer,
Citigroup Global Markets Inc. and Goldman Sachs Credit Partners L.P., as joint book runners and
joint lead arrangers, BNP Paribas, as Administrative Agent, The Bank of Nova Scotia, as Collateral
Agent, and [•], as syndication agent. Terms defined in the Credit Agreement are used herein with
the same meanings as therein provided unless otherwise defined herein.



     In connection therewith, the undersigned, on behalf of the Company, does hereby represent and
certify, that:




The execution, delivery and performance by the Company of the [Transaction
Documents] and the performance by the Company of its obligations thereunder, to the
undersigned’s knowledge (having made due inquiry with respect thereto) (a) do not
and will not conflict with, constitute a default under, or violate any of the terms,
conditions or provisions of any material document, agreement or other instrument to
which the Company is a party or by which it is bound, or (b) conflict with or
violate any provision of any existing judgment, writ, injunction, decree, order, or
ruling of any court or governmental authority applicable to the Company.



5









 





     IN WITNESS WHEREOF, the undersigned, a duly authorized officer, has signed this Certificate on
behalf of the Company this [•] day of [•].



	 	 	 	 	 
	 	ENEXUS NUCLEAR FINANCE 

HOLDING, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




6









 





EXHIBIT O




FORM OF GUARANTEE AND COLLATERAL AGREEMENT




See attached.




O-1









 





Exhibit O to Credit Agreement




 





GUARANTEE AND COLLATERAL AGREEMENT




dated as of [                    ], 200_




made by




ENEXUS ENERGY CORPORATION




and the other Grantors from time to time party hereto




in favor of




THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,

as Collateral Agent




and




BNP PARIBAS,

 as
Administrative Agent




and the other Secured Obligations Representatives from time to time party hereto




 





 









 





TABLE OF CONTENTS




	 	 	 
	 	 	Page
	SECTION 1. DEFINED TERMS
	 	 2
	1.1. Definitions
	 	 2
	1.2. Other Definitional Provisions
	 	18
	SECTION 2. GUARANTEE
	 	18
	2.1. Guarantee
	 	18
	2.2. Rights of Reimbursement, Contribution and Subrogation
	 	20
	2.3. Amendments, etc. With Respect to the Guaranteed Obligations
	 	22
	2.4. Guarantee Absolute and Unconditional
	 	22
	2.5. Reinstatement
	 	23
	2.6. Payments
	 	24
	SECTION 3. GRANT OF SECURITY INTEREST; CONTINUING LIABILITY
	 	24
	SECTION 4. REPRESENTATIONS AND WARRANTIES
	 	25
	4.1. Title; No Other Liens
	 	25
	4.2. Perfected First Priority Liens
	 	25
	4.3. Name; Jurisdiction of Organization, etc
	 	26
	4.4. Inventory and Equipment
	 	26
	4.5. Condition and Maintenance of Equipment
	 	26
	4.6. Investment Property
	 	26
	4.7. Receivables
	 	28
	4.8. Contracts
	 	28
	4.9. Intellectual Property
	 	28
	4.10. Letters of Credit and Letter of Credit Rights
	 	30
	4.11. Commercial Tort Claims
	 	30
	4.12. Deposit and Securities Accounts
	 	31
	SECTION 5. COVENANTS
	 	31
	5.1. Delivery and Control of Instruments, Certificated Securities, Chattel
Paper, Negotiable Documents, Investment Property, Letter of Credit
Rights and Receivables
	 	31
	5.2. Maintenance of Insurance
	 	32
	5.3. Maintenance of Perfected Security Interest; Further Documentation
	 	33
	5.4. Changes in Location, Name, Jurisdiction of Incorporation, etc
	 	33
	5.5. Notices
	 	34






i









 





TABLE OF CONTENTS

(continued)




	 	 	 
	 	 	Page
	5.6. Investment Property
	 	34
	5.7. Intellectual Property
	 	35
	5.8. Commercial Tort Claims
	 	37
	5.9. Deposit, Securities and Commodity Accounts
	 	37
	5.10. Core Assets
	 	38
	5.11. Investment Property
	 	38
	5.12. Letters of Credit
	 	38
	5.13. INPO
	 	38
	SECTION 6. REMEDIAL PROVISIONS
	 	38
	6.1. Certain Matters Relating to Receivables
	 	38
	6.2. Communications with Obligors, Grantors Remain Liable
	 	39
	6.3. Pledged Securities
	 	40
	6.4. Intellectual Property; Grant of License
	 	41
	6.5. Intellectual Property Litigation and Protection
	 	41
	6.6. Proceeds to be Turned Over To Collateral Agent
	 	42
	6.7. Application of Proceeds
	 	42
	6.8. Code and Other Remedies
	 	42
	6.9. Securities Law Issues
	 	44
	6.10. Deficiency
	 	44
	6.11. Certain Matters Relating to Deposit, Securities and Commodity
Accounts
	 	44
	6.12. Change of Control
	 	44
	SECTION 7. THE COLLATERAL AGENT
	 	45
	7.1. Collateral Agent’s Appointment as Attorney-in-Fact, etc
	 	45
	7.2. Duty of Collateral Agent
	 	46
	7.3. Financing Statements
	 	47
	7.4. Authority of Collateral Agent
	 	47
	7.5. Access to Collateral, Books and Records; Other Information
	 	47
	7.6. Appointment of Co-Collateral Agents
	 	48
	SECTION 8. MISCELLANEOUS
	 	48
	8.1. Amendments in Writing
	 	48
	8.2. Notices
	 	48






ii









 





TABLE OF CONTENTS

(continued)




	 	 	 
	 	 	Page
	8.3. No Waiver by Course of Conduct; Cumulative Remedies
	 	48
	8.4. Enforcement Expenses; Indemnification
	 	48
	8.5. Successors and Assigns
	 	49
	8.6. Set-Off
	 	49
	8.7. Counterparts
	 	50
	8.8. Severability
	 	50
	8.9. Section Headings
	 	50
	8.10. Integration
	 	50
	8.11. APPLICABLE LAW
	 	50
	8.12. Submission to Jurisdiction; Waivers
	 	50
	8.13. Acknowledgments
	 	51
	8.14. Additional Grantors
	 	51
	8.15. Releases
	 	51
	8.16. Conflicts
	 	52
	8.17. WAIVER OF JURY TRIAL
	 	52






iii









 





Exhibits:




	 	 	 
	Exhibit A

	 	Form of Acknowledgment and Consent
	Exhibit B

	 	Form of Intellectual Property Security Agreement
	Exhibit C

	 	Form of After-Acquired Intellectual Property Security Agreement






Annexes:




	 	 	 
	Annex 1

	 	Guarantee Joinder and Assumption Agreement
	Annex 2

	 	Accession Agreement






Schedules:




	 	 	 
	Schedule 1.01(a)

	 	Core Assets
	Schedule 1.01(b)

	 	Key Contracts
	Schedule 4.2(a)

	 	Filings and Other Actions Required to Perfect Security
Interests
	Schedule 4.3

	 	Organizational Information
	Schedule 4.4

	 	Inventory and Equipment
	Schedule 4.6(a)

	 	Description of Equity Instruments
	Schedule 4.6(b)

	 	Description of Pledged Debt Instruments
	Schedule 4.6(c)

	 	Description of Pledged Accounts
	Schedule 4.8(a)

	 	Material Contracts
	Schedule 4.8(b)

	 	Contracts Prohibiting or Restricting Assignment
	Schedule 4.9(a)

	 	Intellectual Property
	Schedule 4.9(c)

	 	Licenses, etc.
	Schedule 4.9(e)

	 	Releases, etc.
	Schedule 4.10

	 	Letter of Credit Rights
	Schedule 4.11

	 	Commercial Tort Claims
	Schedule 8.2

	 	Notice Addresses of Grantors







iv











 





          GUARANTEE AND COLLATERAL AGREEMENT, dated as of [                    ], 200_, by and among (i) each of the Grantors party hereto,
(ii) The Bank of Nova Scotia
Trust Company of New York, in its capacity as collateral agent (in such capacity and together with
its successors, the “Collateral Agent”) for the benefit of the Senior Secured Parties (as
defined in the Intercreditor Agreement), (iii) BNP Paribas, as administrative agent (in such
capacity and in its capacity as “Secured Obligations Representative” for the Lenders (as defined
below) under and as defined in the Intercreditor Agreement, and together with its successors, the
“Administrative Agent”) for the banks and other financial institutions or entities (the
“Lenders”) from time to time party to the Credit Agreement (as defined below), (iv) the
Hedge Counterparty Lienholders from time to time party hereto, and (v) the other Secured
Obligations Representatives from time to time party hereto.




W I T N E S S E T H:




          WHEREAS, pursuant to the Credit Agreement dated as of December 23, 2008 (as amended,
restated, supplemented, modified, refinanced or replaced from time to time, the “Credit
Agreement”), among Enexus Energy Corporation, a Delaware corporation (the “Company”),
the Administrative Agent, the Collateral Agent, the Lenders, Citigroup Global Markets Inc. and
Goldman Sachs Credit Partners L.P., as joint book runners and joint lead arrangers (in such
capacities, collectively, the “Arrangers”), Mizuho Corporate Bank, Ltd., as syndication
agent (in such capacity, the “Syndication Agent”) and the other Senior Secured Parties
thereunder, the Lenders have severally agreed to make revolving extensions of credit to the
Company upon the terms and subject to the conditions set forth therein;




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




          WHEREAS, the Company and the other Grantors are engaged in related businesses, and each
Grantor will derive substantial direct and indirect benefit from the making of the extensions of
credit and financial accommodations by the Senior Secured Parties under the Senior Secured
Documents;




          WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective
extensions of credit and financial accommodations to the Company under the Senior Secured Documents
that the Grantors shall have executed and delivered this Agreement; and




          WHEREAS, the Company and the other Grantors have entered into the Collateral Agency and
Intercreditor Agreement, dated as of December 23, 2008 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among
the Company, the other Obligors (as defined therein) from time to time party thereto, the
Administrative Agent, the Hedge Counterparty Lienholders from time to time party thereto, the other
Secured Obligations Representatives from time to time party thereto and the Collateral Agent, which
sets forth the terms on which each Senior Secured Party has appointed the Collateral Agent as agent
for the present and future holders of the Guaranteed Obligations (as hereinafter defined) to
receive, hold, maintain, administer and distribute the Collateral (as hereinafter defined) at any
time delivered to the Collateral Agent and to enforce the Senior Collateral Documents, including
this Agreement, and all interests, rights, powers and remedies of the Collateral Agent in respect
thereof or thereunder and the proceeds thereof;




 









 








          NOW, THEREFORE, in consideration of the premises and to induce the Senior Secured Parties to
enter into the Senior Secured Documents and to induce such Senior Secured Parties to make their
respective extensions of credit and financial accommodations to the applicable Grantors thereunder,
each Grantor hereby agrees with the Collateral Agent, the Administrative Agent, each Hedge
Counterparty Lienholder and each other Secured Obligations Representative party hereto (whether by
joinder or otherwise), for the benefit of the applicable Senior Secured Parties, as follows:




SECTION 1. DEFINED TERMS




          1.1. Definitions. (a) Unless otherwise defined herein, terms defined in the
Intercreditor Agreement and used herein shall have the meanings given to them in the Intercreditor
Agreement and the following terms are used herein as defined in the UCC (and if defined in more
than one Article of the UCC shall have the meanings given in Article 9 thereof): Accounts, Account
Debtor, Certificated Security, Chattel Paper, Commercial Tort Claim, Commodity Accounts, Commodity
Contract, Commodity Intermediary, Documents, Electronic Chattel Paper, Equipment, Entitlement
Orders, Financial Asset, Fixtures, General Intangibles, Goods, Instruments, Inventory, Letter of
Credit, Letter-of-Credit Right, Money, Payment Intangibles, Securities Accounts, Securities
Intermediary, Security, Security Entitlement, Supporting Obligations, Tangible Chattel Paper and
Uncertificated Security.




          (b) The following terms shall have the following meanings: 1





     “Accession Agreement” shall mean an accession agreement substantially in the
form of Annex 2 (or such other form as reasonably agreed by the Collateral Agent),
to be executed and delivered by the Secured Obligations Representative of any applicable
Series of Secured Obligations that becomes Guaranteed Obligations hereunder after the date
hereof and acknowledged and agreed by each of the Grantors then party hereto.




     “Act of Instructing Senior Secured Parties” shall have the meaning assigned
to such term in the Intercreditor Agreement.




     “Additional Senior Secured Facilities” shall have the meaning assigned to such
term in the Intercreditor Agreement.




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




     “After-Acquired Intellectual Property” shall have the meaning assigned to such
term in Section 5.7(k).




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




     “Applicable Laws” shall mean, as to any Person, any law, rule, regulation,
ordinance or treaty, or any determination, ruling or other directive by or from a court,





 




			
	1	 	Terms used herein that are also defined in the Credit Agreement will be conformed
to the extent those definitions change in the Credit Agreement.




2









 









arbitrator or other Governmental Authority, in each case applicable to or binding on such Person
or any of its property or assets or to which such Person or any of its property or assets is
subject.





     “Approved Deposit Account” shall mean a Deposit Account that is the subject of an
effective Deposit Account Control Agreement and that is maintained by any Grantor with a Deposit
Account Bank. An “Approved Deposit Account” includes all monies on deposit in a Deposit Account
and all certificates and instruments, if any, representing or evidencing such Deposit Account.




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




     “Attributable Debt” in respect of a sale and leaseback transaction shall mean, at the
time of determination, the present value of the obligation of the lessee for net rental payments
during the remaining term of the lease included in such sale and leaseback transaction, including
any period for which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal to the rate of
interest implicit in such transaction, determined in accordance with GAAP; provided,
however, that if such sale and leaseback transaction results in a Capital Lease
Obligation, the amount of Indebtedness represented thereby will be determined in accordance with
the definition of “Capital Lease Obligation”, and shall not be deemed to be Attributable
Debt.




     “Board of Directors” shall mean (a) with respect to a corporation, the board of
directors of the corporation or any committee thereof duly authorized to act on behalf of such
board; (b) with respect to a partnership, the Board of Directors of the general partner of the
partnership; (c) with respect to a limited liability company, the managing member or members or any
controlling committee or board of managing members or managers thereof; and (d) with respect to any
other Person, the board or committee of such Person serving a similar function.




     “Business Day” shall mean any day other than a Saturday, Sunday or day on which
commercial banks in New York City are authorized or required by law to close.




     “Capital Lease Obligation” shall mean, at the time any determination is to be made,
the amount of the liability in respect of a capital lease that would at that time be required to
be capitalized on a balance sheet in accordance with GAAP, and the latest Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such lease prior to
the first date upon which such lease may be prepaid by the lessee without payment of a penalty.




     “Capital Stock” shall mean shares of capital stock (whether denominated as common
stock or preferred stock), beneficial, partnership or membership interests, participations or
other equivalents (regardless of how designated) of or in a corporation, partnership, limited
liability company or equivalent entity, whether voting or non-voting, but excluding from all of
the foregoing any debt securities convertible into Capital Stock, whether or not such debt
securities include any right of participation with Capital Stock.




     “Capital Stock Equivalents” shall mean all securities convertible into or
exchangeable for Capital Stock and all warrants, options, stock appreciation rights or



3









 







other rights to purchase or subscribe for any Capital Stock, whether or not presently convertible,
exchangeable or exercisable.




     “Cash Equivalents” shall mean:




          (i) United States dollars or, in the case of any Foreign Subsidiary, any local currencies
held by it readily convertible into United States dollars;




          (ii) securities issued or directly and fully unconditionally guaranteed or insured by the
United States government or any agency of the United States government having in each case
maturities and/or reset dates of not more than 12 months from the date of acquisition;




          (iii) securities issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof having maturities of not more
than 24 months from the date of acquisition thereof and, at the time of acquisition, having a
rating of at least A-1 from S&P or at least P-1 from Moody’s;




          (iv) certificates of deposit, Eurodollar time deposits, and bankers’ acceptances maturing not
more than 6 months after such date and issued or accepted by any Lender or by any commercial bank
organized under the laws of the United States of America or any state thereof or the District of
Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its
primary federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of
not less than $500,000,000;




          (v) overnight bank deposits;




          (vi) repurchase agreements with a term of not more than 120 days;




          (vii) commercial paper maturing not more than 120 days from the date of acquisition and
having a rating of at least A-1 from S&P or at least P-1 from Moody’s; and




          (viii) shares of any money market mutual fund that (a) has substantially all of its assets
invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b)
has net assets of not less than $5,000,000,000 and (c) has the highest rating obtainable from
either S&P or Moody’s.




     “Collateral” shall have the meaning given such term in the Intercreditor Agreement.




     “Collateral Account” shall mean any collateral account established by the Collateral
Agent as provided in Section 6.1(b) or 6.6.




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




     “Commodity Account Control Agreement” shall mean a Control Agreement in the form
agreed by the Collateral Agent in its reasonable discretion, to be executed and delivered by the
applicable Grantor and the other party or parties thereto with respect to



4









 







each Commodity Account of such Grantor except to the extent that, and for so long as the same
constitutes an Excluded Perfection Asset at any time.




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




     “Contracts” shall mean all contracts and agreements (in each case, whether written or
oral, or third party or intercompany) entered into by any Grantor, as the same may be amended,
assigned, extended, restated, supplemented, replaced or otherwise modified from time to time,
including (i) all rights of any Grantor to receive moneys due and to become due to it thereunder or
in connection therewith, (ii) all rights of any Grantor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect thereto, (iii) all rights of any Grantor to damages
arising thereunder and (iv) all rights of any Grantor to terminate, and to perform and compel
performance of, such Contracts and to exercise all remedies thereunder.




     “control”, as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by contract or otherwise, and the
terms “controlling” and “controlled” shall have meanings correlative thereto;
provided that when used in connection with the Collateral Agent’s rights with respect to,
or security interest in, any GCA Collateral, “control” shall have the meaning specified in the UCC
with respect to that type of GCA Collateral.




     “Copyright Licenses” shall mean any agreement, whether written or oral, naming any
Grantor as licensor or licensee (including those listed in Schedule 4.9(a) (as such
schedule may be supplemented from time to time pursuant to a Guarantee Joinder and Assumption
Agreement)), granting any right in, to or under any Copyright, including the grant of rights to
manufacture, distribute, exploit and sell materials derived from any Copyright.




     “Copyrights” shall mean (i) all copyrights arising under the laws of the United
States, any other country, or union of countries, or any political subdivision of any of the
foregoing, whether registered or unregistered and whether published or unpublished, all
registrations and recordings thereof, and all applications in connection therewith and rights
corresponding thereto throughout the world, including all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to, and to obtain, all
extensions and renewals of any of the foregoing.




     “Core Assets” shall mean the power generating facilities owned by the Grantors and
set forth on Schedule 1.01(a), as such schedule is updated or supplemented from time to
time in accordance with Section 5.10.




     “Core Asset Subsidiary” shall mean any Subsidiary that directly owns Core Assets.




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




     “Credit Agreement Documents” shall have the meaning assigned to such term in the
Intercreditor Agreement.



5









 






     “Currency Hedging Transactions” shall mean all contracts, agreements or arrangements
designed to protect against fluctuations in currency exchange rates entered into in the ordinary
course of business and, in any case, not for speculative purposes.




     “Deposit Account” shall have the meaning assigned to such term in the UCC, including,
without limitation, all of the accounts listed on Schedule 4.6(c) under the heading
“Deposit Accounts” (as such schedule may be supplemented from time to time) together, in each
case, with all funds held therein and all certificates or instruments representing any of the
foregoing.




     “Deposit Account Control Agreement” shall mean a Control Agreement substantially in
the form agreed by the Collateral Agent in its reasonable discretion, to be executed and delivered
by the applicable Grantor and the other party or parties thereto with respect to each Deposit
Account of such Grantor except to the extent that, and for so long as the same constitutes an
Excluded Perfection Asset at any time.




     “Depositary Bank” shall mean a financial institution that has delivered to the
Collateral Agent an executed Deposit Account Control Agreement.




     “Domestic Subsidiary” shall mean any Subsidiary that is not a Foreign Subsidiary.




     “dollars” or “$” shall mean lawful money of the United States of America,
except when expressly used in reference to the lawful money of another country.




     “EquaGen” shall mean EquaGen LLC, a Delaware limited liability company.




     “EquaGen Interests” shall mean the Equity Interests of EquaGen.




     “Equity Interests” shall mean all Capital Stock and Capital Stock Equivalents.




     “Event of Default” shall have the meaning assigned to such term in the Intercreditor
Agreement.




     “Excluded Assets” shall mean




     (i) any lease, license, contract or agreement to which any Grantor is a party or any of such
Grantor’s rights or interests thereunder if and only for so long as applicable law prohibits the
creation of a security interest therein or the grant of a security interest therein under the
Senior Collateral Documents shall constitute or result in (A) a breach, termination or default or
invalidity under any such lease, license, contract, property right or agreement or (B) the loss,
abandonment, termination or unenforceability of any right, title or interest in or to such
property, in each case, other than to the extent that any such term would be rendered ineffective
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or any
other Applicable Law or principles of equity; provided that such lease, license, contract,
property right or agreement shall be an Excluded Asset only to the extent and for so long as the
consequences specified above shall exist and shall cease to be an Excluded Asset and shall become
subject to the security interest granted under the Senior Collateral



6









 







Documents, immediately and automatically, at such time as such consequences shall no longer exist;




     (ii) any goods, accounts, deposit accounts, general intangibles or investment property (as
each such term is used in the UCC) in which a security interest therein is prohibited by Applicable
Law, other than to the extent that any such prohibition would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or any other
Applicable Law or principles of equity; provided that such goods, deposit accounts, general
intangibles or investment property shall be an Excluded Asset only to the extent and for so long as
the consequences specified above shall exist and shall cease to be an Excluded Asset and shall
become subject to the security interest granted under the Senior Collateral Documents, immediately
and automatically, at such time as such consequences shall no longer exist;




     (iii) (A) each fee-owned real property held by any Grantor with a fair market value of less
than $2,500,000, (B) leasehold interests that do not constitute Material Leases, (C) fee-owned
real property and leasehold interests (but not personal property or fixtures) owned or leased by
any Grantor that is located in the State of New York, (D) any fee-owned real property or leasehold
interest (but not personal property or fixtures) acquired by any Grantor and located in the State
of New York; and (E) the Charlevoix County, Michigan parcel of real property and the improvements
located thereon constituting the facility known as the Big Rock Independent Spent Fuel Storage
Installation;




     (iv) any applications for trademarks or service marks filed in the United States Patent and
Trademark Office (the “PTO”) pursuant to 15 U.S.C. §1051 Section 1(b) unless and until
evidence of use of the mark in interstate commerce is submitted to the PTO pursuant to 15 U.S.C.
§1051 Section 1(c) or Section 1(d);




     (v) shares of Capital Stock held by a Grantor having voting power in excess of 65% of the
voting power of all classes of Capital Stock of a Foreign Subsidiary;




     (vi) motor vehicles and other assets subject to certificates of title;




     (vii) letter of credit rights (as defined in the UCC) that do not constitute Supporting
Obligations;




     (viii) Liens on cash and Cash Equivalents (A)(i) deposited by the Grantors in margin accounts
with or on behalf of futures contract brokers or paid over to other counterparties, or (ii) pledged
or deposited as collateral to a contract counterparty or issuer of surety bonds or issuer of
letters of credit by the Grantors, in each case incurred in the ordinary course of business to
secure obligations with respect to Interest Rate Hedging Transactions or Currency Hedging
Transactions that are not secured by the Lien of the Collateral Agent, Commodity Hedging
Transactions (other than Specified Commodity Hedging Transactions) and Credit Support Facilities
(other than Specified Credit Support Facilities); provided, that for so long as any
Specified Grantor Obligations in respect of the Credit Agreement are outstanding at the time such
Lien is incurred, such Grantor would be in pro forma compliance with its financial covenants as
calculated with the most recent financial information delivered pursuant to the Credit Agreement
(while the Credit Agreement is in effect and thereafter, in accordance with the financial



7









 







covenants as set forth in any Senior Secured Document) or (B) deposited by the Grantors in margin
accounts with or on behalf of credit clearing organizations, independent system operators, regional
transmission organizations, state agencies or federal agencies; and




     (ix) any cash collateral accounts maintained pursuant to the Secured Obligations in connection
with letters of credit issued thereunder for the sole benefit of any of the applicable Senior
Secured Parties (which cash collateral accounts shall solely be for the benefit of such applicable
Senior Secured Parties and the issuing bank that issued such letters of credit and not the other
Senior Secured Parties).




     “Excluded Perfection Assets” shall mean (i) any Deposit Account, Securities Account or
Commodities Account (and all cash, Cash Equivalents and Commodity Contracts held therein) if and
only for so long as such Deposit Account, Securities Account or Commodities Account holds cash or
Cash Equivalents in an amount not exceeding $2,000,000 individually or $15,000,000 in the aggregate
for all such Deposit Accounts, Securities Accounts and Commodities Accounts; (ii) any Deposit
Account that is a “zero-balance” account (as long as (x) the balance in such “zero balance” account
does not exceed at any time the applicable threshold described in clause (i) above for a period of
24 consecutive hours or more and (y) all amounts in such “zero-balance” account shall be swept on a
daily basis into another Deposit Account that does not constitute an Excluded Perfection Asset),
(iii) promissory notes in an aggregate principal amount not to exceed $3,000,000 at any time
outstanding issued in connection with extensions of trade credit by any Grantor in the ordinary
course of business and (iv) those assets for which the Collateral Agent has determined in its
reasonable discretion that the costs of perfecting a security interest in such assets are excessive
in relation to the value to be afforded to the Senior Secured Parties thereby.




     “Excluded Subsidiary” shall mean (i) any Unrestricted Subsidiary, (ii) any Immaterial
Subsidiary and (iii) any Foreign Subsidiary.




     “FERC” shall mean the Federal Energy Regulatory Commission or its successor.




     “Foreign Subsidiary” shall mean (a) any Subsidiary that is organized under the laws of
a jurisdiction other than the United States of America, any State thereof or the District of
Columbia, (b) any Subsidiary if (i) for United States federal income tax purposes, substantially
all of the assets of such Subsidiary consist of stock of “controlled foreign corporations,” as
defined in Section 957(a) of the Code (“CFC”) and (ii) such Subsidiary does not have any
material assets or Indebtedness other than the stock of its Subsidiaries and any intercompany
Indebtedness owed to or from the Company or another Subsidiary and does not engage in any
operations other than the ownership of such assets and activities incidental thereto, and (c) any
Subsidiary of a CFC.




     “GAAP” shall mean generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a significant segment of the
accounting profession, which are in effect from time to time.



8









 






     “GCA Collateral” shall mean, with respect to any Grantor, all of the personal
property of such Grantor, including, in any event, the property described in items (i) through
(xix) below, in each case, wherever located and now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may acquire any right,
title or interest:




          (i) all Accounts;




          (ii) all Chattel Paper;




          (iii) all Commercial Tort Claims from time to time specifically described on Schedule
4.11 and on any supplement to this Agreement received by the Collateral Agent pursuant to
Section 5.8 (Commercial Tort Claims);




          (iv) all Contracts (including, without limitation, the Key Contracts);





          (v) all Deposit Accounts;




          (vi) all Documents;




          (vii) all Equipment;




          (viii) all Fixtures;




          (ix) all General Intangibles (including Intellectual Property);




          (x) all Goods;




          (xi) all Instruments;




          (xii) all Insurance;




          (xiii) all Inventory;




          (xiv) all Investment Property;




          (xv) all Letters of Credit and Letter of Credit Rights;




          (xvi) all Money;




          (xvii) all Securities Accounts;




          (xviii) all books, records, ledger cards, files, correspondence, customer lists, blueprints,
technical specifications, manuals, computer software, computer printouts, tapes, disks and other
electronic storage media and related data processing software and similar items; and




          (xix) to the extent not otherwise included, all other property, whether tangible or
intangible, of the Grantor and all Proceeds and products accessions, rents and



9









 







profits of any and all of the foregoing and all collateral security, Supporting Obligations and
guarantees given by any Person with respect to any of the foregoing;




     provided, however, that notwithstanding anything to the contrary herein, this
Agreement shall not, at any time, constitute a grant of a security interest in, and the term “GCA
Collateral” does not include, any right, title or interest in any property that is an Excluded
Asset so long as such property remains an Excluded Asset; and provided, further,
that if and when any property shall cease to be an Excluded Asset, such property shall be deemed at
all times from and after the date thereof to constitute GCA Collateral.




     “Governmental Authority” shall mean the government of the United States of America or
any other nation, any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of
government or any governmental or non-governmental authority regulating the generation and/or
transmission of energy.




     “Grantors” shall mean the collective reference to the Company and each Restricted
Subsidiary that is or becomes a party hereto as provided herein.




     “Grantor Obligations” shall mean with respect to any Grantor, all obligations and
liabilities of such Grantor which may arise under or in connection with this Agreement (including
pursuant to Section 2) or any other Senior Secured Document to which such Grantor is a
party, in each case whether on account of guarantee obligations, reimbursement obligations, payment
and/or delivery obligations, termination obligations, fees, indemnities, costs, expenses or
otherwise (including all fees and disbursements of counsel to any Senior Secured Party that are
required to be paid by such Grantor pursuant to the terms of this Agreement or any other Senior
Secured Document).




     “Guarantee Joinder and Assumption Agreement” shall mean a guarantee joinder
substantially in the form of Annex 1 (or such other form agreed by the Collateral Agent)
to be executed and delivered by any Subsidiary that is required to become a party to this
Agreement pursuant to any Senior Secured Document and acknowledged and agreed by each of the
Grantors party hereto.




     “Guaranteed Obligations” shall mean (i) in the case of the Specified Grantor, the
Specified Grantor Obligations and (ii) in the case of each Grantor, its Grantor Obligations.




     “Hedging Transactions” shall have the meaning assigned to such term in the
Intercreditor Agreement.




     “ICA Event of Default” shall have the meaning assigned to such term in the
Intercreditor Agreement.




     “Immaterial Subsidiary” shall mean on any date, any Subsidiary of the Company (other
than any Core Asset Subsidiary or EquaGen (if EquaGen becomes a Subsidiary)) that (i) had less
than 2.5% of consolidated assets or 2.5% of consolidated revenues of the Company and its
Restricted Subsidiaries as reflected on the most recent financial statements delivered by the
Company in accordance with Section 5.05 of the Credit



10









 







Agreement prior to such date (for so long as any Specified Grantor Obligations in respect of the
Credit Agreement are outstanding and thereafter, on the Company’s most recent publicly filed
financial statements on form 10-K or 10-Q) and (ii) has been designated as such by the Company in
a written notice delivered to the Collateral Agent and the Administrative Agent (other than any
Subsidiary as to which the Company has revoked such designation by written notice to the
Collateral Agent and the Administrative Agent); provided, however that at no time
shall all Immaterial Subsidiaries so designated by the Company have in the aggregate consolidated
assets or annual consolidated revenues as reflected on the most recent financial statements
delivered in accordance with Section 5.05 of the Credit Agreement (for so long as any
Specified Grantor Obligations in respect of the Credit Agreement are outstanding and thereafter,
on the Company’s most recent publicly filed financial statements on form 10-K or 10-Q) in excess
of 7.5% of consolidated assets or annual consolidated revenues, respectively, of the Company and
its Restricted Subsidiaries.




     “Indebtedness” of any Person shall mean, without duplication and whether or not
contingent, (a) all indebtedness of such Person for borrowed money (including indebtedness with
respect to any Credit Support Facilities), (b) all obligations of such Person evidenced by notes,
bonds, debentures or similar instruments, (c) all reimbursement and all obligations with respect to
letters of credit, bankers’ acceptances, surety bonds and performance bonds, whether or not
matured, (d) all indebtedness for the deferred purchase price of property or services, other than
trade payables incurred in the ordinary course of such Person’s business, (e) all indebtedness of
such Person created or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession or sale of such
property), (f) all Capital Lease Obligations of such Person and all Attributable Debt in respect of
sale and leaseback transactions, (g) all Guarantee obligations of such Person, (h) unfunded vested
benefits under plans covered by Title IV of ERISA, (i) obligations in respect of Hedging
Transactions if and to the extent they would appear as a liability on a balance sheet prepared in
accordance with GAAP, (j) all Indebtedness of the type referred to above secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including Accounts and General Intangibles) owned by such Person,
even though such Person has not assumed or become liable for the payment of such Indebtedness, (k)
unfunded amounts in respect of Indebtedness incurred by such Person in good faith to invest in
nuclear decommissioning trusts or to comply with decommissioning agreements and (l) contingent
adjustments or earn-outs when they are required to be recognized as a liability on the balance
sheet in accordance with GAAP.




     “Insurance” shall mean (i) all insurance policies covering any or all of the GCA
Collateral (regardless of whether the Collateral Agent is the loss payee thereof) and (ii) any key
man life insurance policies, in each case, the beneficiary or insured person of which is the
Company or any Grantor.




     “Intellectual Property” shall mean the collective reference to all rights, priorities
and privileges pertaining to intellectual property, whether arising under United States,
multinational or foreign laws or otherwise, including, without limitation, Copyrights, Patents,
Trademarks, and Trade Secrets.



11









 






     “Intellectual Property Collateral” shall mean the Intellectual Property included in
the GCA Collateral.




     “Intellectual Property Licenses” shall mean the collective reference to all rights,
priorities and privileges with respect to Intellectual Property, arising under the Copyright
Licenses, the Patent Licenses and the Trademark Licenses.




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




     “Interest Rate Hedging Transactions” shall mean all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate insurance and other
agreements or arrangements designed to manage interest rates or interest rate risk.




     “Investment Property” shall mean the collective reference to (i) all “investment
property” as such term is defined in Section 9-102(a)(49) of the UCC (other than any investment
property that constitutes an Excluded Asset) including all Certificated Securities and
Uncertificated Securities, all Security Entitlements, all Securities Accounts, all Commodity
Contracts and all Commodity Accounts, (ii) security entitlements, in the case of any United States
Treasury book-entry securities, as defined in 31 C.F.R. section 357.2, or, in the case of any
United States federal agency book-entry securities, as defined in the corresponding United States
federal regulations governing such book-entry securities and (iii) whether or not otherwise
constituting “investment property”, all Pledged Notes, all Pledged Equity Interests, all Pledged
Security Entitlements.




     “Issuers” shall mean the collective reference to each issuer of a Pledged
Security.




     “Key Contracts” shall mean those contracts that evidence obligations of EquaGen or its
subsidiaries owing to any Core Asset Subsidiary for the maintenance and operation of nuclear power
facilities owned by such Core Asset Subsidiary.




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




     “Licensed Intellectual Property” shall have the meaning assigned to such term in
Section 4.9.




     “Lien” shall mean, with respect to any asset (a) any mortgage, deed of trust, deed to
secure debt, lien (statutory or otherwise), pledge, hypothecation, encumbrance, restriction,
collateral assignment, charge or security interest in, on or of such asset; (b) the interest of a
vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement
(or any financing lease having substantially the same economic effect as any of the foregoing)
relating to such asset; and (c) in the case of Equity Interests, any purchase option, call or
similar right of a third party with respect to such Equity Interests. For the avoidance of doubt,
“Lien” shall not be deemed to include licenses of intellectual property.




     “Material Adverse Effect” shall mean any material adverse change in or material
adverse effect on (i) the business, financial condition, results of operations, performance,



12









 







assets or liabilities, or prospects of the Company and its Restricted Subsidiaries, taken as a
whole, (ii) the ability of the Grantors, taken as a whole, to perform their payment obligations
under this Agreement or the other Senior Secured Documents or (iii) the rights and remedies of the
Arrangers, the Administrative Agent, the Collateral Agent or the Senior Secured Parties hereunder
or thereunder.




     “Material Contract” shall mean any contract or agreement to which a Grantor is party,
the breach or termination (other than at the expiration of its term) of which could reasonably be
expected to have a Material Adverse Effect.




     “Material Intellectual Property” shall have the meaning assigned to such term in
Section 4.9.




     “Material Lease” shall mean a lease with respect to real property with annual
payments in excess of $1,500,000.




     “Minority Investment” shall mean any Person (other than a Subsidiary) in which any
Grantor owns Capital Stock.




     “Owned Intellectual Property” shall have the meaning assigned to such term in
Section 4.9.




     “Patent License” shall mean all agreements, whether written or oral, providing for
the grant by or to any Grantor of any right to manufacture, use or sell any invention covered in
whole or in part by a Patent, including any of the foregoing listed in Schedule 4.9(a) (as
such schedule may supplemented from time to time pursuant to a Guarantee Joinder and Assumption
Agreement).




     “Patents” shall mean (i) all letters patent of the United States, any other country,
union of countries or any political subdivision of any of the foregoing, all reissues and
extensions thereof, (ii) all applications for letters patent of the United States or any other
country or union of countries or any political subdivision of any of the foregoing and all
divisions, continuations and continuations-in-part thereof, and (iii) all rights to, and to
obtain, any reissues or extensions of the foregoing.




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




     “Pledged Accounts” shall have the meaning assigned to such term in Section
4.12.




     “Pledged Debt Securities” shall mean all debt securities now owned or hereafter
acquired by any Grantor, including the debt securities listed on Schedule 4.6(b) (as such
schedule may be supplemented from time to time pursuant to a Guarantee Joinder and Assumption
Agreement), together with any other certificates, options, rights or security entitlements of any
nature whatsoever in respect of the debt securities of any Person that may be issued or granted to,
or held by, any Grantor while this Agreement is in effect.



13









 






     “Pledged Equity Interests” shall mean all Pledged Stock, Pledged LLC Interests and
Pledged Partnership Interests (including interests constituting Minority Investments that do not
constitute Excluded Assets and including, for the avoidance of doubt, all the Grantors’ EquaGen
Interests).




     “Pledged LLC Interests” shall mean all limited liability company interests directly
owned by any Grantor in any limited liability company (other than those interests that constitute
Excluded Assets), including all limited liability company interests listed on Schedule
4.6(a) under the heading “Pledged LLC Interests” (as such schedule may be supplemented from
time to time pursuant to a Guarantee Joinder and Assumption Agreement) and the certificates, if
any, representing such limited liability company interests and any interest of such Grantor on the
books and records of such limited liability company and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for any or all of such
limited liability company interests and any other warrant, right or option to acquire any of the
foregoing.




     “Pledged Notes” shall mean all promissory notes in favor of any Grantor including,
without limitation, those (i) listed on Schedule 4.6(b) (as such schedule may be
supplemented from time to time pursuant to a Guarantee Joinder and Assumption Agreement) and (ii)
all promissory notes issued to evidence intercompany loans at any time issued to or held by any
Grantor.




     “Pledged Partnership Interests” shall mean all partnership interests directly owned by
any Grantor in any general partnership, limited partnership, limited liability partnership or other
partnership (other than those interests that constitute Excluded Assets), including all partnership
interests listed on Schedule 4.6(a) under the heading “Pledged Partnership Interests” (as
such schedule may be supplemented from time to time pursuant to a Guarantee Joinder and Assumption
Agreement) and the certificates, if any, representing such partnership interests and any interest
of such Grantor on the books and records of such partnership and all dividends, distributions,
cash, warrants, rights, options, instruments, securities and other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or in exchange for any or all
of such partnership interests and any other warrant, right or option to acquire any of the
foregoing.




     “Pledged Securities” shall mean the collective reference to the Pledged Debt
Securities, the Pledged Notes and the Pledged Equity Interests.




     “Pledged Security Entitlements” shall mean all security entitlements with respect to
the Financial Assets listed on Schedule 4.6(c) (as such schedule may be supplemented from
time to time pursuant to a Guarantee Joinder and Assumption Agreement) and all other security
entitlements of any Grantor.




     “Pledged Stock” shall mean all shares of Capital Stock in a corporation directly owned
by any Grantor (other than those interests that constitute an Excluded Asset), including all shares
of Capital Stock in a corporation listed on Schedule 4.6(a) under the heading “Pledged
Stock” (as such schedule may be supplemented from time to time pursuant to a Guarantee Joinder and
Assumption Agreement) and the certificates, if any,



14









 







representing such shares and any interest of such Grantor in the entries on the books of the
issuer of such shares and all dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares and any other
warrant, right or option to acquire any of the foregoing.




     “Proceeds” shall mean all “proceeds” as such term is defined in Section 9-102(a)(64)
of the UCC and, in any event, shall include all dividends or other income from the Investment
Property, collections thereon or distributions or payments with respect thereto.




     “Receivable” shall mean all Accounts and any other any right to payment for goods or
other property sold, leased, licensed or otherwise disposed of or for services rendered, whether
or not such right is evidenced by an Instrument or Chattel Paper or classified as a Payment
Intangible and whether or not it has been earned by performance. References herein to Receivables
shall include any Supporting Obligation or collateral securing such Receivable.




     “Remedies Notice” shall have the meaning assigned to such term in the Intercreditor
Agreement.




     “Requirement of Law” shall mean as to any Person, the certificate of incorporation
and by-laws or other organizational or governing documents of such Person and any Applicable Law
or determination of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which such Person or any of
its property is subject, or which pertains to or governs the legality, validity, perfection,
performance or enforcement of the Senior Secured Documents or the Liens thereunder.




     “Restricted Subsidiary” shall mean each wholly-owned Subsidiary that is not an
Unrestricted Subsidiary.




     “Schedule Update Date” shall mean (i) for so long as the Credit Agreement is in
effect, the most recent date specified for the update of Key Contracts and Material Contracts in
Section 5.05(c)(ii)(E) of the Credit Agreement and (ii) thereafter, at the update date specified
for Key Contracts and Material Contracts in any Senior Secured Document.




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




     “Securities Account Control Agreement” shall mean a Control Agreement substantially in
the form agreed by the Collateral Agent in its reasonable discretion, to be executed and delivered
by the applicable Grantor and the other party or parties thereto with respect to each Securities
Account of such Grantor except to the extent that, and for so long as the same constitutes an
Excluded Perfection Asset at any time.




     “Security Grant Date” shall mean the date of this Agreement.




     “Senior Collateral Documents” shall mean this Agreement, the Intercreditor Agreement
and each other agreement, document or instrument entered into for the



15









 







purposes of creating and/or perfecting (or purporting to create or perfect) a Lien granted to the
Collateral Agent, for the benefit of the Senior Secured Parties, on the Collateral to secure the
Guaranteed Obligations, as amended, modified, renewed or restated from time to time, in accordance
with its terms and the terms of the Intercreditor Agreement, and all agreements entered into in
substitution, refinancing or replacement thereof in accordance with the terms of the Intercreditor
Agreement.




     “Senior Debt Facilities” shall have the meaning assigned to such term in the
Intercreditor Agreement.




     “Senior Debt Facility Obligations” shall have the meaning assigned to such term in
the Intercreditor Agreement.




     “Senior Liens” shall have the meaning assigned to such term in the Intercreditor
Agreement.




     “Senior Secured Documents” shall have the meaning assigned to such term in the
Intercreditor Agreement.




     “Senior Secured Parties” shall have the meaning assigned to such term in the
Intercreditor Agreement.




     “Specified Grantor” shall mean a Grantor that is the borrower, issuer or a
counterparty under the applicable Senior Secured Document.




     “Specified Grantor Obligations” shall mean the obligations of the Specified Grantor
that are Secured Obligations, whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or in connection with
this Agreement or any other Senior Secured Document.




     “Stated Maturity” shall mean, with respect to any installment of interest or principal
on any series of Indebtedness, the date on which the payment of interest or principal was scheduled
to be paid in the documentation governing such Indebtedness as of the date of its original
incurrence or, if incurred before the date of the Intercreditor Agreement, as of the date of the
Intercreditor Agreement, and will not include any contingent obligations to repay, redeem or
repurchase any such interest or principal prior to the date originally scheduled for the payment
thereof.




     “Subsidiary” shall mean any subsidiary (direct or indirect) of the Company.




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




     “Trademark License” shall mean any agreement, whether written or oral, providing for
the grant by or to any Grantor of any right in, to or under any Trademark, including any of the
foregoing listed in Schedule 4.9(a) (as such schedule may be



16









 







supplemented from time to time pursuant to a Guarantee Joinder and Assumption Agreement).




     “Trademarks” shall mean (i) all trademarks, trade names, fictitious business names,
trade styles, service marks, logos and other identifiers of the source of products and services,
and all goodwill associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or agency of the United States,
any State thereof or any other country, union of countries, or any political subdivision of any of
the foregoing, or otherwise, and all common-law rights related thereto, (ii) the right to, and to
obtain, all renewals thereof, and (iii) the goodwill of the business symbolized by the foregoing.




     “Trade Secrets” shall mean all trade secrets and all other confidential or proprietary
information and know-how (all of the foregoing being collectively called a “Trade Secret”),
whether or not reduced to a writing or other tangible form, including all documents and things
embodying, incorporating, or describing such Trade Secret.




     “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York or
any other applicable jurisdiction.




     “Unrestricted Subsidiary” shall mean any Subsidiary (other than any Core Asset
Subsidiary or EquaGen) that is designated by the Board of Directors (or any committee thereof) of
the Company as an Unrestricted Subsidiary pursuant to a board or committee resolution, but only to
the extent that (a) such Subsidiary has no Indebtedness other than Indebtedness that is
non-recourse to the Company and its Restricted Subsidiaries, (b) except as otherwise permitted
under the terms of the Senior Secured Documents, such Subsidiary is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted Subsidiary unless the
terms of any such agreement, contract, arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Company; (c) such Subsidiary is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation to
maintain or preserve such Person’s financial condition or to cause such Person to achieve any
specified levels of operating results except as otherwise permitted by the terms of the Senior
Secured Documents; (d) such Subsidiary has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries
except as otherwise permitted by the terms of the Senior Secured Documents; and (e) such
designation complies with the terms of the Senior Secured Documents. Any designation of a
Subsidiary as an Unrestricted Subsidiary will be evidenced to the Administrative Agent by filing
with the Administrative Agent a certified copy of the board or committee resolution giving effect
to such designation and an officers’ certificate certifying that such designation complied with the
conditions set forth above. If, at any time, any Unrestricted Subsidiary fails to meet the above
requirements as an Unrestricted Subsidiary, it will cease to be an Unrestricted Subsidiary for
purposes of this Agreement and will be deemed to be a Restricted Subsidiary as of such date (even
if deeming such Unrestricted Subsidiary a Restricted Subsidiary results in a default or Event of
Default under any Senior Secured Document). The Board of Directors (or any committee thereof) of
the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary. To
the extent that this definition refers to the



17









 






terms and provisions of the Senior Secured Documents, for so long as the Credit Agreement
is in effect, the terms and provisions of the Credit Agreement shall control.




     “Voting Stock” of any Person as of any date shall mean the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of Directors
of such Person.



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




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




          (c) Unless otherwise indicated, any reference to any agreement or instrument shall be deemed
to include a reference to such agreement or instrument as assigned, amended, amended and restated,
supplemented, otherwise modified from time to time or replaced in accordance with the terms of
such agreement.




          (d) Where the context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Grantor, shall refer to the property or assets such Grantor has granted as
Collateral or the relevant part thereof.




          (e) 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”.




          (f) All references to the Lenders herein shall, where appropriate, include any Lender, the
Administrative Agent, the Collateral Agent, any Arranger or the Syndication Agent or, in each case,
any Affiliate thereof that is party to a Related Agreement.




          (g) With respect to any term used herein but not defined herein and defined by cross-reference
to another agreement, if any such agreement is terminated or shall otherwise cease to be in effect
(and there shall not be any restatement, replacement or refinancing thereof), such defined term
shall have the meaning set forth in such agreement immediately prior to the time such agreement
ceases to be in effect.




SECTION 2. GUARANTEE




          2.1. Guarantee.





     (a) (i) Each of the Grantors, jointly and severally, unconditionally and irrevocably,
hereby guarantees to the Administrative Agent, for the ratable benefit of the Senior Debt
Parties under the Credit Agreement Documents and their respective successors, endorsees,
transferees and assigns, the prompt and complete payment and performance by the Company when
due (whether at the stated maturity, by acceleration or otherwise) of the Specified Grantor
Obligations under the Credit Agreement Documents.



18









 






          (ii) Each of the Grantors, jointly and severally, unconditionally and irrevocably,
hereby guarantees to the Hedge Counterparty Lienholders, the prompt and complete payment
and performance by the applicable Specified Grantor when due (whether at the stated
maturity, by acceleration or otherwise) of its Specified Grantor Obligations under the
applicable Secured Commodity Hedging Documents.




          (iii) Each of the Grantors, jointly and severally, unconditionally and irrevocably,
hereby guarantees to the designated Secured Obligations Representative, for the ratable
benefit of the applicable Credit Support Facility Lienholders, the prompt and complete
payment and performance by the applicable Specified Grantor when due (whether at the
stated maturity, by acceleration or otherwise) of its Specified Grantor Obligations under
the applicable Specified Credit Support Facilities.




          (iv) Each of the Grantors, jointly and severally, unconditionally and irrevocably,
hereby guarantees to the applicable Secured Obligations Representative, for the ratable
benefit of the holders of the applicable Secured Obligations under the Additional Senior
Secured Facilities, the prompt and complete payment and performance by the applicable
Specified Grantor when due (whether at the stated maturity, by acceleration or otherwise)
of the applicable Specified Grantor Obligations under the applicable Senior Secured
Documents.



          (b) If and to the extent required in order for the Grantor Obligations of any Grantor to be
enforceable under applicable federal, state and other laws relating to the insolvency of debtors,
the maximum liability of such Grantor hereunder shall be limited to the greatest amount which can
lawfully be guaranteed by such Grantor under such laws, after giving effect to any rights of
contribution, reimbursement and subrogation arising under Section 2.2. Each Grantor
acknowledges and agrees that, to the extent not prohibited by Applicable Law, (i) such Grantor (as
opposed to its creditors, representatives of creditors or bankruptcy trustee, including such
Grantor in its capacity as debtor-in-possession exercising any powers of a bankruptcy trustee) has
no personal right under such laws to reduce, or request any judicial relief that has the effect of
reducing, the amount of its liability under this Agreement, (ii) such Grantor (as opposed to its
creditors, representatives of creditors or bankruptcy trustee, including such Grantor in its
capacity as debtor-in-possession exercising any powers of a bankruptcy trustee) has no personal
right to enforce the limitation set forth in this Section 2.1(b) or to reduce, or request
judicial relief reducing, the amount of its liability under this Agreement and (iii) the limitation
set forth in this Section 2.1(b) may be enforced only to the extent required under such
laws in order for the obligations of such Grantor under this Agreement to be enforceable under such
laws and only by or for the benefit of a creditor, representative of creditors or bankruptcy
trustee of such Grantor or other Person entitled, under such laws, to enforce the provisions
thereof.




          (c) Each Grantor agrees that the applicable Specified Grantor Obligations may at any time and
from time to time be incurred or permitted in an amount exceeding the maximum liability of such
Grantor under Section 2.1(b) without impairing the guarantee contained in this Section
2 or affecting the rights and remedies of any Senior Secured Party hereunder.




          (d) The guarantee contained in Section 2(a)(i), (iii), (iv) and in all
Accession Agreements hereto, to the extent constituting Indebtedness under any Senior Debt
Facility, shall remain in full force and effect until the Discharge of Senior Debt Facility
Obligations shall have occurred, notwithstanding that from time to time during the term of the
applicable Senior Debt




19









 




Facility the applicable Specified Grantor may be free from any or all of its Specified Grantor
Obligations. The guarantee contained in Section 2(a)(ii) and in all Accession Agreements
hereto in respect of Grantor Obligations under any applicable Secured Commodity Hedging Document
shall remain in full force and effect until the Discharge of the Secured Obligations under such
Secured Commodity Hedging Document shall have occurred, notwithstanding that from time to time
during the term of the applicable Secured Commodity Hedging Document the applicable Specified
Grantor may be free from any or all of its Specified Grantor Obligations. Each guarantee contained
in Section 2(a) constitutes a guarantee of payment and not of collection.




          (e) No payment made by any applicable Specified Grantor, any other Grantor, any other
guarantor or any other Person or received or collected by any Senior Secured Party from any
applicable Specified Grantor, any other Grantor, any other guarantor or any other Person by virtue
of any action or proceeding or any set-off or appropriation or application at any time or from time
to time in reduction of or in payment of the Specified Grantor Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Grantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Grantor in respect of the
Specified Grantor Obligations or any payment received or collected from such Grantor in respect of
the applicable Specified Grantor Obligations), remain liable for the Specified Grantor Obligations
up to the maximum liability of such Grantor hereunder until the Specified Grantor Obligations shall
have been satisfied in full (whether, in the case of Specified Grantor Obligations under any
Secured Commodity Hedging Document, by payment in cash, set-off or as otherwise provided therein)
(other than indemnification and other contingent obligations not then due and payable), and with
respect to any Senior Debt Facility, no letter of credit shall be outstanding (unless such letters
of credit shall have been cash collateralized at 100% of the aggregate undrawn amount or such
lesser amount as otherwise required or permitted by the applicable Senior Secured Document) under
the applicable Senior Secured Document and all commitments to extend credit under such Senior
Secured Documents shall have been terminated or expired.




          2.2. Rights of Reimbursement, Contribution and Subrogation. In case any payment is
made on account of the Guaranteed Obligations by any Grantor or is received or collected on
account of the Guaranteed Obligations from any Grantor or its property:




          (a) If such payment is made by a Specified Grantor or from its property, then, if and to the
extent such payment is made on account of Guaranteed Obligations arising from or relating to a loan
or other extension of credit made to such Specified Grantor or a letter of credit issued for the
account of such Specified Grantor, such Specified Grantor shall not be entitled (i) to demand or
enforce reimbursement or contribution in respect of such payment from any other Grantor or (ii) to
be subrogated to any claim, interest, right or remedy of any Senior Secured Party against any other
Person, including any other Grantor or its property.




          (b) If such payment is made by a Grantor other than a Specified Grantor or from its property,
such Grantor shall be entitled, subject to and upon payment in full of the Guaranteed Obligations
(other than indemnification and other contingent obligations not then due and payable), (i) to
demand and enforce reimbursement for the full amount of such payment from the applicable Specified
Grantor and (ii) to demand and enforce contribution in respect of such payment from each other
applicable Grantor that has not paid its fair share of such payment, as necessary to ensure that
(after giving effect to any enforcement of reimbursement rights provided hereby) each applicable
Grantor pays its fair share of the un-reimbursed portion of such payment. For this purpose, the
fair share of each Grantor as to any un-reimbursed payment shall be




20









 





determined based on an equitable apportionment of such un-reimbursed payment among all applicable
Grantors based on the relative value of their assets and any other equitable considerations deemed
appropriate by a court of competent jurisdiction.




          (c) If and whenever (after payment in full of the Guaranteed Obligations (other than
indemnification and other contingent obligations not then due and payable) and delivery of
notification thereof to the Collateral Agent in accordance with Article 4 of the Intercreditor
Agreement) any right of reimbursement or contribution becomes enforceable by any Grantor against
any other Grantor under Section 2.2(b), such Grantor shall be entitled, subject to and upon
payment in full of the Guaranteed Obligations (other than indemnification and other contingent
obligations not then due and payable), to be subrogated (equally and ratably with all other
Grantors entitled to reimbursement or contribution from any other Grantor as set forth in this
Section 2.2) to any security interest that may then be held by the Collateral Agent upon
any Collateral granted to it in any Senior Collateral Document. Such right of subrogation shall be
enforceable solely against the Grantors, and not against the Collateral Agent or any other Senior
Secured Party, and neither the Collateral Agent nor any other Senior Secured Party shall have any
duty whatsoever to warrant, ensure or protect any such right of subrogation or to obtain, perfect,
maintain, hold, enforce or retain any Collateral for any purpose related to any such right of
subrogation. If subrogation is demanded by any Grantor, then (after payment in full in cash of the
Guaranteed Obligations) and, if applicable, the termination of all commitments to extend credit
thereunder, the discharge or cash collateralization (at 100% of the aggregate undrawn amount or
such lesser amount as otherwise required or permitted by the applicable Senior Secured Document) of
all outstanding letters of credit issued thereunder and the Collateral Agent has received
reasonable evidence of the same, the Collateral Agent shall deliver to the Grantors making such
demand, or to a representative of such Grantors or of the Grantors generally, an instrument
reasonably satisfactory to the Collateral Agent transferring, on a quitclaim basis without any
recourse, representation, warranty or obligation whatsoever, whatever security interest the
Collateral Agent then may hold in whatever Collateral that may then exist that was not previously
released or disposed of by the Collateral Agent (provided that such Grantors shall prepare
and deliver the initial draft of such instrument to the Collateral Agent).




          (d) All rights and claims arising under this Section 2.2 or based upon or relating to
any other right of reimbursement, indemnification, contribution or subrogation that may at any time
arise or exist in favor of any Grantor as to any payment on account of the Guaranteed Obligations
made by it or received or collected from its property shall be fully subordinated in all respects
to the prior payment in full in cash of all of the Guaranteed Obligations (other than
indemnification and other contingent obligations not then due and payable) and, if applicable, the
termination of all commitments to extend credit thereunder and, the discharge or cash
collateralization (at 100% of the aggregate undrawn amount or such lesser amount as otherwise
required or permitted by the applicable Senior Secured Document) of all outstanding letters of
credit issued thereunder. Until payment in full in cash of the Guaranteed Obligations (other than
indemnification and other contingent obligations not then due and payable) and, if applicable, the
termination of all commitments to extend credit thereunder, the discharge or cash collateralization
(at 100% of the aggregate undrawn amount or such lesser amount as otherwise required or permitted
by the applicable Senior Secured Document) of all outstanding letters of credit issued thereunder,
no Grantor shall demand or receive any collateral security, payment or distribution whatsoever
(whether in cash, property or securities or otherwise) on account of any such right or claim. If
any such payment or distribution is made or becomes available to any Grantor in any Insolvency
Proceeding, such Grantor shall request that such




21









 





payment or distribution be delivered by the Person making such payment or distribution directly to
the Collateral Agent for application to the payment of the Guaranteed Obligations. If any such
payment or distribution is received by any Grantor, it shall be held by such Grantor for the
benefit of the Senior Secured Parties, and shall forthwith be transferred and delivered by such
Grantor to the Collateral Agent, in the exact form received and, if necessary, duly endorsed.




          (e) The obligations of each Grantor under the Senior Secured Documents to which it is a
party, including its liability for the Guaranteed Obligations and the enforceability of the
security interests granted thereby, are not contingent upon the validity, legality,
enforceability, collectibility or sufficiency of any right of reimbursement, contribution or
subrogation arising under this Section 2.2. The invalidity, insufficiency,
unenforceability or uncollectibility of any such right shall not in any respect diminish, affect
or impair any such obligation or any other claim, interest, right or remedy at any time held by
the Collateral Agent or any other Senior Secured Party against any Grantor or its property. The
Senior Secured Parties make no representations or warranties in respect of any such right and
shall have no duty to assure, protect, enforce or ensure any such right or otherwise relating to
any such right.




          (f) Each Grantor reserves any and all other rights of reimbursement, contribution or
subrogation at any time available to it as against any other Grantor, but (i) the exercise and
enforcement of such rights shall be subject to Section 2.2(d) and (ii) neither the
Collateral Agent nor any other Senior Secured Party shall ever have any duty or liability
whatsoever in respect of any such right, except as provided in Section 2.2(c).




          2.3. Amendments, etc. With Respect to the Guaranteed Obligations. Each Grantor shall
remain obligated hereunder notwithstanding that, without any reservation of rights against any
Grantor and without notice to or further assent by any Grantor, (a) any demand for payment of any
of Guaranteed Obligations made by any Secured Obligations Representative or any other Senior
Secured Party may be rescinded by such Secured Obligations Representative or such other Senior
Secured Party and any of the Guaranteed Obligations continues; (b) the Guaranteed Obligations, or
the liability of any other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, increased, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by any Secured Obligations Representative or any other Senior Secured Party
in accordance with the terms of the applicable Senior Secured Documents; (c) the other Senior
Secured Documents and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the requisite parties
thereto may deem advisable from time to time, and (d) any collateral security, guarantee or right
of offset at any time held by any Senior Secured Party for the payment of the Guaranteed
Obligations may be sold, exchanged, waived, surrendered or released. No Secured Obligations
Representative or any other Senior Secured Party shall have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the Specified Grantor Obligations
or for the guarantee contained in this Section 2 or any property subject thereto.




          2.4. Guarantee Absolute and Unconditional. (a) Each Grantor waives any and all notice
of the creation, renewal, extension or accrual of any of the Guaranteed Obligations other than
those for which it is the Specified Grantor and notice of or proof of reliance by any Secured
Obligations Representative or any other Senior Secured Party upon the guarantee contained in this
Section 2 or acceptance of the guarantee contained in this Section 2. (b) The
Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created,




22









 




contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2. (c) All dealings between the applicable Specified Grantor and
any of the other Grantors, on the one hand, and the Secured Obligations Representative and the
other Senior Secured Parties, on the other hand, likewise shall be conclusively presumed to have
been had or consummated in reliance upon the guarantee contained in this Section 2. (d)
Each Grantor waives diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the applicable Specified Grantor or any of the Grantors with respect to the
Guaranteed Obligations. (e) Each Grantor understands and agrees that the guarantees contained in
this Section 2 shall be construed as continuing, absolute and unconditional guarantees of
payment and performance (and not collection) without regard to (i) the validity or enforceability
of any Senior Secured Document, any of the Guaranteed Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or from time to time held
by any Secured Obligations Representative or any other Senior Secured Party, (ii) the
non-perfection or release of any collateral security therefor, (iii) any defense, set-off or
counterclaim (other than a defense of payment or performance hereunder) which may at any time be
available to or be asserted by the applicable Specified Grantor or any other Person against any
Secured Obligations Representative or any other Senior Secured Party, (iv) any Applicable Law of
any jurisdiction or other event affecting any term of any Guaranteed Obligation or (v) any other
circumstance whatsoever (with or without notice to or knowledge of the applicable Specified Grantor
or such Grantor) which constitutes, or might be construed to constitute, an equitable or legal
discharge of the applicable Specified Grantor for the Guaranteed Obligations, or of such Grantor
under any guarantee contained in this Section 2, in any Insolvency Proceeding or in any
other instance. (f) When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Grantor, any Secured Obligations Representative or any other Senior Secured
Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such
rights and remedies as it may have against the applicable Specified Grantor, any other Grantor or
any other Person or against any collateral security or guarantee for the Guaranteed Obligations or
any right of offset with respect thereto, and any failure by any Senior Secured Party to make any
such demand, to pursue such other rights or remedies or to collect any payments from the applicable
Specified Grantor, any other Grantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of the applicable
Specified Grantor, any other Grantor or any other Person or any such collateral security, guarantee
or right of offset, shall not relieve any Grantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or available as a
matter of law, of any Secured Obligations Representative or any other Senior Secured Party against
any Grantor. For the purposes hereof “demand” shall include the commencement and continuance of any
legal proceedings.




          2.5. Reinstatement. Each Grantor further agrees that, if (i) any payment made by the
Specified Grantor or any other Person and applied to the Guaranteed Obligations is at any time
annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or (ii) the proceeds of Collateral are required to be
returned by any Senior Secured Party to such Specified Grantor, its estate, trustee, receiver or
any other party, including any Grantor, under any bankruptcy law, equitable cause or any other
requirement of Applicable Law, then, to the extent of such payment or repayment, any such Grantor’s
liability hereunder (and any Lien or other Collateral securing such liability) shall be and remain
in full force and effect, as fully as if such payment had never been made. If, prior to any of the
foregoing, the guarantees contained in this Section 2 shall have been cancelled or
surrendered (and if any Lien or other Collateral securing such Grantor’s liability hereunder shall





23









 







have been released or terminated by virtue of such cancellation or surrender), the applicable
guarantee (and such Lien or other Collateral) shall be reinstated in full force and effect, and
such prior cancellation or surrender shall not diminish, release, discharge, impair or otherwise
affect the obligations of any such Grantor in respect of the amount of such payment (or any Lien or
other Collateral securing such obligation).




          2.6. Payments. Each Grantor hereby guarantees that payments hereunder will be paid to
the Collateral Agent without set-off or counterclaim in dollars (or such other currency as
permitted by the applicable Senior Secured Documents) in immediately available funds at the office
of the Collateral Agent specified in the applicable Senior Secured Documents as the office for
payments thereunder.




SECTION 3. GRANT OF SECURITY INTEREST;

CONTINUING LIABILITY




          (a) Each Grantor hereby assigns and pledges to the Collateral Agent, for the ratable benefit
of the Senior Secured Parties, and hereby grants to the Collateral Agent, for the ratable benefit
of the Senior Secured Parties a security interest in all of its right, title and interest in the
GCA Collateral now owned or at any time hereafter acquired by such Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or interest, as
collateral security for the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Guaranteed Obligations.




          (b) The Grantors and the Collateral Agent hereby acknowledge and agree that the security
interest created hereby in the GCA Collateral is not, in and of itself, to be construed as a grant
of a fee interest in (as opposed to a security interest in) any Intellectual Property, including
any Copyright, Trademark, Patent, Copyright License, Patent License, Trademark License, or Trade
Secret.




          This Agreement, and the security interests and Liens granted and created herein, secures the
payment and performance of all Guaranteed Obligations now or hereafter in effect, whether direct or
indirect, absolute or contingent, and whether for principal, reimbursement obligations, interest,
fees, premiums, penalties, indemnifications, expenses or otherwise, and including all amounts that
constitute part of the Guaranteed Obligations and would be owed by any Grantor but for the fact
that they are unenforceable or not allowed due to a pending Insolvency Proceeding.




          (c) Notwithstanding anything herein to the contrary, (i) each Grantor shall

remain liable for all obligations under and in respect of the Collateral and nothing contained
herein is intended or shall be a delegation of duties to the Collateral Agent or any other
Senior
Secured Party, (ii) each Grantor shall remain liable under each of the agreements included in
the
Collateral, including any Receivables, any Contracts and any agreements relating to Pledged
Equity Interests, to perform all of the obligations undertaken by it thereunder all in
accordance
with and pursuant to the terms and provisions thereof and neither the Collateral Agent nor any
other Senior Secured Party shall have any obligation or liability under any of such agreements
by
reason of or arising out of this Agreement or any other document related hereto nor shall the
Collateral Agent nor any other Senior Secured Party have any obligation to make any inquiry as
to the nature or sufficiency of any payment received by it or have any obligation to take any
action to collect or enforce any rights under any agreement included in the Collateral,
including
any agreements relating to any Receivables, any Contracts, or any agreements relating to
Pledged





24









 







Equity Interests and (iii) the exercise by the Collateral Agent of any of its rights hereunder
shall not release any Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral, including any agreements relating to any Receivables, any
Contracts (except as provided under the terms of any such Contract upon the assumption thereof by
the Collateral Agent or a third party) and any agreements relating to Pledged Equity Interests.




SECTION 4. REPRESENTATIONS AND WARRANTIES




          To induce the applicable Senior Secured Parties to enter into the Senior Secured Documents
and to induce the Lenders to make their respective extensions of credit to the applicable
Specified Grantors thereunder, each Grantor hereby represents and warrants to the Collateral Agent
and each other applicable Senior Secured Party that:




          4.1. Title; No Other Liens. Except for the security interest granted to the Collateral
Agent for the ratable benefit of the Senior Secured Parties pursuant to this Agreement and the
other Liens permitted to exist on the Collateral by any Senior Secured Document, such Grantor owns
or has a right to use each item of the GCA Collateral in which it purports to grant a Lien
hereunder free and clear of any and all Liens or claims, except for Liens not prohibited to exist
on the Collateral by the Credit Agreement Documents and the other Senior Secured Documents;
provided that the foregoing shall not be deemed to apply to the Intellectual Property
Collateral, which Intellectual Property Collateral is subject to Section 4.9 of this
Agreement. No Grantor has filed or consented to the filing of any financing statement, mortgage or
other public notice with respect to all or any part of the Collateral with any public office,
except such as have been filed in favor of the Collateral Agent, for the benefit of the Senior
Secured Parties, pursuant to this Agreement or as are not prohibited by the Credit Agreement and
the other Senior Secured Documents.




          4.2. Perfected First Priority Liens. The security interests granted pursuant to this
Agreement (a) upon completion of the filings and other actions specified on Schedule 4.2(a)
within the time periods prescribed by Applicable Law (all of which, in the case of all filings
and other documents listed on such schedule, have been delivered to the Collateral Agent in duly
completed and duly executed form, as applicable, and may be filed by or on behalf of the Collateral
Agent at any time) and payment of all filing fees, will constitute valid, perfected security
interests (with respect to Intellectual Property, if and to the extent perfection may be achieved
by the filing of UCC financing statements and/or security agreements in the United States Patent
and Trademark Office and the United States Copyright Office) in all of the GCA Collateral (other
than the Excluded Perfection Assets) in favor of the Collateral Agent, for the benefit of the
Senior Secured Parties, as collateral security for such Grantor’s Guaranteed Obligations,
enforceable in accordance with the terms hereof and of the Intercreditor Agreement;
provided, however, that additional filings may be necessary to perfect the
Collateral Agent’s security interest in any After-Acquired Intellectual Property and,
provided, further, that to the extent that a security interest may be granted in a
jurisdiction outside of the United States, additional filings and/or other actions may be required
to perfect the Collateral Agent’s security interest in Intellectual Property Collateral which is
created under the laws of a jurisdiction outside the United States, (b) are, to the extent that
such Liens have been granted to the Collateral Agent for the benefit of the Senior Secured Parties,
prior to all other Liens on the Collateral except for Liens not prohibited by the Credit Agreement
Documents or any other Senior Secured Document. Without limiting the foregoing, each Grantor has
taken all actions necessary, including those specified in Section 5.1, and as reasonably
requested by the Collateral Agent, to: (i) establish the Collateral Agent’s “control” (within the
meanings of Sections 8-106 and 9-106 of the UCC) over




25









 




any portion of the Investment Property constituting Certificated Securities, Uncertificated
Securities, Securities Accounts, Securities Entitlements or Commodity Accounts, (ii) establish the
Collateral Agent’s “control” (within the meaning of Section 9-104 of the UCC) over all Deposit
Accounts, (iii) establish the Collateral Agent’s “control” (within the meaning of Section 9-107 of
the UCC) over all Letter of Credit Rights, (iv) establish the Collateral Agent’s “control” (within
the meaning of Section 9-105 of the UCC) over all Electronic Chattel Paper and (v) establish the
Collateral Agent’s “control” (within the meaning of Section 16 of the Uniform Electronic
Transaction Act as in effect in the applicable jurisdiction (the “UETA”)) over all
“transferable records” (as defined in UETA); provided the foregoing representation shall
not apply to any Excluded Assets or Excluded Perfection Assets.



     4.3. Name; Jurisdiction of Organization, etc. On the date hereof, such Grantor’s exact
legal name (as indicated on the public record of such Grantor’s jurisdiction of formation or
organization), jurisdiction of organization, organizational identification number, if any, and the
location of such Grantor’s chief executive office or sole place of business are specified on
Schedule 4.3. Except as disclosed on Schedule 4.3, on the date hereof each Grantor
is organized solely under the law of the jurisdiction so specified and has not filed any
certificates of domestication, foreign qualification, transfer or continuance in any other
jurisdiction. Except as specified on Schedule 4.3, on the date hereof no such Grantor has
changed its name or jurisdiction of organization within the past five years, (ii) no such Grantor
has within the last five years become bound (whether as a result of merger or otherwise) as a
grantor under a security agreement entered into by another Person which has not heretofore been
terminated and (iii) no such Grantor has changed its corporate structure in any way (e.g. by
merger, consolidation, change in corporate form or otherwise) within the past two years.



     4.4. Inventory and Equipment. On the date hereof, the Inventory and Equipment (other
than mobile goods) are kept at the locations listed on Schedule 4.4. None of the Inventory
or Equipment (other than nuclear fuel) that is included in the Collateral having a book value (net
of depreciation) in excess of $10,000,000 is in the possession of any bailee or warehouseman for
which the Collateral Agent has not been granted an access agreement in form and substance
reasonably satisfactory to it.



     4.5. Condition and Maintenance of Equipment. The Equipment (taken as a whole) of such
Grantor that is included in the Collateral is in good repair, working order and condition,
reasonable wear and tear excepted. Each Grantor shall cause its Equipment (taken as a whole) that
is included in the Collateral to be maintained and preserved in good repair, working order and
condition, reasonable wear and tear excepted, and shall as quickly as commercially practicable make
or cause to be made all repairs, replacements and other improvements which are necessary or
appropriate in the conduct of such Grantor’s business in its prudent business judgment. Subject to
any restrictions in the Senior Secured Documents, each Grantor may sell or otherwise dispose of any
Equipment that is included in the Collateral if it is necessary or appropriate in the conduct of
such Grantor’s business in its prudent business judgment.



     4.6. Investment Property. (a) Schedule 4.6(a) (as such schedule may be
updated or supplemented from time to time pursuant to Section 5.11) sets forth under the
headings “Pledged Stock,” “Pledged LLC Interests” and “Pledged Partnership Interests”
respectively, (i) all of the Pledged Stock, Pledged LLC Interests and Pledged Partnership
Interests owned by any Grantor and (ii) the percentage of issued and outstanding shares of stock,
percentage of membership interests, percentage of partnership interests or percentage of
beneficial interest of the respective issuers thereof owned by such Grantor. Schedule
4.6(b) (as




26









 




such schedule may be updated or supplemented from time to time pursuant to Section 5.11)
sets forth under the heading “Pledged Debt Securities” and “Pledged Notes” all of the Pledged Debt
Securities and Pledged Notes owned by any Grantor. Schedule 4.6(c) (as such schedule may be
updated or supplemented from time to time pursuant to Section 5.11) sets forth under the
headings “Securities Accounts,” “Commodities Accounts,” and “Deposit Accounts” respectively, all of
the Securities Accounts, Commodities Accounts and Deposit Accounts in which each Grantor has an
interest that are included in the GCA Collateral. Each Grantor is the sole entitlement holder or
customer of each such account set forth opposite its name on such schedule, and such Grantor has
not consented to, and is not otherwise aware of, any Person (other than the Collateral Agent
pursuant hereto) having “control” (within the meanings of Sections 8-106, 9-106 and 9-104 of the
UCC) over, or any other interest in, any such Securities Account, Commodity Account or Deposit
Account or any securities, commodities or other property credited thereto, except for any such
account that constitutes an Excluded Asset or Excluded Perfection Asset.




          (b) The shares of Pledged Equity Interests pledged by such Grantor hereunder constitute all
of the issued and outstanding shares of all classes of the Capital Stock of each Issuer directly
owned by such Grantor or, in the case of Foreign Subsidiary or foreign Minority Investment, 65%
(or the full amount held, if less than 65%) of the outstanding Voting Stock (for any Foreign
Subsidiary) or the outstanding voting equity interests (for any foreign Minority Investment) of
each relevant Issuer in each case excluding Excluded Perfection Assets.




          (c) Such Grantor’s Pledged Equity Interests have been duly and validly issued and all the
shares of the Pledged Stock are fully paid and, in respect of stock of a corporation only,
nonassessable.




          (d) As of the Security Grant Date, no Uncertificated Securities (including, without
limitation uncertificated Pledged Equity Interests) pledged by such Grantor provide that they are
securities governed by Article 8 of the UCC in effect from time to time in the “issuer’s
jurisdiction” (as such term is defined in the UCC in effect in such jurisdiction) of each Issuer
thereof.




          (e) As of the Security Grant Date, there are no Certificated Securities pledged by such
Grantor (including, without limitation Pledged Equity Interests) that expressly provide that they
are securities governed by Article 8 of the UCC in effect from time to time in the “issuer’s
jurisdiction” (as such term is defined in the UCC in effect in such jurisdiction) of each Issuer
thereof, except for Certificated Securities that have been delivered to the Collateral Agent
pursuant to the terms hereof in each case excluding Excluded Perfection Assets.




          (f) Such Grantor is the record and beneficial owner of, and has good and marketable title to,
the Investment Property and Deposit Accounts pledged by it hereunder, free of any and all Liens or
options in favor of, or claims of, any other Person, except Liens not prohibited to exist thereon
by the Credit Agreement Documents or any other Senior Secured Document, and there are no
outstanding warrants, options or other rights to purchase, or shareholder, voting trust or similar
agreements outstanding with respect to, or property that is convertible into, or that requires the
issuance or sale of, any Pledged Equity Interests.




          (g) Each Issuer that is not a Grantor hereunder and that is a Subsidiary of or that
constitutes a Minority Investment by the Company or another Grantor or is otherwise controlled by
the Company or another Grantor has executed and delivered to the Collateral Agent an Acknowledgment
and Consent, substantially in the form of Exhibit A or such other form as




27









 




reasonably agreed by the Administrative Agent, to the pledge of the Pledged Securities pursuant to this Agreement.



     4.7. Receivables.



     (a) No amount payable to such Grantor under or in connection with any Receivable (other than a
Receivable constituting an Excluded Perfection Asset) that constitutes Collateral (i) is evidenced
by any Instrument or Tangible Chattel Paper unless such Instrument or Tangible Chattel Paper has
been delivered to the Collateral Agent or (ii) constitutes Electronic Chattel Paper that has not
been subjected to the “control” (within the meaning of Section 9-105 of the UCC) of the Collateral
Agent.



     (b) On the Security Grant Date, the face amount of all Receivables on which a federal
Governmental Authority is an obligor constitutes no more than 10% of the face amount of all
Receivables.



     (c) On the Security Grant Date, the amounts represented by such Grantor to the Senior Secured
Parties from time to time as owing to such Grantor in respect of the Receivables are accurate in
all material respects.



     4.8. Contracts.



     (a) As of the most recent Schedule Update Date, Schedule 4.8(a) sets forth all of the
Material Contracts in which such Grantor has any right or interest.



     (b) Except as set forth on Schedule 4.8(b) as of the most recent Schedule Update Date,
no Material Contract or Key Contract prohibits assignment or encumbrance by such Grantor or
requires or purports to require consent of, or notice to, any party (other than such Grantor) to
any Material Contract or Key Contract in connection with the execution, delivery and performance of
this Agreement, including the exercise of remedies by the Collateral Agent with respect to such
Material Contract or such Key Contract, except for such consents that have been obtained and such
notices that have been given.



     (c) Each Material Contract and each Key Contract is in full force and effect and constitutes
a valid and legally enforceable obligation of the Grantor party thereto and (to such Grantor’s
knowledge) each other party thereto, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’
rights generally, general equitable principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.



     (d) Such Grantor has delivered to the Collateral Agent a complete and correct copy of each
Material Contract and each Key Contract, if any, including all amendments, supplements and other
modifications thereto.



     4.9. Intellectual Property. (a) Schedule 4.9(a) lists all Intellectual
Property
which is registered with a Governmental Authority or is the subject of an application for
registration, in each case which is owned by such Grantor in its own name on the date hereof.
For each such Intellectual Property, Schedule 4.9(a) also includes the name of the
registrant or
applicant, the jurisdiction, the filing date, and if issued, the issuance date, and the serial
or
registration number. Except as set forth in Schedule 4.9(a), and subject only to the
license terms





28









 







of the licensing or franchise agreements referred to in paragraph (c) below, such Grantor (i) is
the exclusive owner of the entire and unencumbered (except for Liens not prohibited to exist on the
Collateral by each of the Credit Agreement Documents and the other Senior Secured Documents) right,
title and interest in and to all Intellectual Property that is owned by such Grantor in its own
name on the date hereof which is material to such Grantor’s business (collectively, the “Owned
Intellectual Property”) and (ii) is otherwise entitled to use, and grant to others the right to
use, all Owned Intellectual Property. To such Grantor’s knowledge, each Grantor has a valid and
enforceable right to use all Intellectual Property material to such Grantor’s business and used in
such Grantor’s business, but that such Grantor does not own (collectively, the “Licensed
Intellectual Property” and together with the Owned Intellectual Property, the “Material
Intellectual Property”).




          (b) On the date hereof, all Owned Intellectual Property that is registered with a Governmental
Authority is valid, subsisting, unexpired and enforceable, and has not been abandoned. To such
Grantor’s knowledge, neither the operation of such Grantor’s business as currently conducted nor
the use of any Material Intellectual Property in connection therewith conflicts with, infringes,
misappropriates, dilutes, misuses or otherwise violates the Intellectual Property rights of any
other Person, and no claim has been so asserted by any other Person except as could not reasonably
be expected to have a Material Adverse Effect.




          (c) Except as set forth in Schedule 4.9(c), on the date hereof (i) none of the
Material Intellectual Property is the subject of any licensing or franchise agreement pursuant to
which such Grantor is the licensor or franchisor and (ii) there are no other agreements,
obligations, orders or judgments which restrict such Grantor’s use of any Owned Intellectual
Property.




          (d) No holding, decision or judgment has been rendered by any Governmental Authority or
arbitrator in the United States or outside the United States, to which such Grantor is party
thereto, which would restrict, cancel or question the validity or enforceability of, or such
Grantor’s rights in, any Owned Intellectual Property in any material respect.




          (e) No action or proceeding, in which such Grantor is a party thereto, is pending, or, to
such Grantor’s knowledge, threatened, on the date hereof that could reasonably be expected to have
a Material Adverse Effect (i) seeking to restrict, cancel or question the validity of any Owned
Intellectual Property, (ii) alleging that any services provided by, processes used by, or products
manufactured or sold by such Grantor infringe any Patent, Trademark, Copyright, or any other
Intellectual Property right of any other Person, (iii) alleging that any Owned Intellectual
Property, or to such Grantor’s knowledge, Licensed Intellectual Property, is being licensed,
sublicensed or used in violation of any Intellectual Property or any other proprietary right of
any other Person or (iv) which, if adversely determined, would have a material adverse effect on
the value of any Owned Intellectual Property. To such Grantor’s knowledge, no Person is engaging
in any activity that infringes upon, or is otherwise an unauthorized use of, in any material
respect any Owned Intellectual Property. Except as set forth in Schedule 4.9(e), such
Grantor has not granted any exclusive license, release, covenant not to sue, non-assertion
assurance, or other exclusive right to any Person with respect to any part of the Material
Intellectual Property.




          (f) Except as set forth in Schedule 4.9(a), such Grantor has performed all acts and
has paid all required fees and taxes necessary to maintain each and every item of registered Owned
Intellectual Property that is material to its business in full force and effect and




29









 





performed all acts deemed necessary in such Grantor’s reasonable business discretion to protect and
maintain its interest therein in all material respects. Such Grantor has used proper statutory
notice in connection with its use of each Patent, Trademark and Copyright that is material to its
business included in the Owned Intellectual Property to the extent required by applicable
Requirements of Law, except as could not reasonably be expected to have a Material Adverse Effect.




          (g) To such Grantor’s knowledge and except as could not reasonably be expected to have a
Material Adverse Effect, (i) none of the Trade Secrets of such Grantor that are material to its
business have been used, divulged, disclosed or appropriated in a manner that has resulted or would
result in the loss of such material Trade Secret; (ii) no employee, independent contractor or agent
of such Grantor has misappropriated any material Trade Secrets of any other Person in the course of
the performance of his or her duties as an employee, independent contractor or agent of such
Grantor; and (iii) no employee, independent contractor or agent of such Grantor is in default or
breach in any material respect of any term of any employment agreement, nondisclosure agreement,
assignment of inventions agreement or similar agreement or contract relating in any way to the
protection, ownership, development, use or transfer of such Grantor’s Intellectual Property.




          (h) Such Grantor has taken commercially reasonable steps, as determined by such Grantor in
its reasonable business judgment, to use consistent standards of quality in the manufacture,
distribution and sale of all products sold and provision of all services provided under or in
connection with any Trademark included in the Owned Intellectual Property and has taken
commercially reasonable steps, as determined by such Grantor in its reasonable business judgment,
to ensure that all licensed users of any such Trademark use such consistent standards of quality.




          4.10. Letters of Credit and Letter of Credit Rights. No Grantor is a beneficiary or
assignee under any Letter of Credit with a face amount in excess of $10,000,000 individually other
than the Letters of Credit described on Schedule 4.10 (as such schedule may be updated or
supplemented from time to time pursuant to Section 5.12). With respect to any Letters of
Credit that do not constitute Excluded Perfection Assets and are by their terms transferable, each
Grantor has caused (or, in the case of the Letters of Credit that are specified on Schedule
4.10 on the date hereof, will use commercially reasonable efforts to cause) all issuers and
nominated persons under Letters of Credit in which the Grantor is the beneficiary or assignee to
consent to the assignment of such Letter of Credit to the Collateral Agent and has agreed that upon
the occurrence of a ICA Event of Default it shall cause all payments thereunder to be made to the
Collateral Account. With respect to any Letters of Credit that do not constitute Excluded
Perfection Assets and that are not transferable, each Grantor shall obtain (or, in the case of the
Letters of Credit that do not constitute Excluded Perfection Assets and that are specified on
Schedule 4.10 on the date hereof, use commercially reasonable efforts to obtain) the
consent of the issuer thereof and any nominated Person thereon to the assignment of the proceeds of
the released Letter of Credit to the Collateral Agent in accordance with Section 5-114(c) of the
UCC.




          4.11. Commercial Tort Claims. On the Security Grant Date, no Grantor has any
Commercial Tort Claims in an amount, individually or in the aggregate, in excess of $10,000,000,
except as specifically described on Schedule 4.11 (as such schedule may be updated or
supplemented from time to time in accordance with Section 5.8).




30









 





          4.12. Deposit and Securities Accounts. On or prior to the Security Grant Date, each
Grantor has delivered to the Collateral Agent one or more Deposit Account Control Agreements and
Securities Account Control Agreements, executed by all parties thereto, for each Deposit Account
and each Securities Account that is included in the Collateral in which such Grantor has an
interest as of the date hereof (collectively, the “Pledged Accounts”); provided
that no Grantor shall be required to enter into a Deposit Account Control Agreement or a
Securities Account Control Agreement with respect to any Deposit Account or Securities Account to
the extent that and so long as the same constitutes an Excluded Perfection Asset.




SECTION 5. COVENANTS




          Each Grantor covenants and agrees with the Collateral Agent and the other Senior Secured
Parties that, from and after the date of this Agreement, until the Guaranteed Obligations shall
have been paid in full in cash, and all commitments to extend credit under all Senior Secured
Documents shall have expired or been terminated:




          5.1. Delivery and Control of Instruments, Certificated Securities, Chattel Paper,
Negotiable Documents, Investment Property, Letter of Credit Rights and Receivables. (a) If any
of the GCA Collateral is or shall become evidenced or represented by any Instrument, Certificated
Security, negotiable Document or Tangible Chattel Paper and such Instrument, Certificated Security,
negotiable Document, Tangible Chattel Paper or Instrument shall not constitute an Excluded
Perfection Asset, then such Instrument (other than checks received in the ordinary course of
business), Certificated Security, negotiable Documents or Tangible Chattel Paper shall promptly be
delivered to the Collateral Agent, duly endorsed or accompanied by a duly executed instrument of
transfer or assignment in blank, in each case in a manner reasonably satisfactory to the Collateral
Agent, to be held as GCA Collateral pursuant to this Agreement, and all of such property
constituting GCA Collateral owned by any Grantor as of the Security Grant Date shall be delivered
on the Security Grant Date.




          (b) If any of the GCA Collateral is or shall become “Electronic Chattel Paper” and such
“Electronic Chattel Paper” shall not constitute an Excluded Perfection Asset, then such Grantor
shall ensure that (i) a single authoritative copy exists that is unique, identifiable, unalterable
(except as provided in clauses (iii), (iv) and (v) of this paragraph), (ii) such authoritative copy
identifies the Collateral Agent as the assignee and is communicated to and maintained by the
Collateral Agent or its designee, (iii) copies or revisions that add or change the assignee of the
authoritative copy can only be made with the participation of the Collateral Agent, (iv) each copy
of the authoritative copy and any copy of a copy is readily identifiable as a copy and not the
authoritative copy and (v) any revision of the authoritative copy is readily identifiable as an
authorized or unauthorized revision.




          (c) If any of the GCA Collateral is or shall become evidenced or represented by an
Uncertificated Security, such Grantor shall cause the Issuer thereof as requested by the Collateral
Agent either (i) to register the Collateral Agent as the registered owner of such Uncertificated
Security, upon original issue or registration of transfer or (ii) to agree in writing with such
Grantor and the Collateral Agent that such Issuer will comply with instructions with respect to
such Uncertificated Security originated by the Collateral Agent without further consent of such
Grantor, such agreement to be in such form as agreed by the Collateral Agent, and such action shall
be taken on or prior to the Security Grant Date with respect to any Uncertificated Securities owned
as of the Security Grant Date by any Grantor.





31









 








          (d) Each Grantor, upon becoming a party to this agreement, shall maintain any Securities
Entitlements, Securities Accounts and Deposit Accounts that constitute GCA Collateral (other than
any that constitute Excluded Perfection Assets) that it owns as of the date hereof only with
financial institutions that have agreed, pursuant to Deposit Account Control Agreements and
Securities Account Control Agreements, to comply with Entitlement Orders and instructions issued
or originated by the Collateral Agent without further consent of such Grantor.




          (e) If any of the GCA Collateral is or shall become evidenced or represented by a Commodity
Contract that constitutes GCA Collateral, and such Commodity Contract shall not constitute an
Excluded Perfection Asset, such Grantor shall cause the Commodity Intermediary with respect to
such Commodity Contract to agree in writing, within 45 days of the date such Commodity Contract is
first held by the applicable Grantor, with such Grantor and the Collateral Agent, pursuant to a
Commodity Account Control Agreement, that such Commodity Intermediary will apply any value
distributed on account of such Commodity Contract as directed by the Collateral Agent without
further consent of such Grantor.




          (f) In the case of any transferable Letters of Credit that constitute GCA Collateral in excess
of $10,000,000 individually or in the aggregate, each Grantor shall use commercially reasonable
efforts to obtain the consent of any issuer thereof to the transfer of such Letter of Credit to the
Collateral Agent. In the case of any other Letter-of-credit Rights that do not constitute Excluded
Perfection Assets each Grantor shall use commercially reasonable efforts to obtain the consent of
the issuer thereof and any nominated Person thereon to the assignment of the proceeds of the
related Letter of Credit contemplated by Section 5-114(c) of the UCC.




          (g) (i) No Uncertificated Securities (including uncertificated Pledged Equity Interests) that
constitute GCA Collateral provide that they are securities governed by Article 8 of the UCC in
effect from time to time in the “issuer’s jurisdiction (as such term is defined in the UCC in
effect in such jurisdiction) of each Issuer thereof and (ii) no Certificated Securities (including
Pledged Equity Interests) provide that they are securities governed by Article 8 of the UCC in
effect from time to time in the “issuer’s jurisdiction (as such term is defined in the UCC in
effect in such jurisdiction) of each Issuer thereof, except, in case of sub-clause (ii) hereof, if
such certificate has been delivered to the Collateral Agent pursuant to the terms hereof.




          (h) The amounts represented by such Grantor to the Senior Secured Parties from time to time
as owing to such Grantor in respect of the Receivables shall, at the time any such representation
is made, accurately represent the amount of Receivables owing to such Grantor.




          5.2. Maintenance of Insurance. (a) Such Grantor shall comply with any insurance
requirements set forth in the Credit Agreement and any other Senior Secured Document then in
effect, including, without limitation, the covenant set forth in Section 5.03 of the
Credit Agreement (while the Credit Agreement is in effect and thereafter, in accordance with
insurance requirements set forth in any Senior Secured Document).




          (b) The Company shall deliver to the Collateral Agent on behalf of the Senior Secured
Parties, (i) on the Security Grant Date, a certificate dated such date showing the amount and
types of insurance coverage as of such date, together with endorsements naming the Collateral
Agent (A) as additional insured on all liability insurance policies of such Grantor and (B) as
loss payee on all property and casualty insurance policies of such Grantor and (ii) upon





32









 







request of the Collateral Agent, information reasonably satisfactory to the Collateral Agent to
ensure compliance with this Section 5.2.




          (c) Upon the request of the Collateral Agent, the Company shall deliver to the Collateral
Agent a report of a reputable insurance consultant with respect to such insurance and such
supplemental reports with respect thereto as the Collateral Agent may from time to time reasonably
request, provided however, that to the extent no Event of Default has occurred and is
continuing, the Collateral Agent shall make no more than four such requests per calendar year.




          (d) All such insurance shall provide, at a minimum, that no cancellation, material reduction
in amount of material change in coverage thereof shall be effective until at least 30 days (or, in
the case of non-payment or premium, 10 days) after receipt by the Collateral Agent of written
notice thereof.




          5.3. Maintenance of Perfected Security Interest; Further Documentation.
(a) Such Grantor shall maintain each of the security interests created by this Agreement as a
perfected security interest (other than security interests created with respect to Excluded
Perfection Assets) having at least the priority, but subject to the limitations with respect
to
perfection, described in Section 4.2 and shall, in accordance with its business
practices from time
to time, defend such security interest against the material claims and demands of all persons
whomsoever, provided, however, that nothing herein shall limit any rights of
such Grantor under
the Senior Secured Documents to dispose of the Collateral and/or limit the provisions relating
to
the release of the Liens in the Senior Secured Documents and the Intercreditor Agreement.




          (b) Such Grantor shall furnish to the Collateral Agent from time to time statements and
schedules further identifying and describing the GCA Collateral and, in the case of any Grantor,
such other reports in connection with the assets and property of such Grantor as the Collateral
Agent may reasonably request, all in reasonable detail.




          (c) At any time and from time to time, upon the written request of the Collateral Agent, and
at the sole expense of such Grantor, such Grantor shall promptly and duly authorize, execute and
deliver, and have recorded, such further instruments and documents and take such further actions as
the Collateral Agent may reasonably deem as necessary for the purpose of obtaining or preserving
the full benefits of this Agreement and of the rights and powers herein granted, including (i) the
filing of any financing or continuation statements under the UCC (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and (ii) in the case of
Investment Property, Deposit Accounts and any other relevant GCA Collateral, taking any actions
necessary to enable the Collateral Agent to obtain “control” (within the meaning of the applicable
UCC) with respect to such GCA Collateral, including executing and delivering and causing the
relevant depositary bank or Securities Intermediary to execute and deliver a Deposit Account
Control Agreement or Securities Account Control Agreement, as applicable.




          5.4. Changes in Location, Name, Jurisdiction of Incorporation, etc. Such
Grantor shall not, except upon 5 Business Days’ prior written notice to the Collateral Agent
and
delivery to the Collateral Agent of duly authorized and, where required, executed copies of
all
additional financing statements and other documents reasonably requested by the Collateral
Agent to maintain the validity, perfection and priority of the security interests provided
for
herein:




33









 








          (a) change its legal name, jurisdiction of organization or the location of its chief
executive office or sole place of business from that referred to in Section 4.3; or




          (b) change its legal name, identity or structure to such an extent that any financing
statement filed by the Collateral Agent in connection with this Agreement would become misleading.




          5.5. Notices. Such Grantor shall advise the Collateral Agent promptly upon
becoming aware of any such event, in reasonable detail, of:




          (a) any Lien (other than any Lien not prohibited under the Senior Secured Documents) on any
of the Collateral which would adversely affect the ability of the Collateral Agent to exercise any
of its remedies hereunder; and




          (b) the occurrence of any other event which could reasonably be expected to have a material
adverse effect on the aggregate value of any Collateral or on the security interests created under
any Senior Collateral Document.




          5.6. Investment Property. (a) Without the prior written consent of the
Collateral Agent, such Grantor shall not (i) vote to enable or take any other action that (A)
could
reasonably be expected to materially and adversely affect the rights inuring to the Collateral
Agent hereunder or (B) that is prohibited under any Senior Secured Document, (ii) without the
prior written consent of the Collateral Agent, cause or permit any Issuer of any Pledged
Equity
Interests on the date hereof to elect or otherwise take any action to cause such Pledged
Equity
Interests to be treated as Securities for purposes of the UCC; provided,
however, notwithstanding
the foregoing, if any issuer of any Pledged Equity Interests takes any such action in
violation of
the provisions in this clause (iii), such Grantor shall, promptly upon obtaining knowledge
thereof,
notify the Collateral Agent in writing of any such election or action and, in such event,
shall take
all steps necessary or advisable to establish the Collateral Agent’s “control” thereof.
Without the
prior written consent of the Collateral Agent, such Grantor shall not (i) sell, assign,
transfer,
exchange, or otherwise dispose of, or grant any option with respect to, any of the Investment
Property constituting GCA Collateral or Proceeds thereof or any interest therein (except, in
each
case, pursuant to a transaction not prohibited by the provisions of the Senior Secured
Documents), (ii) create, incur or permit to exist any Lien or option in favor of, or any claim
of
any Person with respect to, any of the Investment Property constituting GCA Collateral or
Proceeds thereof, or any interest therein, except for the security interests created by this
Agreement or any other security interests not prohibited by any Senior Secured Document or
(iii)
enter into any agreement or undertaking restricting the right or ability of such Grantor or
the
Collateral Agent to sell, assign or transfer any of the Investment Property constituting GCA
Collateral or Proceeds thereof or any interest therein except to the extent not prohibited
under any
Senior Secured Document.




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





34









 







grant by each other Grantor of the security interest hereunder in favor of the Collateral Agent and
to the transfer of any Pledged Security to the Collateral Agent or its nominee following an ICA
Event of Default and delivery of a Remedies Notice as provided in the Intercreditor Agreement, and
to the substitution of the Collateral Agent or its nominee as a partner, member or shareholder of
the Issuer of the related Pledged Security.




          5.7. Intellectual Property. (a) Such Grantor (either itself or through licensees)
shall (i) to the extent consistent with Grantor’s reasonable commercial judgment, continue to use
each Trademark owned by such Grantor material to its business to the extent necessary under
applicable Requirements of Law to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain as in the past substantially the same quality of products
and services offered under such Trademark and take all necessary steps, as determined in such
Grantor’s reasonable business judgment, to ensure that all licensed users of such Trademark
maintain as in the past such quality, (iii) use such Trademark with the appropriate notice of
registration and all other notices and legends to the extent required by applicable Requirements of
Law, and (iv) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly
omit to do any act whereby such Trademark would reasonably be expected to become invalidated or
impaired in any material respect.




          (b) Such Grantor (either itself or through licensees) shall not do any act, or knowingly omit
to do any act, whereby any Patent owned by such Grantor material to its business may reasonably be
expected to become forfeited, abandoned or dedicated to the public (except as a result of the
expiration of such Patent at the end of its statutory term).




          (c) Such Grantor (either itself or through licensees) shall not (and shall not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any material
portion of any Copyright owned by such Grantor material to its business would reasonably be
expected to become impaired. Such Grantor shall not (either itself or through licensees) knowingly
do any act whereby any material portion of such Copyrights may reasonably be expected to fall into
the public domain (except as a result of the expiration of such Copyright at the end of its
statutory term).




          (d) Such Grantor (either itself or through licensees) shall not knowingly use any Intellectual
Property in a manner that infringes, misappropriates or violates the Intellectual Property rights
of any other Person, except as would not reasonably be expected to have a Material Adverse Effect.




          (e) Such Grantor (either itself or through licensees) shall use proper statutory notice in
connection with the use of Owned Intellectual Property to the extent required by applicable
Requirements of Law, except as would not reasonably be expected to have a Material Adverse Effect.




          (f) Such Grantor shall notify the Collateral Agent promptly if it knows, or has reason to
know, that any application or registration relating to any Owned Intellectual Property will or is
likely to, in Grantor’s reasonable commercial judgment, become forfeited, abandoned or dedicated to
the public (except as a result of the expiration of any registration at the end of its statutory
term), or of any material adverse determination or development (including the institution of, or
any such determination or development in, any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office or any court or tribunal in any




35









 





country) regarding such Grantor’s ownership of, or the validity of, any Owned Intellectual
Property or such Grantor’s right to register the same or to own and maintain the same.




          (g) Whenever such Grantor (either by itself or through any agent, employee, licensee or
designee acting on its behalf) shall file an application for the registration of any Owned
Intellectual Property with the United States Patent and Trademark Office or any similar office or
agency in any other country or any political subdivision thereof, such Grantor shall report such
filing to the Collateral Agent within ten (10) Business Days after the last day of the fiscal
quarter in which such filing occurs. Upon the reasonable request of the Collateral Agent, such
Grantor shall execute and deliver, any and all agreements, instruments, documents, and papers to
evidence the Senior Secured Parties’ security interest in any Material Intellectual Property of
such Grantor and, with respect to Trademarks, the goodwill of the business connected with the use
of or symbolized by such Trademarks relating thereto or represented thereby.




          (h) Such Grantor shall, if appropriate in Grantor’s reasonable commercial judgment, take
commercially reasonable and necessary steps, including in any proceeding before the United States
Patent and Trademark Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, to maintain and pursue each application
(and to obtain the relevant registration) and to maintain each registration of Owned Intellectual
Property, including the payment of required fees and taxes, the filing of responses to office
actions issued by the United States Patent and Trademark Office and the United States Copyright
Office, the filing of applications for renewal or extension, the filing of affidavits of use, the
filing of divisional, continuation, continuation-in-part, reissue, and renewal applications or
extensions, and the payment of maintenance fees, and the participation in interference,
reexamination, opposition, cancellation, infringement and misappropriation proceedings, in each
case as applicable.




          (i) Such Grantor (either itself or through licensees) shall not, without the prior written
consent of the Collateral Agent, abandon (or, with respect to Trademarks, discontinue use of) any
Owned Intellectual Property, or abandon any application or any right to file an application for
letters patent, trademark, or copyright owned by such Grantor, unless such Grantor shall have
previously determined that such use or the pursuit or maintenance of such Intellectual Property
could not reasonably be expected to have a Material Adverse Effect.




          (j) In the event that any Owned Intellectual Property is infringed, misappropriated or diluted
by a third party in any material respect, such Grantor shall (i) take such actions as such Grantor
shall reasonably deem appropriate, if any, under the circumstances to protect such Intellectual
Property and (ii) if such Intellectual Property is of material economic value, promptly notify the
Collateral Agent after it learns thereof, and where appropriate in Grantor’s reasonable commercial
judgment, sue for infringement, misappropriation or dilution, to seek injunctive relief and to
recover any and all damages for such infringement, misappropriation or dilution.




          (k) Such Grantor agrees that, should it obtain an ownership interest in any item of
Intellectual Property which is not, as of the Security Grant Date, a part of the Intellectual
Property Collateral (the “After-Acquired Intellectual Property”), (i) the provisions of
Section 3 shall automatically apply thereto, (ii) any such After-Acquired Intellectual
Property, and in the case of Trademarks, the goodwill of the business connected with the use of or
symbolized thereby, shall automatically become part of the Intellectual Property Collateral, (iii)
it shall give prompt (and, in any event within 10 days after the last day of the fiscal quarter in
which such





36









 







Grantor acquires such ownership interest) written notice thereof to the Collateral Agent in
accordance herewith of any such Intellectual Property Collateral constituting a registration or
application for registration and (iv) it shall provide the Collateral Agent promptly (and, in any
event within 45 days after the last day of the fiscal quarter in which such Grantor acquires such
ownership interest) with a supplement to Schedule 4.9(a) and take the actions specified in
Section 5.7(m) with respect to any such Intellectual Property Collateral constituting a
registration or application for registration, in each case to the extent that such Intellectual
Property does not constitute an Excluded Asset.




          (l) Such Grantor agrees to execute an Intellectual Property Security Agreement with respect to
the Intellectual Property Collateral substantially in the form of Exhibit B or such other
form as reasonably requested by the Collateral Agent in order to record the security interest
granted herein to the Collateral Agent for the benefit of the Senior Secured Parties with the
United States Patent and Trademark Office, the United States Copyright Office and any other
applicable Governmental Authority.




          (m) Such Grantor agrees to execute an After-Acquired Intellectual Property Security Agreement
with respect to its After-Acquired Intellectual Property substantially in the form of Exhibit
C or such other form as reasonably requested by the Collateral Agent in order to record the
security interest granted herein to the Collateral Agent, for the benefit of Senior Secured
Parties, with the United States Patent and Trademark Office, the United States Copyright Office
and any other applicable Governmental Authority.




          (n) Such Grantor shall take all steps necessary and desirable in its reasonable commercial
judgment to protect the secrecy of all Trade Secrets material to its business.




          5.8. Commercial Tort Claims. Such Grantor shall advise the Collateral Agent promptly
of any Commercial Tort Claim held by such Grantor individually or in the aggregate in excess of
$10,000,000 and shall promptly execute and deliver to the Collateral Agent, in each case in form
and substance reasonably satisfactory to the Collateral Agent, any certificate, agreement and other
document, and take all other action, deemed by the Collateral Agent to be reasonably necessary or
appropriate, in each case for purpose of granting a security interest in such Commercial Tort Claim
to the Collateral Agent for the benefit of the Senior Secured Parties, including without limitation
supplementing Schedule 4.11.




          5.9. Deposit, Securities and Commodity Accounts. After the Security Grant Date, each
Grantor shall deliver to the Collateral Agent a Deposit Account Control Agreement, Securities
Account Control Agreement and Commodity Account Control Agreement for each Deposit Account, each
Securities Account and each Commodity Account constituting GCA Collateral in which such Grantor
acquires an interest after the Security Grant Date; provided that no Grantor shall be
required at any time to enter into a Deposit Account Control Agreement, Securities Account Control
Agreement or Commodity Account Control Agreement with respect to any Deposit Account, Securities
Account or Commodity Account solely to the extent that the same constitutes an Excluded Perfection
Asset at such time. Each Grantor agrees that it shall have no Deposit Account, Securities Accounts
or Commodity Accounts other than (i) Deposit Accounts, Securities Accounts and Commodity Accounts
with respect to which Deposit Account Control Agreements, Securities Account Control Agreements
and Commodity Account Control Agreements, as applicable, have been delivered within 45 days after
the date any such Deposit Account, Securities Account or Commodity Account is opened, (ii) Deposit
Accounts, Securities




37









 




Accounts and Commodity Accounts that constitute Excluded Perfection Assets and (iii) Deposit
Accounts, Securities Accounts and Commodity Accounts that constitute Excluded Assets.




          5.10. Core Assets. Promptly following the acquisition of (i) any new power generating
facility by any Grantor or (ii) the acquisition of any Subsidiary that owns a power generating
facility and becomes a Grantor, the Company shall update the “Core Assets” schedule attached as
Schedule 1.01(a) to include such newly acquired power generating facility.




          5.11. Investment Property. Promptly following (i) the acquisition of any Equity
Interests that are to constitute Pledged Stock, Pledged LLC Interests or Pledged Partnerships
Interests by any Grantor, the Company shall update Schedule 4.6(a) to include such Pledged
Stock, Pledged LLC Interests or Pledged Partnerships Interests, (ii) the acquisition of any debt
securities or promissory notes that are to constitute Pledged Debt Securities or Pledged Notes by
any Grantor, the Company shall update Schedule 4.6(b) to include such Pledged Debt
Securities or Pledged Notes, and (iii) the opening of any Securities Account, Commodities Account
or Deposit Account (in each case to the extent constituting GCA Collateral) by any Grantor, the
Company shall update Schedule 4.6(c) to include such Securities Account, Commodities
Account or Deposit Account and, in each case, take all other actions required to be taken with
respect to such GCA Collateral thereunder.




          5.12. Letters of Credit. Promptly after any Grantor becomes the beneficiary or
assignee to any Letter of Credit with a face amount in excess of $10,000,000, the Company shall
update Schedule 4.10 to include such Letter of Credit and take all other actions required
to be taken with respect to such GCA Collateral thereunder.




          5.13. INPO. Notwithstanding anything to the contrary in Sections 4 and 5
hereof, the Grantors and the Collateral Agent hereby acknowledge and agree that, as required in
connection with the Grantors’ membership in the Institute of Nuclear Power Operators
(“INPO”), the Grantors have disclosed and may at any time in the future disclose to the
INPO and other nuclear power plant operators and have received and may at any time in the future
receive from such entities, operational, safety and other information regarding the operation of
nuclear power plants, which information may include Intellectual Property. Each recipient of such
information may use such information in operating nuclear power plants, with such use subject to
applicable rules and guidelines of INPO.




SECTION 6. REMEDIAL PROVISIONS




          6.1. Certain Matters Relating to Receivables.




          (a) At any time after the occurrence and during the continuance of an Event of Default, the
Collateral Agent shall have the right, but shall in no way be obligated to make test verifications
of the Receivables that are included in the GCA Collateral in any manner and through any medium
that it reasonably considers advisable, and each Grantor shall furnish all such assistance and
information as the Collateral Agent may require in connection with such test verifications. At any
time and from time to time after the occurrence and during the continuance of an Event of Default,
upon the Collateral Agent’s request and at the expense of the relevant Grantor, such Grantor shall
cause independent public accountants or others satisfactory to the Collateral Agent to furnish to
the Collateral Agent reports showing reconciliations, aging and test verifications of, and trial
balances for, the Receivables that are included in the GCA Collateral.




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          (b) Each Grantor may collect such Grantor’s Receivables that are included in the GCA
Collateral, and each Grantor hereby agrees to continue to collect all amounts due or to become due
to such Grantor under the Receivables and any Supporting Obligation, in each case, that are
included in the GCA Collateral and diligently exercise, in accordance with such Grantor’s business
practices, each material right it may have under any Receivable and any Supporting Obligation, in
each case, that are included in the GCA Collateral at its own expense; provided,
however, that the Collateral Agent may curtail or terminate said authority at any time
after the occurrence and during the continuance of an ICA Event of Default and upon receipt by the
Collateral Agent of an Act of Instructing Senior Secured Parties directing the Collateral Agent to
send a Remedies Notice in connection therewith as provided in the Intercreditor Agreement, and
until such time as such Remedies Notice has been rescinded. If required by the Collateral Agent at
any time after the occurrence and during the continuance of an ICA Event of Default and upon
receipt by the Collateral Agent of an Act of Instructing Senior Secured Parties directing the
Collateral Agent to send a Remedies Notice in connection therewith as provided in the Intercreditor
Agreement, and until such time as such Remedies Notice has been rescinded, any payments of
Receivables that are included in the GCA Collateral, when collected by any Grantor, (i) shall be
forthwith (and, in any event, within two Business Days) deposited by such Grantor in the exact form
received, duly endorsed by such Grantor to the Collateral Agent for the benefit of the Senior
Secured Parties if required, in a Collateral Account maintained under the control of the Collateral
Agent, subject to withdrawal by the Collateral Agent for the account of the Senior Secured Parties
only as provided in Section 6.6, and (ii) until so turned over, shall be held by such
Grantor for the Senior Secured Parties, segregated from other funds of such Grantor. Each such
deposit of Proceeds of Receivables that are included in the GCA Collateral shall be accompanied by
a report identifying in reasonable detail the nature and source of the payments included in the
deposit.




          (c) At any time after the occurrence and during the continuance of an ICA Event of Default and
upon receipt by the Collateral Agent of an Act of Instructing Senior Secured Parties directing the
Collateral Agent to send a Remedies Notice in connection therewith as provided in the Intercreditor
Agreement, and until such time as such Remedies Notice has been rescinded, at the Collateral
Agent’s request, each Grantor shall deliver to the Collateral Agent all original and other
documents evidencing, and relating to, the agreements and transactions which gave rise to the
Receivables that are included in the GCA Collateral, including all original orders, invoices and
shipping receipts.




          6.2. Communications with Obligors, Grantors Remain Liable. (a) At any time after the
occurrence and during the continuance of an Event of Default, the Collateral Agent in its own name
or in the name of others may at any time communicate with obligors under the Receivables that are
included in the GCA Collateral and parties to the Contracts to verify with them to the Collateral
Agent’s reasonable satisfaction the existence, amount and terms of any Receivables or Contracts, in
each case, that are included in the GCA Collateral.




          (b) At any time after the occurrence and during the continuance of an Event of Default, the
Collateral Agent may at any time notify, or require any Grantor to so notify, the Account Debtor or
counterparty on any Receivable or Contract that is included in the GCA Collateral of the security
interest of the Collateral Agent therein. In addition, after the occurrence and during the
continuance of an ICA Event of Default and upon receipt by the Collateral Agent of an Act of
Instructing Senior Secured Parties directing the Collateral Agent to send a Remedies Notice in
connection therewith as provided in the Intercreditor Agreement, and until such time as





39









 







such Remedies Notice has been rescinded, the Collateral Agent may upon written notice to the
applicable Grantor, notify, or require any Grantor to notify, the Account Debtor or counterparty to
make all payments under the Receivables and/or Contracts that are included in the GCA Collateral
directly to the Collateral Agent in accordance with the terms thereof.




          (c) No Senior Secured Party shall have any obligation or liability under any Receivable (or
any agreement giving rise thereto) or Contract that is included in the GCA Collateral by reason of
or arising out of this Agreement or the receipt by any Senior Secured Party of any payment relating
thereto, nor shall any Senior Secured Party be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto) or Contract that is included in the GCA Collateral, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency
of any performance by any party thereunder, to present or file any claim, to take any action to
enforce any performance or to collect the payment of any amounts which may have been assigned to it
or to which it may be entitled at any time or times.




          6.3. Pledged Securities. (a) Unless an ICA Event of Default shall have occurred and
be continuing and the Collateral Agent (subject to the terms of the Intercreditor Agreement) shall
have given notice to the relevant Grantor of the Collateral Agent’s intent to exercise its rights
pursuant to Section 6.3(b) upon receipt by the Collateral Agent of an Act of Instructing
Senior Secured Parties directing the Collateral Agent to send a Remedies Notice in connection
therewith as provided in the Intercreditor Agreement, and until such time as such Remedies Notice
has been rescinded, each Grantor shall be permitted to receive all dividends paid in respect of
the Pledged Equity Interests and all payments made in respect of the Pledged Notes, in each case
paid in the normal course of business of the relevant Issuer, to the extent not prohibited by any
Senior Secured Document, and to exercise all voting and corporate rights with respect to the
Pledged Securities; provided, however, that no vote shall be cast or corporate or
other ownership right exercised or other action taken that would materially impair the Collateral
or that would be inconsistent with or result in any violation of any provision of this Agreement
or any Senior Secured Document.




          (b) Each Grantor hereby authorizes and instructs each Issuer of any Investment Property
pledged by such Grantor hereunder to (i) comply with any instruction received by it from the
Collateral Agent in writing that (x) states that an ICA Event of Default has occurred and is
continuing upon receipt by the Collateral Agent of an Act of Instructing Senior Secured Parties
directing the Collateral Agent to send a Remedies Notice in connection therewith as provided in the
Intercreditor Agreement, and until such time as such Remedies Notice has been rescinded and (y) is
otherwise in accordance with the terms of this Agreement and the Intercreditor Agreement, without
any other or further instructions from such Grantor and each Grantor agrees that each Issuer shall
be fully protected in so complying and (ii) upon delivery of any notice to such effect pursuant to
Section 6.3(a), pay any dividends or other payments with respect to the Investment Property
directly to the Collateral Agent. In order to permit the Collateral Agent to exercise the voting
and other consensual rights which it may be entitled to exercise pursuant hereto and to receive all
dividends and other distributions which it may be entitled to receive hereunder each Grantor shall
promptly execute and deliver (or cause to be executed and delivered) to the Collateral Agent all
proxies, dividend payment orders and other instruments as the Collateral Agent may from time to
time reasonably request and each Grantor acknowledges that the Collateral Agent may utilize the
power of attorney set forth herein.




40









 








          (c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged Securities
pledged by such Grantor hereunder to (i) comply with any instruction received by it from the
Collateral Agent in writing that states that an ICA Event of Default has occurred and is
continuing upon receipt by the Collateral Agent of an Act of Instructing Senior Secured Parties
directing the Collateral Agent to send a Remedies Notice in connection therewith as provided in
the Intercreditor Agreement, and until such time as such Remedies Notice has been rescinded, and
is otherwise in accordance with the terms of this Agreement and the Intercreditor Agreement,
without any other or further instructions from such Grantor and each Grantor agrees that each
Issuer shall be fully protected in so complying, and (ii) upon any such instruction, pay any
dividends or other payments with respect to the Investment Property, including the Pledged
Securities, directly to the Collateral Agent.




          6.4. Intellectual Property; Grant of License. For the purpose of enabling the
Collateral Agent, after the occurrence and during the continuance of an ICA Event of Default and
subject to the terms of the Intercreditor Agreement, to exercise rights and remedies under this
Section 6 at such time as the Collateral Agent shall be lawfully entitled to exercise such
rights and remedies, and for no other purpose, each Grantor hereby grants to the Collateral Agent
an irrevocable (during the continuance of such ICA Event of Default), non-exclusive license
(exercisable without payment of royalty or other compensation to such Grantor) to use, effective
after the occurrence and during the continuance of an ICA Event of Default and upon receipt by the
Collateral Agent of an Act of Instructing Senior Secured Parties directing the Collateral Agent to
send a Remedies Notice in connection therewith as provided in the Intercreditor Agreement, and
until such time as such Remedies Notice has been rescinded, any of the Intellectual Property now
owned or hereafter acquired by such Grantor, wherever the same may be located, through any and all
media, whether now existing or hereafter developed, throughout the world, including in such license
access to all media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout hereof. The foregoing license shall be
subject to any quality standards and quality control practices then in effect.




          6.5. Intellectual Property Litigation and Protection.




          (a) Upon the occurrence and during the continuance of any Event of Default and subject to the
terms of the Intercreditor Agreement, the Collateral Agent shall have the right, upon notice to the
applicable Grantor, but shall in no way be obligated to file applications for registration of the
Owned Intellectual Property and/or bring suit in the name of any Grantor, the Collateral Agent or
the Senior Secured Parties to protect or enforce the Owned Intellectual Property and any
Intellectual Property License. In the event of such suit, each Grantor shall, at the reasonable
request of the Collateral Agent, do any and all lawful acts and execute any and all documents
reasonably requested by the Collateral Agent in aid of such enforcement and the Grantors shall
promptly reimburse and indemnify the Collateral Agent for all costs and expenses incurred by the
Collateral Agent in the exercise of its rights under this Section 6.5 in accordance with
Section 8.4 hereof.




          (b) Subject to the terms of the Intercreditor Agreement, if an ICA Event of Default shall
occur and be continuing and upon receipt by the Collateral Agent of an Act of Instructing Senior
Secured Parties directing the Collateral Agent to send a Remedies Notice in connection therewith
as provided in the Intercreditor Agreement, and until such time as such Remedies Notice has been
rescinded, upon written demand from the Collateral Agent and in accordance with Applicable Law
(including the applicable provisions of the UCC), each Grantor (i) shall grant, assign, convey or
otherwise transfer to the Collateral Agent or such Collateral




41









 





Agent’s designee all of such Grantor’s right, title and interest in and to the Owned Intellectual
Property and (ii) shall execute and deliver to the Collateral Agent such documents as are necessary
or appropriate to carry out the intent and purposes of this Agreement.




          (c) Subject to the terms of the Intercreditor Agreement, if (i) an ICA Event of Default shall
have occurred and, by reason of cure, waiver, modification, amendment or otherwise, no longer be
continuing, and any associated Remedies Notice has been rescinded, (ii) no other ICA Event of
Default shall have occurred and be continuing, and (iii) an assignment or other transfer to the
Collateral Agent of any rights, title and interests in and to any Owned Intellectual Property shall
have been previously made, upon the written request of any Grantor, the Collateral Agent shall
promptly execute and deliver to such Grantor, at such Grantor’s sole cost and expense, such
assignments or other transfer as may be necessary to reassign to such Grantor any such rights,
title and interests as may have been assigned to the Collateral Agent as aforesaid;
provided that, so long as the Guaranteed Obligations shall not have become immediately due
and payable, that after giving effect to such reassignment, the Collateral Agent’s security
interest granted pursuant hereto, as well as all other rights and remedies of the Collateral Agent
granted hereunder, shall continue to be in full force and effect; and provided further, the
rights, title and interests so reassigned shall be free and clear of any other Liens granted by or
on behalf of the Collateral Agent and the Senior Secured Parties.




          6.6. Proceeds to be Turned Over To Collateral Agent. In addition to the rights of the
Senior Secured Parties specified in Section 6.1 with respect to payments of Receivables
that are included in the GCA Collateral, if an ICA Event of Default shall occur and be continuing
and upon receipt by the Collateral Agent of an Act of Instructing Senior Secured Parties directing
the Collateral Agent to send a Remedies Notice in connection therewith as provided in the
Intercreditor Agreement, and until such time as such Remedies Notice has been rescinded, all
Proceeds received by any Grantor consisting of cash, Cash Equivalents, checks and other near-cash
items shall be held by such Grantor for the Senior Secured Parties, segregated from other funds of
such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Collateral
Agent in the form received by such Grantor (duly endorsed by such Grantor to the Collateral Agent,
if required by the Collateral Agent). All Proceeds received by the Collateral Agent hereunder shall
be held by the Collateral Agent in a Collateral Account maintained under its control. All Proceeds
while held by the Collateral Agent in a Collateral Account (or by such Grantor for the Senior
Secured Parties) shall continue to be held as collateral security for all the Secured Obligations
and shall not constitute payment thereof until applied as provided in Section 6.7.




          6.7. Application of Proceeds. At such intervals as may be agreed upon by the Company
and the Collateral Agent, or if an ICA Event of Default shall have occurred and be continuing and
upon receipt by the Collateral Agent of an Act of Instructing Senior Secured Parties directing the
Collateral Agent to send a Remedies Notice in connection therewith as provided in the Intercreditor
Agreement, and until such time as such Remedies Notice has been rescinded, at any time at the
Collateral Agent’s election, the Collateral Agent may apply all or any part of Proceeds
constituting GCA Collateral realized through the exercise by the Collateral Agent of its remedies
hereunder, whether or not held in any Collateral Account, in payment of the Secured Obligations in
accordance with the provisions of the Intercreditor Agreement.




          6.8. Code and Other Remedies. (a) If an ICA Event of Default shall occur and be
continuing and upon receipt by the Collateral Agent of an Act of Instructing Senior Secured Parties
directing the Collateral Agent to send a Remedies Notice in connection therewith




42









 




as provided in the Intercreditor Agreement, and until such time as such Remedies Notice has been
rescinded, the Collateral Agent, on behalf of the Senior Secured Parties, may exercise in
accordance with the terms of the Intercreditor Agreement, in addition to all other rights and
remedies granted to them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Guaranteed Obligations, all rights and remedies of a secured party
under the UCC (whether or not the UCC applies to the affected Collateral) or its rights under any
other Applicable Law or in equity. Without limiting the generality of the foregoing and in each
case subject to the terms of the Intercreditor Agreement, the Collateral Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other Person (all and each
of which demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, license, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Collateral Agent or any other Senior Secured Party or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or
on credit or for future delivery without assumption of any credit risk. The Collateral Agent and
each other Senior Secured Party shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or
equity is hereby waived and released. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of any Grantor, and each Grantor hereby waives
(to the extent permitted by Applicable Law) all rights of redemption, stay and/or appraisal which
it now has or may at any time in the future have under any rule of law or statute now existing or
hereafter enacted. Each Grantor agrees that, to the extent notice of sale shall be required by law,
at least ten Business Days notice to such Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable notification. The
Collateral Agent shall not be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. In connection with any such sale, the
Collateral Agent may sell the Collateral without giving any warranties as to the Collateral. The
Collateral Agent may specifically disclaim or modify any warranties of title or the like. This
procedure will not be considered to adversely affect the commercial reasonableness of any sale of
the Collateral. In the exercise of its remedies, each Grantor agrees that it would not be
commercially unreasonable for the Collateral Agent to dispose of the Collateral or any portion
thereof by using Internet sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of
assets. Each Grantor hereby waives any claims against the Collateral Agent arising by reason of the
fact that the price at which any Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale, even if the Collateral Agent accepts the
first offer received and does not offer such Collateral to more than one offeree. Each Grantor
further agrees, at the Collateral Agent’s request and upon receipt by the Collateral Agent of an
Act of Instructing Senior Secured Parties directing the Collateral Agent to send a Remedies Notice
in connection therewith as provided in the Intercreditor Agreement, and until such time as such
Remedies Notice has been rescinded and subject to the terms of the Intercreditor Agreement, to
assemble the Collateral and make it available to the Collateral Agent at places which the
Collateral Agent shall reasonably select, whether at such





43









 







Grantor’s premises or elsewhere. In the exercise of its remedies in accordance with the
Intercreditor Agreement and upon receipt by the Collateral Agent of an Act of Instructing Senior
Secured Parties directing the Collateral Agent to send a Remedies Notice in connection therewith as
provided in the Intercreditor Agreement, and until such time as such Remedies Notice has been
rescinded, the Collateral Agent shall have the right to enter onto the property where any
Collateral is located and take possession thereof with or without judicial process.




          (b) The Collateral Agent shall apply the net proceeds of any action taken by it pursuant to
this Section 6.8 in accordance with the Intercreditor Agreement. If the Collateral Agent
sells any of the Collateral upon credit, the Grantor will be credited only with payments actually
made by the purchaser and received by the Collateral Agent and applied to indebtedness of the
purchaser. In the event the purchaser fails to pay for the Collateral, the Collateral Agent may
resell the Collateral and the Grantor shall be credited with proceeds of the sale. To the extent
permitted by Applicable Law, each Grantor waives all claims, damages and demands it may acquire
against the Collateral Agent or the other Senior Secured Parties arising out of the exercise by
them of any rights hereunder, except for gross negligence and willful misconduct.




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




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




          6.11. Certain Matters Relating to Deposit, Securities and Commodity Accounts. Each
Grantor irrevocably authorizes the Collateral Agent to notify each Depositary Bank, Securities
Intermediary or Commodity Intermediary, as applicable, of the occurrence of an ICA Event of
Default. Following the occurrence of an ICA Event of Default and upon receipt by the Collateral
Agent of an Act of Instructing Senior Secured Parties directing the Collateral Agent to send a
Remedies Notice in connection therewith as provided in the Intercreditor Agreement, and until such
time as such Remedies Notice has been rescinded, the Collateral Agent may issue a blockage notice
under the applicable Deposit Account Control Agreement, Securities Account Control Agreement or
Commodity Account Control Agreement and take all further actions specified therein.




          6.12. Change of Control. Each Senior Secured Party acknowledges that, under existing
law, a change of control of a Grantor whose Equity Interests are pledged hereunder as a result of
a proposed exercise of remedies hereunder may require the prior approval of the FERC




44









 




and/or any public utility commission. Each Senior Secured Party further acknowledges that,
notwithstanding the provisions of this Article, with respect to any Collateral constituting Pledged
Equity Interests issued by a Person organized under the laws of any State of the United States, to
the extent (and only to the extent) that Applicable Law specifically requires that regulatory
approval be obtained prior to such Collateral Agent, on behalf of the Senior Secured Parties,
enforcing its rights hereunder with respect to such Collateral, the Collateral Agent shall not be
entitled to enforce its rights hereunder with respect to such Collateral without first obtaining
such required regulatory approval.




SECTION 7. THE COLLATERAL AGENT2




          7.1. Collateral Agent’s Appointment as Attorney-in-Fact, etc. (a) Each Grantor hereby
irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of such Grantor and in the name of such Grantor or in its own
name, for the purpose of carrying out the terms of this Agreement and the Intercreditor Agreement,
to take any and all appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, each Grantor hereby gives the Collateral Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:





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




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




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




          (iv) execute, in connection with any sale provided for in Section 6.8 or
6.9, any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral; and




          (v) (1) direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder





 




			
	2	 	Subject to Collateral Agent review and comment.





45









 






directly to the Collateral Agent or as the Collateral Agent shall direct; (2) ask or demand
for, collect, and receive payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of any Collateral;
(3) sign and endorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in respect of
any Collateral; (5) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or releases as the Collateral
Agent may deem appropriate; (7) assign any Copyright, Patent or Trademark owned by such
Grantor (along with the goodwill of the business to which any such Trademark pertains),
throughout the world for such term or terms, on such conditions, and in such manner, as the
Collateral Agent shall in its sole discretion determine; and (8) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Collateral Agent were the absolute owner thereof for
all purposes, and do, at the Collateral Agent’s option and such Grantor’s expense, at any
time, or from time to time, all acts and things which the Collateral Agent deems necessary
to protect, preserve or realize upon the Collateral and the Collateral Agent’s security
interests therein and to effect the intent of this Agreement, all as fully and effectively
as such Grantor might do.



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




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




          (c) The expenses of the Collateral Agent incurred in connection with actions undertaken as
provided in this Section 7.1, together with interest thereon at the rate applicable under
Section 2.07 of the Credit Agreement, from the date of payment by the Collateral Agent to
the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Collateral
Agent on demand.




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




          7.2. Duty of Collateral Agent. The Collateral Agent’s duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its possession, under Section
9-207 of the UCC or otherwise, shall be governed by Section 5.12 of the Intercreditor
Agreement.




          Notwithstanding anything to the contrary contained in this Agreement, the rights, privileges,
powers, benefits and immunities of the Collateral Agent hereunder are subject to the




46









 







terms, conditions and limitations set forth in the Intercreditor Agreement, reference to which is
made for all purposes; provided, however, that any forbearance by the Collateral
Agent in exercising any right or remedy available to it under the Intercreditor Agreement shall not
give rise to a defense on the part of the Grantors with respect to the Collateral Agent’s exercise
of any right or remedy pursuant to this Agreement or as otherwise afforded by Applicable Law.




          7.3. Financing Statements. Each Grantor acknowledges that pursuant to Section 9-509(b)
of the UCC and any other Applicable Law, each Grantor authorizes the Collateral Agent to file or
record financing or continuation statements, and amendments thereto, and other filing or recording
documents or instruments with respect to the Collateral, without the signature of such Grantor, in
such form and in such offices as the Collateral Agent reasonably determines appropriate to perfect
or maintain the perfection of the security interests of the Collateral Agent under this Agreement.
Each Grantor agrees that such financing statements may describe the Collateral in the same manner
as described in the Senior Collateral Documents or as “all assets” or “all personal property”,
wherever located and whether now owned or hereafter existing or acquired or such other description
as the Collateral Agent, in its sole judgment, determines is necessary or advisable. A photographic
or other reproduction of this Agreement shall be sufficient as a financing statement, security
agreement or other filing or recording document or instrument for filing or recording in any
jurisdiction.




          7.4. Authority of Collateral Agent. Each Grantor acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect to any action taken by
the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or resulting or arising out
of this Agreement shall, as between the Collateral Agent and the other Senior Secured Parties, be
governed by the Intercreditor Agreement and by such other agreements with respect thereto as may
exist from time to time among them, but, as between the Collateral Agent and the Grantors, the
Collateral Agent shall be conclusively presumed to be acting as agent for the Senior Secured
Parties, in its capacities as further described in the Intercreditor Agreement, and with full and
valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority. Notwithstanding anything to the
contrary contained herein, in taking any action hereunder the Collateral Agent shall not be
required to act except to the extent that it shall have been directed in writing; provided
that all actions of the Collateral Agent hereunder shall be taken pursuant to the terms of the
Intercreditor Agreement and the Collateral Agent shall act to the extent directed pursuant to the
terms thereof with respect to those matters specified therein.




          7.5. Access to Collateral, Books and Records; Other Information. Upon reasonable
request to any Grantor, representatives of the Collateral Agent or any other Senior Secured Party
(acting through the applicable Secured Obligations Representative) shall have full and free access
to visit and inspect, as applicable, during normal business hours all of the Collateral of such
Grantor, including all of the books, correspondence and records of such Grantor relating thereto;
provided that no Grantor shall be required to provide such access more than two times in
any fiscal year, unless an Event of Default shall have occurred and be continuing. The Collateral
Agent and its representatives may examine the same, take extracts therefrom and make photocopies
thereof, and such Grantor agrees to render to the Collateral Agent, at such Grantor’s cost and
expense, such clerical and other assistance as may be reasonably requested by the Collateral Agent
with regard thereto. Such Grantor shall, at any and all times, within a reasonable time after
written request by the Collateral Agent, furnish or cause




47









 




to be furnished to the Collateral Agent, in such manner and in such detail as may be reasonably
requested by the Collateral Agent, additional information with respect to the Collateral.




          7.6. Appointment of Co-Collateral Agents. At any time or from time to time, in order
to comply with any Requirement of Law, the Collateral Agent may appoint another bank or trust
company or one of more other persons, either to act as co-agent, sub-agent or agent on behalf of
the Senior Secured Parties with such power and authority as may be necessary for the effectual
operation of the provisions hereof and which may be specified in the instrument of appointment.
Each separate trustee or co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment, either jointly with the
Collateral Agent or separately, as may be provided therein, subject to all the provisions of the
Intercreditor Agreement and the other Senior Collateral Documents, specifically including every
provision of such agreements relating to the conduct of, affecting the liability of, or affording
protection to, the Collateral Agent. A copy of every such instrument shall be sent to the
Collateral Agent.




SECTION 8. MISCELLANEOUS




          8.1. Amendments in Writing. None of the terms or provisions of this Agreement may be
waived, amended, supplemented or otherwise modified except in accordance with Section 7.1
of the Intercreditor Agreement.




          8.2. Notices. All notices, requests and demands to or upon the Collateral Agent or
any Grantor hereunder shall be effected in the manner provided for in Section 7.5 of the
Intercreditor Agreement; provided that any such notice, request or demand to or upon any
Grantor shall be addressed to such Grantor at its notice address set forth on Schedule 8.2
or such other address specified in writing to each Secured Obligations Representative and the
Collateral Agent in accordance with such Section. Each Grantor agrees to provide a copy of each
notice provided by it hereunder to the Collateral Agent to each Secured Obligations Representative
in the manner provided for in Section 7.5 of the Intercreditor Agreement.




          8.3. No Waiver by Course of Conduct; Cumulative Remedies. Neither the Collateral Agent
nor any other Senior Secured Party shall by any act (except by a written instrument pursuant to
Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived any right
or remedy hereunder or to have acquiesced in any Event of Default under any Senior Secured
Document. No failure to exercise, nor any delay in exercising, on the part of the Collateral Agent
or any other Senior Secured Party, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Collateral Agent or any Senior Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or remedy which such
Senior Secured Party would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.




          8.4. Enforcement Expenses; Indemnification. (a) Each Grantor agrees to pay or
reimburse the Collateral Agent for all its costs and expenses incurred in collecting against such
Grantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any
rights under this Agreement and the Senior Secured Documents to which such Grantor is a party,




48









 




including the reasonable and documented fees and disbursements of counsel to the Collateral Agent.




          (b) Each Grantor agrees to pay, and to hold the Collateral Agent harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to, or resulting from any delay in
paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement except to the extent the same arises from the gross negligence or
willful misconduct of the Collateral Agent.




          (c) Each Grantor agrees to pay, and to hold the Collateral Agent harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the Company would be
required to do so pursuant to Section 9.05 of the Credit Agreement (whether or not then in
effect), if the Collateral Agent were acting as the Administrative Agent under the Credit Agreement
except to the extent the same arises from the gross negligence or willful misconduct of the
Collateral Agent.




          (d) The agreements in this Section shall survive repayment of the Guaranteed Obligations and
all other amounts payable under the Senior Secured Documents.




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




          8.6. Set-Off. Each Grantor hereby irrevocably authorizes each Senior Secured Party at
any time and from time to time upon the occurrence and during the continuance of an Event of
Default, without notice to such Grantor or any other Grantor, any such notice being hereby
expressly waived by each Grantor, to set-off and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by each Senior Secured Party to or for
the credit or the account of such Grantor, or any part thereof in such amounts as each Senior
Secured Party may elect, against and on account of the obligations and liabilities of such Grantor
to each Senior Secured Party hereunder and claims of every nature and description of each Senior
Secured Party against such Grantor, in any currency, whether arising hereunder, under any other
Senior Secured Document or otherwise, as each Senior Secured Party may elect, whether or not each
Senior Secured Party has made any demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured, provided that each such set-off and appropriation by
any Senior Secured Party shall be held by it and applied in accordance with the terms of the
Intercreditor Agreement. The applicable Senior Secured Party shall notify such Grantor promptly of
any such setoff and the application made by each Senior Secured Party of the proceeds thereof,
provided that the failure to give such notice shall not affect the validity of such set-off
and application. The rights of each Senior Secured Party under this Section are in




49









 




addition to other rights and remedies (including other rights of set-off) which each Senior
Secured Party may have.




          8.7. Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including by facsimile), and all of said
counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of
an executed signature page to this Agreement by electronic transmission shall be as effective as
delivery of a manually signed counterpart of this Agreement.




          8.8. Severability. In the event any one or more of the provisions contained in this
Agreement 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.




          8.9. Section 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.




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




          8.11. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS (OTHER
THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH THE PARTIES HERETO
AGREE APPLY HERETO).




          8.12. Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably and
unconditionally:





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




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



50









 






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




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




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



          8.13. Acknowledgments. Each party hereto hereby acknowledges that:




          (a) it has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Senior Secured Documents to which it is a party;




          (b) no Senior Secured Party has any fiduciary relationship with or duty to any Grantor
arising out of or in connection with this Agreement or any of the other Senior Secured Documents,
and the relationship between the Grantors, on the one hand, and the Collateral Agent and the other
Senior Secured Parties, on the other hand, in connection herewith or therewith is solely that of
debtor and creditor; and




          (c) no joint venture is created hereby or by the Senior Secured Documents or otherwise exists
by virtue of the transactions contemplated hereby among the Senior Secured Parties or among the
Grantors and the Senior Secured Parties.




          8.14. Additional Grantors. Each Subsidiary of the Company that is required to become
a party to this Agreement pursuant to any Senior Secured Document shall become a Grantor for all
purposes of this Agreement upon execution and delivery by such Subsidiary of a Guarantee Joinder
and Assumption Agreement.




          8.15. Releases.




          (a) All or any portion of the GCA Collateral shall be released from the Liens created hereby
as provided in Section 4.1 of the Intercreditor Agreement.




          (b) This Agreement, the guarantees made herein, and all security interests granted hereby
shall terminate upon a Discharge of Secured Obligations.




          (c) Upon the sale, lease, transfer or other disposition of any item of GCA Collateral of any
Grantor (other than to another Grantor) as a result of the liquidation or dissolution of any
Subsidiary whose Equity Interests have been pledged under any Senior Secured Document, in
accordance with the terms of the Senior Secured Documents, the security interest created in such
item of GCA Collateral of such liquidated or dissolved Subsidiary under this Agreement shall be
automatically released and the Collateral Agent will, at the Company’s expense upon receipt by the
Collateral Agent of evidence of the same, execute and deliver to such Grantor such document as such
Grantor may reasonably request to evidence the release of such




51









 





item of GCA Collateral from the assignment and security interest granted under this Agreement in
accordance with the terms of the Senior Secured Documents and, if applicable, the release of such
Grantor from its obligations under this Agreement.




          (d) In the event of any sale or other disposition of all of the Equity Interests in any
Grantor to a Person that is not (either before or after giving effect to such transactions) the
Company or a Subsidiary, then such Grantor will be released and relieved of any obligations under
its guarantee under this Agreement or the applicable Senior Secured Document; provided that
such sale or other disposition is not prohibited by any Senior Secured Document and the proceeds of
such sale or other disposition are applied in accordance with the applicable provisions of all
applicable Senior Secured Documents, including without limitation the Intercreditor Agreement.




          8.16. Conflicts. In the case of any conflicts between this Agreement and the
Intercreditor Agreement, the provisions of the Intercreditor Agreement shall govern and control.




          8.17. 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. 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 SENIOR SECURED DOCUMENTS, AS APPLICABLE, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.17.




[Remainder of page intentionally left blank]





52












 





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




	 	 	 	 	 
	 	ENEXUS ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[GUARANTEE AND COLLATERAL AGREEMENT SIGNATURE PAGE]





 









 





Grantors:




Entergy Nuclear Holding Company #3 LLC3




Entergy Nuclear Indian Point 2, LLC




Entergy Nuclear Vermont Yankee, LLC




Entergy Nuclear Midwest Investment Company, LLC




Entergy Nuclear Palisades, LLC




Entergy Nuclear FitzPatrick, LLC




Entergy Nuclear Indian Point 3, LLC




Enexus Nuclear Pilgrim LLC




Enexus Nuclear Holding Company LLC




Entergy Nuclear Finance Holding, Inc.




Entergy Nuclear Finance, LLC




Entergy Nuclear Power Marketing, LLC




Entergy Retail Holding Company




Entergy Nuclear Nebraska, LLC




Entergy Nuclear Fuels Company




Nuclear Services Company, LLC




Entergy Solutions LLC




Executing this Agreement on behalf of and so as to

bind each of the persons named above under the

caption “Grantors”




	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 





 




			
	3	 	Skadden to provide exact signature blocks for each Grantor.





[GUARANTEE AND COLLATERAL AGREEMENT SIGNATURE PAGE]





 








 









	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA TRUST

COMPANY OF NEW YORK,

as Collateral Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[GUARANTEE AND COLLATERAL AGREEMENT SIGNATURE PAGE]





 









 








	 	 	 	 	 
	 	BNP PARIBAS,

as Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[GUARANTEE AND COLLATERAL AGREEMENT SIGNATURE PAGE]





 









 








	 	 	 	 	 
	 	[                                        ],

as Hedge Counterparty Lienholder

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[GUARANTEE AND COLLATERAL AGREEMENT SIGNATURE PAGE]





 









 








	 	 	 	 	 
	 	[                                        ],

as Specified Credit Facility Lienholder

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[GUARANTEE AND COLLATERAL AGREEMENT SIGNATURE PAGE]





 









 








Exhibit A

to

Guarantee and Collateral Agreement




Form of Acknowledgment and Consent




          The undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement dated as of [                    ], 2008 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Agreement”), made by the Grantors
thereto in favor of The Bank of Nova Scotia Trust Company of New York, in its capacity as
Collateral Agent (in such capacity and together with its successors, the “Collateral Agent”);
capitalized terms used but not defined herein have the meanings given such terms therein. The
undersigned agrees for the benefit of the Collateral Agent and the Senior Secured Parties as
follows:




          1. The undersigned will be bound by the terms of the Agreement and will comply with such terms
insofar as such terms are applicable to the undersigned.




          2. The undersigned confirms the statements made in the Agreement with respect to the
undersigned including, without limitation, in Section 4.6 and Schedules 4.6(a), 4.6(b) and 4.6(c).




          3. The undersigned will notify the Collateral Agent promptly in writing of the occurrence of
any of the events described in Section 5.5 of the Agreement.




          4. The terms of Sections 6.3(c) and 6.8 of the Agreement shall apply to it, mutatis
mutandis, with respect to all actions that may be required of it pursuant to Section 6.3(c) or
6.8 of the Agreement.




[NAME OF ISSUER]




By            
                        
    




          
      Name:




        
         Title:




Address for Notices:




           
                        
          




           
                        
          




Fax:            
                        
     





A-1









 





Exhibit B

to

guarantee and collateral Agreement




Form of Intellectual Property Security Agreement1




[Copyright] [Patent] [Trademark] Security Agreement




          [Copyright] [Patent] [Trademark] Security
Agreement, dated as of
                     ___, 20___, made by each of the Grantors party hereto, in favor of The Bank of Nova
Scotia Trust Company of New York, in its capacity as collateral agent (in such capacity, the
“Collateral Agent”) for the ratable benefit of the Senior Secured Parties (as defined in the
Guarantee and Collateral Agreement referred to below). Capitalized terms used but not defined
herein shall have the meaning assigned thereto in the Guarantee and Collateral Agreement, dated
as of [               ], 2008, made by the Grantors (as defined therein) from time to time party
thereto in favor of the Collateral Agent, BNP Paribas in its capacity as administrative
agent (in such capacity, the “Administrative Agent”) for the Lenders and the other Secured
Obligations Representatives from time to time party thereto (as amended, restated, supplemented or
otherwise modified from time to time, the “Guarantee and Collateral Agreement”).




W i t n e s s e t h:




          Whereas, pursuant to the Credit Agreement dated as of December 23, 2008 (as amended,
restated, supplemented, modified, refinanced or replaced from time to time, the “Credit
Agreement”), among Enexus Energy Corporation, a Delaware corporation (the “Company”), the
Administrative Agent, the Collateral Agent, the Lenders, Citigroup Global Markets Inc. and Goldman
Sachs Lending Partners LLC, as joint book runners and joint lead arrangers (in such
capacities, collectively, the “Arrangers”), Mizuho Corporate Bank, Ltd., as syndication agent (in
such capacity, the “Syndication Agent”), the Lenders have severally agreed to make extensions of
credit to the Borrower upon the terms and subject to the conditions set forth therein;




          Whereas, pursuant to the Guarantee and Collateral Agreement, the Grantors party
hereto are required to execute and deliver this [Copyright] [Patent] [Trademark] Security
Agreement; and




          Whereas, the Borrower and certain Grantors have entered into the Specified Commodity
Hedging Transactions with the Hedge Counterparty Lienholders and the Senior Debt Facilities in
addition to the Credit Agreement (including the Specified Credit Support Facilities) with the
lenders thereunder (including the Credit Support Facility Lienholders), and from time to time may
enter into additional Specified Commodity Hedging Transactions and Senior Debt Facilities
(including Specified Credit Support Facilities);




          Now, Therefore, in consideration of the premises and to induce the Lenders,
the Collateral Agent and the Administrative Agent to enter into the Credit Agreement and to induce
the Lenders to make their respective extensions of credit to the Borrower thereunder and






 




			
	1	 	Separate short form agreements should be filed relating to each Grantor’s respective
copyrights, patents and trademarks.





B-1









 




to induce the other Senior Secured Parties to enter into the transactions contemplated by the
Senior Collateral Documents, each Grantor hereby agrees with the Collateral Agent as follows:




     Section 1 Defined Terms



          Unless otherwise defined herein, terms defined in the Credit Agreement or in the Guarantee
and Collateral Agreement and used herein have the meaning given to them in the Credit Agreement
or the Guarantee and Collateral Agreement, as applicable.




     Section 2 Grant of Security Interest in [Copyright] [Trademark] [Patent] Collateral



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




          [ (a) all of its Copyrights and exclusive Copyright Licenses to which it is a party,
including, without limitation, those Copyright registrations and Copyright applications
referred to on Schedule I hereto; and




          (b) all Proceeds of the foregoing, including, without limitation, any claim by Grantor
against third parties for past, present or future infringement of any Copyright or Copyright
licensed under any exclusive Copyright License.]




or




          [ (a) all of its Patents and exclusive Patent Licenses to which it is a party, including,
without limitation, those Patents and Patent applications referred to on Schedule I hereto; and




          (b) all Proceeds of the foregoing, including, without limitation, any claim by Grantor
against third parties for past, present or future infringement of any Patent or any Patent
licensed under any exclusive Patent License.]




or




          [ (a) all of its Trademarks (except for any Intent-to-Use Trademarks, unless and until
evidence of use in interstate commerce of the Intent-to-Use Trademarks is submitted to and
accepted by the USPTO pursuant to 15 U.S.C. §1051(c) or 15 U.S.C. §1051(d)) and exclusive
Trademark Licenses to which it is a party, including, without limitation, those Trademark
registrations and Trademark applications referred to on Schedule I hereto; and




          (b) all Proceeds of the foregoing, including, without limitation, any claim by Grantor
against third parties for past, present, future (i) infringement or dilution of any Trademark
or Trademark licensed under any exclusive Trademark License or (ii) injury to the goodwill





B-2









 







associated with any Trademark or any Trademark licensed under any exclusive Trademark License.]




          Notwithstanding any of the other provisions set forth in this [Copyright] [Patent] [Trademark]
Security Agreement, this [Copyright] [Patent] [Trademark] Security Agreement shall not constitute a
grant of security interest in, and the Collateral shall not be deemed to include, any Excluded
Assets.




     Section 3 Security Agreement



          The security interest granted pursuant to this [Copyright] [Patent] [Trademark] Security
Agreement is granted in conjunction with the security interest granted to the Collateral Agent
pursuant to the Guarantee and Collateral Agreement and each Grantor hereby acknowledges and affirms
that the rights and remedies of the Collateral Agent with respect to the security interest in the
[Copyright] [Patent] [Trademark] Collateral made and granted hereby are more fully set forth in the
Guarantee and Collateral Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein. In the event that any provision of this [Copyright] [Patent]
[Trademark] Security Agreement is deemed to conflict with the Guarantee and Collateral Agreement,
the provisions of the Guarantee and Collateral Agreement shall control.




[Signature Pages Follow]




B-3









 





          In witness whereof, each Grantor has caused this [Copyright] [Patent] [Trademark]
Security Agreement to be executed and delivered by its duly authorized offer as of the date first
set forth above.




	 	 	 	 	 
	 	,


[Grantor],

as Grantor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 
	Accepted and Agreed

as of the date first above written:



The Bank of Nova Scotia Trust Company of New York,
 as
Collateral Agent

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 



[Signature Page to [Copyright] [Patent] [Trademark] Security Agreement]




B-4









 








Schedule I

to

[Copyright] [Patent] [Trademark] Security Agreement




[Copyright] [Patent] [Trademark] Registrations




[INCLUDE ONLY U.S. REGISTERED INTELLECTUAL PROPERTY]





	[ A.	 	 REGISTERED COPYRIGHTS
	 
	 	 	[Include Copyright Title, Registration Number and Date]
	 
	B.	 	COPYRIGHT APPLICATIONS
	 
	C.	 	EXCLUSIVE COPYRIGHT LICENSES]
	 
	[ A.	 	 REGISTERED PATENTS
	 
	B.	 	PATENT APPLICATIONS
	 
	C.	 	EXCLUSIVE PATENT LICENSES]
	 
	[ A.	 	 REGISTERED TRADEMARKS
	 
	B.	 	TRADEMARK APPLICATIONS
	 
	C.	 	EXCLUSIVE TRADEMARK LICENSES]





     [Include complete legal description of agreement (name of agreement, parties and date)]




B-5









 








Exhibit C

to

guarantee and collateral Agreement




Form of After-Acquired Intellectual Property Security Agreement1




After-Acquired [Copyright] [Patent] [Trademark] Security Agreement




          After-Acquired [Copyright] [Patent] [Trademark] Security
Agreement, dated as of                      ___, 20___, made by each of the Grantors party hereto, in
favor of The Bank of Nova Scotia Trust Company of New York, in its capacity as collateral agent (in
such capacity, the “Collateral Agent”) for the ratable benefit of the Senior Secured Parties (as
defined in the Guarantee and Collateral Agreement referred to below). Capitalized terms used but
not defined herein shall have the meaning assigned thereto in the Guarantee and Collateral
Agreement, dated as of [                    ], 2008, made by the Grantors (as defined therein) from time
to time party thereto in favor of the Collateral Agent, BNP Paribas in its capacity as
administrative agent (in such capacity, the “Administrative Agent”) for the Lenders and the other
Secured Obligations Representatives from time to time party thereto (as amended, restated,
supplemented or otherwise modified from time to time, the “Guarantee and Collateral Agreement”).




W i t n e s s e t h:




          Whereas, pursuant to the Credit Agreement dated as of December 23, 2008 (as amended,
restated, supplemented, modified, refinanced or replaced from time to time, the “Credit
Agreement”), among Enexus Energy Corporation, a Delaware corporation (the “Company”), the
Administrative Agent, the Collateral Agent, the Lenders, Citigroup Global Markets Inc. and Goldman
Sachs Lending Partners LLC, as joint book runners and joint lead arrangers (in such
capacities, collectively, the “Arrangers”), Mizuho Corporate Bank, Ltd., as syndication agent (in
such capacity, the “Syndication Agent”), the Lenders have severally agreed to make extensions of
credit to the Borrower upon the terms and subject to the conditions set forth therein;




          Whereas, pursuant to the Guarantee and Collateral Agreement, the Grantors party
hereto are required to execute and deliver this [Copyright] [Patent] [Trademark] Security
Agreement; and




          Whereas, the Borrower and certain Grantors have entered into the Specified Commodity
Hedging Transactions with the Hedge Counterparty Lienholders and the Senior Debt Facilities in
addition to the Credit Agreement (including the Specified Credit Support Facilities) with the
lenders thereunder (including the Credit Support Facility Lienholders), and from time to time may
enter into additional Specified Commodity Hedging Transactions and Senior Debt Facilities
(including Specified Credit Support Facilities);




          Now, Therefore, in consideration of the premises and to induce the Lenders,
the Collateral Agent and the Administrative Agent to enter into the Credit Agreement and to induce
the Lenders to make their respective extensions of credit to the Borrower thereunder and






 




			
	1	 	Separate short form agreements should be filed relating to each Grantor’s respective
copyrights, patents and trademarks.





C-1









 




to induce the other Senior Secured Parties to enter into the transactions contemplated by the
Senior Collateral Documents, each Grantor hereby agrees with the Collateral Agent as follows:




     Section 1 Defined Terms



          Unless otherwise defined herein, terms defined in the Credit Agreement or in the Guarantee
and Collateral Agreement and used herein have the meaning given to them in the Credit Agreement
or the Guarantee and Collateral Agreement, as applicable.




     Section 2 Grant of Security Interest in [Copyright] [Trademark] [Patent] Collateral



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




          [ (a) all of its Copyrights and exclusive Copyright Licenses to which it is a party,
including, without limitation, those Copyright registrations and Copyright applications
referred to on Schedule I hereto; and




          (b) all Proceeds of the foregoing, including, without limitation, any claim by Grantor
against third parties for past, present or future infringement of any Copyright or Copyright
licensed under any exclusive Copyright License.]




or




          [ (a) all of its Patents and exclusive Patent Licenses to which it is a party, including,
without limitation, those Patents and Patent applications referred to on Schedule I hereto; and




          (b) all Proceeds of the foregoing, including, without limitation, any claim by Grantor
against third parties for past, present or future infringement of any Patent or any Patent
licensed under any exclusive Patent License.]




or




          [ (a) all of its Trademarks (except for any Intent-to-Use Trademarks, unless and until
evidence of use in interstate commerce of the Intent-to-Use Trademarks is submitted to and
accepted by the USPTO pursuant to 15 U.S.C. §1051(c) or 15 U.S.C. §1051(d)) and exclusive
Trademark Licenses to which it is a party, including, without limitation, those Trademark
registrations and Trademark applications referred to on Schedule I hereto; and




          (b) all Proceeds of the foregoing, including, without limitation, any claim by Grantor
against third parties for past, present, future (i) infringement or dilution of any Trademark
or Trademark licensed under any exclusive Trademark License or (ii) injury to the goodwill





C-2









 







associated with any Trademark or any Trademark licensed under any exclusive Trademark License.]




          Notwithstanding any of the other provisions set forth in this After-Acquired [Copyright]
[Patent] [Trademark] Security Agreement, this After-Acquired [Copyright] [Patent] [Trademark]
Security Agreement shall not constitute a grant of security interest in, and the Collateral shall
not be deemed to include, any Excluded Assets.




     Section 3 Security Agreement



          The security interest granted pursuant to this After-Acquired [Copyright] [Patent] [Trademark]
Security Agreement is granted in conjunction with the security interest granted to the Collateral
Agent pursuant to the Guarantee and Collateral Agreement and each Grantor hereby acknowledges and
affirms that the rights and remedies of the Collateral Agent with respect to the security interest
in the [Copyright] [Patent] [Trademark] Collateral made and granted hereby are more fully set forth
in the Guarantee and Collateral Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein. In the event that any provision of this [Copyright]
[Patent] [Trademark] Security Agreement is deemed to conflict with the Guarantee and Collateral
Agreement, the provisions of the Guarantee and Collateral Agreement shall control.




[Signature Pages Follow]




C-3









 





          In witness whereof, each Grantor has caused this [Copyright] [Patent] [Trademark]
Security Agreement to be executed and delivered by its duly authorized offer as of the date first
set forth above.




	 	 	 	 	 
	 	,




[Grantor],

as Grantor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 
	Accepted and Agreed

as of the date first above written:



The Bank of Nova Scotia Trust Company of New York, 
as
Collateral Agent

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 



[Signature Page to [Copyright] [Patent] [Trademark] Security Agreement]




C-4









 








Schedule I

to

[Copyright] [Patent] [Trademark] Security Agreement




[Copyright] [Patent] [Trademark] Registrations




[INCLUDE ONLY U.S. REGISTERED INTELLECTUAL PROPERTY]





	[ A.	 	 REGISTERED COPYRIGHTS
	 
	 	 	[Include Copyright Title, Registration Number and Date]
	 
	B.	 	COPYRIGHT APPLICATIONS
	 
	C.	 	EXCLUSIVE COPYRIGHT LICENSES]
	 
	[ A.	 	 REGISTERED PATENTS
	 
	B.	 	PATENT APPLICATIONS
	 
	C.	 	EXCLUSIVE PATENT LICENSES]
	 
	[ A.	 	 REGISTERED TRADEMARKS
	 
	B.	 	TRADEMARK APPLICATIONS
	 
	C.	 	EXCLUSIVE TRADEMARK LICENSES]





     [Include complete legal description of agreement (name of agreement, parties and date)]




C-5









 








Annex 1

to

Guarantee and Collateral Agreement




[Form of Guarantee Joinder and Assumption Agreement]




          GUARANTEE JOINDER AND ASSUMPTION AGREEMENT, dated as of
                    , 200___, by
and between             
            , a
corporation (the “Additional Grantor”), and [Name of Collateral Agent] (the
“Collateral Agent”). All capitalized terms not defined herein shall have the meaning
ascribed to them in the Guarantee and Collateral Agreement or if not defined therein, in the
Intercreditor Agreement.




W I T N E S S E T H :




          WHEREAS, the Company and certain other Grantors (other than the Additional
Grantor) have entered into (i) the Guarantee and Collateral Agreement, dated as of                     ,
200___ (as amended, supplemented or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”) by and among the Company, the other Grantors party thereto from time to
time, the Collateral Agent, BNP Paribas, as administrative agent and Secured Obligations
Representative for the Lenders under the Credit Agreement, and the other Secured Obligations
Representatives from time to time party thereto and (ii) the Collateral Agency and Intercreditor
Agreement dated as of December 23, 2008 (as amended, supplemented or otherwise modified from time
to time, the “Intercreditor Agreement”) by and among the Company, the other Grantors from
time to time party thereto, the Administrative Agent, the Hedge Counterparty Lienholders, the
other Secured Obligations Representatives from time to time party thereto in respect of any other
Senior Debt Facilities and the Collateral Agent;




          WHEREAS, the terms of the Credit Agreement and/or other Senior Secured Documents require the
Additional Grantor to become a party to the Guarantee and Collateral Agreement and the
Intercreditor Agreement; and




          WHEREAS, the Additional Grantor has agreed to execute and deliver this Guarantee Joinder and
Assumption Agreement in order to become a party to the Guarantee and Collateral Agreement and the
Intercreditor Agreement;




          NOW, THEREFORE, IT IS AGREED:




          1. Intercreditor Agreement. By executing and delivering this Guarantee Joinder and
Assumption Agreement, the Additional Grantor, as provided in Section 7.17 of the Intercreditor
Agreement, hereby becomes a party to and agrees to be bound by the Intercreditor Agreement as an
Obligor thereunder with the same force and effect as if originally named therein as an Obligor and,
without limiting the generality of the foregoing, hereby expressly assumes all obligations and
liabilities of an Obligor thereunder. The information set forth in Annex 1-A hereto is hereby added
to the information currently set forth in Schedules A and B to the Intercreditor Agreement.




          2. Guarantee and Collateral Agreement. By executing and delivering this Guarantee
Joinder and Assumption Agreement, the Additional Grantor, as provided in Section




A1-1









 




8.15 of the Guarantee and Collateral Agreement, hereby becomes a party to and agrees to be bound by
the Guarantee and Collateral Agreement as a Grantor thereunder with the same force and effect as if
originally named therein as a Grantor and, without limiting the generality of the foregoing, hereby
(a) expressly assumes all obligations and liabilities of a Grantor thereunder, (b) grants to the
Collateral Agent a security interest in all of its right, title and interest in the GCA Collateral,
whether now owned or hereafter acquired, to secure the Guaranteed Obligations and (c) authorizes
the filing of any financing statement describing the GCA Collateral as “all assets” or “all
personal property”, wherever located and whether now owned or hereafter existing or acquired or
such other description as the Collateral Agent, in its sole judgment, determines is necessary or
advisable to comply with Applicable Law and all Senior Secured Documents. The information set forth
in Annex 1-B hereto is hereby added to the information currently set forth in the corresponding
Schedule 1.01(b), Schedule 4.2(a), Schedule 4.6(a), Schedule 4.6(b), Schedule 4.6(c), Schedule
4.8(a), Schedule 4.8(b), Schedule 4.9(a), Schedule 4.9(e), Schedule 4.10 and Schedule 4.11 to the
Guarantee and Collateral Agreement. The Additional Grantor hereby represents and warrants that each
of the representations and warranties contained in Section 4 of the Guarantee and Collateral
Agreement is true and correct on and as the date hereof (after giving effect to this Guarantee
Joinder and Assumption Agreement) as if made on and as of such date.




          3. GOVERNING LAW. THIS GUARANTEE JOINDER AND
ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH THE PARTIES HERETO AGREE APPLY
HERETO).




A1-2









 





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




	 	 	 	 	 
	 	[ADDITIONAL GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[NAME OF COLLATERAL AGENT], 

as Collateral Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




A1-3









 








Annex 2

to

Guarantee and Collateral Agreement




[Form of Accession Agreement]




Accession Agreement




          This Accession Agreement, dated as of                      ___, 20___, is entered into
by and among ENEXUS ENERGY CORPORATION, a Delaware corporation (the “Company”).
the other Grantors party hereto, [Name of Collateral Agent] as Collateral Agent and                     , a
                     organized under the law of                     , (the “New Secured Obligations
Representative”). This agreement is delivered pursuant to Section 8.4 (Additional Secured
Obligations Representative) of the Guarantee and Collateral Agreement and Section 3.9 (Additional
Secured Obligations) of the Intercreditor Agreement, each referred to below.




          Reference is made to (a) the Guarantee and Collateral Agreement, dated as of
[                    ], 200[_] (as amended, restated, supplemented, or otherwise modified from time
to time, the “Guarantee and Collateral Agreement”) pursuant to which each of the Grantors
party thereto (i) granted a security interest in the GCA Collateral owned by such Grantor in favor
of the Collateral Agent for the benefit of the Senior Secured Parties referred to therein, and (ii)
for purposes of Section 2.1 (Guarantee) thereof, made a guarantee in favor of (A) BNP Paribas, in
its capacity as administrative agent and Secured Obligations Representative for the Lenders under
the Credit Agreement (the “Administrative Agent”) and (B) each other Secured Obligations
Representative from time to time party thereto and (b) the Collateral Agency and Intercreditor
Agreement, dated as of December 23, 2008 (as amended, restated, supplemented, or otherwise modified
from time to time, the “Intercreditor Agreement”) by and among the Company, the other
Grantors from time to time party thereto, the Administrative Agent, the Secured Obligations
Representatives from time to time party thereto in respect of any other Senior Debt Facilities and
the Collateral Agent. Capitalized terms used herein but not defined herein are used with the
meanings given to them in the Intercreditor Agreement or if not defined therein, in the Guarantee
and Collateral Agreement.




          [Choose one:][The New Secured Obligations Representative represents that it has been
appointed as a Secured Obligations Representative by the holders of the [identify the relevant
Series of Secured Obligations] under the [identify the relevant document] (the “New Accession
Facility”) and that the New Accession Facility is an Additional Senior Secured Facility.] [The
New Secured Obligations Representative represents that it is the Secured Obligations
Representative under the [identify the relevant hedge transaction] (the “New Hedge Transaction”)
and that the New Hedge Transaction is a Commodity Hedging Transaction.] [The New Secured
Obligations Representative represents that it is the Secured Obligations Representative under an
ISDA Master Agreement [identify the relevant document] pursuant to which only Specified Commodity
Hedging Transactions will be entered into.]




          By executing and delivering this Accession Agreement, the New Secured Obligations
Representative hereby becomes a party as a Secured Obligations Representative to, and is bound by
(a) the Guarantee and Collateral Agreement as a Secured Obligations Representative thereunder for
purposes of Section 2.1 (Guarantee) thereof and (b) the





A2-1









 







Intercreditor Agreement as a Secured Obligations Representative thereunder for all purposes
thereof, in each case, on the terms set forth therein and with the same force and effect as if the
New Secured Obligations Representative had executed and delivered the Intercreditor Agreement as
of the date thereof.




          The New Secured Obligations Representative hereby irrevocably (i) appoints [Insert name of
Collateral Agent] as Collateral Agent for purposes of the Intercreditor Agreement and the other
Senior Secured Documents, (ii) authorizes the Collateral Agent to take such actions on its behalf
and to exercise such powers as are delegated to the Collateral Agent in the Senior Secured
Documents, including, without limitation, Section 3.1 of the Intercreditor Agreement, together
with such actions and powers as are reasonably incidental thereto and (iii) authorizes the
Collateral Agent to execute any Senior Secured Documents on behalf of all Senior Secured Parties
and to take such other actions to maintain and preserve the security interests granted pursuant to
any Senior Secured Documents. The New Secured Obligations Representative hereby acknowledges and
agrees that the Collateral Agent in its capacity as such shall be agent on its behalf and on
behalf of all other Senior Secured Parties. [Insert name of Collateral Agent] as Collateral Agent
hereby accepts such appointment.




          The New Secured Obligations Representative acknowledges and agrees that the Senior Liens held
by the Collateral Agent for its benefit may be released, in certain instances, without the
undersigned’s consent pursuant to the terms of Section 4 of the Intercreditor Agreement.





     By acknowledging and agreeing to this Accession Agreement, each of the Grantors hereby, (i)
jointly and severally, unconditionally and irrevocably , guarantees to the undersigned Secured
Obligations Representative, for the ratable benefit of the holders of the applicable Secured
Obligations (and the undersigned Secured Obligations Representative) thereunder, the prompt and
complete payment and performance by the applicable Specified Grantor when due (whether at the
stated maturity, by acceleration or otherwise) of the Specified Grantor Obligations therein, (ii)
reaffirms the security interests granted pursuant to the Guarantee and Collateral Agreement and
grants to the Collateral Agent a security interest in all of its right, title and interest in the
GCA Collateral as defined in the Guarantee and Collateral Agreement whether now owned or hereafter
acquired to secure the Guaranteed Obligations, and (iii) reaffirms the guarantees of the Guaranteed
Obligations provided pursuant to Section 2.1 of the Guarantee and Collateral Agreement.



          The provisions of Article 7 of the Intercreditor Agreement will apply with like effect to
this Accession Agreement.




[Remainder of page intentionally left blank. Signature pages follow.]




A2-2









 





          In witness whereof, the undersigned has caused this Accession Agreement to be duly
executed and delivered as of the date first above written.




	 	 	 	 	 
	 	[New Secured Obligations
Representative]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[Grantors]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 
	Acknowledged and Agreed

as of the date first above
written:



[NAME OF COLLATERAL AGENT],

as Collateral Agent and on behalf of

the Existing Secured Obligations Representatives

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 




A2-3









 





Schedule 1.1




Key Contracts





	1.	 	Amended and Restated Operating Agreement by and between and EquaGen Nuclear LLC and Enexus
Nuclear FitzPatrick, LLC, dated [ ]
	 
	2.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus
Nuclear Pilgrim, LLC, dated [ ]
	 
	3.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus
Nuclear Indian Point 2, LLC, dated [ ]
	 
	4.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus
Nuclear Indian Point 3, LLC, dated [ ]
	 
	5.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus
Nuclear Palisades, LLC, dated [ ]
	 
	6.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus
Nuclear Vermont Yankee, LLC, dated [ ]





1









 





Schedule 4.2(a)




Filings and Other Actions Required to Perfect Security Interests




	 	 	 
	Entity	 	Action
	Enexus Energy Corporation

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware
	 
	 	 
	Enexus Nuclear Indian Point 2, LLC

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware
	 
	 	 
	 

	 	Filing of UCC-1 Financing Statement with Secretary of State Delaware
	 
	 	 
	 

	 	Filing of a Copyright Security Agreement with the United States Copyright Office
	 
	 	 
	 

	 	Filing of UCC-1 Fixture Filing with Windham County for 320 Governor Hunt Road, Vernon, VT 05354 (main plant site)
	 
	 	 
	Enexus Nuclear Vermont Yankee, LLC

	 	Filing of UCC-1 Fixture Filing with Windham County for 304-06, 374, and 394-96 Governor Hunt Road, Vernon, VT
05354 (Edson, Tuttle and Lagro parcels)
	 
	 	 
	 

	 	Filing of UCC-1 Fixture Filing with Windham County for 185 Old Ferry Road and 24 Glen Orne Drive, Brattleboro,
VT 05301 (office and training center) and for Old Ferry Road, Brattleboro, VT 05301 (gravel parking lot)
	 
	 	 
	 

	 	Filing of UCC-1 Fixture Filing with Windham County for Monitoring Site I off Stebbins Road and Monitoring Sites
2-I and 2-II off Route 142, Vernon, VT (monitoring sites)
	 
	 	 
	Enexus Nuclear Midwest Investment Company, LLC

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware
	 
	 	 
	Enexus Nuclear Palisades, LLC

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware
	 
	 	 
	 

	 	Filing of UCC-1 Fixture Filing with Van Buren County for 27780 Blue Star Memorial Highway, Covert, MI 49043
(Palisades plant address)
	 
	 	 
	Enexus Nuclear FitzPatrick, LLC

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware
	 
	 	 
	Enexus Nuclear Indian Point 3, LLC

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware






2









 





	 	 	 
	Entity	 	Action
	Enexus Nuclear Pilgrim, LLC

	 	Filing of UCC-1 Financing Statement with Secretary of State of Massachusetts
	 
	 	 
	 

	 	Filing of UCC-1 Fixture Filing with Plymouth County for 0, 490, 680 and 769
Rocky Hill Road, Plymouth, MA 02360 and 0 State Road, Plymouth, MA 02360
(Pilgrim plant address)
	 
	 	 
	 

	 	Filing of UCC-1 Fixture Filing with Plymouth County for 46 Sandwich Road,
Plymouth, MA 02360 (Chiltonville training center)
	 
	 	 
	Enexus Nuclear Finance Holding, Inc.

	 	Filing of UCC-1 Financing Statement with Secretary of State of Arkansas
	 
	 	 
	Enexus Nuclear Finance, LLC

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware
	 
	 	 
	Enexus Nuclear Holding Company, LLC

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware
	 
	 	 
	Enexus Power Marketing, LLC

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware
	 
	 	 
	Enexus Retail Holding Company

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware
	 
	 	 
	Enexus Nuclear Nebraska, LLC

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware
	 
	 	 
	Enexus Nuclear Fuels Company

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware
	 
	 	 
	Nuclear Services Company, LLC

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware
	 
	 	 
	Enexus Retail Energy LLC

	 	Filing of UCC-1 Financing Statement with Secretary of State of Delaware






3









 





Schedule 4.3




Organizational Information




	 	 	 	 	 	 	 	 	 	  	 
	 	 	 	 	 	 	 	 	Federal	 	Location of Chief
	 	 	 	 	 	 	 	 	Taxpayer	 	Executive Office
	Grantor’s Legal	 	Jurisdiction of	 	Organizational	 	Identification	 	or Sole Place of
	Name	 	Organization	 	Number	 	Number	 	Business
	Enexus Energy Corporation

	 	Delaware
	 	 	4533659	 	 	26-2511059
	 	1018 Highland Colony Parkway 
Ridgeland, MS 39157
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear Indian Point 2, LLC

	 	Delaware
	 	 	3304190	 	 	13-4161691
	 	Bleakley Avenue and Broadway 
Buchanan, NY 10511
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear Vermont Yankee, LLC

	 	Delaware
	 	 	3137546	 	 	58-2507604
	 	320 Governor Hunt Road 
Vernon, VT 05302
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear Midwest Investment
Company, LLC

	 	Delaware
	 	 	4206968	 	 	20-5454796
	 	1340 Echelon
Parkway

Jackson, MS 39213
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear Palisades, LLC,

	 	Delaware
	 	 	4186422	 	 	20-5454284
	 	27780 Blue Star 
Memorial Highway
 Covert, MI 49043
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear FitzPatrick, LLC

	 	Delaware
	 	 	3170190	 	 	72-1466282
	 	268 Lake Road 
Lycoming, NY 13093
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear Indian Point 3, LLC

	 	Delaware
	 	 	3170193	 	 	72-1466425
	 	Bleakley Avenue and Broadway 
Buchanan, NY 10511
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear Pilgrim, LLC

	 	Massachusetts
	 	 	000911853	 	 	64-0900523
	 	600 Rocky Hill Road 
Plymouth, MA 02360-5599
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear Finance Holding, Inc.

	 	Arkansas
	 	 	100202756	 	 	72-1510644
	 	425 W. Capitol Ave. 
Little Rock, AR 72201
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear Finance, LLC

	 	Delaware
	 	 	3426644	 	 	76-0688928
	 	2001 Timberloch 
Place, 2nd Floor North
 The Woodlands, TX 77380
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Power Marketing, LLC

	 	Delaware
	 	 	4046787	 	 	20-3681047
	 	100 First Stamford Place
Stamford, CT 06902
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Retail
Holding Company

	 	Delaware
	 	 	3278322	 	 	51-0402114
	 	440 Hamilton

Avenue, First Floor 
White Plains, NY 10601






4









 






	 	 	 	 	 	 	 	 	 	   	 
	 	 	 	 	 	 	 	 	Federal	 	Location of Chief
	 	 	 	 	 	 	 	 	Taxpayer	 	Executive Office
	Grantor’s Legal	 	Jurisdiction of	 	Organizational	 	Identification	 	or Sole Place of
	Name	 	Organization	 	Number	 	Number	 	Business
	Enexus Nuclear Nebraska, LLC

	 	Delaware
	 	 	3686904	 	 	20-0120321
	 	Cooper Nuclear Station
72676 648A Avenue
Brownville, NE 68321
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear Fuels Company

	 	Delaware
	 	 	3258022	 	 	72-1484125
	 	1018 Highland 
Colony Parkway 
Ridgeland, MS 39157
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear Holding Company, LLC

	 	Delaware
	 	 	 	 	 	(this company
will obtain a
new id no. after
the reorg)
	 	2001 Timberloch

Place, 2nd Floor North

The Woodlands, TX

77380
	 
	 	 	 	 	 	 	 	 	 	 
	Nuclear Services Company, LLC

	 	Delaware
	 	 	4518633	 	 	26-2526401
	 	1018 Highland
 Colony Parkway
 Ridgeland, MS 39157
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Retail Energy, LLC

	 	Delaware
	 	 	4582377	 	 	76-0653032
	 	440 Hamilton Avenue,
 First Floor 
White Plains, NY 10601







5









 








Schedule 4.4 




Inventory and Equipment



See Schedule 4.3 for chief executive offices.




Additional Locations of Equipment and Inventory




	 	 	 
	Company	 	Address
	The following companies have nuclear
fuel located at the facilities noted
in this schedule from time to time:
Enexus 

Nuclear Indian Point 2, LLC; 

Enexus Nuclear Vermont 

Yankee, LLC; Enexus Nuclear 

Palisades, LLC; Enexus Nuclear 

FitzPatrick, LLC; Enexus 

Nuclear Indian Point 3, LLC; 

Enexus Nuclear Pilgrim, LLC;

Enexus Nuclear Fuels Company

	 	ConverDyn conversion facility in Metropolis, IL


US Enrichment Corporation enrichment facility in Paducah, Kentucky


Global Nuclear Fuels, LLC fabrication facility in Wilmington, North Carolina


Westinghouse Electric Company, LLC fabrication facility in Columbia, South Carolina


Areva NP, Inc. fabrication facility in Richland, Washington


Areva NC, Eurodif enrichment facility in France


Areva NC, Comurhex conversion facility in France


Urenco enrichment facility in Netherlands, UK and Germany


Cameco conversion facility in Canada or UK
	 
	 	 
	Enexus Nuclear FitzPatrick, LLC

	 	Oswego Warehousing, 193 E. Seneca St, Oswego, NY 13126





Note: certain books are located at the locations below




	 	 	 
	Company	 	Address
	Enexus Nuclear

	 	440 Hamilton Avenue, First Floor
	Indian Point 3, LLC

	 	White Plains, NY 10601 (certain older books and records)
	 
	 	 
	The Companies
maintain certain
older books and
records in storage
at Iron Mountain

	 	IronMountain

PO Box 447

Route 9 South

Port Ewen, NY 12466 (small volume)


Iron Mountain Rosendale
 NYMetro Vital Records






6









 






	 	 	 
	Company	 	Address
	 

	 	694 Binnewater Road

Rosendale, NY 12472 (larger volume)
	 
	 	 
	Enexus Nuclear 

Pilgrim, LLC

	 	71 Armstrong Road 
Plymouth, MA 02360







7









 








Schedule 4.6(a)


Description of Equity Instruments


Pledged Stock




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Percentage	 	Percentage	 	Interest is
	Issuer	 	Owner	 	Owned	 	Pledged	 	Certified
	Enexus Nuclear Finance
Holding, Inc. (“ENFHI”)

	 	Enexus Energy Corporation
	 	 	100	%	 	 	100	%	 	Yes
	Enexus Retail Holding
Company (“ERHC”)

	 	Enexus Energy Corporation
	 	 	100	%	 	 	100	%	 	Yes
	Enexus Nuclear Fuels Company

	 	Enexus Energy Corporation
	 	 	100	%	 	 	100	%	 	Yes






Pledged LLC Interests




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Percentage	 	Percentage	 	Interest is
	Issuer	 	Owner	 	Owned	 	Pledged	 	Certified
	Enexus Nuclear Indian Point 2, LLC

	 	Enexus Nuclear Holding
Company, LLC
	 	 	100	%	 	 	100	%	 	No
	Enexus Nuclear Vermont Yankee, LLC

	 	Enexus Nuclear Holding
Company, LLC
	 	 	100	%	 	 	100	%	 	No
	Enexus Nuclear Midwest Investment
Company, LLC (“ENMIC”)

	 	Enexus Nuclear Holding
Company, LLC
	 	 	100	%	 	 	100	%	 	No
	Enexus Nuclear Palisades, LLC

	 	Enexus Nuclear Midwest

Investment Company, LLC
	 	 	100	%	 	 	100	%	 	No
	Enexus Nuclear FitzPatrick, LLC

	 	Enexus Energy Corporation
	 	 	100	%	 	 	100	%	 	Yes






8









 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Percentage	 	Percentage	 	Interest is
	Issuer	 	Owner	 	Owned	 	Pledged	 	Certified
	Enexus Nuclear Indian Point 3, LLC

	 	Enexus Energy Corporation
	 	 	100	%	 	 	100	%	 	No
	Enexus Nuclear Pilgrim, LLC

	 	Enexus Energy Corporation
	 	 	100	%	 	 	100	%	 	No
	Enexus Nuclear Finance, LLC

	 	Enexus Nuclear Finance
Holding, Inc.
	 	 	100	%	 	 	100	%	 	No
	Enexus Nuclear Holding Company, LLC

	 	Enexus Energy Corporation
	 	 	100	%	 	 	100	%	 	No
	Enexus Power Marketing, LLC

	 	Enexus Energy Corporation
	 	 	100	%	 	 	100	%	 	No
	Enexus Nuclear Nebraska, LLC

	 	Enexus Retail Holding Company
	 	 	100	%	 	 	100	%	 	No
	Nuclear Services Company, LLC

	 	Enexus Energy Corporation
	 	 	100	%	 	 	100	%	 	No
	Enexus Retail Energy LLC

	 	Enexus Energy Corporation
	 	 	100	%	 	 	100	%	 	No
	EquaGen LLC

	 	Enexus Energy Corporation
and Entergy Corporation
	 	 	50	%	 	 	100	%	 	No






Pledged Partnership Interests



None.




9









 





Schedule 4.6(b)




Description of Pledged Debt Instruments




Pledged Debt Securities



None




Pledged Notes





	1.	 	Promissory notes issued pursuant to the following intercompany credit agreements:






	 	a.	 	Credit Agreement dated February 19, 2003, as amended, between Enexus
Energy Corporation, as lender, and Entergy Nuclear Holding Company # 3, as borrower
	 
	 	b.	 	Credit Agreement July 30, 2002, as amended, between Entergy Nuclear
Finance, LLC, as lender, and Entergy Nuclear Vermont Investment Company, LLC, as
borrower
	 
	 	c.	 	Credit Agreement dated September 5, 2001, as amended, between Entergy
Nuclear Finance, LLC, as lender, and Entergy Nuclear Holding Company #3, as
borrower
	 
	 	d.	 	Credit Agreement dated May 23, 2003, as amended, among Entergy Nuclear
FitzPatrick, LLC, Entergy Nuclear Generation Company, Entergy Nuclear Indian Point
2, LLC, Entergy Nuclear Indian Point 3, LLC, Entergy Nuclear Vermont Yankee, LLC,
Entergy Nuclear Nebraska, LLC, Entergy Nuclear Palisades, LLC, Entergy Nuclear
Power Marketing, LLC, and Entergy Solutions, LLC, each as a borrower and lender
from time to time
	 
	 	e.	 	Credit Agreement dated November 20, 2008, between Entergy Nuclear Power
Marketing, LLC, as lender, and Entergy Nuclear Finance Holding, Inc., as borrower
	 
	 	f.	 	Credit Agreement dated November 20, 2008 between Entergy Nuclear Indian
Point 3, LLC, as lender, and Entergy Nuclear Finance Holding, Inc., as borrower
	 
	 	g.	 	Credit Agreement dated November 20, 2008, between Entergy Nuclear
Generation Company, as lender, and Entergy Nuclear Finance Holding, Inc., as
borrower
	 
	 	h.	 	Credit Agreement dated April 10, 2007, between Entergy Nuclear Finance, LLC, as lender, and Entergy Nuclear Midwest Investment Company, as borrower
	 
	 	i.	 	Credit Agreement between Enexus Energy Corporation, as lender, and Entergy
Nuclear Power Marketing, LLC, as borrower (not entered into yet)
	 
	 	j.	 	Credit Agreement between Entergy Nuclear Finance, LLC, as lender, and
Entergy Nuclear Power Marketing, LLC, as borrower (not entered into yet)
	 
	 	k.	 	Credit Agreement between Enexus Energy Corporation, as lender, and Entergy
Nuclear Power Marketing, LLC, as borrower (not entered into yet)
	 
	 	l.	 	Credit Agreement between Enexus Energy Corporation, as lender, and Entergy
Nuclear Power Marketing, LLC, as borrower (not entered into yet)






10











 





Schedule 4.6(c)




Description of Pledged Accounts





11









 





Schedule 4.8(a)




Material Contracts





	1.	 	Separation and Distribution Agreement by and between Enexus Energy Corporation and Entergy
Corporation
	 
	2.	 	Senior Note Indenture by and among Enexus Energy Corporation and the other parties thereto
	 
	3.	 	Federal Income Tax Matters Agreement by and between Enexus Energy Corporation and Entergy
Corporation
	 
	4.	 	State Tax Matters Agreement by and between Enexus Energy Corporation and Entergy Corporation
	 
	5.	 	Transition Services Agreement by and between Enexus Energy Corporation and Entergy
Corporation
	 
	6.	 	Employee Matters Agreement by and among Enexus Energy Corporation, Entergy Corporation
and EquaGen LLC
	 
	7.	 	Joint Venture Formation Agreement by and among Enexus Energy Corporation, Entergy Corporation
and EquaGen LLC
	 
	8.	 	EquaGen LLC Limited Liability Company Agreement by and between Entergy Corporation,
Enexus Energy Corporation and EquaGen LLC
	 
	9.	 	Amended and Restated Operating Agreements by and between (i) EquaGen Nuclear LLC, and (ii)
Enexus Nuclear FitzPatrick, LLC, Enexus Nuclear Pilgrim, LLC, Enexus Indian Point 2, LLC,
Enexus Nuclear Indian Point 3, LLC, Enexus Nuclear Palisades, LLC and Enexus Nuclear Vermont
Yankee, LLC, respectively
	 
	10.	 	Shared Services Agreement by and between EquaGen LLC and Entergy Operations, Inc.
	 
	11.	 	Shared Services Agreement by and between EquaGen LLC and Entergy Services, Inc.
	 
	12.	 	Corporate Services Agreement by and between EquaGen LLC and Entergy Services, Inc.
	 
	13.	 	2008 Equity Ownership and Long Term Cash Incentive Plan of Enexus Energy
Corporation and Subsidiaries
	 
	14.	 	Credit Agreement by and among Enexus Energy Corporation and the other parties thereto
	 
	15.	 	Collateral Agency and Intercreditor Agreement by and among Enexus Energy
Corporation and the other parties thereto




12









 






	16.	 	Guarantee and Collateral Agreement by and among Enexus Energy Corporation and the other
parties thereto
	 
	17.	 	Support Agreement by and among Enexus Energy Corporation and the other parties thereto
	 
	18.	 	Nuclear Fuel and Fuel Services Purchase Agreement




13









 











Schedule 4.8(b)




Non-Assignable Contracts



None.





14









 








Schedule 4.9(a)




Intellectual Property




Patents



None




Copyright




	 	 	 	 	 	 	 	 	 
	Name of	 	 	 	 	 	 	 	Serial or
	Registrant or	 	 	 	 	 	 	 	Registration
	Applicant	 	Jurisdiction	 	Filing	 	Issuance Date	 	Number
	Entergy Nuclear Vermont Yankee, LLC

	 	 	 	Vermont Yankee emergency planning brochure; color map.
	 	N/A
	 	VA 000081415






Trademark




	 	 	 	 	 	 	 	 	 
	Name of	 	 	 	 	 	 	 	Serial or
	Registrant or	 	 	 	 	 	 	 	Registration
	Applicant	 	Jurisdiction	 	Filing	 	Issuance Date	 	Number
	Enexus Energy Corporation C/O The Corporation Trust Company 1209 Orange Street Wilmington, DE

	 	U.S.
	 	ENEXUS
	 	4/18/2008 (App. Date)
	 	77/452,433 (1(b) application)











15









 











Schedule 4.9(c)




Licenses, etc.



None





16









 








Schedule 4.9(e)




Releases, etc.



None





17









 








Schedule 4.10




Letter of Credit Rights




	 	 	 	 	 	 	 	 	 	 	 
	Company-	 	 	 	Issuing	 	Face	 	Letter of Credit	 	Expiration
	Beneficiary	 	Account Party	 	Bank	 	Amount	 	No.	 	date
	Entergy Nuclear Power Marketing, LLC

	 	Consumers Energy Company
	 	The Bank of Nova
Scotia
	 	$30 million
	 	92524/80085
	 	11/24/09
	Entergy Nuclear Palisades, LLC

	 	Consumers Energy Company
	 	The Bank of Nova
Scotia
	 	$162 million
	 	92523/80085
	 	11/24/09






18









 





Schedule 4.11




Commercial Tort Claims



None




19









 





Schedule 8.2




Notice Addresses of Grantors




Enexus Energy Corporation

1018 Highland Colony Parkway

Ridgeland, MS 39157

Attn: President

-with a copy to the General Counsel (same address)




Enexus Nuclear Indian Point 2, LLC

Bleakley Avenue and Broadway

Buchanan, NY 10511

Attn: President

-with a copy to Enexus at the address set forth above




Enexus Nuclear Vermont Yankee, LLC

320 Governor Hunt Road

Vernon, VT 05302

Attn: President

-with a copy to Enexus at the address set forth above




Enexus Nuclear Midwest Investment Company, LLC

1340 Echelon Parkway

Jackson, MS 39213

Attn: President

-with a copy to Enexus at the address set forth above




Enexus Nuclear Palisades, LLC

27780 Blue Star Memorial Highway

Covert, MI 49043

Attn: President

-with a copy to Enexus at the address set forth above




Enexus Nuclear FitzPatrick, LLC

268 Lake Road

Lycoming, NY 13093

Attn: President

-with a copy to Enexus at the address set forth above




Enexus Nuclear Indian Point 3, LLC 

Bleakley Avenue and Broadway

Buchanan, NY 10511

Attn: President





20









 





-with a copy to Enexus at the address set forth above



Enexus Nuclear Pilgrim, LLC

600 Rocky Hill Road

Plymouth, MA 02360-5599

Attn: President

-with a copy to Enexus at the address set forth above




Enexus Nuclear Finance Holding, Inc.

425 W. Capitol Ave.

Little Rock, AR 72201

Attn: President

-with a copy to Enexus at the address set forth above




Enexus Nuclear Finance, LLC

2001 Timberloch Place, 2nd Floor North

The Woodlands, TX 77380

Attn: President

-with a copy to Enexus at the address set forth above




Enexus Nuclear Holding Company, LLC

2001 Timberloch Place, 2nd Floor North

The Woodlands, TX 77380

Attn: President

-with a copy to Enexus at the address set forth above




Enexus Power Marketing, LLC

100 First Stamford Place

Stamford, CT 06902

Attn: President

-with a copy to Enexus at the address set forth above




Enexus Retail Holding Company

440 Hamilton Avenue, First Floor

White Plains, NY 10601

Attn: President

-with a copy to Enexus at the address set forth above




Enexus Nuclear Nebraska, LLC

Cooper Nuclear Station

72676 648A Avenue

Brownsville, NE 68321

Attn: President

-with a copy to Enexus at the address set forth above




Enexus Nuclear Fuels Company 

1018 Highland Colony Parkway




21









 





Ridgeland, MS 39157Attn: President

-with a copy to Enexus at the address set forth above




Nuclear Services Company, LLC

1018 Highland Colony Parkway

Ridgeland, MS 39157

Attn: President

-with a copy to Enexus at the address set forth above




Enexus Retail Energy, LLC

440 Hamilton Avenue, First Floor

White Plains, NY 10601

Attn: President

-with a copy to Enexus at the address set forth above





22









 








EXHIBIT P




FORM OF MORTGAGE




See attached.




P-1









 





RECORDING REQUESTED BY AND

WHEN RECORDED, RETURN TO:




Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10035

Attn: Samuel Zylberberg, Esq. (LW)




 





MORTGAGE, ASSIGNMENT OF RENTS AND LEASES,

FIXTURE FILING, FINANCING STATEMENT

AND SECURITY AGREEMENT




Dated as of                        , 200     




by




                                              

a                                          ,

as Mortgagor




for the benefit of




THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,

as Collateral Agent and Mortgagee




Relating to Premises in:




[                    ] County, [State]




 





 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE 1 - DEFINITIONS
	 	 	5	 
	 
	 	 	 	 
	1.1 Defined Terms 
	 	 	5	 
	1.2 Accounting Terms 
	 	 	7	 
	1.3 The Rules of Interpretation 
	 	 	7	 
	 
	 	 	 	 
	ARTICLE 2 - GENERAL COVENANTS AND PROVISIONS
	 	 	7	 
	 
	 	 	 	 
	2.1 Mortgagor Performance of the Guarantee and Collateral Agreement
and the Intercreditor Agreement 
	 	 	7	 
	2.2 General Representations, Covenants and Warranties 
	 	 	7	 
	2.3 Compliance with Legal Requirements 
	 	 	7	 
	2.4 Insurance; Application of Insurance Proceeds; Application of Eminent
Domain Proceeds
	 	 	8	 
	2.5 Assignment of Rents 
	 	 	8	 
	2.6 Mortgagee Assumes No Guaranteed Obligations 
	 	 	9	 
	2.7 Further Assurances 
	 	 	9	 
	2.8 Acts of Mortgagor 
	 	 	10	 
	2.9 After-Acquired Property 
	 	 	10	 
	2.10 Mortgaged Property 
	 	 	10	 
	2.11 Power of Attorney 
	 	 	10	 
	2.12 Covenant to Pay 
	 	 	11	 
	2.13 Security Agreement 
	 	 	11	 
	 
	 	 	 	 
	ARTICLE 3 - REMEDIES
	 	 	12	 
	 
	 	 	 	 
	3.1 Acceleration of Maturity 
	 	 	12	 
	3.2 Protective Advances 
	 	 	12	 
	3.3 Institution of Equity Proceedings 
	 	 	12	 
	3.4 Mortgagee’s Power of Enforcement 
	 	 	12	 
	3.5 Mortgagee’s Right to Enter and Take Possession, Operate and Apply
Income 
	 	 	13	 
	3.6 Separate Sales 
	 	 	14	 
	3.7 Waiver of Appraisement, Moratorium, Valuation, Stay, Extension and
Redemption Laws 
	 	 	15	 
	3.8 Receiver 
	 	 	15	 
	3.9 Suits to Protect the Mortgaged Property 
	 	 	15	 
	3.10 Proofs of Claim 
	 	 	16	 
	3.11 Mortgagor to Pay Amounts Secured Hereby on Any Default in Payment;
Application of Monies by Mortgagee 
	 	 	16	 
	3.12 Delay or Omission; No Waiver 
	 	 	16	 
	3.13 No Waiver of One Default to Affect Another 
	 	 	16	 
	3.14 Discontinuance of Proceedings; Position of Parties Restored 
	 	 	17	 
	3.15 Remedies Cumulative 
	 	 	17	 
	3.16 Interest After Event of Default 
	 	 	17	 
	3.17 Foreclosure; Expenses of Litigation 
	 	 	18	 
	3.18 Deficiency Judgments
	 	 	18	 
	3.19 WAIVER OF JURY TRIAL
	 	 	19	 
	3.20 Exculpation of Mortgagee
	 	 	19	 






ii 









 






	 	 	 	 	 
	 	 	Page
	ARTICLE 4 - GENERAL
	 	 	19	 
	 
	 	 	 	 
	4.1 Discharge 
	 	 	19	 
	4.2 No Waiver 
	 	 	19	 
	4.3 Extension, Rearrangement or Renewal of Guaranteed Obligations 
	 	 	19	 
	4.4 Forcible Detainer 
	 	 	20	 
	4.5 Waiver of Stay or Extension 
	 	 	20	 
	4.6 Notices 
	 	 	20	 
	4.7 Severability
	 	 	20	 
	4.8 Application of Payments 
	 	 	20	 
	4.9 Governing Law 
	 	 	21	 
	4.10 Entire Agreement 
	 	 	21	 
	4.11 Amendments 
	 	 	21	 
	4.12 Successors and Assigns 
	 	 	21	 
	4.13
Renewal, Etc. 
	 	 	21	 
	4.14 Future Advances 
	 	 	21	 
	4.15 Liability 
	 	 	21	 
	4.16 Severability and Compliance With Usury Law 
	 	 	22	 
	4.17 Release of Collateral 
	 	 	22	 
	4.18 Intercreditor Agreement 
	 	 	23	 
	4.19 Time of the Essence 
	 	 	23	 
	4.20 Counterpart Execution 
	 	 	23	 
	 
	 	 	 	 
	ARTICLE 5 - STATE SPECIFIC PROVISIONS [TO BE ADDED AS APPROPRIATE]
	 	 	23	 











iii 









 











MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, FIXTURE FILING,

FINANCING STATEMENT AND SECURITY AGREEMENT




     This MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, FIXTURE FILING,
FINANCING STATEMENT AND SECURITY AGREEMENT, dated as of                     , 200_
(as modified, supplemented, consolidated, extended or amended from time to time, this
“Mortgage”) by [                                        ], a [                              
          ], with an address at [                                                            ] (“Mortgagor”), for the benefit of THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK, with an address at One Liberty Plaza, New York, NY 10006, as Collateral Agent
for the benefit of the Senior Secured Parties, and as mortgagee (together with its successors and
assigns, in such capacities, “Collateral Agent” and “Mortgagee”). Capitalized
terms used in this Mortgage and not otherwise defined herein shall have the meanings ascribed to
them in the Intercreditor Agreement (defined below).



Recitals




     A. ENEXUS ENERGY CORPORATION, a Delaware corporation (the “Borrower”), the Lenders
from time to time party thereto, CITIGROUP GLOBAL MARKETS, INC. and GOLDMAN SACHS CREDIT PARTNERS,
L.P., as joint book runners and joint lead arrangers (in such capacities, collectively, the
“Arrangers”), BNP PARIBAS, as administrative agent (in such capacity and together with its
successors, the “Administrative Agent”) and Collateral Agent and MIZUHO CORPORATE BANK,
LTD., as Syndication Agent (in such capacity, the “Syndication Agent”) have entered into a
Credit Agreement, dated as of December 23, 2008 (as modified, supplemented, replaced, refinanced
or amended from time to time, the “Credit Agreement”), pursuant to which the Lenders,
severally and not jointly, have agreed to make the Loans to Borrower on the terms and conditions
set forth therein.



     B. The Borrower has requested the Lenders to extend credit hereunder in the form of Revolving
Loans and Swing Loans and Additional Permitted Secured Indebtedness made or issued at any time and
from time to time on or after the Closing Date (as defined in the Credit Agreement) and prior to
the Revolving Credit Maturity Date (as defined in the Credit Agreement) in an aggregate principal
and face amount at any time outstanding not to exceed a maximum principal amount of TWO BILLION
THREE HUNDRED MILLION AND 00/100 DOLLARS ($2,300,000,000.00) (subject to the limitations set forth
in the Credit Agreement).



     C. Subject to the terms and conditions of the Credit Agreement, Borrower may enter into one
or more (i) Specified Credit Support Facilities and (ii) Specified Commodity Hedging Transactions.



     D. Mortgagor, Subsidiary Guarantors (as defined in the Credit Agreement), Collateral Agent,
Administrative Agent, the Borrower and the other Secured Obligations Representatives from time to
time party thereto, have entered into the Guarantee and Collateral
Agreement, dated as of [                                              , 200___] (the “Guarantee and Collateral
Agreement”) pursuant to which Mortgagor has guaranteed the Guaranteed Obligations (as such
term is defined in the Guarantee and Collateral Agreement).



1









 





     E. Mortgagor, Borrower, the Grantors party from time to time thereto, the Hedge Counterparty
Lienholders party from time to time thereto, the Secured Obligations Representatives party from
time to time thereto, Administrative Agent and Collateral Agent have entered into the Collateral
Agency and Intercreditor Agreement, dated as of December 23, 2008 (the “Intercreditor
Agreement”) pursuant to which Collateral Agent, as agent for the present and future holders of
the Guaranteed Obligations, has agreed to receive, hold, maintain, administer and distribute the
Collateral and enforce the Senior Collateral Documents.



     F. The execution and delivery of this Mortgage are conditions precedent to the making of
Loans (as defined in the Credit Agreement).



     G. As set forth more fully below, Mortgagor intends to secure its payment and performance of
its obligations under the Guarantee and Collateral Agreement with the Mortgaged Property (as
defined below), along with various other items of personal and real property owned by Mortgagor.



Agreement




     NOW, THEREFORE, to secure the Mortgagor’s payment and performance of its obligations under the
Guarantee and Collateral Agreement, the Intercreditor Agreement and this Mortgage, including but
not limited to the prompt and complete payment and performance, when and as required, due and/or
payable, of all of the Guaranteed Obligations, by acceleration or otherwise, or arising out of or
in connection therewith, and in consideration of the extension of credit to Borrower under the
Credit Agreement and other good and valuable consideration, and the covenants herein contained and
in the Guarantee and Collateral Agreement, Mortgagor, intending to be legally bound, does hereby
grant, bargain, sell, convey, warrant, assign, transfer, mortgage, pledge, set over and confirm
unto Mortgagee, for the benefit of the Senior Secured Parties and their respective successors and
assigns, forever, as set forth in this Mortgage, all of Mortgagor’s estate, right, title, interest,
property, claim and demand, now or hereafter arising, in and to the following property and rights
(herein collectively called the “Mortgaged Property”):




     (a) the lands and premises more particularly described in Exhibit A hereto (the
“Site”);




     (b) any and all easements, leases, licenses, option rights, rights-of-way and other
rights used in connection with the Site or as a means of ingress and egress thereto and
therefrom, all easements for ingress and egress and easements for water, natural gas and
sewage pipelines, running in favor of Mortgagor, or appurtenant to the Site, and any and all
sidewalks, alleys, strips and gores of land adjacent thereto or used in connection therewith
together with all and singular the tenements, hereditaments and appurtenances thereto, and
with any land lying within the right-of-way of any streets, open or proposed, adjoining the
same (collectively, the “Easements”; and the Site and the Easements collectively
referred to herein as the “Real Property”);




     (c) all buildings, structures, fixtures and other improvements now or hereafter erected
on the Real Property (collectively, the “Improvements”);



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     (d) all machinery, apparatus, equipment, fittings, fixtures, generators, boilers, turbines and
other articles of personal property, including all goods and all goods which become fixtures, now
owned or hereafter acquired by Mortgagor and now or hereafter located on, attached to or used in
the operation of or in connection with the Real Property and/or the Improvements, and all
replacements thereof, additions thereto and substitutions therefor, to the fullest extent permitted
by applicable law (collectively, the “Equipment”);




     (e) all raw materials, work in process and other materials used or consumed in the
construction of, or now or hereafter located on or used in connection with, the Real Property, the
Improvements and/or the Equipment, (including, without limitation, fuel and fuel deposits, now or
hereafter located on the Real Property or elsewhere or otherwise owned by Mortgagor) (the above
items, together with the Equipment, the “Tangible Collateral”);




     (f) all rights, powers, privileges and other benefits of Mortgagor (to the extent assignable)
now or hereafter obtained by Mortgagor from any Governmental Authority (as such term is defined in
the Credit Agreement), including, without limitation, all Permits ((as defined in the Credit
Agreement) but excluding any of the Permits which by their terms or by operation of law prohibit or
do not allow assignment or which would become void solely by virtue of a security interest being
granted therein), licenses, certificates and other similar instruments and documents, issued in the
name of Mortgagor, governmental actions relating to the ownership, operation, management and use of
the Real Property, Improvements, Equipment or Tangible Collateral, and any improvements,
modifications or additions thereto;




     (g) all the lands and interests in lands, tenements and hereditaments hereafter acquired by
Mortgagor in connection with or appurtenant to the Site, and all income, rents, rent equivalents,
issues, profits, revenues (including all oil and gas or other mineral royalties and bonuses),
deposits and other benefits from the Site and the Improvements (including all receivables and other
obligations now existing or hereafter arising or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and occupancy of property or rendering of
services by Mortgagor or any operator or manager of the Mortgaged Property or the commercial space
located in the Improvements or acquired from others) (collectively, the “Rents”) and all
proceeds from the sale or other disposition of the Leases (as defined herein) and the right to
receive and apply the Rents and/or any other property or rights subject to the lien hereof,
including (without limitation) all interests of Mortgagor, whether as lessor or lessee, in any
leases of land hereafter made and all rights of Mortgagor thereunder;




     (h) any and all other property in any way associated or used in connection with or
appurtenant to the Real Property, Improvements, Equipment or Tangible Collateral that may from time
to time, by delivery or by writing of any kind, be subjected to the lien hereof by Mortgagor or by
anyone on its behalf or with its consent, or which may come into the possession or be subject to
the control of Mortgagee pursuant to this Mortgage, being hereby collaterally assigned to Mortgagee
and subjected or added to the lien or estate created by this Mortgage forthwith upon the
acquisition thereof by Mortgagor, as fully as if such property



3









 







were now owned by Mortgagor and were specifically described in this Mortgage and subjected to the
lien and security interest hereof; and Mortgagee is hereby authorized to receive any and all such
property as and for additional security hereunder;




     (i) all the remainder or remainders, reversion or reversions, Rents, revenues, issues,
profits, royalties, income, proceeds and other benefits derived from any of the foregoing, all of
which are hereby assigned to Mortgagee, who is hereby authorized to collect and receive the same,
to give proper receipts and acquittances therefor and to apply the same in accordance with the
provisions of this Mortgage;




     (j) all Proceeds, as defined in the UCC (defined below), including all proceeds,
products, offspring, Rents, profits or receipts, in whatever form, arising from the Mortgaged
Property, including (i) cash, instruments and other property received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Mortgaged Property, (ii) the
collection, sale, lease, sublease, concession, exchange, assignment, licensing or other disposition
of, or realization upon, any item or portion of the Mortgaged Property (including all claims of
Mortgagor against third parties for loss of, damage to, destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of insurance in respect of, any the Mortgaged
Property now existing or hereafter arising), (iii) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to Mortgagor from time to time with respect to any of the
Mortgaged Property, (iv) any and all payments (in any form whatsoever) made or due and payable to
Mortgagor from time to time in connection with the requisition, confiscation, condemnation, seizure
or forfeiture of all or any part of the Mortgaged Property by any Governmental Authority (or any
person acting under color of Governmental Authority) and (v) any and all other amounts from time to
time paid or payable under or in connection with any of the Mortgaged Property;




     (k) all agreements to which Mortgagor is a party or which are assigned to Mortgagor in
any management agreement or any other document and which are executed in connection with the
construction, operation and management of the Improvements located on the Mortgaged Property
(including agreements for the sale, lease or exchange of goods or other property and/or the
performance of services by it, in each case whether now in existence or hereafter arising or
acquired) as any such agreements have been or may be from time to time amended, supplemented or
otherwise modified;




     (l) all general intangibles, now owned or hereafter acquired by Mortgagor, including
(i) all obligations or indebtedness owing to Mortgagor from whatever source arising, (ii) all
unearned premiums accrued or to accrue under all insurance policies for the Mortgaged Property
obtained by Mortgagor, all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or liquidated claims (including proceeds of insurance, condemnation awards, and
all rights of Mortgagor to refunds of real estate taxes and assessments), (iii) all royalties and
license fees and (iv) all rights or claims in respect of refunds for taxes paid;



4









 






     (m) all instruments, chattel paper or letters of credit, evidencing, representing,
arising from or existing in respect of, relating to, securing or otherwise supporting the
payment of, any of the Mortgaged Property (including promissory notes, drafts, bills of
exchange and trade acceptances) and chattel paper obtained by Mortgagor in connection with
the Mortgaged Property (including all ledger sheets, computer records and printouts,
databases, programs, books of account and files of Mortgagor relating thereto) and such
notes or other obligations of indebtedness owing to Mortgagor from whatever source arising,
in each case now owned or hereafter acquired by Mortgagor and relating to the Mortgaged
Property; and




     (n) all inventory, whether now or hereafter existing or acquired, and which
arises out of or is used in connection with, directly or indirectly, the ownership and
operation of the Mortgaged Property, all documents representing the same and all Proceeds
and products of the same, including all goods, merchandise, raw materials, work in process
and other personal property, wherever located, now or hereafter owned or held by Mortgagor
for manufacture, processing, the providing of services or sale, use or consumption in the
operation of the Mortgaged Property (including fuel, supplies and similar items and all
substances commingled therewith or added thereto) and rights and claims of Mortgagor against
anyone who may store or acquire the same for the account of Mortgagor, or from whom
Mortgagor may purchase the same.



     TO HAVE AND TO HOLD the said Mortgaged Property, whether now owned or held or hereafter
acquired, unto Mortgagee, its successors and assigns, pursuant to the provisions of this Mortgage.



     IT IS HEREBY COVENANTED, DECLARED AND AGREED that the lien, security interest or estate
created by this Mortgage to secure the payment and performance of the Guaranteed Obligations, both
present and future, shall be first, prior and superior to any Lien, security interest, reservation
of title or other interest heretofore, contemporaneously or subsequently suffered or granted by
Mortgagor, its legal representatives, successors or assigns, except Permitted Encumbrances (as
defined below) and that the Mortgaged Property is to be held, dealt with and disposed of by
Mortgagee, upon and subject to the terms, covenants, conditions, uses and agreements set forth in
this Mortgage.



     PROVIDED ALWAYS, that when as set forth in the Intercreditor Agreement and upon the observance
and performance by Mortgagor of its covenants and agreements set forth herein and therein, then
this Mortgage and the estate hereby and therein granted shall cease and be void and shall be
reconveyed as provided herein below.



ARTICLE 1- DEFINITIONS




     1.1 Defined Terms. Any term defined by reference to an agreement, instrument or
other document shall have the meaning so assigned to it whether or not such document is in effect.
In addition, for purposes of this Mortgage, the following definitions shall apply:



5









 






“Credit Agreement” has the meaning ascribed to it in Recital [A] hereof.




“Easements” has the meaning ascribed to it in the Granting Clauses.




“Equipment” has the meaning ascribed to it in the Granting Clauses.




“Event
of Default” has the meaning ascribed to it in the Credit Agreement.




“GAAP” shall mean generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a significant segment of the
accounting profession, which are in effect from time to time.




“Guarantee and Collateral Agreement” has the meaning ascribed to it in Recital [D] hereof.




“Guaranteed Obligations” has the meaning ascribed to it in the Guarantee and
Collateral Agreement.




“Improvements” has the meaning ascribed to it in the Granting Clauses.




“Intercreditor Agreement” has the meaning ascribed to it in Recital [E] hereof.




“Leases” has the meaning ascribed to it in Section 2.5.




“Lien” shall mean any mortgage, deed of trust, deed to secure debt, lien (statutory or
otherwise), pledge, hypothecation, encumbrance, restriction, collateral assignment, charge or
security interest in, on or of the Mortgaged Property.




“Legal Requirements” has the meaning ascribed to it in Section 2.3.




“Mortgaged Property” has the meaning ascribed to it in the Granting Clauses.




“Permitted Encumbrances” has the meaning ascribed to it in Section 2.2.




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




“Proceeds” has the meaning ascribed to it in the Granting Clauses.




“Real Property” has the meaning ascribed to it in the Granting Clauses.




“Site” has the meaning ascribed to it in the Granting Clauses.




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          “State” means the State of [                    ].


          “Tangible Collateral” has the meaning ascribed to it in the Granting
Clauses.


          “UCC” shall mean Uniform Commercial Code of New York or, if the creation,
perfection and enforcement of any security interest herein granted is governed by
the laws of the State, then, as to the matter in question, the Uniform Commercial
Code in effect in the State.



     1.2 Accounting Terms. As used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms not defined herein shall have the respective meanings
given to them under GAAP.



     1.3 The Rules of Interpretation. The rules of interpretation as set forth in the
Intercreditor Agreement shall govern the terms, conditions and provisions hereof. In the event of
any conflict between those set forth in this Mortgage and the Intercreditor Agreement, the latter
shall be deemed controlling and shall preempt the former.



ARTICLE 2- GENERAL COVENANTS AND PROVISIONS




     2.1 Mortgagor Performance of the Guarantee and Collateral Agreement and the Intercreditor
Agreement. Mortgagor shall perform, observe and comply with each and every provision hereof,
and with each and every provision contained in the Guarantee and Collateral Agreement and the
Intercreditor Agreement and shall promptly pay to Mortgagee, when payment shall become due under
the Guarantee and Collateral Agreement, the amounts provided for thereunder with interest thereon,
if any, and all other sums required to be paid by Mortgagor under this Mortgage and the Guarantee
and Collateral Agreement at the time and in the manner provided herein and therein.



     2.2 General Representations, Covenants and Warranties. Mortgagor represents, covenants
and warrants that as of the date hereof: (a) Mortgagor has good and marketable fee simple title to
the Site and Improvements, free and clear of all encumbrances except the permitted encumbrances set
forth on Schedule B to the applicable title policy, if any (“Permitted Encumbrances”); (b)
All Easements are and will remain valid, subsisting and in full force and effect; (c) Mortgagor has
the right to hold, occupy and enjoy its interest in the Mortgaged Property, and has good right,
full power and lawful authority to mortgage and pledge the same as provided herein and prior to the
occurrence and continuance of an Event of Default, Mortgagor may at all times peaceably and quietly
enter upon, hold, occupy, use and enjoy the Mortgaged Property in accordance with the terms hereof;
(d) all costs arising from construction of any improvements, the performance of any labor and the
purchase of all Mortgaged Property have been or shall be paid when due; (e) the Site has access for
ingress and egress to dedicated street(s); and (f) no material part of the Mortgaged Property has
been damaged, destroyed, condemned or abandoned.



     2.3 Compliance with Legal Requirements. Mortgagor shall promptly comply in all
material respects with all governmental statutes, laws, rules, orders, regulations, ordinances,






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judgments, decrees and injunctions of Governmental Authorities affecting either the Mortgaged
Property or any part thereof or the construction, use, alteration or operation thereof, or any part
thereof (whether now or hereafter enacted and in force), and all Permits, licenses and
authorizations and regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, at any time in force affecting the Mortgaged Property or
any part thereof (collectively “Legal Requirements”) relating to its use and occupancy of
the Mortgaged Property, whether or not such compliance requires work or remedial measures that are
ordinary or extraordinary, foreseen or unforeseen, structural or nonstructural, or that interfere
with the use or enjoyment of the Mortgaged Property.




     2.4 Insurance; Application of Insurance Proceeds; Application of Eminent Domain
Proceeds.


          2.4.1 Mortgagor shall at its sole expense obtain for, deliver to (or deliver certificates
evidencing), assign and maintain for the benefit of Mortgagee, during the term of this Mortgage,
insurance policies insuring the Mortgaged Property (to the extent insurable) and liability
insurance policies, all in accordance with the requirements of the Guarantee and Collateral
Agreement. Mortgagor shall pay promptly when due any premiums on such insurance policies and on any
renewals thereof. In the event of the foreclosure of this Mortgage or any other transfer of the
Mortgaged Property in extinguishment of the indebtedness and other sums secured hereby, all right,
title and interest of Mortgagor in and to all casualty insurance policies, and renewals thereof
then in force, shall pass to the purchaser or grantee in connection therewith. In addition, if any
portion of the Mortgaged Property is located in an area identified by the Federal Emergency
Management Agency or any other Governmental Authority as an area having special flood hazards and
in which flood insurance has been made available under the National Flood Insurance Act of 1968 (or
any amendment or successor act thereto), then Mortgagor shall maintain, or cause to be maintained,
with a financially sound and reputable insurer, flood insurance in an amount sufficient to comply
with all applicable rules and regulations promulgated pursuant to the National Flood Insurance Act
of 1968 (or any amendment or successor act thereto).


          2.4.2 All insurance proceeds and all awards payable with respect to any taking of the Real
Property or Improvements shall be paid and/or shall be applied in accordance with the provisions of
the Senior Secured Documents.



     2.5 Assignment of Rents. Mortgagor unconditionally and absolutely assigns to Mortgagee
all of Mortgagor’s right, title and interest in and to: all leases, subleases, occupancy
agreements, licenses, rental contracts and other similar agreements now or hereafter existing
relating to the use or occupancy of the Mortgaged Property, together with all guarantees,
modifications, extensions and renewals thereof; and all Rents, issues, profits, income and proceeds
due or to become due from tenants of the Mortgaged Property (the “Leases”), including
rentals and all other payments of any kind under any Leases now existing or hereafter entered into,
together with all deposits (including security deposits) of tenants thereunder. This is an absolute
assignment to Mortgagee and not an assignment as security for the performance of the obligations
under the Guarantee and Collateral Agreement, or any other indebtedness. Subject to the provisions
below, Mortgagee shall have the right, power and authority to: notify any person that the Leases
have been







8









 








assigned to Mortgagee and that all Rents and other obligations are to be paid directly to
Mortgagee, whether or not Mortgagee has commenced or completed foreclosure or taken possession of
the Mortgaged Property; settle compromise, release, extend the time of payment of, and make
allowances, adjustments and discounts of any Rents or other obligations under the Leases; enforce
payment of Rents and other rights under the Leases, prosecute any action or proceeding, and defend
against any claim with respect to Rents and Leases; enter upon, take possession of and operate the
Mortgaged Property; lease all or any part of the Mortgaged Property; and/or perform any and all
obligations of Mortgagor under the Leases and exercise any and all rights of Mortgagor therein
contained to the full extent of Mortgagor’s rights and obligations thereunder, with or without the
bringing of any action or the appointment of a receiver. At Mortgagee’s request, Mortgagor shall
deliver a copy of this Mortgage to each tenant under a Lease. Mortgagor irrevocably directs any
tenant, without any requirement for notice to or consent by Mortgagor, to comply with all demands
of Mortgagee under this Section and to turn over to Mortgagee on demand all Rents which it
receives. Mortgagee shall have the right, but not the obligation, to use and apply all Rents
received hereunder in such order and such manner as Mortgagee may determine in accordance with the
Intercreditor Agreement. Notwithstanding that this is an absolute assignment of the Rents and
Leases and not merely the collateral assignment of, or the grant of a lien or security interest in
the Rents and Leases, Mortgagee grants to Mortgagor a revocable license to collect and receive the
Rents and to retain, use and enjoy such Rents. Such license may be revoked by Mortgagee only upon
the occurrence and during the continuance of any Event of Default. Mortgagor shall apply any Rents
which it receives to the payment due under the Guaranteed Obligations, taxes, assessments, water
charges, sewer Rents and other governmental charges levied, assessed or imposed against the
Mortgaged Property, insurance premiums, and other obligations of lessor under the Leases before
using such proceeds for any other purpose.




     2.6 Mortgagee Assumes No Guaranteed Obligations. It is expressly agreed that, anything
herein contained to the contrary notwithstanding, Mortgagor shall remain obligated under all
agreements which are included in the definition of “Mortgaged Property” and shall perform all of
its obligations thereunder in accordance with the provisions thereof, and neither Mortgagee nor any
of the Senior Secured Parties shall have any obligation or liability with respect to such
obligations of Mortgagor, nor shall Mortgagee or any of the Senior Secured Parties be required or
obligated in any manner to perform or fulfill any obligations or duties of Mortgagor under such
agreements, or to make any payment or to make any inquiry as to the nature or sufficiency of any
payment received by it, or to present or file any claim or take any action to collect or enforce
the payment of any amounts which have been assigned to Mortgagee hereunder or to which Mortgagee or
the Senior Secured Parties may be entitled at any time or times.



     2.7 Further Assurances. Mortgagor shall, from time to time, at its expense, promptly
execute and deliver all further instruments and documents, and take all further action, that may be
necessary or that Mortgagee may reasonably request, in order to perfect and continue the lien and
security interest granted hereby and to enable Mortgagee to obtain the full benefits of the lien
and security interest granted or intended to be granted hereby. Mortgagor shall keep the Mortgaged
Property free and clear of all Liens, other than Permitted Encumbrances. Without limiting the
generality of the foregoing, Mortgagor shall execute and record or file this Mortgage and each
amendment hereto, and such financing or continuation statements, or amendments thereto, and such
other instruments, endorsements or notices, as may be necessary, or as Mortgagee may reasonably







9









 








request, in order to perfect and preserve the lien and security interest granted or purported to be
granted hereby. Mortgagor hereby authorizes Mortgagee to file one or more financing statements or
continuation statements, and amendments thereto, relative to all or any part of the Mortgaged
Property necessary to preserve or protect the lien and security interest granted hereby without the
signature of Mortgagor where permitted by law.




     2.8 Acts of Mortgagor. Mortgagor hereby represents and warrants that it has not
mortgaged, hypothecated, assigned or pledged and hereby covenants that it will not mortgage,
hypothecate, assign or pledge, so long as this Mortgage shall remain in effect, any of its right,
title or interest in and to the Mortgaged Property or any part thereof, to anyone other than
Mortgagee.



     2.9 After-Acquired Property. Any and all of the Mortgaged Property which is hereafter
acquired shall immediately, without any further conveyance, assignment or act on the part of
Mortgagor or Mortgagee, become and be subject to the lien and security interest of this Mortgage as
fully and completely as though specifically described herein. If and whenever from time to time
Mortgagor shall hereafter acquire any real property or interest therein which constitutes or is
intended to constitute part of the Mortgaged Property hereunder, Mortgagor shall promptly give
notice thereof to Mortgagee and Mortgagor shall forthwith execute, acknowledge and deliver to
Mortgagee a supplement to this Mortgage in form and substance reasonably satisfactory to Mortgagee
subjecting the property so acquired to the lien of this Mortgage. At the same time, if Mortgagee so
requests, Mortgagor shall deliver to Mortgagee either (i) an endorsement to the lender’s policy of
title insurance issued to Mortgagee insuring the lien of this Mortgage, or (ii) a new lender’s
title policy (which shall include tie in coverage relating to the lender’s policy described in (i),
above), in each case which shall insure to Mortgagee in form and substance reasonably satisfactory
to Mortgagee that the lien of this Mortgage as insured under such title insurance policy or
policies encumbers such later acquired property and that Mortgagor’s title to such property meets
all of the applicable requirements of the Senior Secured Documents with respect to title to
Mortgagor’s real property interests.



     2.10 Mortgaged Property. Mortgagor shall observe all applicable covenants, easements
and other restrictions of record with respect to the Site, the Easements or to any other part of
the Mortgaged Property, in all material respects.



     2.11 Power of Attorney. Mortgagor does hereby irrevocably constitute and appoint
Mortgagee its true and lawful attorney (which appointment is coupled with an interest), with full
power of substitution, for Mortgagor and in the name, place and stead of Mortgagor or in
Mortgagee’s own name, for so long as any of the Guaranteed Obligations are outstanding, to ask,
demand, collect, receive, receipt for and sue for any and all Rents, income and other sums which
are assigned hereunder with full power to endorse the name of Mortgagor on all instruments given in
payment or in part payment thereof, to settle, adjust or compromise any claims thereunder as fully
as Mortgagor itself could do and in its discretion file any claim or take any action or proceeding,
either in its own name or in the name of Mortgagor or otherwise, which Mortgagee may deem necessary
or appropriate to protect and preserve the right, title and interest of Mortgagee in and to such
Rents, income and other sums and the security intended to be afforded hereby; provided that
Mortgagee shall not exercise such rights unless an Event of Default has occurred and is continuing.



10









 





     2.12 Covenant to Pay. If an Event of Default has occurred and is continuing, then
Mortgagee, among its other rights and remedies, shall have the right, but not the obligation, to
pay, observe or perform the obligations of Mortgagor herein, in whole or in part, and with such
modifications as Mortgagee reasonably shall deem advisable. All sums, including, without
limitation, reasonable attorneys fees’, so expended or incurred by Mortgagee by reason of the
default of Mortgagor, or by reason of the bankruptcy or insolvency of Mortgagor, as well as,
without limitation, sums expended or incurred to sustain the lien or estate of this Mortgage or its
priority, or to protect or enforce any rights of Mortgagee hereunder, or to recover any of the
Guaranteed Obligations, or for repairs, maintenance, alterations, replacements or improvements
thereto or for the protection thereof, or for real estate taxes or other governmental assessments
or charges against any part of the Mortgaged Property, or premiums for insurance of the Mortgaged
Property, shall be entitled to the benefit of the lien on the Mortgaged Property as of the date of
the recording of this Mortgage, shall be deemed to be added to and be part of the Guaranteed
Obligations secured hereby, whether or not the result thereof causes the total amount of the
Guaranteed Obligations to exceed the stated amount set forth in the recitals of this Mortgage, and
shall be guaranteed by Mortgagor as provided in the Guarantee and Collateral Agreement.



     2.13 Security Agreement.


          2.13.1 This Mortgage shall also be a security agreement between Mortgagor and Mortgagee
covering the Mortgaged Property constituting personal property or fixtures (hereinafter
collectively called “UCC Collateral”) governed by the UCC as such UCC Collateral may be
more specifically set forth in any financing statement delivered in connection with this Mortgage,
and, as further security for the payment and performance of the Guaranteed Obligations, Mortgagor
hereby grants to Mortgagee a security interest in such portion of the Mortgaged Property to the
full extent that the Mortgaged Property may be subject to the UCC. In addition to Mortgagee’s other
rights hereunder, Mortgagee shall have all rights of a secured party under the UCC, as is in effect
in the relevant jurisdiction, or other applicable laws or in equity. Mortgagor hereby authorizes
the filing of, and if requested by Mortgagee, Mortgagor shall execute and deliver to Mortgagee, all
financing statements and such further assurances that may be reasonably required by Mortgagee to
establish, create, perfect (to the extent the same can be achieved by the filing of a financing
statement) and maintain the validity and priority of Mortgagee’s security interests, and Mortgagor
shall bear all reasonable costs thereof, including all UCC searches. Except as otherwise provided
in the Guarantee and Collateral Agreement, if Mortgagee should dispose of any of the Mortgaged
Property comprising the UCC Collateral pursuant to the UCC, ten (10) days’ prior written notice by
Mortgagee to Mortgagor shall be deemed to be reasonable notice; provided, however, that Mortgagee
may dispose of such property in accordance with the foreclosure procedures of this Mortgage in lieu
of proceeding under the UCC. Mortgagee may from time to time execute and deliver at Mortgagor’s
expense all continuation statements, termination statements, amendments, partial releases, or other
instruments relating to all financing statements by and between Mortgagor and Mortgagee. Except as
otherwise provided in the Guarantee and Collateral Agreement, but otherwise subject to the
provisions thereof, if an Event of Default shall occur and be continuing, (a) Mortgagee, in
addition to any other rights and remedies which it may have, may exercise immediately and without
demand to the extent permitted by law, any and all rights and remedies granted to a secured party
under the UCC, as in effect in any relevant jurisdiction, including, without limiting







11









 








the generality of the foregoing, the right to take possession of the UCC Collateral or any part
thereof, and to take such other measures as Mortgagee may deem necessary for the care, protection
and preservation of such collateral and (b) upon request or demand of Mortgagee, Mortgagor shall at
its expense, assemble the UCC Collateral and make it available to Mortgagee at a convenient place
acceptable to Mortgagee. Mortgagor shall pay to Mortgagee on demand any and all expenses, including
reasonable attorneys’ fees and disbursements incurred or paid by Mortgagee in protecting the
interest in the UCC Collateral and in enforcing Mortgagee’s rights hereunder with respect to such
UCC Collateral.



          2.13.2 Mortgagor and the Mortgagee agree, to the extent permitted by law, that: (i) this
Mortgage upon recording or registration in the real estate records of the proper office shall
constitute a financing statement filed as a “fixture filing” within the meaning of Sections
9-102(a)(40) and 9-502(c) of the UCC; (ii) all or a part of the Mortgaged Property are or are to
become fixtures; and (iii) the addresses of Mortgagor and Mortgagee are as set forth in the first
paragraph of this Mortgage [and if Mortgagor is not the record owner of any real property to
which the fixtures are or may become attached, the name of the record owner is [                     ]]
and (iv) Mortgagor’s organizational identification number is [                     ].



ARTICLE 3- REMEDIES




     3.1 Acceleration of Maturity. As provided in each of the Senior Secured Documents if
an Event of Default shall have occurred and is continuing, the applicable Secured Debt
Representative may declare the Guaranteed Obligations with respect to the applicable Series of
Guaranteed Obligations to be due and payable immediately, and upon such declaration such Guaranteed
Obligations and other sums shall immediately become due and payable without demand, presentment,
notice or other requirements of any kind (all of which Mortgagor waives).



     3.2 Protective Advances. If an Event of Default shall have occurred and is continuing,
then without thereby limiting Mortgagee’s other rights or remedies, waiving or releasing any of
Mortgagor’s obligations, or imposing any obligation on Mortgagee, Mortgagee may either advance any
amount owing or perform any or all actions that Mortgagee considers necessary or appropriate to
cure such default. All such advances shall constitute “Protective Advances.” No sums advanced or
performance rendered by Mortgagee shall cure, or be deemed a waiver of, any Event of Default.



     3.3 Institution of Equity Proceedings. If an Event of Default occurs and is
continuing, Mortgagee, may institute an action, suit or proceeding in equity for specific
performance of this Mortgage and the Guarantee and Collateral Agreement, both of which shall be
specifically enforceable by injunction or other equitable remedy.



     3.4 Mortgagee’s Power of Enforcement.


          (a) If an Event of Default occurs and is continuing, Mortgagee shall be entitled, at its
option and in its sole and absolute discretion, to institute a proceeding or proceedings, judicial
or nonjudicial, by advertisement or otherwise, for the complete foreclosure of this Mortgage in
which case the Mortgaged Property or any interest therein may be sold for cash or
upon credit in one or more parcels or in several interests or portions and in any order or
manner




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in accordance with the laws of the jurisdiction in which such Mortgaged Property is located, and
sell for cash or upon credit the Mortgaged Property or any part thereof and all estate, claim,
demand, right, title and interest of Mortgagor therein and rights of redemption thereof, pursuant
to the power of sale contained herein or otherwise, at one or more sales, as an entity or in
parcels, at such time and place, upon such terms and after such notice thereof as may be required
or permitted by the laws of the State. Mortgagee may require Mortgagor to pay monthly in advance to
Mortgagee, or any receiver appointed to collect the Rents, the fair and reasonable rental value for
the use and occupation of any portion of the Mortgaged Property occupied by Mortgagor and require
Mortgagor to vacate and surrender possession to Mortgagee of the Mortgaged Property or to such
receiver and, in default thereof, evict Mortgagor by summary proceedings or otherwise.



          (b) If any Event of Default occurs and is continuing, Mortgagee may, either with or without
entry or taking possession of the Mortgaged Property, and without regard to whether or not the
indebtedness and other sums secured hereby shall be due and without prejudice to the right of
Mortgagee thereafter to bring an action or proceeding to foreclose or any other action for any
default existing at the time such earlier action was commenced, proceed by any appropriate action
or proceeding: (a) to enforce payment of the Guaranteed Obligations, to the extent permitted by
law, or the performance of any term hereof or any other right; (b) to foreclose this Mortgage in
any manner provided by law for the foreclosure of mortgages on real property and to sell, as an
entirety or in separate lots or parcels, the Mortgaged Property or any portion thereof pursuant to
the laws of the State or under the judgment or decree of a court or courts of competent
jurisdiction, and Mortgagee shall be entitled to recover in any such proceeding all costs and
expenses incident thereto, including reasonable attorneys’ fees in such amount as shall be awarded
by the court; (c) to the extent not prohibited by the laws of the State to exercise any or all of
the rights and remedies available to it under the Senior Secured Documents; and (d) to pursue any
other remedy available to it. Mortgagee shall take action either by such proceedings or by the
exercise of its powers with respect to entry or taking possession, or both, as Mortgagee may
determine.


          (c) The remedies described in this Section may be exercised with respect to all or any portion
of the UCC Collateral, either simultaneously with the sale of any real property encumbered hereby
or independent thereof. Mortgagee shall at any time be permitted to proceed with respect to all or
any portion of the UCC Collateral in any manner permitted by the UCC. Mortgagor agrees that
Mortgagee’s inclusion of all or any portion of the UCC Collateral in a sale or other remedy
exercised with respect to the real property encumbered hereby, as permitted by the UCC, is a
commercially reasonable disposition of such property.



     3.5 Mortgagee’s Right to Enter and Take Possession, Operate and Apply Income.


          (a) If an Event of Default occurs and is continuing, Mortgagor, upon demand of Mortgagee,
shall forthwith surrender to Mortgagee the actual possession and, if and to the extent permitted by
law, Mortgagee itself, or by such officers or agents as it may appoint, may enter and take
possession of all of the Mortgaged Property, including the Tangible Collateral, without liability
for trespass, damages or otherwise, and may exclude Mortgagor and its agents and employees








13









 











wholly therefrom and may have joint access with Mortgagor to the books, papers and accounts of
Mortgagor.



          (b) If an Event of Default has occurred and is continuing and Mortgagor shall for any reason
fail to surrender or deliver the Mortgaged Property or any part thereof after Mortgagee’s demand,
Mortgagee may obtain a judgment or decree conferring on Mortgagee the right to immediate possession
or requiring Mortgagor to deliver immediate possession of all or part of such property to Mortgagee
and Mortgagor hereby specifically consents to the entry of such judgment or decree. Mortgagor shall
pay to Mortgagee, upon demand, all costs and expenses of obtaining such judgment or decree and
reasonable compensation to Mortgagee, their attorneys and agents, and all such costs, expenses and
compensation shall, until paid, be secured by the lien of this Mortgage.


          (c) Upon every such entering upon or taking of possession, Mortgagee may hold, store, use,
operate, manage and control the Mortgaged Property and conduct the business thereof, and, from
time to time in its sole and absolute discretion and without being under any duty to so act:



               (1) make all necessary and proper maintenance, repairs, renewals and replacements thereto and
thereon, and all necessary additions, betterments and improvements thereto and thereon and purchase
or otherwise acquire fixtures, personalty and other property in connection therewith;



               (2) insure or keep the Mortgaged Property insured;



               (3) manage and operate the Mortgaged Property and exercise all the rights and powers of
Mortgagor in their name or otherwise with respect to the same;



               (4) enter into agreements with others to exercise the powers herein granted Mortgagee, all as
Mortgagee from time to time may determine; and shall apply the monies so received by Mortgagee in
such priority as provided by the Intercreditor Agreement; and/or



               (5) rent or sublet the Mortgaged Property or any portion thereof for any purpose
permitted by this Mortgage.


          Mortgagee shall surrender possession of the Mortgaged Property to Mortgagor (i) as may be
required by law or court order, or (ii) when all amounts under any of the terms of the Senior
Secured Documents, including this Mortgage, shall have been paid current and all Events of Default
have been cured or waived. The same right of taking possession, however, shall exist if any
subsequent Event of Default shall occur and be continuing.



     3.6 Separate Sales. To the extent permitted by law or Legal Requirements upon
and during the continuation of an Event of Default, the Mortgaged Property may be sold in one or
more parcels and in such manner and order as Mortgagee, in its sole discretion, may elect, it being
expressly understood and agreed that the right of sale arising out of any Event of Default shall
not be exhausted by any one or more sales.








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     3.7 Waiver of Appraisement, Moratorium, Valuation, Stay, Extension and Redemption
Laws. Mortgagor agrees to the full extent permitted by law that if an Event of Default occurs
and is continuing, neither Mortgagor nor anyone claiming through or under it shall or will set up,
claim or seek to take advantage of any appraisement, moratorium, valuation, stay, extension or
redemption laws now or hereafter in force, in order to prevent or hinder the enforcement or
foreclosure of this Mortgage or the absolute sale of the Mortgaged Property or any portion thereof
or the final and absolute putting into possession thereof, immediately after such sale, of the
purchasers thereof, and Mortgagor for itself and all who may at any time claim through or under it,
hereby waives, to the full extent that it may lawfully so do, the benefit of all such laws, and any
and all right to have the assets comprising the Mortgaged Property marshalled upon any foreclosure
of the lien hereof and agrees that Mortgagee or any court having jurisdiction to foreclose such
lien may sell the Mortgaged Property in part or as an entirety.



     3.8 Receiver. If an Event of Default occurs and is continuing, Mortgagee, to the
extent permitted by law, and without regard to the value, adequacy or occupancy of the security for
the indebtedness and other sums secured hereby, shall be entitled as a matter of right if it so
elects to the appointment of a receiver to enter upon and take possession of the Mortgaged Property
and to collect all earnings, revenues and receipts and apply the same as the court may direct, and
such receiver may be appointed by any court of competent jurisdiction upon application by
Mortgagee. To the extent permitted by law or Legal Requirement, Mortgagee may have a receiver
appointed without notice to Mortgagor or any third party, and Mortgagee may waive any requirement
that the receiver post a bond. To the extent permitted by law or Legal Requirement, Mortgagee shall
have the power to designate and select the Person who shall serve as the receiver and to negotiate
all terms and conditions under which such receiver shall serve. To the extent permitted by law or
Legal Requirement, any receiver appointed on Mortgagee’s behalf may be an Affiliate of Mortgagee.
The reasonable expenses, including receiver’s fees, reasonable attorneys’ fees, costs and agents’
compensation, incurred pursuant to the powers herein contained shall be secured by this Mortgage.
The right to enter and take possession of and to manage and operate the Mortgaged Property and to
collect all earnings, revenues and receipts, whether by a receiver or otherwise, shall be
cumulative to any other right or remedy available to Mortgagee under this Mortgage, the
Intercreditor Agreement, the Guarantee and Collateral Agreement or otherwise available to Mortgagee
and may be exercised concurrently therewith or independently thereof, but such rights shall be
exercised in a manner which is otherwise in accordance with and consistent with the Intercreditor
Agreement. Mortgagee shall be liable to account only for such earnings, revenues and receipts
(including, without limitation, security deposits) actually received by Mortgagee, whether received
pursuant to this section or any other provision hereof. Notwithstanding the appointment of any
receiver or other custodian, Mortgagee shall be entitled as pledgee to the possession and control
of any cash, deposits, or instruments at the time held by, or payable or deliverable under the
terms of this Mortgage to, Mortgagee.



     3.9 Suits to Protect the Mortgaged Property. Mortgagee shall have the power and
authority to institute and maintain any suits and proceedings as Mortgagee, in its sole and
absolute discretion, may deem advisable (a) to prevent any impairment of the Mortgaged Property by
any acts which may be unlawful or in violation of this Mortgage, (b) to preserve or protect its
interest in the Mortgaged Property, or (c) to restrain the enforcement of or compliance with any
legislation or other Legal Requirements that may be unconstitutional or otherwise invalid, if the
enforcement of or








15









 











compliance with such enactment, rule or order might impair the security hereunder or be prejudicial
to Mortgagee’s interest.




     3.10 Proofs of Claim. In the case of any receivership, insolvency, reorganization,
arrangement, adjustment, composition or other judicial proceedings affecting Mortgagor, any
Affiliate or any guarantor, co-maker or endorser of any of Mortgagor’s obligations, its creditors
or its property, Mortgagee, to the extent permitted by law, shall be entitled to file such proofs
of claim or other documents as it may deem necessary or advisable in order to have its claims
allowed in such proceedings for the entire amount due and payable by Mortgagor under the Senior
Secured Documents, at the date of the institution of such proceedings, and for any additional
amounts which may become due and payable by Mortgagor after such date.



     3.11 Mortgagor to Pay Amounts Secured Hereby on Any Default in Payment;
Application of Monies by Mortgagee.


          (a) In case of a foreclosure sale of all or any part of the Mortgaged Property and of the
application of the proceeds of sale to the payment of the sums secured hereby, to the extent
permitted by law, Mortgagee shall be entitled to enforce payment from Mortgagor of any additional
amounts then remaining due and unpaid and to recover judgment against Mortgagor for any portion
thereof remaining unpaid, with interest at the interest rate on the Notes.


          (b) Mortgagor hereby agrees, to the extent permitted by law, that no recovery of any such
judgment by Mortgagee or other action by Mortgagee and no attachment or levy of any execution upon
any of the Mortgaged Property or any other property shall in any way affect the Lien and security
interest of this Mortgage upon the Mortgaged Property or any part thereof or any Lien, rights,
powers or remedies of Mortgagee hereunder, but such Lien, rights, powers and remedies shall
continue unimpaired as before.


          (c) Any monies collected or received by Mortgagee under this Section shall be first applied as
set forth in the Intercreditor Agreement.



     3.12 Delay or Omission; No Waiver. No delay or omission of Mortgagee to exercise any
right, power or remedy upon any Event of Default shall exhaust or impair any such right, power or
remedy or shall be construed to waive any such Event of Default or to constitute acquiescence
therein. Every right, power and remedy given to Mortgagee whether contained herein or in the
Intercreditor Agreement or the Guarantee and Collateral Agreement or otherwise available to
Mortgagee may be exercised from time to time and as often as may be deemed expedient by Mortgagee.



     3.13 No Waiver of One Default to Affect Another. No waiver of any Event of Default
hereunder shall extend to or affect any subsequent or any other Event of Default then existing, or
impair any rights, powers or remedies consequent thereon. If Mortgagee (a) grants forbearance or an
extension of time for the payment of any sums secured hereby; (b) takes other or additional
security for the payment thereof; (c) waives or does not exercise any right granted in this
Mortgage, the Intercreditor Agreement or Guarantee and Collateral Agreement; (d) releases any part
of the Mortgaged Property from the lien or security interest of this Mortgage or any other
instrument







16









 








securing the Guaranteed Obligations; (e) consents to the filing of any map, plat or replat of the
Real Property or any part thereof; (f) consents to the granting of any easement on the Real
Property; or (g) makes or consents to any agreement changing the terms of this Mortgage or the
other Senior Secured Documents or the Intercreditor Agreement subordinating the lien or any charge
hereof, no such act or omission shall release, discharge, modify, change or affect the liability
under this Mortgage or the Guarantee and Collateral Agreement or otherwise of Mortgagor, or any
subsequent purchaser of the Mortgaged Property or any part thereof or any maker, co-signer, surety
or guarantor with respect to any other matters not addressed by such act or omission. No such act
or omission shall preclude Mortgagee from exercising any present or future right, power or
privilege herein granted in case of any Event of Default then existing, nor, except as otherwise
expressly provided in an instrument or instruments executed by Mortgagee, shall the lien or
security interest of this Mortgage be altered thereby, except to the extent expressly provided in
such acts or omissions. In the event of the sale or transfer by operation of law or otherwise of
all or any part of the Mortgaged Property, Mortgagee, without notice to any person, firm or
corporation, is hereby authorized and empowered to deal with any such vendee or transferee with
reference to the Mortgaged Property or the indebtedness secured hereby, or with reference to any of
the terms or conditions hereof, as fully and to the same extent as it might deal with the original
parties hereto and without in any way releasing or discharging any of the liabilities or
undertakings hereunder, or waiving its right to declare such sale or transfer an Event of Default
as provided herein. Notwithstanding anything to the contrary contained in this Mortgage or any
other Security Document, (i) in the case of any non-monetary Event of Default, Mortgagee may
continue to accept payments due hereunder without thereby waiving the existence of such or any
other Event of Default and (ii) in the case of any monetary Event of Default, Mortgagee may accept
partial payments of any sums due hereunder without thereby waiving the existence of such Event of
Default if the partial payment is not sufficient to completely cure such Event of Default.




     3.14 Discontinuance of Proceedings; Position of Parties Restored. If Mortgagee shall
have proceeded to enforce any right or remedy under this Mortgage by foreclosure, entry of judgment
or otherwise and such proceedings shall have been discontinued or abandoned for any reason, or such
proceedings shall have resulted in a final determination adverse to Mortgagee, then and in every
such case Mortgagor and Mortgagee shall be restored to their former positions and rights hereunder,
and all rights, powers and remedies of Mortgagee shall continue as if no such proceedings had
occurred or had been taken.



     3.15 Remedies Cumulative. Subject to the provisions of Section 4.15 hereof, no
right, power or remedy, including without limitation remedies with respect to any security for the
Guaranteed Obligations, conferred upon or reserved to Mortgagee by this Mortgage or any other
Senior Secured Document is exclusive of any other right, power or remedy, but each and every such
right, power and remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or under any other Senior Secured Document, now or
hereafter existing at law, in equity or by statute, and Mortgagee shall be entitled to resort to
such rights, powers, remedies or security as Mortgagee shall in its sole and absolute discretion
deem advisable.



     3.16 Interest After Event of Default. If an Event of Default shall have occurred and
is continuing, all sums outstanding and unpaid under the Senior Secured Documents, including this






17









 








Mortgage, shall, at Mortgagee’s option, subject to the provisions of the Guarantee and Collateral
Agreement and/or the Intercreditor Agreement, bear interest at the interest rate on the applicable
Series of Guaranteed Obligations, as provided in the applicable Senior Secured Documents, until
such Event of Default has been cured. Mortgagor’s obligation to pay such interest shall be secured
by this Mortgage.




     3.17 Foreclosure; Expenses of Litigation. If Mortgagee forecloses, reasonable
attorneys’ fees for services in the supervision of said foreclosure proceeding shall be allowed to
Mortgagee as part of the foreclosure costs. In the event of foreclosure of the lien hereof, there
shall be allowed and included as additional indebtedness all expenditures and expenses which may be
paid or incurred by or on behalf of Mortgagee for reasonable attorneys’ fees, appraisers’ fees,
outlays for documentary and expert evidence, stenographers’ charges, publication costs, and costs
(which may be estimated as to items to be expended after foreclosure sale or entry of the decree)
of procuring all such abstracts of title, title searches and examinations, title insurance policies
and guarantees, and similar data and assurances with respect to title as Mortgagee may deem
reasonably necessary either to prosecute such suit or to evidence to a bidder at any sale which may
be had pursuant to such decree the true condition of the title to or the value of the Mortgaged
Property or any portion thereof. All expenditures and expenses of the nature in this section
mentioned, and such expenses and fees as may be incurred in the protection of the Mortgaged
Property and the maintenance of the lien and security interest of this Mortgage, including the
reasonable fees of any attorney employed by Mortgagee in any litigation or proceeding affecting
this Mortgage or any other Senior Secured Document, the Mortgaged Property or any portion thereof,
including, without limitation, civil, probate, appellate and bankruptcy proceedings, or in
preparation for the commencement or defense of any proceeding or threatened suit or proceeding,
shall be immediately due and payable by Mortgagor, with interest thereon at the default interest
rate specified in Section 2.07(b) of the Credit Agreement, and shall be secured by this Mortgage.
Mortgagee waives its right to any statutory fee in connection with any judicial or nonjudicial
foreclosure of the lien hereof and agrees to accept a reasonable fee for such services.



     3.18 Deficiency Judgments. If after foreclosure of this Mortgage or Mortgagee’s sale
hereunder, there shall remain any deficiency with respect to any amounts payable under the Senior
Secured Documents, including hereunder, or any amounts secured hereby, and Mortgagee shall
institute any proceedings to recover such deficiency or deficiencies, all such amounts shall
continue to bear interest at the default interest rate specified in Section 2.07(b) of the Credit
Agreement. Mortgagor waives any defense to Mortgagee’s recovery against Mortgagor of any deficiency
after any foreclosure sale of the Mortgaged Property. Subject to the Intercreditor Agreement and
the Guarantee and Collateral Agreement, to the extent permitted by law, Mortgagor expressly waives
any defense or benefits that may be derived from any statute granting Mortgagor any defense to any
such recovery by Mortgagee. In addition, Mortgagee shall be entitled to recovery of all of its
reasonable costs and expenditures (including without limitation any court imposed costs) in
connection with such proceedings, including reasonable attorneys’ fees, appraisal fees and the
other costs, fees and expenditures referred to in Section 3.17 above. This provision shall
survive any foreclosure or sale of the Mortgaged Property, any portion thereof and/or the
extinguishment of the lien hereof.



18









 





     3.19 WAIVER OF JURY TRIAL. MORTGAGEE AND MORTGAGOR EACH WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE ARISING OUT
OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS MORTGAGE, THE GUARANTEE AND COLLATERAL AGREEMENT OR ANY OTHER SECURITY
DOCUMENT. ANY SUCH DISPUTES SHALL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.



     3.20 Exculpation of Mortgagee. The acceptance by Mortgagee of the assignment contained
herein with all of the rights, powers, privileges and authority created hereby shall not, prior to
entry upon and taking possession of the Mortgaged Property by Mortgagee, be deemed or construed to
make Mortgagee a “mortgagee in possession”, nor thereafter or at any time or in any event obligate
Mortgagee to appear in or defend any action or proceeding relating to the Mortgaged Property, nor
shall Mortgagee, prior to such entry and taking, be liable in any way for any injury or damage to
person or property sustained by any person in or about the Mortgaged Property.



ARTICLE 4- GENERAL




     4.1 Discharge. Mortgagor shall be released from the covenants, agreements and
obligations of Mortgagor contained in this Mortgage and all right, title and interest in and to the
Mortgaged Property shall revert to Mortgagor when and as set forth in the Intercreditor Agreement
and, in connection therewith, Mortgagee, at the request and the expense of Mortgagor, shall
promptly execute a deed of reconveyance and such other documents as may be reasonably requested by
Mortgagor to evidence the discharge and satisfaction of this Mortgage and the release of Mortgagor
from its obligations hereunder.



     4.2 No Waiver. The exercise of the privileges granted in this Mortgage to perform
Mortgagor’s obligations under the agreements which constitute the Mortgaged Property shall in no
event be considered or constitute a waiver of any right which Mortgagee or any other Secured Party
may have at any time, after an Event of Default shall have occurred and be continuing, to declare
the Guaranteed Obligations or any part thereof to be immediately due and payable. No delay or
omission to exercise any right, remedy or power accruing upon any default shall impair any such
right, remedy or power or shall be construed to be a waiver of any such default or acquiescence
therein; and every such right, remedy and power may be exercised from time to time and as often as
may be deemed expedient.



     4.3 Extension, Rearrangement or Renewal of Guaranteed Obligations. It is expressly
agreed that any of the Guaranteed Obligations at any time secured hereby may be from time to time
extended for any period, or with the consent of Mortgagor rearranged or renewed, and that any part
of the security herein described, or any other security for the Guaranteed Obligations, may be
waived or released, without altering, varying or diminishing the force, effect or lien or security
interest of this Mortgage; and the lien and security interest granted by this Mortgage shall
continue as a prior lien and security interest on all of the Mortgaged Property not expressly so
released, until the Guaranteed Obligations are fully paid and this Mortgage is terminated in
accordance with the provisions of the Intercreditor Agreement; and no other security now existing
or hereafter taken to






19









 








secure the payment of the Guaranteed Obligations or any part thereof or the performance of any
obligation or liability of Mortgagor whatever shall in any manner impair or affect the security
given by this Mortgage; and all security for the payment of the Guaranteed Obligations or any part
thereof and the performance of any obligation or liability shall be taken, considered and held as
cumulative.




     4.4 Forcible Detainer. Mortgagor agrees for itself and all persons claiming by,
through or under it, that subsequent to foreclosure hereunder in accordance with this Mortgage and
applicable law if Mortgagor shall hold possession of the Mortgaged Property or any part thereof,
Mortgagor or the persons so holding possession shall be guilty of trespass; and any such persons
(including Mortgagor) failing or refusing to surrender possession upon demand shall be guilty of
forcible detainer and shall be liable to Mortgagee or any purchaser in foreclosure, as applicable,
for reasonable rental on said premises, and shall be subject to eviction and removal in accordance
with law.



     4.5 Waiver of Stay or Extension. To the extent permitted to be waived by law,
Mortgagor shall not at any time insist upon or plead or in any manner whatever claim the benefit or
advantage of any stay, extension or moratorium law now or at any time hereafter in force in any
locality where the Mortgaged Property or any part thereof may or shall be situated, nor shall
Mortgagor claim any benefit or advantage from any law now or hereafter in force providing for the
valuation or appraisement of the Mortgaged Property or any part thereof prior to any sale thereof
to be made pursuant to any provision of this Mortgage or to a decree of any court of competent
jurisdiction, nor after any such sale shall Mortgagor claim or exercise any right conferred by any
law now or at any time hereafter in force to redeem the Mortgaged Property so sold or any part
thereof; and Mortgagor hereby expressly waives all benefit or advantage of any such law or laws and
the appraisement of the Mortgaged Property or any part thereof, and covenants that Mortgagor shall
not hinder or delay the execution of any power herein granted and delegated to Mortgagee but that
Mortgagor shall permit the execution of every such power as though no such law had been made.



     4.6 Notices. Except where certified or registered mail notice is required by
applicable law, any notice to Mortgagor or Mortgagee required or permitted hereunder shall be
deemed to be given when given in the manner prescribed in the Intercreditor Agreement.



     4.7 Severability. All rights, powers and remedies provided herein may be exercised
only to the extent that the exercise thereof does not violate any applicable law, and are intended
to be limited to the extent necessary so that they will not render this Mortgage invalid,
unenforceable or not entitled to be recorded, registered or filed under any applicable law. In the
event any term or provision contained in this Mortgage is in conflict, or may hereafter be held to
be in conflict, with the laws of the State of New York, the State or of the United States of
America, this Mortgage shall be affected only as to such particular term or provision, and shall in
all other respects remain in full force and effect.



     4.8 Application of Payments. In the event that any part of the Guaranteed Obligations
cannot lawfully be secured hereby, or in the event that the lien and security interest hereof
cannot be lawfully enforced to pay any part of the Guaranteed Obligations, or in the event that the
lien or security interest created by this Mortgage shall be invalid or unenforceable as to any part
of the






20









 








Guaranteed Obligations, then all payments on the Guaranteed Obligations shall be deemed to have
been first applied to the complete payment and liquidation of that part of the Guaranteed
Obligations which is not secured by this Mortgage and the unsecured portion of the Guaranteed
Obligations shall be completely paid and liquidated prior to the payment and liquidation of the
remaining secured portion of the Guaranteed Obligations.




     4.9 Governing Law. THE PROVISIONS OF THIS MORTGAGE REGARDING THE CREATION, PERFECTION
AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS HEREIN GRANTED SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE LAWS OF THE STATE. ALL OTHER PROVISIONS OF THIS MORTGAGE AND THE RIGHTS AND
OBLIGATIONS OF MORTGAGOR AND MORTGAGEE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF.



     4.10 Entire Agreement. This Mortgage, the Guarantee and Collateral Agreement and the
Intercreditor Agreement represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties.



     4.11 Amendments. This Mortgage may be amended, supplemented or otherwise modified
only by an instrument in writing signed by Mortgagor and Mortgagee.



     4.12 Successors and Assigns. All terms of this Mortgage shall run with the land and
bind each of Mortgagor and Mortgagee and their respective successors and assigns, and all persons
claiming under or through Mortgagor or Mortgagee, as the case may be, or any such successor or
assign, and shall inure to the benefit of Mortgagee and Mortgagor, and their respective successors
and assigns.



     4.13 Renewal, Etc. Mortgagee may at any time and from time to time renew or extend
this Mortgage, or alter or modify the same in any way, or waive any of the terms, covenants or
conditions hereof in whole or in part and may release any portion of the Mortgaged Property or any
other security, and grant such extensions and indulgences in relation to the Guaranteed Obligations
as Mortgagee may determine, without the consent of any junior lienor or encumbrancer and without
any obligation to give notice of any kind thereto and without in any manner affecting the priority
of the lien and security interest hereof on any part of the Mortgaged Property; provided that
nothing in this Section 4.13 shall grant Mortgagee the right to alter or modify the
Mortgage without the consent of Mortgagor unless otherwise specifically permitted in this Mortgage.



     4.14 Future Advances. This Mortgage is executed and delivered to secure, among other
things, Mortgagor’s guaranty of future advances under the Senior Secured Documents. It is
understood and agreed that this Mortgage secures Mortgagor’s guaranty of present and future
advances made pursuant to the Senior Secured Documents and that the lien of such future advances
shall relate to the date of this Mortgage.



     4.15 Liability. Notwithstanding any provision in this Mortgage to the contrary,
recourse against Mortgagor under this Mortgage shall be limited to the extent provided in the
Guarantee and Collateral Agreement.



21









 





     4.16 Severability and Compliance With Usury Law. The Senior Secured Documents are
intended to be performed in accordance with, and only to the extent permitted by, all applicable
Legal Requirements. If any provision of any of the Senior Secured Documents or the application
thereof to any person or circumstance shall, for any reason and to any extent, be invalid or
unenforceable, neither the remainder of the instrument in which such provision is contained, nor
the application of such provision to other persons or circumstances, nor the other instruments
referred to hereinabove, shall be affected thereby, but rather shall be enforceable to the greatest
extent permitted by law. It is expressly stipulated and agreed to be the intent of Mortgagor and
Mortgagee at all times to comply with the applicable State law governing the maximum rate or amount
of interest payable on or in connection with the Guaranteed Obligations (or applicable United
States federal law to the extent that it permits Mortgagee to contract for, charge, take, reserve
or receive a greater amount of interest than under State law). If the applicable law is ever
judicially interpreted so as to render usurious any amount called for under the Senior Secured
Documents, or contracted for, charged, taken, reserved or received with respect to the extensions
of credit evidenced by the Senior Secured Documents or if acceleration of the maturity of the
Guaranteed Obligations or if any prepayment by Mortgagor results in Mortgagor having paid any
interest in excess of that permitted by law, then it is Mortgagor’s and Mortgagee’s express intent
that all excess amounts theretofore collected by Mortgagee be credited on the principal balance due
under the Senior Secured Documents (or, if the Senior Secured Documents have been or would thereby
be paid in full, refunded to Mortgagor), and the provisions of the Senior Secured Documents
immediately be deemed reformed and the amounts thereafter collectible thereunder reduced, without
the necessity of the execution of any new document, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder. The
right to accelerate maturity of the Guaranteed Obligations does not include the right to accelerate
any interest which has not otherwise accrued on the date of such acceleration, and Mortgagee does
not intend to collect any unearned interest in the event of acceleration. All sums paid or agreed
to be paid to Mortgagee for the use, forbearance or detention of the Guaranteed Obligations shall,
to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout
the full term of the Guaranteed Obligations until payment in full so that the rate or amount of
interest on account of the Guaranteed Obligations does not exceed the applicable usury ceiling.



     4.17 Release of Collateral.


          (a) Notwithstanding any provision herein to the contrary, the Mortgaged Property or any part
thereof shall be released from the security interest created by this Mortgage at any time or from
time to time upon the request of Mortgagor; provided that the requirements of the Intercreditor
Agreement have been satisfied. Upon satisfaction of such requirements, a Responsible Officer of
Mortgagee shall promptly execute, deliver and acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release of any Mortgaged Property permitted to
be released pursuant to this Mortgage in each case as required by, and in accordance with, the
Intercreditor Agreement.


          (b) Collateral Agent may release the Mortgaged Property or any part thereof from the security
interest created hereunder upon the sale or disposition of such Mortgaged Property pursuant to
Mortgagee’s powers, rights and duties with respect to remedies provided herein.






22









 





     4.18 Intercreditor Agreement. In the event of any conflict between any terms and
provisions set forth in this Mortgage and those set forth in the Intercreditor Agreement, the terms
and provisions of the Intercreditor Agreement shall supersede and control the terms and provisions
of this Mortgage.



     4.19 Time of the Essence. Mortgagor acknowledges that time is of the essence in
performing all of Mortgagor’s obligations set forth herein.



     4.20 Counterpart Execution. This Mortgage may be executed by the parties hereto in
any number of counterparts (and be each of the parties hereof on separate counterparts), each of
which when so executed and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.



ARTICLE 5– STATE SPECIFIC PROVISIONS




[TO BE ADDED AS APPROPRIATE]



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




23









 





     IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly executed and delivered as of
the day and year first above written.



	 	 	 	 	 
	 	                                                                        
        ,
a                                                                       
          

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



24









 







	 	 	 
	THE STATE OF

	 	§
	 

	 	§
	COUNTY OF

	 	§







     This instrument was acknowledged before
me on
                                        ,
200     , by                      

,             of
                                                                              , a

                      ,
on behalf of such                                                      .



	 	 	 
	 

	 	 
	 

	 	Notary Public, State of                     
	 

	 	My Commission Expires:                                                            
	 
	 	 
	 

	 	 
	 

	 	Printed Name of Notary










25









 








EXHIBIT A




DESCRIPTION OF SITE



(see attached)





26









 








EXHIBIT P-1




MICHIGAN FORM OF MORTGAGE




See attached.







P-1-1









 








      




MORTGAGE




Dated as of                     , 200     



by



ENEXUS NUCLEAR PALISADES, LLC

a Delaware limited liability company,

as Mortgagor



for the benefit of



THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,

as Collateral Agent and Mortgagee



Relating to Premises in:



Van Buren County, Michigan



 

















 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1 - DEFINITIONS
	 	 	8	 
	1.1 Defined Terms
	 	 	8	 
	1.2 Accounting Terms
	 	 	10	 
	1.3 The Rules Of Interpretation
	 	 	10	 
	 
	 	 	 	 
	ARTICLE 2 - GENERAL COVENANTS AND PROVISIONS
	 	 	10	 
	 
	 	 	 	 
	2.1 Mortgagor Performance Of The Guarantee And Collateral Agreement
And The Intercreditor Agreement
	 	 	10	 
	2.2 General Representations, Covenants And Warranties
	 	 	10	 
	2.3 Compliance With Legal Requirements
	 	 	10	 
	2.4 Insurance; Application Of Insurance Proceeds; Application Of Eminent
Domain Poceeds.
	 	 	11	 
	2.5 Assignment Of Rents
	 	 	11	 
	2.6 Mortgagee Assumes No Guaranteed Obligations
	 	 	12	 
	2.7 Further Assurances
	 	 	12	 
	2.8 Acts Of Mortgagor
	 	 	13	 
	2.9 After-Acquired Property
	 	 	13	 
	2.10 Mortgaged Property
	 	 	13	 
	2.11 Power Of Attorney
	 	 	13	 
	2.12 Covenant To Pay
	 	 	14	 
	2.13 Security Agreement
	 	 	14	 
	 
	 	 	 	 
	ARTICLE 3 - REMEDIES
	 	 	15	 
	 
	 	 	 	 
	3.1 Acceleration Of Maturity
	 	 	15	 
	3.2 Protective Advances
	 	 	15	 
	3.3 Institution Of Equity Proceedings
	 	 	15	 
	3.4 Mortgagee’s Power Of Enforcement
	 	 	15	 
	3.5 Mortgagee’s Right To Enter And Take Possession, Operate And Apply
Income
	 	 	16	 
	3.6 Separate Sales
	 	 	17	 
	3.7 Waiver Of Appraisement, Moratorium, Valuation, Stay, Extension And
Redemption Laws
	 	 	17	 
	3.8 Receiver
	 	 	18	 
	3.9 Suits To Protect The Mortgaged Property
	 	 	18	 
	3.10 Proofs Of Claim
	 	 	19	 
	3.11 Mortgagor To Pay Amounts Secured Hereby On Any Default In Payment;
Application Of Monies  By Mortgagee
	 	 	19	 
	3.12 Delay Or Omission; No Waiver
	 	 	19	 
	3.13 No Waiver Of One Default To Affect Another
	 	 	19	 
	3.14 Discontinuance Of Proceedings; Position Of Parties Restored
	 	 	20	 
	3.15 Remedies Cumulative
	 	 	20	 
	3.16 Interest After Event Of Default
	 	 	20	 
	3.17 Foreclosure; Expenses Of Litigation
	 	 	21	 
	3.18 Deficiency Judgments
	 	 	21	 
	3.19
WAIVER OF JURY TRIAL 
	 	 	21	 
	3.20 Exculpation Of Mortgagee
	 	 	22	 






2









 






	 	 	 	 	 
	 	 	Page	 
	ARTICLE 4 - GENERAL
	 	 	22	 
	 
	 	 	 	 
	4.1 Discharge
	 	 	22	 
	4.2 No Waiver
	 	 	22	 
	4.3 Extension, Rearrangement Or Renewal Of Guaranteed Obligations
	 	 	22	 
	4.4 Forcible Detainer
	 	 	23	 
	4.5 Waiver Of Stay Or Extension
	 	 	23	 
	4.6 Notices
	 	 	23	 
	4.7 Severability
	 	 	23	 
	4.8 Application Of Payments
	 	 	23	 
	4.9 Governing Law
	 	 	24	 
	4.10 Entire Agreement
	 	 	24	 
	4.11 Amendments
	 	 	24	 
	4.12 Successors And Assigns
	 	 	24	 
	4.13 Renewal, Etc.
	 	 	24	 
	4.14 Future Advances
	 	 	24	 
	4.15 Liability
	 	 	24	 
	4.16 Severability And Compliance With Usury Law
	 	 	24	 
	4.17 Release Of Collateral
	 	 	25	 
	4.18 Intercreditor Agreement Controls
	 	 	25	 
	4.19 Time Of The Essence
	 	 	26	 
	4.20 Counterpart Execution
	 	 	26	 
	 
	 	 	 	 
	ARTICLE 5 - STATE SPECIFIC PROVISIONS
	 	 	26	 
	 
	 	 	 	 
	5.1 Power Of Sale
	 	 	26	 
	5.2 Mortgaged Property
	 	 	26	 
	5.3 Failure To Pay Taxes And/Or Assessments
	 	 	27	 
	5.4 Future Advance Mortgage
	 	 	27	 






3









 





MORTGAGE




     This MORTGAGE, dated as of                     , 200      (as modified, supplemented,
consolidated, extended or amended from time to time, this “Mortgage”) by ENEXUS NUCLEAR
PALISADES, LLC, a Delaware limited liability company, with an address at 27780 Blue Star Memorial
Highway, Covert, MI 49043 (“Mortgagor”), for the benefit of THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK, with an address at One Liberty Plaza, New York, NY 10006, as Collateral Agent
for the benefit of the Senior Secured Parties, and as mortgagee (together with its successors and
assigns, in such capacities, “Collateral Agent” and “Mortgagee”). Capitalized
terms used in this Mortgage and not otherwise defined herein shall have the meanings ascribed to
them in the Intercreditor Agreement (defined below).



Recitals




     A. ENEXUS ENERGY CORPORATION, a Delaware corporation (the “Borrower”), the Lenders
from time to time party thereto, CITIGROUP GLOBAL MARKETS, INC. and GOLDMAN SACHS CREDIT PARTNERS,
L.P., as joint book runners and joint lead arrangers (in such capacities, collectively, the
“Arrangers”), BNP PARIBAS, as administrative agent (in such capacity and together with its
successors, the “Administrative Agent”) and Collateral Agent and MIZUHO CORPORATE BANK,
LTD., as Syndication Agent (in such capacity, the “Syndication Agent”) have entered into a
Credit Agreement, dated as of December 23, 2008 (as modified, supplemented, replaced, refinanced
or amended from time to time, the “Credit Agreement”), pursuant to which the Lenders,
severally and not jointly, have agreed to make the Loans to Borrower on the terms and conditions
set forth therein.



     B. The Borrower has requested the Lenders to extend credit hereunder and/or under the Credit
Agreement in the form of Revolving Loans and Swing Loans and Additional Permitted Secured
Indebtedness made or issued at any time and from time to time on or after the Closing Date (as
defined in the Credit Agreement) and prior to the Revolving Credit Maturity Date (as defined in
the Credit Agreement) in an aggregate principal and face amount at any time outstanding not to
exceed a maximum principal amount of TWO BILLION THREE HUNDRED MILLION AND 00/100 DOLLARS
($2,300,000,000.00) (subject to the limitations set forth in the Credit Agreement).



     C. Subject to the terms and conditions of the Credit Agreement, Borrower may enter into one
or more (i) Specified Credit Support Facilities and (ii) Specified Commodity Hedging Transactions.



     D. Mortgagor, Subsidiary Guarantors (as defined in the Credit Agreement), Collateral Agent,
Administrative Agent, the Borrower and the other Secured Obligations Representatives from time to
time party thereto, have entered into the Guarantee and Collateral Agreement, dated as of [                                         , 200     
] (the “Guarantee and Collateral Agreement”) pursuant to which Mortgagor has guaranteed
the Guaranteed Obligations (as such term is defined in the Guarantee and Collateral Agreement).



4









 





     E. Mortgagor, Borrower, the Grantors party from time to time thereto, the Hedge Counterparty
Lienholders party from time to time thereto, the Secured Obligations Representatives party from
time to time thereto, Administrative Agent and Collateral Agent have entered into the Collateral
Agency and Intercreditor Agreement, dated as of December 23, 2008 (the “Intercreditor
Agreement”) pursuant to which Collateral Agent, as agent for the present and future holders of
the Guaranteed Obligations, has agreed to receive, hold, maintain, administer and distribute the
Collateral and enforce the Senior Collateral Documents.



     F. The execution and delivery of this Mortgage are conditions precedent to the making of Loans
(as defined in the Credit Agreement).



     G. As set forth more fully below, Mortgagor intends to secure its payment and performance of
its obligations under the Guarantee and Collateral Agreement with the Mortgaged Property (as
defined below), along with various other items of personal and real property owned by Mortgagor.



Agreement




     NOW, THEREFORE, to secure the Mortgagor’s payment and performance of its obligations under the
Guarantee and Collateral Agreement, the Intercreditor Agreement and this Mortgage, including but
not limited to the prompt and complete payment and performance, when and as required, due and/or
payable, of all of the Guaranteed Obligations, by acceleration or otherwise, or arising out of or
in connection therewith, and in consideration of the extension of credit to Borrower under the
Credit Agreement and other good and valuable consideration, and the covenants herein contained and
in the Guarantee and Collateral Agreement, Mortgagor, intending to be legally bound, does hereby
grant, bargain, sell, convey, warrant, assign, transfer, mortgage, pledge, set over and confirm
unto Mortgagee, for the ratable benefit of the Senior Secured Parties and their respective
successors and assigns, forever, as set forth in this Mortgage, all of Mortgagor’s estate, right,
title, interest, property, claim and demand, now or hereafter arising, in and to the following
property and rights (herein collectively called the “Mortgaged Property”):




     (a) the lands and premises more particularly described in Exhibit A hereto (the
“Site”);




     (b) any and all easements, leases, licenses, option rights, rights-of-way and other
rights used in connection with the Site or as a means of ingress and egress thereto and
therefrom, all easements for ingress and egress and easements for water, natural gas and
sewage pipelines, running in favor of Mortgagor, or appurtenant to the Site, and any and all
sidewalks, alleys, strips and gores of land adjacent thereto or used in connection therewith
together with all and singular the tenements, hereditaments and appurtenances thereto, and
with any land lying within the right-of-way of any streets, open or proposed, adjoining the
same (collectively, the “Easements”; and the Site and the Easements collectively
referred to herein as the “Real Property”);




     (c) all buildings, structures, fixtures and other improvements now or hereafter erected
on the Real Property (collectively, the “Improvements”);



5









 






     (d) all machinery, apparatus, equipment, fittings, fixtures, generators, boilers, turbines and
other articles of personal property, including all goods and all goods which become fixtures, now
owned or hereafter acquired by Mortgagor and now or hereafter located on, attached to or used in
the operation of or in connection with the Real Property and/or the Improvements, and all
replacements thereof, additions thereto and substitutions therefor, to the fullest extent permitted
by applicable law (collectively, the “Equipment”);




     (e) all raw materials, work in process and other materials used or consumed in the
construction of, or now or hereafter located on or used in connection with, the Real Property, the
Improvements and/or the Equipment, (including, without limitation, fuel and fuel deposits, now or
hereafter located on the Real Property or elsewhere or otherwise owned by Mortgagor) (the above
items, together with the Equipment, the “Tangible Collateral”);




     (f) all rights, powers, privileges and other benefits of Mortgagor (to the extent assignable)
now or hereafter obtained by Mortgagor from any Governmental Authority (as such term is defined in
the Credit Agreement), including, without limitation, all Permits ((as defined in the Credit
Agreement) but excluding any of the Permits which by their terms or by operation of law prohibit or
do not allow assignment or which would become void solely by virtue of a security interest being
granted therein), licenses, certificates and other similar instruments and documents, issued in the
name of Mortgagor, governmental actions relating to the ownership, operation, management and use of
the Real Property, Improvements, Equipment or Tangible Collateral, and any improvements,
modifications or additions thereto;




     (g) all the lands and interests in lands, tenements and hereditaments hereafter acquired by
Mortgagor in connection with or appurtenant to the Site, and all income, rents, rent equivalents,
issues, profits, revenues (including all oil and gas or other mineral royalties and bonuses),
deposits and other benefits from the Site and the Improvements (including all receivables and other
obligations now existing or hereafter arising or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and occupancy of property or rendering of
services by Mortgagor or any operator or manager of the Mortgaged Property or the commercial space
located in the Improvements or acquired from others) (collectively, the “Rents”) and all
proceeds from the sale or other disposition of the Leases (as defined herein) and the right to
receive and apply the Rents and/or any other property or rights subject to the lien hereof,
including (without limitation) all interests of Mortgagor, whether as lessor or lessee, in any
leases of land hereafter made and all rights of Mortgagor thereunder;




     (h) any and all other property in any way associated or used in connection with or
appurtenant to the Real Property, Improvements, Equipment or Tangible Collateral that may from time
to time, by delivery or by writing of any kind, be subjected to the lien hereof by Mortgagor or by
anyone on its behalf or with its consent, or which may come into the possession or be subject to
the control of Mortgagee pursuant to this Mortgage, being hereby collaterally assigned to Mortgagee
and subjected or added to the lien or estate created by this Mortgage forthwith upon the
acquisition thereof by Mortgagor, as fully as if such property



6









 






     were now owned by Mortgagor and were specifically described in this Mortgage and subjected to
the lien and security interest hereof; and Mortgagee is hereby authorized to receive any and
all such property as and for additional security hereunder;




     (i) all the remainder or remainders, reversion or reversions, Rents, revenues, issues,
profits, royalties, income, proceeds and other benefits derived from any of the foregoing, all of
which are hereby assigned to Mortgagee, who is hereby authorized to collect and receive the same,
to give proper receipts and acquittances therefor and to apply the same in accordance with the
provisions of this Mortgage;




     (j) all Proceeds, as defined in the UCC (defined below), including all proceeds,
products, offspring, Rents, profits or receipts, in whatever form, arising from the Mortgaged
Property, including (i) cash, instruments and other property received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Mortgaged Property, (ii) the
collection, sale, lease, sublease, concession, exchange, assignment, licensing or other disposition
of, or realization upon, any item or portion of the Mortgaged Property (including all claims of
Mortgagor against third parties for loss of, damage to, destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of insurance in respect of, any the Mortgaged
Property now existing or hereafter arising), (iii) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to Mortgagor from time to time with respect to any of the
Mortgaged Property, (iv) any and all payments (in any form whatsoever) made or due and payable to
Mortgagor from time to time in connection with the requisition, confiscation, condemnation, seizure
or forfeiture of all or any part of the Mortgaged Property by any Governmental Authority (or any
person acting under color of Governmental Authority) and (v) any and all other amounts from time to
time paid or payable under or in connection with any of the Mortgaged Property;




     (k) all agreements to which Mortgagor is a party or which are assigned to Mortgagor in
any management agreement or any other document and which are executed in connection with the
construction, operation and management of the Improvements located on the Mortgaged Property
(including agreements for the sale, lease or exchange of goods or other property and/or the
performance of services by it, in each case whether now in existence or hereafter arising or
acquired) as any such agreements have been or may be from time to time amended, supplemented or
otherwise modified;




     (l) all general intangibles, now owned or hereafter acquired by Mortgagor, including
(i) all obligations or indebtedness owing to Mortgagor from whatever source arising, (ii) all
unearned premiums accrued or to accrue under all insurance policies for the Mortgaged Property
obtained by Mortgagor, all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or liquidated claims (including proceeds of insurance, condemnation awards, and
all rights of Mortgagor to refunds of real estate taxes and assessments), (iii) all royalties and
license fees and (iv) all rights or claims in respect of refunds for taxes paid;



7









 






     (m) all instruments, chattel paper or letters of credit, evidencing, representing,
arising from or existing in respect of, relating to, securing or otherwise supporting the
payment of, any of the Mortgaged Property (including promissory notes, drafts, bills of
exchange and trade acceptances) and chattel paper obtained by Mortgagor in connection with
the Mortgaged Property (including all ledger sheets, computer records and printouts,
databases, programs, books of account and files of Mortgagor relating thereto) and such
notes or other obligations of indebtedness owing to Mortgagor from whatever source arising,
in each case now owned or hereafter acquired by Mortgagor and relating to the Mortgaged
Property; and




     (n) all inventory, whether now or hereafter existing or acquired, and which
arises out of or is used in connection with, directly or indirectly, the ownership and
operation of the Mortgaged Property, all documents representing the same and all Proceeds
and products of the same, including all goods, merchandise, raw materials, work in process
and other personal property, wherever located, now or hereafter owned or held by Mortgagor
for manufacture, processing, the providing of services or sale, use or consumption in the
operation of the Mortgaged Property (including fuel, supplies and similar items and all
substances commingled therewith or added thereto) and rights and claims of Mortgagor against
anyone who may store or acquire the same for the account of Mortgagor, or from whom
Mortgagor may purchase the same.




     TO HAVE AND TO HOLD the said Mortgaged Property, whether now owned or held or hereafter
acquired, unto Mortgagee, its successors and assigns, pursuant to the provisions of this Mortgage.



     IT IS HEREBY COVENANTED, DECLARED AND AGREED that the lien, security interest or estate
created by this Mortgage to secure the payment and performance of the Guaranteed Obligations, both
present and future, shall be first, prior and superior to any Lien, security interest, reservation
of title or other interest heretofore, contemporaneously or subsequently suffered or granted by
Mortgagor, its legal representatives, successors or assigns, except Permitted Encumbrances (as
defined below) and that the Mortgaged Property is to be held, dealt with and disposed of by
Mortgagee, upon and subject to the terms, covenants, conditions, uses and agreements set forth in
this Mortgage.



     PROVIDED ALWAYS, that when as set forth in the Intercreditor Agreement and upon the observance
and performance by Mortgagor of its covenants and agreements set forth herein and therein, then
this Mortgage and the estate hereby and therein granted shall be discharged as provided herein
below.



ARTICLE 1 - DEFINITIONS




     1.1 Defined Terms. Any term defined by reference to an agreement, instrument or
other document shall have the meaning so assigned to it whether or not such document is in effect.
In addition, for purposes of this Mortgage, the following definitions shall apply:








8









 












“Credit Agreement” has the meaning ascribed to it in Recital A hereof.




“Easements” has the meaning ascribed to it in the Granting Clauses.




“Equipment” has the meaning ascribed to it in the Granting Clauses.




“Event
of Default” has the meaning ascribed to it in the Credit Agreement.




“GAAP” shall mean generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a significant segment of the
accounting profession, which are in effect from time to time.




“Guarantee and Collateral Agreement” has the meaning ascribed to it in Recital D hereof.




“Guaranteed Obligations” has the meaning ascribed to it in the Guarantee and
Collateral Agreement.




“Improvements” has the meaning ascribed to it in the Granting Clauses.




“Intercreditor Agreement” has the meaning ascribed to it in Recital E hereof.




“Leases” has the meaning ascribed to it in Section 2.5.




“Legal Requirements” has the meaning ascribed to it in Section 2.3.




“Lien” shall mean any mortgage, deed of trust, deed to secure debt, lien (statutory or
otherwise), pledge, hypothecation, encumbrance, restriction, collateral assignment, charge or
security interest in, on or of the Mortgaged Property.




“Mortgaged Property” has the meaning ascribed to it in the Granting Clauses.




“Permitted Encumbrances” has the meaning ascribed to it in Section 2.2.




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




“Proceeds” has the meaning ascribed to it in the Granting Clauses.




“Real Property” has the meaning ascribed to it in the Granting Clauses.




“Site” has the meaning ascribed to it in the Granting Clauses.



9









 






“State” means the State of Michigan.




“Tangible Collateral” has the meaning ascribed to it in the Granting
Clauses.




“UCC” shall mean Uniform Commercial Code of New York or, if the creation, perfection
and enforcement of any security interest herein granted is governed by the laws of
the State, then, as to the matter in question, the Uniform Commercial Code in effect
in the State.



     1.2 Accounting Terms. As used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms not defined herein shall have the respective meanings
given to them under GAAP.



     1.3 The Rules of Interpretation. The rules of interpretation as set forth in the
Intercreditor Agreement shall govern the terms, conditions and provisions hereof. In the event of
any conflict between those set forth in this Mortgage and the Intercreditor Agreement, the latter
shall be deemed controlling and shall preempt the former.



ARTICLE 2- GENERAL COVENANTS AND PROVISIONS




     2.1 Mortgagor Performance of the Guarantee and Collateral Agreement and the Intercreditor
Agreement. Mortgagor shall perform, observe and comply with each and every provision hereof,
and with each and every provision contained in the Guarantee and Collateral Agreement and the
Intercreditor Agreement and shall promptly pay to Mortgagee, when payment shall become due under
the Guarantee and Collateral Agreement, the amounts provided for thereunder with interest thereon,
if any, and all other sums required to be paid by Mortgagor under this Mortgage and the Guarantee
and Collateral Agreement at the time and in the manner provided herein and therein.



     2.2 General Representations, Covenants and Warranties. Mortgagor represents, covenants
and warrants that as of the date hereof: (a) Mortgagor has good and marketable fee simple title to
the Site and Improvements, free and clear of all encumbrances except the permitted encumbrances set
forth on Schedule B to the applicable title policy, if any (“Permitted Encumbrances”); (b)
All Easements are and will remain valid, subsisting and in full force and effect; (c) Mortgagor has
the right to hold, occupy and enjoy its interest in the Mortgaged Property, and has good right,
full power and lawful authority to mortgage and pledge the same as provided herein and prior to the
occurrence and continuance of an Event of Default, Mortgagor may at all times peaceably and quietly
enter upon, hold, occupy, use and enjoy the Mortgaged Property in accordance with the terms hereof;
(d) all costs arising from construction of any improvements, the performance of any labor and the
purchase of all Mortgaged Property have been or shall be paid when due; (e) the Site has access for
ingress and egress to dedicated street(s); and (f) no material part of the Mortgaged Property has
been damaged, destroyed, condemned or abandoned.



     2.3 Compliance with Legal Requirements. Mortgagor shall promptly comply in all
material respects with all governmental statutes, laws, rules, orders, regulations, ordinances,






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judgments, decrees and injunctions of Governmental Authorities affecting either the Mortgaged
Property or any part thereof or the construction, use, alteration or operation thereof, or any part
thereof (whether now or hereafter enacted and in force), and all Permits, licenses and
authorizations and regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, at any time in force affecting the Mortgaged Property or
any part thereof (collectively “Legal Requirements”) relating to its use and occupancy of
the Mortgaged Property, whether or not such compliance requires work or remedial measures that are
ordinary or extraordinary, foreseen or unforeseen, structural or nonstructural, or that interfere
with the use or enjoyment of the Mortgaged Property.




     2.4 Insurance; Application of Insurance Proceeds; Application of Eminent Domain
Proceeds.


          2.4.1 Mortgagor shall at its sole expense obtain for, deliver to (or deliver certificates
evidencing), assign and maintain for the benefit of Mortgagee, during the term of this Mortgage,
insurance policies insuring the Mortgaged Property (to the extent insurable) and liability
insurance policies, all in accordance with the requirements of the Guarantee and Collateral
Agreement. Mortgagor shall pay promptly when due any premiums on such insurance policies and on any
renewals thereof. In the event of the foreclosure of this Mortgage or any other transfer of the
Mortgaged Property in extinguishment of the indebtedness and other sums secured hereby, all right,
title and interest of Mortgagor in and to all casualty insurance policies, and renewals thereof
then in force, shall pass to the purchaser or grantee in connection therewith. In addition, if any
portion of the Mortgaged Property is located in an area identified by the Federal Emergency
Management Agency or any other Governmental Authority as an area having special flood hazards and
in which flood insurance has been made available under the National Flood Insurance Act of 1968 (or
any amendment or successor act thereto), then Mortgagor shall maintain, or cause to be maintained,
with a financially sound and reputable insurer, flood insurance in an amount sufficient to comply
with all applicable rules and regulations promulgated pursuant to the National Flood Insurance Act
of 1968 (or any amendment or successor act thereto).


          2.4.2 All insurance proceeds and all awards payable with respect to any taking of the Real
Property or Improvements shall be paid and/or shall be applied in accordance with the provisions of
the Senior Secured Documents.



     2.5 Assignment of Rents. Mortgagor unconditionally and absolutely assigns to Mortgagee
all of Mortgagor’s right, title and interest in and to: all leases, subleases, occupancy
agreements, licenses, rental contracts and other similar agreements now or hereafter existing
relating to the use or occupancy of the Mortgaged Property, together with all guarantees,
modifications, extensions and renewals thereof; and all Rents, issues, profits, income and proceeds
due or to become due from tenants of the Mortgaged Property (the “Leases”), including
rentals and all other payments of any kind under any Leases now existing or hereafter entered into,
together with all deposits (including security deposits) of tenants thereunder. This is an absolute
assignment to Mortgagee and not an assignment as security for the performance of the obligations
under the Guarantee and Collateral Agreement, or any other indebtedness. Subject to the provisions
below, Mortgagee shall have the right, power and authority to: notify any person that the Leases
have been







11









 








assigned to Mortgagee and that all Rents and other obligations are to be paid directly to
Mortgagee, whether or not Mortgagee has commenced or completed foreclosure or taken possession of
the Mortgaged Property; settle compromise, release, extend the time of payment of, and make
allowances, adjustments and discounts of any Rents or other obligations under the Leases; enforce
payment of Rents and other rights under the Leases, prosecute any action or proceeding, and defend
against any claim with respect to Rents and Leases; enter upon, take possession of and operate the
Mortgaged Property; lease all or any part of the Mortgaged Property; and/or perform any and all
obligations of Mortgagor under the Leases and exercise any and all rights of Mortgagor therein
contained to the full extent of Mortgagor’s rights and obligations thereunder, with or without the
bringing of any action or the appointment of a receiver. At Mortgagee’s request, Mortgagor shall
deliver a copy of this Mortgage to each tenant under a Lease. Mortgagor irrevocably directs any
tenant, without any requirement for notice to or consent by Mortgagor, to comply with all demands
of Mortgagee under this Section and to turn over to Mortgagee on demand all Rents which it
receives. Mortgagee shall have the right, but not the obligation, to use and apply all Rents
received hereunder in such order and such manner as Mortgagee may determine in accordance with the
Intercreditor Agreement. Notwithstanding that this is an absolute assignment of the Rents and
Leases and not merely the collateral assignment of, or the grant of a lien or security interest in
the Rents and Leases, Mortgagee grants to Mortgagor a revocable license to collect and receive the
Rents and to retain, use and enjoy such Rents. Such license may be revoked by Mortgagee only upon
the occurrence and during the continuance of any Event of Default. Mortgagor shall apply any Rents
which it receives to the payment due under the Guaranteed Obligations, taxes, assessments, water
charges, sewer Rents and other governmental charges levied, assessed or imposed against the
Mortgaged Property, insurance premiums, and other obligations of lessor under the Leases before
using such proceeds for any other purpose.




     2.6 Mortgagee Assumes No Guaranteed Obligations. It is expressly agreed that, anything
herein contained to the contrary notwithstanding, Mortgagor shall remain obligated under all
agreements which are included in the definition of “Mortgaged Property” and shall perform all of
its obligations thereunder in accordance with the provisions thereof, and neither Mortgagee nor any
of the Senior Secured Parties shall have any obligation or liability with respect to such
obligations of Mortgagor, nor shall Mortgagee or any of the Senior Secured Parties be required or
obligated in any manner to perform or fulfill any obligations or duties of Mortgagor under such
agreements, or to make any payment or to make any inquiry as to the nature or sufficiency of any
payment received by it, or to present or file any claim or take any action to collect or enforce
the payment of any amounts which have been assigned to Mortgagee hereunder or to which Mortgagee or
the Senior Secured Parties may be entitled at any time or times.



     2.7 Further Assurances. Mortgagor shall, from time to time, at its expense, promptly
execute and deliver all further instruments and documents, and take all further action, that may be
necessary or that Mortgagee may reasonably request, in order to perfect and continue the lien and
security interest granted hereby and to enable Mortgagee to obtain the full benefits of the lien
and security interest granted or intended to be granted hereby. Mortgagor shall keep the Mortgaged
Property free and clear of all Liens, other than Permitted Encumbrances. Without limiting the
generality of the foregoing, Mortgagor shall execute and record or file this Mortgage and each
amendment hereto, and such financing or continuation statements, or amendments thereto, and such
other instruments, endorsements or notices, as may be necessary, or as Mortgagee may reasonably







12









 








request, in order to perfect and preserve the lien and security interest granted or purported to be
granted hereby. Mortgagor hereby authorizes Mortgagee to file one or more financing statements or
continuation statements, and amendments thereto, relative to all or any part of the Mortgaged
Property necessary to preserve or protect the lien and security interest granted hereby without the
signature of Mortgagor where permitted by law.




     2.8 Acts of Mortgagor. Mortgagor hereby represents and warrants that it has not
mortgaged, hypothecated, assigned or pledged and hereby covenants that it will not mortgage,
hypothecate, assign or pledge, so long as this Mortgage shall remain in effect, any of its right,
title or interest in and to the Mortgaged Property or any part thereof, to anyone other than
Mortgagee.



     2.9 After-Acquired Property. Any and all of the Mortgaged Property which is hereafter
acquired shall immediately, without any further conveyance, assignment or act on the part of
Mortgagor or Mortgagee, become and be subject to the lien and security interest of this Mortgage as
fully and completely as though specifically described herein. If and whenever from time to time
Mortgagor shall hereafter acquire any real property or interest therein which constitutes or is
intended to constitute part of the Mortgaged Property hereunder, Mortgagor shall promptly give
notice thereof to Mortgagee and Mortgagor shall forthwith execute, acknowledge and deliver to
Mortgagee a supplement to this Mortgage in form and substance reasonably satisfactory to Mortgagee
subjecting the property so acquired to the lien of this Mortgage. At the same time, if Mortgagee so
requests, Mortgagor shall deliver to Mortgagee either (i) an endorsement to the lender’s policy of
title insurance issued to Mortgagee insuring the lien of this Mortgage, or (ii) a new lender’s
title policy (which shall include tie in coverage relating to the lender’s policy described in (i),
above), in each case which shall insure to Mortgagee in form and substance reasonably satisfactory
to Mortgagee that the lien of this Mortgage as insured under such title insurance policy or
policies encumbers such later acquired property and that Mortgagor’s title to such property meets
all of the applicable requirements of the Senior Secured Documents with respect to title to
Mortgagor’s real property interests.



     2.10 Mortgaged Property. Mortgagor shall observe all applicable covenants, easements
and other restrictions of record with respect to the Site, the Easements or to any other part of
the Mortgaged Property, in all material respects.



     2.11 Power of Attorney. Mortgagor does hereby irrevocably constitute and appoint
Mortgagee its true and lawful attorney (which appointment is coupled with an interest), with full
power of substitution, for Mortgagor and in the name, place and stead of Mortgagor or in
Mortgagee’s own name, for so long as any of the Guaranteed Obligations are outstanding, to ask,
demand, collect, receive, receipt for and sue for any and all Rents, income and other sums which
are assigned hereunder with full power to endorse the name of Mortgagor on all instruments given in
payment or in part payment thereof, to settle, adjust or compromise any claims thereunder as fully
as Mortgagor itself could do and in its discretion file any claim or take any action or proceeding,
either in its own name or in the name of Mortgagor or otherwise, which Mortgagee may deem necessary
or appropriate to protect and preserve the right, title and interest of Mortgagee in and to such
Rents, income and other sums and the security intended to be afforded hereby; provided that
Mortgagee shall not exercise such rights unless an Event of Default has occurred and is continuing.



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     2.12 Covenant to Pay. If an Event of Default has occurred and is continuing, then
Mortgagee, among its other rights and remedies, shall have the right, but not the obligation, to
pay, observe or perform the obligations of Mortgagor herein, in whole or in part, and with such
modifications as Mortgagee reasonably shall deem advisable. All sums, including, without
limitation, reasonable attorneys fees’, so expended or incurred by Mortgagee by reason of the
default of Mortgagor, or by reason of the bankruptcy or insolvency of Mortgagor, as well as,
without limitation, sums expended or incurred to sustain the lien or estate of this Mortgage or its
priority, or to protect or enforce any rights of Mortgagee hereunder, or to recover any of the
Guaranteed Obligations, or for repairs, maintenance, alterations, replacements or improvements
thereto or for the protection thereof, or for real estate taxes or other governmental assessments
or charges against any part of the Mortgaged Property, or premiums for insurance of the Mortgaged
Property, shall be entitled to the benefit of the lien on the Mortgaged Property as of the date of
the recording of this Mortgage, shall be deemed to be added to and be part of the Guaranteed
Obligations secured hereby, whether or not the result thereof causes the total amount of the
Guaranteed Obligations to exceed the stated amount set forth in the recitals of this Mortgage, and
shall be guaranteed by Mortgagor as provided in the Guarantee and Collateral Agreement.



     2.13 Security Agreement.


          2.13.1 This Mortgage shall also be a security agreement between Mortgagor and Mortgagee
covering the Mortgaged Property constituting personal property or fixtures (hereinafter
collectively called “UCC Collateral”) governed by the UCC as such UCC Collateral may be
more specifically set forth in any financing statement delivered in connection with this Mortgage,
and, as further security for the payment and performance of the Guaranteed Obligations, Mortgagor
hereby grants to Mortgagee a security interest in such portion of the Mortgaged Property to the
full extent that the Mortgaged Property may be subject to the UCC. In addition to Mortgagee’s other
rights hereunder, Mortgagee shall have all rights of a secured party under the UCC, as is in effect
in the relevant jurisdiction, or other applicable laws or in equity. Mortgagor hereby authorizes
the filing of, and if requested by Mortgagee, Mortgagor shall execute and deliver to Mortgagee, all
financing statements and such further assurances that may be reasonably required by Mortgagee to
establish, create, perfect (to the extent the same can be achieved by the filing of a financing
statement) and maintain the validity and priority of Mortgagee’s security interests, and Mortgagor
shall bear all reasonable costs thereof, including all UCC searches. Except as otherwise provided
in the Guarantee and Collateral Agreement, if Mortgagee should dispose of any of the Mortgaged
Property comprising the UCC Collateral pursuant to the UCC, ten (10) days’ prior written notice by
Mortgagee to Mortgagor shall be deemed to be reasonable notice; provided, however, that Mortgagee
may dispose of such property in accordance with the foreclosure procedures of this Mortgage in lieu
of proceeding under the UCC. Mortgagee may from time to time execute and deliver at Mortgagor’s
expense all continuation statements, termination statements, amendments, partial releases, or other
instruments relating to all financing statements by and between Mortgagor and Mortgagee. Except as
otherwise provided in the Guarantee and Collateral Agreement, but otherwise subject to the
provisions thereof, if an Event of Default shall occur and be continuing, (a) Mortgagee, in
addition to any other rights and remedies which it may have, may exercise immediately and without
demand to the extent permitted by law, any and all rights and remedies granted to a secured party
under the UCC, as in effect in any relevant jurisdiction, including, without limiting







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the generality of the foregoing, the right to take possession of the UCC Collateral or any part
thereof, and to take such other measures as Mortgagee may deem necessary for the care, protection
and preservation of such collateral and (b) upon request or demand of Mortgagee, Mortgagor shall at
its expense, assemble the UCC Collateral and make it available to Mortgagee at a convenient place
acceptable to Mortgagee. Mortgagor shall pay to Mortgagee on demand any and all expenses, including
reasonable attorneys’ fees and disbursements incurred or paid by Mortgagee in protecting the
interest in the UCC Collateral and in enforcing Mortgagee’s rights hereunder with respect to such
UCC Collateral.



          2.13.2 Mortgagor and the Mortgagee agree, to the extent permitted by law, that: (i) this
Mortgage upon recording or registration in the real estate records of the proper office shall
constitute a financing statement filed as a “fixture filing” within the meaning of Sections
9-102(a)(40) and 9-502(c) of the UCC; (ii) all or a part of the Mortgaged Property are or are to
become fixtures; and (iii) the addresses of Mortgagor and Mortgagee are as set forth in the first
paragraph of this Mortgage and (iv) Mortgagor’s organizational identification number is 4186422.



ARTICLE 3- REMEDIES




     3.1 Acceleration of Maturity. As provided in each of the Senior Secured Documents if
an Event of Default shall have occurred and is continuing, the applicable Secured Debt
Representative may declare the Guaranteed Obligations with respect to the applicable Series of
Guaranteed Obligations to be due and payable immediately, and upon such declaration such Guaranteed
Obligations and other sums shall immediately become due and payable without demand, presentment,
notice or other requirements of any kind (all of which Mortgagor waives).



     3.2 Protective Advances. If an Event of Default shall have occurred and is continuing,
then without thereby limiting Mortgagee’s other rights or remedies, waiving or releasing any of
Mortgagor’s obligations, or imposing any obligation on Mortgagee, Mortgagee may either advance any
amount owing or perform any or all actions that Mortgagee considers necessary or appropriate to
cure such default. All such advances shall constitute “Protective Advances.” No sums advanced or
performance rendered by Mortgagee shall cure, or be deemed a waiver of, any Event of Default.



     3.3 Institution of Equity Proceedings. If an Event of Default occurs and is
continuing, Mortgagee, may institute an action, suit or proceeding in equity for specific
performance of this Mortgage and the Guarantee and Collateral Agreement, both of which shall be
specifically enforceable by injunction or other equitable remedy.



     3.4 Mortgagee’s Power of Enforcement.


          (a) If an Event of Default occurs and is continuing, Mortgagee shall be entitled, at its
option and in its sole and absolute discretion, to institute a proceeding or proceedings, judicial
or nonjudicial, by advertisement or otherwise, for the complete foreclosure of this Mortgage in
which case the Mortgaged Property or any interest therein may be sold for cash or upon credit in
one or more parcels or in several interests or portions and in any order or manner in accordance
with the laws of the jurisdiction in which such Mortgaged Property is located, and







15









 








sell for cash or upon credit the Mortgaged Property or any part thereof and all estate, claim,
demand, right, title and interest of Mortgagor therein and rights of redemption thereof, pursuant
to the power of sale contained herein or otherwise, at one or more sales, as an entity or in
parcels, at such time and place, upon such terms and after such notice thereof as may be required
or permitted by the laws of the State. Mortgagee may require Mortgagor to pay monthly in advance to
Mortgagee, or any receiver appointed to collect the Rents, the fair and reasonable rental value for
the use and occupation of any portion of the Mortgaged Property occupied by Mortgagor and require
Mortgagor to vacate and surrender possession to Mortgagee of the Mortgaged Property or to such
receiver and, in default thereof, evict Mortgagor by summary proceedings or otherwise.



          (b) If any Event of Default occurs and is continuing, Mortgagee may, either with or without
entry or taking possession of the Mortgaged Property, and without regard to whether or not the
indebtedness and other sums secured hereby shall be due and without prejudice to the right of
Mortgagee thereafter to bring an action or proceeding to foreclose or any other action for any
default existing at the time such earlier action was commenced, proceed by any appropriate action
or proceeding: (a) to enforce payment of the Guaranteed Obligations, to the extent permitted by
law, or the performance of any term hereof or any other right; (b) to foreclose this Mortgage in
any manner provided by law for the foreclosure of mortgages on real property and to sell, as an
entirety or in separate lots or parcels, the Mortgaged Property or any portion thereof pursuant to
the laws of the State or under the judgment or decree of a court or courts of competent
jurisdiction, and Mortgagee shall be entitled to recover in any such proceeding all costs and
expenses incident thereto, including reasonable attorneys’ fees in such amount as shall be awarded
by the court; (c) to the extent not prohibited by the laws of the State to exercise any or all of
the rights and remedies available to it under the Senior Secured Documents; and (d) to pursue any
other remedy available to it. Mortgagee shall take action either by such proceedings or by the
exercise of its powers with respect to entry or taking possession, or both, as Mortgagee may
determine.


          (c) The remedies described in this Section may be exercised with respect to all or any portion
of the UCC Collateral, either simultaneously with the sale of any real property encumbered hereby
or independent thereof. Mortgagee shall at any time be permitted to proceed with respect to all or
any portion of the UCC Collateral in any manner permitted by the UCC. Mortgagor agrees that
Mortgagee’s inclusion of all or any portion of the UCC Collateral in a sale or other remedy
exercised with respect to the real property encumbered hereby, as permitted by the UCC, is a
commercially reasonable disposition of such property.




	3.5	 	Mortgagee’s Right to Enter and Take Possession, Operate and Apply Income.




          (a) If an Event of Default occurs and is continuing, Mortgagor, upon demand of Mortgagee,
shall forthwith surrender to Mortgagee the actual possession and, if and to the extent permitted by
law, Mortgagee itself, or by such officers or agents as it may appoint, may enter and take
possession of all of the Mortgaged Property, including the Tangible Collateral, without liability
for trespass, damages or otherwise, and may exclude Mortgagor and its agents and employees wholly
therefrom and may have joint access with Mortgagor to the books, papers and accounts of Mortgagor.



16









 




          (b) If an Event of Default has occurred and is continuing and Mortgagor shall for any reason
fail to surrender or deliver the Mortgaged Property or any part thereof after Mortgagee’s demand,
Mortgagee may obtain a judgment or decree conferring on Mortgagee the right to immediate possession
or requiring Mortgagor to deliver immediate possession of all or part of such property to Mortgagee
and Mortgagor hereby specifically consents to the entry of such judgment or decree. Mortgagor shall
pay to Mortgagee, upon demand, all costs and expenses of obtaining such judgment or decree and
reasonable compensation to Mortgagee, their attorneys and agents, and all such costs, expenses and
compensation shall, until paid, be secured by the lien of this Mortgage.


          (c) Upon every such entering upon or taking of possession, Mortgagee may hold, store, use,
operate, manage and control the Mortgaged Property and conduct the business thereof, and, from
time to time in its sole and absolute discretion and without being under any duty to so act:



                         (1) make all necessary and proper maintenance, repairs, renewals and replacements thereto
and thereon, and all necessary additions, betterments and improvements thereto and thereon and
purchase or otherwise acquire fixtures, personalty and other property in connection therewith;



                         (2) insure or keep the Mortgaged Property insured;



                         (3) manage and operate the Mortgaged Property and exercise all the rights and powers of
Mortgagor in their name or otherwise with respect to the same;



                         (4) enter into agreements with others to exercise the powers herein granted Mortgagee, all as
Mortgagee from time to time may determine; and shall apply the monies so received by Mortgagee in
such priority as provided by the Intercreditor Agreement; and/or



                         (5) rent or sublet the Mortgaged Property or any portion thereof for any purpose
permitted by this Mortgage.


          Mortgagee shall surrender possession of the Mortgaged Property to Mortgagor (i) as may be
required by law or court order, or (ii) when all amounts under any of the terms of the Senior
Secured Documents, including this Mortgage, shall have been paid current and all Events of Default
have been cured or waived. The same right of taking possession, however, shall exist if any
subsequent Event of Default shall occur and be continuing.



     3.6 Separate Sales. To the extent permitted by law or Legal Requirements upon and
during the continuation of an Event of Default, the Mortgaged Property may be sold in one or more
parcels and in such manner and order as Mortgagee, in its sole discretion, may elect, it being
expressly understood and agreed that the right of sale arising out of any Event of Default shall
not be exhausted by any one or more sales.



     3.7 Waiver of Appraisement, Moratorium, Valuation, Stay, Extension and Redemption
Laws. Mortgagor agrees to the full extent permitted by law that if an Event of Default occurs
and is continuing, neither Mortgagor nor anyone claiming through or under it shall or will set






17









 








up, claim or seek to take advantage of any appraisement, moratorium, valuation, stay, extension or
redemption laws now or hereafter in force, in order to prevent or hinder the enforcement or
foreclosure of this Mortgage or the absolute sale of the Mortgaged Property or any portion thereof
or the final and absolute putting into possession thereof, immediately after such sale, of the
purchasers thereof, and Mortgagor for itself and all who may at any time claim through or under it,
hereby waives, to the full extent that it may lawfully so do, the benefit of all such laws, and any
and all right to have the assets comprising the Mortgaged Property marshalled upon any foreclosure
of the lien hereof and agrees that Mortgagee or any court having jurisdiction to foreclose such
lien may sell the Mortgaged Property in part or as an entirety.




     3.8 Receiver. If an Event of Default occurs and is continuing, Mortgagee, to the
extent permitted by law, and without regard to the value, adequacy or occupancy of the security for
the indebtedness and other sums secured hereby, shall be entitled as a matter of right if it so
elects to the appointment of a receiver to enter upon and take possession of the Mortgaged Property
and to collect all earnings, revenues and receipts and apply the same as the court may direct, and
such receiver may be appointed by any court of competent jurisdiction upon application by
Mortgagee. To the extent permitted by law or Legal Requirement, Mortgagee may have a receiver
appointed without notice to Mortgagor or any third party, and Mortgagee may waive any requirement
that the receiver post a bond. To the extent permitted by law or Legal Requirement, Mortgagee shall
have the power to designate and select the Person who shall serve as the receiver and to negotiate
all terms and conditions under which such receiver shall serve. To the extent permitted by law or
Legal Requirement, any receiver appointed on Mortgagee’s behalf may be an Affiliate of Mortgagee.
The reasonable expenses, including receiver’s fees, reasonable attorneys’ fees, costs and agents’
compensation, incurred pursuant to the powers herein contained shall be secured by this Mortgage.
The right to enter and take possession of and to manage and operate the Mortgaged Property and to
collect all earnings, revenues and receipts, whether by a receiver or otherwise, shall be
cumulative to any other right or remedy available to Mortgagee under this Mortgage, the
Intercreditor Agreement, the Guarantee and Collateral Agreement or otherwise available to Mortgagee
and may be exercised concurrently therewith or independently thereof, but such rights shall be
exercised in a manner which is otherwise in accordance with and consistent with the Intercreditor
Agreement. Mortgagee shall be liable to account only for such earnings, revenues and receipts
(including, without limitation, security deposits) actually received by Mortgagee, whether received
pursuant to this section or any other provision hereof. Notwithstanding the appointment of any
receiver or other custodian, Mortgagee shall be entitled as pledgee to the possession and control
of any cash, deposits, or instruments at the time held by, or payable or deliverable under the
terms of this Mortgage to, Mortgagee.



     3.9 Suits to Protect the Mortgaged Property. Mortgagee shall have the power and
authority to institute and maintain any suits and proceedings as Mortgagee, in its sole and
absolute discretion, may deem advisable (a) to prevent any impairment of the Mortgaged Property by
any acts which may be unlawful or in violation of this Mortgage, (b) to preserve or protect its
interest in the Mortgaged Property, or (c) to restrain the enforcement of or compliance with any
legislation or other Legal Requirements that may be unconstitutional or otherwise invalid, if the
enforcement of or compliance with such enactment, rule or order might impair the security hereunder
or be prejudicial to Mortgagee’s interest.



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     3.10 Proofs of Claim. In the case of any receivership, insolvency, reorganization,
arrangement, adjustment, composition or other judicial proceedings affecting Mortgagor, any
Affiliate or any guarantor, co-maker or endorser of any of Mortgagor’s obligations, its creditors
or its property, Mortgagee, to the extent permitted by law, shall be entitled to file such proofs
of claim or other documents as it may deem necessary or advisable in order to have its claims
allowed in such proceedings for the entire amount due and payable by Mortgagor under the Senior
Secured Documents, at the date of the institution of such proceedings, and for any additional
amounts which may become due and payable by Mortgagor after such date.



     3.11 Mortgagor to Pay Amounts Secured Hereby on Any Default in Payment;
Application of Monies by Mortgagee.


          (a) In case of a foreclosure sale of all or any part of the Mortgaged Property and of the
application of the proceeds of sale to the payment of the sums secured hereby, to the extent
permitted by law, Mortgagee shall be entitled to enforce payment from Mortgagor of any additional
amounts then remaining due and unpaid and to recover judgment against Mortgagor for any portion
thereof remaining unpaid, with interest at the interest rate on the Notes.


          (b) Mortgagor hereby agrees, to the extent permitted by law, that no recovery of any such
judgment by Mortgagee or other action by Mortgagee and no attachment or levy of any execution upon
any of the Mortgaged Property or any other property shall in any way affect the Lien and security
interest of this Mortgage upon the Mortgaged Property or any part thereof or any Lien, rights,
powers or remedies of Mortgagee hereunder, but such Lien, rights, powers and remedies shall
continue unimpaired as before.


          (c) Any monies collected or received by Mortgagee under this Section shall be first applied as
set forth in the Intercreditor Agreement.



     3.12 Delay or Omission; No Waiver. No delay or omission of Mortgagee to exercise any
right, power or remedy upon any Event of Default shall exhaust or impair any such right, power or
remedy or shall be construed to waive any such Event of Default or to constitute acquiescence
therein. Every right, power and remedy given to Mortgagee whether contained herein or in the
Intercreditor Agreement or the Guarantee and Collateral Agreement or otherwise available to
Mortgagee may be exercised from time to time and as often as may be deemed expedient by Mortgagee.



     3.13 No Waiver of One Default to Affect Another. No waiver of any Event of Default
hereunder shall extend to or affect any subsequent or any other Event of Default then existing, or
impair any rights, powers or remedies consequent thereon. If Mortgagee (a) grants forbearance or an
extension of time for the payment of any sums secured hereby; (b) takes other or additional
security for the payment thereof; (c) waives or does not exercise any right granted in this
Mortgage, the Intercreditor Agreement or Guarantee and Collateral Agreement; (d) releases any part
of the Mortgaged Property from the lien or security interest of this Mortgage or any other
instrument securing the Guaranteed Obligations; (e) consents to the filing of any map, plat or
replat of the Real Property or any part thereof; (f) consents to the granting of any easement on
the Real Property; or (g) makes or consents to any agreement changing the terms of this Mortgage or
the other Senior




19











 




Secured Documents or the Intercreditor Agreement subordinating the lien or any charge hereof, no
such act or omission shall release, discharge, modify, change or affect the liability under this
Mortgage or the Guarantee and Collateral Agreement or otherwise of Mortgagor, or any subsequent
purchaser of the Mortgaged Property or any part thereof or any maker, co-signer, surety or
guarantor with respect to any other matters not addressed by such act or omission. No such act or
omission shall preclude Mortgagee from exercising any present or future right, power or privilege
herein granted in case of any Event of Default then existing, nor, except as otherwise expressly
provided in an instrument or instruments executed by Mortgagee, shall the lien or security interest
of this Mortgage be altered thereby, except to the extent expressly provided in such acts or
omissions. In the event of the sale or transfer by operation of law or otherwise of all or any part
of the Mortgaged Property, Mortgagee, without notice to any person, firm or corporation, is hereby
authorized and empowered to deal with any such vendee or transferee with reference to the Mortgaged
Property or the indebtedness secured hereby, or with reference to any of the terms or conditions
hereof, as fully and to the same extent as it might deal with the original parties hereto and
without in any way releasing or discharging any of the liabilities or undertakings hereunder, or
waiving its right to declare such sale or transfer an Event of Default as provided herein.
Notwithstanding anything to the contrary contained in this Mortgage or any other Security Document,
(i) in the case of any non-monetary Event of Default, Mortgagee may continue to accept payments due
hereunder without thereby waiving the existence of such or any other Event of Default and (ii) in
the case of any monetary Event of Default, Mortgagee may accept partial payments of any sums due
hereunder without thereby waiving the existence of such Event of Default if the partial payment is
not sufficient to completely cure such Event of Default.




     3.14 Discontinuance of Proceedings; Position of Parties Restored. If Mortgagee shall
have proceeded to enforce any right or remedy under this Mortgage by foreclosure, entry of judgment
or otherwise and such proceedings shall have been discontinued or abandoned for any reason, or such
proceedings shall have resulted in a final determination adverse to Mortgagee, then and in every
such case Mortgagor and Mortgagee shall be restored to their former positions and rights hereunder,
and all rights, powers and remedies of Mortgagee shall continue as if no such proceedings had
occurred or had been taken.



     3.15 Remedies Cumulative. Subject to the provisions of Section 4.15 hereof,
no right, power or remedy, including without limitation remedies with respect to any security for
the Guaranteed Obligations, conferred upon or reserved to Mortgagee by this Mortgage or any other
Senior Secured Document is exclusive of any other right, power or remedy, but each and every such
right, power and remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or under any other Senior Secured Document, now or
hereafter existing at law, in equity or by statute, and Mortgagee shall be entitled to resort to
such rights, powers, remedies or security as Mortgagee shall in its sole and absolute discretion
deem advisable.



     3.16 Interest After Event of Default. If an Event of Default shall have occurred and
is continuing, all sums outstanding and unpaid under the Senior Secured Documents, including this
Mortgage, shall, at Mortgagee’s option, subject to the provisions of the Guarantee and Collateral
Agreement and/or the Intercreditor Agreement, bear interest at the interest rate on the applicable
Series of Guaranteed Obligations, as provided in the applicable Senior Secured Documents, until



20









 







such Event of Default has been cured. Mortgagor’s obligation to pay such interest shall be secured
by this Mortgage.



     3.17 Foreclosure; Expenses of Litigation. If Mortgagee forecloses, reasonable
attorneys’ fees for services in the supervision of said foreclosure proceeding shall be allowed to
Mortgagee as part of the foreclosure costs. In the event of foreclosure of the lien hereof, there
shall be allowed and included as additional indebtedness all expenditures and expenses which may be
paid or incurred by or on behalf of Mortgagee for reasonable attorneys’ fees, appraisers’ fees,
outlays for documentary and expert evidence, stenographers’ charges, publication costs, and costs
(which may be estimated as to items to be expended after foreclosure sale or entry of the decree)
of procuring all such abstracts of title, title searches and examinations, title insurance policies
and guarantees, and similar data and assurances with respect to title as Mortgagee may deem
reasonably necessary either to prosecute such suit or to evidence to a bidder at any sale which may
be had pursuant to such decree the true condition of the title to or the value of the Mortgaged
Property or any portion thereof. All expenditures and expenses of the nature in this section
mentioned, and such expenses and fees as may be incurred in the protection of the Mortgaged
Property and the maintenance of the lien and security interest of this Mortgage, including the
reasonable fees of any attorney employed by Mortgagee in any litigation or proceeding affecting
this Mortgage or any other Senior Secured Document, the Mortgaged Property or any portion thereof,
including, without limitation, civil, probate, appellate and bankruptcy proceedings, or in
preparation for the commencement or defense of any proceeding or threatened suit or proceeding,
shall be immediately due and payable by Mortgagor, with interest thereon at the default interest
rate specified in Section 2.07(b) of the Credit Agreement, and shall be secured by this Mortgage.
Mortgagee waives its right to any statutory fee in connection with any judicial or nonjudicial
foreclosure of the lien hereof and agrees to accept a reasonable fee for such services.



     3.18 Deficiency Judgments. If after foreclosure of this Mortgage or Mortgagee’s sale
hereunder, there shall remain any deficiency with respect to any amounts payable under the Senior
Secured Documents, including hereunder, or any amounts secured hereby, and Mortgagee shall
institute any proceedings to recover such deficiency or deficiencies, all such amounts shall
continue to bear interest at the default interest rate specified in Section 2.07(b) of the Credit
Agreement. Mortgagor waives any defense to Mortgagee’s recovery against Mortgagor of any deficiency
after any foreclosure sale of the Mortgaged Property. Subject to the Intercreditor Agreement and
the Guarantee and Collateral Agreement, to the extent permitted by law, Mortgagor expressly waives
any defense or benefits that may be derived from any statute granting Mortgagor any defense to any
such recovery by Mortgagee. In addition, Mortgagee shall be entitled to recovery of all of its
reasonable costs and expenditures (including without limitation any court imposed costs) in
connection with such proceedings, including reasonable attorneys’ fees, appraisal fees and the
other costs, fees and expenditures referred to in Section 3.17 above. This provision shall
survive any foreclosure or sale of the Mortgaged Property, any portion thereof and/or the
extinguishment of the lien hereof.



     3.19 WAIVER OF JURY TRIAL. MORTGAGEE AND MORTGAGOR EACH WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE ARISING OUT
OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE



21









 







RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS MORTGAGE, THE GUARANTEE AND
COLLATERAL AGREEMENT OR ANY OTHER SECURITY DOCUMENT. ANY SUCH DISPUTES SHALL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY.



     3.20 Exculpation of Mortgagee. The acceptance by Mortgagee of the assignment
contained herein with all of the rights, powers, privileges and authority created hereby shall not,
prior to entry upon and taking possession of the Mortgaged Property by Mortgagee, be deemed or
construed to make Mortgagee a “mortgagee in possession”, nor thereafter or at any time or in any
event obligate Mortgagee to appear in or defend any action or proceeding relating to the Mortgaged
Property, nor shall Mortgagee, prior to such entry and taking, be liable in any way for any injury
or damage to person or property sustained by any person in or about the Mortgaged Property.



ARTICLE 4- GENERAL




     4.1 Discharge. Mortgagor shall be released from the covenants, agreements and
obligations of Mortgagor contained in this Mortgage and all right, title and interest in and to the
Mortgaged Property shall revert to Mortgagor when and as set forth in the Intercreditor Agreement
and, in connection therewith, Mortgagee, at the request and the expense of Mortgagor, shall
promptly execute a discharge of this Mortgage and such other documents as may be reasonably
requested by Mortgagor to evidence the discharge and satisfaction of this Mortgage and the release
of Mortgagor from its obligations hereunder.



     4.2 No Waiver. The exercise of the privileges granted in this Mortgage to perform
Mortgagor’s obligations under the agreements which constitute the Mortgaged Property shall in no
event be considered or constitute a waiver of any right which Mortgagee or any other Secured Party
may have at any time, after an Event of Default shall have occurred and be continuing, to declare
the Guaranteed Obligations or any part thereof to be immediately due and payable. No delay or
omission to exercise any right, remedy or power accruing upon any default shall impair any such
right, remedy or power or shall be construed to be a waiver of any such default or acquiescence
therein; and every such right, remedy and power may be exercised from time to time and as often as
may be deemed expedient.



     4.3 Extension, Rearrangement or Renewal of Guaranteed Obligations. It is expressly
agreed that any of the Guaranteed Obligations at any time secured hereby may be from time to time
extended for any period, or with the consent of Mortgagor rearranged or renewed, and that any part
of the security herein described, or any other security for the Guaranteed Obligations, may be
waived or released, without altering, varying or diminishing the force, effect or lien or security
interest of this Mortgage; and the lien and security interest granted by this Mortgage shall
continue as a prior lien and security interest on all of the Mortgaged Property not expressly so
released, until the Guaranteed Obligations are fully paid and this Mortgage is terminated in
accordance with the provisions of the Intercreditor Agreement; and no other security now existing
or hereafter taken to secure the payment of the Guaranteed Obligations or any part thereof or the
performance of any obligation or liability of Mortgagor whatever shall in any manner impair or
affect the security given by this Mortgage; and all security for the payment of the Guaranteed
Obligations or any part thereof and the performance of any obligation or liability shall be taken,
considered and held as cumulative.



22









 





     4.4 Forcible Detainer. Mortgagor agrees for itself and all persons claiming by,
through or under it, that subsequent to foreclosure hereunder in accordance with this Mortgage and
applicable law if Mortgagor shall hold possession of the Mortgaged Property or any part thereof,
Mortgagor or the persons so holding possession shall be guilty of trespass; and any such persons
(including Mortgagor) failing or refusing to surrender possession upon demand shall be guilty of
forcible detainer and shall be liable to Mortgagee or any purchaser in foreclosure, as applicable,
for reasonable rental on said premises, and shall be subject to eviction and removal in accordance
with law.



     4.5 Waiver of Stay or Extension. To the extent permitted to be waived by law,
Mortgagor shall not at any time insist upon or plead or in any manner whatever claim the benefit or
advantage of any stay, extension or moratorium law now or at any time hereafter in force in any
locality where the Mortgaged Property or any part thereof may or shall be situated, nor shall
Mortgagor claim any benefit or advantage from any law now or hereafter in force providing for the
valuation or appraisement of the Mortgaged Property or any part thereof prior to any sale thereof
to be made pursuant to any provision of this Mortgage or to a decree of any court of competent
jurisdiction, nor after any such sale shall Mortgagor claim or exercise any right conferred by any
law now or at any time hereafter in force to redeem the Mortgaged Property so sold or any part
thereof; and Mortgagor hereby expressly waives all benefit or advantage of any such law or laws and
the appraisement of the Mortgaged Property or any part thereof, and covenants that Mortgagor shall
not hinder or delay the execution of any power herein granted and delegated to Mortgagee but that
Mortgagor shall permit the execution of every such power as though no such law had been made.



     4.6 Notices. Except where certified or registered mail notice is required by
applicable law, any notice to Mortgagor or Mortgagee required or permitted hereunder shall be
deemed to be given when given in the manner prescribed in the Intercreditor Agreement.



     4.7 Severability. All rights, powers and remedies provided herein may be exercised
only to the extent that the exercise thereof does not violate any applicable law, and are intended
to be limited to the extent necessary so that they will not render this Mortgage invalid,
unenforceable or not entitled to be recorded, registered or filed under any applicable law. In the
event any term or provision contained in this Mortgage is in conflict, or may hereafter be held to
be in conflict, with the laws of the State of New York, the State or of the United States of
America, this Mortgage shall be affected only as to such particular term or provision, and shall in
all other respects remain in full force and effect.



     4.8 Application of Payments. In the event that any part of the Guaranteed Obligations
cannot lawfully be secured hereby, or in the event that the lien and security interest hereof
cannot be lawfully enforced to pay any part of the Guaranteed Obligations, or in the event that the
lien or security interest created by this Mortgage shall be invalid or unenforceable as to any part
of the Guaranteed Obligations, then all payments on the Guaranteed Obligations shall be deemed to
have been first applied to the complete payment and liquidation of that part of the Guaranteed
Obligations which is not secured by this Mortgage and the unsecured portion of the Guaranteed
Obligations shall be completely paid and liquidated prior to the payment and liquidation of the
remaining secured portion of the Guaranteed Obligations.



23









 





     4.9 Governing Law. THE PROVISIONS OF THIS MORTGAGE REGARDING THE CREATION, PERFECTION
AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS HEREIN GRANTED SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE LAWS OF THE STATE. ALL OTHER PROVISIONS OF THIS MORTGAGE AND THE RIGHTS AND
OBLIGATIONS OF MORTGAGOR AND MORTGAGEE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF.



     4.10 Entire Agreement. This Mortgage, the Guarantee and Collateral Agreement and the
Intercreditor Agreement represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties.



     4.11 Amendments. This Mortgage may be amended, supplemented or otherwise modified
only by an instrument in writing signed by Mortgagor and Mortgagee.



     4.12 Successors and Assigns. All terms of this Mortgage shall run with the land and
bind each of Mortgagor and Mortgagee and their respective successors and assigns, and all persons
claiming under or through Mortgagor or Mortgagee, as the case may be, or any such successor or
assign, and shall inure to the benefit of Mortgagee and Mortgagor, and their respective successors
and assigns.



     4.13 Renewal, Etc . Mortgagee may at any time and from time to time renew or extend
this Mortgage, or alter or modify the same in any way, or waive any of the terms, covenants or
conditions hereof in whole or in part and may release any portion of the Mortgaged Property or any
other security, and grant such extensions and indulgences in relation to the Guaranteed Obligations
as Mortgagee may determine, without the consent of any junior lienor or encumbrancer and without
any obligation to give notice of any kind thereto and without in any manner affecting the priority
of the lien and security interest hereof on any part of the Mortgaged Property; provided that
nothing in this Section 4.13 shall grant Mortgagee the right to alter or modify the
Mortgage without the consent of Mortgagor unless otherwise specifically permitted in this Mortgage.



     4.14 Future Advances. This Mortgage is executed and delivered to secure, among other
things, Mortgagor’s guaranty of future advances under the Senior Secured Documents. It is
understood and agreed that this Mortgage secures Mortgagor’s guaranty of present and future
advances made pursuant to the Senior Secured Documents and that the lien of such future advances
shall relate to the date of this Mortgage.



     4.15 Liability. Notwithstanding any provision in this Mortgage to the contrary,
recourse against the Mortgagor under this Mortgage shall be limited to the extent provided in the
Guarantee and Collateral Agreement.



     4.16 Severability and Compliance With Usury Law. The Senior Secured Documents are
intended to be performed in accordance with, and only to the extent permitted by, all applicable
Legal Requirements. If any provision of any of the Senior Secured Documents or the application
thereof to any person or circumstance shall, for any reason and to any extent, be invalid or
unenforceable, neither the remainder of the instrument in which such provision is contained, nor
the



24









 







application of such provision to other persons or circumstances, nor the other instruments referred
to hereinabove, shall be affected thereby, but rather shall be enforceable to the greatest extent
permitted by law. It is expressly stipulated and agreed to be the intent of Mortgagor and Mortgagee
at all times to comply with the applicable State law governing the maximum rate or amount of
interest payable on or in connection with the Guaranteed Obligations (or applicable United States
federal law to the extent that it permits Mortgagee to contract for, charge, take, reserve or
receive a greater amount of interest than under State law). If the applicable law is ever
judicially interpreted so as to render usurious any amount called for under the Senior Secured
Documents, or contracted for, charged, taken, reserved or received with respect to the extensions
of credit evidenced by the Senior Secured Documents or if acceleration of the maturity of the
Guaranteed Obligations or if any prepayment by Mortgagor results in Mortgagor having paid any
interest in excess of that permitted by law, then it is Mortgagor’s and Mortgagee’s express intent
that all excess amounts theretofore collected by Mortgagee be credited on the principal balance due
under the Senior Secured Documents (or, if the Senior Secured Documents have been or would thereby
be paid in full, refunded to Mortgagor), and the provisions of the Senior Secured Documents
immediately be deemed reformed and the amounts thereafter collectible thereunder reduced, without
the necessity of the execution of any new document, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder. The
right to accelerate maturity of the Guaranteed Obligations does not include the right to accelerate
any interest which has not otherwise accrued on the date of such acceleration, and Mortgagee does
not intend to collect any unearned interest in the event of acceleration. All sums paid or agreed
to be paid to Mortgagee for the use, forbearance or detention of the Guaranteed Obligations shall,
to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout
the full term of the Guaranteed Obligations until payment in full so that the rate or amount of
interest on account of the Guaranteed Obligations does not exceed the applicable usury ceiling.



     4.17 Release of Collateral.



          (a) Notwithstanding any provision herein to the contrary, the Mortgaged Property or any part
thereof shall be released from the security interest created by this Mortgage at any time or from
time to time upon the request of Mortgagor; provided that the requirements of the Intercreditor
Agreement have been satisfied. Upon satisfaction of such requirements, a Responsible Officer of
Mortgagee shall promptly execute, deliver and acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release of any Mortgaged Property permitted to
be released pursuant to this Mortgage in each case as required by, and in accordance with, the
Intercreditor Agreement.




          (b) Collateral Agent may release the Mortgaged Property or any part thereof from the security
interest created hereunder upon the sale or disposition of such Mortgaged Property pursuant to
Mortgagee’s powers, rights and duties with respect to remedies provided herein.




     4.18 Intercreditor Agreement Controls. In the event of any conflict between any terms
and provisions set forth in this Mortgage and those set forth in the Intercreditor Agreement,
the
terms and provisions of the Intercreditor Agreement shall supersede and control the terms and
provisions of this Mortgage.



25









 





     4.19 Time of the Essence. Mortgagor acknowledges that time is of the essence in
performing all of Mortgagor’s obligations set forth herein.



     4.20 Counterpart Execution. This Mortgage may be executed by the parties hereto in
any number of counterparts (and be each of the parties hereof on separate counterparts), each of
which when so executed and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.



ARTICLE 5– STATE SPECIFIC PROVISIONS




     5.1 Power of Sale. Mortgagor grants Mortgagee the power to sell the Mortgaged
Property or to cause the same to be sold at public sale, and to convey the same to the
purchaser, in
accordance with applicable statutes.


WARNING: THIS INDENTURE CONTAINS A POWER OF SALE AND UPON DEFAULT, MAY BE FORECLOSED BY
ADVERTISEMENT. IN FORECLOSURE BY ADVERTISEMENT AND THE RELATED SALE OF THE PROPERTY, NO HEARING IS
REQUIRED AND THE ONLY NOTICE REQUIRED IS TO PUBLISH NOTICE IN A LOCAL NEWSPAPER AND TO POST A COPY
OF THE NOTICE ON THE PROPERTY. THE MORTGAGOR WAIVES ALL RIGHTS UNDER THE CONSTITUTION AND LAWS OF
THE UNITED STATES AND UNDER THE CONSTITUTION AND LAWS OF THE STATE OF MICHIGAN TO A HEARING PRIOR
TO SALE IN CONNECTION WITH FORECLOSURE BY ADVERTISEMENT AND ALL NOTICE REQUIREMENTS EXCEPT AS SET
FORTH IN THE MICHIGAN STATUTE PROVIDING FOR FORECLOSURE BY ADVERTISEMENT.




     5.2 Mortgaged Property. The Mortgaged Property includes (without limitation upon the
description of the Mortgaged Property in the foregoing provisions of this Mortgage) (i) all rents,
issues, profits, income, proceeds and security deposits (in accordance with Act No. 210 of the
Michigan Public Acts of 1953 as amended by Act No. 151 of the Michigan Public Acts of 1966 (MCLA
554.231 et seq.) and to the extent applicable Act No. 228 of the Michigan Public Acts of 1925 (MCLA
554.211 et seq.), and (ii) all or any part of the oil and gas located in, on or under oil and gas
properties, and all or any of the rents and profits from oil and gas properties, and the income
from the sales of oil and gas produced or to be produced form oil and gas properties (in accordance
with Act No. 66 of the Michigan Public Acts of 1956 (MCLA 565.81 et seq.)).



          Mortgagee shall be entitled to all the rights and remedies conferred by MCLA 554.231, et.
seq., MCLA 554.211, et. seq. to the extent applicable, and MCLA 565.81, et. seq. Upon the
occurrence of an Event of Default and without any action by Mortgagee, Mortgagor shall have no
further right to collect or otherwise receive such Rents, which will be the absolute and sole
property of Mortgagee pursuant to those statutes. MORTGAGOR HEREBY WAIVES ANY RIGHT TO NOTICE OF
ASSIGNMENT OF RENTS, OTHER THAN SUCH NOTICE AS MAY BE PROVIDED IN ACT 210 OF THE PUBLIC ACTS OF
MICHIGAN OF 1953 AND ACT 66 OF THE PUBLIC ACTS OF MICHIGAN OF 1956, EACH AS AMENDED OR SUPERSEDED,
AND WAIVES ANY RIGHT TO ANY HEARING, JUDICIAL OR OTHERWISE, PRIOR TO



26









 







MORTGAGEE’S EXERCISE OF ITS RIGHTS UNDER THIS MORTGAGE AND/OR THE ASSIGNMENT WITH RESPECT TO THE
ASSIGNMENT OF RENTS GRANTED TO MORTGAGEE HEREUNDER OR UNDER THE SEPARATE ASSIGNMENT OF RENTS AND
LEASES GRANTED TO MORTGAGEE IN CONNECTION WITH THIS MORTGAGE.



     5.3 Failure to Pay Taxes and/or Assessments. Failure to pay any taxes and/or
assessments assessed against the Mortgaged Property prior to the date upon which such taxes and/or
assessments become delinquent or any installment thereof, or any insurance premium upon policies
covering any part of the Mortgaged Property, shall constitute waste as provided by Michigan
Compiled Laws, 2003, as amended, Section 600.2927 and Mortgagor agrees to and hereby does consent
to the appointment of a receiver, in the case of such waste should Mortgagee so elect.



     5.4 Future Advance Mortgage. THIS IS A FUTURE ADVANCE MORTGAGE. Without limiting in
any way the indebtedness secured by this Mortgage, it is agreed that this Mortgage secures future
advances under Act. No. 348 of the Michigan Public Acts of 1990 as amended.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




27









 





     IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly executed and delivered as of
the day and year first above written.



	 	 	 	 	 	 	 
	 	 	ENEXUS NUCLEAR PALISADES, LLC,

a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






signature page to michigan mortgage




 









 








	 	 	 	 	 	 	 	 	 
	STATE OF

	 	 	 	 	)	 	 	 
	 

	 

	 	)	SS.	 	 
	COUNTY OF

	 	 	 	)	 	 	 	 
	 

	 	 

	 	 	 	 	 






     The foregoing instrument was acknowledged before me this            day of
                                        , 200            by                           
                                   the
                                         of ENEXUS NUCLEAR PALISADES, LLC, on behalf of the
                    
who is known to me personally or who produced                      as
identification.



	 	 	 	 	 	 	 
	Notary’s

	 	Notary’s Signature: 	 	 	 	 
	Stamp: 

	 	 	 

	 	 






	 	 	 	 	 	 	 
	 

	 	Notary’s Name: 	 	 	 	 
	 

	 	 	 

	 	 






	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Notary Public, State of 
	 	 	 	, County of 	 	 	 	 
	 

	 	 	 

	 
	 

	 	 






	 	 	 	 	 	 	 
	 

	 	  My commission Expires: 	 	 	 	 
	 

	 	 	 

	 	 






	 	 	 	 	 	 	 
	 

	 	  Acting in the County of: 	 	 	 	 
	 

	 	 	 

	 	 






DRAFTED BY AND WHEN

RECORDED, RETURN TO:




Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10035

Attn: Samuel Zylberberg, Esq. (LW)




notary page to michigan mortgage




 









 








EXHIBIT A




DESCRIPTION OF SITE




(see attached)



Tax Parcel No(s):





 









 








EXHIBIT P-2




MASSACHUSETTS FORM OF MORTGAGE




See attached.




P-2-1









 





RECORDING REQUESTED BY AND

WHEN RECORDED, RETURN TO:




Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10035

Attn: Samuel Zylberberg, Esq. (LW)




 





MORTGAGE, ASSIGNMENT OF RENTS AND LEASES,

FIXTURE FILING, FINANCING STATEMENT

AND SECURITY AGREEMENT




Dated as of                     , 200          




by




ENEXUS NUCLEAR PILGRIM, LLC,

a Massachusetts limited liability company,

as Mortgagor




for the benefit of




THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,

as Collateral Agent and Mortgagee




Relating to Premises in:




Plymouth County, Massachusetts




 






 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE 1 - DEFINITIONS
	 	 	5	 
	 
	 	 	 	 
	1.1 Defined Terms 
	 	 	5	 
	1.2 Accounting Terms 
	 	 	7	 
	1.3 The Rules of Interpretation 
	 	 	7	 
	 
	 	 	 	 
	ARTICLE 2 - GENERAL COVENANTS AND PROVISIONS
	 	 	7	 
	 
	 	 	 	 
	2.1 Mortgagor Performance of the Guarantee and Collateral Agreement
and the Intercreditor Agreement 
	 	 	7	 
	2.2 General Representations, Covenants and Warranties 
	 	 	7	 
	2.3 Compliance with Legal Requirements 
	 	 	7	 
	2.4 Insurance; Application of Insurance Proceeds; Application of Eminent
Domain Proceeds
	 	 	8	 
	2.5 Assignment of Rents 
	 	 	8	 
	2.6 Mortgagee Assumes No Guaranteed Obligations 
	 	 	9	 
	2.7 Further Assurances 
	 	 	9	 
	2.8 Acts of Mortgagor 
	 	 	10	 
	2.9 After-Acquired Property 
	 	 	10	 
	2.10 Mortgaged Property 
	 	 	10	 
	2.11 Power of Attorney 
	 	 	10	 
	2.12 Covenant to Pay 
	 	 	11	 
	2.13 Security Agreement 
	 	 	11	 
	 
	 	 	 	 
	ARTICLE 3 - REMEDIES
	 	 	12	 
	 
	 	 	 	 
	3.1 Acceleration of Maturity 
	 	 	12	 
	3.2 Protective Advances 
	 	 	12	 
	3.3 Institution of Equity Proceedings 
	 	 	12	 
	3.4 Mortgagee’s Power of Enforcement 
	 	 	12	 
	3.5 Mortgagee’s Right to Enter and Take Possession, Operate and Apply
Income 
	 	 	13	 
	3.6 Separate Sales 
	 	 	14	 
	3.7 Waiver of Appraisement, Moratorium, Valuation, Stay, Extension and
Redemption Laws 
	 	 	14	 
	3.8 Receiver 
	 	 	15	 
	3.9 Suits to Protect the Mortgaged Property 
	 	 	15	 
	3.10 Proofs of Claim 
	 	 	16	 
	3.11 Mortgagor to Pay Amounts Secured Hereby on Any Default in Payment;
Application of Monies by Mortgagee 
	 	 	16	 
	3.12 Delay or Omission; No Waiver 
	 	 	16	 
	3.13 No Waiver of One Default to Affect Another 
	 	 	16	 
	3.14 Discontinuance of Proceedings; Position of Parties Restored 
	 	 	17	 
	3.15 Remedies Cumulative 
	 	 	17	 
	3.16 Interest After Event of Default 
	 	 	17	 
	3.17 Foreclosure; Expenses of Litigation 
	 	 	18	 
	3.18 Deficiency Judgments
	 	 	18	 
	3.19 WAIVER OF JURY TRIAL
	 	 	18	 
	3.20 Exculpation of Mortgagee
	 	 	19	 






ii 









 







	 	 	 	 	 
	 	 	Page
	ARTICLE 4 - GENERAL
	 	 	19	 
	 
	 	 	 	 
	4.1 Discharge 
	 	 	19	 
	4.2 No Waiver 
	 	 	19	 
	4.3 Extension, Rearrangement or Renewal of Guaranteed Obligations 
	 	 	19	 
	4.4 Forcible Detainer 
	 	 	20	 
	4.5 Waiver of Stay or Extension 
	 	 	20	 
	4.6 Notices 
	 	 	20	 
	4.7 Severability
	 	 	20	 
	4.8 Application of Payments 
	 	 	20	 
	4.9 Governing Law 
	 	 	21	 
	4.10 Entire Agreement 
	 	 	21	 
	4.11 Amendments 
	 	 	21	 
	4.12 Successors and Assigns 
	 	 	21	 
	4.13 Renewal, Etc. 
	 	 	21	 
	4.14 Future Advances 
	 	 	21	 
	4.15 Liability 
	 	 	21	 
	4.16 Severability and Compliance With Usury Law 
	 	 	21	 
	4.17 Release of Collateral 
	 	 	22	 
	4.18 Intercreditor Agreement 
	 	 	22	 
	4.19 Time of the Essence 
	 	 	23	 
	4.20 Counterpart Execution 
	 	 	23	 
	 
	 	 	 	 
	ARTICLE 5 – STATE SPECIFIC PROVISIONS
	 	 	23	 
	 
	 	 	 	 
	5.1 Statutory Condition/Statutory Power of Sale 
	 	 	23	 











iii 









 










MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, FIXTURE FILING, 
FINANCING STATEMENT
AND SECURITY AGREEMENT



     This MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, FIXTURE FILING,
FINANCING STATEMENT AND SECURITY AGREEMENT, dated as of                     , 200___
(as modified, supplemented, consolidated, extended or amended from time to time, this
“Mortgage”) by ENEXUS NUCLEAR PILGRIM, LLC, a Massachusetts limited liability company,
with an address at 600 Rocky Hill Road, Plymouth, MA 02360-5599 (“Mortgagor”), for the
benefit of THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK, with an address at One Liberty
Plaza, New York, NY 10006, as Collateral Agent for the benefit of the Senior Secured Parties, and
as mortgagee (together with its successors and assigns, in such capacities, “Collateral
Agent” and “Mortgagee”). Capitalized terms used in this Mortgage and not otherwise
defined herein shall have the meanings ascribed to them in the Intercreditor Agreement (defined
below).



Recitals




     A. ENEXUS ENERGY CORPORATION, a Delaware corporation (the “Borrower”), the Lenders
from time to time party thereto, CITIGROUP GLOBAL MARKETS, INC. and GOLDMAN SACHS CREDIT PARTNERS,
L.P., as joint book runners and joint lead arrangers (in such capacities, collectively, the
“Arrangers”), BNP PARIBAS, as administrative agent (in such capacity and together with its
successors, the “Administrative Agent”) and Collateral Agent and MIZUHO CORPORATE BANK,
LTD., as Syndication Agent (in such capacity, the “Syndication Agent”) have entered into a
Credit Agreement, dated as of December 23, 2008 (as modified, supplemented, replaced, refinanced
or amended from time to time, the “Credit Agreement”), pursuant to which the Lenders,
severally and not jointly, have agreed to make the Loans to Borrower on the terms and conditions
set forth therein.



     B. The Borrower has requested the Lenders to extend credit hereunder in the form of Revolving
Loans and Swing Loans and Additional Permitted Secured Indebtedness made or issued at any time and
from time to time on or after the Closing Date (as defined in the Credit Agreement) and prior to
the Revolving Credit Maturity Date (as defined in the Credit Agreement) in an aggregate principal
and face amount at any time outstanding not to exceed a maximum principal amount of TWO BILLION
THREE HUNDRED MILLION AND 00/100 DOLLARS ($2,300,000,000.00) (subject to the limitations set forth
in the Credit Agreement).



     C. Subject to the terms and conditions of the Credit Agreement, Borrower may enter into one
or more (i) Specified Credit Support Facilities and (ii) Specified Commodity Hedging Transactions.



     D. Mortgagor, Subsidiary Guarantors (as defined in the Credit Agreement), Collateral Agent,
Administrative Agent, the Borrower and the other Secured Obligations Representatives from time to
time party thereto, have entered into the Guarantee and Collateral
Agreement, dated as of [                                                             ,
200     ] (the “Guarantee and Collateral
Agreement”) pursuant to which Mortgagor has guaranteed the Guaranteed Obligations (as such
term is defined in the Guarantee and Collateral Agreement).



1









 





     E. Mortgagor, Borrower, the Grantors party from time to time thereto, the Hedge Counterparty
Lienholders party from time to time thereto, the Secured Obligations Representatives party from
time to time thereto, Administrative Agent and Collateral Agent have entered into the Collateral
Agency and Intercreditor Agreement, dated as of December 23, 2008 (the “Intercreditor
Agreement”) pursuant to which Collateral Agent, as agent for the present and future holders of
the Guaranteed Obligations, has agreed to receive, hold, maintain, administer and distribute the
Collateral and enforce the Senior Collateral Documents.



     F. The execution and delivery of this Mortgage are conditions precedent to the making of
Loans (as defined in the Credit Agreement).



     G. As set forth more fully below, Mortgagor intends to secure its payment and performance of
its obligations under the Guarantee and Collateral Agreement with the Mortgaged Property (as
defined below), along with various other items of personal and real property owned by Mortgagor.



Agreement




     NOW, THEREFORE, to secure the Mortgagor’s payment and performance of its obligations under the
Guarantee and Collateral Agreement, the Intercreditor Agreement and this Mortgage, including but
not limited to the prompt and complete payment and performance, when and as required, due and/or
payable, of all of the Guaranteed Obligations, by acceleration or otherwise, or arising out of or
in connection therewith, and in consideration of the extension of credit to Borrower under the
Credit Agreement and other good and valuable consideration, and the covenants herein contained and
in the Guarantee and Collateral Agreement, Mortgagor, intending to be legally bound, does hereby
grant, bargain, sell, convey, warrant, assign, transfer, mortgage, pledge, set over and confirm,
WITH MORTGAGE COVENANTS unto Mortgagee, for the ratable benefit of the Senior Secured Parties and
their respective successors and assigns, forever, as set forth in this Mortgage, all of Mortgagor’s
estate, right, title, interest, property, claim and demand, now or hereafter arising, in and to the
following property and rights (herein collectively called the “Mortgaged Property”):




     (a) the lands and premises more particularly described in Exhibit A hereto (the
“Site”);




     (b) any and all easements, leases, licenses, option rights, rights-of-way and other
rights used in connection with the Site or as a means of ingress and egress thereto and
therefrom, all easements for ingress and egress and easements for water, natural gas and
sewage pipelines, running in favor of Mortgagor, or appurtenant to the Site, and any and all
sidewalks, alleys, strips and gores of land adjacent thereto or used in connection therewith
together with all and singular the tenements, hereditaments and appurtenances thereto, and
with any land lying within the right-of-way of any streets, open or proposed, adjoining the
same (collectively, the “Easements”; and the Site and the Easements collectively
referred to herein as the “Real Property”);




     (c) all buildings, structures, fixtures and other improvements now or hereafter erected
on the Real Property (collectively, the “Improvements”);



2









 






     (d) all machinery, apparatus, equipment, fittings, fixtures, generators, boilers, turbines and
other articles of personal property, including all goods and all goods which become fixtures, now
owned or hereafter acquired by Mortgagor and now or hereafter located on, attached to or used in
the operation of or in connection with the Real Property and/or the Improvements, and all
replacements thereof, additions thereto and substitutions therefor, to the fullest extent permitted
by applicable law (collectively, the “Equipment”);




     (e) all raw materials, work in process and other materials used or consumed in the
construction of, or now or hereafter located on or used in connection with, the Real Property, the
Improvements and/or the Equipment, (including, without limitation, fuel and fuel deposits, now or
hereafter located on the Real Property or elsewhere or otherwise owned by Mortgagor) (the above
items, together with the Equipment, the “Tangible Collateral”);




     (f) all rights, powers, privileges and other benefits of Mortgagor (to the extent assignable)
now or hereafter obtained by Mortgagor from any Governmental Authority (as such term is defined in
the Credit Agreement), including, without limitation, all Permits ((as defined in the Credit
Agreement) but excluding any of the Permits which by their terms or by operation of law prohibit or
do not allow assignment or which would become void solely by virtue of a security interest being
granted therein), licenses, certificates and other similar instruments and documents, issued in the
name of Mortgagor, governmental actions relating to the ownership, operation, management and use of
the Real Property, Improvements, Equipment or Tangible Collateral, and any improvements,
modifications or additions thereto;




     (g) all the lands and interests in lands, tenements and hereditaments hereafter acquired by
Mortgagor in connection with or appurtenant to the Site, and all income, rents, rent equivalents,
issues, profits, revenues (including all oil and gas or other mineral royalties and bonuses),
deposits and other benefits from the Site and the Improvements (including all receivables and other
obligations now existing or hereafter arising or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and occupancy of property or rendering of
services by Mortgagor or any operator or manager of the Mortgaged Property or the commercial space
located in the Improvements or acquired from others) (collectively, the “Rents”) and all
proceeds from the sale or other disposition of the Leases (as defined herein) and the right to
receive and apply the Rents and/or any other property or rights subject to the lien hereof,
including (without limitation) all interests of Mortgagor, whether as lessor or lessee, in any
leases of land hereafter made and all rights of Mortgagor thereunder;




     (h) any and all other property in any way associated or used in connection with or
appurtenant to the Real Property, Improvements, Equipment or Tangible Collateral that may from time
to time, by delivery or by writing of any kind, be subjected to the lien hereof by Mortgagor or by
anyone on its behalf or with its consent, or which may come into the possession or be subject to
the control of Mortgagee pursuant to this Mortgage, being hereby collaterally assigned to Mortgagee
and subjected or added to the lien or estate created by this



3









 







Mortgage forthwith upon the acquisition thereof by Mortgagor, as fully as if such property were now
owned by Mortgagor and were specifically described in this Mortgage and subjected to the lien and
security interest hereof; and Mortgagee is hereby authorized to receive any and all such property
as and for additional security hereunder;




     (i) all the remainder or remainders, reversion or reversions, Rents, revenues, issues,
profits, royalties, income, proceeds and other benefits derived from any of the foregoing, all of
which are hereby assigned to Mortgagee, who is hereby authorized to collect and receive the same,
to give proper receipts and acquittances therefor and to apply the same in accordance with the
provisions of this Mortgage;




     (j) all Proceeds, as defined in the UCC (defined below), including all proceeds,
products, offspring, Rents, profits or receipts, in whatever form, arising from the Mortgaged
Property, including (i) cash, instruments and other property received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Mortgaged Property, (ii) the
collection, sale, lease, sublease, concession, exchange, assignment, licensing or other disposition
of, or realization upon, any item or portion of the Mortgaged Property (including all claims of
Mortgagor against third parties for loss of, damage to, destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of insurance in respect of, any the Mortgaged
Property now existing or hereafter arising), (iii) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to Mortgagor from time to time with respect to any of the
Mortgaged Property, (iv) any and all payments (in any form whatsoever) made or due and payable to
Mortgagor from time to time in connection with the requisition, confiscation, condemnation, seizure
or forfeiture of all or any part of the Mortgaged Property by any Governmental Authority (or any
person acting under color of Governmental Authority) and (v) any and all other amounts from time to
time paid or payable under or in connection with any of the Mortgaged Property;




     (k) all agreements to which Mortgagor is a party or which are assigned to Mortgagor in
any management agreement or any other document and which are executed in connection with the
construction, operation and management of the Improvements located on the Mortgaged Property
(including agreements for the sale, lease or exchange of goods or other property and/or the
performance of services by it, in each case whether now in existence or hereafter arising or
acquired) as any such agreements have been or may be from time to time amended, supplemented or
otherwise modified;




     (l) all general intangibles, now owned or hereafter acquired by Mortgagor, including
(i) all obligations or indebtedness owing to Mortgagor from whatever source arising, (ii) all
unearned premiums accrued or to accrue under all insurance policies for the Mortgaged Property
obtained by Mortgagor, all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or liquidated claims (including proceeds of insurance, condemnation awards, and
all rights of Mortgagor to refunds of real estate taxes and assessments), (iii) all royalties and
license fees and (iv) all rights or claims in respect of refunds for taxes paid;



4









 






     (m) all instruments, chattel paper or letters of credit, evidencing, representing,
arising from or existing in respect of, relating to, securing or otherwise supporting the
payment of, any of the Mortgaged Property (including promissory notes, drafts, bills of
exchange and trade acceptances) and chattel paper obtained by Mortgagor in connection with
the Mortgaged Property (including all ledger sheets, computer records and printouts,
databases, programs, books of account and files of Mortgagor relating thereto) and such
notes or other obligations of indebtedness owing to Mortgagor from whatever source arising,
in each case now owned or hereafter acquired by Mortgagor and relating to the Mortgaged
Property; and




     (n) all inventory, whether now or hereafter existing or acquired, and which
arises out of or is used in connection with, directly or indirectly, the ownership and
operation of the Mortgaged Property, all documents representing the same and all Proceeds
and products of the same, including all goods, merchandise, raw materials, work in process
and other personal property, wherever located, now or hereafter owned or held by Mortgagor
for manufacture, processing, the providing of services or sale, use or consumption in the
operation of the Mortgaged Property (including fuel, supplies and similar items and all
substances commingled therewith or added thereto) and rights and claims of Mortgagor against
anyone who may store or acquire the same for the account of Mortgagor, or from whom
Mortgagor may purchase the same.



     TO HAVE AND TO HOLD the said Mortgaged Property, whether now owned or held or hereafter
acquired, unto Mortgagee, its successors and assigns, pursuant to the provisions of this Mortgage.



     IT IS HEREBY COVENANTED, DECLARED AND AGREED that the lien, security interest or estate
created by this Mortgage to secure the payment and performance of the Guaranteed Obligations, both
present and future, shall be first, prior and superior to any Lien, security interest, reservation
of title or other interest heretofore, contemporaneously or subsequently suffered or granted by
Mortgagor, its legal representatives, successors or assigns, except Permitted Encumbrances (as
defined below) and that the Mortgaged Property is to be held, dealt with and disposed of by
Mortgagee, upon and subject to the terms, covenants, conditions, uses and agreements set forth in
this Mortgage.



     PROVIDED ALWAYS, that when as set forth in the Intercreditor Agreement and upon the observance
and performance by Mortgagor of its covenants and agreements set forth herein and therein, then
this Mortgage and the estate hereby and therein granted shall cease and be void and shall be
reconveyed as provided herein below.



ARTICLE 1- DEFINITIONS




     1.1 Defined Terms. Any term defined by reference to an agreement, instrument or
other document shall have the meaning so assigned to it whether or not such document is in effect.
In addition, for purposes of this Mortgage, the following definitions shall apply:



5









 






“Credit Agreement” has the meaning ascribed to it in Recital A hereof.




“Easements” has the meaning ascribed to it in the Granting Clauses.




“Equipment” has the meaning ascribed to it in the Granting Clauses.




“Event
of Default” has the meaning ascribed to it in the Credit Agreement.




“GAAP” shall mean generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a significant segment of the
accounting profession, which are in effect from time to time.




“Guarantee and Collateral Agreement” has the meaning ascribed to it in Recital D hereof.




“Guaranteed Obligations” has the meaning ascribed to it in the Guarantee and
Collateral Agreement.




“Improvements” has the meaning ascribed to it in the Granting Clauses.




“Intercreditor Agreement” has the meaning ascribed to it in Recital E hereof.




“Leases” has the meaning ascribed to it in Section 2.5.




“Lien” shall mean any mortgage, deed of trust, deed to secure debt, lien (statutory or
otherwise), pledge, hypothecation, encumbrance, restriction, collateral assignment, charge or
security interest in, on or of the Mortgaged Property.




“Legal Requirements” has the meaning ascribed to it in Section 2.3.




“Mortgaged Property” has the meaning ascribed to it in the Granting Clauses.




“Permitted Encumbrances” has the meaning ascribed to it in Section 2.2.




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




“Proceeds” has the meaning ascribed to it in the Granting Clauses.




“Real
Property” has the meaning ascribed to it in the Granting Clauses.




“Site”
has the meaning ascribed to it in the Granting Clauses.




6











 






“State” means the Commonwealth of Massachusetts.




“Tangible Collateral” has the meaning ascribed to it in the
Granting Clauses.




“UCC” shall mean Uniform Commercial Code of New York or, if the
creation, perfection and enforcement of any security interest herein
granted is governed by the laws of the State, then, as to the matter in
question, the Uniform Commercial Code in effect in the State.



     1.2 Accounting Terms. As used herein and in any certificate or other
document made or delivered pursuant hereto, accounting terms not defined herein shall
have the respective meanings given to them under GAAP.



     1.3 The Rules of Interpretation. The rules of interpretation as set forth in
the Intercreditor Agreement shall govern the terms, conditions and provisions hereof. In
the event of any conflict between those set forth in this Mortgage and the Intercreditor
Agreement, the latter shall be deemed controlling and shall preempt the former.



ARTICLE 2- GENERAL COVENANTS AND PROVISIONS




     2.1 Mortgagor Performance of the Guarantee and Collateral Agreement and the
Intercreditor Agreement. Mortgagor shall perform, observe and comply with each and
every provision hereof, and with each and every provision contained in the Guarantee and
Collateral Agreement and the Intercreditor Agreement and shall promptly pay to Mortgagee,
when payment shall become due under the Guarantee and Collateral Agreement, the amounts
provided for thereunder with interest thereon, if any, and all other sums required to be
paid by Mortgagor under this Mortgage and the Guarantee and Collateral Agreement at the
time and in the manner provided herein and therein.



     2.2 General Representations, Covenants and Warranties. Mortgagor represents,
covenants and warrants that as of the date hereof: (a) Mortgagor has good and marketable
fee simple title to the Site and Improvements, free and clear of all encumbrances except
the permitted encumbrances set forth on Schedule B to the applicable title policy, if any
(“Permitted Encumbrances”); (b) All Easements are and will remain valid,
subsisting and in full force and effect; (c) Mortgagor has the right to hold, occupy and
enjoy its interest in the Mortgaged Property, and has good right, full power and lawful
authority to mortgage and pledge the same as provided herein and prior to the occurrence
and continuance of an Event of Default, Mortgagor may at all times peaceably and quietly
enter upon, hold, occupy, use and enjoy the Mortgaged Property in accordance with the
terms hereof; (d) all costs arising from construction of any improvements, the
performance of any labor and the purchase of all Mortgaged Property have been or shall be
paid when due; (e) the Site has access for ingress and egress to dedicated street(s); and
(f) no material part of the Mortgaged Property has been damaged, destroyed, condemned or
abandoned.



     2.3 Compliance with Legal Requirements. Mortgagor shall promptly comply in
all material respects with all governmental statutes, laws, rules, orders, regulations,
ordinances,



7









 




judgments, decrees and injunctions of Governmental Authorities affecting either the
Mortgaged Property or any part thereof or the construction, use, alteration or
operation thereof, or any part thereof (whether now or hereafter enacted and in
force), and all Permits, licenses and authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained in
any instruments, at any time in force affecting the Mortgaged Property or any part
thereof (collectively “Legal Requirements”) relating to its use and
occupancy of the Mortgaged Property, whether or not such compliance requires work
or remedial measures that are ordinary or extraordinary, foreseen or unforeseen,
structural or nonstructural, or that interfere with the use or enjoyment of the
Mortgaged Property.




     2.4 Insurance; Application of Insurance Proceeds; Application of Eminent
Domain Proceeds.



          2.4.1 Mortgagor shall at its sole expense obtain for, deliver to (or deliver
certificates evidencing), assign and maintain for the benefit of Mortgagee, during
the term of this Mortgage, insurance policies insuring the Mortgaged Property (to
the extent insurable) and liability insurance policies, all in accordance with the
requirements of the Guarantee and Collateral Agreement. Mortgagor shall pay
promptly when due any premiums on such insurance policies and on any renewals
thereof. In the event of the foreclosure of this Mortgage or any other transfer of
the Mortgaged Property in extinguishment of the indebtedness and other sums secured
hereby, all right, title and interest of Mortgagor in and to all casualty insurance
policies, and renewals thereof then in force, shall pass to the purchaser or
grantee in connection therewith. In addition, if any portion of the Mortgaged
Property is located in an area identified by the Federal Emergency Management
Agency or any other Governmental Authority as an area having special flood hazards
and in which flood insurance has been made available under the National Flood
Insurance Act of 1968 (or any amendment or successor act thereto), then Mortgagor
shall maintain, or cause to be maintained, with a financially sound and reputable
insurer, flood insurance in an amount sufficient to comply with all applicable
rules and regulations promulgated pursuant to the National Flood Insurance Act of
1968 (or any amendment or successor act thereto).



          2.4.2 All insurance proceeds and all awards payable with respect to any taking
of the Real Property or Improvements shall be paid and/or shall be applied in
accordance with the provisions of the Senior Secured Documents.



     2.5 Assignment of Rents. Mortgagor unconditionally and absolutely
assigns to Mortgagee all of Mortgagor’s right, title and interest in and to: all
leases, subleases, occupancy agreements, licenses, rental contracts and other
similar agreements now or hereafter existing relating to the use or occupancy of
the Mortgaged Property, together with all guarantees, modifications, extensions and
renewals thereof; and all Rents, issues, profits, income and proceeds due or to
become due from tenants of the Mortgaged Property (the “Leases”), including
rentals and all other payments of any kind under any Leases now existing or
hereafter entered into, together with all deposits (including security deposits) of
tenants thereunder. This is an absolute assignment to Mortgagee and not an
assignment as security for the performance of the obligations under the Guarantee
and Collateral Agreement, or any other indebtedness. Subject to the provisions
below, Mortgagee shall have the right, power and authority to: notify any person
that the Leases have been



8









 




assigned to Mortgagee and that all Rents and other obligations are to be paid
directly to Mortgagee, whether or not Mortgagee has commenced or completed
foreclosure or taken possession of the Mortgaged Property; settle compromise,
release, extend the time of payment of, and make allowances, adjustments and
discounts of any Rents or other obligations under the Leases; enforce payment of
Rents and other rights under the Leases, prosecute any action or proceeding, and
defend against any claim with respect to Rents and Leases; enter upon, take
possession of and operate the Mortgaged Property; lease all or any part of the
Mortgaged Property; and/or perform any and all obligations of Mortgagor under the
Leases and exercise any and all rights of Mortgagor therein contained to the full
extent of Mortgagor’s rights and obligations thereunder, with or without the
bringing of any action or the appointment of a receiver. At Mortgagee’s request,
Mortgagor shall deliver a copy of this Mortgage to each tenant under a Lease.
Mortgagor irrevocably directs any tenant, without any requirement for notice to or
consent by Mortgagor, to comply with all demands of Mortgagee under this Section
and to turn over to Mortgagee on demand all Rents which it receives. Mortgagee
shall have the right, but not the obligation, to use and apply all Rents received
hereunder in such order and such manner as Mortgagee may determine in accordance
with the Intercreditor Agreement. Notwithstanding that this is an absolute
assignment of the Rents and Leases and not merely the collateral assignment of, or
the grant of a lien or security interest in the Rents and Leases, Mortgagee grants
to Mortgagor a revocable license to collect and receive the Rents and to retain,
use and enjoy such Rents. Such license may be revoked by Mortgagee only upon the
occurrence and during the continuance of any Event of Default. Mortgagor shall
apply any Rents which it receives to the payment due under the Guaranteed
Obligations, taxes, assessments, water charges, sewer Rents and other governmental
charges levied, assessed or imposed against the Mortgaged Property, insurance
premiums, and other obligations of lessor under the Leases before using such
proceeds for any other purpose.




     2.6 Mortgagee Assumes No Guaranteed Obligations. It is expressly
agreed that, anything herein contained to the contrary notwithstanding, Mortgagor
shall remain obligated under all agreements which are included in the definition of
“Mortgaged Property” and shall perform all of its obligations thereunder in
accordance with the provisions thereof, and neither Mortgagee nor any of the Senior
Secured Parties shall have any obligation or liability with respect to such
obligations of Mortgagor, nor shall Mortgagee or any of the Senior Secured Parties
be required or obligated in any manner to perform or fulfill any obligations or
duties of Mortgagor under such agreements, or to make any payment or to make any
inquiry as to the nature or sufficiency of any payment received by it, or to
present or file any claim or take any action to collect or enforce the payment of
any amounts which have been assigned to Mortgagee hereunder or to which Mortgagee
or the Senior Secured Parties may be entitled at any time or times.



     2.7 Further Assurances. Mortgagor shall, from time to time, at its
expense, promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or that Mortgagee may reasonably
request, in order to perfect and continue the lien and security interest granted
hereby and to enable Mortgagee to obtain the full benefits of the lien and security
interest granted or intended to be granted hereby. Mortgagor shall keep the
Mortgaged Property free and clear of all Liens, other than Permitted Encumbrances.
Without limiting the generality of the foregoing, Mortgagor shall execute and
record or file this Mortgage and each amendment hereto, and such financing or
continuation statements, or amendments thereto, and such other instruments,
endorsements or notices, as may be necessary, or as Mortgagee may reasonably



9









 




request, in order to perfect and preserve the lien and security interest granted or
purported to be granted hereby. Mortgagor hereby authorizes Mortgagee to file one or more
financing statements or continuation statements, and amendments thereto, relative to all
or any part of the Mortgaged Property necessary to preserve or protect the lien and
security interest granted hereby without the signature of Mortgagor where permitted by
law.




     2.8 Acts of Mortgagor. Mortgagor hereby represents and warrants that it has
not mortgaged, hypothecated, assigned or pledged and hereby covenants that it will not
mortgage, hypothecate, assign or pledge, so long as this Mortgage shall remain in effect,
any of its right, title or interest in and to the Mortgaged Property or any part thereof,
to anyone other than Mortgagee.



     2.9 After-Acquired Property. Any and all of the Mortgaged Property which is
hereafter acquired shall immediately, without any further conveyance, assignment or act on
the part of Mortgagor or Mortgagee, become and be subject to the lien and security
interest of this Mortgage as fully and completely as though specifically described herein.
If and whenever from time to time Mortgagor shall hereafter acquire any real property or
interest therein which constitutes or is intended to constitute part of the Mortgaged
Property hereunder, Mortgagor shall promptly give notice thereof to Mortgagee and
Mortgagor shall forthwith execute, acknowledge and deliver to Mortgagee a supplement to
this Mortgage in form and substance reasonably satisfactory to Mortgagee subjecting the
property so acquired to the lien of this Mortgage. At the same time, if Mortgagee so
requests, Mortgagor shall deliver to Mortgagee either (i) an endorsement to the lender’s
policy of title insurance issued to Mortgagee insuring the lien of this Mortgage, or (ii)
a new lender’s title policy (which shall include tie in coverage relating to the lender’s
policy described in (i), above), in each case which shall insure to Mortgagee in form and
substance reasonably satisfactory to Mortgagee that the lien of this Mortgage as insured
under such title insurance policy or policies encumbers such later acquired property and
that Mortgagor’s title to such property meets all of the applicable requirements of the
Senior Secured Documents with respect to title to Mortgagor’s real property interests.



     2.10 Mortgaged Property. Mortgagor shall observe all applicable covenants,
easements and other restrictions of record with respect to the Site, the Easements or to
any other part of the Mortgaged Property, in all material respects.



     2.11 Power of Attorney. Mortgagor does hereby irrevocably constitute and
appoint Mortgagee its true and lawful attorney (which appointment is coupled with an
interest), with full power of substitution, for Mortgagor and in the name, place and stead
of Mortgagor or in Mortgagee’s own name, for so long as any of the Guaranteed Obligations
are outstanding, to ask, demand, collect, receive, receipt for and sue for any and all
Rents, income and other sums which are assigned hereunder with full power to endorse the
name of Mortgagor on all instruments given in payment or in part payment thereof, to
settle, adjust or compromise any claims thereunder as fully as Mortgagor itself could do
and in its discretion file any claim or take any action or proceeding, either in its own
name or in the name of Mortgagor or otherwise, which Mortgagee may deem necessary or
appropriate to protect and preserve the right, title and interest of Mortgagee in and to
such Rents, income and other sums and the security intended to be afforded hereby;
provided that Mortgagee shall not exercise such rights unless an Event of Default has
occurred and is continuing.



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     2.12 Covenant to Pay. If an Event of Default has occurred and is
continuing, then Mortgagee, among its other rights and remedies, shall have the
right, but not the obligation, to pay, observe or perform the obligations of
Mortgagor herein, in whole or in part, and with such modifications as Mortgagee
reasonably shall deem advisable. All sums, including, without limitation,
reasonable attorneys fees’, so expended or incurred by Mortgagee by reason of the
default of Mortgagor, or by reason of the bankruptcy or insolvency of Mortgagor, as
well as, without limitation, sums expended or incurred to sustain the lien or
estate of this Mortgage or its priority, or to protect or enforce any rights of
Mortgagee hereunder, or to recover any of the Guaranteed Obligations, or for
repairs, maintenance, alterations, replacements or improvements thereto or for the
protection thereof, or for real estate taxes or other governmental assessments or
charges against any part of the Mortgaged Property, or premiums for insurance of
the Mortgaged Property, shall be entitled to the benefit of the lien on the
Mortgaged Property as of the date of the recording of this Mortgage, shall be
deemed to be added to and be part of the Guaranteed Obligations secured hereby,
whether or not the result thereof causes the total amount of the Guaranteed
Obligations to exceed the stated amount set forth in the recitals of this Mortgage,
and shall be guaranteed by Mortgagor as provided in the Guarantee and Collateral
Agreement.



     2.13 Security Agreement.



          2.13.1 This Mortgage shall also be a security agreement between Mortgagor and
Mortgagee covering the Mortgaged Property constituting personal property or
fixtures (hereinafter collectively called “UCC Collateral”) governed by the
UCC as such UCC Collateral may be more specifically set forth in any financing
statement delivered in connection with this Mortgage, and, as further security for
the payment and performance of the Guaranteed Obligations, Mortgagor hereby grants
to Mortgagee a security interest in such portion of the Mortgaged Property to the
full extent that the Mortgaged Property may be subject to the UCC. In addition to
Mortgagee’s other rights hereunder, Mortgagee shall have all rights of a secured
party under the UCC, as is in effect in the relevant jurisdiction, or other
applicable laws or in equity. Mortgagor hereby authorizes the filing of, and if
requested by Mortgagee, Mortgagor shall execute and deliver to Mortgagee, all
financing statements and such further assurances that may be reasonably required by
Mortgagee to establish, create, perfect (to the extent the same can be achieved by
the filing of a financing statement) and maintain the validity and priority of
Mortgagee’s security interests, and Mortgagor shall bear all reasonable costs
thereof, including all UCC searches. Except as otherwise provided in the Guarantee
and Collateral Agreement, if Mortgagee should dispose of any of the Mortgaged
Property comprising the UCC Collateral pursuant to the UCC, ten (10) days’ prior
written notice by Mortgagee to Mortgagor shall be deemed to be reasonable notice;
provided, however, that Mortgagee may dispose of such property in accordance with
the foreclosure procedures of this Mortgage in lieu of proceeding under the UCC.
Mortgagee may from time to time execute and deliver at Mortgagor’s expense all
continuation statements, termination statements, amendments, partial releases, or
other instruments relating to all financing statements by and between Mortgagor and
Mortgagee. Except as otherwise provided in the Guarantee and Collateral Agreement,
but otherwise subject to the provisions thereof, if an Event of Default shall occur
and be continuing, (a) Mortgagee, in addition to any other rights and remedies
which it may have, may exercise immediately and without demand to the extent
permitted by law, any and all rights and remedies granted to a secured party under
the UCC, as in effect in any relevant jurisdiction, including, without limiting



11









 







the generality of the foregoing, the right to take possession of the UCC Collateral
or any part thereof, and to take such other measures as Mortgagee may deem
necessary for the care, protection and preservation of such collateral and (b) upon
request or demand of Mortgagee, Mortgagor shall at its expense, assemble the UCC
Collateral and make it available to Mortgagee at a convenient place acceptable to
Mortgagee. Mortgagor shall pay to Mortgagee on demand any and all expenses,
including reasonable attorneys’ fees and disbursements incurred or paid by
Mortgagee in protecting the interest in the UCC Collateral and in enforcing
Mortgagee’s rights hereunder with respect to such UCC Collateral.



          2.13.2 Mortgagor and the Mortgagee agree, to the extent permitted by law,
that: (i) this Mortgage upon recording or registration in the real estate records
of the proper office shall constitute a financing statement filed as a “fixture
filing” within the meaning of Sections 9-102(a)(40) and 9-502(c) of the UCC; (ii)
all or a part of the Mortgaged Property are or are to become fixtures; and (iii)
the addresses of Mortgagor and Mortgagee are as set forth in the first paragraph of
this Mortgage and (iv) Mortgagor’s organizational identification number is
000911853.



ARTICLE 3- REMEDIES




     3.1 Acceleration of Maturity. As provided in each of the Senior
Secured Documents if an Event of Default shall have occurred and is continuing, the
applicable Secured Debt Representative may declare the Guaranteed Obligations with
respect to the applicable Series of Guaranteed Obligations to be due and payable
immediately, and upon such declaration such Guaranteed Obligations and other sums
shall immediately become due and payable without demand, presentment, notice or
other requirements of any kind (all of which Mortgagor waives).



     3.2 Protective Advances. If an Event of Default shall have occurred
and is continuing, then without thereby limiting Mortgagee’s other rights or
remedies, waiving or releasing any of Mortgagor’s obligations, or imposing any
obligation on Mortgagee, Mortgagee may either advance any amount owing or perform
any or all actions that Mortgagee considers necessary or appropriate to cure such
default. All such advances shall constitute “Protective Advances.” No sums advanced
or performance rendered by Mortgagee shall cure, or be deemed a waiver of, any
Event of Default.



     3.3 Institution of Equity Proceedings. If an Event of Default occurs
and is continuing, Mortgagee, may institute an action, suit or proceeding in equity
for specific performance of this Mortgage and the Guarantee and Collateral
Agreement, both of which shall be specifically enforceable by injunction or other
equitable remedy.



     3.4 Mortgagee’s Power of Enforcement.



          (a) If an Event of Default occurs and is continuing, Mortgagee shall be
entitled, at its option and in its sole and absolute discretion, to institute a
proceeding or proceedings, judicial or nonjudicial, by advertisement or otherwise,
for the complete foreclosure of this Mortgage in which case the Mortgaged Property
or any interest therein may be sold for cash or upon credit in one or more parcels
or in several interests or portions and in any order or manner in accordance with
the laws of the jurisdiction in which such Mortgaged Property is located, and



12









 




sell for cash or upon credit the Mortgaged Property or any part thereof and all
estate, claim, demand, right, title and interest of Mortgagor therein and rights of
redemption thereof, pursuant to the power of sale contained herein or otherwise, at
one or more sales, as an entity or in parcels, at such time and place, upon such
terms and after such notice thereof as may be required or permitted by the laws of
the State. Mortgagee may require Mortgagor to pay monthly in advance to Mortgagee,
or any receiver appointed to collect the Rents, the fair and reasonable rental
value for the use and occupation of any portion of the Mortgaged Property occupied
by Mortgagor and require Mortgagor to vacate and surrender possession to Mortgagee
of the Mortgaged Property or to such receiver and, in default thereof, evict
Mortgagor by summary proceedings or otherwise.




          (b) If any Event of Default occurs and is continuing, Mortgagee may, either
with or without entry or taking possession of the Mortgaged Property, and without
regard to whether or not the indebtedness and other sums secured hereby shall be
due and without prejudice to the right of Mortgagee thereafter to bring an action
or proceeding to foreclose or any other action for any default existing at the time
such earlier action was commenced, proceed by any appropriate action or proceeding:
(a) to enforce payment of the Guaranteed Obligations, to the extent permitted by
law, or the performance of any term hereof or any other right; (b) to foreclose
this Mortgage in any manner provided by law for the foreclosure of mortgages on
real property and to sell, as an entirety or in separate lots or parcels, the
Mortgaged Property or any portion thereof pursuant to the laws of the State or
under the judgment or decree of a court or courts of competent jurisdiction, and
Mortgagee shall be entitled to recover in any such proceeding all costs and
expenses incident thereto, including reasonable attorneys’ fees in such amount as
shall be awarded by the court; (c) to the extent not prohibited by the laws of the
State to exercise any or all of the rights and remedies available to it under the
Senior Secured Documents; and (d) to pursue any other remedy available to it.
Mortgagee shall take action either by such proceedings or by the exercise of its
powers with respect to entry or taking possession, or both, as Mortgagee may
determine.



          (c) The remedies described in this Section may be exercised with respect to
all or any portion of the UCC Collateral, either simultaneously with the sale of
any real property encumbered hereby or independent thereof. Mortgagee shall at any
time be permitted to proceed with respect to all or any portion of the UCC
Collateral in any manner permitted by the UCC. Mortgagor agrees that Mortgagee’s
inclusion of all or any portion of the UCC Collateral in a sale or other remedy
exercised with respect to the real property encumbered hereby, as permitted by the
UCC, is a commercially reasonable disposition of such property.



     3.5 Mortgagee’s Right to Enter and Take Possession, Operate and Apply
Income.



          (a) If an Event of Default occurs and is continuing, Mortgagor, upon demand of
Mortgagee, shall forthwith surrender to Mortgagee the actual possession and, if and
to the extent permitted by law, Mortgagee itself, or by such officers or agents as
it may appoint, may enter and take possession of all of the Mortgaged Property,
including the Tangible Collateral, without liability for trespass, damages or
otherwise, and may exclude Mortgagor and its agents and employees wholly therefrom
and may have joint access with Mortgagor to the books, papers and accounts of
Mortgagor.



13









 





          (b) If an Event of Default has occurred and is continuing and Mortgagor shall
for any reason fail to surrender or deliver the Mortgaged Property or any part
thereof after Mortgagee’s demand, Mortgagee may obtain a judgment or decree
conferring on Mortgagee the right to immediate possession or requiring Mortgagor to
deliver immediate possession of all or part of such property to Mortgagee and
Mortgagor hereby specifically consents to the entry of such judgment or decree.
Mortgagor shall pay to Mortgagee, upon demand, all costs and expenses of obtaining
such judgment or decree and reasonable compensation to Mortgagee, their attorneys
and agents, and all such costs, expenses and compensation shall, until paid, be
secured by the lien of this Mortgage.



          (c) Upon every such entering upon or taking of possession, Mortgagee may
hold, store, use, operate, manage and control the Mortgaged Property and conduct
the business thereof, and, from time to time in its sole and absolute discretion
and without being under any duty to so act:



               (1) make all necessary and proper maintenance, repairs, renewals and
replacements thereto and thereon, and all necessary additions, betterments and
improvements thereto and thereon and purchase or otherwise acquire fixtures,
personalty and other property in connection therewith;



               (2) insure or keep the Mortgaged Property insured;



               (3) manage and operate the Mortgaged Property and exercise all the rights and
powers of Mortgagor in their name or otherwise with respect to the same;



               (4) enter into agreements with others to exercise the powers herein granted
Mortgagee, all as Mortgagee from time to time may determine; and shall apply the
monies so received by Mortgagee in such priority as provided by the Intercreditor
Agreement; and/or



               (5) rent or sublet the Mortgaged Property or any portion thereof for any
purpose permitted by this Mortgage.



          Mortgagee shall surrender possession of the Mortgaged Property to Mortgagor
(i) as may be required by law or court order, or (ii) when all amounts under any of
the terms of the Senior Secured Documents, including this Mortgage, shall have been
paid current and all Events of Default have been cured or waived. The same right of
taking possession, however, shall exist if any subsequent Event of Default shall
occur and be continuing.



     3.6 Separate Sales. To the extent permitted by law or Legal
Requirements upon and during the continuation of an Event of Default, the
Mortgaged Property may be sold in one or more parcels and in such manner and order
as Mortgagee, in its sole discretion, may elect, it being expressly understood and
agreed that the right of sale arising out of any Event of Default shall not be
exhausted by any one or more sales.



     3.7 Waiver of Appraisement, Moratorium, Valuation, Stay, Extension and
Redemption Laws. Mortgagor agrees to the full extent permitted by law that if
an Event of Default occurs and is continuing, neither Mortgagor nor anyone
claiming through or under it shall or will set



14









 




up, claim or seek to take advantage of any appraisement, moratorium, valuation, stay,
extension or redemption laws now or hereafter in force, in order to prevent or hinder the
enforcement or foreclosure of this Mortgage or the absolute sale of the Mortgaged Property
or any portion thereof or the final and absolute putting into possession thereof,
immediately after such sale, of the purchasers thereof, and Mortgagor for itself and all
who may at any time claim through or under it, hereby waives, to the full extent that it
may lawfully so do, the benefit of all such laws, and any and all right to have the assets
comprising the Mortgaged Property marshalled upon any foreclosure of the lien hereof and
agrees that Mortgagee or any court having jurisdiction to foreclose such lien may sell the
Mortgaged Property in part or as an entirety.




     3.8 Receiver. If an Event of Default occurs and is continuing, Mortgagee, to
the extent permitted by law, and without regard to the value, adequacy or occupancy of the
security for the indebtedness and other sums secured hereby, shall be entitled as a matter
of right if it so elects to the appointment of a receiver to enter upon and take
possession of the Mortgaged Property and to collect all earnings, revenues and receipts
and apply the same as the court may direct, and such receiver may be appointed by any
court of competent jurisdiction upon application by Mortgagee. To the extent permitted by
law or Legal Requirement, Mortgagee may have a receiver appointed without notice to
Mortgagor or any third party, and Mortgagee may waive any requirement that the receiver
post a bond. To the extent permitted by law or Legal Requirement, Mortgagee shall have the
power to designate and select the Person who shall serve as the receiver and to negotiate
all terms and conditions under which such receiver shall serve. To the extent permitted by
law or Legal Requirement, any receiver appointed on Mortgagee’s behalf may be an Affiliate
of Mortgagee. The reasonable expenses, including receiver’s fees, reasonable attorneys’
fees, costs and agents’ compensation, incurred pursuant to the powers herein contained
shall be secured by this Mortgage. The right to enter and take possession of and to manage
and operate the Mortgaged Property and to collect all earnings, revenues and receipts,
whether by a receiver or otherwise, shall be cumulative to any other right or remedy
available to Mortgagee under this Mortgage, the Intercreditor Agreement, the Guarantee and
Collateral Agreement or otherwise available to Mortgagee and may be exercised concurrently
therewith or independently thereof, but such rights shall be exercised in a manner which
is otherwise in accordance with and consistent with the Intercreditor Agreement. Mortgagee
shall be liable to account only for such earnings, revenues and receipts (including,
without limitation, security deposits) actually received by Mortgagee, whether received
pursuant to this section or any other provision hereof. Notwithstanding the appointment of
any receiver or other custodian, Mortgagee shall be entitled as pledgee to the possession
and control of any cash, deposits, or instruments at the time held by, or payable or
deliverable under the terms of this Mortgage to, Mortgagee.



     3.9 Suits to Protect the Mortgaged Property. Mortgagee shall have the power
and authority to institute and maintain any suits and proceedings as Mortgagee, in its
sole and absolute discretion, may deem advisable (a) to prevent any impairment of the
Mortgaged Property by any acts which may be unlawful or in violation of this Mortgage, (b)
to preserve or protect its interest in the Mortgaged Property, or (c) to restrain the
enforcement of or compliance with any legislation or other Legal Requirements that may be
unconstitutional or otherwise invalid, if the enforcement of or compliance with such
enactment, rule or order might impair the security hereunder or be prejudicial to
Mortgagee’s interest.



15









 





     3.10 Proofs of Claim. In the case of any receivership, insolvency,
reorganization, arrangement, adjustment, composition or other judicial proceedings
affecting Mortgagor, any Affiliate or any guarantor, co-maker or endorser of any of
Mortgagor’s obligations, its creditors or its property, Mortgagee, to the extent
permitted by law, shall be entitled to file such proofs of claim or other documents
as it may deem necessary or advisable in order to have its claims allowed in such
proceedings for the entire amount due and payable by Mortgagor under the Senior
Secured Documents, at the date of the institution of such proceedings, and for any
additional amounts which may become due and payable by Mortgagor after such date.



     3.11 Mortgagor to Pay Amounts Secured Hereby on Any Default in
Payment; Application of Monies by Mortgagee.



          (a) In case of a foreclosure sale of all or any part of the Mortgaged Property
and of the application of the proceeds of sale to the payment of the sums secured
hereby, to the extent permitted by law, Mortgagee shall be entitled to enforce
payment from Mortgagor of any additional amounts then remaining due and unpaid and
to recover judgment against Mortgagor for any portion thereof remaining unpaid,
with interest at the interest rate on the Notes.



          (b) Mortgagor hereby agrees, to the extent permitted by law, that no recovery
of any such judgment by Mortgagee or other action by Mortgagee and no attachment or
levy of any execution upon any of the Mortgaged Property or any other property
shall in any way affect the Lien and security interest of this Mortgage upon the
Mortgaged Property or any part thereof or any Lien, rights, powers or remedies of
Mortgagee hereunder, but such Lien, rights, powers and remedies shall continue
unimpaired as before.



          (c) Any monies collected or received by Mortgagee under this Section shall be
first applied as set forth in the Intercreditor Agreement.



     3.12 Delay or Omission; No Waiver. No delay or omission of Mortgagee
to exercise any right, power or remedy upon any Event of Default shall exhaust or
impair any such right, power or remedy or shall be construed to waive any such
Event of Default or to constitute acquiescence therein. Every right, power and
remedy given to Mortgagee whether contained herein or in the Intercreditor
Agreement or the Guarantee and Collateral Agreement or otherwise available to
Mortgagee may be exercised from time to time and as often as may be deemed
expedient by Mortgagee.



     3.13 No Waiver of One Default to Affect Another. No waiver of any
Event of Default hereunder shall extend to or affect any subsequent or any other
Event of Default then existing, or impair any rights, powers or remedies consequent
thereon. If Mortgagee (a) grants forbearance or an extension of time for the
payment of any sums secured hereby; (b) takes other or additional security for the
payment thereof; (c) waives or does not exercise any right granted in this
Mortgage, the Intercreditor Agreement or Guarantee and Collateral Agreement; (d)
releases any part of the Mortgaged Property from the lien or security interest of
this Mortgage or any other instrument securing the Guaranteed Obligations; (e)
consents to the filing of any map, plat or replat of the Real Property or any part
thereof; (f) consents to the granting of any easement on the Real Property; or (g)
makes or consents to any agreement changing the terms of this Mortgage or the other
Senior



16









 




Secured Documents or the Intercreditor Agreement subordinating the lien or any
charge hereof, no such act or omission shall release, discharge, modify, change or
affect the liability under this Mortgage or the Guarantee and Collateral Agreement
or otherwise of Mortgagor, or any subsequent purchaser of the Mortgaged Property or
any part thereof or any maker, co-signer, surety or guarantor with respect to any
other matters not addressed by such act or omission. No such act or omission shall
preclude Mortgagee from exercising any present or future right, power or privilege
herein granted in case of any Event of Default then existing, nor, except as
otherwise expressly provided in an instrument or instruments executed by Mortgagee,
shall the lien or security interest of this Mortgage be altered thereby, except to
the extent expressly provided in such acts or omissions. In the event of the sale
or transfer by operation of law or otherwise of all or any part of the Mortgaged
Property, Mortgagee, without notice to any person, firm or corporation, is hereby
authorized and empowered to deal with any such vendee or transferee with reference
to the Mortgaged Property or the indebtedness secured hereby, or with reference to
any of the terms or conditions hereof, as fully and to the same extent as it might
deal with the original parties hereto and without in any way releasing or
discharging any of the liabilities or undertakings hereunder, or waiving its right
to declare such sale or transfer an Event of Default as provided herein.
Notwithstanding anything to the contrary contained in this Mortgage or any other
Security Document, (i) in the case of any non-monetary Event of Default, Mortgagee
may continue to accept payments due hereunder without thereby waiving the existence
of such or any other Event of Default and (ii) in the case of any monetary Event of
Default, Mortgagee may accept partial payments of any sums due hereunder without
thereby waiving the existence of such Event of Default if the partial payment is
not sufficient to completely cure such Event of Default.




     3.14 Discontinuance of Proceedings; Position of Parties Restored. If
Mortgagee shall have proceeded to enforce any right or remedy under this Mortgage
by foreclosure, entry of judgment or otherwise and such proceedings shall have been
discontinued or abandoned for any reason, or such proceedings shall have resulted
in a final determination adverse to Mortgagee, then and in every such case
Mortgagor and Mortgagee shall be restored to their former positions and rights
hereunder, and all rights, powers and remedies of Mortgagee shall continue as if no
such proceedings had occurred or had been taken.



     3.15 Remedies Cumulative. Subject to the provisions of Section
4.15 hereof, no right, power or remedy, including without limitation remedies
with respect to any security for the Guaranteed Obligations, conferred upon or
reserved to Mortgagee by this Mortgage or any other Senior Secured Document is
exclusive of any other right, power or remedy, but each and every such right, power
and remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or under any other Senior Secured Document,
now or hereafter existing at law, in equity or by statute, and Mortgagee shall be
entitled to resort to such rights, powers, remedies or security as Mortgagee shall
in its sole and absolute discretion deem advisable.



     3.16 Interest After Event of Default. If an Event of Default shall
have occurred and is continuing, all sums outstanding and unpaid under the Senior
Secured Documents, including this Mortgage, shall, at Mortgagee’s option, subject
to the provisions of the Guarantee and Collateral Agreement and/or the
Intercreditor Agreement, bear interest at the interest rate on the applicable
Series of Guaranteed Obligations, as provided in the applicable Senior Secured
Documents, until



17









 




such Event of Default has been cured. Mortgagor’s obligation to pay such interest
shall be secured by this Mortgage.




     3.17 Foreclosure; Expenses of Litigation. If Mortgagee forecloses,
reasonable attorneys’ fees for services in the supervision of said foreclosure
proceeding shall be allowed to Mortgagee as part of the foreclosure costs. In the
event of foreclosure of the lien hereof, there shall be allowed and included as
additional indebtedness all expenditures and expenses which may be paid or incurred
by or on behalf of Mortgagee for reasonable attorneys’ fees, appraisers’ fees,
outlays for documentary and expert evidence, stenographers’ charges, publication
costs, and costs (which may be estimated as to items to be expended after
foreclosure sale or entry of the decree) of procuring all such abstracts of title,
title searches and examinations, title insurance policies and guarantees, and
similar data and assurances with respect to title as Mortgagee may deem reasonably
necessary either to prosecute such suit or to evidence to a bidder at any sale
which may be had pursuant to such decree the true condition of the title to or the
value of the Mortgaged Property or any portion thereof. All expenditures and
expenses of the nature in this section mentioned, and such expenses and fees as may
be incurred in the protection of the Mortgaged Property and the maintenance of the
lien and security interest of this Mortgage, including the reasonable fees of any
attorney employed by Mortgagee in any litigation or proceeding affecting this
Mortgage or any other Senior Secured Document, the Mortgaged Property or any
portion thereof, including, without limitation, civil, probate, appellate and
bankruptcy proceedings, or in preparation for the commencement or defense of any
proceeding or threatened suit or proceeding, shall be immediately due and payable
by Mortgagor, with interest thereon at the default interest rate specified in
Section 2.07(b) of the Credit Agreement, and shall be secured by this Mortgage.
Mortgagee waives its right to any statutory fee in connection with any judicial or
nonjudicial foreclosure of the lien hereof and agrees to accept a reasonable fee
for such services.



     3.18 Deficiency Judgments. If after foreclosure of this Mortgage or
Mortgagee’s sale hereunder, there shall remain any deficiency with respect to any
amounts payable under the Senior Secured Documents, including hereunder, or any
amounts secured hereby, and Mortgagee shall institute any proceedings to recover
such deficiency or deficiencies, all such amounts shall continue to bear interest
at the default interest rate specified in Section 2.07(b) of the Credit Agreement.
Mortgagor waives any defense to Mortgagee’s recovery against Mortgagor of any
deficiency after any foreclosure sale of the Mortgaged Property. Subject to the
Intercreditor Agreement and the Guarantee and Collateral Agreement, to the extent
permitted by law, Mortgagor expressly waives any defense or benefits that may be
derived from any statute granting Mortgagor any defense to any such recovery by
Mortgagee. In addition, Mortgagee shall be entitled to recovery of all of its
reasonable costs and expenditures (including without limitation any court imposed
costs) in connection with such proceedings, including reasonable attorneys’ fees,
appraisal fees and the other costs, fees and expenditures referred to in
Section 3.17 above. This provision shall survive any foreclosure or sale of
the Mortgaged Property, any portion thereof and/or the extinguishment of the lien
hereof.



     3.19 WAIVER OF JURY TRIAL. MORTGAGEE AND MORTGAGOR EACH WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE



18









 




RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS MORTGAGE, THE
GUARANTEE AND COLLATERAL AGREEMENT OR ANY OTHER SECURITY DOCUMENT. ANY SUCH
DISPUTES SHALL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.




     3.20 Exculpation of Mortgagee. The acceptance by Mortgagee of the
assignment contained herein with all of the rights, powers, privileges and
authority created hereby shall not, prior to entry upon and taking possession of
the Mortgaged Property by Mortgagee, be deemed or construed to make Mortgagee a
“mortgagee in possession”, nor thereafter or at any time or in any event obligate
Mortgagee to appear in or defend any action or proceeding relating to the Mortgaged
Property, nor shall Mortgagee, prior to such entry and taking, be liable in any way
for any injury or damage to person or property sustained by any person in or about
the Mortgaged Property.



ARTICLE 4- GENERAL




     4.1 Discharge. Mortgagor shall be released from the covenants,
agreements and obligations of Mortgagor contained in this Mortgage and all right,
title and interest in and to the Mortgaged Property shall revert to Mortgagor when
and as set forth in the Intercreditor Agreement and, in connection therewith,
Mortgagee, at the request and the expense of Mortgagor, shall promptly execute a
deed of reconveyance and such other documents as may be reasonably requested by
Mortgagor to evidence the discharge and satisfaction of this Mortgage and the
release of Mortgagor from its obligations hereunder.



     4.2 No Waiver. The exercise of the privileges granted in this Mortgage
to perform Mortgagor’s obligations under the agreements which constitute the
Mortgaged Property shall in no event be considered or constitute a waiver of any
right which Mortgagee or any other Secured Party may have at any time, after an
Event of Default shall have occurred and be continuing, to declare the Guaranteed
Obligations or any part thereof to be immediately due and payable. No delay or
omission to exercise any right, remedy or power accruing upon any default shall
impair any such right, remedy or power or shall be construed to be a waiver of any
such default or acquiescence therein; and every such right, remedy and power may be
exercised from time to time and as often as may be deemed expedient.



     4.3 Extension, Rearrangement or Renewal of Guaranteed Obligations. It
is expressly agreed that any of the Guaranteed Obligations at any time secured
hereby may be from time to time extended for any period, or with the consent of
Mortgagor rearranged or renewed, and that any part of the security herein
described, or any other security for the Guaranteed Obligations, may be waived or
released, without altering, varying or diminishing the force, effect or lien or
security interest of this Mortgage; and the lien and security interest granted by
this Mortgage shall continue as a prior lien and security interest on all of the
Mortgaged Property not expressly so released, until the Guaranteed Obligations are
fully paid and this Mortgage is terminated in accordance with the provisions of the
Intercreditor Agreement; and no other security now existing or hereafter taken to
secure the payment of the Guaranteed Obligations or any part thereof or the
performance of any obligation or liability of Mortgagor whatever shall in any
manner impair or affect the security given by this Mortgage; and all security for
the payment of the Guaranteed Obligations or any part thereof and the performance
of any obligation or liability shall be taken, considered and held as cumulative.



19









 





     4.4 Forcible Detainer. Mortgagor agrees for itself and all persons claiming
by, through or under it, that subsequent to foreclosure hereunder in accordance with this
Mortgage and applicable law if Mortgagor shall hold possession of the Mortgaged Property
or any part thereof, Mortgagor or the persons so holding possession shall be guilty of
trespass; and any such persons (including Mortgagor) failing or refusing to surrender
possession upon demand shall be guilty of forcible detainer and shall be liable to
Mortgagee or any purchaser in foreclosure, as applicable, for reasonable rental on said
premises, and shall be subject to eviction and removal in accordance with law.



     4.5 Waiver of Stay or Extension. To the extent permitted to be waived by
law, Mortgagor shall not at any time insist upon or plead or in any manner whatever claim
the benefit or advantage of any stay, extension or moratorium law now or at any time
hereafter in force in any locality where the Mortgaged Property or any part thereof may
or shall be situated, nor shall Mortgagor claim any benefit or advantage from any law now
or hereafter in force providing for the valuation or appraisement of the Mortgaged
Property or any part thereof prior to any sale thereof to be made pursuant to any
provision of this Mortgage or to a decree of any court of competent jurisdiction, nor
after any such sale shall Mortgagor claim or exercise any right conferred by any law now
or at any time hereafter in force to redeem the Mortgaged Property so sold or any part
thereof; and Mortgagor hereby expressly waives all benefit or advantage of any such law
or laws and the appraisement of the Mortgaged Property or any part thereof, and covenants
that Mortgagor shall not hinder or delay the execution of any power herein granted and
delegated to Mortgagee but that Mortgagor shall permit the execution of every such power
as though no such law had been made.



     4.6 Notices. Except where certified or registered mail notice is required
by applicable law, any notice to Mortgagor or Mortgagee required or permitted hereunder
shall be deemed to be given when given in the manner prescribed in the Intercreditor
Agreement.



     4.7 Severability. All rights, powers and remedies provided herein may be
exercised only to the extent that the exercise thereof does not violate any applicable
law, and are intended to be limited to the extent necessary so that they will not render
this Mortgage invalid, unenforceable or not entitled to be recorded, registered or filed
under any applicable law. In the event any term or provision contained in this Mortgage
is in conflict, or may hereafter be held to be in conflict, with the laws of the State of
New York, the State or of the United States of America, this Mortgage shall be affected
only as to such particular term or provision, and shall in all other respects remain in
full force and effect.



     4.8 Application of Payments. In the event that any part of the Guaranteed
Obligations cannot lawfully be secured hereby, or in the event that the lien and security
interest hereof cannot be lawfully enforced to pay any part of the Guaranteed
Obligations, or in the event that the lien or security interest created by this Mortgage
shall be invalid or unenforceable as to any part of the Guaranteed Obligations, then all
payments on the Guaranteed Obligations shall be deemed to have been first applied to the
complete payment and liquidation of that part of the Guaranteed Obligations which is not
secured by this Mortgage and the unsecured portion of the Guaranteed Obligations shall be
completely paid and liquidated prior to the payment and liquidation of the remaining
secured portion of the Guaranteed Obligations.



20









 





     4.9 Governing Law. THE PROVISIONS OF THIS MORTGAGE REGARDING THE
CREATION, PERFECTION AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS HEREIN
GRANTED SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE. ALL OTHER
PROVISIONS OF THIS MORTGAGE AND THE RIGHTS AND OBLIGATIONS OF MORTGAGOR AND
MORTGAGEE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF.



     4.10 Entire Agreement. This Mortgage, the Guarantee and Collateral
Agreement and the Intercreditor Agreement represent the final agreement between the
parties and may not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreements of the parties.



     4.11 Amendments. This Mortgage may be amended, supplemented or
otherwise modified only by an instrument in writing signed by Mortgagor and
Mortgagee.



     4.12 Successors and Assigns. All terms of this Mortgage shall run with
the land and bind each of Mortgagor and Mortgagee and their respective successors
and assigns, and all persons claiming under or through Mortgagor or Mortgagee, as
the case may be, or any such successor or assign, and shall inure to the benefit of
Mortgagee and Mortgagor, and their respective successors and assigns.



     4.13 Renewal, Etc. Mortgagee may at any time and from time to time
renew or extend this Mortgage, or alter or modify the same in any way, or waive any
of the terms, covenants or conditions hereof in whole or in part and may release
any portion of the Mortgaged Property or any other security, and grant such
extensions and indulgences in relation to the Guaranteed Obligations as Mortgagee
may determine, without the consent of any junior lienor or encumbrancer and without
any obligation to give notice of any kind thereto and without in any manner
affecting the priority of the lien and security interest hereof on any part of the
Mortgaged Property; provided that nothing in this Section 4.13 shall grant
Mortgagee the right to alter or modify the Mortgage without the consent of
Mortgagor unless otherwise specifically permitted in this Mortgage.



     4.14 Future Advances. This Mortgage is executed and delivered to
secure, among other things, Mortgagor’s guaranty of future advances under the
Senior Secured Documents. It is understood and agreed that this Mortgage secures
Mortgagor’s guaranty of present and future advances made pursuant to the Senior
Secured Documents and that the lien of such future advances shall relate to the
date of this Mortgage. Nothing in this section shall limit the rights of Mortgagee
pursuant to M.G.L. c. 183 §28A or any similar law protecting the rights of a
mortgagee with respect to future advances.



     4.15 Liability. Notwithstanding any provision in this Mortgage to
the contrary, recourse against Mortgagor under this Mortgage shall be limited to
the extent provided in the Guarantee and Collateral Agreement.



     4.16 Severability and Compliance With Usury Law. The Senior Secured
Documents are intended to be performed in accordance with, and only to the extent
permitted by, all applicable Legal Requirements. If any provision of any of the
Senior Secured Documents or the application



21









 




thereof to any person or circumstance shall, for any reason and to any extent, be invalid
or unenforceable, neither the remainder of the instrument in which such provision is
contained, nor the application of such provision to other persons or circumstances, nor
the other instruments referred to hereinabove, shall be affected thereby, but rather shall
be enforceable to the greatest extent permitted by law. It is expressly stipulated and
agreed to be the intent of Mortgagor and Mortgagee at all times to comply with the
applicable State law governing the maximum rate or amount of interest payable on or in
connection with the Guaranteed Obligations (or applicable United States federal law to the
extent that it permits Mortgagee to contract for, charge, take, reserve or receive a
greater amount of interest than under State law). If the applicable law is ever judicially
interpreted so as to render usurious any amount called for under the Senior Secured
Documents, or contracted for, charged, taken, reserved or received with respect to the
extensions of credit evidenced by the Senior Secured Documents or if acceleration of the
maturity of the Guaranteed Obligations or if any prepayment by Mortgagor results in
Mortgagor having paid any interest in excess of that permitted by law, then it is
Mortgagor’s and Mortgagee’s express intent that all excess amounts theretofore collected
by Mortgagee be credited on the principal balance due under the Senior Secured Documents
(or, if the Senior Secured Documents have been or would thereby be paid in full, refunded
to Mortgagor), and the provisions of the Senior Secured Documents immediately be deemed
reformed and the amounts thereafter collectible thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the applicable law, but so as
to permit the recovery of the fullest amount otherwise called for hereunder and
thereunder. The right to accelerate maturity of the Guaranteed Obligations does not
include the right to accelerate any interest which has not otherwise accrued on the date
of such acceleration, and Mortgagee does not intend to collect any unearned interest in
the event of acceleration. All sums paid or agreed to be paid to Mortgagee for the use,
forbearance or detention of the Guaranteed Obligations shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full term of
the Guaranteed Obligations until payment in full so that the rate or amount of interest on
account of the Guaranteed Obligations does not exceed the applicable usury ceiling.




     4.17 Release of Collateral.



          (a) Notwithstanding any provision herein to the contrary, the Mortgaged Property or
any part thereof shall be released from the security interest created by this Mortgage at
any time or from time to time upon the request of Mortgagor; provided that the
requirements of the Intercreditor Agreement have been satisfied. Upon satisfaction of such
requirements, a Responsible Officer of Mortgagee shall promptly execute, deliver and
acknowledge any necessary or proper instruments of termination, satisfaction or release to
evidence the release of any Mortgaged Property permitted to be released pursuant to this
Mortgage in each case as required by, and in accordance with, the Intercreditor Agreement.



          (b) Collateral Agent may release the Mortgaged Property or any part thereof from the
security interest created hereunder upon the sale or disposition of such Mortgaged
Property pursuant to Mortgagee’s powers, rights and duties with respect to remedies
provided herein.



     4.18 Intercreditor Agreement. In the event of any conflict between any terms
and provisions set forth in this Mortgage and those set forth in the Intercreditor
Agreement, the terms



22









 




and provisions of the Intercreditor Agreement shall supersede and control the
terms and provisions of this Mortgage.




     4.19 Time of the Essence. Mortgagor acknowledges that time is
of the essence in performing all of Mortgagor’s obligations set forth
herein.



     4.20 Counterpart Execution. This Mortgage may be executed by the
parties hereto in any number of counterparts (and be each of the parties hereof on
separate counterparts), each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the same
instrument.



ARTICLE 5– STATE SPECIFIC PROVISIONS




     5.1 Statutory Condition/Statutory Power of Sale. This Mortgage
is granted upon the STATUTORY CONDITION, for any breach of which Mortgagee shall
have the STATUTORY POWER OF SALE. This Mortgage is given for business and
commercial purposes only.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




23









 





     IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly executed
and delivered as of the day and year first above written.



	 	 	 	 	 
	 	ENEXUS NUCLEAR PILGRIM, LLC, 

a Massachusetts limited liability company

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



signature page to massachusetts mortgage















 





	 	 	 	 	 
	THE STATE OF 
	 

	 	§ 
	 

	 	 	 	§


	 	 	 	 	 
	COUNTY OF 

	 

	 	§ 






     On this ___ day of                                 
        , 200___, before me, the undersigned Notary
Public, personally appeared                
                   
                   
       , proved to me through
satisfactory evidence of identification, which was            
                   
                   
           , to be
the person whose name is signed on the preceding or attached document, and
acknowledged to me that he/she signed it voluntarily for its stated purpose,
as                    
                   
                   
    of ENEXUS NUCLEAR PILGRIM, LLC, a Massachusetts limited liability company.



	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Notary Public, State of
	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	My Commission Expires:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Printed Name of Notary
	 	 

	 	 






notary page to massachusetts mortgage














 








EXHIBIT A




DESCRIPTION OF SITE


(see attached)















 








EXHIBIT P-3




VERMONT FORM OF MORTGAGE




See attached




P-3-1









 





RECORDING REQUESTED BY AND 

WHEN RECORDED, RETURN TO:




Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10035

Attn: Samuel Zylberberg, Esq. (LW)




 





MORTGAGE, ASSIGNMENT OF RENTS AND LEASES,

FIXTURE FILING, FINANCING STATEMENT

AND SECURITY AGREEMENT




Dated as of                     , 200___




by




ENEXUS NUCLEAR VERMONT YANKEE, LLC,

a Delaware limited liability company,




as Mortgagor




for the benefit of




THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,

as Collateral Agent and Mortgagee




Relating to Premises in:




Towns of Vermont and Brattleboro, Vermont




 











 



TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE 1 - DEFINITIONS
	 	 	5	 
	1.1 Defined Terms
	 	 	5	 
	1.2 Accounting Terms
	 	 	7	 
	1.3 The Rules of Interpretation
	 	 	7	 
	ARTICLE 2 - GENERAL COVENANTS AND PROVISIONS
	 	 	7	 
	2.1 Mortgagor Performance of the Guarantee and Collateral Agreement
and the Intercreditor Agreement
	 	 	7	 
	2.2 General Representations, Covenants and Warranties
	 	 	7	 
	2.3 Compliance with Legal Requirements
	 	 	7	 
	2.4 Insurance; Application of Insurance Proceeds; Application of Eminent
Domain Proceeds
	 	 	8	 
	2.5 Assignment of Rents
	 	 	8	 
	2.6 Mortgagee Assumes no Guaranteed Obligations
	 	 	9	 
	2.7 Further Assurances
	 	 	9	 
	2.8 Acts of Mortgagor
	 	 	10	 
	2.9 After-Acquired Property
	 	 	10	 
	2.10 Mortgaged Property
	 	 	10	 
	2.11 Power of Attorney
	 	 	10	 
	2.12 Covenant to Pay
	 	 	11	 
	2.13 Security Agreement
	 	 	11	 
	ARTICLE 3 - REMEDIES
	 	 	12	 
	3.1 Acceleration of Maturity
	 	 	12	 
	3.2 Protective Advances
	 	 	12	 
	3.3 Institution of Equity Proceedings
	 	 	12	 
	3.4 Mortgagee’s Power of Enforcement
	 	 	12	 
	3.5 Mortgagee’s Right to Enter and Take Possession, Operate and Apply
Income
	 	 	13	 
	3.6 Separate Sales
	 	 	14	 
	3.7 Waiver of Appraisement, Moratorium, Valuation, Stay, Extension and
Redemption Laws
	 	 	14	 
	3.8 Receiver
	 	 	15	 
	3.9 Suits to Protect the Mortgaged Property
	 	 	15	 
	3.10 Proofs of claim
	 	 	16	 
	3.11 Mortgagor to Pay Amounts Secured Hereby on Any Default in Payment;
Application of Monies by Mortgagee
	 	 	16	 
	3.12 Delay or Omission; No Waiver
	 	 	16	 
	3.13 No Waiver of One Default to Affect Another
	 	 	16	 
	3.14 Discontinuance of Proceedings; Position of Parties Restored
	 	 	17	 
	3.15 Remedies Cumulative
	 	 	17	 
	3.16 Interest After Event of Default
	 	 	17	 
	3.17 Foreclosure; Expenses of Litigation
	 	 	18	 
	3.18 Deficiency Judgments
	 	 	18	 
	3.19 WAIVER OF JURY TRIAL
	 	 	18	 
	3.20 Exculpation of Mortgagee
	 	 	19	 






ii









 






	 	 	 	 	 
	 	 	Page
	ARTICLE 4 - GENERAL
	 	 	19	 
	4.1 Discharge
	 	 	19	 
	4.2 No Waiver
	 	 	19	 
	4.3 Extension, Rearrangement or Renewal of Guaranteed Obligations
	 	 	19	 
	4.4 Forcible Detainer
	 	 	20	 
	4.5 Waiver of Stay or Extension
	 	 	20	 
	4.6 Notices
	 	 	20	 
	4.7 Severability
	 	 	20	 
	4.8 Application of Payments
	 	 	20	 
	4.9 Governing Law
	 	 	21	 
	4.10 Entire Agreement
	 	 	21	 
	4.11 Amendments
	 	 	21	 
	4.12 Successors and Assigns
	 	 	21	 
	4.13 Renewal, Etc
	 	 	21	 
	4.14 Future Advances
	 	 	21	 
	4.15 Liability
	 	 	21	 
	4.16 Severability and Compliance With Usury Law
	 	 	21	 
	4.17 Release of Collateral
	 	 	22	 
	4.18 Intercreditor Agreement
	 	 	22	 
	4.19 Time of the Essence
	 	 	23	 
	4.20 Counterpart Execution
	 	 	23	 
	ARTICLE 5 – STATE SPECIFIC PROVISIONS
	 	 	23	 
	5.1 Power of Sale
	 	 	23	 
	5.2 Future Advances
	 	 	23	 
	5.3 MAximum Principal Amount
	 	 	23	 
	5.4 Recording of Survey Plans
	 	 	23	 
	5.5 Loan Purpose
	 	 	23	 
	5.6 Title Opinions and Title and Hazard Insurers
	 	 	24	 
	5.7 Application of Payments
	 	 	24	 
	5.8 Waiver of Attorneys’ Fees Limitation
	 	 	24	 






iii









 












MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, FIXTURE FILING,

FINANCING STATEMENT AND SECURITY AGREEMENT




     This MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, FIXTURE FILING,
FINANCING STATEMENT AND SECURITY AGREEMENT, dated as of                     , 200___
(as modified, supplemented, consolidated, extended or amended from time to time, this
“Mortgage”) by ENEXUS NUCLEAR VERMONT YANKEE, LLC, a Delaware limited liability
company, with an address at 320 Governor Hunt Road, Vernon, VT 05302
(“Mortgagor”), for the benefit of THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW
YORK, with an address at One Liberty Plaza, New York, NY 10006, as Collateral Agent for
the benefit of the Senior Secured Parties, and as mortgagee (together with its successors
and assigns, in such capacities, “Collateral Agent” and “Mortgagee”).
Capitalized terms used in this Mortgage and not otherwise defined herein shall have the
meanings ascribed to them in the Intercreditor Agreement (defined below).



Recitals




     A. ENEXUS ENERGY CORPORATION, a Delaware corporation (the “Borrower”), the
Lenders from time to time party thereto, CITIGROUP GLOBAL MARKETS, INC. and GOLDMAN SACHS
CREDIT PARTNERS, L.P., as joint book runners and joint lead arrangers (in such capacities,
collectively, the “Arrangers”), BNP PARIBAS, as administrative agent (in such
capacity and together with its successors, the “Administrative Agent”) and
Collateral Agent and MIZUHO CORPORATE BANK, LTD., as Syndication Agent (in such capacity,
the “Syndication Agent”) have entered into a Credit Agreement, dated as of
December 23, 2008 (as modified, supplemented, replaced, refinanced or amended from time to
time, the “Credit Agreement”), pursuant to which the Lenders, severally and not
jointly, have agreed to make the Loans to Borrower on the terms and conditions set forth
therein.



     B. The Borrower has requested the Lenders to extend credit hereunder in the form of
Revolving Loans and Swing Loans and Additional Permitted Secured Indebtedness made or
issued at any time and from time to time on or after the Closing Date (as defined in the
Credit Agreement) and prior to the Revolving Credit Maturity Date (as defined in the
Credit Agreement) in an aggregate principal and face amount at any time outstanding not
to exceed a maximum principal amount of TWO BILLION THREE HUNDRED MILLION AND 00/100
DOLLARS ($2,300,000,000.00) (subject to the limitations set forth in the Credit
Agreement).



     C. Subject to the terms and conditions of the Credit Agreement, Borrower may enter
into one or more (i) Specified Credit Support Facilities and (ii) Specified Commodity
Hedging Transactions.



     D. Mortgagor, Subsidiary Guarantors (as defined in the Credit Agreement), Collateral
Agent, Administrative Agent, the Borrower and the other Secured Obligations
Representatives from time to time party thereto, have entered into the Guarantee and
Collateral Agreement, dated as of [                     ___, 200___] (the “Guarantee and Collateral
Agreement”) pursuant to which Mortgagor has guaranteed the Guaranteed Obligations (as
such term is defined in the Guarantee and Collateral Agreement).



1









 





     E. Mortgagor, Borrower, the Grantors party from time to time thereto, the Hedge
Counterparty Lienholders party from time to time thereto, the Secured Obligations
Representatives party from time to time thereto, Administrative Agent and Collateral
Agent have entered into the Collateral Agency and Intercreditor Agreement, dated as of
December 23, 2008 (the “Intercreditor Agreement”) pursuant to which Collateral
Agent, as agent for the present and future holders of the Guaranteed Obligations, has
agreed to receive, hold, maintain, administer and distribute the Collateral and enforce
the Senior Collateral Documents.



     F. The execution and delivery of this Mortgage are conditions precedent to the making
of Loans (as defined in the Credit Agreement).



     G. As set forth more fully below, Mortgagor intends to secure its payment and
performance of its obligations under the Guarantee and Collateral Agreement with the
Mortgaged Property (as defined below), along with various other items of personal and
real property owned by Mortgagor.



Agreement




     NOW, THEREFORE, to secure the Mortgagor’s payment and performance of its obligations
under the Guarantee and Collateral Agreement, the Intercreditor Agreement and this
Mortgage, including but not limited to the prompt and complete payment and performance,
when and as required, due and/or payable, of all of the Guaranteed Obligations, by
acceleration or otherwise, or arising out of or in connection therewith, and in
consideration of the extension of credit to Borrower under the Credit Agreement and other
good and valuable consideration, and the covenants herein contained and in the Guarantee
and Collateral Agreement, Mortgagor, intending to be legally bound, does hereby grant,
bargain, sell, convey, warrant, assign, transfer, mortgage, pledge, set over and confirm
unto Mortgagee, for the ratable benefit of the Senior Secured Parties and their respective
successors and assigns, forever, as set forth in this Mortgage, all of Mortgagor’s estate,
right, title, interest, property, claim and demand, now or hereafter arising, in and to
the following property and rights (herein collectively called the “Mortgaged
Property”):




     (a) the lands and premises more particularly described in Exhibit A
hereto (the “Site”);




     (b) any and all easements, leases, licenses, option rights, rights-of-way and
other rights used in connection with the Site or as a means of ingress and egress
thereto and therefrom, all easements for ingress and egress and easements for
water, natural gas and sewage pipelines, running in favor of Mortgagor, or
appurtenant to the Site, and any and all sidewalks, alleys, strips and gores of
land adjacent thereto or used in connection therewith together with all and
singular the tenements, hereditaments and appurtenances thereto, and with any land
lying within the right-of-way of any streets, open or proposed, adjoining the same
(collectively, the “Easements”; and the Site and the Easements collectively
referred to herein as the “Real Property”);




     (c) all buildings, structures, fixtures and other improvements now or
hereafter erected on the Real Property (collectively, the “Improvements”);



2









 






     (d) all machinery, apparatus, equipment, fittings, fixtures,
generators, boilers, turbines and other articles of personal property,
including all goods and all goods which become fixtures, now owned or
hereafter acquired by Mortgagor and now or hereafter located on, attached to
or used in the operation of or in connection with the Real Property and/or
the Improvements, and all replacements thereof, additions thereto and
substitutions therefor, to the fullest extent permitted by applicable law
(collectively, the “Equipment”);




     (e) all raw materials, work in process and other materials used or
consumed in the construction of, or now or hereafter located on or used in
connection with, the Real Property, the Improvements and/or the Equipment,
(including, without limitation, fuel and fuel deposits, now or hereafter
located on the Real Property or elsewhere or otherwise owned by Mortgagor)
(the above items, together with the Equipment, the “Tangible
Collateral”);




     (f) all rights, powers, privileges and other benefits of Mortgagor (to
the extent assignable) now or hereafter obtained by Mortgagor from any
Governmental Authority (as such term is defined in the Credit Agreement),
including, without limitation, all Permits ((as defined in the Credit
Agreement) but excluding any of the Permits which by their terms or by
operation of law prohibit or do not allow assignment or which would become
void solely by virtue of a security interest being granted therein),
licenses, certificates and other similar instruments and documents, issued
in the name of Mortgagor, governmental actions relating to the ownership,
operation, management and use of the Real Property, Improvements, Equipment
or Tangible Collateral, and any improvements, modifications or additions
thereto;




     (g) all the lands and interests in lands, tenements and hereditaments
hereafter acquired by Mortgagor in connection with or appurtenant to the
Site, and all income, rents, rent equivalents, issues, profits, revenues
(including all oil and gas or other mineral royalties and bonuses), deposits
and other benefits from the Site and the Improvements (including all
receivables and other obligations now existing or hereafter arising or
created out of the sale, lease, sublease, license, concession or other grant
of the right of the use and occupancy of property or rendering of services
by Mortgagor or any operator or manager of the Mortgaged Property or the
commercial space located in the Improvements or acquired from others)
(collectively, the “Rents”) and all proceeds from the sale or other
disposition of the Leases (as defined herein) and the right to receive and
apply the Rents and/or any other property or rights subject to the lien
hereof, including (without limitation) all interests of Mortgagor, whether
as lessor or lessee, in any leases of land hereafter made and all rights of
Mortgagor thereunder;




     (h) any and all other property in any way associated or used in
connection with or appurtenant to the Real Property, Improvements, Equipment
or Tangible Collateral that may from time to time, by delivery or by writing
of any kind, be subjected to the lien hereof by Mortgagor or by anyone on
its behalf or with its consent, or which may come into the possession or be
subject to the control of Mortgagee pursuant to this Mortgage, being hereby
collaterally assigned to Mortgagee and subjected or added to the lien or
estate created by this Mortgage forthwith upon the acquisition thereof by
Mortgagor, as fully as if such property



3









 







were now owned by Mortgagor and were specifically described in this Mortgage
and subjected to the lien and security interest hereof; and Mortgagee is
hereby authorized to receive any and all such property as and for additional
security hereunder;




     (i) all the remainder or remainders, reversion or reversions, Rents,
revenues, issues, profits, royalties, income, proceeds and other benefits derived
from any of the foregoing, all of which are hereby assigned to Mortgagee, who is
hereby authorized to collect and receive the same, to give proper receipts and
acquittances therefor and to apply the same in accordance with the provisions of
this Mortgage;




     (j) all Proceeds, as defined in the UCC (defined below), including all
proceeds, products, offspring, Rents, profits or receipts, in whatever form,
arising from the Mortgaged Property, including (i) cash, instruments and other
property received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Mortgaged Property, (ii) the collection, sale, lease,
sublease, concession, exchange, assignment, licensing or other disposition of, or
realization upon, any item or portion of the Mortgaged Property (including all
claims of Mortgagor against third parties for loss of, damage to, destruction of,
or for proceeds payable under, or unearned premiums with respect to, policies of
insurance in respect of, any the Mortgaged Property now existing or hereafter
arising), (iii) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to Mortgagor from time to time with respect to any of the
Mortgaged Property, (iv) any and all payments (in any form whatsoever) made or due
and payable to Mortgagor from time to time in connection with the requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Mortgaged Property by any Governmental Authority (or any person acting under color
of Governmental Authority) and (v) any and all other amounts from time to time paid
or payable under or in connection with any of the Mortgaged Property;




     (k) all agreements to which Mortgagor is a party or which are assigned
to Mortgagor in any management agreement or any other document and which are
executed in connection with the construction, operation and management of the
Improvements located on the Mortgaged Property (including agreements for the sale,
lease or exchange of goods or other property and/or the performance of services by
it, in each case whether now in existence or hereafter arising or acquired) as any
such agreements have been or may be from time to time amended, supplemented or
otherwise modified;




     (l) all general intangibles, now owned or hereafter acquired by
Mortgagor, including (i) all obligations or indebtedness owing to Mortgagor from
whatever source arising, (ii) all unearned premiums accrued or to accrue under all
insurance policies for the Mortgaged Property obtained by Mortgagor, all proceeds
of the conversion, voluntary or involuntary, of any of the foregoing into cash or
liquidated claims (including proceeds of insurance, condemnation awards, and all
rights of Mortgagor to refunds of real estate taxes and assessments), (iii) all
royalties and license fees and (iv) all rights or claims in respect of refunds for
taxes paid;



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     (m) all instruments, chattel paper or letters of credit,
evidencing, representing, arising from or existing in respect of, relating
to, securing or otherwise supporting the payment of, any of the Mortgaged
Property (including promissory notes, drafts, bills of exchange and trade
acceptances) and chattel paper obtained by Mortgagor in connection with the
Mortgaged Property (including all ledger sheets, computer records and
printouts, databases, programs, books of account and files of Mortgagor
relating thereto) and such notes or other obligations of indebtedness owing
to Mortgagor from whatever source arising, in each case now owned or
hereafter acquired by Mortgagor and relating to the Mortgaged Property; and




     (n) all inventory, whether now or hereafter existing or acquired,
and which arises out of or is used in connection with, directly or
indirectly, the ownership and operation of the Mortgaged Property, all
documents representing the same and all Proceeds and products of the same,
including all goods, merchandise, raw materials, work in process and other
personal property, wherever located, now or hereafter owned or held by
Mortgagor for manufacture, processing, the providing of services or sale,
use or consumption in the operation of the Mortgaged Property (including
fuel, supplies and similar items and all substances commingled therewith or
added thereto) and rights and claims of Mortgagor against anyone who may
store or acquire the same for the account of Mortgagor, or from whom
Mortgagor may purchase the same.



     TO HAVE AND TO HOLD the said Mortgaged Property, whether now owned or held or
hereafter acquired, unto Mortgagee, its successors and assigns, pursuant to the
provisions of this Mortgage.



     IT IS HEREBY COVENANTED, DECLARED AND AGREED that the lien, security interest
or estate created by this Mortgage to secure the payment and performance of the
Guaranteed Obligations, both present and future, shall be first, prior and superior
to any Lien, security interest, reservation of title or other interest heretofore,
contemporaneously or subsequently suffered or granted by Mortgagor, its legal
representatives, successors or assigns, except Permitted Encumbrances (as defined
below) and that the Mortgaged Property is to be held, dealt with and disposed of by
Mortgagee, upon and subject to the terms, covenants, conditions, uses and
agreements set forth in this Mortgage.



     PROVIDED ALWAYS, that when as set forth in the Intercreditor Agreement and
upon the observance and performance by Mortgagor of its covenants and agreements
set forth herein and therein, then this Mortgage and the estate hereby and therein
granted shall cease and be void and shall be reconveyed as provided herein below.



ARTICLE 1- DEFINITIONS




     1.1 Defined Terms. Any term defined by reference to an agreement,
instrument or other document shall have the meaning so assigned to it whether or
not such document is in effect. In addition, for purposes of this Mortgage, the
following definitions shall apply:



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“Credit Agreement” has the meaning ascribed to it in Recital A hereof.




“Easements” has the meaning ascribed to it in the
Granting Clauses. 


“Equipment” has the meaning
ascribed to it in the Granting Clauses.


 “Event of
Default” has the meaning ascribed to it in the Credit
Agreement.




“GAAP” shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which
are in effect from time to time.




“Guarantee and Collateral Agreement” has the meaning ascribed
to it in Recital D hereof.




“Guaranteed Obligations” has the meaning ascribed to
it in the Guarantee and Collateral Agreement.




“Improvements”
has the meaning ascribed to it in the Granting Clauses.


“Intercreditor Agreement” has the meaning ascribed to it in Recital E
hereof.


“Leases” has the meaning ascribed to it in Section 2.5.




“Lien” shall mean any mortgage, deed of trust, deed to secure
debt, lien (statutory or otherwise), pledge, hypothecation,
encumbrance, restriction, collateral assignment, charge or security
interest in, on or of the Mortgaged Property.




“Legal Requirements” has the meaning ascribed to it in Section
2.3.


“Mortgaged Property” has the meaning ascribed to it in the Granting
Clauses.


“Permitted Encumbrances” has the meaning ascribed to it in Section
2.2.



“Proceeds”
has the meaning ascribed to it in the Granting Clauses.


“Real Property” has the meaning ascribed to it in the Granting
Clauses.




“Site”
has the meaning ascribed to it in the Granting Clauses.


“State”
means the State of Vermont.


“Tangible Collateral” has the meaning ascribed to it in the Granting
Clauses.



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“UCC” shall mean Uniform Commercial Code of New York or, if
the creation, perfection and enforcement of any security interest
herein granted is governed by the laws of the State, then, as to the
matter in question, the Uniform Commercial Code in effect in the
State.



     1.2 Accounting Terms. As used herein and in any certificate or other
document made or delivered pursuant hereto, accounting terms not defined herein
shall have the respective meanings given to them under GAAP.



     1.3 The Rules of Interpretation. The rules of interpretation as set
forth in the Intercreditor Agreement shall govern the terms, conditions and
provisions hereof. In the event of any conflict between those set forth in this
Mortgage and the Intercreditor Agreement, the latter shall be deemed controlling
and shall preempt the former.



ARTICLE 2- GENERAL COVENANTS AND PROVISIONS




     2.1 Mortgagor Performance of the Guarantee and Collateral Agreement and
the Intercreditor Agreement. Mortgagor shall perform, observe and comply with
each and every provision hereof, and with each and every provision contained in the
Guarantee and Collateral Agreement and the Intercreditor Agreement and shall
promptly pay to Mortgagee, when payment shall become due under the Guarantee and
Collateral Agreement, the amounts provided for thereunder with interest thereon, if
any, and all other sums required to be paid by Mortgagor under this Mortgage and
the Guarantee and Collateral Agreement at the time and in the manner provided
herein and therein.



     2.2 General Representations, Covenants and Warranties. Mortgagor
represents, covenants and warrants that as of the date hereof: (a) Mortgagor has
good and marketable fee simple title to and is the sole owner of the Site and
Improvements, free and clear of all encumbrances except the permitted encumbrances
set forth on Schedule B to the applicable title policy, if any (“Permitted
Encumbrances”); (b) All Easements are and will remain valid, subsisting and in
full force and effect; (c) Mortgagor has the right to hold, occupy and enjoy its
interest in the Mortgaged Property, and has good right, full power and lawful
authority to mortgage and pledge the same as provided herein and prior to the
occurrence and continuance of an Event of Default, Mortgagor may at all times
peaceably and quietly enter upon, hold, occupy, use and enjoy the Mortgaged
Property in accordance with the terms hereof; (d) all costs arising from
construction of any improvements, the performance of any labor and the purchase of
all Mortgaged Property have been or shall be paid when due; (e) the Site has access
for ingress and egress to dedicated street(s); (f) no material part of the
Mortgaged Property has been damaged, destroyed, condemned or abandoned; and (g)
Mortgagor will warrant and defend the title to the Real Property against all claims
and demands, except as otherwise expressly provided in this Mortgage.



     2.3 Compliance with Legal Requirements. Mortgagor shall promptly
comply in all material respects with all governmental statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities affecting either the Mortgaged



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Property or any part thereof or the construction, use, alteration or operation
thereof, or any part thereof (whether now or hereafter enacted and in force), and
all Permits, licenses and authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any instruments,
at any time in force affecting the Mortgaged Property or any part thereof
(collectively “Legal Requirements”) relating to its use and occupancy of
the Mortgaged Property, whether or not such compliance requires work or remedial
measures that are ordinary or extraordinary, foreseen or unforeseen, structural or
nonstructural, or that interfere with the use or enjoyment of the Mortgaged
Property.




     2.4 Insurance; Application of Insurance Proceeds; Application of Eminent
Domain Proceeds.



          2.4.1 Mortgagor shall at its sole expense obtain for, deliver to (or deliver
certificates evidencing), assign and maintain for the benefit of Mortgagee, during
the term of this Mortgage, insurance policies insuring the Mortgaged Property (to
the extent insurable) and liability insurance policies, all in accordance with the
requirements of the Guarantee and Collateral Agreement. Mortgagor shall pay
promptly when due any premiums on such insurance policies and on any renewals
thereof. In the event of the foreclosure of this Mortgage or any other transfer of
the Mortgaged Property in extinguishment of the indebtedness and other sums secured
hereby, all right, title and interest of Mortgagor in and to all casualty insurance
policies, and renewals thereof then in force, shall pass to the purchaser or
grantee in connection therewith. In addition, if any portion of the Mortgaged
Property is located in an area identified by the Federal Emergency Management
Agency or any other Governmental Authority as an area having special flood hazards
and in which flood insurance has been made available under the National Flood
Insurance Act of 1968 (or any amendment or successor act thereto), then Mortgagor
shall maintain, or cause to be maintained, with a financially sound and reputable
insurer, flood insurance in an amount sufficient to comply with all applicable
rules and regulations promulgated pursuant to the National Flood Insurance Act of
1968 (or any amendment or successor act thereto).




          2.4.2 All insurance proceeds and all awards payable with respect to any taking
of the Real Property or Improvements shall be paid and/or shall be applied in
accordance with the provisions of the Senior Secured Documents.




     2.5 Assignment of Rents. Mortgagor unconditionally and absolutely
assigns to Mortgagee all of Mortgagor’s right, title and interest in and to: all
leases, subleases, occupancy agreements, licenses, rental contracts and other
similar agreements now or hereafter existing relating to the use or occupancy of
the Mortgaged Property, together with all guarantees, modifications, extensions and
renewals thereof; and all Rents, issues, profits, income and proceeds due or to
become due from tenants of the Mortgaged Property (the “Leases”), including
rentals and all other payments of any kind under any Leases now existing or
hereafter entered into, together with all deposits (including security deposits) of
tenants thereunder. This is an absolute assignment to Mortgagee and not an
assignment as security for the performance of the obligations under the Guarantee
and Collateral Agreement, or any other indebtedness. Subject to the provisions
below, Mortgagee shall have the right, power and authority to: notify any person
that the Leases have been assigned to Mortgagee and that all Rents and other
obligations are to be paid directly to Mortgagee,



8









 




whether or not Mortgagee has commenced or completed foreclosure or taken possession
of the Mortgaged Property; settle compromise, release, extend the time of payment
of, and make allowances, adjustments and discounts of any Rents or other
obligations under the Leases; enforce payment of Rents and other rights under the
Leases, prosecute any action or proceeding, and defend against any claim with
respect to Rents and Leases; enter upon, take possession of and operate the
Mortgaged Property; lease all or any part of the Mortgaged Property; and/or perform
any and all obligations of Mortgagor under the Leases and exercise any and all
rights of Mortgagor therein contained to the full extent of Mortgagor’s rights and
obligations thereunder, with or without the bringing of any action or the
appointment of a receiver. At Mortgagee’s request, Mortgagor shall deliver a copy
of this Mortgage to each tenant under a Lease. Mortgagor irrevocably directs any
tenant, without any requirement for notice to or consent by Mortgagor, to comply
with all demands of Mortgagee under this Section and to turn over to Mortgagee on
demand all Rents which it receives. Mortgagee shall have the right, but not the
obligation, to use and apply all Rents received hereunder in such order and such
manner as Mortgagee may determine in accordance with the Intercreditor Agreement.
Notwithstanding that this is an absolute assignment of the Rents and Leases and not
merely the collateral assignment of, or the grant of a lien or security interest in
the Rents and Leases, Mortgagee grants to Mortgagor a revocable license to collect
and receive the Rents and to retain, use and enjoy such Rents. Such license may be
revoked by Mortgagee only upon the occurrence and during the continuance of any
Event of Default. Mortgagor shall apply any Rents which it receives to the payment
due under the Guaranteed Obligations, taxes, assessments, water charges, sewer
Rents and other governmental charges levied, assessed or imposed against the
Mortgaged Property, insurance premiums, and other obligations of lessor under the
Leases before using such proceeds for any other purpose.




     2.6 Mortgagee Assumes No Guaranteed Obligations. It is expressly
agreed that, anything herein contained to the contrary notwithstanding, Mortgagor
shall remain obligated under all agreements which are included in the definition of
“Mortgaged Property” and shall perform all of its obligations thereunder in
accordance with the provisions thereof, and neither Mortgagee nor any of the Senior
Secured Parties shall have any obligation or liability with respect to such
obligations of Mortgagor, nor shall Mortgagee or any of the Senior Secured Parties
be required or obligated in any manner to perform or fulfill any obligations or
duties of Mortgagor under such agreements, or to make any payment or to make any
inquiry as to the nature or sufficiency of any payment received by it, or to
present or file any claim or take any action to collect or enforce the payment of
any amounts which have been assigned to Mortgagee hereunder or to which Mortgagee
or the Senior Secured Parties may be entitled at any time or times.



     2.7 Further Assurances. Mortgagor shall, from time to time, at its
expense, promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or that Mortgagee may reasonably
request, in order to perfect and continue the lien and security interest granted
hereby and to enable Mortgagee to obtain the full benefits of the lien and security
interest granted or intended to be granted hereby. Mortgagor shall keep the
Mortgaged Property free and clear of all Liens, other than Permitted Encumbrances.
Without limiting the generality of the foregoing, Mortgagor shall execute and
record or file this Mortgage and each amendment hereto, and such financing or
continuation statements, or amendments thereto, and such other instruments,
endorsements or notices, as may be necessary, or as Mortgagee may reasonably
request, in order to perfect and preserve the lien and security interest granted or
purported to be



9









 




granted hereby. Mortgagor hereby authorizes Mortgagee to file one or more financing
statements or continuation statements, and amendments thereto, relative to all or any part
of the Mortgaged Property necessary to preserve or protect the lien and security interest
granted hereby without the signature of Mortgagor where permitted by law.




     2.8 Acts of Mortgagor. Mortgagor hereby represents and warrants that it has
not mortgaged, hypothecated, assigned or pledged and hereby covenants that it will not
mortgage, hypothecate, assign or pledge, so long as this Mortgage shall remain in effect,
any of its right, title or interest in and to the Mortgaged Property or any part thereof,
to anyone other than Mortgagee.



     2.9 After-Acquired Property. Any and all of the Mortgaged Property which is
hereafter acquired shall immediately, without any further conveyance, assignment or act on
the part of Mortgagor or Mortgagee, become and be subject to the lien and security
interest of this Mortgage as fully and completely as though specifically described herein.
If and whenever from time to time Mortgagor shall hereafter acquire any real property or
interest therein which constitutes or is intended to constitute part of the Mortgaged
Property hereunder, Mortgagor shall promptly give notice thereof to Mortgagee and
Mortgagor shall forthwith execute, acknowledge and deliver to Mortgagee a supplement to
this Mortgage in form and substance reasonably satisfactory to Mortgagee subjecting the
property so acquired to the lien of this Mortgage. At the same time, if Mortgagee so
requests, Mortgagor shall deliver to Mortgagee either (i) an endorsement to the lender’s
policy of title insurance issued to Mortgagee insuring the lien of this Mortgage, or (ii)
a new lender’s title policy (which shall include tie in coverage relating to the lender’s
policy described in (i), above), in each case which shall insure to Mortgagee in form and
substance reasonably satisfactory to Mortgagee that the lien of this Mortgage as insured
under such title insurance policy or policies encumbers such later acquired property and
that Mortgagor’s title to such property meets all of the applicable requirements of the
Senior Secured Documents with respect to title to Mortgagor’s real property interests.



     2.10 Mortgaged Property. Mortgagor shall observe all applicable covenants,
easements and other restrictions of record with respect to the Site, the Easements or to
any other part of the Mortgaged Property, in all material respects.



     2.11 Power of Attorney. Mortgagor does hereby irrevocably constitute and
appoint Mortgagee its true and lawful attorney (which appointment is coupled with an
interest), with full power of substitution, for Mortgagor and in the name, place and stead
of Mortgagor or in Mortgagee’s own name, for so long as any of the Guaranteed Obligations
are outstanding, to ask, demand, collect, receive, receipt for and sue for any and all
Rents, income and other sums which are assigned hereunder with full power to endorse the
name of Mortgagor on all instruments given in payment or in part payment thereof, to
settle, adjust or compromise any claims thereunder as fully as Mortgagor itself could do
and in its discretion file any claim or take any action or proceeding, either in its own
name or in the name of Mortgagor or otherwise, which Mortgagee may deem necessary or
appropriate to protect and preserve the right, title and interest of Mortgagee in and to
such Rents, income and other sums and the security intended to be afforded hereby;
provided that Mortgagee shall not exercise such rights unless an Event of Default has
occurred and is continuing.



10









 





     2.12 Covenant to Pay. If an Event of Default has occurred and is
continuing, then Mortgagee, among its other rights and remedies, shall have the
right, but not the obligation, to pay, observe or perform the obligations of
Mortgagor herein, in whole or in part, and with such modifications as Mortgagee
reasonably shall deem advisable. All sums, including, without limitation,
reasonable attorneys fees’, so expended or incurred by Mortgagee by reason of the
default of Mortgagor, or by reason of the bankruptcy or insolvency of Mortgagor, as
well as, without limitation, sums expended or incurred to sustain the lien or
estate of this Mortgage or its priority, or to protect or enforce any rights of
Mortgagee hereunder, or to recover any of the Guaranteed Obligations, or for
repairs, maintenance, alterations, replacements or improvements thereto or for the
protection thereof, or for real estate taxes or other governmental assessments or
charges against any part of the Mortgaged Property, or premiums for insurance of
the Mortgaged Property, shall be entitled to the benefit of the lien on the
Mortgaged Property as of the date of the recording of this Mortgage, shall be
deemed to be added to and be part of the Guaranteed Obligations secured hereby,
whether or not the result thereof causes the total amount of the Guaranteed
Obligations to exceed the stated amount set forth in the recitals of this Mortgage,
and shall be guaranteed by Mortgagor as provided in the Guarantee and Collateral
Agreement.



     2.13 Security Agreement.



          2.13.1 This Mortgage shall also be a security agreement between Mortgagor and
Mortgagee covering the Mortgaged Property constituting personal property or
fixtures (hereinafter collectively called “UCC Collateral”) governed by the
UCC as such UCC Collateral may be more specifically set forth in any financing
statement delivered in connection with this Mortgage, and, as further security for
the payment and performance of the Guaranteed Obligations, Mortgagor hereby grants
to Mortgagee a security interest in such portion of the Mortgaged Property to the
full extent that the Mortgaged Property may be subject to the UCC. In addition to
Mortgagee’s other rights hereunder, Mortgagee shall have all rights of a secured
party under the UCC, as is in effect in the relevant jurisdiction, or other
applicable laws or in equity. Mortgagor hereby authorizes the filing of, and if
requested by Mortgagee, Mortgagor shall execute and deliver to Mortgagee, all
financing statements and such further assurances that may be reasonably required by
Mortgagee to establish, create, perfect (to the extent the same can be achieved by
the filing of a financing statement) and maintain the validity and priority of
Mortgagee’s security interests, and Mortgagor shall bear all reasonable costs
thereof, including all UCC searches. Except as otherwise provided in the Guarantee
and Collateral Agreement, if Mortgagee should dispose of any of the Mortgaged
Property comprising the UCC Collateral pursuant to the UCC, ten (10) days’ prior
written notice by Mortgagee to Mortgagor shall be deemed to be reasonable notice;
provided, however, that Mortgagee may dispose of such property in accordance with
the foreclosure procedures of this Mortgage in lieu of proceeding under the UCC.
Mortgagee may from time to time execute and deliver at Mortgagor’s expense all
continuation statements, termination statements, amendments, partial releases, or
other instruments relating to all financing statements by and between Mortgagor and
Mortgagee. Except as otherwise provided in the Guarantee and Collateral Agreement,
but otherwise subject to the provisions thereof, if an Event of Default shall occur
and be continuing, (a) Mortgagee, in addition to any other rights and remedies
which it may have, may exercise immediately and without demand to the extent
permitted by law, any and all rights and remedies granted to a secured party under
the UCC, as in effect in any relevant jurisdiction, including, without limiting



11









 







the generality of the foregoing, the right to take possession of the UCC Collateral
or any part thereof, and to take such other measures as Mortgagee may deem
necessary for the care, protection and preservation of such collateral and (b) upon
request or demand of Mortgagee, Mortgagor shall at its expense, assemble the UCC
Collateral and make it available to Mortgagee at a convenient place acceptable to
Mortgagee. Mortgagor shall pay to Mortgagee on demand any and all expenses,
including reasonable attorneys’ fees and disbursements incurred or paid by
Mortgagee in protecting the interest in the UCC Collateral and in enforcing
Mortgagee’s rights hereunder with respect to such UCC Collateral.



          2.13.2 Mortgagor and the Mortgagee agree, to the extent permitted by law,
that: (i) this Mortgage upon recording or registration in the real estate records
of the proper office shall constitute a financing statement filed as a “fixture
filing” within the meaning of Sections 9-102(a)(40) and 9-502(c) of the UCC; (ii)
all or a part of the Mortgaged Property are or are to become fixtures; and (iii)
the addresses of Mortgagor and Mortgagee are as set forth in the first paragraph of
this Mortgage and (iv) Mortgagor’s organizational identification number is 3137546.



ARTICLE 3- REMEDIES




     3.1 Acceleration of Maturity. As provided in each of the Senior
Secured Documents if an Event of Default shall have occurred and is continuing, the
applicable Secured Debt Representative may declare the Guaranteed Obligations with
respect to the applicable Series of Guaranteed Obligations to be due and payable
immediately, and upon such declaration such Guaranteed Obligations and other sums
shall immediately become due and payable without demand, presentment, notice or
other requirements of any kind (all of which Mortgagor waives).



     3.2 Protective Advances. If an Event of Default shall have occurred
and is continuing, then without thereby limiting Mortgagee’s other rights or
remedies, waiving or releasing any of Mortgagor’s obligations, or imposing any
obligation on Mortgagee, Mortgagee may either advance any amount owing or perform
any or all actions that Mortgagee considers necessary or appropriate to cure such
default. All such advances shall constitute “Protective Advances.” No sums advanced
or performance rendered by Mortgagee shall cure, or be deemed a waiver of, any
Event of Default.



     3.3 Institution of Equity Proceedings. If an Event of Default occurs
and is continuing, Mortgagee, may institute an action, suit or proceeding in equity
for specific performance of this Mortgage and the Guarantee and Collateral
Agreement, both of which shall be specifically enforceable by injunction or other
equitable remedy.



     3.4 Mortgagee’s Power of Enforcement.



          (a) If an Event of Default occurs and is continuing, Mortgagee shall be
entitled, at its option and in its sole and absolute discretion, to institute a
proceeding or proceedings, judicial or nonjudicial, by advertisement or otherwise,
for the complete foreclosure of this Mortgage in which case the Mortgaged Property
or any interest therein may be sold for cash or upon credit in one or more parcels
or in several interests or portions and in any order or manner in accordance with
the laws of the jurisdiction in which such Mortgaged Property is located, and




12









 




sell for cash or upon credit the Mortgaged Property or any part thereof and all
estate, claim, demand, right, title and interest of Mortgagor therein and rights of
redemption thereof, pursuant to the power of sale contained herein or otherwise, at
one or more sales, as an entity or in parcels, at such time and place, upon such
terms and after such notice thereof as may be required or permitted by the laws of
the State. Mortgagee may require Mortgagor to pay monthly in advance to Mortgagee,
or any receiver appointed to collect the Rents, the fair and reasonable rental
value for the use and occupation of any portion of the Mortgaged Property occupied
by Mortgagor and require Mortgagor to vacate and surrender possession to Mortgagee
of the Mortgaged Property or to such receiver and, in default thereof, evict
Mortgagor by summary proceedings or otherwise.




          (b) If any Event of Default occurs and is continuing, Mortgagee may, either
with or without entry or taking possession of the Mortgaged Property, and without
regard to whether or not the indebtedness and other sums secured hereby shall be
due and without prejudice to the right of Mortgagee thereafter to bring an action
or proceeding to foreclose or any other action for any default existing at the time
such earlier action was commenced, proceed by any appropriate action or proceeding:
(a) to enforce payment of the Guaranteed Obligations, to the extent permitted by
law, or the performance of any term hereof or any other right; (b) to foreclose
this Mortgage in any manner provided by law for the foreclosure of mortgages on
real property and to sell, as an entirety or in separate lots or parcels, the
Mortgaged Property or any portion thereof pursuant to the laws of the State or
under the judgment or decree of a court or courts of competent jurisdiction, and
Mortgagee shall be entitled to recover in any such proceeding all costs and
expenses incident thereto, including reasonable attorneys’ fees in such amount as
shall be awarded by the court; (c) to the extent not prohibited by the laws of the
State to exercise any or all of the rights and remedies available to it under the
Senior Secured Documents; and (d) to pursue any other remedy available to it.
Mortgagee shall take action either by such proceedings or by the exercise of its
powers with respect to entry or taking possession, or both, as Mortgagee may
determine.




          (c) The remedies described in this Section may be exercised with respect to
all or any portion of the UCC Collateral, either simultaneously with the sale of
any real property encumbered hereby or independent thereof. Mortgagee shall at any
time be permitted to proceed with respect to all or any portion of the UCC
Collateral in any manner permitted by the UCC. Mortgagor agrees that Mortgagee’s
inclusion of all or any portion of the UCC Collateral in a sale or other remedy
exercised with respect to the real property encumbered hereby, as permitted by the
UCC, is a commercially reasonable disposition of such property.




     3.5 Mortgagee’s Right to Enter and Take Possession, Operate and Apply
Income.



          (a) If an Event of Default occurs and is continuing, Mortgagor, upon demand of
Mortgagee, shall forthwith surrender to Mortgagee the actual possession and, if and
to the extent permitted by law, Mortgagee itself, or by such officers or agents as
it may appoint, may enter and take possession of all of the Mortgaged Property,
including the Tangible Collateral, without liability for trespass, damages or
otherwise, and may exclude Mortgagor and its agents and employees wholly therefrom
and may have joint access with Mortgagor to the books, papers and accounts of
Mortgagor.




13









 





          (b) If an Event of Default has occurred and is continuing and Mortgagor shall
for any reason fail to surrender or deliver the Mortgaged Property or any part
thereof after Mortgagee’s demand, Mortgagee may obtain a judgment or decree
conferring on Mortgagee the right to immediate possession or requiring Mortgagor to
deliver immediate possession of all or part of such property to Mortgagee and
Mortgagor hereby specifically consents to the entry of such judgment or decree.
Mortgagor shall pay to Mortgagee, upon demand, all costs and expenses of obtaining
such judgment or decree and reasonable compensation to Mortgagee, their attorneys
and agents, and all such costs, expenses and compensation shall, until paid, be
secured by the lien of this Mortgage.




          (c) Upon every such entering upon or taking of possession, Mortgagee may
hold, store, use, operate, manage and control the Mortgaged Property and conduct
the business thereof, and, from time to time in its sole and absolute discretion
and without being under any duty to so act:




               (1) make all necessary and proper maintenance, repairs, renewals and
replacements thereto and thereon, and all necessary additions, betterments and
improvements thereto and thereon and purchase or otherwise acquire fixtures,
personalty and other property in connection therewith;



               (2) insure or keep the Mortgaged Property insured;



               (3) manage and operate the Mortgaged Property and exercise all the rights and
powers of Mortgagor in their name or otherwise with respect to the same;



               (4) enter into agreements with others to exercise the powers herein granted
Mortgagee, all as Mortgagee from time to time may determine; and shall apply the
monies so received by Mortgagee in such priority as provided by the Intercreditor
Agreement; and/or



               (5) rent or sublet the Mortgaged Property or any portion thereof for any
purpose permitted by this Mortgage.



          Mortgagee shall surrender possession of the Mortgaged Property to Mortgagor
(i) as may be required by law or court order, or (ii) when all amounts under any of
the terms of the Senior Secured Documents, including this Mortgage, shall have been
paid current and all Events of Default have been cured or waived. The same right of
taking possession, however, shall exist if any subsequent Event of Default shall
occur and be continuing.




     3.6 Separate Sales. To the extent permitted by law or Legal
Requirements upon and during the continuation of an Event of Default, the
Mortgaged Property may be sold in one or more parcels and in such manner and order
as Mortgagee, in its sole discretion, may elect, it being expressly understood and
agreed that the right of sale arising out of any Event of Default shall not be
exhausted by any one or more sales.



     3.7 Waiver of Appraisement, Moratorium, Valuation, Stay, Extension and
Redemption Laws. Mortgagor agrees to the full extent permitted by law that if
an Event of Default occurs and is continuing, neither Mortgagor nor anyone
claiming through or under it shall or will set



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up, claim or seek to take advantage of any appraisement, moratorium, valuation, stay,
extension or redemption laws now or hereafter in force, in order to prevent or hinder the
enforcement or foreclosure of this Mortgage or the absolute sale of the Mortgaged Property
or any portion thereof or the final and absolute putting into possession thereof,
immediately after such sale, of the purchasers thereof, and Mortgagor for itself and all
who may at any time claim through or under it, hereby waives, to the full extent that it
may lawfully so do, the benefit of all such laws, and any and all right to have the assets
comprising the Mortgaged Property marshalled upon any foreclosure of the lien hereof and
agrees that Mortgagee or any court having jurisdiction to foreclose such lien may sell the
Mortgaged Property in part or as an entirety.




     3.8 Receiver. If an Event of Default occurs and is continuing, Mortgagee, to
the extent permitted by law, and without regard to the value, adequacy or occupancy of the
security for the indebtedness and other sums secured hereby, shall be entitled as a matter
of right if it so elects to the appointment of a receiver to enter upon and take
possession of the Mortgaged Property and to collect all earnings, revenues and receipts
and apply the same as the court may direct, and such receiver may be appointed by any
court of competent jurisdiction upon application by Mortgagee. To the extent permitted by
law or Legal Requirement, Mortgagee may have a receiver appointed without notice to
Mortgagor or any third party, and Mortgagee may waive any requirement that the receiver
post a bond. To the extent permitted by law or Legal Requirement, Mortgagee shall have the
power to designate and select the Person who shall serve as the receiver and to negotiate
all terms and conditions under which such receiver shall serve. To the extent permitted by
law or Legal Requirement, any receiver appointed on Mortgagee’s behalf may be an Affiliate
of Mortgagee. The reasonable expenses, including receiver’s fees, reasonable attorneys’
fees, costs and agents’ compensation, incurred pursuant to the powers herein contained
shall be secured by this Mortgage. The right to enter and take possession of and to manage
and operate the Mortgaged Property and to collect all earnings, revenues and receipts,
whether by a receiver or otherwise, shall be cumulative to any other right or remedy
available to Mortgagee under this Mortgage, the Intercreditor Agreement, the Guarantee and
Collateral Agreement or otherwise available to Mortgagee and may be exercised concurrently
therewith or independently thereof, but such rights shall be exercised in a manner which
is otherwise in accordance with and consistent with the Intercreditor Agreement. Mortgagee
shall be liable to account only for such earnings, revenues and receipts (including,
without limitation, security deposits) actually received by Mortgagee, whether received
pursuant to this section or any other provision hereof. Notwithstanding the appointment of
any receiver or other custodian, Mortgagee shall be entitled as pledgee to the possession
and control of any cash, deposits, or instruments at the time held by, or payable or
deliverable under the terms of this Mortgage to, Mortgagee.



     3.9 Suits to Protect the Mortgaged Property. Mortgagee shall have the power
and authority to institute and maintain any suits and proceedings as Mortgagee, in its
sole and absolute discretion, may deem advisable (a) to prevent any impairment of the
Mortgaged Property by any acts which may be unlawful or in violation of this Mortgage, (b)
to preserve or protect its interest in the Mortgaged Property, or (c) to restrain the
enforcement of or compliance with any legislation or other Legal Requirements that may be
unconstitutional or otherwise invalid, if the enforcement of or compliance with such
enactment, rule or order might impair the security hereunder or be prejudicial to
Mortgagee’s interest.



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     3.10 Proofs of Claim. In the case of any receivership, insolvency,
reorganization, arrangement, adjustment, composition or other judicial proceedings
affecting Mortgagor, any Affiliate or any guarantor, co-maker or endorser of any of
Mortgagor’s obligations, its creditors or its property, Mortgagee, to the extent
permitted by law, shall be entitled to file such proofs of claim or other documents
as it may deem necessary or advisable in order to have its claims allowed in such
proceedings for the entire amount due and payable by Mortgagor under the Senior
Secured Documents, at the date of the institution of such proceedings, and for any
additional amounts which may become due and payable by Mortgagor after such date.



     3.11 Mortgagor to Pay Amounts Secured Hereby on Any Default in
Payment; Application of Monies by Mortgagee.



          (a) In case of a foreclosure sale of all or any part of the Mortgaged Property
and of the application of the proceeds of sale to the payment of the sums secured
hereby, to the extent permitted by law, Mortgagee shall be entitled to enforce
payment from Mortgagor of any additional amounts then remaining due and unpaid and
to recover judgment against Mortgagor for any portion thereof remaining unpaid,
with interest at the interest rate on the Notes.




          (b) Mortgagor hereby agrees, to the extent permitted by law, that no recovery
of any such judgment by Mortgagee or other action by Mortgagee and no attachment or
levy of any execution upon any of the Mortgaged Property or any other property
shall in any way affect the Lien and security interest of this Mortgage upon the
Mortgaged Property or any part thereof or any Lien, rights, powers or remedies of
Mortgagee hereunder, but such Lien, rights, powers and remedies shall continue
unimpaired as before.




          (c) Any monies collected or received by Mortgagee under this Section shall be
first applied as set forth in the Intercreditor Agreement.




     3.12 Delay or Omission; No Waiver. No delay or omission of Mortgagee
to exercise any right, power or remedy upon any Event of Default shall exhaust or
impair any such right, power or remedy or shall be construed to waive any such
Event of Default or to constitute acquiescence therein. Every right, power and
remedy given to Mortgagee whether contained herein or in the Intercreditor
Agreement or the Guarantee and Collateral Agreement or otherwise available to
Mortgagee may be exercised from time to time and as often as may be deemed
expedient by Mortgagee.



     3.13 No Waiver of One Default to Affect Another. No waiver of any
Event of Default hereunder shall extend to or affect any subsequent or any other
Event of Default then existing, or impair any rights, powers or remedies consequent
thereon. If Mortgagee (a) grants forbearance or an extension of time for the
payment of any sums secured hereby; (b) takes other or additional security for the
payment thereof; (c) waives or does not exercise any right granted in this
Mortgage, the Intercreditor Agreement or Guarantee and Collateral Agreement; (d)
releases any part of the Mortgaged Property from the lien or security interest of
this Mortgage or any other instrument securing the Guaranteed Obligations; (e)
consents to the filing of any map, plat or replat of the Real Property or any part
thereof; (f) consents to the granting of any easement on the Real Property; or (g)
makes or consents to any agreement changing the terms of this Mortgage or the other
Senior



16









 




Secured Documents or the Intercreditor Agreement subordinating the lien or any
charge hereof, no such act or omission shall release, discharge, modify, change or
affect the liability under this Mortgage or the Guarantee and Collateral Agreement
or otherwise of Mortgagor, or any subsequent purchaser of the Mortgaged Property or
any part thereof or any maker, co-signer, surety or guarantor with respect to any
other matters not addressed by such act or omission. No such act or omission shall
preclude Mortgagee from exercising any right, power or privilege herein granted or
intended to be granted in case of any Event of Default then existing, nor, except
as otherwise expressly provided in an instrument or instruments executed by
Mortgagee, shall the lien or security interest of this Mortgage be altered thereby,
except to the extent expressly provided in such acts or omissions. In the event of
the sale or transfer by operation of law or otherwise of all or any part of the
Mortgaged Property, Mortgagee, without notice to any person, firm or corporation,
is hereby authorized and empowered to deal with any such vendee or transferee with
reference to the Mortgaged Property or the indebtedness secured hereby, or with
reference to any of the terms or conditions hereof, as fully and to the same extent
as it might deal with the original parties hereto and without in any way releasing
or discharging any of the liabilities or undertakings hereunder, or waiving its
right to declare such sale or transfer an Event of Default as provided herein.
Notwithstanding anything to the contrary contained in this Mortgage or any other
Security Document, (i) in the case of any non-monetary Event of Default, Mortgagee
may continue to accept payments due hereunder without thereby waiving the existence
of such or any other Event of Default and (ii) in the case of any monetary Event of
Default, Mortgagee may accept partial payments of any sums due hereunder without
thereby waiving the existence of such Event of Default if the partial payment is
not sufficient to completely cure such Event of Default.




     3.14 Discontinuance of Proceedings; Position of Parties Restored. If
Mortgagee shall have proceeded to enforce any right or remedy under this Mortgage
by foreclosure, entry of judgment or otherwise and such proceedings shall have been
discontinued or abandoned for any reason, or such proceedings shall have resulted
in a final determination adverse to Mortgagee, then and in every such case
Mortgagor and Mortgagee shall be restored to their former positions and rights
hereunder, and all rights, powers and remedies of Mortgagee shall continue as if no
such proceedings had occurred or had been taken.



     3.15 Remedies Cumulative. Subject to the provisions of Section
4.15 hereof, no right, power or remedy, including without limitation remedies
with respect to any security for the Guaranteed Obligations, conferred upon or
reserved to Mortgagee by this Mortgage or any other Senior Secured Document is
exclusive of any other right, power or remedy, but each and every such right, power
and remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or under any other Senior Secured Document,
now or hereafter existing at law, in equity or by statute, and Mortgagee shall be
entitled to resort to such rights, powers, remedies or security as Mortgagee shall
in its sole and absolute discretion deem advisable.



     3.16 Interest After Event of Default. If an Event of Default shall
have occurred and is continuing, all sums outstanding and unpaid under the Senior
Secured Documents, including this Mortgage, shall, at Mortgagee’s option, subject
to the provisions of the Guarantee and Collateral Agreement and/or the
Intercreditor Agreement, bear interest at the interest rate on the applicable
Series of Guaranteed Obligations, as provided in the applicable Senior Secured
Documents, until



17









 




such Event of Default has been cured. Mortgagor’s obligation to pay such interest
shall be secured by this Mortgage.




     3.17 Foreclosure; Expenses of Litigation. If Mortgagee forecloses,
reasonable attorneys’ fees for services in the supervision of said foreclosure
proceeding shall be allowed to Mortgagee as part of the foreclosure costs. In the
event of foreclosure of the lien hereof, there shall be allowed and included as
additional indebtedness all expenditures and expenses which may be paid or incurred
by or on behalf of Mortgagee for reasonable attorneys’ fees, appraisers’ fees,
outlays for documentary and expert evidence, stenographers’ charges, publication
costs, and costs (which may be estimated as to items to be expended after
foreclosure sale or entry of the decree) of procuring all such abstracts of title,
title searches and examinations, title insurance policies and guarantees, and
similar data and assurances with respect to title as Mortgagee may deem reasonably
necessary either to prosecute such suit or to evidence to a bidder at any sale
which may be had pursuant to such decree the true condition of the title to or the
value of the Mortgaged Property or any portion thereof. All expenditures and
expenses of the nature in this section mentioned, and such expenses and fees as may
be incurred in the protection of the Mortgaged Property and the maintenance of the
lien and security interest of this Mortgage, including the reasonable fees of any
attorney employed by Mortgagee in any litigation or proceeding affecting this
Mortgage or any other Senior Secured Document, the Mortgaged Property or any
portion thereof, including, without limitation, civil, probate, appellate and
bankruptcy proceedings, or in preparation for the commencement or defense of any
proceeding or threatened suit or proceeding, shall be immediately due and payable
by Mortgagor, with interest thereon at the default interest rate specified in
Section 2.07(b) of the Credit Agreement, and shall be secured by this Mortgage.
Mortgagee waives its right to any statutory fee in connection with any judicial or
nonjudicial foreclosure of the lien hereof and agrees to accept a reasonable fee
for such services.



     3.18 Deficiency Judgments. If after foreclosure of this Mortgage or
Mortgagee’s sale hereunder, there shall remain any deficiency with respect to any
amounts payable under the Senior Secured Documents, including hereunder, or any
amounts secured hereby, and Mortgagee shall institute any proceedings to recover
such deficiency or deficiencies, all such amounts shall continue to bear interest
at the default interest rate specified in Section 2.07(b) of the Credit Agreement.
Mortgagor waives any defense to Mortgagee’s recovery against Mortgagor of any
deficiency after any foreclosure sale of the Mortgaged Property. Subject to the
Intercreditor Agreement and the Guarantee and Collateral Agreement, to the extent
permitted by law, Mortgagor expressly waives any defense or benefits that may be
derived from any statute granting Mortgagor any defense to any such recovery by
Mortgagee. In addition, Mortgagee shall be entitled to recovery of all of its
reasonable costs and expenditures (including without limitation any court imposed
costs) in connection with such proceedings, including reasonable attorneys’ fees,
appraisal fees and the other costs, fees and expenditures referred to in
Section 3.17 above. This provision shall survive any foreclosure or sale of
the Mortgaged Property, any portion thereof and/or the extinguishment of the lien
hereof.



     3.19 WAIVER OF JURY TRIAL. MORTGAGEE AND MORTGAGOR EACH WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE



18









 




RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS MORTGAGE, THE
GUARANTEE AND COLLATERAL AGREEMENT OR ANY OTHER SECURITY DOCUMENT. ANY SUCH
DISPUTES SHALL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.




     3.20 Exculpation of Mortgagee. The acceptance by Mortgagee of the
assignment contained herein with all of the rights, powers, privileges and
authority created hereby shall not, prior to entry upon and taking possession of
the Mortgaged Property by Mortgagee, be deemed or construed to make Mortgagee a
“mortgagee in possession”, nor thereafter or at any time or in any event obligate
Mortgagee to appear in or defend any action or proceeding relating to the Mortgaged
Property, nor shall Mortgagee, prior to such entry and taking, be liable in any way
for any injury or damage to person or property sustained by any person in or about
the Mortgaged Property.



ARTICLE 4- GENERAL




     4.1 Discharge. Mortgagor shall be released from the covenants,
agreements and obligations of Mortgagor contained in this Mortgage and all right,
title and interest in and to the Mortgaged Property shall revert to Mortgagor when
and as set forth in the Intercreditor Agreement and, in connection therewith,
Mortgagee, at the request and the expense of Mortgagor, shall promptly execute a
deed of reconveyance and such other documents as may be reasonably requested by
Mortgagor to evidence the discharge and satisfaction of this Mortgage and the
release of Mortgagor from its obligations hereunder.



     4.2 No Waiver. The exercise of the privileges granted in this Mortgage
to perform Mortgagor’s obligations under the agreements which constitute the
Mortgaged Property shall in no event be considered or constitute a waiver of any
right which Mortgagee or any other Secured Party may have at any time, after an
Event of Default shall have occurred and be continuing, to declare the Guaranteed
Obligations or any part thereof to be immediately due and payable. No delay or
omission to exercise any right, remedy or power accruing upon any default shall
impair any such right, remedy or power or shall be construed to be a waiver of any
such default or acquiescence therein; and every such right, remedy and power may be
exercised from time to time and as often as may be deemed expedient.



     4.3 Extension, Rearrangement or Renewal of Guaranteed Obligations. It
is expressly agreed that any of the Guaranteed Obligations at any time secured
hereby may be from time to time extended for any period, or with the consent of
Mortgagor rearranged or renewed, and that any part of the security herein
described, or any other security for the Guaranteed Obligations, may be waived or
released, without altering, varying or diminishing the force, effect or lien or
security interest of this Mortgage; and the lien and security interest granted by
this Mortgage shall continue as a prior lien and security interest on all of the
Mortgaged Property not expressly so released, until the Guaranteed Obligations are
fully paid and this Mortgage is terminated in accordance with the provisions of the
Intercreditor Agreement; and no other security now existing or hereafter taken to
secure the payment of the Guaranteed Obligations or any part thereof or the
performance of any obligation or liability of Mortgagor whatever shall in any
manner impair or affect the security given by this Mortgage; and all security for
the payment of the Guaranteed Obligations or any part thereof and the performance
of any obligation or liability shall be taken, considered and held as cumulative.



19









 





     4.4 Forcible Detainer. Mortgagor agrees for itself and all persons
claiming by, through or under it, that subsequent to foreclosure hereunder in
accordance with this Mortgage and applicable law if Mortgagor shall hold possession
of the Mortgaged Property or any part thereof, Mortgagor or the persons so holding
possession shall be guilty of trespass; and any such persons (including Mortgagor)
failing or refusing to surrender possession upon demand shall be guilty of forcible
detainer and shall be liable to Mortgagee or any purchaser in foreclosure, as
applicable, for reasonable rental on said premises, and shall be subject to
eviction and removal in accordance with law.



     4.5 Waiver of Stay or Extension. To the extent permitted to be waived
by law, Mortgagor shall not at any time insist upon or plead or in any manner
whatever claim the benefit or advantage of any stay, extension or moratorium law
now or at any time hereafter in force in any locality where the Mortgaged Property
or any part thereof may or shall be situated, nor shall Mortgagor claim any benefit
or advantage from any law now or hereafter in force providing for the valuation or
appraisement of the Mortgaged Property or any part thereof prior to any sale
thereof to be made pursuant to any provision of this Mortgage or to a decree of any
court of competent jurisdiction, nor after any such sale shall Mortgagor claim or
exercise any right conferred by any law now or at any time hereafter in force to
redeem the Mortgaged Property so sold or any part thereof; and Mortgagor hereby
expressly waives all benefit or advantage of any such law or laws and the
appraisement of the Mortgaged Property or any part thereof, and covenants that
Mortgagor shall not hinder or delay the execution of any power herein granted and
delegated to Mortgagee but that Mortgagor shall permit the execution of every such
power as though no such law had been made.



     4.6 Notices. Except where certified or registered mail notice is
required by applicable law, any notice to Mortgagor or Mortgagee required or
permitted hereunder shall be deemed to be given when given in the manner
prescribed in the Intercreditor Agreement.



     4.7 Severability. All rights, powers and remedies provided herein may
be exercised only to the extent that the exercise thereof does not violate any
applicable law, and are intended to be limited to the extent necessary so that they
will not render this Mortgage invalid, unenforceable or not entitled to be
recorded, registered or filed under any applicable law. In the event any term or
provision contained in this Mortgage is in conflict, or may hereafter be held to be
in conflict, with the laws of the State of New York, the State or of the United
States of America, this Mortgage shall be affected only as to such particular term
or provision, and shall in all other respects remain in full force and effect.



     4.8 Application of Payments. In the event that any part of the
Guaranteed Obligations cannot lawfully be secured hereby, or in the event that the
lien and security interest hereof cannot be lawfully enforced to pay any part of
the Guaranteed Obligations, or in the event that the lien or security interest
created by this Mortgage shall be invalid or unenforceable as to any part of the
Guaranteed Obligations, then all payments on the Guaranteed Obligations shall be
deemed to have been first applied to the complete payment and liquidation of that
part of the Guaranteed Obligations which is not secured by this Mortgage and the
unsecured portion of the Guaranteed Obligations shall be completely paid and
liquidated prior to the payment and liquidation of the remaining secured portion of
the Guaranteed Obligations.



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     4.9 Governing Law. THE PROVISIONS OF THIS MORTGAGE REGARDING THE
CREATION, PERFECTION AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS HEREIN
GRANTED SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE. ALL OTHER
PROVISIONS OF THIS MORTGAGE AND THE RIGHTS AND OBLIGATIONS OF MORTGAGOR AND
MORTGAGEE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF.



     4.10 Entire Agreement. This Mortgage, the Guarantee and Collateral
Agreement and the Intercreditor Agreement represent the final agreement between the
parties and may not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreements of the parties.



     4.11 Amendments. This Mortgage may be amended, supplemented or
otherwise modified only by an instrument in writing signed by Mortgagor and
Mortgagee.



     4.12 Successors and Assigns. All terms of this Mortgage shall run with
the land and bind each of Mortgagor and Mortgagee and their respective successors
and assigns, and all persons claiming under or through Mortgagor or Mortgagee, as
the case may be, or any such successor or assign, and shall inure to the benefit of
Mortgagee and Mortgagor, and their respective successors and assigns.



     4.13 Renewal, Etc. Mortgagee may at any time and from time to time
renew or extend this Mortgage, or alter or modify the same in any way, or waive any
of the terms, covenants or conditions hereof in whole or in part and may release
any portion of the Mortgaged Property or any other security, and grant such
extensions and indulgences in relation to the Guaranteed Obligations as Mortgagee
may determine, without the consent of any junior lienor or encumbrancer and without
any obligation to give notice of any kind thereto and without in any manner
affecting the priority of the lien and security interest hereof on any part of the
Mortgaged Property; provided that nothing in this Section 4.13 shall grant
Mortgagee the right to alter or modify the Mortgage without the consent of
Mortgagor unless otherwise specifically permitted in this Mortgage.



     4.14 Future Advances. This Mortgage is executed and delivered to
secure, among other things, Mortgagor’s guaranty of future advances under the
Senior Secured Documents. It is understood and agreed that this Mortgage secures
Mortgagor’s guaranty of present and future advances made pursuant to the Senior
Secured Documents and that the lien of such future advances shall relate to the
date of this Mortgage.



     4.15 Liability. Notwithstanding any provision in this Mortgage to
the contrary, recourse against Mortgagor under this Mortgage shall be limited to
the extent provided in the Guarantee and Collateral Agreement.



     4.16 Severability and Compliance With Usury Law. The Senior Secured
Documents are intended to be performed in accordance with, and only to the extent
permitted by, all applicable Legal Requirements. If any provision of any of the
Senior Secured Documents or the application thereof to any person or circumstance
shall, for any reason and to any extent, be invalid or unenforceable, neither the
remainder of the instrument in which such provision is contained, nor the



21









 




application of such provision to other persons or circumstances, nor the other instruments
referred to hereinabove, shall be affected thereby, but rather shall be enforceable to the
greatest extent permitted by law. It is expressly stipulated and agreed to be the intent
of Mortgagor and Mortgagee at all times to comply with the applicable State law governing
the maximum rate or amount of interest payable on or in connection with the Guaranteed
Obligations (or applicable United States federal law to the extent that it permits
Mortgagee to contract for, charge, take, reserve or receive a greater amount of interest
than under State law). If the applicable law is ever judicially interpreted so as to
render usurious any amount called for under the Senior Secured Documents, or contracted
for, charged, taken, reserved or received with respect to the extensions of credit
evidenced by the Senior Secured Documents or if acceleration of the maturity of the
Guaranteed Obligations or if any prepayment by Mortgagor results in Mortgagor having paid
any interest in excess of that permitted by law, then it is Mortgagor’s and Mortgagee’s
express intent that all excess amounts theretofore collected by Mortgagee be credited on
the principal balance due under the Senior Secured Documents (or, if the Senior Secured
Documents have been or would thereby be paid in full, refunded to Mortgagor), and the
provisions of the Senior Secured Documents immediately be deemed reformed and the amounts
thereafter collectible thereunder reduced, without the necessity of the execution of any
new document, so as to comply with the applicable law, but so as to permit the recovery of
the fullest amount otherwise called for hereunder and thereunder. The right to accelerate
maturity of the Guaranteed Obligations does not include the right to accelerate any
interest which has not otherwise accrued on the date of such acceleration, and Mortgagee
does not intend to collect any unearned interest in the event of acceleration. All sums
paid or agreed to be paid to Mortgagee for the use, forbearance or detention of the
Guaranteed Obligations shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of the Guaranteed Obligations
until payment in full so that the rate or amount of interest on account of the Guaranteed
Obligations does not exceed the applicable usury ceiling.




     4.17 Release of Collateral.



          (a) Notwithstanding any provision herein to the contrary, the Mortgaged Property or
any part thereof shall be released from the security interest created by this Mortgage at
any time or from time to time upon the request of Mortgagor; provided that the
requirements of the Intercreditor Agreement have been satisfied. Upon satisfaction of such
requirements, a Responsible Officer of Mortgagee shall promptly execute, deliver and
acknowledge any necessary or proper instruments of termination, satisfaction or release to
evidence the release of any Mortgaged Property permitted to be released pursuant to this
Mortgage in each case as required by, and in accordance with, the Intercreditor Agreement.




          (b) Collateral Agent may release the Mortgaged Property or any part thereof from the
security interest created hereunder upon the sale or disposition of such Mortgaged
Property pursuant to Mortgagee’s powers, rights and duties with respect to remedies
provided herein.




     4.18 Intercreditor Agreement. In the event of any conflict between any terms
and provisions set forth in this Mortgage and those set forth in the Intercreditor
Agreement, the terms and provisions of the Intercreditor Agreement shall supersede and
control the terms and provisions of this Mortgage.



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     4.19 Time of the Essence. Mortgagor acknowledges that time is of the
essence in performing all of Mortgagor’s obligations set forth herein.



     4.20 Counterpart Execution. This Mortgage may be executed by the parties
hereto in any number of counterparts (and be each of the parties hereof on separate
counterparts), each of which when so executed and delivered shall be an original, but all
such counterparts shall together constitute but one and the same instrument.



ARTICLE 5 – STATE SPECIFIC PROVISIONS




     5.1 Power of Sale. Mortgagor hereby grants to Mortgagee a power of sale
under 12 V.S.A. §4531a et seq., and accordingly Mortgagee shall have all of the rights and
powers granted by Vermont law to the holder of a mortgage containing a power of sale,
including the right, to the extent permitted by Vermont law, to foreclose Mortgagor’s
equity of redemption upon an Event of Default by exercising the power of sale without
first commencing a foreclosure action or obtaining a foreclosure decree, and to give such
notices and to do all other acts, including the giving of a foreclosure deed upon
completion of the foreclosure sale, as are permitted or required by 12 V.S.A. §§4531a –
4533a to foreclose a mortgage without judicial action.



     5.2 Future Advances. It is the express intention of Mortgagor that this
Mortgage secures the payment and performance of all of the debts and other obligations of
Mortgagor under the Guarantee and Collateral Agreement, the Intercreditor Agreement and
this Mortgage, whether now existing or hereinafter incurred by reason of future advances
made by Mortgagee pursuant to a commitment set forth in the Credit Agreement, to protect
and preserve the Mortgaged Property, or otherwise, and regardless of whether such debts
and other obligations are related to transactions contemplated by the Guarantee and
Collateral Agreement, the Intercreditor Agreement or the Credit Agreement at the time of
granting of this Mortgage. Notice of the continuing grant or security of this Mortgage
need not be stated in any document evidencing any of such debts or obligations, nor shall
it be necessary to state in any such document that this Mortgage secures such debts or
obligations.



     5.3 Maximum Principal Amount. The maximum amount of principal indebtedness
secured by this Mortgage at the date of the execution of this Mortgage is Five Billion
U.S. Dollars (U.S. $5,000,000,000.00), plus interest and other charges due thereon and all
amounts expended by Mortgagee to maintain the lien of this Mortgage, including without
limitation, all amounts which constitute payment of (i) taxes, charges or assessments that
may be imposed by law upon the Mortgaged Property; (ii) expenses incurred in upholding the
lien of this Mortgage or (iii) any amount, cost or charge to which Mortgagee becomes
subrogated, upon payment, whether under recognized principles of law or equity, or under
express statutory authority.



     5.4 Recording of Survey Plans. If the description of the Site set forth in
Exhibit A hereto refers to a survey, Mortgagor shall obtain and record a copy of
survey plan.



     5.5 Loan Purpose. Mortgagor has guaranteed the Guaranteed Obligations
pursuant to the Guarantee and Collateral Agreement solely to finance an income-producing
business or activity.



23









 





     5.6 Title Opinions and Title and Hazard Insurers. Mortgagor may procure
title opinions, title insurance and hazard insurance required by Mortgagee from companies
of Mortgagor’s choice acceptable to Mortgagee, and Mortgagee’s acceptance shall not be
unreasonably withheld provided, however, that it shall not be unreasonable for Mortgagee
to require any insurance (including title and hazard insurance) to be placed with
companies that are adequately capitalized and within the highest rating category, and
requiring such co-insurance agreements and in such amounts as are acceptable to Mortgagee.
Further, it shall not be unreasonable for Mortgagee to withhold its consent for any
insurance that includes direct or indirect coverage or coinsurance relying on any captive
insurance companies.



     5.7 Application of Payments. Payments to Mortgagee with respect to the
Guaranteed Obligations, and insurance and condemnation proceeds and any other sums
collected by Mortgagee, shall be applied first to late charges, attorneys’ fees or other
expenses or charges due Mortgagee under the Guarantee and Collateral Agreement, the Credit
Agreement and this Mortgage, second to accrued interest, and third to principal; provided,
however, that after the occurrence of any Event of Default, payments received by Mortgagee
may be applied by Mortgagee to the payment of such obligations in such priority and
proportions as Mortgagee in its discretion shall deem proper.



     5.8 Waiver of Attorneys’ Fees Limitation. Notwithstanding anything to the
contrary contained in this Mortgage, Mortgagor and Mortgagee acknowledge and agree that in
the event of a foreclosure of this Mortgage, the attorneys’ fees incurred by Mortgagee as
a result of such foreclosure may exceed the amount of two percent (2%) of principal,
interest and costs that are allowed, unless otherwise agreed herein, pursuant to Vermont
Rules of Civil Procedure (V.R.C.P.) Rule 80.1. Therefore, notwithstanding anything to the
contrary contained in this Mortgage, Mortgagor and Mortgagee further acknowledge and agree
that in the event of a foreclosure of this Mortgage, Mortgagee shall be entitled to
recover from Mortgagor those reasonable attorneys’ fees actually incurred by Mortgagee in
connection with such foreclosure, and such amount shall be allowed and included in the
amount found due under the accounting to be made for such foreclosure under V.R.C.P. Rule
80.1.




NOTICE TO MORTGAGOR: YOUR SIGNATURE ON THIS MORTGAGE MEANS THAT YOU ARE
EQUALLY LIABLE FOR REPAYMENT OF THE GUARANTEED OBLIGATIONS. IF THE BORROWER
DOES NOT PAY, MORTGAGEE HAS A LEGAL RIGHT TO COLLECT FROM YOU.




NOTICE TO MORTGAGOR: CERTAIN PROVISIONS OF THIS MORTGAGE REQUIRE PAYMENT BY
MORTGAGOR UPON DEMAND OF MORTGAGEE, AND SUCH PAYMENTS MAY BE COLLECTED BY MORTGAGEE
AT ANY TIME. AN AGREEMENT BY MORTGAGEE TO FORBEAR COLLECTION MAY BE CONDITIONED
UPON PAYMENT OF INTEREST AT A HIGHER RATE THAN THAT SPECIFIED IN THE NOTE.



[SIGNATURE PAGE FOLLOWS]




24









 





     IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly
executed and delivered as of the day and year first above written.



	 	 	 	 	 
	 	ENEXUS NUCLEAR VERMONT YANKEE,

LLC,

a Delaware limited liability company

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



signature page to vermont mortgage

















 





	 	 	 
	THE STATE OF
 

	 	§ 
	 


	 	 
	 

	 	§
	COUNTY OF

	 	§
	 


	 	 






     At                                          in the aforesaid County this ___ day of      
               , 200_,
personally appeared                                         , duly authorized agent of ENEXUS
NUCLEAR VERMONT YANKEE, LLC and he/she acknowledged this instrument, by him/her sealed and
subscribed, to be his/her free act and deed, and the free act and deed of ENEXUS NUCLEAR VERMONT
YANKEE, LLC.



	 	 	 	 	 
	 

	 	Before me
	 	 
	 

	 	 


	 	 
	 

	 	Notary Public	 	 
	 
	 	 	 	 
	 

	 	My Commission Expires:	 	 
	 

	 	 


	 	 





notary page to vermont mortgage














 








EXHIBIT A




DESCRIPTION OF SITE




(see attached)















 








EXHIBIT Q




FORM OF COMPLIANCE CERTIFICATE




Financial Statement Date:                     ,           




BNP Paribas, as Administrative Agent

525 Washington Boulevard

Jersey City, NJ, 07310

Attention: Socorro Lantin

Tel.: (201) 850-6577

Fax: (201) 850-4020

Email: nyls.agency.support@americas.bnpparibas.com




Ladies and Gentlemen:




     Reference is made to the Credit Agreement dated as of December 23, 2008 (as amended, modified
or supplemented from time to time, the “Credit Agreement”; the terms defined therein being
used herein as therein defined) among Enexus Energy Corporation, a Delaware corporation (the
“Borrower”), the Lenders and Issuers from time to time party thereto, Citigroup Global
Markets Inc. and Goldman Sachs Lending Partners LLC, as joint book runners and joint lead
arrangers, BNP Paribas, as administrative agent, The Bank of Nova Scotia Trust Company of New York,
as collateral agent and Mizuho Corporate Bank, Ltd., as Syndication Agent.



     This certificate is being delivered on                     ,            pursuant to Section 5.05(c) of the
Credit Agreement.



     The undersigned Financial Officer hereby certifies as of the date hereof that he/she is the
[chief executive officer] [chief financial officer] [treasurer] of the Borrower, and that, as such,
he/she is authorized to execute and deliver this Certificate to the Administrative Agent on behalf
of the Borrower, and that:



     [Use following paragraph 1 for fiscal year-end financial statements]



          1. Attached hereto as Schedule 1 are the year-end audited financial
statements
required by Section 5.05(a) of the Credit Agreement for the fiscal year of Borrower and its
consolidated Subsidiaries ended as of the Financial Statement Date written above, together with the
report and opinion of Deloitte & Touche LLP [or other independent public accountants of recognized
national standing reasonably satisfactory to the Administrative Agent] required by Section
5.05(a) and Section 5.05(c)(i) of the Credit Agreement 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.




     [Use following paragraph 1 for interim financial statements]



          1. Attached hereto as Schedule 1 are the unaudited financial statements
required by
Section 5.05(b) of the Credit Agreement for the [fiscal quarter of Borrower] ended as of
the above date.




Q-1









 




As at such date and for such period, such financial statements reflect in the opinion of the
Borrower all adjustments necessary to present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis as of the end of and for the above period in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments.




          2. The undersigned has reviewed and is familiar with the terms of the Credit
Agreement and has made, or has caused to be made under his/her supervision, a detailed review
of the
transactions and condition (financial or otherwise) of the Borrower and its consolidated
Subsidiaries
during the accounting period covered by the attached financial statements.




[select one:]




          3. [No condition or event has occurred that would cause the undersigned to believe
that a Default or Event of Default has occurred and no Default or Event of Default has
occurred.]




—or—




          3. [The following Default[s] or Event[s] of Default has [have] occurred and the following is a
list of each such Event of Default or Default specifying its nature and extent and any corrective
action taken or proposed to be taken with respect thereto:]




          4. The financial covenant analyses and information required by Section 5.05(c)(ii)(B)
is set forth on Schedule 2 attached hereto as of, and for, for the period referred to
therein and is true and accurate on and as of the date of this Certificate.




          5. Attached hereto as Schedule 3 is a list of the Reinvestment Events consummated in
the preceding fiscal quarter and specifying the nature thereof and the use of proceeds with respect
thereto, as required by Section 5.05(c)(ii)(C) of the Credit Agreement.




          6. The calculation of the outstanding balance of all material, long-term intercompany
Indebtedness as of the Financial Statement Date is set forth on Schedule 2 as required by
Section 5.05(c)(ii)(D) and is true and accurate as of the date of this Certificate.




          7. Attached hereto as Schedule 4 is a list of any amendments or supplements to or
replacements of Key Contracts on Schedule 1.01(b) to the Credit Agreement that occurred in
the preceding fiscal quarter, as required by Section 5.05(c)(ii)(E) of the Credit
Agreement.




          8. Attached hereto as Schedule 5 is a status report setting forth
developments to
date and an expected timeline in connection with the Reinvestment Notice dated [                    ,___] for
making the proposed reinvestment specified therein on the Reinvestment Decision Date, as required
by Section 5.05(c)(ii)(F) of the Credit Agreement.




[Signature page follows]




Q-2









 





     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
                    ,           .



	 	 	 	 	 
	 	ENEXUS ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




Q-3









 





For the Quarter/Year ended on the Financial Statement Date



SCHEDULE 2

to the Compliance Certificate

($ in 000s)




Consolidated EBITDA




	 	 	 	 	 
	A. Consolidated Net Income of the Borrower and its consolidated
Subsidiaries for the most recent four consecutive fiscal quarters ended on or
prior to the Financial Statement Date (“Consolidated EBITDA” – clause (a)):
	 	 	 	 
	 
	 	 	 	 
	1. Consolidated net income (or loss) of the Borrower and its
consolidated Subsidiaries for such period:
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	2. Addition for dividends or distributions from any Minority
Investment (including in EquaGen) paid to Borrower or its consolidated
Subsidiaries (“Consolidated Net Income” – clause (b)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	3. Excluding net income (or loss) from any Minority Investment
(including in EquaGen) (“Consolidated Net Income” – clause (a)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	4. Excluding any cumulative effect of a change in accounting
principles during such period (“Consolidated Net Income” – clause
(c)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	5. Excluding gains and losses from Asset Sales during such period
(“Consolidated Net Income” – clause (d)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	6. Excluding net income of any Subsidiary of such Person that is
subject to any restriction or limitation on the payment of dividends
or the making of other distributions (to the extent of such
restriction or limitation) (“Consolidated Net Income” – clause (e)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	7. Consolidated Net Income (Line A.1 plus Line A.2 less the sum of
Lines A.3 through A.6):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	B. Permitted addbacks to Consolidated Net Income (in each case only to the
extent reducing Consolidated Net Income for such period but without
duplication) (“Consolidated EBITDA” – clause (b)):
	 	 	 	 
	 
	 	 	 	 
	1. Consolidated Interest Expense (“Consolidated EBITDA” – clause
(b)(i)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	2. Provision for income taxes (“Consolidated EBITDA” – clause (b)(ii)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	3. Depreciation, depletion and amortization expenses (“Consolidated
EBITDA” – clause (b)(iii)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	4. Loss from extraordinary items (“Consolidated EBITDA” – clause
(b)(iv):
	 	$	 	 
	 
	 	 	 	 





Q-4









 





	 	 	 	 	 
	5. Costs, expenses or charges (including any
professional or underwriting fees) related to the
Transactions (“Consolidated EBITDA” – clause (b)(v)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	6. Other non-cash charges and non-cash losses (“Consolidated
EBITDA” – clause (b)(vi)):
	 	 	 	 
	 
	 	 	 	 
	a. Compensation deduction as the result of any
grant of Capital Stock or Capital Stock Equivalents
to employees, officers, directors or consultants
(“Consolidated EBITDA” – clause (b)(vi)(A)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	b. Losses from early extinguishment of Indebtedness
(“Consolidated EBITDA” – clause (b)(vi)(B)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	c. Decommissioning costs (“Consolidated EBITDA” –
clause (b)(vi)(C)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	d. Other [specify]      
              
              
              
              
              
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	e. Total addback for other non-cash and non-cash
losses (sum of Lines B.6.a through B.6.d)
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	7. Total permitted addbacks (sum of Lines B.1 through B.5
plus Line B.6.e)
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	C. Required deductions from Consolidated Net Income (in each case to
the extent included in the calculation of such Consolidated Net
Income for such period but without duplication) (“Consolidated
EBITDA” – clause (c)):
	 	 	 	 
	 
	 	 	 	 
	1. Credit for income taxes (“Consolidated EBITDA” –
clause (c)(i)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	2. Gains from extraordinary items for such period
(“Consolidated EBITDA” – clause (c)(ii)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	3. Any other non-cash gains or other items which have been
added in determining Consolidated Net Income (“Consolidated
EBITDA” – clause (c)(iii)):
	 	 	 	 
	 
	 	 	 	 
	a. Any reversal of a charge referred to in clause
(b)(vi) of the definition of Consolidated EBITDA by
reason of a decrease in the value of any such
Capital Stock or Capital Stock Equivalent
(“Consolidated EBITDA” – clause (c)(iii)(A)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	b. Gains from early extinguishment of Indebtedness
(“Consolidated EBITDA” – clause (c)(iii)(B)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	c. Other [specify]      
              
              
              
              
              
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	d. Total deduction for other non-cash gains and
other items (sum of Lines C.3.a through C.3.c):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	4. Total required deductions (Line C.1 plus line
C.2 plus Line C.3.d):
	 	$	 	 
	 
	 	 	 	 





Q-5









 





	 	 	 	 	 
	D. Deduction for Consolidated EBITDA attributable to
Unrestricted Subsidiaries unless (and solely to the extent)
actually distributed in cash to the Borrower or any Restricted
Subsidiary (“Consolidated EBITDA” – proviso (i)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	E. Consolidated EBITDA (Line A.7 plus Line B.7 minus Line C.4
minus Line D):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	F. Addition for the Consolidated EBITDA of any Person or line of
business acquired by the Borrower or any Restricted Subsidiary
during such period pursuant to a Permitted Acquisition (assuming
the consummation of such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred
as of the first day of such period) on a pro forma basis
(“Consolidated EBITDA” – proviso (ii)(A)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	G. Deduction for the Consolidated EBITDA of any Person or line
of business sold or otherwise disposed of by the Borrower or any
Restricted Subsidiary during such period (assuming the
consummation of such sale or other disposition and the repayment
of any Indebtedness in connection therewith occurred as of the
first day of such period) (“Consolidated EBITDA” – proviso
(ii)(B)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	H. Consolidated EBITDA for the purposes of the Financial
Covenants (Line E plus Line F minus Line G):
	 	$	 	 
	 
	 	 	 	 






 




			
	Note: Line items in this Compliance Certificate have been short handed for ease of
reference. In case of any conflict between the provisions of this Compliance Certificate
and the provisions of the Credit Agreement, the Credit Agreement shall govern.






Q-6









 









Section 6.12 – Consolidated Interest Coverage Ratio:




	 	 	 	 	 
	A. Consolidated EBITDA for the most recent four consecutive fiscal
quarters ended on or prior to the Financial Statement Date
(“Consolidated Interest Coverage Ratio” – clause (a)) (Line H of
Consolidated EBITDA above):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	B. Consolidated Interest Expense for the most recent four consecutive
fiscal quarters ended on or prior to the Financial Statement Date
(“Consolidated Interest Coverage Ratio” – clause (b)):
	 	 	 	 
	 
	 	 	 	 
	1. Consolidated total cash interest expense of the Borrower
and its Restricted Subsidiaries
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	2. Deduction for cash interest expense of Unrestricted
Subsidiaries (“Consolidated Interest Expense” – clause (a)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	3. Consolidated Interest Expense (Line B.1 minus Line B.2)
	 	 	 	 
	 
	 	 	 	 
	C. Cash interest income (“Consolidated Interest Expense” – clause (b))
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	D. Consolidated Interest Expense net of cash interest income (Line
B.3 minus Line B.3)
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	E. Interest Coverage Ratio (Line A divided by Line D):
	 	 	____ to ____
	 
	 	 	 	 
	Minimum Required under Section 6.12:
	 	 	 	 






	 	 	 
	Period	 	Ratio
	Funds Availability Date to Revolving Credit Maturity Date

	 	1.5 to 1.0 







 




			
	Note: Line items in this Compliance Certificate have been short handed for ease of
reference. In case of any conflict between the provisions of this Compliance Certificate and
the provisions of the Credit Agreement, the Credit Agreement shall govern.







Q-7









 








Section 6.13 – Consolidated Total Leverage Ratio:




	 	 	 	 	 
	A. Consolidated Total Net Debt on the Financial Statement Date
(“Consolidated Total Leverage Ratio” – clause (a)):
	 	 	 	 
	 
	 	 	 	 
	1. Indebtedness for borrowed money (including indebtedness
with respect to the funded portion of any Credit Support
Facilities but excluding Guarantees of the obligations
thereof) (“Consolidated Total Net Debt” – clause (i) and
proviso)
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	2. Obligations evidenced by notes, bonds, debentures, or
similar instruments or that bear interest (“Consolidated
Total Net Debt” – clause (i)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	3. Indebtedness for the deferred purchase price of property
or services (other than trade payables incurred in the
ordinary course of the Permitted Business) as reported over
time in accordance with GAAP (“Consolidated Total Net Debt”
– clause (i)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	4. Indebtedness created or arising under any conditional
sale or other title retention agreement with respect to
property acquired (“Consolidated Total Net Debt” – clause
(i)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	5. Liabilities, obligations, and indebtedness (whether
contingent or otherwise) in respect of Capital Lease
Obligations permitted under Section 6.01(f) of the Credit
Agreement (“Consolidated Total Net Debt” – clause (ii)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	6. Liabilities, obligations, and indebtedness (whether
contingent or otherwise) for reimbursement obligations in
respect of drawn letters of credit (including, with respect
to any Loan Party, Letters of Credit issued under the Credit
Agreement) (“Consolidated Total Net Debt” – clause (iii)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	7. Liabilities, obligations, and indebtedness (whether
contingent or otherwise) under any Guarantees of obligations
of the type described above in Lines A.1. through Line A.6
(“Consolidated Total Net Debt” – clause (iv)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	8. Liabilities, obligations, and indebtedness (whether
contingent or otherwise) in respect of unfunded vested
benefits under plans covered by Title IV of ERISA actually
owing by the Borrower and the Restricted Subsidiaries on
such date8 (“Consolidated Total Net Debt” –
clause (v)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	9. Total debt (sum of Lines A.1 through A.8)
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	10. Unrestricted Cash (“Consolidated Total Net Debt”
– proviso (x)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	11. Cash or Cash Equivalents posted as collateral in respect
of Credit Support Facilities not secured by the Collateral
(“Consolidated Total Net Debt” – proviso (y)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	12. Consolidated Total Net Debt (Line A.9 minus the sum of
Lines A.10 and A.11)
	 	$	 	 
	 
	 	 	 	 





Q-8









 






	 	 	 	 	 
	B. Consolidated EBITDA for the most recent four consecutive
fiscal quarters ended on or prior to the Financial Statement Date
(“Consolidated Total Leverage Ratio” – clause (b)) (Line H of
Consolidated EBITDA above):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	C. Consolidated Total Leverage Ratio (Line A.12 divided by Line B):
	 	 ___ to  ___
	 
	 	 	 	 
	Maximum Permitted under Section 6.13:
	 	 	 	 






	 	 	 
	Period	 	Ratio
	Funds Availability Date to Revolving Credit Maturity Date

	 	5.0 to 1.0 







 




			
	Note: Line items in this Compliance Certificate have been short handed for ease of
reference. In case of any conflict between the provisions of this Compliance Certificate
and the provisions of the Credit Agreement, the Credit Agreement shall govern.









Q-9









 








Available Amount




	 	 	 	 	 
	A. 50% of the Consolidated Net Income from the Funds Availability Date to the
Financial Statement Date9 (“Available Amount” – clause
(a)(ii)(A)):
	 	 	 	 
	 
	 	 	 	 
	1. Consolidated Net Income of the Borrower and its consolidated
Subsidiaries for such period (Line A.7 in the calculation of
Consolidated EBITDA above)
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	2. Deduction for insurance proceeds, other than proceeds of business
interruption insurance, to the extent included in Consolidated Net
Income (“Available Amount” – clause (a)(ii)(A)):
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	3. Consolidated Net Income for Available Amount definition (Line A.1
minus Line A.2 )
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	4. 50% of Consolidated Net Income for such period (Line A.3
multiplied by 0.50)
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	B. 100% of aggregate proceeds received by the Borrower since the Funds
Availability Date as a contribution to its Capital Stock or from the issuance
or sale of its Capital Stock (“Available Amount” – clause (a)(ii)(B))
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	C. Greater of zero and the sum of Lines A and B (“Available Amount” – clause (a))
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	D. $500,000,000 basket (“Available Amount” – clause (b))
	 	$	500,000,000	 
	 
	 	 	 	 
	E. Reduction of Available Amount for certain outstanding Investments,
Dividends and distributions or payments (“Available Amount” – clause (c))
	 	 	 	 
	 
	 	 	 	 
	1. Aggregate amount of outstanding Investments made pursuant to
Section 6.05(j) of the Credit Agreement since the Funds Availability
Date in excess of the $150,000,000 allowance for such Investments
(“Available Amount” – clause (c)(i))
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	2. Aggregate amount of Dividends made since the Funds Availability
Date pursuant to Section 6.06(c) of the Credit Agreement (“Available
Amount” – clause (c)(ii))
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	3. Aggregate amount of any distributions or payments made since the
Funds Availability Date pursuant to Section 6.07(a) of the Credit
Agreement (“Available Amount” – clause (c)(iii))
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	4. Total reductions of Available Amount (sum of Lines E.1 through E.3)
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	5. Available Amount as of the Financial Statement Date (Line C plus
line D minus Line E.4)
	 	$	 	 
	 
	 	 	 	 






 




			
	Note: Line items in this Compliance Certificate have been short handed for ease of
reference. In case of any conflict between the provisions of this Compliance Certificate
and the provisions of the Credit
Agreement, the Credit Agreement shall govern.





Q-10









 





Material, Long-Term Intercompany Indebtedness




	 	 	 	 	 
	A. Material, long-term intercompany Indebtedness as of the
Financial Statement Date
	 	$	 	 
	 
	 	 	 	 
	1. [specify]      
              
              
              
              
              
	 	$	 	 
	 
	 	 	 	 
	2. [specify]      
              
              
              
              
              
	 	$	 	 
	 
	 	 	 	 
	3. [specify]      
              
              
              
              
              
	 	$	 	 
	 
	 	 	 	 
	4. Total material, long-term intercompany Indebtedness
(sum of Lines A.1 through [__] above)
	 	$	 	 
	 
	 	 	 	 






 




			
	Note:  Line items in this Compliance Certificate have been short handed for ease of reference. In
case of any conflict between the provisions of this Compliance Certificate and the provisions of
the Credit Agreement, the Credit Agreement shall govern.






Q-11









 








Additional Intercreditor Indebtedness




	 	 	 	 	 
	A. Principal amount of Indebtedness outstanding as of
the Financial Statement Date:
	 	$	 	 
	 
	 	 	 	 
	1. [specify]      
              
              
              
              
              
	 	$	 	 
	 
	 	 	 	 
	2. [specify]      
              
              
              
              
              
	 	$	 	 
	 
	 	 	 	 
	3. [specify]      
              
              
              
              
              
	 	$	 	 
	 
	 	 	 	 
	4. Total Additional Intercreditor Indebtedness
(sum of Lines A.1 through [__] above)
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	B. Maximum Additional Intercreditor Indebtedness as of
the Financial Statement Date
	 	 	 	 
	 
	 	 	 	 
	1. $2,300,000,000 basket (“Additional
Intercreditor Indebtedness” – clause (a))
	 	$	2,300,000,000	 
	 
	 	 	 	 
	2. Aggregate principal amount of Commitments
outstanding under the Credit Agreement as of
the Financial Statement Date (“Additional
Intercreditor Indebtedness” – clause (b))
	 	$	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	3. Maximum Additional Intercreditor
Indebtedness (Line B.1 minus Line B.2)
	 	$	 	 
	 
	 	 	 	 







 




			
	Note: Line items in this Compliance Certificate have been short handed for ease of
reference. In case of
any conflict between the provisions of this Compliance Certificate and the provisions of the
Credit Agreement, the Credit Agreement shall govern.








Q-12









 








EXHIBIT R




FORM OF SEPARATION AND DISTRIBUTION AGREEMENT




Filed as Exhibit 2.1 with Amendment No. 1 to the Registration Statement on Form 10




 


R-1












 








EXHIBIT S




FORM OF LIMITED LIABILITY COMPANY AGREEMENT OF EQUAGEN




Filed as Exhibit 10.6 with Amendment No. 1 to the Registration Statement on Form 10.



 


S-1











 








EXHIBIT T




DESCRIPTION OF SENIOR NOTES




See attached.





T-1











 




 




    DESCRIPTION
    OF THE NOTES





 



    You can find the definitions of certain terms used in this
    description under “— Description of the Entergy
    Notes — Certain Definitions Under the Entergy
    Indenture” and “— Description of the Enexus Notes
    — Certain Definitions Under the Enexus
    Indenture.” In this description, “Entergy” refers
    only to Entergy Corporation and not to any of its subsidiaries
    and “Enexus” refers only to Enexus Energy Corporation
    and not to any of its subsidiaries.
    Entergy’s     % Senior Notes
    due
    20          
    (the
    “20          
    Entergy notes”)
    and     % Senior Notes due
    20          
    (the
    “20          
    Entergy notes”) are referred to collectively as the
    “Entergy notes.”
    Enexus’     % Senior Notes
    due           (the “20          
    Enexus notes”)
    and     % Senior Notes due
    20          
    (the
    “20          
    Enexus notes”) are referred collectively to as the
    “Enexus notes.”





 




    Description
    of the Entergy Notes





 



    Entergy will issue the
    20          
    Entergy notes and the
    20          
    Entergy notes under a second supplemental indenture to the
    indenture between itself and Deutsche Bank Trust Company
    Americas, as trustee, dated as of December 1, 2002, as
    supplemented by the first supplemental indenture between itself
    and Deutsche Bank Trust Company Americas, as trustee, dated
    as of December 20, 2005, which are collectively referred to
    herein as the “Entergy indenture.” The terms of the
    Entergy notes include those stated in the Entergy indenture and
    those made part of the Entergy indenture by reference to the
    Trust Indenture Act of 1939, as amended (the
    “Trust Indenture Act”).





 



    The following description is a summary of the material
    provisions of the Entergy notes and the Entergy indenture. It
    does not restate the Entergy notes and the Entergy indenture in
    their entirety. You are urged to read the Entergy notes and the
    Entergy indenture because they, and not this description, define
    your rights as holders of the Entergy notes. Copies of the
    proposed form of the Entergy indenture are available as
    described under “Where You Can Find More Information.”
    Certain defined terms used in this description but not defined
    below under “— Certain Definitions Under the
    Entergy Indenture” have the meanings assigned to them in
    the Entergy indenture.



 



    The registered holder of an Entergy note is treated as the owner
    of it for all purposes. Only registered holders have rights
    under the Entergy indenture.





 




      General





 



    The Entergy notes:



 


			
	 	    • 
	
    will be general unsecured obligations of Entergy;






 


			
	 	    • 
	
    will be equal in right of payment with all existing and future
    senior indebtedness of Entergy but will effectively rank junior
    to any secured indebtedness of Entergy to the extent of the
    value of the assets securing all such indebtedness;






 


			
	 	    • 
	
    will be senior in right of payment to any future subordinated
    indebtedness of Entergy;






 


			
	 	    • 
	
    will be subject to mandatory exchange (the
    “Exchange”), at Entergy’s option, for a like
    amount of notes issued by Enexus in the event the Separation, as
    defined below, is consummated on or before the Outside Date (as
    defined below) and the exchange conditions described below (the
    “Exchange Conditions”) are satisfied; and








 


			
	 	    • 
	
    will be subject to a special optional redemption, at
    Entergy’s option, if (1) Entergy abandons or
    terminates the Separation, (2) the Separation is not
    consummated on or before the Outside Date, or (3) there is
    a failure to obtain any required approval from any applicable
    state or federal regulatory or governmental agency or body for
    the issuance by Enexus of the Enexus notes containing the terms
    described in this offering memorandum or an approval is obtained
    from any applicable state or federal regulatory or governmental
    agency or body for the issuance by Enexus of notes with terms
    other than those described in this offering memorandum, in each
    case, on or before the Outside Date.





138









 






 




    Principal,
    Maturity and Interest





 



    Entergy will issue $      million
    in aggregate principal amount of
    20          
    Entergy notes and $      million
    in aggregate principal amount of
    20          
    Entergy notes in this offering. Entergy may issue additional
    Entergy notes under the Entergy indenture from time to time
    after this offering that rank equally and ratably with the
    Entergy notes in all respects (or in all respects except for the
    payment of interest accruing prior to the issue date of such
    further Entergy notes or except for the first payment of
    interest following the issue date of such further Entergy
    notes), without notice to or the consent of the registered
    holders of the Entergy notes, and so that such further Entergy
    notes shall be consolidated and form a single series with the
    Entergy notes and shall have the same terms as to status,
    redemption or otherwise as the Entergy notes. Any further
    Entergy notes shall be issued subject to an agreement
    supplemental to the indenture. The Entergy notes will be issued
    in minimum denominations of $2,000 and integral multiples of
    $1,000. The
    20          
    Entergy notes will mature
    on           ,          and
    the
    20          
    Entergy notes will mature
    on          ,          .







 



    Interest on the
    20          
    Entergy notes will accrue at the rate
    of     % per annum and will be payable
    semi-annually in arrears
    on          
    and          
    of each year, commencing
    on          ,
    2009. Interest payments will be paid to the holders of record
    immediately
    preceding          and          ;
    provided, however, that with respect to any
    20          
    Entergy note that is exchanged for an Enexus note in an Exchange
    that takes place prior to an interest payment date, the interest
    on such
    20          
    Entergy note that is payable on such interest payment date will
    be paid by Enexus to the holders of record of the
    20          
    Enexus notes for which such
    20          
    Entergy notes have been exchanged on the next interest payment
    date for such
    20          
    Enexus notes.







 



    Interest on the
    20          
    Entergy notes will accrue at the rate
    of     % per annum and will be payable
    semi-annually in arrears
    on          
    and          
    of each year. Interest payments will be paid to the holders of
    record
    immediately preceding          
    and          ;
    provided, however, that with respect to any
    20          
    Entergy note that is exchanged for a 20          Enexus note in an Exchange that takes place prior to an interest
    payment date, the interest on such
    20          
    Entergy note that is payable on such interest payment date will
    be paid by Enexus to the holders of record of the
    20          
    Enexus notes for which such
    20          
    Entergy notes have been exchanged on the next interest payment
    date for such
    20          
    Enexus notes.





 



    Interest on the Entergy notes will accrue from the date of
    original issuance or, if interest has already been paid, from
    the date it was most recently paid. Interest on any Entergy
    notes that are exchanged for Enexus notes shall cease to accrue
    on the date of the Exchange. Interest will be computed on the
    basis of a
    360-day year
    comprised of twelve
    30-day
    months.



 




    Mandatory
    Exchange at the Option of Entergy in the Event of the
    Separation





 



    As discussed elsewhere in this offering memorandum, Entergy
    plans to separate its Non-Utility Nuclear business from the rest
    of Entergy into Enexus in a series of transactions that are
    collectively referred to herein as the “Separation.”
    Prior to the completion of the Separation, as partial
    consideration of Entergy’s transfer of the
    Non-Utility
    Nuclear business to Enexus, and in addition to other equity and
    debt securities issued by Enexus in connection therewith, Enexus
    will issue notes having the terms described below under
    “— Description of the Enexus Notes” to
    Entergy in an aggregate principal amount equal to the Entergy
    notes sold in this offering. If the Separation is consummated
    and the Exchange Conditions described below are satisfied on or
    prior to the Outside Date, Entergy may, at its option, exchange,
    all or part, but not less than $300 million in aggregate
    principal amount of the Entergy notes for Enexus notes. Entergy
    expects the Exchange to occur on or about the effective time of
    the Separation. In the Exchange, each $1,000 principal amount of
    Entergy notes subject to the Exchange will be exchanged for
    $1,000 principal amount of Enexus notes. In connection with any
    such Exchange of less than all of the Entergy notes, in no case
    will Entergy cause less than $300 million aggregate
    principal amount of either Entergy notes or Enexus notes
    (excluding any Enexus notes held by Entergy) to be outstanding
    at any time. New global notes or certificates representing the
    Enexus notes will be delivered to holders of the old exchanged
    Entergy notes, which will then become void. If Entergy elects to
    effect the Exchange (which it presently intends to do if the
    Separation is





139









 






    consummated and the Exchange Conditions are satisfied on or
    before the Outside Date), holders of the Entergy notes will not
    have the option to opt out of the Exchange. The Exchange will be
    mandatory, and it shall not give any holder of the Entergy notes
    the right to require Entergy or any other party to repurchase
    any Entergy notes held by such holder.



 



    If Entergy elects to effect the Exchange, Entergy will mail, or
    will cause the trustee to mail, a written notification to the
    holders of the Entergy notes (the “Notification”) on
    or prior to the intended date of the Exchange. The Notification
    will include (1) a statement that Entergy intends to
    exchange the Entergy notes for the Enexus notes on the basis
    discussed herein, (2) a statement that Entergy intends to
    exchange all of the Entergy notes or, if less than all (and
    subject to the $300 million minimum referred to above), the
    aggregate principal amount of Entergy notes to be exchanged, in
    which case the Exchange will be effected on a pro rata basis,
    (3) a statement confirming that, at the time of mailing of
    the Notification (the “Notification mailing date”),
    the Exchange Conditions have been satisfied, and (4) the
    effective date of the Exchange. Entergy may give the
    Notification at any time during the nine-month period commencing
    on the consummation of the Separation, but in no event after the
    Outside Date.





 



    Upon consummation of the Exchange, the holders of Entergy notes
    shall become holders of Enexus notes, entitled to look only to
    Enexus for payment of principal and interest on the Enexus
    notes. Upon the Exchange of all of the Entergy notes, Entergy
    shall be discharged from all obligations under the Entergy
    indenture. The Enexus notes shall be issued pursuant to an
    indenture containing the terms of the Enexus notes, which is
    referred to herein as the “Enexus indenture.” See
    “— Description of the Enexus Notes.” Any
    accrued and unpaid interest on the Entergy notes shall be paid
    as regular interest on the Enexus notes on the next interest
    payment date as scheduled according to the Entergy notes.







 



    By purchasing the Entergy notes offered hereby, each holder of
    Entergy notes is deemed to have expressly and irrevocably
    consented to having such holder’s Entergy notes exchanged,
    in whole or in part (subject to the $300 million minimum
    referred to above) for a like principal amount of Enexus notes
    at the time of the Exchange, provided that all the Exchange
    Conditions described herein have been met.





 




    Conditions
    Precedent to the Exchange



 



    The Exchange will not occur unless the Separation has been
    consummated on or prior to the Outside Date and each of the
    following Exchange Conditions has been satisfied:



 



    On the Notification mailing date:



 


			
	 	    • 
	
    Enexus shall consist of substantially the same assets,
    liabilities and capitalization as described in this offering
    memorandum, except for additions, dispositions and changes that
    occur in the ordinary course of business;

	 
	 	    • 
	
    Enexus’ business shall consist of the line of business
    conducted by Enexus as described in this offering memorandum;






 


			
	 	    • 
	
    Enexus’ total Long-Term Indebtedness upon consummation of
    the Separation shall not exceed
    $[     ];








 


			
	 	    • 
	
    the terms of the Enexus notes as described in this offering
    memorandum shall have been approved by any applicable state or
    federal regulatory or governmental agency or body and no such
    approval shall require any additional terms for the Enexus
    notes; and








 


			
	 	    • 
	
    the trustee shall have received an officer’s certificate,
    dated the Notification mailing date, from Entergy relating to
    its intention to effect the Exchange and stating that each of
    the Exchange Conditions has been satisfied.








 



    For purposes of this section, “Long-Term Indebtedness”
    shall mean any Debt for borrowed money with a maturity of
    greater than one year.







 




    Special
    Optional Redemption in the Event the Separation Is Not
    Consummated





 



    If (1) Entergy abandons or terminates the Separation,
    (2) the Separation is not consummated on or before the
    Outside Date, or (3) there is a failure to obtain any
    required approval from any applicable state or federal



140








 








     regulatory or governmental agency or body or an approval is
    obtained from any applicable state or federal regulatory or
    governmental agency or body, in either case, which prevents
    Entergy from being able to satisfy one of the Exchange
    Conditions on or before the Outside Date, Entergy may redeem
    (the “Special Optional Redemption”) the Entergy notes
    in whole or in part, in the case of a Special Optional
    Redemption pursuant to clauses (1) or (2) above, on
    the date that is 31 days after the Outside Date (the
    “Final Special Optional Redemption Date”), and,
    in the case of a Special Optional Redemption pursuant to
    clause (3) above, on or before the Final Special Optional
    Redemption Date, in each case, upon at least
    30 days’ irrevocable written notice mailed by
    first-class to the registered address of each holder of Entergy
    notes, at a redemption price equal to 101% of the principal
    amount of the Entergy notes redeemed plus accrued and unpaid
    interest, if any, on the Entergy notes be redeemed to the
    date of redemption. If after giving effect to any such Special
    Optional Redemption, less than $300 million aggregate
    principal amount of the Entergy notes will remain outstanding,
    Entergy must redeem all of the outstanding Entergy notes.





 




    Make-Whole
    Redemption



 



    If either (1) the Separation is not consummated and Entergy
    does not exercise the Special Optional Redemption, or
    (2) the Separation is consummated and Entergy does not
    effect the Exchange for 100% of the Entergy notes, in each case
    during the period Entergy has the right to do so, then
    thereafter, Entergy may redeem the Entergy notes, in whole or in
    part, at Entergy’s option, from time to time at any time
    prior to the maturity of the Entergy notes (the “Make-Whole
    Redemption”). Entergy will give notice of its intent to
    redeem the Entergy notes pursuant to the Make-Whole Redemption
    at least 30 days prior to the redemption date (the
    “Make-Whole Redemption Date”). If Entergy redeems
    all or any part of the Entergy notes, Entergy will pay a
    redemption price equal to the greater of:



 


			
	 	    • 
	
    100% of the principal amount of the Entergy notes being
    redeemed, or

	 
	 	    • 
	
    as determined by the Independent Investment Banker, the sum of
    the present values of the remaining scheduled payments of
    principal of and interest on the Entergy notes being redeemed
    (excluding the portion of any such interest accrued to the
    redemption date) discounted (for purposes of determining such
    present values) to the Make-Whole Redemption Date on a
    semi-annual basis (assuming a
    360-day year
    consisting of twelve
    30-day
    months) at the Adjusted Treasury Rate plus 0.50%,






 



    plus, in each case, accrued and unpaid interest, if any, on the
    Entergy notes being redeemed to the
    Make-Whole
    Redemption Date.





 



    If at the time notice of the Make-Whole Redemption is given, the
    redemption moneys are not on deposit with the trustee, then the
    Make-Whole Redemption shall be subject to their receipt on or
    before the
    Make-Whole
    Redemption Date and such notice shall be of no effect
    unless such moneys are received. If less than all of the Entergy
    notes are to be redeemed at Entergy’s option, the trustee
    will select, in a manner it deems fair and appropriate, the
    Entergy notes or portions of the Entergy notes to be redeemed.



 



    Upon payment of the redemption price, on and after the
    Make-Whole Redemption Date, interest will cease to accrue
    on the Entergy notes or portions thereof called for the
    Make-Whole Redemption.



 




    Payment
    and Paying Agents



 



    Interest on the Entergy notes payable on each interest payment
    date will be paid to the person in whose name that Entergy note
    is registered as of the close of business on the regular record
    date for the interest payment date, which will be the close of
    business on the 15th calendar day before that interest
    payment date. However, interest payable at maturity will be paid
    to the person to whom the principal is paid. If there has been a
    default in the payment of interest on any Entergy note, other
    than at maturity, the defaulted interest may be paid to the
    holder of such Entergy note as of the close of business on a
    date between 10 and 15 days before the date proposed by
    Entergy for payment of such defaulted interest or in any other
    lawful manner permitted by any securities exchange on which that
    Entergy note may be listed, if the trustee finds it practicable.



141








 







 



    Principal, premium, if any, and interest on the Entergy notes at
    maturity will be payable upon presentation of the Entergy notes
    at the corporate trust office of Deutsche Bank Trust Company
    Americas, as Entergy’s paying agent. Entergy may change the
    place of payment on the Entergy notes, and may appoint one or
    more additional paying agents (including Entergy) and may remove
    any paying agent, all at Entergy’s discretion.







 



    Entergy will pay principal, premium, if any, and interest due on
    the Entergy notes in the form of global securities to DTC or its
    nominee in immediately available funds. DTC will then make
    payment to its participants for disbursement to the Beneficial
    Owners of the Entergy notes as described under “—
    Global Securities; Book-Entry System.”





 




    Registration
    and Transfer





 



    Subject to the transfer restrictions relating to the Entergy
    notes as described under “Exchange Offer and Registration
    Rights Agreements,” in the event that the Exchange is not
    consummated, the transfer of Entergy notes may be registered,
    and Entergy notes may be exchanged for other Entergy notes of
    the same series, of authorized denominations and with the same
    terms and principal amount, at the offices of the trustee in The
    City of New York. Entergy may change the place for registration
    of transfer and exchange of the Entergy notes and may designate
    additional places for registration and exchange. No service
    charge will be made for any transfer or exchange of the Entergy
    notes. However, Entergy may require payment to cover any tax or
    other governmental charge that may be imposed. Entergy will not
    be required to execute or to provide for the registration of,
    transfer of, or the exchange of (i) any Entergy notes
    during the 15 days before giving any notice of redemption,
    or (ii) any Entergy note selected for redemption except the
    unredeemed portion of any Entergy note being redeemed in part.





 




    Defeasance



 



    Subject to certain conditions, Entergy will be discharged from
    its obligations on the Entergy notes if Entergy irrevocably
    deposits with the trustee sufficient cash or Government
    Securities to pay the principal, interest, any premium and any
    other sums when due on the Stated Maturity date or a redemption
    date of the Entergy notes.



 




    Certain
    Covenants



 




    Liens



 



    The Entergy indenture provides that, so long as any Entergy
    notes are outstanding, Entergy will not create or suffer to
    exist any lien upon or with respect to any of its properties,
    including, without limitation, any shares of any class of equity
    security of any Significant Subsidiary, as defined below, to
    secure or provide for the payment of any Debt without also
    securing such outstanding Entergy notes, and all other Debt
    entitled to be so secured, equally and ratably with such Debt.



 



    This restriction does not apply to:



 



    (1) liens in existence on the date of the Entergy indenture;



 



    (2) liens for taxes, assessments or governmental charges or
    levies to the extent not past due or which are being contested
    in good faith by appropriate proceedings diligently conducted
    and for which Entergy has provided adequate reserves for the
    payment thereof in accordance with GAAP;



 



    (3) pledges or deposits in the ordinary course of business
    to secure obligations under workers’ compensation laws or
    similar legislation;



 



    (4) other pledges or deposits in the ordinary course of
    business, other than for Debt, that, in the aggregate are not
    material to Entergy;



 



    (5) purchase money mortgages or other purchase money
    security interests upon or in any property acquired or held by
    Entergy in the ordinary course of business to secure the
    purchase price of such property or to secure Debt incurred
    solely for the purpose of financing the acquisition of such
    property;




142








 





 



    (6) liens imposed by law such as materialmen’s,
    mechanics’, carriers’, workers’ and
    repairmen’s liens and other similar liens arising in the
    ordinary course of business for sums not yet due or currently
    being contested in good faith by appropriate proceedings
    diligently conducted;



 



    (7) attachment, judgment or other similar liens arising in
    connection with court proceedings, provided that such liens, in
    the aggregate, shall not exceed $50 million at any one time
    outstanding;



 



    (8) liens securing (x) Hedging Obligations entered
    into in the ordinary course of business and not for speculative
    purposes and (y) Guaranty Obligations or Credit Support
    Facilities, supporting or in respect of Hedging Obligations
    entered into in the ordinary course of business and not for
    speculative purposes;



 



    (9) liens in addition to those liens permitted by
    clauses (1) through (8) above, provided that such
    additional liens in the aggregate, shall not exceed
    $200 million at any one time outstanding; and



 



    (10) liens created for the sole purpose of extending,
    renewing or replacing in whole or in part Debt secured by
    any lien referred to in clauses (1) through (9) above,
    provided that the principal amount of the Debt secured by such
    liens shall not exceed the principal amount of Debt so secured
    at the time of such extension, renewal, replacement and that
    such extension, renewal or replacement shall be limited to all
    or a part of the property or Debt that secured the lien so
    extended, renewed or replaced, and any improvements on such
    properties;



 



    provided, however, that Entergy cannot place any lien permitted
    under the foregoing clauses (1) through (10) upon any
    shares of any class of equity security of any Significant
    Subsidiary without simultaneously, equally and ratably securing
    the outstanding Entergy notes.





 



    For purposes of this section, the term “Significant
    Subsidiary” means Entergy Arkansas, Inc., Entergy Gulf
    States Louisiana, L.L.C., Entergy Texas, Inc., Entergy
    Louisiana, LLC, Entergy Mississippi, Inc., System Energy
    Resources, Inc., and any other Domestic Regulated Utility
    Subsidiary: (i) the total assets (after intercompany
    eliminations) of which exceed 5% of total assets of Entergy and
    its subsidiaries, or (ii) the net worth of which exceeds 5%
    of the Consolidated Net Worth of Entergy and its subsidiaries,
    in each case as shown on the most recent audited consolidated
    balance sheet of Entergy and its subsidiaries. In no event shall
    “Significant Subsidiary” include any Domestic
    Regulated Utility Subsidiary that as of June 30, 2008,
    (i) had total assets (after intercompany eliminations)
    which were 5% or less of the total assets of Entergy and its
    subsidiaries at such date, or (ii) had a net worth which
    was 5% or less of the Consolidated Net Worth of Entergy and its
    subsidiaries at such date.





 




    Disposition
    of Assets



 



    The Entergy indenture provides that, so long as any Entergy
    notes are outstanding, Entergy will not sell, lease, transfer,
    convey or otherwise dispose of (whether in one transaction or in
    a series of transactions) any shares of voting common stock (or
    of stock or other instruments convertible into voting common
    stock) of any Principal Utility Subsidiary, or permit any
    Principal Utility Subsidiary to issue, sell or otherwise dispose
    of any of its shares of voting common stock (or of stock or
    other instruments convertible into voting common stock) (each
    such case, a “Stock Disposition”), except to Entergy
    or to a Principal Utility Subsidiary, unless within
    180 days of such Stock Disposition, Entergy applies (or
    cause such Principal Utility Subsidiary to apply) all of the Net
    Available Cash from such Stock Disposition (i) to prepay,
    repay, purchase, repurchase, redeem, retire, defease or
    otherwise acquire for value its Debt
    and/or Debt
    of one or more Domestic Regulated Utility Subsidiaries that
    remain a Subsidiary of Entergy’s,
    and/or
    (ii) to reinvest in the business of one or more Domestic
    Regulated Utility Subsidiaries. For purposes of this
    restriction, a Stock Disposition shall be treated as a separate
    transaction and not part of a series of transactions if it
    occurs 180 days or more after another Stock Disposition.



143








 








    Consolidation,
    Merger, Conveyance or Other Transfer



 



    The Entergy indenture provides that Entergy may not consolidate
    with or merge into any other entity or convey, transfer or lease
    its properties and assets substantially as an entirety to any
    entity, unless:



 



    (1) the surviving or successor entity or an entity which
    acquires by conveyance or transfer or which leases
    Entergy’s properties and assets substantially as an
    entirety is organized and validly existing under the laws of the
    United States of America or any state thereof and it expressly
    assumes Entergy’s obligations on the Entergy notes and
    under the Entergy indenture;



 



    (2) immediately after giving effect to the transaction, no
    Event of Default under the Entergy indenture or no event which,
    after notice or lapse of time or both, would become an Event of
    Default, shall have occurred and be continuing; and



 



    (3) Entergy shall have delivered to the trustee an
    officer’s certificate and an opinion of counsel as provided
    in the Entergy indenture.



 



    Upon the consummation of any such transaction, the surviving or
    successor entity will succeed to Entergy’s rights and
    powers under the Entergy indenture and, except in the case of a
    lease, Entergy shall be relieved of all obligations and
    covenants under the Entergy indenture and the outstanding
    Entergy notes. The terms of the Entergy indenture do not
    restrict Entergy in a merger in which Entergy is the surviving
    entity.



 




    Reports





 



    To the extent required by the Trust Indenture Act, whether
    or not the Entergy indenture is qualified under the
    Trust Indenture Act, if Entergy is required to file with
    the SEC the following documents and reports:





 



    (1) Entergy’s annual reports on
    Form 10-K;



 



    (2) Entergy’s quarterly reports on
    Form 10-Q;



 



    (3) Entergy’s current reports on
    Form 8-K; and





 



    (4) Any other documents filed with the SEC which are filed
    with or incorporated by reference in the foregoing reports,
    related to Entergy, and have not previously been filed with the
    trustee,







 



    then Entergy shall file with the trustee such documents and
    reports within 30 days after such documents or reports (or
    consolidated documents or reports containing such documents or
    reports) are filed with the SEC.





 



    To the extent that any of the foregoing documents or reports are
    consolidated with similar documents or reports filed by an
    affiliate, Entergy may file such consolidated document or report
    with the trustee in lieu of the separate document or report.



 



    Delivery of such reports, information and documents to the
    trustee is for informational purposes only and the
    trustee’s receipt of such shall not constitute constructive
    notice of any information contained therein or determinable from
    information contained therein, including Entergy’s
    compliance with any of its covenants hereunder (as to which the
    trustee is entitled to rely exclusively on an officer’s
    certificates).



 




    Events
    of Default





 



    “Event of Default” when used in the Entergy indenture
    with respect to the Entergy notes, means any of the following:





 



    (1) failure to pay interest on the Entergy notes for three
    Business Days after it is due and payable;





 



    (2) failure to pay the principal of or any premium
    on the Entergy notes when due and payable;





 



    (3) failure to perform any other covenant in the Entergy
    indenture that continues for 30 days after Entergy receives
    written notice from the trustee, or Entergy and the trustee
    receives a written notice from the holders of 33% in aggregate
    principal amount of the Entergy notes; provided, however, that
    the trustee



144








 






    or such holders, shall be deemed to have agreed to an
    extension of such period if Entergy initiates and diligently
    pursues corrective action within such period;



 



    (4) events of bankruptcy, insolvency or reorganization
    relating to Entergy specified in the Entergy indenture;



 



    (5) failure to pay any principal of or premium or interest
    on any of Entergy’s Debt that is outstanding in a principal
    amount in excess of $50 million in the aggregate, whether
    by scheduled maturity, required prepayment, acceleration, demand
    or otherwise, and such failure continues after the expiration of
    any applicable grace period specified in the agreement or
    instrument relating to such Debt;





 



    (6) failure by Entergy or any of its Significant
    Subsidiaries to pay its debts as such debts become due, or
    admission in writing of its inability to pay its debts
    generally, or making a general assignment for the benefit of
    creditors; or any proceeding shall be instituted by or against
    Entergy or any of its Significant Subsidiaries seeking to
    adjudicate Entergy or any such Significant Subsidiary as
    bankrupt or insolvent, or seeking liquidation, winding up,
    reorganization, arrangement, adjustment, protection, relief or
    composition of it or its debts under any law relating to
    bankruptcy, insolvency or reorganization or relief of debtors,
    or seeking the entry of an order for relief or the appointment
    of a receiver, trustee, custodian or other similar official for
    it or for any substantial part of its property and, in the case
    of any such proceeding instituted against it (but not instituted
    by it), either such proceeding shall remain undismissed or
    unstayed for a period of 30 days, or any of the actions
    sought in such proceeding, including, without limitation, the
    entry of an order for relief against, or the appointment of a
    receiver, trustee, custodian or other similar official for, it
    or for any substantial part of its property, shall occur; or
    Entergy or any its Significant Subsidiary shall take any
    corporate action to authorize or to consent to any of the
    actions set forth in this subparagraph; or





 



    (7) any judgment or order for the payment of money in
    excess of $25 million has been rendered against Entergy and
    either (i) enforcement proceedings shall have been
    commenced by any creditor upon such judgment or order, or
    (ii) there shall be any period of 10 consecutive Business
    Days during which a stay of enforcement of such judgment or
    order, by reason of a pending appeal or otherwise, shall not be
    in effect.





 



    The trustee may withhold notice to the holders of the Entergy
    notes of any Default, except Default in the payment of
    principal, premium or interest, if it considers the
    withholding of notice to be in the interests of the holders.





 




    Remedies





 



    If an Event of Default under the Entergy indenture for any
    series of notes, including the Entergy notes, occurs and
    continues or, so long as the Entergy notes are outstanding, if a
    Prepayment Event, as defined below, with respect to the Entergy
    notes occurs and continues, the trustee or the holders of a
    majority in aggregate principal amount of all of the notes of
    such series or of the Entergy notes, as the case may be, may
    declare the entire principal amount of all of the notes of such
    series or the Entergy notes, as the case may be, together with
    accrued interest, to be due and payable immediately. However, if
    the event of default is applicable to more than one series of
    notes outstanding under the Entergy indenture, only the trustee
    or the holders of a majority in aggregate principal amount of
    all outstanding notes of all of those series, voting as one
    class, and not the holders of any series, may make that
    declaration of acceleration. Notwithstanding the foregoing, so
    long as the Entergy notes are outstanding, the Entergy notes
    shall become automatically due and payable upon an actual entry
    of an order for relief under the federal bankruptcy code with
    respect to Entergy or any of its Significant Subsidiary. For the
    purposes of this paragraph, “Prepayment Event” means
    the occurrence of any event or the existence of any condition
    under any agreement or instrument relating to Debt of
    Entergy’s Significant Subsidiary that is outstanding in a
    principal amount in excess of $50 million in the aggregate,
    which the occurrence or event results in the declaration of such
    Debt being due and payable, or such Debt being required to be
    prepaid (other than by a regularly scheduled required
    prepayment), prior to the Stated Maturity thereof.





145








 







 



    At any time after a declaration of acceleration with respect to
    the notes of any series including the Entergy notes, has been
    made and before a judgment or decree for payment of the money
    due has been obtained, the Event of Default under the Entergy
    indenture giving rise to the declaration of acceleration will be
    considered waived, and the declaration and its consequences will
    be considered automatically rescinded and annulled, if:







 



    (1) Entergy has paid or deposited with the trustee a sum
    sufficient to pay: (i) all overdue interest on all notes of
    the series, including the Entergy notes; (ii) the principal
    of and premium, if any, on any notes of the series, including
    the Entergy notes, which have otherwise become due and interest
    thereon that is currently due; (iii) interest on overdue
    interest; and (iv) all amounts due to the trustee under the
    Entergy indenture; and







 



    (2) any other Event of Default under the Entergy indenture
    with respect to the notes of that series, including Entergy
    notes, other than the non-payment of principal of such series
    which shall have become due solely by such declaration of
    acceleration, has been cured or waived as provided in the
    Entergy indenture.





 



    However, no such waiver or rescission and annulment shall extend
    to or shall affect any subsequent Default or impair any related
    right.





 



    Other than its duties in case of an Event of Default under the
    Entergy indenture, the trustee is not obligated to exercise any
    of its rights or powers under the Entergy indenture at the
    request, order or direction of any of the holders, unless the
    holders offer the trustee a reasonable indemnity. If they
    provide this reasonable indemnity, the holders of a majority in
    aggregate principal amount of any series of notes, including the
    Entergy notes, will have the right to direct the time, method
    and place of conducting any proceeding for any remedy available
    to the trustee, or exercising any power conferred upon the
    trustee. However, if the Event of Default under the Entergy
    indenture relates to more than one series, only the holders of a
    majority in aggregate principal amount of all affected series,
    considered as one class, will have the right to give this
    direction and not the holders of the Entergy notes. The trustee
    is not obligated to comply with directions that conflict with
    law or other provisions of the Entergy indenture.







 



    No holder of notes of any series, including the Entergy notes,
    will have any right to institute any proceeding under the
    Entergy indenture, or any remedy under the Entergy indenture,
    unless:





 



    (1) the holder has previously given to the trustee written
    notice of a continuing Event of Default under the Entergy
    indenture;





 



    (2) the holders of a majority in aggregate principal amount
    of the outstanding notes of all series in respect of which an
    event of default shall have occurred and be continuing,
    considered as one class, have made a written request to the
    trustee, and have offered reasonable indemnity to the trustee to
    institute proceedings;





 



    (3) the trustee has failed to institute any proceeding for
    60 days after notice; and





 



    (4) no direction inconsistent with such written request
    shall have been given to the trustee during that
    60-day
    period by the holders of a majority in aggregate principal
    amount of the outstanding notes of all series in respect of
    which an event of default shall have occurred and be continuing,
    considered as one class.





 



    Entergy has agreed under the Entergy indenture to provide to the
    trustee an annual statement by an appropriate officer as to
    Entergy’s compliance with all conditions and covenants
    under the Entergy indenture.



146








 







    Modification
    and Waiver





 



    Without the consent of any holder of notes issued under the
    Entergy indenture, including holders of the Entergy notes,
    Entergy and the trustee may enter into one or more supplemental
    indenture for any of the following purposes:





 



    (1) to evidence the assumption by any permitted successor
    of the covenants in the Entergy indenture and in the Entergy
    notes;



 



    (2) to add additional covenants or for Entergy to surrender
    any right or power under the Entergy indenture;



 



    (3) to add additional Events of Default under the Entergy
    indenture;



 



    (4) to change or eliminate or add any provision to the
    Entergy indenture; provided, however, if the change, elimination
    or addition will adversely affect the interests of the holders
    of the Entergy notes in any material respect, the change,
    elimination or addition will become effective only when the
    consent of the holders of Entergy notes has been obtained in
    accordance with the Entergy indenture;



 



    (5) to provide collateral security for all but not part of
    the Entergy notes;



 



    (6) to provide for the authentication and delivery of
    bearer securities and coupons appertaining thereto;



 



    (7) to evidence and provide for the acceptance of
    appointment of a successor trustee;



 



    (8) to provide for the procedures required for use of a
    noncertificated system of registration for the Entergy notes;



 



    (9) to change any place where principal, premium, if any,
    and interest shall be payable, Entergy notes may be surrendered
    for registration of transfer or exchange and notices to Entergy
    may be served; or



 



    (10) to cure any ambiguity, to correct or supplement any
    defect or inconsistency or to make any other changes or to add
    provisions with respect to matters and questions arising under
    the Entergy indenture; provided that such other changes or
    additions do not adversely affect the interests of the holders
    of the Entergy notes in any material respect.





 



    The holders of a majority in aggregate principal amount of the
    notes of all series issued under the Entergy indenture then
    outstanding and affected, including Entergy notes, if
    applicable, considered as one class, may waive compliance by
    Entergy with some restrictive provisions of the Entergy
    indenture. The holders of a majority in aggregate principal
    amount of the outstanding notes of any series, including the
    Enexus notes, may waive any past Default under the Entergy
    indenture with respect to that series, except a default in the
    payment of principal, premium, if any, or interest and certain
    covenants and provisions of the Entergy indenture that cannot be
    modified or be amended without the consent of the holder of each
    outstanding notes of the series affected.







 



    The consent of the holders of a majority in aggregate principal
    amount of the notes of all series then outstanding, including
    the Enexus notes, is required for all other modifications to
    the Entergy indenture. However, if less than all of the series
    of notes outstanding under the Entergy indenture are directly
    affected by a proposed supplemental indenture, then the consent
    only of the holders of a majority in aggregate principal amount
    of all series that are directly affected, considered as one
    class, will be required. No such amendment or modification may:







 



    (1) change the Stated Maturity of the principal of, or any
    installment of principal of or interest on, any note, or reduce
    the principal amount of any note or its rate of interest or
    change the method of calculating the interest rate or reduce any
    premium payable upon redemption, or change the currency in which
    payments are made, or impair the right to institute suit for the
    enforcement of any payment on or after the Stated Maturity of
    the any note, without the consent of the holder;





147








 







 



    (2) reduce the percentage in principal amount of the
    outstanding notes of any series the consent of the holders of
    which is required for any supplemental indenture or any waiver
    of compliance with a provision of the Entergy indenture or any
    Default thereunder and its consequences, or reduce the
    requirements for quorum or voting, without the consent of all
    the holders of all the series; or







 



    (3) modify some of the provisions of the Entergy indenture
    relating to supplemental indentures, waivers of some covenants
    and waivers of past Defaults with respect to the notes of any
    series, without the consent of the holders of each outstanding
    note affected thereby.







 



    A supplemental indenture which changes the Entergy indenture
    solely for the benefit of one or more particular series of
    notes, or modifies the rights of the holders of notes of one or
    more series, will not affect the rights under the Entergy
    indenture of the holders of the notes of any other series.





 



    The Entergy indenture provides that the Entergy notes owned by
    Entergy or any other obligor or by any person directly or
    indirectly controlling or controlled by or under direct or
    indirect common control with Entergy or such obligor shall be
    disregarded and considered not to be outstanding in determining
    whether the required holders have given a request or consent.





 



    Entergy may fix in advance a record date to determine the
    required number of holders entitled to give any request, demand,
    authorization, direction, notice, consent, waiver or other such
    act of the holders, but Entergy shall have no obligation to do
    so. If Entergy fixes a record date, that request, demand,
    authorization, direction, notice, consent, waiver or other act
    of the holders may be given before or after that record date,
    but only the holders of record at the close of business on that
    record date will be considered holders for the purposes of
    determining whether holders of the required percentage of the
    outstanding Entergy notes have authorized or agreed or consented
    to the request, demand, authorization, direction, notice,
    consent, waiver or other act of the holders. For that purpose,
    the outstanding Entergy notes shall be computed as of the record
    date. Any request, demand, authorization, direction, notice,
    consent, election, waiver or other act of a holder will bind
    every future holder of the Entergy notes and the holder of every
    Entergy note issued upon the registration of transfer of or in
    exchange of these Entergy notes. A transferee will be bound by
    acts of the trustee or Entergy in reliance thereon, whether or
    not notation of that action is made upon the Entergy notes.





 




    Resignation
    of a Trustee



 



    A trustee may resign at any time by giving written notice to
    Entergy or may be removed at any time by act of the holders of a
    majority in aggregate principal amount of the Entergy notes
    delivered to the trustee and Entergy. No resignation or removal
    of a trustee and no appointment of a successor trustee will be
    effective until the acceptance of appointment by a successor
    trustee. So long as no Event of Default or event which, after
    notice or lapse of time, or both, would become an Event of
    Default has occurred and is continuing and except with respect
    to a trustee appointed by act of the holders, if Entergy has
    delivered to the trustee a resolution of its Board of Directors
    appointing a successor trustee and such successor has accepted
    the appointment in accordance with the terms of the Entergy
    indenture, the trustee will be deemed to have resigned and the
    successor will be deemed to have been appointed as trustee in
    accordance with the Entergy indenture.



 




    Notices



 



    Notices to holders of Entergy notes will be given by mail to the
    addresses of such holders as they may appear in the security
    register for Entergy notes.



 




    Governing
    Law



 



    The Entergy indenture and the Entergy notes will be governed by,
    and construed in accordance with, the laws of the State of New
    York.



148








 







    Information
    about the Trustee





 



    The trustee under the Entergy indenture is Deutsche Bank
    Trust Company Americas. In addition to acting as trustee
    for the Entergy indenture, Deutsche Bank Trust Company
    Americas also acts as trustee under various indentures of
    Entergy’s affiliates.





 




    Certain
    Definitions Under the Entergy Indenture



 



    Set forth below are certain defined terms used in the Entergy
    indenture. Reference is made to the Entergy indenture for a full
    disclosure of all such terms, as well as any other capitalized
    terms used herein for which no definition is provided.



 



    “Adjusted Treasury Rate” means, with respect to
    any Make-Whole Redemption Date:



 



    (1) the yield, under the heading which represents the
    average for the immediately preceding week, appearing in the
    most recently published statistical release designated
    “H.15(519)” or any successor publication which is
    published weekly by the Board of Governors of the Federal
    Reserve System and which establishes yields on actively traded
    United States Treasury securities adjusted to constant maturity
    under the caption “Treasury Constant Maturities,” for
    the maturity corresponding to the Comparable Treasury Issue (if
    no maturity is within three months before or after the remaining
    term of the Entergy notes being redeemed, yields for the two
    published maturities most closely corresponding to the
    Comparable Treasury Issue shall be determined and the Adjusted
    Treasury Rate shall be interpolated or extrapolated from such
    yields on a straight line basis, rounding to the nearest
    month); or



 



    (2) if such release (or any successor release) is not
    published during the week preceding the calculation date for the
    Adjusted Treasury Rate or does not contain such yields, the rate
    per annum equal to the semi-annual equivalent yield to maturity
    of the Comparable Treasury Issue, calculated using a price for
    the Comparable Treasury Issue (expressed as a percentage of its
    principal amount) equal to the Comparable Treasury Price for
    such redemption date.



 



    The Adjusted Treasury Rate shall be calculated on the third
    Business Day preceding the Make-Whole Redemption Date.



 



    “Beneficial Owner” has the meaning assigned to
    such term in
    Rule 13d-3
    and
    Rule 13d-5
    under the Exchange Act. The terms “Beneficially Owns”
    and “Beneficially Owned” have a corresponding meaning.



 



    “Board of Directors” means:



 



    (1) with respect to a corporation, the board of directors
    of the corporation or any committee thereof duly authorized to
    act on behalf of such board;



 



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



 



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



 



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



 



    “Business Day” means any day other than a
    Saturday or a Sunday or a day on which banking institutions in
    The City of New York are authorized or required by law or
    executive order to remain closed or a day on which the corporate
    trust office of the trustee is closed for business.





 



    “Commodity Hedge Transaction” shall mean any
    swaps (including without limitation heat rate swaps), caps,
    collars, puts, calls, floors, futures, options, spots, forwards,
    power purchase, tolling or sale agreements, fuel purchase or
    sale agreements (including any and all fuels used for power
    generation, whether or not used by Entergy and its
    Subsidiaries), weather risk management transactions, emissions
    or renewable energy credit or allowance purchase or sales
    agreements, power transmission agreements, fuel enrichment,
 transportation or storage agreements,
    netting agreements, or commercial or trading agreements, each
    with respect to, or involving the purchase, transmission,
    distribution, sale, lease or hedge of, energy, generation capacity or fuel





149








 






(including any and all fuels used
    for power generation, whether or not used by Entergy and its
    Subsidiaries), or any other energy related commodity or service,
    price or price indices for any such commodities or services or
    any other similar derivative agreements, and any other similar
    agreements from time to time entered into by Entergy or any
    Subsidiary in the course of its business as a merchant power
    generator (as its risk management practices and methods may
    evolve from time to time, consistent with all requirements of
    law and applicable regulation) in order to manage fluctuations
    in the price or availability of any energy commodity or to
    manage any regulatory or other risk of Entergy or such
    Subsidiary in connection with its business as a merchant power
    generator (and in any case not for speculative purposes).



 



    “Common Equity” shall mean the stock, shares or
    other ownership interests in the issuer thereof howsoever
    evidenced (including, without limitation, limited liability
    company membership interests) that has ordinary voting power for
    the election of directors, managers or trustees (or other
    persons performing similar functions) of the issuer, as
    applicable, provided that Preferred Equity, even if it has such
    ordinary voting power, shall not be Common Equity.



 



    “Comparable Treasury Issue” means the United
    States Treasury security selected by the Independent Investment
    Banker as having a maturity comparable to the remaining term of
    the Entergy notes that would be utilized, at the time of
    selection and in accordance with customary financial practice,
    in pricing new issues of corporate debt securities of comparable
    maturity to the remaining term of the Entergy notes.



 



    “Comparable Treasury Price” means, with respect
    to any redemption date, (1) the average of five Reference
    Treasury Dealer Quotations for such redemption date after
    excluding the highest and lowest such Reference Treasury Dealer
    Quotations, or (2) if the Independent Investment Banker
    obtains fewer than five such Reference Treasury Dealer
    Quotations, the average of all such Reference Treasury Dealer
    Quotations.



 



    “Consolidated Net Worth” means the sum of the
    capital stock, excluding treasury stock and capital stock
    subscribed for and unissued, and surplus, including earned
    surplus, capital surplus and the balance of the current profit
    and loss account not transferred to surplus, accounts of Entergy
    and its subsidiaries appearing on a consolidated balance sheet
    of Entergy and its subsidiaries prepared as of the date of
    determination in accordance with GAAP consistent with those
    applied in the preparation of Entergy’s consolidated
    financial statements, after eliminating all intercompany
    transactions and all amounts properly attributable to minority
    interests, if any, in the stock and surplus of subsidiaries.



 



    “Credit Support Facilities” shall mean any
    commodity credit revolver, credit commodity posting facility,
    novation or other third party guarantee or credit support
    provided with respect to a Commodity Hedge Transaction.



 



    “Debt,” with respect to any Person, means
    (without duplication) all liabilities, obligations and
    indebtedness, contingent or otherwise, of such Person:



 



    (1) for borrowed money or evidenced by bonds, debentures,
    notes, or other similar instruments;



 



    (2) to pay the deferred purchase price of property or
    services, other than such obligations incurred in the ordinary
    course of business on customary trade terms, provided that such
    obligations are not more than 30 days past due;



 



    (3) as lessee under leases, which shall have been or should
    be, in accordance with GAAP, recorded as capital leases;



 



    (4) under reimbursement agreements or similar agreements
    with respect to the issuance of letters of credit, other than
    obligations in respect of letters of credit opened to provide
    for the payment of goods or services purchased in the ordinary
    course of business;



 



    (5) under any Guaranty Obligations;





 



    (6) representing any Hedging Obligations; and







 



    (7) liabilities in respect of unfunded vested benefits under plans
    covered by Title IV of ERISA.





150








 





 



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



 



    “Domestic Regulated Utility Subsidiary” means a
    direct or indirect domestic Subsidiary of Entergy engaged in the
    generation, transmission or distribution of electricity or the
    transmission or distribution of natural gas that is regulated as
    to rates by the Federal Energy Regulatory Commission (or
    successor federal agency) or a state or local governmental body
    on a cost-of-service basis.



 



    “ERISA” means the Employee Retirement Income
    Security Act of 1974, as amended from time to time, and the
    regulations promulgated and rulings issued thereunder, each as
    amended and modified from time to time.



 



    “GAAP” means generally accepted accounting
    principles set forth in the opinions and pronouncements of the
    Accounting Principles Board of the American Institute of
    Certified Public Accountants and statements and pronouncements
    of the Financial Accounting Standards Board or in such other
    statements by such other entity as have been approved by a
    significant segment of the accounting profession, which are in
    effect from time to time.



 



    “Government Securities” means direct
    obligations of, or obligations guaranteed by, the United States
    of America (including any agency or instrumentality thereof) for
    the payment of which obligations or guarantees the full faith
    and credit of the United States of America is pledged and which
    are not callable or redeemable at the issuer’s option.



 



    “Guaranty Obligations” means (i) direct or
    indirect guaranties in respect of, and obligations to purchase
    or otherwise acquire, or otherwise to assure a creditor against
    loss in respect of, Debt of any Person, and (ii) other
    guaranty or similar obligations in respect of the financial
    obligations of others including without limitation, Support
    Obligations.



 



    “Hedging Obligations” means, with respect to
    any Person, the obligations of such Person under:



 



    (1) currency exchange or interest rate swap, cap or collar
    agreements;



 



    (2) other agreements or arrangements designed to protect
    such Person against fluctuations in currency exchange or
    interest rates, and



 



    (3) Commodity Hedge Transactions.



 



    “Independent Investment Banker” means Citigroup
    Global Markets Inc. or Goldman, Sachs & Co. or, if
    such firm is unwilling or unable to select the Comparable
    Treasury Issue, an independent investment banking institution of
    national standing appointed by Entergy.



 



    “Issue Date”
    means          ,
    2008.



 



    “Net Available Cash” from a Stock Disposition
    means cash payments received therefrom net of all legal, title
    and recording tax expenses, commissions and other fees and
    expenses incurred, and all federal, state and local taxes
    required to be paid or accrued as a liability under GAAP, as a
    result of such Stock Disposition.



 



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



 



    “Preferred Equity” shall mean any stock, shares
    or other ownership interests in the issuer thereof howsoever
    evidenced (including, without limitation, limited liability
    company membership interests), whether with or without voting
    rights, that is entitled to dividends or distributions prior to
    the payment of dividends or distributions with respect to Common
    Equity.



 



    “Principal Utility Subsidiary” means Entergy
    Arkansas, Inc., Entergy Gulf States Louisiana, L.L.C., Entergy
    Texas, Inc., Entergy Louisiana, LLC, Entergy Mississippi, Inc.,
    System Energy Resources, Inc., or in each case, its successors
    and permitted assigns and any other Domestic Regulated Utility
    Subsidiary (i) the total assets (after intercompany
    eliminations) of which exceed 20% of total assets of Entergy and
    the total assets of its subsidiaries, or (ii) the net worth
    of which exceeds 20% of the Consolidated Net Worth of Entergy



151








 








     and its subsidiaries, in each case as shown on the most recent
    audited consolidated balance sheet of Entergy and its
    subsidiaries. In no event shall “Principal Utility
    Subsidiary” include any Domestic Regulated Utility
    Subsidiary that as of June 30, 2008, (i) had
    total assets (after intercompany eliminations) which were 5% or
    less of Entergy’s total assets and the total assets of its
    subsidiaries at such date, or (ii) had a net worth which
    was 5% or less of the Consolidated Net Worth of Entergy and its
    subsidiaries at such date.





 



    “Reference Treasury Dealer” means
    (1) Citigroup Global Markets Inc., Goldman,
    Sachs & Co. and their respective successors; provided,
    however, that if any of the foregoing shall cease to be a
    primary U.S. Government securities dealer in New York City
    (a “Primary Treasury Dealer”), Entergy will substitute
    therefor another Primary Treasury Dealer, and (2) any other
    Primary Treasury Dealer selected by the Independent Investment
    Banker after consultation with Entergy.



 



    “Reference Treasury Dealer Quotations” means,
    with respect to each Reference Treasury Dealer and any
    redemption date, the average, as determined by the Independent
    Investment Banker, of the bid and asked prices for the
    Comparable Treasury Issue (expressed in each case as a
    percentage of its principal amount) quoted in writing to the
    Independent Investment Banker at 5:00 p.m. on the third
    Business Day preceding such Make-Whole Redemption Date.





 



    “Significant Subsidiary” means any Subsidiary
    that would be a “significant subsidiary” as defined in
    Article 1,
    Rule 1-02
    of
    Regulation S-X,
    promulgated pursuant to the Securities Act, as such Regulation
    is in effect on the date of the supplemental indenture relating
    to the Entergy notes.







 



    “Stated Maturity” means, with respect to any
    installment of interest or principal on any series of
    indebtedness, the date on which the payment of interest or
    principal was scheduled to be paid in the documentation
    governing such indebtedness as of the date of the supplemental
    indenture relating to the Entergy notes, and will not include
    any contingent obligations to repay, redeem or repurchase any
    such interest or principal prior to the date originally
    scheduled for the payment thereof.





 



    “Stock Disposition” means, with respect to any
    Person, the issuance, sale, lease, transfer, conveyance or other
    disposition of (whether in one transaction or in a series of
    transactions) any Common Equity (or stock or other instruments
    convertible into Common Equity) of such Person.



 



    “Subsidiary” means any corporation, association
    or other business entity more than 50% of the outstanding voting
    stock of which is owned, directly or indirectly, by Entergy or
    by one of more other subsidiaries, or by Entergy and one or more
    other subsidiaries. For the purpose of this definition,
    “voting stock” means stock or other interests
    (including partnership or limited liability company interests)
    that ordinarily has voting power for the election of directors,
    managers or trustees, whether at all times or only so long as no
    senior class of stock or other interests has such voting power
    by reason of any contingency.



 



    “Support Obligations” means any financial
    obligation, contingent or otherwise, of any Person guaranteeing
    or otherwise supporting any Debt or other obligation of any
    other Person in any manner, whether directly or indirectly, and
    including, without limitation, any obligation of such Person,
    direct or indirect, (i) to purchase or pay (or advance or
    supply funds for the purchase or payment of) such Debt or to
    purchase (or to advance or supply funds for the purchase of) any
    security for the payment of such Debt, (ii) to purchase
    property, securities or services for the purpose of assuring the
    owner of such Debt of the payment of such Debt, (iii) to
    maintain working capital, equity capital, available cash or
    other financial statement condition of the primary obligor so as
    to enable the primary obligor to pay such Debt, (iv) to
    provide equity capital under or in respect of equity
    subscription arrangements so as to assure any Person with
    respect to the payment of such Debt or the performance of such
    obligation, or (v) to provide financial support for the
    performance of, or to arrange for the performance of, any
    non-monetary obligations or non-funded debt payment obligations
    (including, without limitation, guaranties of payments under
    power purchase or other similar arrangements) of the primary
    obligor.



 




    Description
    of the Enexus Notes





 



    Prior to the completion of the Separation, as partial
    consideration of Entergy’s transfer of the Non-Utility
    Nuclear business to Enexus, and in addition to other equity and
    debt securities issued by Enexus in connection





152








 








     therewith, Enexus will issue the Enexus notes to Entergy in an
    aggregate principal amount equal to the Entergy notes sold in
    this offering. If the Separation is consummated and the Exchange
    Conditions described above are satisfied on or prior to the
    Outside Date, Entergy may, at its option, exchange, all or part,
    but not less than $300 million aggregate principal amount
    of the Entergy notes for Enexus notes. See
    ‘‘— Description of the Entergy
    Notes — Mandatory Exchange at the Option of Entergy in
    the Event of the Separation.” Enexus will issue the Enexus
    notes under an indenture, which is referred to herein as the
    “Enexus indenture,” among itself, the Subsidiary
    Guarantors and Wells Fargo Bank, N.A., as
    trustee. The terms of the Enexus notes include those stated in
    the Enexus indenture and those made part of the Enexus indenture
    by reference to the Trust Indenture Act.





 



    The following description is a summary of the material
    provisions of the Enexus notes and the Enexus indenture. It does
    not restate the Enexus notes and the Enexus indenture in their
    entirety. You are urged to read the Enexus notes and the Enexus
    indenture because they, and not this description, define your
    rights as holders of the Enexus notes. Copies of the proposed
    form of the Enexus indenture are available as described under
    “Where You Can Find More Information.” Certain defined
    terms used in this description but not defined below under
    “— Certain Definitions Under the Enexus
    Indenture” have the meanings assigned to them in the Enexus
    indenture.







 



    The registered holder of an Enexus note is treated as the owner
    of it for all purposes. Only registered holders have rights
    under the Enexus indenture.





 




    General





 



    The Enexus notes:



 


			
	 	    • 
	
    will be general unsecured obligations of Enexus;






 


			
	 	    • 
	
    will be equal in right of payment with all existing and future
    senior indebtedness of Enexus;






 


			
	 	    • 
	
    will be senior in right of payment to any future subordinated
    indebtedness of Enexus;






 


			
	 	    • 
	
    will effectively rank junior to all existing and future secured
    indebtedness of Enexus to the extent of the value of the assets
    securing all such indebtedness; and






 


			
	 	    • 
	
    will be unconditionally guaranteed on a joint and several basis
    by the Subsidiary Guarantors.






 



    The Enexus notes will be guaranteed by Subsidiary Guarantors on
    an unsecured senior subordinated basis solely with respect to
    any Designated Senior Indebtedness and on an unsecured senior
    basis in all other instances. The Subsidiary Guarantee of the
    Enexus notes by a Subsidiary Guarantor:





 


			
	 	    • 
	
    will be a general unsecured obligation of such Subsidiary
    Guarantor;






 


			
	 	    • 
	
    will be subordinated in right of payment to such Subsidiary
    Guarantor’s Obligations under all existing and future
    Designated Senior Indebtedness and will rank equally in right of
    payment with all other existing and future senior indebtedness
    of such Subsidiary Guarantor;






 


			
	 	    • 
	
    will be senior in right of payment to any future subordinated
    indebtedness of such Subsidiary Guarantor; and






 


			
	 	    • 
	
    will effectively rank junior to all existing and future secured
    indebtedness of such Subsidiary Guarantor to the extent of the
    value of the assets securing all such indebtedness.








 



    On the Issue Date, EquaGen and its Subsidiaries will not be
    Subsidiaries of Enexus for purposes of the Enexus indenture and,
    accordingly, will not guarantee the Enexus notes.





 




    Principal,
    Maturity and Interest





 



    In the Exchange, each $1,000 principal amount of
    20          
    Entergy notes will be exchanged for $1,000 principal amount of
    20          
    Enexus notes and each $1,000 principal amount of
    20          
    Entergy notes will be exchanged for $1,000 principal amount of
    20           Enexus
    notes. New certificates





153








 








     (or global notes, as the case may be) representing the Enexus
    notes will be delivered to holders of the old Entergy notes,
    which will then become void.







 



    Enexus may issue additional Enexus notes under the Enexus
    indenture from time to time that rank equally and ratably with
    the Enexus notes in all respects (or in all respects except for
     the payment of interest
    accruing prior to the issue date of such further Enexus notes or
 except for    the first payment of interest following the issue date of such
    further Enexus notes), without notice to or the consent of the
    registered holders of the Enexus notes, and so that such further
    Enexus notes shall be consolidated and form a single series with
    the Enexus notes and shall have the same terms as to status, redemption or
    otherwise as the Enexus notes. Any further Enexus notes shall be
    issued subject to an agreement supplemental to the applicable
    indenture. The Enexus notes will be issued in minimum
    denominations of $2,000 and integral multiples of $1,000. The
    20          
    Enexus notes will mature
    on          ,          and
    the
    20          
    Enexus notes will mature
    on          ,          .







 



    Interest on the
    20          
    Enexus notes will accrue at the rate
    of     % per annum, and will be payable
    semi-annually in arrears
    on          and          
    of each year. Interest payments will be paid to the holders of
    record immediately
    preceding          and          .
    Interest on the
    20          
    Enexus notes will accrue at the rate
    of     % per annum, and will be payable
    semi-annually in arrears
    on          
    and          
    of each year. Interest payments will be paid to the holders of
    record immediately
    preceding          
    and          .







 



    As described above under “— Description of the Entergy
    Notes — Principal, Maturity and Interest,” with
    respect to any Entergy note that is exchanged for an Enexus note
    in an Exchange that takes place prior to an interest payment
    date, the interest on such Entergy note that is payable on such
    interest payment date will be paid by Enexus to the holders of
    record of the Enexus notes for which such Entergy notes have
    been exchanged on the applicable interest payment date for the
    Enexus notes.





 



    Interest on the Enexus notes will accrue from the date of
    original issuance or, if interest has already been paid, from
    the date it was most recently paid. Interest will be computed on
    the basis of a
    360-day year
    comprised of twelve
    30-day
    months.



 




    Subsidiary
    Guarantees





 



    Enexus’ payment obligations under the Enexus notes will be
    guaranteed by each of its current and future Subsidiaries that
    guarantee its Credit Facilities or any other Debt of Enexus (the
    “Subsidiary Guarantors”) on an unsecured senior
    subordinated basis solely with respect to any Designated Senior
    Indebtedness and on an unsecured senior basis in all other
    instances. These Subsidiary Guarantees will be joint and several
    obligations of the Subsidiary Guarantors. The obligations of
    each Subsidiary Guarantor under its Subsidiary Guarantee will be
    limited as necessary to prevent that Subsidiary Guarantee from
    constituting a fraudulent conveyance under applicable law. See
    “Risk Factors — Risks Related to the Enexus Notes
    — Fraudulent transfer statutes may limit your rights
    as a holder of Enexus notes.”





 



    A Subsidiary Guarantor may not sell or otherwise dispose of all
    or substantially all of its assets to, or consolidate with or
    merge with or into (whether or not such Subsidiary Guarantor is
    the surviving Person), another Person, other than Enexus or
    another Subsidiary Guarantor, unless:



 



    (1) immediately after giving effect to that transaction, no
    Default or Event of Default exists; and



 



    (2) the Person acquiring the property in any such sale or
    disposition or the Person formed by or surviving any such
    consolidation or merger assumes all the obligations of that
    Subsidiary Guarantor under the Enexus indenture and its
    Subsidiary Guarantee pursuant to supplemental agreements
    reasonably satisfactory to the trustee under the Enexus
    indenture.



 



    The Subsidiary Guarantee of a Subsidiary Guarantor of the Enexus
    notes will be released automatically:



 



    (1) in connection with any sale or other disposition of all
    or substantially all of the assets of that Subsidiary Guarantor
    (including by way of merger or consolidation) to a Person that
    is not (either before or after giving effect to such transaction) Enexus or a
    Subsidiary of Enexus in a transaction that is not otherwise
    prohibited by the Enexus indenture;



154








 





 



    (2) in connection with any sale or other disposition of
    capital stock of that Subsidiary Guarantor to a Person that is
    not (either before or after giving effect to such transaction)
    Enexus or a Subsidiary of Enexus in a transaction that is not
    otherwise prohibited by the Enexus indenture, if following such
    sale or other disposition, that Subsidiary Guarantor is not a
    direct or indirect Subsidiary of Enexus;



 



    (3) upon defeasance or satisfaction and discharge of such
    Enexus notes as provided by the Enexus indenture;



 



    (4) upon a dissolution of a Subsidiary Guarantor that is
    not prohibited under the Enexus indenture;



 



    (5) otherwise with respect to the Subsidiary Guarantee of
    any Subsidiary Guarantor, upon the contemporaneous release of
    such Subsidiary Guarantor’s Guarantee of all other Debt of
    Enexus (including under Credit Facilities); or



 



    (6) otherwise with respect to the Subsidiary Guarantee of
    any Subsidiary Guarantor, upon the prior consent of holders of
    at least a majority in aggregate principal amount of the Enexus
    notes then outstanding.



 




    Ranking





 



    The payment of the principal of, premium, if any, and interest
    on the Enexus notes by Enexus will rank equally in right of
    payment to all unsubordinated Debt of Enexus, including the
    obligations of Enexus under the Credit Facilities, the Guaranty
    Obligations of Enexus supporting or in respect of Hedging
    Obligations and any Hedging Obligations. The Enexus notes will
    be effectively subordinated to all of the existing and future
    secured Debt of Enexus to the extent of the value of the assets
    securing such Debt.







 



    Each Subsidiary Guarantor’s Obligations under its
    Subsidiary Guarantee of the Enexus notes will be subordinated to
    the Obligations of that Subsidiary Guarantor under any
    Designated Senior Indebtedness. As such, the rights of Holders
    to receive payment pursuant to such Subsidiary Guarantee will be
    subordinated in right of payment to the rights of the holders of
    any Designated Senior Indebtedness. The Subsidiary Guarantee of
    the Enexus notes will rank equally in right of payment to all
    other unsubordinated indebtedness of the relevant Subsidiary
    Guarantor.







 



    Although the Enexus indenture will contain limitations on the
    amount of additional Debt that the Subsidiary Guarantors may
    incur under Credit Facilities that may be Designated Senior
    Indebtedness, the Enexus indenture will not limit the amount of
    Hedging Obligations under Commodity Hedge Transactions or Credit
    Support Facilities supporting or in respect of Hedging
    Obligations that may be incurred by the Subsidiary Guarantors
    and such Obligations  may be Designated Senior
    Indebtedness. Accordingly, under certain circumstances, the
    amount of such Debt could be substantial and the Obligations of
    the Subsidiary Guarantors to the holders of such Debt will be
    senior to the obligations of Subsidiary Guarantors under the
    Subsidiary Guarantees to the extent such Debt is Designated
    Senior Indebtedness. See “Description of Other
    Indebtedness — Enexus — Certain Lien-Based
    Hedging Arrangements and Credit Support Facilities.”





 



    No Subsidiary Guarantor is permitted to make any payment or
    distribution of any kind or character with respect to its
    Obligations under its Subsidiary Guarantee of the Enexus notes
    if either of the following occurs (a “Payment
    Default”):



 



    (1) any Obligation on any Designated Senior Indebtedness of
    such Subsidiary Guarantor is not paid in full in cash when
    due; or



 



    (2) any other default on Designated Senior Indebtedness
    occurs and the maturity of such Designated Senior Indebtedness
    is accelerated in accordance with its terms;



 



    unless, in either case, the Payment Default has been cured or
    waived and any such acceleration has been rescinded or such
    Designated Senior Indebtedness has been paid in full in cash.
    Regardless of the foregoing,
    each Subsidiary Guarantor is permitted to make a payment or
    distribution under its Subsidiary Guarantee of the Enexus notes
    if Enexus and the trustee receive written notice approving such
    payment from the



155








 






Representatives of all Designated Senior
    Indebtedness with respect to which the Payment Default has
    occurred and is continuing.



 



    During the continuance of any default (other than a Payment
    Default) (a “Non-Payment Default”) with respect to any
    Designated Senior Indebtedness pursuant to which the maturity
    thereof may be accelerated without further notice (except such
    notice as may be required to effect such acceleration) or the
    expiration of any applicable grace periods, no Subsidiary
    Guarantor is permitted to make any payment or distribution of
    any kind or character with respect to its Obligations under its
    Subsidiary Guarantee of the Enexus notes for a period (a
    “Payment Blockage Period”) commencing upon the receipt
    by the trustee (with a copy to Enexus) of written notice (a
    “Blockage Notice”) of such Non-Payment Default from
    the Representative of such Designated Senior Indebtedness
    specifying an election to effect a Payment Blockage Period and
    ending 179 days thereafter. The Payment Blockage Period
    will end earlier if such Payment Blockage Period is terminated:



 



    (1) by written notice to the trustee and Enexus from the
    Person or Persons who gave such Blockage Notice;



 



    (2) because the default giving rise to such Blockage Notice
    is cured, waived or otherwise no longer continuing; or



 



    (3) because such Designated Senior Indebtedness has been
    discharged or repaid in full in cash.



 



    Notwithstanding the provisions described above (but subject to
    the subordination provisions of the immediately succeeding
    paragraph), unless the holders of such Designated Senior
    Indebtedness or the Representatives of such Designated Senior
    Indebtedness have accelerated the maturity of such Designated
    Senior Indebtedness or a Payment Default has occurred and is
    continuing, each Subsidiary Guarantor is permitted to make any
    payment or distribution of any kind or character with respect to
    its Obligations under its Subsidiary Guarantee of the Enexus
    notes after the end of such Payment Blockage Period. The
    Subsidiary Guarantees shall not be subject to more than one
    Payment Blockage Period in any consecutive
    360-day
    period, irrespective of the number of Non-Payment Defaults with
    respect to Designated Senior Indebtedness during such period.
    However, in no event may the total number of days during which
    any Payment Blockage Period or Periods on the Subsidiary
    Guarantees are in effect exceed 179 days in the aggregate
    during any consecutive
    360-day
    period, and there must be at least 181 days during any
    consecutive
    360-day
    period during which no Payment Blockage Period is in effect.
    Notwithstanding the foregoing, however, no Non-Payment Default
    that existed or was continuing on the date of the commencement
    of any Payment Blockage Period with respect to any Designated
    Senior Indebtedness and that was the basis for the initiation of
    such Payment Blockage Period will be, or be made, the basis for
    a subsequent Payment Blockage Period unless such default has
    been cured or waived for a period of not less than 90
    consecutive days (it being acknowledged that any subsequent
    action, or any breach of any financial covenants during the
    period after the date of delivery of such initial Payment
    Blockage Period, that, in either case, would give rise to a
    Non-Payment Default pursuant to any provisions under which a
    Non-Payment Default previously existed or was continuing shall
    constitute a new Non-Payment Default for this purpose).



 



    In connection with the Subsidiary Guarantees, in the event of
    any payment or distribution of the assets of a Subsidiary
    Guarantor upon a total or partial liquidation or dissolution or
    reorganization of or similar proceeding relating to such
    Subsidiary Guarantor or its property:



 



    (1) the holders of Designated Senior Indebtedness will be
    entitled to receive payment in full in cash of such Designated
    Senior Indebtedness before the Holders of the Enexus notes are
    entitled to receive any payment or distribution of any kind or
    character with respect to any Obligations on, or related to,
    such Subsidiary Guarantor’s Subsidiary Guarantee of the
    Enexus notes; and



 



    (2) until the Designated Senior Indebtedness is paid in
    full in cash, any payment or distribution to which holders of
    the Enexus notes would be entitled but for the subordination
    provisions of the Enexus
    indenture will be made to holders of such Designated Senior
    Indebtedness and paid over to them as their interests may appear.



156








 





 



    If a distribution is made to holders of the Enexus notes that,
    due to the subordination provisions, should not have been made
    to them, such holders of the Enexus notes are required to hold
    it in trust for the holders of Designated Senior Indebtedness
    and pay it over to them as their interests may appear.





 



    Enexus expects that, except as otherwise provided by an
    intercreditor agreement to which the Representatives under any
    Designated Senior Indebtedness are a party, so long as any
    Designated Senior Indebtedness under any Credit Facility remains
    outstanding and the relevant Subsidiary Guarantor is a guarantor
    thereof, a Blockage Notice may be given only by a Representative
    thereunder (and such other parties to any intercreditor
    agreement as may be required) unless otherwise agreed to in
    writing by the requisite lenders named therein.





 



    The subordination and payment blockage provisions described
    above will not prevent a Default from occurring under the Enexus
    indenture upon the failure of Enexus to pay cash interest or
    principal with respect to the Enexus notes when due by their
    terms. If payment of the Enexus notes is accelerated because of
    an Event of Default and a demand for payment is made on any
    Subsidiary Guarantor pursuant to its Subsidiary Guarantee, the
    Subsidiary Guarantors must promptly notify the holders of
    Designated Senior Indebtedness or the Representative of such
    Designated Senior Indebtedness of the acceleration, provided
    that any failure to give such notice shall have no effect
    whatsoever on the subordination provisions described herein. If
    any Designated Senior Indebtedness is outstanding, any
    Subsidiary Guarantor may not make any payment or distribution
    under its Subsidiary Guarantee of the Enexus notes until five
    Business Days after the Representatives of all the issuers of
    such Designated Senior Indebtedness receive notice of such
    acceleration and, thereafter, may make any payment or
    distribution under its Subsidiary Guarantee of the Enexus notes
    only if the Enexus indenture otherwise permits payment at that
    time.



 



    A holder by its acceptance of Enexus notes agrees to be bound by
    the provisions described in this section and authorizes and
    expressly directs the trustee, on its behalf, to take such
    action as may be necessary or appropriate to effectuate the
    subordination provided for in the Enexus indenture and appoints
    the trustee its attorney-in-fact for such purpose.



 



    By reason of the subordination provisions contained in the
    Enexus indenture, in the event of a liquidation or insolvency
    proceeding, holders of Designated Senior Indebtedness may
    recover more, ratably, than the holders of the Enexus notes, and
    creditors who are not holders of Designated Senior Indebtedness
    may recover less, ratably, than holders of Designated Senior
    Indebtedness and may recover more, ratably, than the holders of
    the Enexus notes.





 



    The terms of the subordination provisions described above will
    not apply to payments from money or the proceeds of government
    securities held in trust by the trustee for the payment of
    principal (including any accretion) of and interest on the
    Enexus notes pursuant to the provisions described under
    “— Defeasance,” if the foregoing subordination
    provisions were not violated at the time the applicable amounts
    were deposited in trust pursuant to such provisions and the
    respective deposit in the trust was otherwise made in accordance
    with such provisions.





 




    Optional
    Redemption



 



    Enexus is not permitted to redeem the Enexus notes prior to
    their maturity.



 




    Mandatory
    Redemption



 



    Enexus is not required to make mandatory redemption or sinking
    fund payments with respect to the Enexus notes.



 




    Payment
    and Paying Agents





 



    Interest on the Enexus notes payable on each interest payment
    date will be paid to the person in whose name that Enexus note
    is registered as of the close of business on the regular record
    date for the interest payment date, which will be the close of
    business on the 15th calendar day before that interest
    payment date. However, interest payable at maturity will be paid
    to the person to whom the principal is paid. If there has



157








 





been a
    default in the payment of interest on any Enexus note, other
    than at maturity, the defaulted interest may be paid to the
    holder of such Enexus note as of the close of business on a date
    between 10 and 15 days before the date proposed by Enexus
    for payment of such defaulted interest or in any other lawful
    manner permitted by any securities exchange on which that Enexus
    note may be listed,  if the trustee finds it practicable.







 



    Principal, premium, if any, and interest on the Enexus notes at
    maturity will be payable upon presentation of the Enexus notes
    at the corporate trust office of Wells Fargo Bank, N.A., as Enexus’ paying agent. Enexus may change the
    place of payment on the Enexus notes, and may appoint one or
    more additional paying agents (including Enexus) and may remove
    any paying agent, all at Enexus’ discretion.







 



    Enexus will pay principal, premium, if any, and interest due on
    the Enexus notes in the form of global securities to DTC or its
    nominee in immediately available funds. DTC will then make
    payment to its participants for disbursement to the beneficial
    owners of the Enexus notes as described under “—
    Global Securities; Book-Entry System.”





 




    Registration
    and Transfer





 



    Subject to the transfer restrictions relating to the Enexus
    notes as described under “Exchange Offer and Registration
    Rights Agreements” in the event that the Exchange is
    consummated, the transfer of Enexus notes may be registered, and
    Enexus notes may be exchanged for other Enexus notes of the same
    series, of authorized denominations and with the same terms and
    principal amount, at the offices of the trustee in The City of
    New York. Enexus may change the place for registration of
    transfer and exchange of the Enexus notes and may designate
    additional places for registration and exchange. No service
    charge will be made for any transfer or exchange of the Enexus
    notes. However, Enexus may require payment to cover any tax or
    other governmental charge that may be imposed.





 




    Defeasance





 



    Subject to certain conditions, Enexus will be discharged from
    its obligations on the Enexus notes if Enexus irrevocably
    deposits with the trustee sufficient cash or  Government
    Securities  to pay the principal,
    interest, any premium and any other sums when due on the Stated
    Maturity date  or a redemption date of the Enexus notes.





 




    Change
    of Control Repurchase at the Option of Holders





 



    If a Change of Control [Triggering Event] occurs, each holder of
    Enexus notes will have the right to require Enexus to repurchase
    all or any part (equal to $2,000 or an integral multiple of
    $1,000) of that holder’s Enexus notes pursuant to a Change
    of Control Offer on the terms set forth in the Enexus indenture.
    In the Change of Control Offer, Enexus will offer a Change of
    Control Payment in cash equal to 101% of the aggregate principal
    amount of Enexus notes repurchased plus accrued and unpaid
    interest on the Enexus notes repurchased, to, but not
    including, the date of purchase, subject to the rights of noteholders  on the relevant record date to receive
    interest due on the relevant interest payment date. Within
    30 days following any Change of Control [Triggering Event],
    Enexus will mail a notice to each holder describing the
    transaction or transactions that constitute the Change of
    Control [Triggering Event] and offering to repurchase Enexus
    notes on the Change of Control Payment Date specified in the
    notice, which date will be no earlier than 30 days and no
    later than 60 days from the date such notice is mailed,
    pursuant to the procedures required by the Enexus indenture and
    described in such notice. Enexus will comply with the
    requirements of
    Rule 14e-1
    under the Exchange Act and any other securities laws and
    regulations thereunder to the extent those laws and regulations
    are applicable in connection with the repurchase of the Enexus
    notes as a result of a Change of Control [Triggering Event]. To
    the extent that the provisions of any securities laws
    or regulations conflict with the Change of Control provisions of
    the Enexus indenture, Enexus will comply with the applicable
    securities laws and regulations and will not be deemed to have
    breached its obligations under the Change of Control provisions
    of the Enexus indenture by virtue of such compliance.





158








 





 



    On the Change of Control Payment Date, Enexus will, to the
    extent lawful:



 



    (1) accept for payment all Enexus notes or portions of
    Enexus notes properly tendered pursuant to the Change of Control
    Offer;



 



    (2) deposit with the paying agent an amount equal to the
    Change of Control Payment in respect of all Enexus notes or
    portions of Enexus notes properly tendered; and



 



    (3) deliver or cause to be delivered to the trustee the
    Enexus notes properly accepted together with an officers’
    certificate stating the aggregate principal amount of Enexus
    notes or portions of Enexus notes being purchased by Enexus.



 



    The paying agent will promptly mail to each holder of Enexus
    notes properly tendered the Change of Control Payment for such
    Enexus notes, and the trustee will promptly authenticate and
    mail (or cause to be transferred by book entry) to each holder a
    new Enexus note equal in principal amount to any unpurchased
    portion of the Enexus notes surrendered, if any; provided
    that each new Enexus note will be in a principal amount of
    $2,000 or an integral multiple of $1,000. Enexus will publicly
    announce the results of the Change of Control Offer on or as
    soon as practicable after the Change of Control Payment Date.



 



    The provisions described above that require Enexus to make a
    Change of Control Offer following a Change of Control
    [Triggering Event] will be applicable whether or not any other
    provisions of the Enexus indenture are applicable.



 



    Except as described above with respect to a Change of Control
    [Triggering Event], the Enexus indenture does not contain
    provisions that permit the holders of the Enexus notes to
    require that Enexus repurchase or redeem the Enexus notes in the
    event of a takeover, recapitalization or similar transaction.



 



    Enexus will not be required to make a Change of Control Offer
    upon a Change of Control [Triggering Event] if a third party
    makes the Change of Control Offer in the manner, at the times
    and otherwise in compliance with the requirements set forth in
    the Enexus indenture applicable to a Change of Control Offer
    made by Enexus and purchases all Enexus notes properly tendered
    and not withdrawn under the Change of Control Offer. A Change in
    Control Offer may be made in advance of a Change of Control
    [Triggering Event], with the obligation to pay and the timing of
    payment conditioned upon the consummation of the Change of
    Control, if a definitive agreement to effect a Change of Control
    is in place at the time of the Change of Control Offer.



 



    The definition of Change of Control includes a phrase relating
    to the direct or indirect sale, lease, transfer, conveyance or
    other disposition of “all or substantially all” of the
    properties or assets of Enexus and its subsidiaries taken as a
    whole. There is a limited body of case law interpreting the
    phrase “substantially all,” and there is no precise
    established definition of the phrase under applicable law.
    Accordingly, the ability of a holder of Enexus notes to require
    Enexus to repurchase its Enexus notes as a result of a sale,
    lease, transfer, conveyance or other disposition of less than
    all of the assets of Enexus and its subsidiaries taken as a
    whole to another Person or group may be uncertain.



 




    Certain
    Covenants



 




    Liens



 



    The Enexus indenture will provide that, so long as any Enexus
    notes are outstanding, Enexus and the Subsidiary Guarantors will
    not create or suffer to exist any lien upon or with respect to
    any of their respective properties or assets, including, without
    limitation, any shares of any class of equity security of any
    Subsidiary, to secure or provide for the payment of any Debt
    without also securing such outstanding Enexus notes, and all
    other Debt entitled to be so secured, equally and ratably with
    such Debt for so long as such Debt is secured.




    This restriction does not apply to:



 



    (1) liens in existence on the date of the Enexus indenture
    (other than under Credit Facilities);



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    (2) liens for taxes, assessments or governmental charges or
    levies to the extent not past due or which are being contested
    in good faith by appropriate proceedings diligently conducted
    and for which Enexus or its Subsidiary Guarantors has provided
    adequate reserves for the payment thereof in accordance with
    GAAP;



 



    (3) pledges or deposits in the ordinary course of business
    to secure obligations under workers’ compensation laws or
    similar legislation;



 



    (4) other pledges or deposits in the ordinary course of
    business, other than for Debt, that, in the aggregate are not
    material to Enexus;





 



    (5) purchase money mortgages or other purchase money
    security interests upon or in any property acquired or held by
    Enexus or a Subsidiary Guarantor in the ordinary course of
    business to secure the purchase price of such property or to
    secure Debt incurred solely for the purpose of financing the
    acquisition of such property or financing all or any part of the
    cost of design, construction, installation or
    improvement or lease of any property (real or personal), plant
    or equipment;





 



    (6) liens imposed by law such as materialmen’s,
    mechanics’, carriers’, workers’ and
    repairmen’s liens and other similar liens arising in the
    ordinary course of business for sums not yet due or currently
    being contested in good faith by appropriate proceedings
    diligently conducted;



 



    (7) liens securing indebtedness and other obligations under
    Credit Facilities, in aggregate principal amount not exceeding,
    on the date of the creation of such liens, $2,300 million;



 



    (8) liens on property (including capital stock) existing at
    the time of acquisition of the property by Enexus or any
    Subsidiary of Enexus, provided, however, that such
    liens are not created or incurred in connection with, or in
    contemplation of, such acquisition; provided further,
    however, that the liens may not extend to any other
    property owned by Enexus or any Material Subsidiary;



 



    (9) liens on property of a Person existing at the time such
    Person is merged with or into or consolidated with Enexus or any
    Subsidiary of Enexus; provided, however, that such
    liens are not created or incurred in connection with, or in
    contemplation of, such merger or consolidation; provided
    further, however, that the liens may not extend to
    any other property owned by Enexus or any Material Subsidiary;



 



    (10) liens securing (x) Hedging Obligations entered
    into in the ordinary course of business and not for speculative
    purposes and (y) Guaranty Obligations or Credit Support
    Facilities, supporting or in respect of Hedging Obligations
    entered into in the ordinary course of business and not for
    speculative purposes;



 



    (11) liens in addition to those liens permitted by
    clauses (1) through (10) above, provided that
    the aggregate amount of Debt secured by such additional liens,
    in the aggregate, shall not exceed 10% of Enexus’
    Consolidated Net Tangible Assets; and





 



    (12) liens created for the sole purpose of extending,
    renewing or replacing in whole or in part Debt secured by
    any lien referred to in clauses (1) through
    (10) above, provided that the principal amount of
    the Debt secured by such liens shall not exceed the principal
    amount of (and an amount necessary to pay any fees and expenses,
    including premiums,  related to such extension, renewal
    or replacement) Debt so secured at the time of such extension,
    renewal, replacement and that such extension, renewal or
    replacement shall be limited to all or a part of the property or
    Debt that secured the lien so extended, renewed or replaced, and
    any improvements on such properties;





 



    provided, however, that Enexus and the Subsidiary
    Guarantors cannot place any lien permitted under the foregoing
    clauses (1) through (6), (8), (9), (11) and (12) (with
    respect to clause (12), only to the extent that any lien created
    pursuant to such clause is in connection with liens referred to
    in clauses (1) through (6), (8),
     (9) and (11)), upon any shares of any class of equity
    security of any Material Subsidiary without simultaneously,
    equally and ratably securing the outstanding Enexus notes. For
    purposes of this section, “Material Subsidiary”
    means [Entergy Nuclear Indian Point 2, LLC, Entergy Nuclear
    Vermont Yankee, LLC,



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 Entergy Nuclear Midwest Investment Company,
    LLC, Entergy Nuclear Palisades, LLC, Entergy Nuclear
    FitzPatrick, LLC, Entergy Nuclear Indian Point 3, LLC, Enexus
    Nuclear Pilgrim LLC, Enexus Nuclear Holding Company LLC, Entergy
    Nuclear Finance Holding, Inc., Entergy Nuclear Finance, LLC,
    Entergy Nuclear Power Marketing, LLC, Entergy Retail Holding
    Company, Entergy Nuclear Nebraska, LLC, Entergy Nuclear Fuels
    Company, Nuclear Services Company, LLC and Entergy Solutions
    LLC] and any other Domestic Subsidiary: (i) the total
    assets (after intercompany eliminations) of which exceed 5% of
    the total consolidated assets of Enexus and its subsidiaries or
    (ii) the net worth of which exceeds 5% of Enexus’
    Consolidated Net Worth, in each case as shown on the most recent
    consolidated financial statements (audited or not) of Enexus and
    its Subsidiaries.





 




    Additional
    Subsidiary Guarantees



 



    Enexus will cause each Subsidiary that is required to become a
    guarantor of any borrowings under any Credit Facilities or any
    other Debt of Enexus, to become a Subsidiary Guarantor and
    execute a supplemental indenture to the Enexus indenture and
    deliver an opinion of counsel satisfactory to the trustee. Each
    Subsidiary Guarantee will be limited to an amount not to exceed
    the maximum amount that can be guaranteed by that Subsidiary,
    without rendering the guarantee, as it relates to such
    Subsidiary, voidable under applicable law relating to fraudulent
    conveyance or fraudulent transfer or similar laws affecting the
    rights of creditors generally.



 




    Consolidation,
    Merger, Conveyance or Other Transfer



 



    The Enexus indenture will provide that Enexus may not
    consolidate with or merge into any other entity or convey,
    transfer or lease its properties and assets, substantially as an
    entirety to any entity, unless:



 



    (1) the surviving or successor entity or an entity which
    acquires by conveyance or transfer or which leases Enexus’
    properties and assets, substantially as an entirety is organized
    and validly existing under the laws of the United States of
    America or any state thereof and it expressly assumes
    Enexus’ obligations on the Enexus notes and under the
    Enexus indenture;



 



    (2) immediately after giving effect to the transaction, no
    Event of Default under the Enexus indenture or no event which,
    after notice or lapse of time or both, would become an Event of
    Default, shall have occurred and be continuing; and



 



    (3) Enexus shall have delivered to the trustee an
    officer’s certificate and an opinion of counsel as provided
    in the Enexus indenture.





 



    Upon the consummation of any such transaction, the surviving or
    successor entity will succeed to Enexus’  rights and powers under the
    Enexus indenture and, except in the case of a lease, Enexus
    shall be relieved of all obligations and covenants under the
    Enexus indenture and the outstanding Enexus notes. The terms of
    the Enexus indenture do not restrict Enexus in (i) a merger
    in which Enexus is the surviving entity, or (ii) any sale,
    transfer, assignment, conveyance, lease or other disposition of
    assets between or among Enexus and its Subsidiary Guarantors,
    including by way of merger or consolidation.





 




    Reports





 



    Whether or not required by the SEC’s rules and regulations,
    so long as any Enexus notes are outstanding, Enexus will furnish
    to the holders of Enexus notes or cause the trustee to furnish
    to the holders of Enexus notes, within the time periods
    (including any extensions thereof) specified in the SEC’s
    rules and regulations:







 



    (1) all quarterly and annual reports that would be required
    to be filed with the SEC on
    Forms 10-Q
    and 10-K if
    Enexus were required to file such reports; and



 



    (2) all current reports that would be required to be filed
    with the SEC on
    Form 8-K
    if Enexus were required to file such reports.







 



    All such reports will be prepared in all material respects in
    accordance with all of the rules and regulations applicable to
    such reports. Each annual report on
    Form 10-K
    will include a report on Enexus’


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consolidated financial
    statements by Enexus’ independent registered public
    accounting firm. In addition, Enexus will file a copy of each of
    the reports referred to in clauses (1) and (2) above
    with the SEC for public availability within the time periods
    (including any extensions thereof) specified in the rules and
    regulations applicable to such reports (unless the SEC will not
    accept such a filing). To the extent such filings are made, the
    reports will be deemed to be furnished to the trustee and
    holders of Enexus notes.







 



    If Enexus is no longer subject to the periodic reporting
    requirements of the Exchange Act for any reason, Enexus will
    nevertheless continue filing the reports specified in the
    preceding paragraph with the SEC within the time periods
    specified in the SEC’s rules and regulations applicable to
    a registrant that is not an accelerated filer or a large
    accelerated filer unless the SEC will not accept such a filing.
    Enexus agrees that it will not take any action for the purpose
    of causing the SEC not to accept any such filings. If,
    notwithstanding the foregoing, the SEC will not accept
    Enexus’ filings for any reason, Enexus will post the
    reports referred to in the preceding paragraph on its website
    within the time periods specified above.







 



    In addition, Enexus and the Subsidiary Guarantors agree that,
    for so long as any Enexus notes remain outstanding, at any time
    they are not required to file the reports required by the
    preceding paragraphs with the SEC, they will furnish to the
    holders of the Enexus notes and to securities analysts and
    prospective investors, upon their request, the information
    required to be delivered pursuant to Rule 144A(d)(4) under
    the Securities Act.





 




    Events
    of Default





 



    “Event of Default” when used in the Enexus indenture
    with respect to the Enexus notes, will mean any of the following:





 



    (1) failure to pay interest on the Enexus notes for 30
    Business Days after it is due and payable;





 



    (2) failure to pay the principal of or any premium
    on the Enexus notes when due and payable;







 



    (3) failure to perform any other covenant in the Enexus
    indenture that continues for 60 days after Enexus receives
    written notice from the trustee, or Enexus and the trustee
    receives a written notice from the holders of 25% in aggregate
    principal amount of the Enexus notes; provided,
    however, that the trustee or such holders, shall be deemed
    to have agreed to an extension of such period if Enexus
    initiates and diligently pursues corrective action within such
    period;







 



    (4) failure to pay any principal of or premium or
    interest on any of Enexus’ or any of its Subsidiaries’
    Debt that is outstanding in a principal amount in excess of
    $100 million in the aggregate, whether by scheduled
    maturity, required prepayment, acceleration, demand or
    otherwise, and such failure continues after the expiration of
    any applicable grace period specified in the agreement or
    instrument relating to such Debt;







 



    (5) failure by Enexus or any of its Significant
    Subsidiaries to pay its debts as such debts become due, or
    admission in writing of its inability to pay its debts
    generally, or making a general assignment for the benefit of
    creditors; or any proceeding shall be instituted by or against
    Enexus or any of its Significant Subsidiaries seeking to
    adjudicate Enexus or any such Significant Subsidiary a bankrupt
    or insolvent, or seeking liquidation, winding up,
    reorganization, arrangement, adjustment, protection, relief, or
    composition of it or its debts under any law relating to
    bankruptcy, insolvency or reorganization or relief of debtors,
    or seeking the entry of an order for relief or the appointment
    of a receiver, trustee, custodian or other similar official for
    it or for any substantial part of its property and, in the case
    of any such proceeding instituted against it (but not instituted
    by it), either such proceeding shall remain undismissed or
    unstayed for a period of 30 days, or any of the actions
    sought in such proceeding,
    including, without limitation, the entry of an order for relief
    against, or the appointment of a receiver, trustee, custodian or
    other similar official for, it or for any substantial part of
    its property, shall occur; or Enexus or any its Significant
    Subsidiary shall take any corporate action to authorize or to
    consent to any of the actions set forth in this subparagraph;





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    (6) any judgment or order for the payment of money in
    excess of $100 million has been rendered against Enexus or
    any of its subsidiaries and the same shall not have been paid,
    discharged or stayed for a period of 60 days after such
    judgment became final and non-appealable, and in the event such
    judgment or order is covered by insurance, an enforcement
    proceeding has been commenced by any creditor upon such judgment
    or order which is not promptly stayed; or





 



    (7) except as permitted by the Enexus indenture, any
    Subsidiary Guarantee held in any final and non-appealable
    judicial proceeding to be unenforceable or invalid or cease for
    any reason to be in full force and effect or any Subsidiary
    Guarantor (or any group of Subsidiary Guarantors) that
    constitutes a Significant Subsidiary, or any Person acting on
    behalf of any Subsidiary Guarantor (or any group of Subsidiary
    Guarantors) that constitutes a Significant Subsidiary, shall
    deny or disaffirm its or their obligations under its or their
    Subsidiary Guarantee(s).





 



    The trustee may withhold notice to the holders of the Enexus
    notes of any Default, except default in the payment of
    principal, premium, if any, or interest, if it considers the
    withholding of notice to be in the interests of the holders.





 




    Remedies





 



    If an Event of Default (other than of a type specified in
    clause (5) above) under the Enexus indenture for any series
    of notes, including the Enexus notes, occurs and continues, the
    trustee or the holders of not less than 25% in aggregate
    principal amount of all of the notes of such series or of the
    Enexus notes, as the case may be, then outstanding may declare
    the entire principal amount of all of the notes of such series
    or of the Enexus notes, as the case may be, together with
    accrued interest, to be due and
    payable immediately. However, if the Event of Default is
    applicable to more than one series of notes outstanding under
    the Enexus indenture, only the trustee or the holders of not
    less than 25% in aggregate principal amount of all outstanding
    notes of all of those series, voting as one class, and not the
    holders of any one series, may make that declaration of
    acceleration. Notwithstanding the foregoing, in the case of an
    Event of Default arising under clause (5) above, all
    outstanding Enexus notes shall become automatically due and
    payable without further action or notice.







 



    At any time after a declaration of acceleration with respect to
    the notes of any series, including the Enexus notes, has been
    made and before a judgment or decree for payment of the money
    due has been obtained, the Event of Default under the Enexus
    indenture giving rise to the declaration of acceleration will be
    considered waived, and the declaration and its consequences will
    be considered automatically rescinded and annulled, if:







 



    (1) Enexus has paid or deposited with the trustee a sum
    sufficient to pay: (i) all overdue interest on all notes of
    such series, including the Enexus notes; (ii) the principal
    of and premium, if any, on any notes of such series, including
    the Enexus notes, which have otherwise become due and interest
    thereon that is currently due; (iii) interest on overdue
    interest; and (iv) all amounts due to the trustee under the
    Enexus indenture; and







 



    (2) any other Event of Default under the Enexus indenture
    with respect to notes of such series, including the Enexus
    notes, other than the non-payment of principal which shall have
    become due solely by such declaration of acceleration, has been
    cured or waived as provided in the Enexus indenture.







 



    However, no such waiver or rescission and annulment shall extend
    to or shall affect any subsequent Default or impair any related
    right.





 



    Other than its duties in case of an Event of Default under the
    Enexus indenture, the trustee is not obligated to exercise any
    of its rights or powers under the Enexus indenture at the
    request, order or direction
     of any of the holders, unless the holders offer the trustee a
    reasonable indemnity. If they provide this reasonable indemnity,
    the holders of a majority in aggregate principal amount of any
    series of notes, including the Enexus notes, will have the right
    to direct the time, method and place of conducting any
    proceeding for any remedy available to the trustee, or
    exercising any power conferred upon the trustee. However, if the
    Event of Default under the Enexus indenture relates to more than
    one series, only the holders of a majority in aggregate
    principal amount of all of the affected series, considered as
    one class, will have the right to give this



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 direction and not
    the other holders of the Enexus notes. The trustee is not
    obligated to comply with directions that conflict with law or
    other provisions of the Enexus indenture.







 



    No holder of the notes of any series, including the Enexus
    notes, will have any right to institute any proceeding under the
    Enexus indenture, or any remedy under the Enexus indenture,
    unless:





 



    (1) the holder has previously given to the trustee written
    notice of a continuing Event of Default under the Enexus
    indenture;





 



    (2) the holders of a majority in aggregate principal amount
    of the outstanding notes of all series in respect of which an
    event of default shall have occurred and be continuing,
    considered as one class, have made a written request to the
    trustee, and have offered reasonable indemnity to the trustee to
    institute proceedings;





 



    (3) the trustee has failed to institute any proceeding for
    60 days after notice; and





 



    (4) no direction inconsistent with such written request
    shall have been given to the trustee during that
    60-day
    period by the holders of a majority in aggregate principal
    amount of the outstanding notes of all series in respect of
    which an event of default shall have occurred and be continuing,
    considered as one class.







 



    Enexus will agree under the Enexus indenture to provide to the
    trustee an annual statement by an appropriate officer as to
    Enexus’ compliance with all conditions and covenants under
    the Enexus indenture.





 




    Modification
    and Waiver





 



    Without the consent of any holder of notes issued under the
    Enexus indenture, including holders of the Enexus notes, Enexus,
    the Subsidiary Guarantors and the trustee may enter into one or
    more supplemental indentures for any of the following purposes:





 



    (1) to evidence the assumption by any permitted successor
    of the covenants in the Enexus indenture and in the Enexus notes;



 



    (2) to add additional covenants or for Enexus to surrender
    any right or power under the Enexus indenture;



 



    (3) to add additional Events of Default under the Enexus
    indenture;



 



    (4) to change or eliminate or add any provision to the
    Enexus indenture; provided, however, if the change, elimination
    or addition will adversely affect the interests of the holders
    of the Enexus notes in any material respect, the change,
    elimination or addition will become effective only when the
    consent of the holders of Enexus notes has been obtained in
    accordance with the Enexus indenture;



 



    (5) to provide collateral security for all but not part of
    the Enexus notes;



 



    (6) to provide for the authentication and delivery of
    bearer securities and coupons appertaining thereto;



 



    (7) to evidence and provide for the acceptance of
    appointment of a successor trustee;



 



    (8) to provide for the procedures required for use of a
    noncertificated system of registration for the Enexus notes;



 



    (9) to change any place where principal, premium, if any,
    and interest shall be payable, Enexus notes may be surrendered
    for registration of transfer or exchange and notices to Enexus
    may be served;

 




    (10) to cure any ambiguity, to correct or supplement any
    defect or inconsistency or to make any other changes or to add
    provisions with respect to matters and questions arising under
    the Enexus indenture; provided that such other changes or
    additions do not adversely affect the interests of the holders
    of the Enexus notes in any material respect; or



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    (11) to allow any Subsidiary Guarantor to execute a
    supplemental indenture
    and/or a
    Subsidiary Guarantee with respect to the Enexus notes.





 



    The holders of a majority in aggregate principal amount of the
    notes of all series issued under the Enexus indenture then
    outstanding and affected, including the Enexus notes, as the
    case may be, considered as one class, may waive compliance by
    Enexus with some restrictive provisions of the Enexus indenture.
    The holders of a majority in aggregate principal amount of the
    outstanding notes of any series may waive any past Default under
    the Enexus indenture, except a default in the payment of
    principal, premium, if any, or interest and certain covenants
    and provisions of the Enexus indenture that cannot be modified
    or be amended without the consent of the holder of each
    outstanding note of the series affected.







 



    The consent of the holders of a majority in aggregate principal
    amount of the notes of all series then outstanding, including
    the Enexus notes, is required for all other modifications to the
    Enexus indenture. However, if less than all of the series of
    notes outstanding under the Enexus indenture are directly
    affected by a proposed supplemental indenture, then the consent
    only of the holders of a majority in aggregate principal amount
    of all series that are directly affected, considered as one
    class, will be required. No such amendment or modification may:







 



    (1) change the Stated Maturity of the principal of, or any
    installment of principal of or interest on, any note, or reduce
    the principal amount of any note its rate of interest or
    change the method of calculating the interest rate or reduce any
    premium payable upon redemption, or change the currency
    in which payments are made, or impair the right to institute
    suit for the enforcement of any payment on or after the Stated
    Maturity of the any note, without the consent of the holder;







 



    (2) reduce the percentage in principal amount of the
    outstanding notes of any series, the consent of the holders of
    which is required for any supplemental indenture or any waiver
    of compliance with a provision of the Enexus indenture or any
    Default thereunder and its consequences, or reduce the
    requirements for quorum or voting, without the consent of all
    the holders of all of the series; or







 



    (3) modify some of the provisions of the Enexus indenture
    relating to supplemental indentures, waivers of some covenants
    and waivers of past defaults with respect to the notes of any
    series, without the consent of the holders of each outstanding
    note affected thereby.







 



    A supplemental indenture which changes the Enexus indenture
    solely for the benefit of one or more particular series of
    notes, or modifies the rights of the holders of notes of one or
    more series, will not affect the rights under the Enexus
    indenture of the holders of the notes of any other series.





 



    The Enexus indenture provides that the Enexus notes owned by
    Enexus or any other obligor or by any person directly or
    indirectly controlling or controlled by or under direct or
    indirect common control with Enexus or such obligor shall be
    disregarded and considered not to be outstanding in determining
    whether the required holders have given a request or consent.



 



    Enexus may fix in advance a record date to determine the
    required number of holders entitled to give any request, demand,
    authorization, direction, notice, consent, waiver or other such
    act of the holders, but Enexus shall have no obligation to do
    so. If Enexus fixes a record date, that request, demand,
    authorization, direction, notice, consent, waiver or other act
    of the holders may be given before or after that record date,
    but only the holders of record at the close of business on that
    record date will be considered holders for the purposes of
    determining whether holders of the required percentage of the
    outstanding Enexus notes have authorized or agreed or consented
    to the request, demand, authorization, direction, notice,
    consent, waiver or other act of the holders. For that purpose,
    the outstanding Enexus notes shall be computed as of the record
    date. Any request, demand, authorization, direction, notice,
    consent, election, waiver or other act of a holder will bind
    every future holder of the Enexus notes and the holder of every
    Enexus notes issued upon the registration of transfer
     of or in exchange of these Enexus notes. A transferee will be
    bound by acts of the trustee or Enexus in reliance thereon,
    whether or not notation of that action is made upon the Enexus
    notes.



165








 








 




    Resignation
    of a Trustee



 



    A trustee may resign at any time by giving written notice to
    Enexus or may be removed at any time by act of the holders of a
    majority in aggregate principal amount of the Enexus notes
    delivered to the trustee and Enexus. No resignation or removal
    of a trustee and no appointment of a successor trustee will be
    effective until the acceptance of appointment by a successor
    trustee. So long as no Event of Default or event which, after
    notice or lapse of time, or both, would become an Event of
    Default has occurred and is continuing and except with respect
    to a trustee appointed by act of the holders, if Enexus has
    delivered to the trustee a resolution of its Board of Directors
    appointing a successor trustee and such successor has accepted
    the appointment in accordance with the terms of the Enexus
    indenture, the trustee will be deemed to have resigned and the
    successor will be deemed to have been appointed as trustee in
    accordance with the Enexus indenture.



 




    Notices



 



    Notices to holders of Enexus notes will be given by mail to the
    addresses of such holders as they may appear in the security
    register for Enexus notes.



 




    Governing
    Law



 



    The Enexus indenture and the Enexus notes will be governed by,
    and construed in accordance with, the laws of the State of New
    York.



 




    Information
    about the Trustee





 



    The trustee under the Enexus indenture will be Wells Fargo Bank,
    N.A.





 




    Certain
    Definitions Under the Enexus Indenture



 



    Set forth below are certain defined terms used in the Enexus
    indenture. Reference is made to the Enexus indenture for a full
    disclosure of all such terms, as well as any other capitalized
    terms used herein for which no definition is provided.



 



    “Beneficial Owner” has the meaning assigned to
    such term in
    Rule 13d-3
    and
    Rule 13d-5
    under the Exchange Act. The terms “Beneficially Owns”
    and “Beneficially Owned” have a corresponding meaning.



 



    “Board of Directors” means:



 



    (1) with respect to a corporation, the board of directors
    of the corporation or any committee thereof duly authorized to
    act on behalf of such board;



 



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



 



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



 



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



 



    “Business Day” means any day other than a
    Saturday or a Sunday or a day on which banking institutions in
    The City of New York are authorized or required by law or
    executive order to remain closed or a day on which the corporate
    trust office of the trustee is closed for business.



 



    “Change of Control” means the occurrence of any
    of the following:



 



    (1) the direct or indirect sale, transfer, conveyance or
    other disposition (other than by way of merger or
    consolidation), in one or a series of related transactions, of
    all or substantially all of the properties or assets of Enexus
    and its subsidiaries taken as a whole to any “person”
    (as that term is used in
    Section 13(d) of the Exchange Act, but excluding any
    employee benefit plan of Enexus or any of its subsidiaries, and
    any person or entity acting in its capacity as trustee, agent or
    other fiduciary or administrator of such plan);



166








 





 



    (2) the adoption of a plan relating to the liquidation or
    dissolution of Enexus;



 



    (3) the consummation of any transaction (including, without
    limitation, any merger or consolidation) the result of which is
    that any “person” (as defined above) becomes the
    Beneficial Owner, directly or indirectly, of more than 50% of
    the Voting Stock of Enexus, measured by voting power rather than
    number of shares; or



 



    (4) the first day on which a majority of the members of the
    Board of Directors of Enexus are not Continuing Directors.



 



    “Change of Control Offer” has the meaning
    assigned to it in the Enexus indenture governing the Enexus
    notes.



 



    [“Change of Control Triggering Event” means the
    occurrence of both a Change of Control and a Rating Decline.]





 



    “Commodity Hedge Transaction” shall mean any
    swaps (including without limitation heat rate swaps), caps,
    collars, puts, calls, floors, futures, options, spots, forwards,
    power purchase, tolling or sale agreements, fuel purchase or
    sale agreements (including any and all fuels used for power
    generation, whether or not used by Enexus and its Subsidiaries),
    weather risk management transactions, emissions or renewable
    energy credit or allowance purchase or sales agreements, power
    transmission agreements, fuel enrichment,
    transportation or storage agreements, netting
    agreements, or commercial or trading agreements, each with
    respect to, or involving the purchase, transmission,
    distribution, sale, lease or hedge of, energy, generation
    capacity or fuel (including any and all fuels used for power
    generation, whether or not used by Enexus and its Subsidiaries),
    or any other energy related commodity or service, price or price
    indices for any such commodities or services or any other
    similar derivative agreements, and any other similar agreements
    from time to time entered into by Enexus or any Subsidiary in
    the course of its business as a merchant power generator (as its
    risk management practices and methods may evolve from time to
    time, consistent with all requirements of law and applicable
    regulation) in order to manage fluctuations in the price or
    availability of any energy commodity or to manage any regulatory
    or other risk of Enexus or such Subsidiary in connection with
    its business as a merchant power generator (and in any case not
    for speculative purposes).





 



    “Consolidated Net Tangible Assets” means
    Enexus’ consolidated total assets after deducting therefrom
    (i) all current liabilities and (ii) all goodwill,
    trade names, trademarks, patents, unamortized debt discount and
    expense and other like intangible assets, as of the end of the
    most recent fiscal period for which financial statements
    (audited or not) are available, determined in accordance with
    GAAP.



 



    “Consolidated Net Worth” means the sum of the
    capital stock, excluding treasury stock and capital stock
    subscribed for and unissued, and surplus, including earned
    surplus, capital surplus and the balance of the current profit
    and loss account not transferred to surplus, accounts of Enexus
    and its subsidiaries appearing on a consolidated balance sheet
    of Enexus and its subsidiaries prepared as of the date of
    determination in accordance with GAAP consistent with those
    applied in the preparation of Enexus’ consolidated
    financial statements, after eliminating all intercompany
    transactions and all amounts properly attributable to minority
    interests, if any, in the stock and surplus of subsidiaries.



 



    “Continuing Director” means, as of any date of
    determination, any member of the Board of Directors of Enexus
    who:



 



    (1) was a member of such Board of Directors on the date of
    the Enexus indenture; or



 



    (2) was nominated for election or elected to such Board of
    Directors with the approval of a majority of the Continuing
    Directors who were members of such Board of Directors at the
    time of such nomination or election.


 


    “Credit Agreement” means the senior secured
    credit agreement expected to be dated on or about the date of
    the Separation among Enexus, the lenders and issuers party
    thereto, Citigroup Global Markets Inc. and Goldman Sachs Credit
    Partners L.P., as joint book runners and joint lead arrangers,
    an administrative agent, a collateral trustee and a syndication
    agent.




167








 







 




 



    “Credit Facilities” means (i) one or more
    debt or credit facilities (including, without limitation, the
    Credit Agreement) or commercial paper facilities, in each case
    with banks or other institutions providing for revolving credit
    loans, term loans, credit-linked deposits (or similar deposits),
    receivables financing (including through the sale of receivables
    to such lenders or to special purpose entities formed to borrow
    from such lenders against such receivables) or letters of credit
    and (ii) debt securities sold to institutional investors,
    in each case, as amended, restated, modified, renewed, refunded,
    replaced or refinanced (including by means of sales of debt
    securities to institutional investors) in whole or in part from
    time to time.



 



    “Credit Support Facilities” shall mean any
    commodity credit revolver, credit commodity posting facility,
    novation or other third party guarantee or credit support
    provided with respect to a Commodity Hedge Transaction.



 



    “Debt,” with respect to any Person, means
    (without duplication) all liabilities, obligations and
    indebtedness, contingent or otherwise, of such Person:



 



    (1) for borrowed money or evidenced by bonds, debentures,
    notes, or other similar instruments;



 



    (2) to pay the deferred purchase price of property or
    services, other than such obligations incurred in the ordinary
    course of business on customary trade terms, provided that such
    obligations are not more than 30 days past due;



 



    (3) as lessee under leases, which shall have been or should
    be, in accordance with GAAP, recorded as capital leases;



 



    (4) under reimbursement agreements or similar agreements
    with respect to the issuance of letters of credit, other than
    obligations in respect of letters of credit opened to provide
    for the payment of goods or services purchased in the ordinary
    course of business;



 



    (5) under any Guaranty Obligations;





 



    (6) representing any Hedging Obligations; and







 



    (7) in respect of unfunded vested benefits under plans
    covered by Title IV of ERISA.





 



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



 



    “Designated Senior Indebtedness” means:





 



    (1) all Debt of any Subsidiary Guarantor under its
    Guarantee of (i) the Credit Facilities that is permitted to
    be and is secured pursuant to clause (7) under “—
    Description of the Enexus Notes — Certain
    Covenants — Liens,” and (ii) Commodity Hedge
    Transactions or Credit Support Facilities that are permitted to
    be and are secured pursuant to clause (10) under
    “— Description of the Enexus Notes — Certain
    Covenants — Liens;”







 



    (2) all Hedging Obligations (and guarantees thereof) owing
    to holder of Designated Senior Indebtedness or any Affiliate
    thereof; and





 



    (3) all Obligations with respect to the items listed in the
    preceding clauses (1) and (2); provided, however,
    that Designated Senior Indebtedness shall not include:



 



    (a) any obligation of such Person to Enexus or any of its
    Subsidiaries;



 



    (b) any liability for federal, state, local or other taxes
    owed or owing by such Person;



 



    (c) any accounts payable or other liability to trade
    creditors arising in the ordinary course of business;
    provided that obligations incurred pursuant to the Credit
    Facilities, Hedging Obligations or Credit Support Facilities
    shall not be excluded pursuant to this clause (c);



 



    (d) any Debt or other Obligation of such Person which is
    subordinate or junior in any respect to any other Debt or other
    Obligation of such Person; or




168








 







 



    (e) that portion of any Debt which at the time of
    incurrence is incurred in violation of the Enexus indenture.





 



    “Domestic Subsidiary” means any Subsidiary of
    Enexus that was formed under the laws of the United States or
    any state of the United States or the District of Columbia or
    that guarantees or otherwise provides direct credit support for
    any indebtedness of Enexus or any Subsidiary Guarantor.



 



    “ERISA” means the Employee Retirement Income
    Security Act of 1974, as amended from time to time, and the
    regulations promulgated and rulings issued thereunder, each as
    amended and modified from time to time.



 



    “GAAP” means generally accepted accounting
    principles set forth in the opinions and pronouncements of the
    Accounting Principles Board of the American Institute of
    Certified Public Accountants and statements and pronouncements
    of the Financial Accounting Standards Board or in such other
    statements by such other entity as have been approved by a
    significant segment of the accounting profession, which are in
    effect from time to time.



 



    “Government Securities” means direct
    obligations of, or obligations guaranteed by, the United States
    of America (including any agency or instrumentality thereof) for
    the payment of which obligations or guarantees the full faith
    and credit of the United States of America is pledged and which
    are not callable or redeemable at the issuer’s option.



 



    “Guarantee” means a guarantee other than by
    endorsement of negotiable instruments for collection in the
    ordinary course of business, direct or indirect, in any manner
    including, without limitation, by way of a pledge of assets or
    through letters of credit or reimbursement agreements in respect
    thereof, of all or any part of any indebtedness (whether arising
    by virtue of partnership arrangements, or by agreements to
    keep-well, to purchase assets, goods, securities or services, to
    take or pay or to maintain financial statement conditions or
    otherwise).



 



    “Guaranty Obligations” means (i) direct or
    indirect guaranties in respect of, and obligations to purchase
    or otherwise acquire, or otherwise to assure a creditor against
    loss in respect of, Debt of any Person, and (ii) other
    guaranty or similar obligations in respect of the financial
    obligations of others including without limitation, Support
    Obligations.



 



    “Hedging Obligations” means, with respect to
    any Person, the obligations of such Person under:



 



    (1) currency exchange or interest rate swap, cap or collar
    agreements;





 



    (2) other agreements or arrangements designed to protect
    such Person against fluctuations in currency exchange or
    interest rates; and





 



    (3) Commodity Hedge Transactions.





 



    “Issue Date”
    means          ,
    2008.





 



    “Obligations” means any principal (including
    any accretion), interest (including any interest accruing on or
    subsequent to the filing of a petition in bankruptcy,
    reorganization or similar proceeding at the rate provided for in
    the documentation with respect thereto, whether or not such
    interest is an allowed claim under applicable state, federal or
    foreign law), premium, penalties, fees, indemnifications,
    reimbursements (including reimbursement obligations with respect
    to letters of credit and banker’s acceptances), damages,
    breakage payments, termination payments, settlement payments and
    other liabilities, and guarantees of payment of such principal
    (including any accretion), interest, penalties, fees,
    indemnifications, reimbursements, damages and other liabilities,
    payable under the documentation governing any Debt.



 



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



 



    [“Rating Agencies” means (1) S&P and
    Moody’s or (2) if S&P or Moody’s or both of
    them are not making ratings publicly available, a nationally
    recognized U.S. rating agency or agencies, as the case may
    be, selected by Enexus, which will be substituted for S&P
    or Moody’s or both, as the case may be.




169








 





 



    “Rating Category” means (1) with respect
    to S&P, any of the following categories (any of which may
    include a “+” or “-”): AAA, AA, A, BBB, BB,
    B, CCC, CC, C and D (or equivalent successor categories),
    (2) with respect to Moody’s, any of the following
    categories: Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or
    equivalent successor categories), and (3) the equivalent of
    any such categories of S&P or Moody’s used by another
    Rating Agency, if applicable.



 



    “Rating Decline” means (i) a decrease of
    one or more graduations (including graduations within Rating
    Categories as well as between Rating Categories) in the rating
    of the notes by either Moody’s or S&P or (ii) a
    withdrawal of the rating of the notes by Moody’s or
    S&P, in each case, directly as a result of a Change of
    Control; provided, however, that such decrease or withdrawal
    occurs on, or within 90 days following the date of public
    notice of the occurrence of a Change of Control or of the
    intention by Enexus or a stockholder of Enexus to effect a
    Change of Control, which period shall be extended so long as the
    rating of the Notes relating to the Change of Control as noted
    by the Rating Agency is under publicly announced consideration
    for downgrade by the applicable Rating
    Agency.]1




 



    “Representative” means any trustee, agent or
    representative (if any) for an issue of Designated Senior
    Indebtedness.



 



    “Significant Subsidiary” means any Subsidiary
    that would be a “significant subsidiary” as defined in
    Article 1,
    Rule 1-02
    of
    Regulation S-X,
    promulgated pursuant to the Securities Act, as such Regulation
    is in effect on the date of the Enexus indenture.



 



    “Stated Maturity” means, with respect to any
    installment of interest or principal on any series of
    indebtedness, the date on which the payment of interest or
    principal was scheduled to be paid in the documentation
    governing such indebtedness as of the date of the Enexus
    indenture, and will not include any contingent obligations to
    repay, redeem or repurchase any such interest or principal prior
    to the date originally scheduled for the payment thereof.



 



    “Subsidiary” means any corporation, association
    or other business entity more than 50% of the outstanding voting
    stock of which is owned, directly or indirectly, by Enexus or by
    one of more other subsidiaries, or by Enexus and one or more
    other subsidiaries. For the purpose of this definition,
    “voting stock” means stock or other interests
    (including partnership or limited liability company interests)
    that ordinarily has voting power for the election of directors,
    managers or trustees, whether at all times or only so long as no
    senior class of stock or other interests has such voting power
    by reason of any contingency.



 



    “Subsidiary Guarantee” means the Guarantee by
    each Subsidiary Guarantor of Enexus’ obligations under the
    Enexus indenture and on the Enexus notes, executed pursuant to
    the provisions of the Enexus indenture.



 



    “Support Obligations” means any financial
    obligation, contingent or otherwise, of any Person guaranteeing
    or otherwise supporting any Debt or other obligation of any
    other Person in any manner, whether directly or indirectly, and
    including, without limitation, any obligation of such Person,
    direct or indirect, (i) to purchase or pay (or advance or
    supply funds for the purchase or payment of) such Debt or to
    purchase (or to advance or supply funds for the purchase of) any
    security for the payment of such Debt, (ii) to purchase
    property, securities or services for the purpose of assuring the
    owner of such Debt of the payment of such Debt, (iii) to
    maintain working capital, equity capital, available cash or
    other financial statement condition of the primary obligor so as
    to enable the primary obligor to pay such Debt, (iv) to
    provide equity capital under or in respect of equity
    subscription arrangements so as to assure any Person with
    respect to the payment of such Debt or the performance of such
    obligation, or (v) to provide financial support for the
    performance of, or
    to arrange for the performance of, any non-monetary obligations
    or non-funded debt payment obligations (including, without
    limitation, guaranties of payments under power purchase or other
    similar arrangements) of the primary obligor.



 



    “Voting Stock” of any Person as of any date
    means the Capital Stock of such Person that is at the time
    entitled to vote in the election of the Board of Directors of
    such Person.




 

 


    1 Subject

    to market conditions.



170








 






 




    Global
    Securities; Book-Entry System







 




    The
    Global Securities







 



    The notes are being offered and sold in connection with the
    initial offering thereof solely to “qualified institutional
    buyers,” as defined in Rule 144A under the Securities
    Act (“QIBs”), pursuant to Rule 144A under the
    Securities Act, and in offshore transactions to persons other
    than U.S. persons, as defined in Regulation S under
    the Securities Act
    (“non-U.S. persons”)
    in reliance on Regulation S. Following the initial offering
    of the Entergy notes, the notes may be sold to QIBs pursuant to
    Rule 144A,
    non-U.S. persons
    in reliance on Regulation S and pursuant to other
    exemptions from, or in transactions not subject to, the
    registration requirements of the Securities Act, as described
    under “Notice to Investors,” including sales to
    institutional accredited investors that are not QIBs.







 



    Rule 144A Global Securities.  Notes
    offered and sold to QIBs pursuant to Rule 144A will be
    issued in the form of registered notes in global form, without
    interest coupons (the “Rule 144A global
    securities”). The Rule 144A global securities will be
    deposited on the date of the closing of the sale of the notes
    with, or on behalf of, a custodian for DTC and registered in the
    name of Cede & Co., as nominee of DTC. Interests in
    the Rule 144A global securities will be available for
    purchase only by QIBs.







 



    Regulation S Global Securities.  Notes
    offered and sold in offshore transactions to
    non-U.S. persons
    in reliance on Regulation S will initially be issued in the
    form of registered notes in global form, without interest
    coupons (the “Regulation S global securities”).
    The Regulation S global securities will be deposited on the
    closing date with, or on behalf of, a custodian for DTC and
    registered in the name of Cede & Co. in the manner
    described in the preceding paragraph, for credit to the
    respective accounts of the purchasers (or to such other accounts
    as they may direct) at Euroclear Bank S.A./NV, as operator of
    the Euroclear System, or Clearstream Banking, société
    anonyme, Luxembourg.







 



    Investors may hold their interests in the Regulation S
    global securities directly through Euroclear or Clearstream
    Luxembourg, if they are participants in such systems, or
    indirectly through organizations that are participants in such
    systems. Investors may also hold such interests through
    organizations other than Euroclear or Clearstream Luxembourg
    that are participants in the DTC system. Euroclear and
    Clearstream Luxembourg will hold such interests in the
    Regulation S global securities on behalf of their
    participants through customers’ securities accounts in
    their respective names on the books of their respective
    depositaries. Such depositaries, in turn, will hold such
    interests in the Regulation S global securities in
    customers’ securities accounts in the depositaries’
    names on the books of DTC.







 



    Institutional Accredited Investor Certificated
    Securities.  Notes transferred to institutional
    “accredited investors,” as defined in
    Rule 501(a)(l), (2), (3) and (7) of
    Regulation D under the Securities Act, that are not QIBs
    (“non-global purchasers”) will be in certificated,
    registered form without interest coupons (“certificated
    securities”). Upon the transfer of a certificated security
    issued to a non-global purchaser to a QIB or in accordance with
    Regulation S, such certificated security will, unless the
    applicable 144A global security or Regulation S global
    security has previously been exchanged in whole for certificated
    securities under the limited circumstances described below, be
    exchanged for an interest in the applicable global security.







 



    Except as set forth below, the Rule 144A global securities
    and the Regulation S global securities (collectively, the
    “global securities”) may be transferred, in whole or
    in part, solely to DTC or another nominee of DTC or to a
    successor of DTC or its nominee. Beneficial interests in the
    global securities may not be exchanged for certificated
    securities except in connection with a transfer to an
    institutional accredited investor or in the limited
    circumstances described below.



 



    The notes will be subject to restrictions on transfer and will
    bear a restrictive legend as set forth under “Notice to
    Investors.”







 



    All interests in the global securities, including those held
    through Euroclear or Clearstream Luxembourg, may be subject to
    the procedures and requirements of DTC. Those interests held
    through Euroclear or Clearstream Luxembourg may also be subject
    to the procedures and requirements of such systems.



171








 







    Exchanges
    Among the Global Securities





 



    Prior to the 40th day after the later of the commencement
    of the offering of the Entergy notes and the closing date (such
    period through and including such 40th day, the
    “distribution compliance period”), transfers by an
    owner of a beneficial interest in a Regulation S global
    security to a transferee who takes delivery of such interest
    through a Rule 144A global security or to an institutional
    accredited investor that is not a QIB who takes delivery of such
    interest in the form of certificated securities will be made
    only upon receipt by the trustee of a written certification from
    the transferor of the beneficial interest in the form provided
    in the Entergy indenture or the Enexus indenture, as the case
    may be, to the effect that such transfer is being made to
    (i) a person whom the transferor reasonably believes is a
    QIB within the meaning of Rule 144A in a transaction
    meeting the requirements of Rule 144A or (ii) an
    institutional accredited investor purchasing notes in a minimum
    principal amount of $250,000 for its own account or in a minimum
    principal amount of $250,000 for the account of another such
    institutional accredited investor. In addition, in the case of a
    transfer pursuant to clause (ii) above, the transferor will
    be required to deliver to the trustee a letter from the
    transferee in a form available from the trustee for the notes,
    which shall provide, among other things, that the transferee is
    an institutional accredited investor that is not acquiring the
    notes for distribution in violation of the Securities Act, and,
    if Entergy or Enexus, as applicable, requests, an opinion of
    counsel reasonably acceptable to them to the effect that the
    transfer is being made pursuant to an exemption from, or in a
    transaction not subject to, the registration requirements of the
    Securities Act.





 



    Transfers by an owner of a beneficial interest in the
    Rule 144 A global security or an institutional accredited
    investor holding certificated securities to a transferee who
    takes delivery through the Regulation S global security
    whether before or after the expiration of the distribution
    compliance period, will be made only upon receipt by the trustee
    of a certification from the transferor to the effect that such
    transfer is being made in accordance with Regulation S or
    (if available) Rule 144 under the Securities Act and that,
    if such transfer is being made prior to the expiration of the
    distribution compliance period, the interest transferred will be
    held immediately thereafter through Euroclear or Clearstream
    Luxembourg.





 



    Any beneficial interest in one of the global securities that is
    transferred to a person who takes delivery in the form of an
    interest in another global security will, upon transfer, cease
    to be an interest in the initial global security and will become
    an interest in the other global security and, accordingly, will
    thereafter be subject to all transfer restrictions, if any, and
    other procedures applicable to beneficial interests in such
    other global security for as long as it remains such an interest.





 




    Certain
    Book-Entry Procedures for the Global Securities





 



    The descriptions of the operations and procedures of DTC,
    Euroclear and Clearstream Luxembourg set forth below are
    provided solely as a matter of convenience. These operations and
    procedures are solely within the control of the respective
    settlement systems and are subject to change by them from time
    to time. None of Entergy, Enexus or the initial purchasers take
    any responsibility for these operations or procedures, and
    investors are urged to contact the relevant system or its
    participants directly to discuss these matters.





 



    DTC has advised Entergy and Enexus that it is:





 


			
	 	    • 
	
    a limited-purpose trust company organized under the laws of the
    State of New York;






 


			
	 	    • 
	
    a “banking organization” within the meaning of the New
    York Banking Law;






 


			
	 	    • 
	
    a member of the Federal Reserve System;




 



			
	 	    • 
	
    a “clearing corporation” within the meaning of the New
    York Uniform Commercial Code, as amended; and






 


			
	 	    • 
	
    a “clearing agency” registered pursuant to
    Section 17A of the Securities Exchange Act of 1934.






 



    DTC was created to hold securities for its participants
    (collectively, the “participants”) and to facilitate
    the clearance and settlement of securities transactions between
    participants through electronic book-entry changes to the
    accounts of its participants, thereby eliminating the need for
    physical transfer and delivery of




172









 








certificates. DTC’s
    participants include securities brokers and dealers (including
    some or all of the initial purchasers), banks and trust
    companies, clearing corporations and certain other
    organizations. Indirect access to DTC’s system is also
    available to other entities such as banks, brokers, dealers and
    trust companies (collectively the “indirect
    participants”) that clear through or maintain a custodial
    relationship with a participant, either directly or indirectly.
    Investors who are not participants may beneficially own
    securities held by or on behalf of DTC only through participants
    or indirect participants.





 



    Each of Entergy and Enexus expects that, pursuant to procedures
    established by DTC:





 


			
	 	    • 
	
    upon deposit of each global security, DTC will credit, on its
    book-entry registration and transfer system, the accounts of
    participants designated by the initial purchasers with an
    interest in that global security, and






 


			
	 	    • 
	
    ownership of beneficial interests in the global securities will
    be shown on, and the transfer of ownership interests in the
    global securities will be effected only through, records
    maintained by DTC (with respect to the interests of
    participants) and by participants and indirect participants
    (with respect to the interests of persons other than
    participants).






 



    The laws of some jurisdictions may require that some purchasers
    of securities take physical delivery of those securities in
    definitive form. Accordingly, the ability to transfer beneficial
    interests in notes represented by a global security to those
    persons may be limited. In addition, because DTC can act only on
    behalf of its participants, who in turn act on behalf of persons
    who hold interests through participants, the ability of a person
    holding a beneficial interest in a global security to pledge or
    transfer that interest to persons or entities that do not
    participate in DTC’s system, or to otherwise take actions
    in respect of that interest, may be affected by the lack of a
    physical security in respect of that interest.





 



    So long as DTC or its nominee is the registered owner of a
    global security, DTC or that nominee, as the case may be, will
    be considered the sole legal owner or holder of the notes
    represented by that global security for all purposes of the
    notes, the Entergy indenture and the Enexus indenture. Except in
    the limited circumstances described below, owners of beneficial
    interests in a global security will not be entitled to have the
    notes represented by that global security registered in their
    names, will not receive or be entitled to receive physical
    delivery of certificated securities (except in connection with a
    transfer to an institutional accredited investor), and will not
    be considered the owners or holders of the notes represented by
    that beneficial interest under the Entergy indenture or the
    Enexus indenture for any purpose, including with respect to the
    giving of any direction, instruction or approval to the trustee.
    Accordingly, each holder owning a beneficial interest in a
    global security must rely on the procedures of DTC and, if that
    holder is not a participant or an indirect participant, on the
    procedures of the participant through which that holder owns its
    interest, to exercise any rights of a holder of notes under the
    Entergy indenture or the Enexus indenture or that global
    security. Both Entergy and Enexus understand that under existing
    industry practice, in the event that either Entergy or Enexus
    request any action of holders of notes, or a holder that is an
    owner of a beneficial interest in a global security desires to
    take any action that DTC, as the holder of that global security,
    is entitled to take, DTC would authorize the participants to
    take that action and the participants would authorize holders
    owning through those participants to take that action or would
    otherwise act upon the instruction of those holders. None of
    Entergy, Enexus or the trustee will have any responsibility or
    liability for any aspect of the records relating to or payments
    made on account of notes by DTC, or for maintaining, supervising
    or reviewing any records of DTC relating to the notes.





 



    Payments with respect to the principal of and premium, if any,
    and interest on a global security will be payable by the trustee
    to or at the direction of DTC or its nominee in its capacity as
    the registered holder of
     the global security under the Entergy indenture or the Enexus
    indenture. Under the terms of the Entergy indenture and the
    Enexus indenture, Entergy or Enexus, as applicable, and the
    applicable trustee may treat the persons in whose names the
    notes, including the global securities, are registered as the
    owners thereof for the purpose of receiving payment thereon and
    for any and all other purposes whatsoever. Accordingly, none of
    Entergy, Enexus or the trustee has or will have any
    responsibility or liability for the payment of those amounts to
    owners of beneficial interests in a global security. Payments by
    the participants and the indirect participants to the owners of
    beneficial interests in a global security will be governed by
    standing instructions and




173









 







customary industry practice and will
    be the responsibility of the participants and indirect
    participants and not of DTC.



 



    Transfers between participants in DTC will be effected in
    accordance with DTC’s procedures and will be settled in
    same-day
    funds. Transfers between participants in Euroclear or
    Clearstream Luxembourg will be effected in the ordinary way in
    accordance with their respective rules and operating procedures.





 



    Subject to compliance with the transfer restrictions applicable
    to the notes, cross-market transfers between the participants in
    DTC, on the one hand, and Euroclear or Clearstream Luxembourg
    participants, on the other hand, will be effected through DTC in
    accordance with DTC’s rules on behalf of Euroclear or
    Clearstream Luxembourg, as the case may be, by its respective
    depositary; however, those cross-market transactions will
    require delivery of instructions to Euroclear or Clearstream
    Luxembourg, as the case may be, by the counterparty in that
    system in accordance with the rules and procedures and within
    the established deadlines (Brussels time) of that system.
    Euroclear and Clearstream Luxembourg, as the case may be, will,
    if the transaction meets its settlement requirements, deliver
    instructions to its respective depositary to take action to
    effect final settlement on its behalf by delivering or receiving
    interests in the relevant global securities in DTC, and making
    or receiving payment in accordance with normal procedures for
    same-day
    funds settlement applicable to DTC. Euroclear participants and
    Clearstream Luxembourg participants may not deliver instructions
    directly to the depositaries for Euroclear or Clearstream
    Luxembourg.





 



    Because of time zone differences, the securities account of a
    Euroclear or Clearstream Luxembourg participant purchasing an
    interest in a global security from a participant in DTC will be
    credited, and any such crediting will be reported to the
    relevant Euroclear or Clearstream Luxembourg participant, during
    the securities settlement processing day (which must be a
    business day for Euroclear or Clearstream Luxembourg)
    immediately following the settlement date of DTC. Cash received
    in Euroclear or Clearstream Luxembourg as a result of sales of
    an interest in a global security by or through a Euroclear or
    Clearstream Luxembourg participant to a participant in DTC will
    be received with value on the settlement date of DTC but will be
    available in the relevant Euroclear or Clearstream Luxembourg
    cash account only as of the business day for Euroclear or
    Clearstream Luxembourg following DTC’s settlement date.





 



    Although Entergy and Enexus understand that DTC, Euroclear and
    Clearstream Luxembourg have agreed to the foregoing procedures
    to facilitate transfers or transfers of interests in the global
    securities among participants in DTC, Euroclear and Clearstream
    Luxembourg, they are under no obligation to perform or to
    continue to perform those procedures, and those procedures may
    be discontinued at any time. None of Entergy, Enexus or the
    trustee will have any responsibility for the performance by DTC,
    Euroclear or Clearstream Luxembourg or their respective
    participants or indirect participants of their respective
    obligations under the rules and procedures governing their
    operations.





 



    Entergy and Enexus obtained the information in this section and
    elsewhere in this offering memorandum concerning DTC, Euroclear
    or Clearstream Luxembourg and their respective book-entry
    systems from sources that Entergy and Enexus believe are
    reliable, but none of Entergy, Enexus or the initial purchasers
    take any responsibility for the accuracy of any of this
    information.


 





    Certificated
    Securities





 



    As described above, beneficial interests in the global
    securities generally may not be exchanged or certificated
    securities except in connection with a transfer to an
    institutional accredited investor. However, both the Entergy
    indenture and the Enexus indenture provide that if:





 


			
	 	    • 
	
    the depositary for a global security notifies Entergy or Enexus,
    as applicable, that it is unwilling or unable to continue as
    depositary for that global security or the depositary for the
    global securities is no longer eligible or in good standing
    under the Exchange Act or other applicable statute or regulation
    and Entergy or Enexus, as applicable, does not appoint a
    successor depositary within 90 days after it receives that
    notice or becomes aware of that ineligibility;





174









 





 


			
	 	    • 
	
    Entergy or Enexus, as applicable, in its sole discretion
    determines that the notes will no longer be represented by
    global securities; or






 


			
	 	    • 
	
    an event of default with respect to the notes has occurred and
    is continuing.






 



    Entergy or Enexus, as applicable, will execute and the trustee
    will authenticate and deliver certificated securities in
    exchange for interests in the global securities. Entergy and
    Enexus anticipate that those certificated securities will be
    registered in such name or names as DTC instructs the trustee
    and that those instructions will be based upon directions
    received by DTC from its participants with respect to ownership
    of beneficial interest in the global securities. None of
    Entergy, Enexus or the trustee shall be liable for any delay by
    DTC or any participant or indirect participant in identifying
    the beneficial owners of the related notes and each of them may
    conclusively rely on, and will be protected in relying on,
    instructions from DTC for all purposes, including with respect
    to the registration and delivery, and the respective principal
    amounts, of the certificated securities to be issued.


175











 





Schedule 1.01(a)




Core Assets and Core Asset Subsidiaries




	 	 	 
	Core Assets	 	Core Asset Subsidiary
	Indian Point 2 power facilities located in
Westchester County, New York

	 	Enexus Nuclear Indian Point 2, LLC
	 
	 	 
	Indian Point 3 power facilities located in
Westchester County, New York

	 	Enexus Nuclear Indian Point 3, LLC
	 
	 	 
	FitzPatrick power facility located in Oswego
County, New York

	 	Enexus Nuclear FitzPatrick, LLC
	 
	 	 
	Vermont Yankee power facility located in
Windham County, Vermont

	 	Enexus Nuclear Vermont Yankee, LLC
	 
	 	 
	Palisades power facility located in Van Buren
County, Michigan

	 	Enexus Nuclear Palisades, LLC
	 
	 	 
	Pilgrim power facility located in Plymouth
County, Massachusetts.

	 	Enexus Nuclear Pilgrim, LLC






1









 






Schedule 1.01(b)




Key Contracts





	1.	 	Amended and Restated Operating Agreement by and between and EquaGen Nuclear LLC and Enexus
Nuclear FitzPatrick, LLC, 
 dated [   ]
	 
	2.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus Nuclear
Pilgrim, LLC, dated [   ]
	 
	3.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus Nuclear
Indian Point 2, LLC, dated [   ]
	 
	4.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus Nuclear
Indian Point 3, LLC, dated [   ]
	 
	5.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus Nuclear
Palisades, LLC, dated [   ]
	 
	6.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus Nuclear
Vermont Yankee, LLC, 
dated [   ]




2









 











Schedule 1.01(c)




Permitted Dispositions




None.




3









 








Schedule 1.01(d)




Material Contracts





	1.	 	Separation and Distribution Agreement by and between Enexus Energy Corporation and Entergy
Corporation
	 
	2.	 	Senior Note Indenture by and among Enexus Energy Corporation and the other parties thereto
	 
	3.	 	Federal Income Tax Matters Agreement by and between Enexus Energy Corporation and Entergy
Corporation
	 
	4.	 	State Tax Matters Agreement by and between Enexus Energy Corporation and Entergy Corporation
	 
	5.	 	Transition Services Agreement by and between Enexus Energy Corporation and Entergy Corporation
	 
	6.	 	Employee Matters Agreement by and among Enexus Energy Corporation, Entergy Corporation and
EquaGen LLC
	 
	7.	 	Joint Venture Formation Agreement by and among Enexus Energy Corporation, Entergy Corporation
and EquaGen LLC
	 
	8.	 	EquaGen LLC Limited Liability Company Agreement by and between Entergy Corporation, Enexus
Energy Corporation and EquaGen LLC
	 
	9.	 	Amended and Restated Operating Agreements by and between (i) EquaGen Nuclear
LLC, and (ii) Enexus Nuclear FitzPatrick, LLC, Enexus Nuclear Pilgrim, LLC, Enexus Indian Point 2,
LLC, Enexus Nuclear Indian Point 3, LLC, Enexus Nuclear Palisades, LLC and Enexus Nuclear Vermont
Yankee, LLC, respectively
	 
	10.	 	Shared Services Agreement by and between EquaGen LLC and Entergy Operations, Inc. 
	 
	11.	 	
 Shared
Services Agreement by and between EquaGen LLC and Entergy Services, Inc.

	 
	12.	 	
 Corporate Services
Agreement by and between EquaGen LLC and Entergy Services, Inc.
	 
	13.	 	2008 Equity Ownership and Long Term Cash Incentive Plan of Enexus Energy
Corporation and Subsidiaries
	 
	14.	 	Credit Agreement by and among Enexus Energy Corporation and the other parties thereto
	 
	15.	 	Collateral Agency and Intercreditor Agreement by and among Enexus Energy
Corporation and the other parties thereto
	 
	16.	 	Guarantee and Collateral Agreement by and among Enexus Energy Corporation and the other parties
thereto




4









 






	17.	 	Support Agreement by and among Enexus Energy Corporation and the other parties thereto
	 
	18.	 	Nuclear Fuel and Fuel Services Purchase Agreement




5









 











Schedule 2.01




Commitments




	 	 	 	 	 	 	 
	Lender	 	Commitment	 	Notices
	Citibank, N.A.

	 	$	150,000,000.00	 	 	388 Greenwich Street

New York, NY 10013

Attention: J. Nicholas Mckee, Managing Director

Tel.: (212) 816-8592

Fax: (212) 816-8098

Email: j.nicholas.mckee@citi.com
	 
	 	 	 	 	 	 
	BNP Paribas

	 	$	150,000,000.00	 	 	525 Washington Boulevard

Jersey City, NJ, 07310

Attention: Socorro Lantin, Loan Administrator

Tel.: (201) 850-6577

Fax: (201) 850-4020

Email:
nyls.agency.support@americas.bnpparibas.com
	Goldman Sachs Lending Partners
LLC

	 	$	150,000,000.00	 	 	c/o Goldman, Sachs & Co.

30 Hudson Street, 17th Floor

Jersey City, NJ 07302

Attention: Andrew Caditz, Vice President

Tel.: (212) 357-6240

Fax: (212) 428-1243

Email: gsd.link@gs.com
	Mizuho Corporate Bank, Ltd.

	 	$	150,000,000.00	 	 	1251 Avenue of the Americas

New York, NY 10020

Attention: Nelson Y. Chang, Vice President,

Corporate Finance Division

Tel.: (212) 282-3465

Fax: (212) 282-4488

E-mail: nelson.chang@mizuhocbus.com
	The Bank of Nova Scotia

	 	$	100,000,000.00	 	 	One Liberty Plaza, 26th floor

New York, NY 10006

Attention: Isabel Abella, Director

Tel.: (212) 225-5305

Fax: (212) 225-5480
	Calyon New York Branch

	 	$	75,000,000.00	 	 	1301 Travis Suite 2100

Houston, TX 77002

Attention: Darrell Stanley, Managing Director

Phone: (713) 890-8602

Fax: (713) 890-8668

E-Mail: darrell.stanley@us.calyon.com
	Natixis New York Branch

	 	$	75,000,000.00	 	 	1251 Avenue of the Americas, 34th floor

New York, NY 10020

Attention: Stephane Leroy, Director

Tel.: (212) 872-5197

Email: stephane.leroy@natixis.us
















 






	 	 	 	 	 	 	 
	Lender	 	Commitment	 	Notices
	Union Bank of California, N.A.

	 	$	75,000,000.00	 	 	445 S. Figueroa Street, 15th Floor

Los Angeles, CA 90071

Attention: Robert Olson, Senior Vice President, 

Energy Capital Services

Tel.: (213) 236-7407

Fax.: (213) 236-4096

Email: robert.olson@uboc.com
	Bank of America, N.A.

	 	$	50,000,000.00	 	 	100 North Tryon St, 17th floor

Charlotte, NC 28255

Attention: Jacob Dowden, Vice President

Tel. (980) 386-5784

Fax: (704) 602-3746

Email: jacob.dowden@bankofamerica.com
	Barclays Bank PLC

	 	$	50,000,000.00	 	 	745 7th Avenue, 21st Floor

New York, NY, 10119

Attention: Maria Lund, Vice President

Tel.: (212) 526-1456

Fax: (212) 526-5115

Email: maria.lund@barcap.com
	Keybank National Association

	 	$	50,000,000.00	 	 	127 Public Square

Cleveland, OH

Attention: Paul Pace, Vice President,

Corporate Loans & Syndications, 

Energy Group

Tel.: (216) 689-4446

Fax: (216) 689 4981

	Morgan Stanley Bank, N.A.

	 	$	50,000,000.00	 	 	750 Seventh Avenue

New York, NY 10019

Attention: Susan Saxe, Managing Director

Tel.: (212) 762-2820

Fax: (212) 507-3672

susan.saxe@morganstanley.com
	Regions Bank

	 	$	25,000,000.00	 	 	210 East Capitol

Jackson, MS 39201

Attention: William Philipp, Vice President

Tel.: (601) 354-8229

Fax: (601) 96804641

Email. bill.philipp@regions.com
	Deutsche Bank Trust Company
Americas

	 	$	25,000,000.00	 	 	60 Wall Street, MS: NYC60-4405

New York, NY 10005

Attention: Marcus Tarkington, Director

Tel.: (212) 250-6153

Fax: (212)797-0070

E-mail: marcus.tarkington@db.com






2









 






Schedule 3.07




Mortgaged Properties




	 	 	 	 	 	 	 
	Entity of Record	 	Location Address	 	Section 3.07(c) Exceptions	 	Section 3.07(d) Exceptions
	Enexus Nuclear Vermont
Yankee, LLC

	 	320 Governor Hunt Road
Vernon,
 VT 05354 (main plant
site)
	 	None
	 	Ground lease between
Enexus Nuclear Vermont
Yankee, LLC, as lessor,
and Vermont Transco
LLC, as lessee (not
entered into yet) (right of
first refusal provision)
	 
	 	 	 	 	 	 
	Enexus Nuclear Vermont
Yankee, LLC

	 	304-06, 374, and 394-96
Governor Hunt Road, Vernon, VT
05354 (Edson, Tuttle and Lagro
additional parcels)
	 	None	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Vermont
Yankee, LLC

	 	185 Old Ferry Road and 24 Glen
Orne Drive,
Brattleboro, VT 05301 (office and
training center); Old Ferry Road
(gravel parking lot)
	 	None	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Vermont
Yankee, LLC

	 	Monitoring Site 1 off Stebbins
Road and Monitoring Sites 2-I
and 2-II off Route 142, Vernon,
VT (monitoring sites)
	 	None	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Palisades,
LLC

	 	27780 Blue Star Memorial
Highway
Covert, MI 49043 (Palisades
plant address)
	 	None	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Pilgrim,
LLC

	 	0, 490,680 and 769 Rocky Hill
Road
Plymouth, MA 02360 and 0
State Road, Plymouth, MA
02360 (Pilgrim plant address)
	 	None
	 	Interconnection
Agreement between
NSTAR and Entergy
Nuclear Generation
Company dated November
18, 1998 (right of first
refusal provision)
	 
	 	 	 	 	 	 
	Enexus Nuclear Pilgrim,
LLC

	 	46 Sandwich Road
Plymouth, MA
02360 (Chiltonville Training
Center)
	 	None	 	 






7









 






Schedule 3.08




Subsidiaries




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Loan	 	 	 	 
	 	 	Jurisdiction	 	 	 	Party/Subsidiary	 	Unrestricted	 	NY Real Property
	Subsidiary	 	of Formation	 	% ownership by Enexus	 	Guarantor	 	Subsidiary	 	Subsidiary
	Enexus Nuclear
Indian Point 2,
LLC

	 	Delaware
	 	100% (indirect ownership
through Enexus Nuclear
Holding Company, LLC
(“ENHC”))
	 	Yes
	 	No
	 	Yes
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear
Vermont Yankee,
LLC

	 	Delaware
	 	100% (indirect ownership
through Enexus Nuclear
Holding Company, LLC
(“ENHC”) which is 100%
owned by Enexus)
	 	Yes
	 	No
	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear
Midwest
Investment
Company, LLC
(“ENMIC”)

	 	Delaware
	 	100% (indirect ownership
through Enexus Nuclear
Holding Company, LLC
(“ENHC”))
	 	Yes
	 	No
	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear
Palisades, LLC,

	 	Delaware
	 	100% (indirect ownership
through ENMIC, which is
owned 100% by ENHC)
	 	Yes
	 	No
	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear
FitzPatrick, LLC

	 	Delaware
	 	100% direct ownership
	 	Yes
	 	No
	 	Yes
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear
Indian Point 3,
LLC

	 	Delaware
	 	100% direct ownership
	 	Yes
	 	No
	 	Yes
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear
Pilgrim, LLC

	 	Massachusetts
	 	100% direct ownership
	 	Yes
	 	No
	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear
Finance Holding,
Inc. (“ENFHI”)

	 	Arkansas
	 	100% direct ownership
	 	Yes
	 	No
	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear
Finance, LLC

	 	Delaware
	 	100% (indirect ownership
through ENFHI)
	 	Yes
	 	No
	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear
Holding
Company, LLC

	 	Delaware
	 	100% direct ownership
	 	Yes
	 	No
	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Power
Marketing, LLC

	 	Delaware
	 	100% direct ownership
	 	Yes
	 	No
	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Retail
Holding Company
(“ERHC”)

	 	Delaware
	 	100% direct ownership
	 	Yes
	 	No
	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear
Nebraska, LLC

	 	Delaware
	 	100% (indirect ownership
through ENHC)
	 	Yes
	 	No
	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Nuclear
Fuels Company

	 	Delaware
	 	100% direct ownership
	 	Yes
	 	No
	 	No






8









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Loan	 	 	 	 
	 	 	Jurisdiction	 	 	 	Party/Subsidiary	 	Unrestricted	 	NY Real Property
	Subsidiary	 	of Formation	 	% ownership by Enexus	 	Guarantor	 	Subsidiary	 	Subsidiary
	Nuclear Services
Company, LLC

	 	Delaware
	 	100% direct ownership
	 	Yes
	 	No
	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Enexus Retail
Energy LLC

	 	Delaware
	 	100% (indirect ownership
through ERHC)
	 	Yes
	 	No
	 	No






9









 






Schedule 3.09(a) (Signing)




Litigation




(i) None



(ii) 1. New York State Department of Environmental Control Clean Water Act permit proceeding,
review pending before the U.S. Supreme Court



2. Application for renewal of State Pollutant Discharge Elimination System Permit for Indian
Point; New York Department of Environmental Conservation



3. Application for renewal of State Pollutant Discharge Elimination System Permit for Vermont
Yankee; Vermont Agency of Natural Resources



4. Application for renewal of National Pollutant Discharge Elimination System Permit for
Pilgrim; U.S. Environmental Protection Agency, Region 1



5. The ongoing license renewal proceedings for Vermont Yankee, Pilgrim, Indian Point 2 and Indian
Point 3



6. Enexus is responding to lawsuits in both state and federal courts and to other labor-related
proceedings filed by current and former employees. These actions include, but are not limited to,
allegations of wrongful employment actions; wage disputes and other claims under the Fair Labor
Standards Act or its state counterparts; claims of race, gender and disability discrimination;
disputes arising under collective bargaining agreements; unfair labor practice proceedings and
other administrative proceedings before the National Labor Relations Board; claims of retaliation;
and claims for or regarding benefits under various Entergy Corporation sponsored plans. If any
number of these claims are adversely determined, in the aggregate, this could reasonably be
expected to result in a Material Adverse Effect.




1









 








Schedule 3.09(a) (Funding)




Litigation




(i) None



(ii) 1. Certiorari review of EPA’s Cooling Water Intake Structure Rule for Existing Facilities;
U.S. Supreme Court



2. Application for renewal of State Pollutant Discharge Elimination System Permit for Indian
Point; New York Department of Environmental Conservation



3. Application for renewal of State Pollutant Discharge Elimination System Permit for Vermont
Yankee; Vermont Agency of Natural Resources



4. Application for renewal of National Pollutant Discharge Elimination System Permit for
Pilgrim; U.S. Environmental Protection Agency, Region 1



5. The ongoing license renewal proceedings for Vermont Yankee, Pilgrim, Indian Point 2 and
Indian Point 3



6. Enexus is responding to lawsuits in both state and federal courts and to other labor-related
proceedings filed by current and former employees. These actions include, but are not limited to,
allegations of wrongful employment actions; wage disputes and other claims under the Fair Labor
Standards Act or its state counterparts; claims of race, gender and disability discrimination;
disputes arising under collective bargaining agreements; unfair labor practice proceedings and
other administrative proceedings before the National Labor Relations Board; claims of retaliation;
and claims for or regarding benefits under various Entergy Corporation sponsored plans. If any
number of these claims are adversely determined, in the aggregate, this could reasonably be
expected to result in a Material Adverse Effect.




2









 








Schedule 3.09(b) (Signing)




Violations




None.




12









 








Schedule 3.09(b) (Funding)




Violations




None.




13









 








Schedule 3.14




Material Tax Claims



The Internal Revenue Service has challenged Entergy Corporation’s tax return position, for the
taxable year 2000, related to allowable depreciation for acquired nuclear plants. Entergy
Corporation believes its tax return position is correct and has filed suit in the U.S. Tax Court.
Assuming the IRS were to prevail on its position in this litigation, approximately $19,493,953
million total depreciation deductions would be reallocated to other assets resulting in $6,822,884
in taxes for taxable year 2000. It is also possible, if the IRS were to prevail, that additional
adjustments may be required in subsequent taxable years. Enexus’s liability to Entergy for any
such taxes is limited under the Tax Matters Agreement to an amount not exceeding any such taxes
(plus a carrying charge).




14









 








Schedule 3.17




Environmental Matters




(i) none



(ii) The following could result in material modifications to the subject permits:




          (a) Indian Point Units 2 and 3 State Pollutant Discharge Elimination System Permit renewal
proceedings, before the New York State Department of Environmental Conservation (currently at
pretrial stage) (regarding the possible requirement for installation of cooling towers or other
large capital expenditures pursuant to Clean Water Act § 316(b) and 6 NYCRR § 704.5)




          (b) Vermont Yankee State Pollutant Discharge Elimination System Permit modification
proceedings for modification requested by the facility, before the Vermont Environmental Court
(regarding the plant’s largely successful request for a modification allowing an additional
discharge of heat into the Connecticut River; opposition has requested reconsideration and likely
will appeal to the Vermont Supreme Court)




          (c) Vermont Yankee State Pollutant Discharge Elimination System Permit renewal proceedings,
before the Vermont Agency of Natural Resources (at application stage; opposition likely will urge a
requirement that increased use of cooling towers be required (and concomitant restrictions on
release of heat into the Connecticut River)




          (d) Pilgrim National Pollutant Discharge Elimination System Permit; United States
Environmental Protection Agency (Region 1) Clean Water Act § 114 Request for Information and permit
renewal proceedings, before EPA as the primary permitting authority (permit review could result in
a requirement of cooling towers or other large capital expenditures or operational modifications in
response to Clean Water Act § 316(b))




          (e) Fitzpatrick State Pollutant Discharge Elimination System Permit ongoing permit
requirements (renewed permit requires studies over the next five-year permit term that may result
in a requirement in the next permit cycle of significant capital expenditures in response to Clean
Water Act § 316(b) and 6 NYCRR § 704.5)



(iii) Each Enexus nuclear facility is subject to decommissioning funding and implementation
requirements pursuant to Nuclear Law.



(iv) none



(v) None.



(vi) In 2006, Enexus Energy Corporation joined a groundwater monitoring initiative program after
the detection of radioactive material, primarily tritium, in groundwater at the Indian Point Energy
Center. In addition to tritium, other radionuclides, such as strontium, have been detected in
on-site groundwater at Indian Point Energy Center, including finding that certain conditions at the
site ultimately migrate and discharge to the Hudson River. The investigation concluded that


4









 






there is no indication of adverse environmental or health risk to either the site or the Hudson
River. Removal of the expected contamination source has now been completed. In October 2007, the
EPA announced that it was consulting with the NRC and the NYDEC regarding Indian Point Energy
Center. The EPA stated that after reviewing data it confirmed with NYDEC that there have been no
violations of federal standards for radionuclides in drinking water supplies.




5









 








Schedule 3.18




Insurance




	 	 	 	 	 	 	 	 	 
	 	 	Enexus Proposed Insurance Program	 	 	 	 
	Coverage	 	Description	 	SIR (Self-Insured Retention)	 	Limits
	Property
	 	 	 	 	 	 	 	 
	Non-Nuclear
Property

	 	Covers loss to Enexus non-nuclear
property/physical assets
	 	$	100K	 	 	$33M
	Nuclear Property

	 	Covers loss to northeast plants’
property/physical assets
	 	$2.5M1
	 	$1.115B
	Accidental Outage
FP, Pilgrim, IP
2/3, Palisades

	 	Coverage is triggered by an accident
that results in a total shutdown of the
unit; policyholder can use the
proceeds as needed.
	 	12 Weeks
	 	$490M2
	Accidental Outage
VY

	 	See above
	 	12 Weeks
	 	$435.6 M
	Aircraft Hull &
Liability

	 	Covers physical damage to
scheduled aircraft and bodily injury
or property damage arising out of
the ownership, maintenance, or use
of the scheduled aircraft
	 	$	0	 	 	$100M
	Liability
	 	 	 	 	 	 	 	 
	Nuclear Facility
Form

	 	Covers third-party bodily injury and
property damage resulting from a
nuclear accident
	 	$	0	 	 	$300M
	Nuclear Master
Worker Form

	 	Covers bodily injury sustained by
third-party nuclear workers, e.g., on-site contractors, related to a nuclear
accident. *The limit is an industry
aggregate.
	 	$	0	 	 	$300M (industry
aggregate)
	Nuclear
Secondary
Financial
Protection

	 	Applies excess of Facility Form and
Master Worker Form. If SFP is
applied, each US nuclear plant is
subject to a retrospective premium.
*The limit is an industry aggregate.
	 	$	300M	 	 	~$12B(industry

aggregate)
	Nuclear Suppliers
& Transporters

	 	Provides third- party nuclear liability
protection when there is an accident
caused by radioactive waste
materials that are temporarily or
permanently stored at a non-indemnified site not owned or
operated by the insured, or are in
transit and the shipment is delayed.
	 	$	0	 	 	$200M








 




			
	1	 	There is currently a $15 million deductible applicable to the IP3 turbine for any loss
associated with steam extraction check valves which have not been internally inspected per the NEIL
Standards,
	 
	2	 	The NEIL Accidental Outage policies have various weekly indemnity (payments) of from
$3.5 to $4.5 million weekly.




14









 










	 	 	 	 	 	 	 	 	 
	 	 	Enexus Proposed Insurance Program	 	 	 	 
	Coverage	 	Description	 	SIR (Self-Insured Retention)	 	Limits
	IP Pollution Legal
Liability -

	 	Asset Sale Agreement required that
Entergy Nuclear Indian Point 2,
LLC purchase Pollution Legal
Liability coverage.
	 	$	0	 	 	$20M
	IP2 Spud Barge

	 	Covers damages to third parties
resulting from injuries/damages
caused in connection with IP 2’s
Spud Barge. This coverage was
prompted by NY governor requiring
that this barge be placed at IP2 for
security purposes. The U.S. Coast
guard moors one of its vessels to this
barge
	 	$	100K	 	 	$5M
	Directors and
Officers (D&O)
Liability

	 	Protects Enexus’ D&Os against loss
associated with alleged wrongful
acts (misstatements, errors,
omissions), while acting in their
capacity as a D or O
	 	$0 Individ., $5M- $10M Corp. Reimb.
	 	$225M, incl. $25M
Side A Excess
	General/Auto
Liability

	 	Covers damages associated with
non-nuclear third-party (public)
property damage and/or bodily
injury arising out of the course of
Enexus’ operations.
	 	$	100K	 	 	$25M
	Employment
Practices Liability
(EPL)

	 	Covers loss associated with alleged
unfair employment practices (hiring,
firing, demotion)
	 	$	100K	 	 	$10M
	Fiduciary Liability

	 	Covers loss associated with alleged
breach of fiduciary duties associated
with employee benefit plans
(savings, pension, group life, health
insurance)
	 	$0 Individ., $50K-$100K Corp. Reimb./Securities
	 	$10M
	Workers’
Compensation

	 	Covers loss resulting from employee
injuries
	 	$	0	 	 	Statutory
	Crime

	 	Covers loss associated with
employee theft
	 	$	100K	 	 	$10M
	Commercial
Package

	 	Provides general liability (GL),
property, workers’ compensation
(WC) and employer’s liability (EL)
coverage for the ENPM office in
Stamford, CT, as required by
contractual leasing requirements.
	 	$	10K	 	 	$10M
	Punitive Liability

	 	Covers punitive damages for
general/auto liability loss in states
that disallow insuring punitive
damages
	 	$	100K	 	 	$5M
	Special Crime

	 	Covers loss associated with kidnap
and ransom, extortion
	 	$	0	 	 	$10M






15









 






Schedule 3.19(a)




UCC Filing Offices




	 	 	 
	Enexus Energy Corporation

	 	Secretary of State of Delaware
	Enexus Nuclear Indian Point 2, LLC

	 	Secretary of State of Delaware
	Enexus Nuclear Vermont Yankee, LLC

	 	Secretary of State of Delaware
	Enexus Nuclear Midwest Investment 

Company, LLC

	 	Secretary of State of Delaware
	Enexus Nuclear Palisades, LLC,

	 	Secretary of State of Delaware
	Enexus Nuclear FitzPatrick, LLC

	 	Secretary of State of Delaware
	Enexus Nuclear Indian Point 3, LLC

	 	Secretary of State of Delaware
	Enexus Nuclear Pilgrim, LLC

	 	Secretary of State of Massachusetts
	Enexus Nuclear Finance Holding, Inc.

	 	Secretary of State of Arkansas
	Enexus Nuclear Finance, LLC

	 	Secretary of State of Delaware
	Enexus Nuclear Holding Company, LLC

	 	Secretary of State of Delaware
	Enexus Power Marketing, LLC

	 	Secretary of State of Delaware
	Enexus Retail Holding Company

	 	Secretary of State of Delaware
	Enexus Nuclear Nebraska, LLC

	 	Secretary of State of Delaware
	Enexus Nuclear Fuels Company

	 	Secretary of State of Delaware
	Nuclear Services Company, LLC

	 	Secretary of State of Delaware
	Enexus Retail Energy, LLC

	 	Secretary of State of Delaware






16









 






Schedule 3.19(c)




Mortgage Filing Offices




	 	 	 
	Enexus Nuclear Palisades, LLC

	 	Van Buren County, MI
	Enexus Nuclear Pilgrim, LLC

	 	Plymouth County, MA
	Enexus Nuclear Vermont Yankee, LLC

	 	Vernon, VT

Brattleboro, VT






17









 






Schedule 3.20




Owned Real Property, Properties Subject to a Material Lease, and Title to Properties




	 	 	 	 	 	 	 
	 	 	 	 	Owned	 	 
	 	 	 	 	or	 	Landlord/Owner if
	Entity of Record	 	Location Address	 	Leased	 	Leased
	Enexus Nuclear Indian
Point 2, LLC

	 	450 Broadway


Buchanan, NY 10511 (IP 2 plant
address)
	 	Owned
	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Indian
Point 2, LLC

	 	Indian Point 1


Buchanan, New York


(non-operating site)
	 	Owned	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Indian
Point 2, LLC

	 	Old Toddville School


4 Locust Ave


Cortlandt Manor, NY 10567-4309


(currently vacant building that was
previously used for training. This
property is scheduled to be donated
post-spin)
	 	Owned	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Vermont
Yankee, LLC

	 	320 Governor Hunt Road


Vernon, VT 05354 (main plant site)
	 	Owned	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Vermont
Yankee, LLC

	 	Monitoring Site I off Stebbins Road and
Monitoring Sites 2-I and 2-II off Route
142, Vernon, VT (monitoring sites)
	 	Owned	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Palisades,
LLC

	 	27780 Blue Star Memorial Highway


Covert, MI 49043 (Palisades plant
address)
	 	Owned	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Palisades,
LLC

	 	Big Rock Independent Spent Fuel


Storage Installation, Charlevoix
County, Michigan


(non-operating facility)
	 	Owned	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear FitzPatrick,
LLC

	 	268 Lake Road
Lycoming, NY 13093 (plant address)


277 Lake Road

Oswego, NY 13126 (address for UPS or
fedex deliveries)
	 	Owned	 	 
	 
	 	 	 	 	 	 





18









 






	 	 	 	 	 	 	 
	 	 	 	 	Owned	 	 
	 	 	 	 	or	 	Landlord/Owner if
	Entity of Record	 	Location Address	 	Leased	 	Leased
	Enexus Nuclear FitzPatrick,
LLC

	 	2262 County Route 176


Fulton, NY 13069 (emergency offsite
facility)
	 	Owned	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear FitzPatrick,
LLC

	 	4.67 acre tract on Airport Road, Fulton NY
	 	Owned
	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Indian
Point 3, LLC

	 	450 Broadway


Buchanan, NY 10511 (IP 3 plant
address)
	 	Owned	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Pilgrim,
LLC

	 	0, 490, 680 and 769 Rocky Hill Road,


Plymouth, MA 02360 and 0 State Road,
Plymouth MA 02360 (Pilgrim plant
address)
	 	Owned	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Pilgrim,
LLC

	 	46 Sandwich Road


Plymouth, MA
02360 (Chiltonville Training Center)
	 	Owned	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Vermont
Yankee, LLC

	 	304-06, 374, and 394-96 Governor Hunt


Road, Vernon, VT 05354 (Edson, Tuttle
and Lagro additional parcels)
	 	Owned	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Vermont
Yankee, LLC

	 	185 Old Ferry Road and 24 Glen Orne

Drive,


Brattleboro, VT 05301 (office and training
center); Old Ferry Road, Brattleboro, VT
05301 (gravel parking lot)
	 	Owned	 	 
	 
	 	 	 	 	 	 
	Enexus Nuclear Indian
Point 2, LLC

	 	295 Broadway


Buchanan, NY 10511-0308 (2 warehouses,
tower)
	 	Owned	 	 
	 
	 	 	 	 	 	 
	Nuclear Services Company,
LLC

	 	300 Renaissance Building


1018 Highland Colony Parkway


Ridgeland, MS
	 	Leased
	 	300 Renaissance
LLC
	 
	 	 	 	 	 	 
	Nuclear Services Company,
LLC

	 	440 Hamilton Avenue


White Plains, NY
	 	Leased
	 	Entergy Nuclear
Operations, Inc.






          Section 3.07(b) Exceptions: None.




19









 








Schedule 3.23(b)




Rate Proceedings




None




20









 








Schedule 3.23(d)




FERC Matters




None





21











 





Schedule 3.23(f)




“QF” and “EWG” Facilities




EWG (Docket Number)




	 	1.	 	Enexus Nuclear Pilgrim, LLC (EG99-56)
	 
	 	2.	 	Enexus Nuclear Fitzpatrick, LLC (EG00-174)
	 
	 	3.	 	Enexus Nuclear Vermont Yankee, LLC(EG02-32)
	 
	 	4.	 	Enexus Nuclear Indian Point 2, LLC(EG01-303)
	 
	 	5.	 	Enexus Nuclear Indian Point 3, LLC(EG00-175)
	 
	 	6.	 	Enexus Nuclear Palisades, LLC (EG07-46)





QF





	 	1.	 	None






22









 








Schedule 5.10(b)




Survey Requirements



1. The survey must be certified by a surveyor licensed in the jurisdiction in which the Mortgaged
Property is located. If that jurisdiction licenses engineers instead of surveyors, then
certified by such a licensed engineer. (If the jurisdiction in which the Mortgaged Property is
located does not license surveyors or engineers, please notify Lender’s counsel regarding other
generally acceptable qualifications).



2. The survey must be certified to Citigroup Global Markets Realty Corp., its successors and/or
assigns, individually and as lead arranger and administrative agent for itself and certain
co-lenders, and the title insurance company (as shown on surveyor’s certificate attached
hereto).



3. The survey must be dated no more than 90 days prior to the date the Mortgage is recorded. If
the word “Date” appears on the survey, this date must be dated no more than 90 days prior to
the date the Mortgage is recorded.



4. The survey must be acceptable to the title insurance company for purposes of insuring title
free and clear of survey exceptions and questions (except as otherwise permitted).



5. The survey must meet at least the requirements of an Urban Class ALTA/ACSM Land Title Survey,
made in accordance with the Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys, jointly established and adopted in 2005 by the American Land Title Association (ALTA), the
American Congress on Surveying and Mapping (ACSM) and National Society of Professional
Surveyors (NSPS) and, if available, the following additional items from the list of “Optional
Survey Responsibilities and Specifications” (Table A) should be added to the survey: 1, 2, 4,
6, 7(a), 7(b)(1), 8, 10, 11(a), 13 and 14 or any other additional items required by Lender.



6. The survey must show the following:





a. the dimensions, total square footage, acreage of the land area of the Mortgaged Property,
its owner, its tax parcel identifying number and its address, including Zip Code;




b. the location, dimensions and a brief description (i.e., “20-unit, 2-story
brick building”) of all buildings, structures and other improvements
(including sidewalks, curbs, parking areas and fences) on the Mortgaged
Property and the distance from the improvements to adjoining exterior
property lines, including any underground construction. Building dimensions
allowed by applicable zoning must also be shown next to actual measurements.
Any lines within the footprint of the building must also be described (e.g.,
“terrace on third floor”);



23









 






c. the location of all easements, servitudes, or rights-of-way (above or below ground) on the
Mortgaged Property, or other similar exceptions listed in the commitment for the title
insurance policy for the Mortgaged Property (except that blanket easements may be shown as
such), including, any exceptions shown on a recorded map or plat, together with the complete
recording information for all such matters;




d. the location and dimensions of any encroachments by the improvements on the Mortgaged Property
onto any adjacent property, street, alley, or easements located on the Mortgaged Property, and by
improvements on any adjacent property, street or alley onto the Mortgaged Property, and labeled as
such with a symbol or abbreviation contained in the Legend;




e. the location of minimum zoning, building code or recorded building restriction or setback lines
for the Mortgaged Property and any other building restrictions (including height and lot coverage
restrictions), including complete recording information if such restrictions have been recorded and
the distance from the improvements to adjoining restriction or setback lines, including any
underground construction. If underground construction is applicable, the survey must state whether
such restrictions apply to the underground construction;




g. the location of utilities serving the Mortgaged Property, including points of ingress to and
egress from the Mortgaged Property of such utilities, must be designated on the survey by placement
of an arrow with a statement, for example: “Water service exits and enters here” (within the
Mortgaged Property; however, the locations of underground utility lines which serve only the
Mortgaged Property are not required to be shown);




h. indication of access (such as curb cuts and driveways) to adjoining streets and highways and the
status of such roadways as public or private;




i. the monuments found (or a reference monument found) at all major corners of the boundary of the
Mortgaged Property;




j. a “Legend” of all symbols or abbreviations used on the survey;




k. a vicinity map showing the Mortgaged Property surveyed in reference to nearby highway(s)
or major street intersection(s);




l. observable evidence of cemeteries;




m. the identity of all abutting owners, subdivision lot and tax lot number and names of
subdivisions;




n. the zoning of the Mortgaged Property and a brief description of that zoning (e.g., “CPD
(Commercial Planned Development)”); and



24









 






o. significant observations not otherwise defined.



7. The survey must contain both a drawing of the boundaries of the property and a
verbal statement of the legal description. The drawing of the Mortgaged Property shown on
the survey must conform exactly (word for word) to the written legal description shown on the
survey and to the legal description shown in the commitment for the title insurance policy for
the Mortgaged Property. (If the title insurance legal description uses the degree symbol (“°”), so
must the surveyor, or vice versa). A metes and bounds description, a lot and block
description, or a description of the Mortgaged Property bounded on all sides by dedicated
streets or alleys is acceptable as long as it corresponds to the legal description shown in
such title insurance commitment. If the title insurance commitment refers to a recorded plat, then such plat with appropriate recording references must be indicated on the
survey. The legal description will be acceptable if it is printed as a legend on the survey
or is on a separate sheet attached to and specifically identifying the survey, but it is
preferable that it appear on the survey itself.



8. The survey must contain a surveyor’s certificate in the form attached hereto. Such certificate
will be acceptable if it is printed as a legend on the survey or is attached to and specifically
identifies the survey.




FORM OF SURVEYOR’S CERTIFICATION




	 	 	 	 	 	 	 
	TO:

	 	 	1.	 	 	[TITLE INSURANCE COMPANY] (“Title Company”)
	 

	 	 	2.	 	 	[TITLE INSURANCE COMPANY AGENT]

	 

	 	 	3.	 	 	[NAME OF PROPERTY OWNER]
	 

	 	 	4.	 	 	Citigroup Global Markets Realty Corp., as Administrative Agent, and its
successors and assigns, as their interests may appear





I hereby certify that on the                      day of                     , 200           : (a) an accurate, “as built” on the
ground instrument survey entitled
“                    ”
(the “Survey”) of the premises (the “Property”)
known by the street address                                          and municipal tax map parcel designation                     , was
conducted under my direction according to local professional practices; (b) the Survey and the
information, courses and distances shown thereon are correct; (c) all monuments shown on the
Survey actually exist, and the location, size and type of materials thereof are correctly shown;
(d) the title lines and lines of actual possession of the Property are the same; (e) the size,
location and type of all buildings and improvements on the Property are as shown on the Survey and
all are within the boundary lines and applicable setback lines of the Property; (f) all zoning,
use and density classifications and requirements are properly shown (including those related to
the use, density, parking and building setback and height) and the Property complies with all such
requirements [as a matter of right without any permitted grandfathered nonconformities, special
use permits, variances or the like], [ but in such compliance is based on the following permitted
grandfathered nonconformities:                                         ]; (g) there are no visible sinkholes or mines on the Property; (h)
the Property has direct access to the following streets                     , which are dedicated public ways; (i) there are no easements, rights-of-ways, old highways
or abandoned roads, lanes, driveways or uses affecting the Property appearing from a careful
physical inspection of the same, other than those shown and depicted on the Survey; (j) except as
shown on the Survey, there are no improvements thereon and there are no




25









 







encroachments affecting the Property; (k) except as shown on the Survey, there are no visible
discrepancies, conflicts, shortages in area or boundary line conflicts; (l) all recorded easements
and other exceptions, as noted in Title Company/TA commitment No.                     , dated
                    , 200        , have been
correctly platted on the survey; (m) except as shown on the survey, there are no setback lines,
party walls, encroachments or overhangs of any improvements on the property upon any easement,
rights-of-way or adjacent land or encroachments of improvements located on adjacent land upon the
Property; (n) there are no visible cemeteries or burying grounds on the Property; (o) all utility
services required for the operation of the Property either enter the Property through adjoining
public streets, or the Survey shows the point of entry and location of any utilities which pass
through or are located on adjoining private land; (p) the Survey shows the location of any visible
telephone, telegraph, electric or other power lines, wires and poles on the Property; (q) the
Survey shows the location and direction of all storm drainage systems for the collection and
disposal of all roof and surface drainage and all springs, streams, rivers, ponds or lakes located
on, bordering on, or running through the Property; (r) any discharge from the Property or
improvements thereon into springs, streams, rivers, ponds or lakes or other conveyance system is
shown on the Survey; (s) the parcel(s) described on the Survey do not lie within flood or mudslide
hazard areas in accordance with any maps entitled “Flood Insurance Rate Map,” “Flood Hazard
Floodway Boundary Map,” “Flood Hazard Boundary Map” or “Flood Boundary and Floodway Map” published
by the Federal Emergency Management Agency or any Flood Hazard Boundary Map published by the U.S.
Department of Housing and Urban Development, which such map covers the area in which the Property
is situated; (t) the Property is made up of one or more parcels, each of which constitutes a
separate tax lot and none of which constitutes a portion of any other tax lot; and (u) there are no
observable indications of recent building construction alterations, repairs, or street or sidewalk
repairs on the Property.



This Survey is made (i) in accordance with the current “Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys, jointly established and adopted in 2005 by the American Land Title
Association (ALTA), the American Congress on Surveying and Mapping (ACSM) and National Society of
Professional Surveyors (NSPS) and includes 1, 2, 4, 6, 7(a), 7(b)(1), 8, 10, 11(a), 13 and 14 of
Table A thereof and meets the Relative Positional Accuracy Standards specified in ALTA and in
effect on the date of this Certification.”



EXECUTED
this                      day of                     , 200                     .




[SEAL]




	 	 	 	 	 
	 

	 	 

[NAME OF SURVEYOR] Registered
	 	 
	 

	 	Public Surveyor No.	 	 
	 

	 	Address:	 	 
	 

	 	Telephone No.:	 	 











26









 











Schedule 6.01(c) (Signing)




Existing Indebtedness




None









27









 











Schedule 6.01(c) (Funding)




Existing Indebtedness





	1.	 	Guarantee of certain payment obligations of EquaGen Nuclear by Enexus Energy Corporation
and/or Enexus Nuclear Fitzpatrick, LLC under the Memorandum of Agreement, by and among
Enexus Energy Corporation, Entergy Nuclear Fitzpatrick, LLC, Entergy Nuclear Operations,
Inc., Entergy Nuclear, Inc. and the International Brotherhood of Electrical Workers Local
Union 97, dated October 7, 2008
	 
	2.	 	Guarantee of certain payment obligations of EquaGen Nuclear by Enexus Energy Corporation
and/or Enexus Nuclear Vermont Yankee, LLC under the Memorandum of Agreement, by and among
Enexus Energy Corporation, Entergy Nuclear Vermont Yankee, LLC, Entergy Nuclear Operations,
Inc., Entergy Nuclear, Inc., and the International Brotherhood of Electrical Workers Local
Union 300, dated September 18, 2008
	 
	3.	 	Discussions and informational exchanges are taking place in an effort to reach a memorandum
of understanding or settlement agreement in Vermont with the Vermont Department of Public
Service and the Vermont Public Service Board, and in New York with the New York Department of
Public Service and the New York Public Service Commission. Resolution with regulatory
authorities is speculative at this point, and this entry is a placeholder in the event of a
possible settlement, agreement, understanding or resolution.
	 
	4.	 	Memorandum of Understanding, dated March 4, 2002, among, inter alia, Entergy Nuclear
Vermont Yankee, LLC and the Vermont Department of Public Service, as amended, restated,
supplemented or otherwise modified from time to time
	 
	5.	 	Amended and Restated Value Sharing Agreement dated as of October 3, 2007, by and between NYPA
and Entergy Nuclear FitzPatrick, LLC as amended, restated, supplemented or otherwise modified
from time to time
	 
	6.	 	Amended and Restated Value Sharing Agreement dated as of October 3, 2007, by and between NYPA
and Entergy Nuclear Indian Point 3, LLC as amended, restated, supplemented or otherwise
modified from time to time
	 
	7.	 	Note in the amount of $80M dated November 21, 2000 issued to NYPA by Entergy Nuclear
Indian Point 3, LLC (Additional Facilities Note)
	 
	8.	 	Note in the amount of $80M dated November 21, 2000 issued to NYPA by Entergy Nuclear
FitzPatrick, LLC (Additional Facilities Note)
	 
	9.	 	Unfunded amounts to be invested in respect of Decommissioning Agreement by and among Power
Authority of the State of New York, Entergy Nuclear Fitzpatrick, LLC, and Entergy Nuclear,
Inc., dated November 21, 2000




28









 












	10.	 	Unfunded amounts to be invested in respect of Decommissioning Agreement by and among Power
Authority of the State of New York, Entergy Nuclear Indian Point 3, LLC, and Entergy Nuclear,
Inc., dated November 21, 2000
	 
	11.	 	The following guarantees are expected to be issued by Enexus:





	 	 	 	 	 
	Tracking	 	 	 	 
	Code (for	 	 	 	 
	internal	 	 	 	 
	reference)	 	Description	 	Guarantor
	6

	 	Entergy Corp. has provided a letter of credit
under its bank facility to a Workers Comp.
insurer (Liberty Mutual). This is a “tail”
liability for 2001-2002.
	 	Enexus
	 
	 	 	 	 
	9

	 	Provision of a surety bond or letter of credit
to the Pension Benefit Guarantee Corporation
(PBGC) to protect the PBGC because of the
unfunded pension liability spun off to Enexus.
It will have to last 5 years and be sized at
150% of the PBGC’s calculation of the unfunded
amount.
	 	Enexus
	 
	 	 	 	 
	N001

	 	Per Terry Burke, Nuclear Electric Insurance
Limited (NEIL) may start requiring credit
support for 10x annual premiums from
non-investment grade members in 2009.
	 	Enexus
	 
	 	 	 	 
	S001

	 	Guarantee to American Nuclear Insurers (ANI) to
pay any retrospective premiums that are owed and
not paid by the nuclear plant under the
Price-Anderson Act. Also contains a commitment
by EIHL to ANI that EIHL will maintain a net
worth of at least $535 million.
	 	Enexus
	 
	 	 	 	 
	S002

	 	Guarantee to American Nuclear Insurers (ANI) to
pay any retrospective premiums that are owed and
not paid by the nuclear plant under the
Price-Anderson Act. Also contains a commitment
by EIHL to ANI that EIHL will maintain a net
worth of at least $535 million.
	 	Enexus
	 
	 	 	 	 
	S003

	 	Guarantee to American Nuclear Insurers (ANI) to
pay any retrospective premiums that are owed and
not paid by the nuclear plant under the
Price-Anderson Act. Also contains a commitment
by EIHL to ANI that EIHL will maintain a net
worth of at least $535 million.
	 	Enexus
	 
	 	 	 	 
	S004

	 	Guarantee to American Nuclear Insurers (ANI) to
pay any retrospective premiums that are owed and
not paid by the nuclear plant under the
Price-Anderson Act. Also contains a commitment
by EIHL to ANI that EIHL will maintain a net
worth of at least $535 million.
	 	Enexus
	 
	 	 	 	 
	S005

	 	Guarantee to American Nuclear Insurers (ANI) to
pay any retrospective premiums that are owed and
not paid by the nuclear plant under the
Price-Anderson Act. Also contains a commitment
by EIHL to ANI that EIHL will maintain a net
worth of at least $535 million.
	 	Enexus
	 
	 	 	 	 
	S007

	 	[Guarantee to ConEd for the the payment and
performance of obligations of ENIP2 under the
P&S and the Ancillary Agreements (other than the
now expired PPA). At this point in time, the
guarantee primarily (but not exclusively) would
involve ENIP2’s obligation under Section 9.01(b)
of the P&S to indemnify Con Ed for the Assumed
Obligations and breach of the Ancillary
Agreements.] (There is a debate about whether
ETR
	 	Enexus






29









 






	 	 	 	 	 
	Tracking	 	 	 	 
	Code (for	 	 	 	 
	internal	 	 	 	 
	reference)	 	Description	 	Guarantor
	 

	 	should retain this guaranty or seek assignment
to ENX.)	 	 
	 
	 	 	 	 
	S030

	 	Guarantee to American Nuclear Insurers (ANI) to
pay any retrospective premiums that are owed and
not paid by the nuclear plant under the
Price-Anderson Act. Also contains a commitment
by EIHL to ANI that EIHL will maintain a net
worth of at least $535 million.
	 	Enexus
	 
	 	 	 	 
	UN002

	 	Entergy Corp. commits to the Massachusetts
Attorney General to maintain the Pilgrim Nuclear
Decommissioning Trust per NRC rules.


(Currently there is debate about whether ETR
should retain (with specific indemnification
from ENX to ETR thereafter) or ENX to ask Mass
AG to assign)
	 	TBD: ETR

or Enexus
	 
	 	 	 	 
	UN084

	 	Guarantee to First Stamford Place LLC and
Merrified First Stamford LLC of ENPM’S payment
and performance obligations under an office
lease
	 	Enexus
	 
	 	 	 	 
	UN087

	 	Entergy Corp commits to VPSB (Vermont
Commission) that if Entergy Corp is rated below
investment grade, Entergy Corp will cause ENVY
to obtain an LOC sized to cover 6 months’ of
post-decommissioning spent fuel handling costs
(not to exceed $60 million)
	 	Enexus
	 
	 	 	 	 
	UN210

	 	At purchase of plant, ENI signed promissory note
to, upon the 8th anniversary of the sale, to
begin paying $10 million per year for both IP3
and Fitz (for total annual of $20 million) for
eight years for NYPA NDT obligation. Total
payments = $160 million. (Known as the $160 M
Additional Facilities Agreement”) (note — this
is a promissory note, not a guarantee)
	 	Enexus
	 
	 	 	 	 
	UN211

	 	Enexus “Support Agreement” with Nuclear
Regulatory Commission (NRC) in which Enexus
agrees to make funding available to the licensed
owners of the plants upon their written request
and up to an aggregate of $700 mm. That funding
can be rendered in the form of a credit
facility, a loan, a capital contribution,
whatever. It does not require any backup. It’s
simply a commitment by Enexus to provide or
cause to be provided, funds upon the request of
its NRC licensed subsidiaries up to an aggregate
amount of $700 million outstanding at any one
time. (The NRC Support Agreement covers the
entire ENX fleet and replaces multiple
guarantees for individual plants.) 


7/22: All NRC to be replaced by $700 M Enexus
support agreement (which will be like a
guarantee.)
	 	Enexus
	 
	 	 	 	 
	UT008

	 	Entergy Corp. has provided a letter of credit
under its bank facility to a Workers Comp. (and
limited general liability) insurer (Liberty
Mutual). This is a “tail” liability and includes
coverage from 2002 to today. This coverage also
includes some other non-nuclear, non-reg
entities.
	 	Enexus
	 
	 	 	 	 
	UT008

	 	Entergy Corp. has provided a letter of credit
under its bank facility to a Workers Comp.
insurer (Travelers). This is a “tail” liability.
	 	Enexus
	 
	 	 	 	 
	 

	 	Guarantee to Entergy Corporation to backstop any
Entergy Corporation guarantees or reimbursement
obligations in respect of letters of credit
outstanding at the Spin Date for Indebtedness of
Enexus or its Restricted Subsidiaries.
	 	Enexus






30









 






Schedule 6.02(d) (Signing)




Existing Liens




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	File no.	 	Filing date	 	Type of	 	Secured	 	
	Debtor	 	Jurisdiction	 	(original)	 	(original)	 	Filing	 	Party	 	Description of Collateral
	Entergy Solutions
Management Services
LLC (“ESMS”)
(merged into
Entergy Retail
Holding Company on
12/26/07)

	 	Delaware Secretary
of State
	 	4056144 1
	 	02/18/2004
	 	UCC-1
	 	Computer Sales
International, Inc.
	 	Various Computer
Equipment;
(together with all
repairs,
accessions,
accessories, and
replacements)
leased to Lessee
pursuant to
Equipment Schedule
One to Master
Lease 204053,
between the
parties. Lessor
intends that the
Equipment remain
subject to this
filing whether the
present location is
different than that
listed or the
Equipment is
subsequently moved
to a different
location. This
filing is for
precautionary
purposes in
connection with an
equipment leasing
transaction and is
not to be construed
as indicating that
the transaction is
other than a true
lease.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	Equipment
Location: 639
Loyola Avenue, New
Orleans, LA 70113
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	ESMS

	 	Delaware Secretary
of State
	 	4272269 4 
(4056144
1)
	 	09/28/2004

(02/18/2004)
	 	UCC-3 (Amendment)
	 	Computer Sales
International, Inc.
	 	Amending to specify
equipment,
quantities and
serial numbers for
Equipment Schedule
No. One to Master
Lease No. 204053.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	See Exhibit “A” to
UCC-3 Amendment
for a listing of
equipment.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	ESMS

	 	Delaware Secretary
of State
	 	4272270 2 
(4056144
1)
	 	09/28/2004

(02/18/2004)
	 	UCC-3 (Assignment)
	 	 Hibernia National

Bank	 	 






31









 






Schedule 6.02(d) (Funding)




Existing Liens




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	File no.	 	Filing date	 	 	 	 	 	 
	Debtor	 	Jurisdiction	 	(original)	 	(original)	 	Type of Filing	 	Secured Party	 	Description of Collateral
	Entergy Solutions
Management Services
LLC (“ESMS”)
(merged into
Entergy Retail
Holding Company on
12/26/07)

	 	Delaware Secretary
of State
	 	4056144 1
	 	02/18/2004
	 	UCC-1
	 	Computer Sales
International, Inc.
	 	Various Computer
Equipment; (together
with all repairs,
accessions, accessories,
and replacements) leased
to Lessee pursuant to
Equipment Schedule One
to Master Lease 204053,
between the parties.
Lessor intends that the
Equipment remain subject
to this filing whether
the present location is
different than that
listed or the Equipment
is subsequently moved to
a different location.
This filing is for
precautionary purposes
in connection with an
equipment leasing
transaction and is not
to be construed as
	 

	 	 	 	 	 	 	 	 	 	 	 	indicating that the
transaction is other
than a true lease.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	Equipment Location: 639
Loyola Avenue, New
Orleans, LA 70113
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	ESMS

	 	Delaware Secretary
of State
	 	4272269 4 
(4056144
1)
	 	09/28/2004

(02/18/2004)
	 	UCC-3 (Amendment)
	 	Computer Sales
International, Inc.
	 	Amending to specify
equipment, quantities
and serial numbers for
Equipment Schedule No.
One to Master Lease No.
204053.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	See Exhibit “A”
to UCC-3 Amendment for
a listing of equipment.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	ESMS

	 	Delaware Secretary
of State
	 	4272270 2 
(4056144
1)
	 	09/28/2004

(02/18/2004)
	 	UCC-3 (Assignment)
	 	Hibernia National

Bank	 	 






32









 





Schedule 6.05(d)




Existing Investments




None





33









 








Schedule 6.07(c)




Restrictions on Liens



The following agreements each include
a restriction on assignment by a Loan Party:





	 	1.	 	Nuclear Fuel and Fuel Services Purchase Agreement, dated as of November 9, 2006, by and
between Entergy Nuclear Fuels Company and Entergy Nuclear Palisades, LLC
	 
	 	2.	 	Nuclear Fuel and Fuel Services Purchase Agreement, dated as of November 9, 2006, by and
between Entergy Nuclear Fuels Company and Entergy Nuclear Indian Point 2, LLC
	 
	 	3.	 	Nuclear Fuel and Fuel Services Purchase Agreement, dated as of November 9, 2006, by and
between Entergy Nuclear Fuels Company and Entergy Nuclear Indian Point 3, LLC
	 
	 	4.	 	Nuclear Fuel and Fuel Services Purchase Agreement, dated as of November 9, 2006, by and
between Entergy Nuclear Fuels Company and Entergy Nuclear FitzPatrick, LLC
	 
	 	5.	 	Nuclear Fuel and Fuel Services Purchase Agreement, dated as of November 9, 2006, by and
between Entergy Nuclear Fuels Company and Entergy Nuclear Generation Company
	 
	 	6.	 	Nuclear Fuel and Fuel Services Purchase Agreement, dated as of November 9, 2006, by and
between Entergy Nuclear Fuels Company and Entergy Nuclear Vermont Yankee,
LLC





34









 










Schedule 6.08(b)




Affiliate Transactions





	1.	 	Employee Matters Agreement by and among Entergy Corporation, Enexus Energy Corporation
and EquaGen LLC, dated [  ]
	 
	2.	 	Federal Income Tax Matters Agreement by and among Entergy Corporation, Enexus Energy
Corporation and EquaGen LLC, dated [  ]
	 
	3.	 	State and Local Tax Matters Agreement by and among Entergy Corporation, Enexus Energy
Corporation and EquaGen LLC, dated [  ]
	 
	4.	 	Amended and Restated Operating Agreement by and between and EquaGen Nuclear LLC and Enexus
Nuclear FitzPatrick, LLC, dated [  ]
	 
	5.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus
Nuclear Pilgrim, LLC, dated [  ]
	 
	6.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus
Nuclear Indian Point 2, LLC, dated [  ]
	 
	7.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus
Nuclear Indian Point 3, LLC, dated [  ]
	 
	8.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus
Nuclear Palisades, LLC, dated [  ]
	 
	9.	 	Amended and Restated Operating Agreement by and between EquaGen Nuclear LLC and Enexus
Nuclear Vermont Yankee, LLC, dated [  ]
	 
	10.	 	Relicensing Services Agreement by and between EquaGen LLC and Enexus Energy Corporation,
dated [  ]
	 
	11.	 	Support Services Agreement by and between EquaGen LLC and Enexus Nuclear Nebraska, LLC,
dated [  ]
	 
	12.	 	Joint Venture Formation Agreement by and among Entergy Corporation, Enexus Energy Corporation
and EquaGen LLC, dated [  ]
	 
	13.	 	Memorandum of Agreement, by and among Enexus Energy Corporation, Entergy Nuclear Fitzpatrick,
LLC, Entergy Nuclear Operations, Inc., Entergy Nuclear, Inc. and the International Brotherhood
of Electrical Workers Local Union 97 , dated October 7,
2008
	 
	14.	 	Memorandum of Agreement, by and among Enexus Energy Corporation, Entergy Nuclear Vermont
Yankee, LLC, Entergy Nuclear Operations, Inc., Entergy Nuclear, Inc., and the International
Brotherhood of Electrical Workers Local Union 300, dated September 18, 2008
	 
	15.	 	Sublease dated                      between Entergy Nuclear Operations, Inc. and Nuclear Services
Company, LLC (for lease in White Plains, NY) (has not been entered into yet)





35









 





	16.	 	Nuclear Fuel and Fuel Services Purchase Agreement between Enexus Nuclear Fuels Company
and EquaGen Nuclear LLC
	 
	17.	 	[Service Agreement between Entergy Nuclear, Inc. and Entergy Nuclear Fitzpatrick, LLC,
dated December 17, 20013
	 
	18.	 	Service Agreement between Entergy Nuclear, Inc. and Entergy Nuclear Generation Company,
dated February 19, 2000
	 
	19.	 	Service Agreement between Entergy Nuclear, Inc. and Entergy Nuclear Indian Point 2, LLC,
dated December 17, 2001
	 
	20.	 	Service Agreement between Entergy Nuclear, Inc. and Entergy Nuclear Indian Point 3, LLC,
dated December 17, 2001
	 
	21.	 	Service Agreement between Entergy Nuclear, Inc. and Entergy Nuclear Vermont
Yankee, LLC, dated December 21, 2007
	 
	22.	 	Service Agreement between Entergy Nuclear, Inc. and Entergy Nuclear Palisades, LLC,
dated March 29, 2007
	 
	23.	 	Service Agreement between Entergy Nuclear Operations, Inc. and Entergy Nuclear
Generation Company, dated December 18, 2000
	 
	24.	 	Service Agreements with ENI






	 	a.	 	Service Agreement between Entergy Nuclear, Inc. and Entergy Nuclear Indian
Point Peaking Facility, LLC, dated December 17, 2001
	 
	 	b.	 	Service Agreement between Entergy Nuclear, Inc. and Entergy Nuclear Investment
Co., dated August 1, 2003
	 
	 	c.	 	Service Agreement between Entergy Nuclear, Inc. and Entergy Power Operations
UK Limited, dated October 1, 2003






	25.	 	Service Agreement between Entergy Nuclear Operations, Inc. and Entergy Nuclear
Generation Company, dated December 18, 2000
	 
	26.	 	ENOI agreements






	 	a.	 	Service Agreement between Entergy Nuclear Operations, Inc. and Entergy Nuclear,
Inc., dated December 18, 2000 (and the Entergy Nuclear Power Marketing amendment dated
December 5, 2007)
	 
	 	b.	 	Service Agreement between Entergy Nuclear Operations, Inc. and Entergy
Nebraska, LLC, dated August 11, 2003
	 
	 	c.	 	Operating Agreement for Palisades Nuclear Power Station and Big Rock
Independent Spent Fuel Storage Installation between Entergy Nuclear Operations, Inc.
and Entergy Nuclear Palisades, LLC, dated March 29, 2007







 




			
	3	 	TBD whether the contracts listed in items 17-26 will be
terminated prior to the spin.






36











 





Annex III




Signing Date Representations and Warranties




     To induce the Arrangers, Administrative Agent, the Collateral Agent, the Issuers and each of
the Lenders to enter into this Agreement, the Borrower hereby represents and warrants to the
Arrangers, the Administrative Agent, the Collateral Agent, each Issuer and each of the Lenders,
which representations and warranties shall be deemed made on the Signing Date (immediately before
and immediately after giving effect to this Agreement) that the representations and warranties set
forth in this Annex III are true and correct in all material respects (except to the extent that
such representations and warranties are qualified as to materiality, in which case they shall be
true and correct in all respects).



     SECTION 1.01. Organization; Powers. The Borrower (a) is duly organized or formed,
validly existing and in good standing under the laws of the jurisdiction of its organization or
formation, (b) has all requisite corporate, limited liability or partnership 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 those aspects of the Permitted Business that it now conducts, (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
corporate, limited liability or partnership power and authority, and the legal right, to execute,
deliver and perform its obligations under this Agreement and each of the other Loan Documents
executed on the Signing Date.



     SECTION 1.02. Authorization; No Conflicts. The execution and delivery of this
Agreement and the other Loan Documents executed on the Signing Date (a) have been duly authorized
by all requisite corporate, partnership or limited liability company and, if required, stockholder,
partner or member action of the Borrower and (b) do not (i) violate, 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 (A) any applicable provision of any material law, statute, rule or regulation, or
of the certificate or articles of incorporation or other constitutive documents or by-laws of the
Borrower, (B) any order of any Governmental Authority or arbitrator or (C) any provision of any
indenture or any material agreement or other material instrument to which the Borrower is a party
or by which any of them or any of their property is or may be bound; or (ii) 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.



     SECTION 1.03. Enforceability. This Agreement has been duly executed and delivered by
the Borrower and constitutes a legal, valid and binding obligation of the Borrower in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other laws now or hereafter in effect relating to creditors’ rights
generally and (including with respect to specific performance) subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law, and to the discretion
of the court before which any proceeding therefor may be brought.



     SECTION 1.04. Approvals. No action, consent or approval of, registration or filing
with, notice to, or any other action by, any Governmental Authority or in respect of any Material
Contract is required in connection with the execution and delivery by the Borrower of this



 









 




Agreement and the Intercreditor Agreement, except for any immaterial actions, consents, approvals,
registrations or filings or such as have been made or obtained and are in full force and effect.




     SECTION 1.05. Financial Statements. (a) The Borrower has, on or prior to the Signing
Date, furnished to the Lenders (i) the audited historical combined financial statements for the
non-utility nuclear business of Entergy and its consolidated subsidiaries (together, “Entergy
Nuclear”) as of and for the fiscal year ended December 31, 2007, which audited historical
combined financial statements have been audited by and are accompanied by the unqualified opinion
of Deloitte & Touche LLP, independent public accountants, and (ii) the unaudited interim combined
financial statements of Entergy Nuclear as of and for the nine months ended September 30, 2008.
Such financial statements present fairly in all material respects the financial condition, results
of operations and cash flows of Entergy Nuclear on a combined basis as of and for their respective
periods and have been prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except, with respect to such financial statements referred to in clause (ii)
above, for normal year-end adjustments and the omission of certain information and footnote
disclosures as permitted by SEC rules and regulations).



          (b) The Borrower also has, on or prior to the Signing Date, furnished to the Lenders
(i) the unaudited pro forma combined financial statements for Entergy Nuclear as of and for the
fiscal year ended December 31, 2007, which have been derived from Entergy Nuclear’s audited
historical combined financial statements as of and for the fiscal year ended December 31, 2007, and
(ii) the unaudited pro forma combined financial statements of Entergy Nuclear as of and for the
nine months ended September 30, 2008, which have been derived from Entergy Nuclear’s unaudited
interim combined financial statements as of and for the nine months ended September 30, 2008. Such
unaudited pro forma combined financial statements have been prepared on a basis consistent with the
historical combined financial statements of Entergy Nuclear from which they are derived (except for
the pro forma adjustments specified therein) and include assumptions that provide a reasonable
basis for presenting the significant effects directly attributable to the Separation Transactions
and the events described therein, the related pro forma adjustments give appropriate effect to
those assumptions and the pro forma adjustments reflect the proper application of those adjustments
to the historical combined financial statements from which they are derived and comply as to form
in all material respects with the applicable accounting requirements of Regulations S-X under the
Securities Act of 1933, as amended.




     SECTION 1.06. No Material Adverse Effect. Since December 31, 2007, there has been no
event, development or circumstance that has had or could reasonably be expected to have a Material
Adverse Effect.



     SECTION 1.07. Litigation; Compliance with Laws. (a) Except as set forth on
Schedule 3.09(a) (Signing), there are no actions, suits or proceedings at law or in equity
or by or before any arbitrator or Governmental Authority now pending or, to the knowledge of the
Borrower, threatened against the Borrower or any Subsidiary or any business, property or material
rights of the Borrower or any Subsidiary (i) that, as of the Signing Date, involve any Loan
Document or the Transactions or, at any time thereafter, involve any Loan Document or the
Transactions and which could reasonably be expected to be material and adverse to the interests of
the Lenders, or (ii)as to which there is a reasonable possibility of an adverse determination and
that, if adversely determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.



2









 





          (b) Except as set forth on Schedule 3.09(b) (Signing), none of the Borrower or any of
the Restricted Subsidiaries or any of their respective material properties or assets is in
violation of any law, rule or regulation (including any zoning, building, ordinance, code or
approval or any building permits), or is in default with respect to any judgment, writ, injunction,
decree or order of any Governmental Authority, where such violation or default, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse Effect (but not
including, in each case, any Environmental Law which would be the subject of Section 3.17 or any
energy regulation matter which would be the subject of Section 3.23).




          (c) The Borrower and all of its Subsidiaries are in possession of all Permits (other than
Permits required under applicable Environmental Laws which would be the subject of Section 3.17)
necessary to own, lease and operate their properties and to lawfully carry on their businesses as
they are now being conducted, except where the failure to be in possession of such Permit would
not, individually or in the aggregate, have a Material Adverse Effect. There is no action,
proceeding or investigation pending or, to the knowledge of the Borrower and each of its
Subsidiaries, threatened regarding any material Permit (other than Permits required under
applicable Environmental Laws which would be the subject of Section 3.17) which would have a
Material Adverse Effect. None of the Borrower or any of its Subsidiaries is in material conflict
with, or in default of, or in material violation of any material Permit (other than Permits
required under applicable Environmental Laws which would be the subject of Section 3.17).




     SECTION 1.08. Contractual Obligations. None of the Borrower or any of the Subsidiaries
is in default under any provision of any Contractual Obligations in respect of Indebtedness, or any
other material Contractual Obligations to which it is a party or by which it or any of its
properties or assets are or may be bound, where such default, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.



     SECTION 1.09. Federal Reserve Regulations. (a) None of the Borrower or any of the
Subsidiaries is engaged principally, or as one of its material activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock. Neither the Borrower nor any
of its Subsidiaries owns any Margin Stock.



          (b) 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,
Regulation U or Regulation X. If requested by any Lender or the Arrangers, the Borrower will
furnish to the Arrangers and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.




     SECTION 1.10. Investment Company Act. Neither the Borrower nor any of its Subsidiaries
is subject to regulation under the Investment Company Act of 1940 as amended from time to time (the
“Investment Company Act”). Neither the Borrower nor any of its Subsidiaries is a
“registered investment company” or a company “controlled” by a “registered investment company” or a
“principal underwriter” of a “registered investment company”, as such terms are defined in the
Investment Company Act.



     SECTION 1.11. Disclosure. The written information relating to the Borrower and its
Subsidiaries and the Separation (including, without limitation, the Confidential Information
Memorandum and the Registration Statement) furnished by or on behalf of the Borrower and its
respective Affiliates to the Arrangers, Administrative Agent, Collateral Agent or any Lender in
connection with the Transactions or the negotiation of this Agreement or delivered hereunder,



3









 




taken as a whole (as modified or supplemented by other information so furnished prior to the
relevant measurement date for this representation and warranty), does not contain any untrue
statement of a material fact or omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not misleading;
provided that, with respect to projected financial information or other forward-looking
statements, the Borrower represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time; it being recognized by the Lenders that
such projections are as to future events and are not to be viewed as facts and that actual results
during the period or periods covered by any such projections may differ from the projected results
and such differences may be material.




     SECTION 1.12. Patriot Act. To the extent applicable, each Loan Party is in compliance,
in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the
foreign assets control regulations of the Untied States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and
(ii) the Patriot Act.



     SECTION 1.13. No Restricted Subsidiaries. As of the Signing Date, there are no
Restricted Subsidiaries.



4









 





Annex V




Signing Date Affirmative Covenants




     The Borrower covenants and agrees with each Lender that, from and after the Signing Date, so
long as this Agreement shall remain in effect and until the earlier of (i) the Funds Availability
Date and (ii) the Outside Date, the Borrower will, and will cause each of the Restricted
Subsidiaries to comply with the affirmative covenants set forth in this Annex V.



     SECTION 1.01. Corporate Existence. Do or cause to be done all things necessary to
preserve and keep in full force and effect (a) its corporate existence, and the corporate,
partnership or other existence of each of its subsidiaries, in accordance with the respective
Constituent Documents (as the same may be amended from time to time) of the Borrower or any such
Subsidiary; and (b) the rights (charter and statutory), licenses and franchises of the Borrower and
its Subsidiaries, except where the failure to so preserve and keep could not reasonably be expected
to have a Material Adverse Effect; provided, however, that neither the Borrower nor
any Restricted Subsidiary shall be required to preserve any such right, license or franchise, or
the corporate, partnership or other existence of itself or any of its Subsidiaries, if (i) the
Borrower or such Restricted Subsidiary shall determine that the preservation thereof is no longer
desirable in the conduct of the Permitted Businesses of the Borrower and its Subsidiaries, taken as
a whole, and that the loss thereof could not reasonably be expected to result in a Material Adverse
Effect or (ii) such preservation is not contemplated in connection with the Separation
Transactions.



     SECTION 1.02. Compliance with Laws. Comply with all Applicable Laws, Contractual
Obligations and Permits, except where the failure so to comply would not, in the aggregate, have a
Material Adverse Effect.



     SECTION 1.03. Financial Statements, Reports, etc. In the case of the Borrower,
furnish to the Administrative Agent for distribution to each Lender:




     (a) Annual Reports. By the earlier of (i) 123 days and (ii) the date of
delivery to the lenders under Entergy’s existing credit facility, after the end of each
fiscal year, the consolidated balance sheet and related statements of income, stockholders’
equity and cash flows showing the financial condition as of the close of such fiscal year
of Entergy and its consolidated subsidiaries at such time and the results of its operations
and the operations of such consolidated subsidiaries during such year, together with
comparative figures for the immediately preceding fiscal year (or, in the case of the
fiscal year ending December 31, 2008, the comparable twelve month period ending December
31, 2007), all audited by Deloitte & Touche LLP or other independent public accountants of
recognized national standing reasonably satisfactory to the Arrangers 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 Entergy and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;




     (b) Quarterly Reports. By the earlier of (i) 63 days and (ii) the date of
delivery to the lenders under Entergy’s existing credit facility, after the end of each of
the first three fiscal quarters of each fiscal year, the unaudited consolidated balance
sheet and



5









 






related statements of income, stockholders’ equity and cash flows showing the financial
condition as of the close of such fiscal quarter of Entergy and its consolidated
subsidiaries at such time and the results of its operations and the operations of such
consolidated subsidiaries during such fiscal quarter and the then elapsed portion of the
fiscal year, and comparative figures for the same periods in the immediately preceding
fiscal year; and




     (c) Certifications with Financial Reports. Concurrently with any delivery
of
financial statements under paragraph (a) or (b) above and each quarter and/or year
thereafter, a certificate of a Financial Officer of the Borrower certifying that (i) no
condition or event has occurred that would cause them to believe that a Default or Event of
Default has occurred and (ii) no Event of Default or Default has occurred or, if an Event
of Default or Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto.



     SECTION 1.04. Information Regarding Collateral. To the extent incurred in
reliance on the exception set forth in Section 1.02(aa) of Annex VI, provide written notice of the
imposition of any Liens, restrictions, regulations, Easements, exceptions or reservations of any
Governmental Authority on any Mortgaged Property or Core Asset..



     SECTION 1.05. SEC Filings. Promptly after the same become publicly available,
provide notice to the Administrative Agent for posting on the Approved Electronic Platform that a
filing in relation to the Borrower has been made with the SEC.



6









 





Annex VI




Signing Date Negative Covenants




     The Borrower covenants and agrees with each Lender that, from time to time after the Signing
Date, so long as this Agreement shall remain in effect and until the earlier of (i) the Funds
Availability Date and (ii) the Outside Date, the Borrower will, and will cause each of the
Restricted Subsidiaries to comply with the negative covenants set forth in this Annex VI.



     Notwithstanding anything to the contrary contained in this Annex VI, the Borrower and its
Restricted Subsidiaries shall be permitted to undertake any action necessary to consummate the
Reorganization and the Separation, in each case pursuant to and in accordance with the Registration
Statement and the Separation Documents; provided that the Borrower and the Restricted
Subsidiaries shall not consummate the Reorganization or Separation in a manner that materially
deviates from the descriptions thereof set forth in the Registration Statement and the Separation
Documents without the prior written consent of the Arrangers and each Lender.



     SECTION 1.01. Indebtedness and Preferred Stock. From the Signing Date, the Borrower
will not, nor will it cause or permit any of its Restricted Subsidiaries to directly or indirectly,
create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to any Indebtedness, and the Borrower will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of
preferred stock except for:




     (a) the incurrence by the Borrower (and the Guarantees thereof by any Subsidiary that
will be a Subsidiary Guarantor) of the Indebtedness created under this Agreement and the
other Loan Documents;




     (b) Indebtedness of the Borrower or any Subsidiary pursuant to a Credit Support
Facility;




     (c) Indebtedness of the Borrower and its Restricted Subsidiaries existing on the
Signing Date and set forth on Schedule 6.01(c) (Signing);




     (d) the incurrence by the Borrower and its Restricted Subsidiaries (other than the
Subsidiaries that will be NY Real Property Subsidiaries) of Additional Intercreditor
Indebtedness; provided that (i) no Default or Event of Default exists immediately prior to,
or would exist immediately after giving effect to, the incurrence of any such Indebtedness
and (ii) the Borrower would be in compliance with the Financial Covenants for the
Borrower’s most recently ended Test Period for which financial statements are publicly
available immediately preceding the date on which any such Indebtedness is incurred on a
pro forma basis (including a pro forma application of the net proceeds therefrom), as if
such additional Indebtedness (and any other Indebtedness incurred during such Test Period
or from the end of such Test Period through the date on which such calculation is made) had
been incurred at the beginning of the applicable Test Period and was outstanding on such
calculation date; provided, further that if such Additional Intercreditor Indebtedness
takes the form of a revolving credit facility, the tests in the proviso above shall be met
on the date such revolving loan commitments become effective, assuming the incurrence of
the full committed amount of such revolving credit facility);



7









 






     (e) the incurrence by (i) the Borrower of Indebtedness in respect of the Senior Notes and, if
applicable, any Funds Availability Indebtedness and (ii) any Subsidiary that will be a Subsidiary
Guarantor of Indebtedness in respect of the Senior Note Guarantees and, if applicable, any Funds
Availability Indebtedness Guarantees;




     (f) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness
represented by Attributable Debt, Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of financing all or any part of the purchase
price or cost of design, construction, installation, repair, restoration, expansion or improvement
or lease of property (real or personal), plant or equipment used in the business of the Borrower or
any of its Restricted Subsidiaries or incurred within 270 days after any of the foregoing, in an
aggregate principal amount, including (without duplication) all Permitted Refinancing Indebtedness
incurred to refund, modify, extend, renew, refinance, replace, defease or discharge any
Indebtedness incurred pursuant to this clause (f), not to exceed $600,000,000 at any time
outstanding;




     (g) the incurrence by the Borrower or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund,
refinance, replace, defease, modify, extend, renew or discharge Indebtedness (other than
intercompany Indebtedness) that was permitted by this Agreement to be incurred under clauses (b),
(c), (e), (f), (o), (p) and (x) of this Section 1.01; provided, however that with
respect to the Subsidiaries that will be NY Real Property Subsidiaries, such Permitted Refinancing
Indebtedness shall be permitted only with respect to clauses (b), (c), (e), (f), (o) and (x) of
this Section 1.01;




     (h) the incurrence by the Borrower and the Restricted Subsidiaries of unsecured
intercompany Indebtedness that would constitute an Investment permitted under Sections 6.05(g) or
6.05(j); provided, however that (i) if the Borrower or any Subsidiary that will be
a Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Borrower or a
Subsidiary that will be a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to
the prior payment in full in cash of all Secured Obligations (which subordination may be pursuant
to an Intercompany Debt Subordination Agreement or any other agreement containing terms
satisfactory to the Administrative Agent and the Collateral Agent executed and delivered by both
the applicable borrower and lender); and (ii)(A) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person other than the Borrower or a
Restricted Subsidiary and (B) any sale or other transfer of any such Indebtedness to a Person that
is not either the Borrower or a Restricted Subsidiary will be deemed, in each case, to constitute
an incurrence of such Indebtedness by the Borrower or such Restricted Subsidiary, as the case may
be, that was not permitted by this clause (h);




     (i) the issuance by any of the Borrower’s Restricted Subsidiaries to the
Borrower or to any of its other Restricted Subsidiaries of shares of preferred stock;
provided, however, that (i) any subsequent issuance or transfer of Equity Interests
that results in any such preferred stock being held by a Person other than the Borrower or a
Restricted Subsidiary and (ii) any sale or other transfer of any such preferred stock to a Person
that is not either the Borrower or a Restricted Subsidiary will be deemed, in each



8









 







case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not
permitted by this clause (i);




     (j) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Commodity Hedging Obligations and Interest Rate/Currency Hedging Obligations, provided,
however, that the Subsidiaries that will be NY Real Property Subsidiaries shall not incur
Commodity Hedging Obligations or Interest Rate/Currency Hedging Obligations other than pursuant to
FERC 205 Contracts;




     (k) the Guarantee by the Borrower or any of the Subsidiaries that will be Subsidiary
Guarantors of Indebtedness of the Borrower or a Restricted Subsidiary that was permitted to be
incurred by another provision of this Section 1.01 (other than in respect of self insurance);
provided that, (i) in each such case, if the Indebtedness being guaranteed is subordinated
to the Secured Obligations hereunder, then the Guarantee shall be subordinated to the same extent
as the Indebtedness guaranteed and (ii) in the case of Guarantees of Indebtedness incurred pursuant
to Section 6.01(w), such Guarantees shall be subordinated on terms at least as restrictive as the
subordination terms of the Senior Note Guarantees;




     (l) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Indebtedness arising from the honoring by a bank or other Financial Institution of a check, draft
or similar instrument (except in the case of daylight overdrafts) inadvertently drawn against
insufficient funds, so long as such Indebtedness is discharged within five Business Days;




     (m) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness
in respect of, bankers’ acceptances and performance bonds, bid bonds, appeal bonds, completion
guarantees, bank guarantees, letters of credit, warehouse receipts and surety bonds provided by the
Borrower or a Restricted Subsidiary in the ordinary course of business;




     (n) the incurrence of Indebtedness that may be deemed to arise as a result of
agreements of the Borrower or any Restricted Subsidiary providing for indemnification, adjustment
of purchase price (including earn outs) or any similar obligations, in each case, incurred in
connection with any acquisition that would constitute a Permitted Acquisition or Investment which
would be permitted pursuant to Sections 6.05(g), 6.05(h) and 6.05(j) or Asset Sale or other
disposition not prohibited hereunder; provided that in the case of any such Asset Sale or
disposition, the aggregate maximum liability associated with such provisions may not exceed the
gross proceeds (including non-cash proceeds) of such disposition;




     (o) the incurrence of Indebtedness of a Person or Indebtedness attaching to assets of a
Person that, in either case, becomes a Restricted Subsidiary or Indebtedness attaching to assets
that are acquired by the Borrower or any Restricted Subsidiary, in each case after the Signing Date
as the result of an acquisition that would constitute a Permitted Acquisition; provided
that (i) such Indebtedness existed at the time such Person became a Restricted Subsidiary or at the
time such assets were acquired and, in each case, was not created in anticipation thereof, (ii)
such Indebtedness is not guaranteed in any respect by the Borrower or any Restricted Subsidiary
(other than any such Person that so becomes a Restricted Subsidiary) and (iii)(A) the Borrower
executes, and delivers in



9









 






escrow for release on the Funds Availability Date, pledges of the Capital Stock of such Person to
the Collateral Agent to the extent it would be required under Section 5.10 and (B) such Person
shall execute and deliver in escrow for release on the Funds Availability Date a supplement to the
Security Documents (or alternative guarantee and security arrangements in relation to the Secured
Obligations) to the extent it would be required under Section 5.10;




     (p) the incurrence by the Borrower (other than the Subsidiaries that will be NY Real
Property Subsidiaries) of Indebtedness to finance an acquisition that would be a Permitted
Acquisition; provided that (i) such Indebtedness is not guaranteed in any respect by any
Person other than the Person acquired (the “acquired Person”) as a result of such
acquisition that would be a Permitted Acquisition, and (ii)(A) the Borrower executes, and delivers
in escrow for release on the Funds Availability Date, pledges of the Capital Stock of such acquired
Person to the Collateral Agent to the extent it would be required under Section 5.10 and (B) such
acquired Person shall execute and deliver in escrow for release on the Funds Availability Date a
supplement to the Security Documents (or alternative guarantee and security arrangements in
relation to the Secured Obligations) to the extent it would be required under Section 5.10;




     (q) the incurrence by the Borrower or any Restricted Subsidiary of Indebtedness
consisting of (i) obligations to pay insurance premiums (ii) self-insurance obligations or (iii)
take-or-pay obligations contained in supply agreements, in each case arising in the ordinary course
of business and not in connection with the borrowing of money or Hedging Obligations;




     (r) [Intentionally omitted]




     (s) Guarantee obligations in respect of any Investment that would be permitted pursuant
to Sections 6.05(a), 6.05(c), 6.05(d), 6.05(e), 6.05(g), 6.05(h), 6.05(j), 6.05(o), 6.05(p) and
6.05(q);




     (t) Cash Management Obligations;




     (u) Indebtedness representing (i) workers compensation claims, (ii) health, disability
or other employee benefits and (iii) deferred compensation to employees, consultants or independent
contractors of the Borrower and the Restricted Subsidiaries incurred in the ordinary course of
business;




     (v) Indebtedness consisting of promissory notes issued by the Borrower or any
Restricted Subsidiary to current or former officers, managers, consultants, directors and employees
(or their respective spouses, former spouses, successors, executors, administrators, heirs,
legatees or distributees) to finance the purchase or redemption of Capital Stock or Capital Stock
Equivalents of the Borrower which would be permitted by Section 6.06(b);




     (w) additional unsecured Indebtedness; provided that (i) such Indebtedness
matures after, and does not require any scheduled amortization or other scheduled payments of
principal prior to, the Revolving Credit Maturity Date, (ii) such Indebtedness is incurred by the
Borrower; (iii) both immediately prior and after giving effect to the incurrence thereof, (A) no
Default or Event of Default shall exist or result therefrom and



10









 







(B) the Borrower and its Restricted Subsidiaries would be in pro forma compliance with the
Financial Covenants and (iv) to the extent that such incurrence of additional unsecured
Indebtedness exceeds an aggregate principal amount of $20,000,000, the Borrower delivers a
certificate of a Financial Officer to the Administrative Agent at least 2 Business Days
prior to the incurrence of such unsecured Indebtedness stating that the Borrower has
determined in good faith that such terms and conditions satisfy the requirements of this
clause (w);




     (x) the incurrence by the Borrower or any Restricted Subsidiary of
Environmental CapEx Debt or Necessary CapEx Debt (which Indebtedness may be secured to the
extent provided in Section 1.02(bb)); provided that, prior to the incurrence of any
such Environmental CapEx Debt or Necessary CapEx Debt, the Borrower shall deliver to the
Administrative Agent an officers’ certificate by a Financial Officer designating such
Indebtedness as Environmental CapEx Debt or Necessary CapEx Debt, as applicable;




     (y) Indebtedness incurred by the Borrower and its Restricted Subsidiaries in
good faith to invest in nuclear decommissioning trusts or to comply with decommissioning
agreements; and




     (z) all premiums (if any), interest (including post-petition interest),
fees, expenses, charges, and additional or contingent interest on obligations
described in clauses (a) through (y) above.



     For purposes of determining compliance with this Section 1.01, in the event that an item of
Indebtedness meets the criteria of more than one of the categories of Indebtedness described in
clauses (a) through (z) above, the Borrower shall, in its reasonable discretion, classify and
reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion
thereof) and will only be required to include the amount and type of such Indebtedness in one or
more of the above clauses.



     SECTION 1.02. Liens. From the Signing Date, the Borrower will not, nor will it cause
or permit any of its Restricted Subsidiaries to directly or indirectly, create, incur, assume or
suffer to exist any Lien of any kind on, or assign any right to receive income or profits on, any
property or asset now owned or hereafter acquired, except:




     (a) Liens held by the Collateral Agent pursuant to the Loan Documents on assets of the
Borrower or any Subsidiary that will be a Subsidiary Guarantor securing the Secured
Obligations of the Borrower or such Subsidiary that will be a Subsidiary Guarantor
(including Liens securing Specified Commodity Hedging Transactions, Specified Credit
Support Facilities and Additional Intercreditor Indebtedness and Related Agreements);




     (b) Liens to secure the performance of statutory obligations, surety or appeal bonds,
performance bonds, bid bonds, completion guarantees or other obligations of a like nature
incurred in the ordinary course of business;




     (c) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by
Section 1.01(f), (o) and (p) hereof covering only the assets acquired with or financed by
such Indebtedness;



11









 






     (d) Liens existing on the Signing Date and set forth on Schedule 6.02(d) (Signing);




     (e) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent
or that are being contested in good faith by appropriate proceedings promptly instituted and
diligently concluded; provided that any reserve or other appropriate provision has been
made to the extent required by GAAP;




     (f) Liens of landlords arising by statute and liens of suppliers, mechanics, repairmen,
carriers, materialmen, bailees, warehousemen or workmen and other similar Liens, in each case (i)
imposed by law or arising in the ordinary course of business, (ii) for amounts not yet due or that
are not overdue for a period of more than sixty (60) days or which are being contested in good
faith by appropriate proceedings and (iii) with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent required by GAAP;




     (g) any exception, minor defect or irregularity (i) listed on the title policies or on the
surveys issued in connection with any real property that would constitute a Mortgaged Property and
(ii) in respect of any real properties that would constitute Mortgaged Properties following the
Signing Date and other real property, other properly recorded easements, rights of way, licenses,
reservations, servitudes, permits, conditions, covenants, rights of others, restrictions, oil, gas
and other mineral interests, royalty interests and leases, encroachments, protrusions, zoning or
land use rights and other similar charges or encumbrances, and with respect to (i) and (ii) that do
not interfere in any material respect with the Permitted Business conducted at such real property
that would constitute a Mortgaged Property or such other real property;




     (h) Liens to secure any Permitted Refinancing Indebtedness permitted under Section
1.01; provided that such Lien shall be limited to all or part of the same property and
assets that secured or, under the written agreements pursuant to which the original Lien arose,
could secure the original Lien (plus improvements and accessions to such property or proceeds or
distributions thereof);




     (i) Liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of social security
benefits;




     (j) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty requirements of the Borrower or any of its
Restricted Subsidiaries, including rights of offset and set-off, in each case made in the ordinary
conduct of the Permitted Business;




     (k) Liens arising under leases or subleases of real property that do not, in the
aggregate, materially detract from the value of such real property or interfere with the ordinary
conduct of the Permitted Business as proposed to be conducted at such real property;




     (l) statutory Liens arising under ERISA incurred in the ordinary conduct of
the Permitted Business;



12









 





     (m) Liens existing on the assets of any Person that becomes a Restricted Subsidiary or
existing on assets acquired, in each case pursuant to an acquisition that would constitute a
Permitted Acquisition, to the extent the Liens on such assets secure Indebtedness which would be
permitted by Section 6.01(o); provided that such Liens attach at all times only to the same
assets that such Liens attached to, and secure only the same Indebtedness that such Liens secured,
immediately prior to such acquisition that would constitute a Permitted Acquisition;



     (n) Liens on cash and Cash Equivalents (i) deposited by the Borrower or any of the
Restricted Subsidiaries in margin accounts with or on behalf of futures contract brokers or paid
over to other counterparties, or (ii) pledged or deposited as collateral to a contract counterparty
or issuer of surety bonds or issuer of letters of credit by the Borrower or any of the Restricted
Subsidiaries, in each case incurred in the ordinary course of the Permitted Business to secure
Interest Rate/Currency Hedging Obligations that are not secured by the Lien of the Collateral
Agent, Commodity Hedging Transactions (other than Specified Commodity Hedging Transactions) and
Credit Support Facilities (other than Specified Credit Support Facilities); provided that
at the time such Lien is incurred, the Borrower would be in pro forma compliance with its Financial
Covenants as calculated with the most recent financial information which would be delivered
pursuant to Section 5.05(a) or (b) (as applicable) assuming that such cash and Cash Equivalents
were no longer netted for purposes of the definition of Consolidated Total Net Debt;



     (o) set-off or netting rights granted by the Borrower or any Restricted Subsidiary of
the Borrower pursuant to any Hedging Transactions, solely in respect of amounts owing under such
agreements;



     (p) Liens arising from UCC financing statements filed on a precautionary basis in respect
of operating leases intended by the parties to be true leases (other than any such leases
entered into in violation of this Agreement);



     (q) Liens on cash deposits and other funds maintained with a depositary institution, in
each case arising in the ordinary course of business by virtue of any statutory or common law
provision relating to banker’s liens, including Section 4-210 of the UCC;



     (r) Liens on assets or securities granted or deemed to arise in connection
with and solely as a result of the execution, delivery or performance of contracts to purchase or
sell such assets or securities if such purchase or sale is otherwise permitted hereunder;



     (s) Liens on assets of the Borrower or any Restricted Subsidiary with respect
to Indebtedness in an aggregate principal amount not to exceed $200,000,000 at any time
outstanding; provided, however, that the assets of the Subsidiaries which will be
NY Real Property Subsidiaries shall not be encumbered by Liens in respect of Indebtedness in an
aggregate principal amount exceeding $50,000,000 at any time outstanding;



     (t) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for sale or purchase of goods entered into by the Borrower or any Restricted
Subsidiary in the ordinary course of the Permitted Business;



13









 





     (u) Liens deemed to exist in connection with Investments in repurchase
agreements which would be permitted under Section 6.05;



     (v) Liens in respect of Cash Management Obligations;



     (w) Liens solely on any cash earnest money deposits made by the Borrower or any
Restricted Subsidiary in connection with any letter of intent or purchase agreement for
Permitted Acquisitions which would be made under Section 6.05(h);



     (x) restrictions contained in joint venture agreements triggering a default
upon the Borrower or a Restricted Subsidiary’s pledge of its Equity Interests or other
ownership interests in such joint venture provided that the Loan Parties would be
in compliance with Section 5.15 when such Liens arise;



     (y) rights reserved to or vested in others to take or receive any part of, or
royalties related to, the power, gas, oil, coal, lignite, nuclear fuel or other minerals or
timber generated, developed, manufactured or produced by, or grown on, or acquired with,
any property of the Borrower and the Restricted Subsidiaries and Liens upon the production
from property of power, gas, oil, coal, lignite, nuclear fuel or other minerals or timber,
and the by-products and proceeds thereof, to secure the obligations to pay all or a part of
the expenses of exploration, drilling, mining or development of such property only out of
such production or proceeds;



     (z) Liens on cash and Cash Equivalents deposited by the Borrower or any
Restricted Subsidiary in margin accounts with or on behalf of credit clearing
organizations, independent system operators, regional transmission organizations state
agencies or federal agencies;



     (aa) Liens, restrictions, regulations, Easements, exceptions or reservations of
any Governmental Authority; and



     (bb) Liens to secure Environmental CapEx Debt or Necessary CapEx Debt permitted
by Section 1.01(x) that encumber only the assets purchased, installed or otherwise acquired
with the proceeds of such Environmental CapEx Debt or Necessary CapEx Debt;
provided, that the Liens securing such Indebtedness must be pari passu with, or
junior to, the Liens on such assets securing the Secured Obligations.



     (cc) Liens on Indebtedness permitted by Sections 1.01(k) or 1.01(z), to the
extent that Liens are permitted on the underlying Indebtedness with respect thereto.



     SECTION 1.03. Mergers, Consolidations and Sales of Assets. From the Signing Date, the
Borrower will not, nor will it cause or permit any of its Restricted Subsidiaries to: (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 (b) sell, transfer, lease, issue or otherwise dispose of (in
one transaction or in a series of transactions) all or substantially all of the assets (whether now
owned or hereafter acquired) of the Borrower, except that if at the time thereof and immediately
after giving effect thereto no Event of Default or Default shall have occurred and be continuing
(i) any Restricted Subsidiary (other than a Subsidiary that will be a NY Real Property Subsidiary)
may merge into the Borrower in a transaction in which the Borrower is the surviving corporation,
(ii) any Restricted Subsidiary (other than a Subsidiary that will be a NY Real Property Subsidiary)



14









 




may merge into or consolidate with any other Restricted Subsidiary in a transaction in which the
surviving entity is a Restricted Subsidiary and no Person other than the Borrower or a Restricted
Subsidiary receives any consideration (provided that if any party to any such transaction
is (A) a Loan Party, the surviving entity of such transaction shall be a Loan Party and (B) a
Domestic Subsidiary, the surviving entity of such transaction shall be a Domestic Subsidiary),
(iii) any merger or consolidation of a Restricted Subsidiary (other than a Subsidiary that will be
a NY Real Property Subsidiary) will be permitted in connection with an Investment which would be
permitted by Sections 6.05(h) or 6.05(j) and (iv) any Restricted Subsidiary (other than a
Subsidiary that will be a NY Real Property Subsidiary) may liquidate or dissolve or, solely for
purposes of reincorporating in a different jurisdiction, merge if the Borrower determines in good
faith that such liquidation or dissolution or merger is in the best interests of the Borrower and
could not reasonably be expected to result in a Material Adverse Effect.




     SECTION 1.04. Business Activities. From the Signing Date, the Borrower will not, nor
will it cause or permit any of its Restricted Subsidiaries to: (a) With respect to any Restricted
Subsidiary, enter into any business, either directly or through any Restricted Subsidiary, except
for the Permitted Business. Notwithstanding the foregoing, the Subsidiaries that will be NY Real
Property Subsidiaries shall engage solely in the business such Subsidiaries that will be NY Real
Property Subsidiaries were engaged in on the Signing Date.



     (b) In the case of the Borrower, (i) hold any assets other than the Equity Interests referred
to in clauses (iii)(B) and (iii)(C) below, (ii) have any material liabilities other than
liabilities under or permitted by the Loan Documents and tax liabilities in the ordinary course of
business or (iii) engage in any business or activity other than (A) the Reorganization and the
Separation Transactions, (B) owning the Equity Interests of the Restricted Subsidiaries and EquaGen
and activities incidental or related thereto or to the maintenance of the corporate existence of
the Borrower or compliance with Applicable Law, (C) owning indirectly through the Restricted
Subsidiary their respective Subsidiaries, (D) participating in tax, accounting and other
administrative activities as members of a consolidated group of companies and (E) issuing its own
Capital Stock.



     (c) Permit any Person other than Entergy to hold any Equity Interests of the Borrower prior to
the consummation of the Separation Transactions.



     SECTION 1.05. Fiscal Year. With respect to the Borrower, change its fiscal year-end to
a date other than December 31; provided, however, that the Borrower may, upon
written notice to the Administrative Agent, change the financial reporting convention specified
above to any other financial reporting convention reasonably acceptable to the Administrative
Agent, in which case the Borrower and the Administrative Agent will, and are hereby authorized by
the Lenders to, make any adjustments to this Agreement that are necessary in order to reflect such
change in financial reporting, provided, that with respect to any such change that delays
the fiscal year-end, the Borrower shall deliver financial information which would be required by
Section 5.05(b) for all intervening fiscal quarters, including the fiscal quarter that was formerly
the year-end.



     SECTION 1.06. No Speculative Hedging Transactions. Neither the Borrower nor any
Restricted Subsidiary shall engage in any speculative Hedging Transactions except (i) as set forth
in the definition of Commodity Hedging Transactions and (ii) Interest Rate Hedging Transactions and
Currency Hedging Transactions for the sole purpose of hedging in the normal course of the Permitted
Business. For the avoidance of doubt, the determination as to whether or not a



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Hedging Transaction is speculative shall be made as of the date such Hedging Transaction is entered
into by the Borrower or the applicable Restricted Subsidiary.





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