EX-10.4






Exhibit 10.4




$650,000,000 FIRST LIEN CREDIT AGREEMENT




Dated as of February 23, 2006




Among




ASTORIA GENERATING COMPANY ACQUISITIONS, L.L.C.




as Borrower and




ASTORIA GENERATING COMPANY HOLDINGS, L.L.C.




as Parent and




THE INITIAL LENDERS, INITIAL REVOLVING ISSUING BANK

AND INITIAL TERM ISSUING BANK NAMED HEREIN




as Initial Lenders and Initial Issuing Banks and




THE BANK OF NEW YORK

as Collateral Agent and




MORGAN STANLEY SENIOR FUNDING, INC.




as Administrative Agent and




MORGAN STANLEY SENIOR FUNDING, INC.




as Structuring Agent and




GOLDMAN SACHS CREDIT PARTNERS L.P.




as Syndication Agent and




MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED and BNP PARIBAS




as Documentation Agents and




MORGAN STANLEY & CO. INCORPORATED

and GOLDMAN SACHS CREDIT PARTNERS L.P.




as Joint Book Running Managers and




MORGAN STANLEY & CO. INCORPORATED, GOLDMAN SACHS CREDIT PARTNERS L.P., MERRILL LYNCH, PIERCE,

FENNER & SMITH INCORPORATED and BNP PARIBAS




as Joint Lead Arrangers




Astoria First Lien Credit Agreement










 



 




TABLE OF CONTENTS




	 	 	 	 	 	 	 
	Section	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE I

	 
	 	 	 	 	 	 
	DEFINITIONS AND ACCOUNTING TERMS

	 
	 	 	 	 	 	 
	SECTION 1.01.
	 	Certain Defined Terms	 	 	2	 
	SECTION 1.02.
	 	Computation of Time Periods; Other Definitional Provisions	 	 	38	 
	SECTION 1.03.
	 	Accounting Terms	 	 	38	 
	SECTION 1.04.
	 	Currency Equivalents Generally	 	 	38	 
	SECTION 1.05.
	 	Certifications, Etc.	 	 	39	 
	 
	 	 	 	 	 	 
	ARTICLE II

	 
	 	 	 	 	 	 
	AMOUNTS AND TERMS OF THE ADVANCES

AND THE LETTERS OF CREDIT

	 
	 	 	 	 	 	 
	SECTION 2.01.
	 	The Advances and the Letters of Credit	 	 	39	 
	SECTION 2.02.
	 	Making the Advances	 	 	40	 
	SECTION 2.03.
	 	Issuance of and Drawings and Reimbursement Under Letters of Credit	 	 	42	 
	SECTION 2.04.
	 	Repayment of Advances	 	 	44	 
	SECTION 2.05.
	 	Termination or Reduction of the Commitments	 	 	46	 
	SECTION 2.06.
	 	Prepayments	 	 	47	 
	SECTION 2.07.
	 	Interest	 	 	50	 
	SECTION 2.08.
	 	Fees	 	 	51	 
	SECTION 2.09.
	 	Conversion of Advances	 	 	52	 
	SECTION 2.10.
	 	Increased Costs, Etc.	 	 	53	 
	SECTION 2.11.
	 	Payments and Computations	 	 	55	 
	SECTION 2.12.
	 	Taxes	 	 	56	 
	SECTION 2.13.
	 	Sharing of Payments, Etc.	 	 	59	 
	SECTION 2.14.
	 	Use of Proceeds	 	 	60	 
	SECTION 2.15.
	 	Defaulting Lenders	 	 	60	 
	SECTION 2.16.
	 	Evidence of Debt	 	 	62	 
	 
	 	 	 	 	 	 
	ARTICLE III

	 
	 	 	 	 	 	 
	CONDITIONS TO EFFECTIVENESS AND OF LENDING AND

ISSUANCES OF LETTERS OF CREDIT

	 
	 	 	 	 	 	 
	SECTION 3.01.
	 	Conditions Precedent	 	 	63	 
	SECTION 3.02.
	 	Conditions Precedent to Each Borrowing and Issuance	 	 	70	 
	SECTION 3.03.
	 	Determinations Under Section 3.01	 	 	71	 












 



ii


	 	 	 	 	 	 	 
	Section	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE IV

	 
	 	 	 	 	 	 
	REPRESENTATIONS AND WARRANTIES

	 
	 	 	 	 	 	 
	SECTION 4.01.
	 	Representations and Warranties of the Borrower	 	 	71	 
	 
	 	 	 	 	 	 
	ARTICLE V

	 
	 	 	 	 	 	 
	COVENANTS OF THE LOAN PARTIES

	 
	 	 	 	 	 	 
	SECTION 5.01.
	 	Affirmative Covenants	 	 	79	 
	SECTION 5.02.
	 	Negative Covenants	 	 	88	 
	SECTION 5.03.
	 	Reporting Requirements	 	 	99	 
	SECTION 5.04.
	 	Financial Covenants	 	 	103	 
	SECTION 5.05.
	 	Covenant of Parent	 	 	105	 
	 
	 	 	 	 	 	 
	ARTICLE VI

	 
	 	 	 	 	 	 
	EVENTS OF DEFAULT

	 
	 	 	 	 	 	 
	SECTION 6.01.
	 	Events of Default	 	 	105	 
	SECTION 6.02.
	 	Actions in Respect of the Letters of Credit upon Default	 	 	109	 
	 
	 	 	 	 	 	 
	ARTICLE VII

	 
	 	 	 	 	 	 
	THE ADMINISTRATIVE AGENT

	SECTION 7.01.
	 	Authorization and Action	 	 	110	 
	SECTION 7.02.
	 	Administrative Agent's Reliance, Etc.	 	 	110	 
	SECTION 7.03.
	 	Initial Banks and Affiliates	 	 	111	 
	SECTION 7.04.
	 	Lender Party Credit Decision	 	 	111	 
	SECTION 7.05.
	 	Indemnification	 	 	111	 
	SECTION 7.06.
	 	Successor Agents	 	 	113	 
	 
	 	 	 	 	 	 
	ARTICLE VIII

	 
	 	 	 	 	 	 
	GUARANTY

	SECTION 8.01.
	 	Guaranty; Limitation of Liability	 	 	114	 
	SECTION 8.02.
	 	Guaranty Absolute	 	 	114	 
	SECTION 8.03.
	 	Waivers and Acknowledgments	 	 	116	 
	SECTION 8.04.
	 	Subrogation	 	 	116	 
	SECTION 8.05.
	 	Guaranty Supplements	 	 	117	 
	SECTION 8.06.
	 	Subordination	 	 	117	 
	SECTION 8.07.
	 	Continuing Guaranty; Assignments	 	 	118	 












 



iii


	 	 	 	 	 	 	 
	Section	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE IX

	 
	 	 	 	 	 	 
	MISCELLANEOUS

	SECTION 9.01.
	 	Amendments, Etc.	 	 	119	 
	SECTION 9.02.
	 	Notices, Etc.	 	 	120	 
	SECTION 9.03.
	 	No Waiver; Remedies	 	 	122	 
	SECTION 9.04.
	 	Costs and Expenses	 	 	122	 
	SECTION 9.05.
	 	Right of Set-off	 	 	124	 
	SECTION 9.06.
	 	Binding Effect	 	 	124	 
	SECTION 9.07.
	 	Assignments and Participations	 	 	124	 
	SECTION 9.08.
	 	Execution in Counterparts	 	 	128	 
	SECTION 9.09.
	 	No Liability of the Issuing Banks	 	 	128	 
	SECTION 9.10.
	 	Confidentiality	 	 	129	 
	SECTION 9.11.
	 	Release of Collateral	 	 	129	 
	SECTION 9.12.
	 	Patriot Act Notice	 	 	129	 
	SECTION 9.13.
	 	Jurisdiction, Etc.	 	 	130	 
	SECTION 9.14.
	 	Governing Law	 	 	130	 
	SECTION 9.15.
	 	Hedge Banks	 	 	130	 
	SECTION 9.16.
	 	Waiver of Jury Trial	 	 	130	 












 



iv


	 	 	 	 	 
	SCHEDULES
	 	 	 	 
	Schedule I
	 	—	 	Commitments and Applicable Lending Offices
	Schedule II
	 	—	 	Subsidiary Guarantors
	Schedule 4.01(a)
	 	—	 	Equity Investors
	Schedule 4.01(b)
	 	—	 	Loan Parties
	Schedule 4.01(c)
	 	—	 	Subsidiaries
	Schedule 4.01(e)
	 	—	 	Governmental Authorizations
	Schedule 4.01(p)
	 	—	 	Plans, Multiemployer Plans and Welfare Plans
	Schedule 4.01(q)
	 	—	 	Environmental Disclosure
	Schedule 4.01(r)
	 	—	 	Open Years; Unpaid Tax Liabilities
	Schedule 4.01(s)
	 	—	 	Existing Debt
	Schedule 4.01(t)
	 	—	 	Liens
	Schedule 4.01(u)
	 	—	 	Owned Real Property
	Schedule 4.01(v)(i)
	 	—	 	Leased Real Property (Lessee)
	Schedule 4.01(v)(ii)
	 	—	 	Leased Real Property (Lessor)
	Schedule 4.01(w)
	 	—	 	Vessels
	Schedule 5.01(d)
	 	—	 	Insurance
	Schedule 5.02(f)
	 	—	 	Investments






	 	 	 	 	 
	EXHIBITS
	 	 	 	 
	Exhibit A-1
	 	—	 	Form of Revolving Credit Note
	Exhibit A-2
	 	—	 	Form of Term B Note
	Exhibit A-3
	 	—	 	Form of Term LC Note
	Exhibit B
	 	—	 	Form of Notice of Borrowing
	Exhibit C
	 	—	 	Form of Assignment and Acceptance
	Exhibit D
	 	—	 	Form of Security Agreement
	Exhibit E
	 	—	 	Form of Intercreditor Agreement
	Exhibit F
	 	—	 	Form of Guaranty Supplement
	Exhibit G-1
	 	—	 	Form of Mortgage
	Exhibit G-2
	 	—	 	Form of Barge Mortgage
	Exhibit H
	 	—	 	Form of Solvency Certificate
	Exhibit I
	 	—	 	Form of Opinion of Counsel to the Loan Parties
	Exhibit J
	 	—	 	Form of Opinion of Admiralty Counsel



















 





CREDIT AGREEMENT




          CREDIT AGREEMENT (this “Agreement”) dated as of February 23, 2006 among Astoria Generating
Company Acquisitions, L.L.C., a Delaware limited liability company (the “Borrower”), Astoria
Generating Company Holdings, L.L.C., a Delaware limited liability company (the “Parent”), the
Subsidiary Guarantors (as hereinafter defined), the Lenders (as hereinafter defined), the Revolving
Issuing Bank (as hereinafter defined), the Term Issuing Bank (as hereinafter defined), The Bank of
New York (“BONY”), as collateral agent (together with any successor collateral agent appointed
pursuant to Article VII, the “Collateral Agent”) for the Secured Parties (as hereinafter defined),
Morgan Stanley Senior Funding, Inc. (“MSSF”) as structuring agent (together with any successor
structuring agent, the “Structuring Agent”), Goldman Sachs Credit Partners L.P. (“Goldman Sachs”)
as syndication agent (together with any successor syndication agent, the “Syndication Agent”),
Morgan Stanley & Co. Incorporated (“MS&Co.”) and Goldman Sachs as joint book running managers
(together with any successor joint book running managers, the “Joint Book Running Managers”),
MS&Co., Goldman Sachs, Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) and BNP
Paribas (“BNP Paribas”) as joint lead arrangers (together with any successor joint lead arrangers,
the “Joint Lead Arrangers”), MLPF&S and BNP Paribas as documentation agents (together with any
successor documentation agents, the “Co-Documentation Agents”), and MSSF, as administrative agent
(together with any successor administrative agent appointed pursuant to Article VII, the
“Administrative Agent” and, together with the Collateral Agent, the “Agents”) for the Lender
Parties (as hereinafter defined).




PRELIMINARY STATEMENTS:




          (1) The Borrower and the Parent were organized by the Equity Investors (as hereinafter
defined) to acquire all of the direct and indirect Equity Interests (as hereinafter defined) of
Astoria Generating Company, L.P., a Delaware limited partnership (“Astoria”) and Orion Power
Operating Services Astoria, Inc., a Delaware corporation (“OPOS” and together with Astoria, the
“Companies”).




          (2) Pursuant to the Purchase and Sale Agreement dated as of September 30, 2005 (as amended (as
defined in Section 1.02), to the extent permitted under the Loan Documents (as hereinafter
defined), the “Purchase Agreement”) between Orion Power Holdings, Inc., as seller (the “Seller”),
Reliant Energy Inc., as guarantor and the Borrower, as buyer, the Borrower has agreed to purchase
from the Seller (the “Acquisition”) 100% of the general and limited partnership interests in
Astoria and 100% of the capital stock of OPOS. Following consummation of the Acquisition, the
Borrower will be a holding company that directly owns, and the sole asset of which is, all of the
direct and indirect Equity Interests in the Companies.




          (3) The Borrower has requested that, immediately upon consummation of the Acquisition, the
Lender Parties lend to the Borrower up to $650,000,000 (comprised of (a) a $430,000,000 term loan B
facility, (b) a $120,000,000 term loan facility, the proceeds of which will be deposited into the
Term LC Collateral Account referred to below to provide for the issuance of letters of credit and
(c) a $100,000,000 working capital revolving facility, of which up to $60,000,000 shall be
available for the issuance of letters of credit) to pay to the Seller the










 



 



2



cash consideration for the Equity Interests of the Companies, pay transaction fees and
expenses, provide ongoing working capital for, and for other general corporate purposes of, the
Borrower and its Subsidiaries. The Lender Parties have indicated their willingness to agree to
lend such amounts on the terms and conditions of this Agreement.




          (4) Simultaneously with the transactions contemplated hereunder, the Borrower will enter into
a $300,000,000 second lien secured credit facility with MSSF, as administrative agent, the lenders
party thereto and certain others (the “Second Lien Facility”).




          NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
contained herein, the parties hereto hereby agree as follows:




ARTICLE I




DEFINITIONS AND ACCOUNTING TERMS




     SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):




     “Account Collateral” has the meaning specified in the Security Agreement.




     “Acquisition” has the meaning specified in the Preliminary Statements.




     “Acquisition Subsidiary” means a Person created by the Borrower for the purpose of
making a Permitted Acquisition.




     “Additional Guarantor” has the meaning specified in Section 8.05.




     “Administrative Agent” has the meaning specified in the recital of parties to this
Agreement.




     “Administrative Agent’s Account” means the account of the Administrative Agent
specified by the Administrative Agent in writing to the Lender Parties from time to time.




     “Advance” means a Term B Advance, a Term LC Advance, a Revolving Credit Advance or a
Letter of Credit Advance.




     “Affected Property” means any Loan Party Asset (in whole or in part) lost, destroyed,
damaged or otherwise taken as a result of the occurrence of any Event of Eminent Domain or
Casualty Event.




     “Affiliate” means, as to any Person, any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person or is a director or
officer of such Person. For purposes of this definition, the term “control” (including the
terms “controlling,” “controlled by” and “under common control with”) of a Person means
the possession, direct or indirect, of the power to vote 10% or more of the Voting









 



 

3





Interests of such Person or to direct or cause the direction of the management and policies of such
Person, whether through the ownership of Voting Interests, by contract or otherwise.




     “Agent Parties” has the meaning specified in Section 9.02(c).




     “Agents” has the meaning specified in the recital of parties to this Agreement.




     “Agreement Value” means, for each Hedge Agreement or Commodity Hedge Agreement, on any
date of determination, an amount determined by the Administrative Agent in its reasonable
judgment equal to the amount, if any, that would be payable by any Loan Party or any of its
Subsidiaries to its counterparty to such Hedge Agreement or Commodity Hedge Agreement in
accordance with its terms as if such Hedge Agreement or Commodity Hedge Agreement was being
terminated early on such date of determination as a result of an event of default or
termination event arising with respect to such Loan Party or Subsidiary.




     “Ancillary Services” has the meaning set forth in the NYISO Rules.




     “Applicable Lending Office” means, with respect to each Lender Party, such Lender
Party’s Domestic Lending Office in the case of a Base Rate Advance and such Lender Party’s
Eurodollar Lending Office in the case of a Eurodollar Rate Advance.




     “Applicable Margin” means 1.00% per annum for Base Rate Advances and 2.00% per annum
for Eurodollar Rate Advances; provided, that following the repayment or prepayment by the
Borrower of $100,000,000 in aggregate principal amount of Term B Advances, the Applicable
Margin shall be 0.75% per annum for Term B Base Rate Advances and 1.75% per annum for Term B
Eurodollar Rate Advances.




     “Appropriate Issuing Bank” means, at any time, with respect to (a) the Revolving Letter
of Credit Facility, the Revolving Issuing Bank, and (b) the Term Letter of Credit Facility,
the Term Issuing Bank.




     “Appropriate Lender” means, at any time, with respect to (a) any of the Term Facility,
the Term LC Facility or the Revolving Credit Facility, a Lender that has a Commitment with
respect to such Facility at such time, (b) the Revolving Letter of Credit Facility, (i) the
Revolving Issuing Bank and (ii) if the other Revolving Credit Lenders have made Revolving
Letter of Credit Advances pursuant to Section 2.03(c) that are outstanding at such time,
each such other Revolving Credit Lender, and (c) the Term Letter of Credit Facility, the
Term Issuing Bank.




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




     “Asset Sale” means any sale, lease, transfer or other disposition of any Loan Party
Asset (in whole or in part) other than any sale, lease, transfer or other disposition
permitted under Section 5.02(e)(i), 5.02(e)(ii), 5.02(e)(iii), 5.02(e)(iv) or 5.02(e)(v).









 



 

4





     “Asset Sale Proceeds” means, with respect to any Asset Sale, the Net Cash Proceeds
payable to any Loan Party in connection with such Asset Sale to the extent that such Net
Cash Proceeds, together with the Net Cash Proceeds from all prior Asset Sales by any Loan
Party occurring during the Fiscal Year in which such Asset Sale is made, exceed $40,000,000.




     “Assignment and Acceptance” means an assignment and acceptance entered into by a Lender
Party and an Eligible Assignee (with the consent of any party whose consent is required by
Section 9.07 or by the definition of “Eligible Assignee”), and accepted by the
Administrative Agent, in accordance with Section 9.07 and in substantially the form of
Exhibit C hereto or any other form approved by the Administrative Agent.




     “Astoria” has the meaning specified in the Preliminary Statements.




     “Astoria Assets” means the Equity Interests in, the Generating Stations and all other
property and assets of, the Companies, whether now owned or hereafter acquired.




     “Astoria Generating Station” means the natural gas/fuel oil-fired electric generating
facility located at 18-01 20th Avenue Gate (Q135), Astoria, New York 11105 and
all appurtenances thereto owned or operated by the Companies, including electrical
switchyards, electrical interconnections, and fuel delivery and storage facilities.




     “Available Amount” of any Letter of Credit means, at any time, the maximum amount
available to be drawn under such Letter of Credit at such time (assuming compliance at such
time with all conditions to drawing).




     “Bankruptcy Law” means Title 11, U.S. Code, or any similar foreign, federal or state
law for the relief of debtors.




     “Barge Mortgages” has the meaning specified in Section 3.01(a)(v).




     “Base Rate” means a fluctuating interest rate per annum in effect from time to time,
which rate per annum shall at all times be equal to the higher of:




     (a) the rate of interest published by the Wall Street Journal, from time to
time, as the prime rate; and




     (b) 1/2 of 1% per annum above the Federal Funds Rate.




     “Base Rate Advance” means an Advance that bears interest as provided in Section
2.07(a)(i).




     “BNP Paribas” has the meaning specified in the recital of parties to this Agreement.




     “BONY” has the meaning specified in the recital of parties to this Agreement.




     “Borrower” has the meaning specified in the recital of parties to this Agreement.









 



 

5





     “Borrower’s Account” means the account of the Borrower specified by the Borrower in
writing to the Administrative Agent from time to time.




     “Borrowing” means a Term B Borrowing, a Term LC Borrowing or a Revolving Credit
Borrowing.




     “Business Day” means a day of the year on which banks are not required or authorized by
law to close in New York City and, if the applicable Business Day relates to any Eurodollar
Rate Advances, on which dealings are carried on in the London interbank market.




     “Business Interruption Insurance Proceeds” means any and all proceeds of any insurance,
indemnity, warranty or guaranty payable from time to time to any Loan Party with respect to
the partial or complete interruption of the operation of the business of such Loan Party.




     “Calculation Period” means with respect to any Excess Cash Flow Payment Date, the two
fiscal quarters of the Parent ending on or prior to such Excess Cash Flow Payment Date.




     “Capacity” shall mean unforced capacity, installed capacity, locational installed
capacity, or any other capacity product for which the NYISO designates a market from time to
time.




     “Capex Carryover” has the meaning specified in Section 5.02(n).




     “Capital Expenditures” means, for any Person for any period, the sum of, without
duplication, (a) all expenditures made, directly or indirectly, by such Person or any of its
Subsidiaries during such period for equipment, fixed assets, real property or improvements,
or for replacements or substitutions therefor or additions thereto, that have been or should
be, in accordance with GAAP, reflected as additions to property, plant or equipment on a
Consolidated balance sheet of such Person plus (b) the aggregate principal amount of all
Debt (including Obligations under Capitalized Leases) assumed or incurred in connection with
any such expenditures. For purposes of this definition, (i) the purchase price of equipment
that is purchased simultaneously with the trade in of existing equipment or with insurance
proceeds shall be included in Capital Expenditures only to the extent of the gross amount of
such purchase price less the credit granted by the seller of such equipment for the
equipment being traded in at such time or the amount of such proceeds, as the case may be,
and (ii) the term “Capital Expenditures” shall not include expenditures (x) made in order to
comply with obligations of law (including, without limitation, consent orders and regulatory
orders and requirements) so long as the aggregate amount of such expenditures shall not
exceed $10,000,000 in any Fiscal Year or (y) made as a part of a Permitted Acquisition so
long as such expenditure is included
in the calculation of the aggregate amount of consideration payable for such Permitted
Acquisition and is permitted by the terms of this Agreement.




     “Capitalized Leases” means all leases that have been or should be, in accordance with
GAAP, recorded as capitalized leases.









 



 

6





     “Cash Equivalents” means any of the following, to the extent owned by the Borrower or
any of its Subsidiaries free and clear of all Liens other than Liens created under the
Collateral Documents and having a maturity of not greater than 360 days from the date of
acquisition thereof: (a) readily marketable direct obligations of the Government of the
United States or any agency or instrumentality thereof or obligations unconditionally
guaranteed by the full faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that is a Lender Party
or a member of the Federal Reserve System, issues (or the parent of which issues) commercial
paper rated as described in clause (c) below, is organized under the laws of the United
States or any State thereof and has combined capital and surplus of at least $1,000,000,000,
(c) commercial paper in an aggregate amount of no more than $20,000,000 per issuer
outstanding at any time, issued by any corporation organized under the laws of any State of
the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or
“A-1” (or the then equivalent grade) by S&P or (d) Investments, classified in accordance
with GAAP as Current Assets of the Borrower or any of its Subsidiaries, in money market
funds that are registered under the Investment Company Act of 1940, as amended, that are
administered by financial institutions that have the highest rating obtainable from either
Moody’s or S&P and the portfolios of which are limited solely to Investments of the
character, quality and maturity described in clauses (a), (b) and (c) of this definition
including, without limitation, any such fund for which any Lender Party, any Agent or an
Affiliate of a Lender Party or an Agent serves as an investment advisor, administrator,
shareholder servicing agent, custodian or subcustodian, notwithstanding that (A) such Lender
Party, Agent or Affiliate of a Lender Party or Agent charges and collects fees and expenses
from such funds for services rendered (provided that such charges, fees and expenses are on
terms consistent with terms negotiated at arm’s length) and (B) such Lender Party or Agent
charges and collects fees and expenses for services rendered, pursuant to this Agreement.




     “Casualty Event” means an event that causes any Loan Party Asset (in whole or in part)
to be damaged, destroyed or rendered unfit for normal use for any reason whatsoever, other
than ordinary use and wear and tear and any Event of Eminent Domain.




     “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended from time to time.




     “CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability
Information System maintained by the U.S. Environmental Protection Agency.




     “Change of Control” means the occurrence of any of the following: (a) MDP shall cease
to own at least 50% of the percentage of the Voting Interests in the Parent that it held as
of the Effective Date; or (b) any Person or two or more Persons acting in concert shall have
entered into a contract or arrangement that, upon consummation, will result in MDP ceasing
to own at least 50% of the percentage of the Voting Interests in the Parent that it held as
of the Effective Date; or (c) the Parent shall cease to own 100% of









 



 

7





the Equity Interests in the Borrower; or (d) MDP shall cease to control fundamental management decisions of the
Borrower.




     “Clean-Down Date” means, until such time as the Borrower has received the Supplemental
NYPSC Order, a period of one day occurring during each consecutive 364-day period,
commencing on the Effective Date.




     “Co-Documentation Agents” has the meaning specified in the recital of parties hereto.




     “COFR” has the meaning specified in Section 5.01(r).




     “Collateral” means all “Collateral” and “Mortgaged Property” referred to in the
Collateral Documents and all other property that is or is intended to be subject to any Lien
in favor of the Collateral Agent for the benefit of the Secured Parties.




     “Collateral Agent” has the meaning specified in the recital of parties to this
Agreement.




     “Collateral Agent’s Office” means, with respect to the Collateral Agent or any
successor Collateral Agent, the office of such Agent as such Agent may from time to time
specify to the Borrower and the Administrative Agent.




     “Collateral Documents” means the Security Agreement, the Mortgages, the Barge
Mortgages, the Account Control Agreements referred to in the Security Agreement, each of the
collateral documents, instruments and agreements delivered pursuant to Section 5.01(k), and
each other agreement that creates or purports to create a Lien in favor of the Collateral
Agent for the benefit of the Secured Parties.




     “Commitment” means a Term B Commitment, a Term LC Commitment, a Revolving Credit
Commitment or a Letter of Credit Commitment.




     “Commodity Hedge Agreement” means any swap, cap, collar, floor, future, option, spot,
forward, power purchase and sale agreement, electric power generation capacity swap or
purchase and sale agreement, fuel purchase and sale agreement, power transmission agreement,
fuel transportation agreement, fuel storage agreement, netting agreement or similar
agreement entered into respect of any commodity.




     “Companies” has the meaning specified in the Preliminary Statements.




     “Confidential Information” means information that any Loan Party furnishes to any Agent
or any Lender Party that is designated as confidential, but does not include any
such information that is or becomes generally available to the public other than as a
result of a breach by such Agent or any Lender Party of its obligations hereunder or that is
or becomes available to such Agent or such Lender Party from a source other than the Loan
Parties that is not, to the best of such Agent’s or such Lender Party’s knowledge, acting in
violation of a confidentiality obligation to a Loan Party.









 



 

8





     “Consolidated” refers to the consolidation of accounts in accordance with GAAP;
provided that if GAAP would require the accounts of a Non Recourse Subsidiary to be
consolidated with the accounts of the Borrower and its Subsidiaries, then for purposes
hereof “Consolidated” shall exclude the consolidation of the accounts of any such Non
Recourse Subsidiary.




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




     “Conversion,” “Convert” and “Converted” each refer to a conversion of Advances of one
Type into Advances of the other Type pursuant to Section 2.09 or 2.10.




     “Cure Notice” has the meaning specified in Section 5.04(c).




     “Current Assets” of any Person means all assets of such Person that would, in
accordance with GAAP, be classified as current assets of a company conducting a business the
same as or similar to that of such Person, after deducting adequate reserves in each case in
which a reserve is proper in accordance with GAAP.




     “Current Liabilities” of any Person means (a) all Debt of such Person that by its terms
is payable on demand or matures within one year after the date of its creation (excluding
(i) any Debt renewable or extendible, at the option of such Person, to a date more than one
year from such date or arising under a revolving credit or similar agreement that obligates
the lender or lenders to extend credit during a period of more than one year from such date
and (ii) current maturities of long-term Debt) and (b) all other items (including taxes
accrued as estimated) that in accordance with GAAP would be classified as current
liabilities of such Person.




     “Debt” of any Person means, without duplication, (a) all indebtedness of such Person
for borrowed money, (b) all Obligations of such Person for the deferred purchase price of
property or services (other than trade payables not overdue by more than 90 days incurred in
the ordinary course of such Person’s business), (c) all Obligations of such Person evidenced
by notes, bonds, debentures or other similar instruments, (d) all Obligations 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 (it being understood that if the rights and remedies of the seller or
lender are limited to repossession or sale, the aggregate amount of Debt of such Person in
respect thereof shall be the lesser of the aggregate Obligations arising under such
conditional sale or title retention agreement and the fair
market value of the property subject to repossession or sale)), (e) the principal
amount of all Obligations of such Person as lessee under Capitalized Leases, (f) all
Obligations (other than contingent Obligations) of such Person under acceptance, letter of
credit or similar facilities, (g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any Equity Interests in such
Person or any other Person or any warrants, rights or options to acquire such Equity
Interests, valued, in









 



 

9





the case of Redeemable Preferred Interests, at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (h) all
Obligations of such Person in respect of any Hedge Agreement or Commodity Hedge Agreement,
valued at the Agreement Value thereof, (i) all Guaranteed Debt and Synthetic Debt of such
Person and (j) all indebtedness and other payment Obligations referred to in clauses (a)
through (i) above of another Person secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such indebtedness or other
payment Obligations (it being understood that if such indebtedness has not been assumed or
such Person has not become liable for the payment thereof, the aggregate amount of such Debt
of such Person shall be the lesser of such indebtedness and the fair market value of the
property subject to such Lien); provided, that Non-Recourse Debt shall not constitute Debt
of a Person solely because such Person has pledged the Equity Interests held by such Person
in the Non-Recourse Subsidiary obligated on such Non-Recourse Debt.




     “Debt for Borrowed Money” of any Person means, at any date of determination, the
principal amount of all interest bearing Debt (including, without limitation, debt bearing
interest payable in kind) of such Person at such date.




     “Debt Proceeds” means, with respect to the incurrence or issuance of any Debt by any
Loan Party (other than Debt permitted hereunder), the Net Cash Proceeds payable to any Loan
Party in connection with such incurrence or issuance.




     “Default” means any Event of Default or any event that would constitute an Event of
Default but for the passage of time or the requirement that notice be given or both.




     “Default Interest” has the meaning set forth in Section 2.07(b).




     “Defaulted Advance” means, with respect to any Lender Party at any time, the portion of
any Advance required to be made by such Lender Party to the Borrower pursuant to Section
2.01 or 2.02 at or prior to such time that has not been made by such Lender Party or by the
Administrative Agent for the account of such Lender Party pursuant to Section 2.02(d) as of
such time. In the event that a portion of a Defaulted Advance shall be deemed made pursuant
to Section 2.15(a), the remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section 2.01 on the same date
as the Defaulted Advance so deemed made in part.




     “Defaulted Amount” means, with respect to any Lender Party at any time, any amount
required to be paid by such Lender Party to any Agent or any other Lender Party hereunder or
under any other Loan Document at or prior to such time that has not been so paid as of such
time, including, without limitation, any amount required to be paid by such Lender Party to
(a) the Revolving Issuing Bank pursuant to Section 2.03(c) to purchase a portion of a
Revolving Letter of Credit Advance made by the Revolving









 



 


10





Issuing Bank, (b) the Administrative Agent pursuant to Section 2.02(d) to reimburse the Administrative Agent for
the amount of any Advance made by the Administrative Agent for the account of such Lender
Party, (c) any other Lender Party pursuant to Section 2.13 to purchase any participation in
Advances owing to such other Lender Party and (d) any Agent or any Issuing Bank pursuant to
Section 7.05 to reimburse such Agent or such Issuing Bank for such Lender Party’s ratable
share of any amount required to be paid by the Lender Parties to such Agent or such Issuing
Bank as provided therein. In the event that a portion of a Defaulted Amount shall be deemed
paid pursuant to Section 2.15(b), the remaining portion of such Defaulted Amount shall be
considered a Defaulted Amount originally required to be paid hereunder or under any other
Loan Document on the same date as the Defaulted Amount so deemed paid in part.




     “Defaulting Lender” means, at any time, any Lender Party that, at such time, (a) owes a
Defaulted Advance or a Defaulted Amount or (b) shall take any action or be the subject of
any action or proceeding of a type described in Section 6.01(f).




     “Domestic Lending Office” means, with respect to any Lender Party, the office of such
Lender Party specified as its “Domestic Lending Office” opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which it became a Lender Party, as
the case may be, or such other office of such Lender Party as such Lender Party may from
time to time specify to the Borrower and the Administrative Agent.




     “EBITDA” means, for any period, the sum, determined on a Consolidated basis, of (a) net
income (or net loss), (b) interest expense, (c) to the extent deducted in calculating net
income, income tax (including unincorporated business tax) expense plus the aggregate amount
of tax distributions to equity holders in respect thereof, (d) depreciation expense, (e)
amortization expense, (f) impairment of goodwill and other non-cash charges or expenses
(excluding any such non-cash charge or expense to the extent that it represents amortization
of a prepaid cash expense that was paid in a prior period), (g) unrealized losses from
hedges and other financial derivatives, market-to-market activity and lower of cost or
market adjustments, (h) non-cash compensation expense, or other non-cash expenses or
charges, arising from the granting of stock options, the granting of stock appreciation
rights and similar arrangements (including any strike price reductions for dividends paid,
repricing, amendment, modification, substitution or charge of any stock option, stock
appreciation rights or similar arrangements), (i) any financing or financial advisory fees,
accounting fees, legal fees, transfer or mortgage recording taxes and other out-of-pocket
costs and expenses of the Parent or Borrower (including expenses of third parties paid or
reimbursed by the Parent or Borrower) incurred solely as a result of the Transaction which
are incurred by the Closing Date and deducted from net income during the fiscal years ending
December 31, 2005 and/or December 31, 2006, (j) charges for amortization of contractual
obligations, (k) non-recurring cash charges resulting from severance, integration and other
adjustments made as a result of the Transaction or any Permitted Acquisitions that are
consummated, (l) any financing or financial advisory fees, accounting fees, legal fees,
transfer or mortgage recording taxes and related out-of-pocket expenses of the Borrower and
its subsidiaries (including expenses of third parties paid or reimbursed by the Parent









 



 


11





or Borrower) incurred as a result of Permitted Acquisitions that are consummated and (m)
transition expenses in an aggregate amount not to exceed $1,000,000 incurred after the
Closing Date, to the extent, in the case of clauses (b) through (m), that such items were
deducted in calculating net income (or net loss) for such period and, in each case of the
Borrower and its Subsidiaries, determined, to the extent that generally applicable
accounting principles are applicable, in accordance with GAAP for such period. EBITDA for
the second fiscal quarter of 2005 shall be deemed to be $53,000,000; EBITDA for the third
fiscal quarter of 2005 shall be deemed to be $123,000,000; and EBITDA for the fourth fiscal
quarter of 2005 shall be deemed to be $41,000,000.




     “Effective Date” has the meaning specified in Section 3.01.




     “Effective Date ISDA Schedule” has the meaning specified in Section 3.01(h).




     “Effective Date Material Adverse Effect” means any change, event, fact, circumstance or
effect that is or would reasonably be expected to be materially adverse to the business,
assets or financial condition of the Parent and its Subsidiaries, taken as a whole, in each
case, except for any such change, event or effect resulting from or arising out of (a)
changes in economic conditions generally or the industry in which the Parent and its
Subsidiaries operate, (b) changes in international, national, regional, state or local
wholesale or retail markets for electric power or fuel or fuel related products including
those due to actions by competitors, (c) changes in regulatory or political conditions
(other than items addressed in clauses (d) and (h)), (d) the adoption, implementation,
promulgation or repeal of any Law of or by any Governmental Authority subsequent to
September 30, 2005 governing national, regional, state or local electric transmission or
distribution systems, (e) strikes, work stoppages or other labor disturbances, (f) increases
in costs of commodities or supplies, including fuel, (g) effects of weather or
meteorological events, (h) the adoption, implementation, promulgation or repeal of any Law
of or by any Governmental Authority (other than those governing electric transmission or
distribution systems) subsequent to September 30, 2005 and (i) any actions to be taken
pursuant to or in accordance with the Purchase Agreement, except in the case of clauses (d)
and (h) for any such change that disproportionately impacts the operation of the Companies
versus similar power plants located in New York City; provided that none of clauses (a)
through (i) foregoing shall be deemed to apply as a result of acts of war or terrorist acts.




     “Eligible Assignee” means (a) a Lender Party; (b) an Affiliate of a Lender Party; (c)
an Approved Fund; and (d) any other Person (other than an individual) approved by (i) the
Administrative Agent and (ii) unless an Event of Default has occurred and is continuing, and
except in the case of an assignment by an Issuing Bank of its Letter of Credit Commitment
within three months after the Effective Date, the Borrower (each
such approval not to be unreasonably withheld or delayed); provided, however, that (A)
without prejudice to clause (B) below, in the case of an assignment of a Revolving Credit
Commitment, the Revolving Issuing Bank shall have approved any such Person referred to in
clauses (a) through (d) above as an “Eligible Assignee” and (B) neither any Loan Party nor
any Affiliate of a Loan Party shall qualify as an Eligible Assignee under this definition.









 



 


12





     “Eminent Domain Proceeds” means with respect to any Event of Eminent Domain, the Net
Cash Proceeds payable to any Loan Party in connection with such Event of Eminent Domain, to
the extent that such Net Cash Proceeds exceed $5,000,000.




     “Energy” means 60-cycle three-phase electrical energy generated in accordance with the
NYISO Rules.




     “Energy Management Agreement” means the Energy Management Agreement between the
Borrower and Sempra dated February 23, 2006, or any replacement thereof.




     “Environmental Action” means any action, suit, demand, demand letter, claim, notice of
non compliance or violation, notice of liability or potential liability, investigation,
proceeding, consent order or consent agreement relating in any way to any Environmental Law,
any Environmental Permit or Hazardous Material or arising from alleged injury or threat to
health, safety or the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or other actions
or damages relating to Hazardous Materials and (b) by any governmental or regulatory
authority or third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief relating to any Environmental Law or Environmental Permit.




     “Environmental Law” means any legally binding Federal, state, local or foreign statute,
law, ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or
judicial or agency interpretation, policy or guidance relating to pollution or protection of
the environment, the protection of health and safety or the protection of natural resources,
or natural resource damages, including, without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials.




     “Environmental Permit” means any permit, approval, identification number, license or
other authorization required under any Environmental Law.




     “Equity Cure” has the meaning specified in Section 5.04(c).




     “Equity Financing” has the meaning specified in Section 3.01(i).




     “Equity Interests” means, with respect to any Person, shares of capital stock of (or
other ownership or profit interests in) such Person, warrants, options or other rights for
the purchase or other acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, securities convertible into or exchangeable
for shares of capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or other acquisition from such
Person of such shares (or such other interests), and other ownership or profit interests in
such Person (including, without limitation, partnership, member or trust interests therein),
whether voting or nonvoting.




     “Equity Investors” means MDP and US Power Generating Company, LLC.









 



 


13





     “Equity Issuance” means any sale or issuance of any Equity Interests by any Loan Party,
other than any such issuance in connection with the exercise of stock options granted to
employees or directors of any Loan Party.




     “Equity Proceeds” means, with respect to any Equity Issuance by any Loan Party, the Net
Cash Proceeds payable to any Loan Party in connection with such Equity Issuance.




     “Equivalent Refinancing” means, with respect to the Special LC Facility, a refinancing
thereof on substantially identical terms and conditions.




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




     “ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a member
of the controlled group of any Loan Party, or under common control with any Loan Party,
within the meaning of Section 414 of the Internal Revenue Code.




     “ERISA Event” means (a) (i) the occurrence of a reportable event, within the meaning of
Section 4043(c) of ERISA, with respect to any Plan unless the 30 day notice requirement with
respect to such event has been waived by the PBGC or (ii) the requirements of Section
4043(b) of ERISA apply with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12)
or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days; (b) the application for a minimum funding waiver with
respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA; (d) the cessation of
operations at a facility of any Loan Party or any ERISA Affiliate in the circumstances
described in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the imposition of a lien under
Section 302(f) of ERISA with respect to any Plan; (g) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section 307 of ERISA; or (h)
the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of
ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that
might reasonably be expected to constitute grounds for the termination of, or the
appointment of a trustee to administer, such Plan.




     “Escrow Bank” has the meaning specified in Section 2.15(c).




     “Eurocurrency Liabilities” has the meaning specified in Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from time to time.




     “Eurodollar Lending Office” means, with respect to any Lender Party, the office of such
Lender Party specified as its “Eurodollar Lending Office” opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which it became a









 



 


14





Lender Party (or, if no such office is specified, its Domestic Lending Office), or such other office of such
Lender Party as such Lender Party may from time to time specify to the Borrower and the
Administrative Agent.




     “Eurodollar Rate” means, for any Interest Period for all Eurodollar Rate Advances
comprising part of the same Borrowing, an interest rate per annum equal to the rate per
annum obtained by dividing (a) the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in U.S. dollars at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period for a period equal to such Interest Period
(provided that, if for any reason such rate is not available, the term “Eurodollar Rate”
shall mean, for any Interest Period for all Eurodollar Rate Advances comprising part of the
same Borrowing, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits
in U.S. dollars at approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates) by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.




     “Eurodollar Rate Advance” means an Advance that bears interest as provided in Section
2.07(a)(ii).




     “Eurodollar Rate Reserve Percentage” for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Borrowing means the reserve percentage applicable two
Business Days before the first day of such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Rate Advances is determined)
having a term equal to such Interest Period.




     “Event of Eminent Domain” means any action, series of actions, omissions or series of
omissions by any Governmental Authority (a) by which such Governmental Authority
appropriates, confiscates, condemns, expropriates, nationalizes, seizes or otherwise takes
all or a material portion of any Loan Party Asset, or any of the Equity Interests in any
Loan Party, (b) by which such Governmental Authority assumes custody
or control of the property or other assets or business operations of any Loan Party or
any Equity Interests in any Loan Party or (c) that prevents the Borrower or any other Loan
Party from carrying on its business or any material portion thereof.




     “Events of Default” has the meaning specified in Section 6.01.









 



 


15





     “Excess Cash Flow” means, for any Calculation Period,




     (a) the sum of:




     (i) Consolidated net income (or loss) of the Parent and its
Subsidiaries for such period plus




     (ii) the aggregate amount of all non cash charges deducted in arriving
at such Consolidated net income (or loss) plus




     (iii) if there was a net increase in Consolidated Current Liabilities
of the Parent and its Subsidiaries during such period, the amount of such
net increase plus




     (iv) if there was a net decrease in Consolidated Current Assets
(excluding cash and Cash Equivalents) of the Parent and its Subsidiaries
during such period, the amount of such net decrease plus




     (v) any Capex Carryover from a prior period permitted to be used for
Capital Expenditures during such period to the extent not so used during
such period less




     (b) the sum of:




     (i) the aggregate amount of all non cash credits included in arriving
at such Consolidated net income (or loss) plus




     (ii) if there was a net decrease in Consolidated Current Liabilities of
the Parent and its Subsidiaries during such period, the amount of such net
decrease plus




     (iii) if there was a net increase in Consolidated Current Assets
(excluding cash and Cash Equivalents) of the Parent and its Subsidiaries
during such period, the amount of such net increase plus




     (iv) the aggregate amount of Capital Expenditures of the Parent and its
Subsidiaries paid in cash during such period solely to the extent permitted
by this Agreement plus




     (v) the aggregate amount of all regularly scheduled principal payments
of Funded Debt of the Parent and its Subsidiaries made during such period
plus




     (vi) the aggregate principal amount of all optional prepayments of
Funded Debt of the Parent and its Subsidiaries (other than Funded Debt that
is revolving in nature and other than Voluntary Prepayments) made during
such period plus









 



 


16





     (vii) the aggregate principal amount of all commitment reductions in
the Revolving Credit Facility made during such period or, if less, the
amount of mandatory prepayments of the Revolving Credit Facility pursuant to
Section 2.06(b)(v) resulting from such commitment reductions plus




     (viii) the aggregate principal amount of all mandatory prepayments of
the Second Lien Facility and of the Term Facilities, in each case, made
during such period in respect of Asset Sale Proceeds, Equity Proceeds,
Insurance Proceeds and Eminent Domain Proceeds, in each case, to the extent
that the applicable Net Cash Proceeds were taken into account in calculating
such Consolidated net income (or loss) for such period plus




     (ix) the Capex Carryover for such period plus




     (x) the amount of any tax distributions made by the Borrower to the
Parent during such period pursuant to Section 5.02(g)(vi)(B) plus




     (xi) the aggregate principal amount of optional prepayments of the
Revolving Credit Facility made during such period; provided that this clause
shall only apply in the event and to the extent that prepayments of the
Revolving Credit Facility made since the Effective Date do not exceed the
aggregate amount of the Revolving Credit Facility drawn on the Effective
Date.




     “Excess Cash Flow Payment Date” means each of the 45th day following the end of the
second fiscal quarter of each Fiscal Year and the 90th day following the end of each Fiscal
Year, commencing with the first such date occurring after December 31, 2006.




     “Excluded Representations” means the representations and warranties set forth in
Sections 4.01(c), (g), (h), (i), (n), (q), (r) and (s).




     “Existing Debt” means Debt of each Loan Party and its Subsidiaries outstanding
immediately before the occurrence of the Effective Date.




     “Facility” means the Term B Facility, the Term LC Facility, the Revolving Credit
Facility, the Revolving Letter of Credit Facility or the Term Letter of Credit Facility.




     “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 for such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.









 



 


17





     “Fee Letter” means the fee letter dated February 23, 2006 between the Borrower and the
Administrative Agent, as amended.




     “Financial Covenants” has the meaning specified in Section 5.04(c).




     “Financial Officer” in respect of any Person means the chief financial officer, chief
accounting officer, controller, treasurer or assistant treasurer of such Person.




     “Fiscal Year” means a fiscal year of the Parent and its Consolidated Subsidiaries
ending on December 31 in any calendar year.




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




     “Funded Debt” of any Person means Debt of such Person that by its terms matures more
than one year after the date of determination or matures within one year from such date but
is renewable or extendible, at the option of such Person, to a date more than one year after
such date or arises under a revolving credit or similar agreement that obligates the lender
or lenders to extend credit during a period of more than one year after such date,
including, without limitation, all amounts of Funded Debt of such Person required to be paid
or prepaid within one year after the date of its creation.




     “GAAP” has the meaning specified in Section 1.03.




     “Generating Stations” means all of the Astoria Generating Station, Narrows Gas Turbine
Facility and Gowanus Gas Turbine Facility.




     “Goldman Sachs” has the meaning specified in the recital of parties to this Agreement.




     “Governmental Authority” means any nation or government, any state, province, city,
municipal entity or other political subdivision thereof, and any governmental, executive,
legislative, judicial, administrative or regulatory agency, department, authority,
instrumentality, commission, board, bureau or similar body, whether federal, state,
provincial, territorial, local or foreign.




     “Governmental Authorization” means any authorization, approval, consent, franchise,
license, covenant, order, ruling, permit, certification, exemption, notice, declaration or
similar right, undertaking or other action of, to or by, or any filing, qualification or
registration with, any Governmental Authority.




     “Gowanus Gas Turbine Facility” means the barge mounted oil fired and partly gas fired
electric generating facility located at 29th Street and 2nd Avenue,
Brooklyn, New York 11232 and all appurtenances thereto owned or operated by the Companies,
including electrical switchyards, electrical interconnections, and fuel delivery and storage
facilities.









 



 


18





     “Guaranteed Debt” means, with respect to any Person, any Obligation or arrangement of
such Person to guarantee or intended to guarantee any Debt (“primary obligations”) of any
other Person (the “primary obligor”) in any manner, whether directly or indirectly,
including, without limitation, (a) the direct or indirect guarantee, endorsement (other than
for collection or deposit in the ordinary course of business), co making, discounting with
recourse or sale with recourse by such Person of the Obligation of a primary obligor, (b)
the Obligation to make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement or (c) any Obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or supply funds
(A) for the purchase or payment of any such primary obligation or (B) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, assets, securities or services
primarily for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Debt shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such Guaranteed
Debt is made (or, if less, the maximum amount of such primary obligation for which such
Person may be liable pursuant to the terms of the instrument evidencing such Guaranteed
Debt) or, if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder), as determined by
such Person in good faith.




     “Guaranteed Obligations” has the meaning specified in Section 8.01.




     “Guaranties” means the Parent Guaranty and the Subsidiary Guaranty.




     “Guarantors” means the Parent and the Subsidiary Guarantors.




     “Guaranty Supplement” has the meaning specified in Section 8.05.




     “Hazardous Materials” means (a) petroleum or petroleum products, by-products or
breakdown products, radioactive materials, asbestos-containing materials, polychlorinated
biphenyls, toxic mold and radon gas and (b) any other chemicals, materials or substances
designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant
under any Environmental Law.




     “Hedge Agreements” means interest rate swap, cap or collar agreements, interest rate
future or option contracts, currency swap agreements, currency future or option
contracts and other hedging agreements but excluding any Commodity Hedging Agreement.




     “Hedge Bank” means any Lender Party or Agent or an Affiliate of a Lender Party or Agent
in its capacity as a party to a Secured Hedge Agreement.




     “Indemnified Party” has the meaning specified in Section 9.04(b).









 



 


19





     “Independent Engineer” has the meaning specified in the Intercreditor Agreement.




     “Information Memorandum” means the information memorandum dated January, 2006 used by
the Lead Arrangers in connection with the syndication of the Commitments.




     “Initial Bank” means the Administrative Agent, the Collateral Agent, each
Co-Documentation Agent, the Syndication Agent, the Structuring Agent, each Joint Bookrunning
Manager and each Joint Lead Arranger.




     “Initial Extension of Credit” means the earlier to occur of the initial Borrowing and
the initial issuance of a Letter of Credit hereunder.




     “Initial Lenders” means the banks, financial institutions and other institutional
lenders listed on the signature pages hereof as the Initial Lenders.




     “Initial Pledged Debt” has the meaning specified in the Security Agreement.




     “Initial Pledged Equity” has the meaning specified in the Security Agreement.




     “Initial Revolving Issuing Bank” means the bank listed on the signature pages hereof as
the Initial Revolving Issuing Bank.




     “Initial Term Issuing Bank” means the bank listed on the signature pages hereof as the
Initial Term Issuing Bank.




     “Insufficiency” means, with respect to any Plan, the amount, if any, of its unfunded
benefit liabilities, as defined in Section 4001(a)(18) of ERISA.




     “Insurance Proceeds” means, with respect to any Casualty Event, the Net Cash Proceeds
payable to any Loan Party from time to time with respect to such Casualty Event, to the
extent that such Net Cash Proceeds exceed $5,000,000.




     “Intercreditor Agreement” has the meaning set forth in Section 3.01(a)(iv).




     “Interest Coverage Ratio” means, for any Measurement Period, the ratio of (a)
Consolidated EBITDA to (b) cash interest payable on all Debt for Borrowed Money and all Term
Letter of Credit Advances, in each case, of or by the Parent and its Subsidiaries during
such Measurement Period.




     “Interest Period” means, for each Eurodollar Rate Advance comprising part of the same
Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of
the Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and ending on the
last day of the period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the Borrower pursuant
to the provisions below. The duration of each such









 



 


20





Interest Period shall be one, two, three or six months, as the Borrower may, upon notice received by the Administrative Agent not
later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day
of such Interest Period, select; provided, however, that:




     (a) the Borrower may not select any Interest Period with respect to any
Eurodollar Rate Advance under a Facility that ends after any principal repayment
installment date for such Facility unless, after giving effect to such selection,
the aggregate principal amount of Base Rate Advances and of Eurodollar Rate Advances
having Interest Periods that end on or prior to such principal repayment installment
date for such Facility shall be at least equal to the aggregate principal amount of
Advances under such Facility due and payable on or prior to such date;




     (b) Interest Periods commencing on the same date for Eurodollar Rate Advances
comprising part of the same Borrowing shall be of the same duration;




     (c) whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be extended to
occur on the next succeeding Business Day, provided, however, that, if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on the
next preceding Business Day; and




     (d) whenever the first day of any Interest Period occurs on a day of an initial
calendar month for which there is no numerically corresponding day in the calendar
month that succeeds such initial calendar month by the number of months equal to the
number of months in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.




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




     “Investment” in any Person means any loan or advance to such Person (excluding prepaid
expenses and security deposits), any purchase or other acquisition of any Equity Interests
or Debt or the assets comprising a division or business unit or a substantial part or all of
the business of such Person, any capital contribution to such Person or any other direct or
indirect investment in such Person, including, without limitation, any acquisition by way of
a merger or consolidation (or similar transaction) and any arrangement pursuant to which the
investor incurs Debt of the types referred to in clause (i) or (j) of the definition of
“Debt” in respect of such Person.




     “Issuing Banks” means the Revolving Issuing Bank and the Term Issuing Bank.




     “Joint Book Running Managers” has the meaning specified in the recital of parties to
this Agreement.




     “Joint Lead Arrangers” has the meaning specified in the recital of parties to this
Agreement.









 



 


21





     “Laws” means all legally binding Federal, state, local or foreign statutes, laws,
ordinances, rules, regulations, codes, orders, writs, judgments, injunctions, decrees or
judicial or agency interpretations, policies or guidance set forth by any Governmental
Authority, including, without limitation, the NYISO Rules and Environmental Laws.




     “LC Disbursement” means a payment or disbursement made by the Appropriate Issuing Bank
pursuant to a Letter of Credit.




     “LC Collateral Accounts” means the Revolving LC Collateral Account and the Term LC
Collateral Accounts.




     “LC Related Documents” has the meaning specified in Section 2.04(d)(iii).




     “Lender Party” means any Lender or any Issuing Bank.




     “Lenders” means the Initial Lenders and each Person that shall become a Lender
hereunder pursuant to Section 9.07 for so long as such Initial Lender or Person, as the case
may be, shall be a party to this Agreement.




     “Letter of Credit Advance” means a Revolving Letter of Credit Advance or a Term Letter
of Credit Advance.




     “Letter of Credit Agreement” means an application and agreement for a Letter of Credit
as the Appropriate Issuing Bank may specify from time to time to the Borrower for use in
connection with a requested Letter of Credit.




     “Letter of Credit Commitment” means a Revolving Letter of Credit Commitment or a Term
Letter of Credit Commitment.




     “Letter of Credit Facility” means the Revolving Letter of Credit Facility or the Term
Letter of Credit Facility.




     “Letters of Credit” means the Revolving Letters of Credit and the Term Letters of
Credit.




     “Leverage Ratio” means, at any date of determination, the ratio of Consolidated Debt
for Borrowed Money of the Borrower and its Subsidiaries at such date to Consolidated EBITDA
of the Borrower and its Subsidiaries for the most recently completed Measurement Period.




     “Lien” means any lien, security interest or other charge or encumbrance of any kind, or
any other type of preferential arrangement, including, without limitation, the lien or
retained security title of a conditional vendor and any easement, right of way or other
encumbrance on title to real property.




     “Loan Documents” means (a) this Agreement, (b) the Notes, (c) the Guaranties, (d) the
Collateral Documents, (e) the Fee Letter, (f) each Letter of Credit Agreement and (g) the
Intercreditor Agreement, in each case as amended.









 



 


22





     “Loan Parties” means the Borrower and the Guarantors.




     “Loan Party Assets” means, collectively, the Astoria Assets and any other asset or
property of any Loan Party.




     “Margin Stock” has the meaning specified in Regulation U.




     “Market-Based Rates” has the meaning specified in Section 4.01(x).




     “Material Adverse Change” means any material adverse change in the business, financial
condition, operations or properties of the Parent and its Subsidiaries, taken as a whole.




     “Material Adverse Effect” means a material adverse effect on (a) the business,
financial condition, operations or properties of the Parent and its Subsidiaries, taken as a
whole, (b) the rights and remedies of any Agent or any Lender Party under any Transaction
Document or (c) the ability of any Loan Party to perform its Obligations under any Loan
Document to which it is or is to be a party.




     “Material Agreement” means each Special LC Facility Document, the Purchase Agreement,
the MSCG Hedging Facility Agreement and the MSCG Capacity Swap Agreement.




     “MDP” means Madison Dearborn Capital Partners IV, L.P.




     “Measurement Period” means each period of four consecutive fiscal quarters of the
Parent or, if less than four consecutive fiscal quarters of the Parent have been completed
since the Effective Date, the fiscal quarters of the Parent that have been completed since
the Effective Date.




     “MLPF&S” has the meaning specified in the recital of parties to this Agreement.




     “Moody’s” means Moody’s Investors Service, Inc.




     “Mortgage Policies” has the meaning specified in Section 3.01(a)(iii)(B).




     “Mortgagee” has the meaning specified in the Barge Mortgages.




     “Mortgages” has the meaning specified in Section 3.01(a)(iii).




     “MS&Co.” has the meaning specified in the recital of parties hereto.




     “MSCG” means Morgan Stanley Capital Group Inc.




     “MSCG Capacity Swap Agreement” means the additional transaction entered into between
Astoria and MSCG on January 10, 2006, which is governed by the MSCG Hedging Facility
Agreement, as amended and any MSCG Capacity Swap Replacement Facility entered into from time
to time.









 



 


23





     “MSCG Capacity Swap Counterparty” means MSCG or the counterparty to any MSCG Capacity
Swap Replacement Facility, in its capacity as a party to the MSCG Capacity Swap Agreement.




     “MSCG Capacity Swap Replacement Facility” means a Permitted Commodity Hedge Agreement
entered into to replace the MSCG Capacity Swap Agreement on terms substantially identical,
or more favorable to the Loan Parties and in respect of which the counterparty thereto shall
have agreed to be bound by the terms of the Intercreditor Agreement as the “MSCG Capacity
Swap Counterparty”.




     “MSCG Hedging Facility” means the MSCG Hedging Facility entered into between Astoria
and MSCG, as evidenced by the MSCG Hedging Facility Agreement.




     “MSCG Hedging Facility Counterparty” means MSCG or the counterparty to any MSCG
Replacement Facility, in its capacity as a party to the MSCG Hedging Facility.




     “MSCG Hedging Facility Agreement” means, collectively, an ISDA Master Agreement, dated
September 30, 2005, together with a Confirmation Agreement, dated as of September 30, 2005
and an ISDA Schedule, dated as of September 30, 2005, in each case issued thereunder,
pursuant to which MSCG and Astoria Generating Company, L.P. will enter into an ISDA Master
Agreement dated as of the date hereof and attached as a form to the Confirmation Agreement,
which shall govern the Confirmation Agreement as of and after the date hereof, in each case
as amended (as defined in Section 1.02) and any MSCG Replacement Facility entered into from
time to time.




     “MSCG Replacement Facility” means a Permitted Commodity Hedge Agreement entered into to
replace the MSCG Hedging Facility on terms substantially identical, or more favorable to the
Loan Parties and in respect of which the counterparty thereto shall have agreed to be bound
by the terms of the Intercreditor Agreement as the “MSCG Hedging Facility Counterparty”.




     “MSCS” means Morgan Stanley Capital Services, Inc.




     “MSSF” has the meaning specified in the recital of parties hereto.




     “Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of
ERISA, to which any Loan Party or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding five
plan years made or accrued an obligation to make contributions.




     “Multiple Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA
Affiliate and at least one Person other than the Loan Parties and the ERISA Affiliates or
(b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate would
have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were
to be terminated.









 



 


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     “MW” means megawatts of electric energy.




     “Narrows Gas Turbine Facility” means the barge-mounted, natural gas/oil-fired
generating facility located at 53rd Street and 1st Avenue, Brooklyn,
New York 11232 and all appurtenances thereto owned or operated by the Companies, including
electrical switchyards, electrical interconnections, and fuel delivery and storage
facilities.




     “Net Cash Proceeds” means, (a) with respect to any Asset Sale, the excess, if any, of
(i) the sum of cash and Cash Equivalents payable to the Parent or any of its Subsidiaries in
connection with such Asset Sale (including any cash or Cash Equivalents received by way of
deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) over (ii) the sum of (A) the principal amount of any Debt
(other than Debt hereunder or under any other Transaction Document) that is secured by such
asset and that is required to be repaid in connection with such Asset Sale to the extent
such amounts were not deducted in determining the amount referred to in clause (i), (B) the
reasonable and customary out-of-pocket costs, fees, commissions, premiums and expenses
incurred by the Parent or any of its Subsidiaries in connection with such Asset Sale to the
extent such amounts were not deducted in determining the amount referred to in clause (i),
and (C) federal, state, provincial, foreign and local taxes reasonably estimated (on a
Consolidated basis) to be actually payable within the current or the immediately succeeding
tax year as a result of any gain recognized in connection therewith to the extent such
amounts were not deducted in determining the amount referred to in clause (i); and




     (b) with respect to the incurrence or issuance of any Debt by any Loan Party (other
than Debt incurred or issued pursuant to Section 5.02(b)), the excess of (i) the sum of the
cash and Cash Equivalents received by the Parent or any of its Subsidiaries in connection
with such incurrence or issuance over (ii) the underwriting discounts and commissions or
other similar payments, and other out-of-pocket costs, fees, commissions, premiums and
expenses incurred by the Parent or any of its Subsidiaries in connection with such
incurrence or issuance to the extent such amounts were not deducted in determining the
amount referred to in clause (i); and




     (c) with respect to any Equity Issuance, the excess of (i) the sum of the cash and Cash
Equivalents received by the Parent or any of its Subsidiaries in connection with such sale
or issuance over (ii) the underwriting discounts and commissions or similar payments, and
other reasonable and customary out-of-pocket costs, fees, commissions,
premiums and expenses, incurred by the Parent or any of its Subsidiaries in connection
with such Equity Issuance to the extent such amounts were not deducted in determining the
amount referred to in clause (i); and




     (d) with respect to any proceeds of or under any insurance, indemnity, warranty or
guaranty (other than Business Interruption Insurance Proceeds) payable to any Loan Party or
any of its Subsidiaries (and actually paid) in connection with the occurrence of any Event
of Eminent Domain or Casualty Event, the excess, if any, of (i) the sum of cash and Cash
Equivalents paid in connection with such Event of Eminent Domain or Casualty Event over (ii)
the sum of (A) the reasonable and customary out-of-









 



 


25





pocket costs and expenses incurred by the Parent or its Subsidiaries in connection with the collection, enforcement, negotiation,
consummation, settlement, proceedings, administration or other activity related to the
receipt or collection of the relevant proceeds to the extent such amounts were not deducted
in determining the amount referred to in clause (i) and (B) federal, state, provincial,
foreign and local taxes reasonably estimated (on a Consolidated basis) to be actually
payable within the current or the immediately succeeding tax year as a result of any gain
recognized in connection therewith.




     “Non-Recourse Debt” means secured Debt for borrowed money of any Non-Recourse
Subsidiary that is incurred to finance the development, construction or acquisition by such
Non-Recourse Subsidiary of any Permitted Acquisition; provided that (a) such Debt is without
recourse to the Borrower or any other Loan Party or to any property or assets of the
Borrower or any Loan Party (other than any Equity Interests in such Non-Recourse Subsidiary
that are owned by any Loan Party), (b) neither the Borrower nor any other Loan Party
provides credit support of any kind (including any undertaking, agreement or instrument that
would constitute Debt) or is directly or indirectly liable as a guarantor or otherwise in
respect of such Debt or in respect of the business or operations of the applicable
Non-Recourse Subsidiary that is the obligor in respect of such Debt or any of its
Subsidiaries (other than a pledge of the Equity Interests in such Non-Recourse Subsidiary by
any Loan Party), (c) neither the Borrower nor any other Loan Party constitutes the lender of
such Debt (other than a pledge of the Equity Interests in such Non-Recourse Subsidiary by
any Loan Party), (d) no default with respect to such Debt (including any rights that the
holders of such Debt may have to take enforcement action against such Non-Recourse
Subsidiary or any of its Subsidiaries) would permit upon notice, lapse of time or both any
holder of any other Debt of the Borrower or any other Loan Party (other than Debt under the
Transaction Documents) to declare a default on such other Debt or cause the payment of such
Debt to be accelerated or payable prior to its stated maturity, (e) the Liens securing such
Debt shall exist only on (i) the property and assets of such Non-Recourse Subsidiary and
(ii) the Equity Interests in such Non-Recourse Subsidiary (and shall not apply to any other
property or assets of the Borrower or any other Loan Party but may apply to property and
assets of Persons other than the Borrower or any other Loan Party) and (f) the lenders of
such Debt have been notified in writing that they will not have any recourse to the Equity
Interests in or assets of the Borrower or any other Loan Party (other than a pledge of the
Equity Interests in such Non-Recourse Subsidiary by any Loan Party).




     “Non-Recourse Subsidiary” means any Acquisition Subsidiary that is an obligor with
respect to any Non-Recourse Debt outstanding at any time, in each case if and for so long as
the grant of a security interest in the property or assets of such Acquisition Subsidiary or
the pledge of the Equity Interests in such Acquisition Subsidiary, in each case in favor of
the Collateral Agent for the benefit of the Secured Parties, shall constitute or result in a
breach, termination or default under the agreement or instrument governing the applicable
Non-Recourse Debt; provided that such Acquisition Subsidiary shall be a Non-Recourse
Subsidiary only to the extent that and for so long as the requirements and consequences
above shall exist; provided further that none of the Companies or any of their Subsidiaries
may at any time be a Non-Recourse Subsidiary.









 



 


26





     “Note” means a Term B Note, a Term LC Note or a Revolving Credit Note.




     “Notice of Borrowing” has the meaning specified in Section 2.02(a).




     “Notice of Issuance” has the meaning specified in Section 2.03(a)(iii).




     “NPL” means the National Priorities List under CERCLA.




     “NYISO” means the New York Independent System Operator Inc., or any successor in
interest thereto, including any Regional Transmission Organization.




     “NYISO Account” means an account established in the name of Citibank, N.A., as
collateral agent (the “Sempra Collateral Agent”), for the benefit of the Borrower, Sempra
and the Secured Parties (as defined in the Intercreditor Agreement) and used for the purpose
of receiving payments from NYISO, the portion of which payments in respect of Energy only
shall be paid to the Sempra Account.




     “NYISO Markets” means the NYISO Day-Ahead Market, Hour-Ahead Market and Real-Time
Markets, as defined in NYISO Rules.




     “NYISO Rules” means all NYISO tariffs, manuals, rules, procedures, technical bulletins,
agreements or other documents governing the interconnection of electric generating
facilities with the transmission system administered by NYISO and participation in the NYISO
Markets.




     “Obligation” means, with respect to any Person, any payment, performance or other
obligation of such Person of any kind, including, without limitation, any liability of such
Person on any claim, whether or not the right of any creditor to payment in respect of such
claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim
is discharged, stayed or otherwise affected by any proceeding referred to in Section
6.01(f). Without limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay principal, interest, Letter
of Credit commissions, charges, expenses, fees, attorneys’ fees and disbursements,
indemnities and other amounts payable by such Loan Party under any Loan Document and (b) the
obligation of such Loan Party to reimburse any amount in
respect of any of the foregoing that any Lender Party, in its sole discretion, may
elect to pay or advance on behalf of such Loan Party.




     “Open Year” has the meaning specified in Section 4.01(r)(iii).




     “Operating Agreement” means the operating agreement of Astoria Generating Company
Holdings, L.L.C. dated February 23, 2006, and as amended from time to time.




     “OPOS” has the meaning specified in the Preliminary Statements.




     “Other Taxes” has the meaning specified in Section 2.12(b).









 



 


27





     “Parent” has the meaning specified in the Preliminary Statements.




     “Parent Guaranty” means the guaranty of the Parent set forth in Article VIII.




     “Patriot Act” means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into
law October 26, 2001.




     “PBGC” means the Pension Benefit Guaranty Corporation (or any successor).




     “Permitted Acquisition” means the development, construction or acquisition of a
electric generating facility, power transmission facility, power distribution facility, fuel
supply facility or a fuel transportation facility located in or providing services to Zone J
or the acquisition of all of the Equity Interests of a Person owning any of the foregoing;
provided that at the time of such transaction (a) both before and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing, and (b) the
Parent would be in compliance with the covenants set forth in Section 5.04 as of the most
recently completed Measurement Period ending prior to such transaction for which the
financial statements and certificates required by Section 5.03(b) or 5.03(c) were required
to be delivered, after giving pro forma effect to such transaction and to any other event
occurring after such Measurement Period as to which pro forma recalculation is appropriate
as if such transaction (and the occurrence of any Debt in connection therewith) had occurred
as of the first day of such Calculation Period.




     “Permitted Commodity Hedge Agreement” means any Commodity Hedge Agreement entered into
by any Loan Party in connection with any Permitted Trading Activity, including, without
limitation, the MSCG Hedging Facility Agreement and the MSCG Capacity Swap Agreement, and
any MSCG Replacement Facility and MSCG Capacity Swap Replacement Facility.




     “Permitted Debt” means Debt of the types described (and permitted pursuant to) Section
5.02(b)(vii), (viii), (ix), (xi) and (xii).




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




     “Permitted Investment” means with respect to any Asset Sale or Equity Issuance, the
application of any related Asset Sale Proceeds or Equity Proceeds, as applicable, to make a
Permitted Acquisition or Capital Expenditure in accordance with the terms of the
Transaction Documents.




     “Permitted Liens” means all Liens permitted by Section 5.02(a).




     “Permitted Priority Liens” means Liens described in Section 5.02(a)(iv), (v), (vi),
(vii), (viii), (ix), (x), (xi), (xii), (xiv), (xvi), (xvii), (xviii) and (xx) as to which
(except in the cases of Section 5.02(a)(v) and 5.02(a)(vii)) no enforcement, collection,
execution, levy or foreclosure proceeding shall have been commenced.









 



 


28





     “Permitted Refinancing” means, in respect of the Second Lien Facility, a refinancing in
respect of which (a) the principal amount of the Second Lien Obligations does not exceed the
sum of (i) the principal amount of the Second Lien Facility outstanding immediately prior to
such refinancing plus (ii) the amount of any accrued and unpaid interest in respect of such
outstanding principal amount plus (iii) the amount of any reasonable fees and expenses
incurred in connection with such refinancing, (b) the agent on behalf of the lenders has
agreed to the terms of, and has become party to, the Intercreditor Agreement, as the “Second
Lien Administrative Agent”, (c) the terms relating to amortization, maturity and other
material terms taken as a whole, are no less favorable in any material respect to the Loan
Parties or the Lender Parties than the terms of the Second Lien Facility immediately prior
to such refinancing, (d) the interest rate does not exceed the then applicable market
interest rate and (e) the terms of such refinancing and of any instrument issued in
connection therewith are otherwise permitted by the Loan Documents (including, without
limitation, the Intercreditor Agreement).




     “Permitted Revolving Credit Refinancing” means, in respect of the Revolving Credit
Facility, a refinancing in which (a) the aggregate principal amount of the Revolving Credit
Commitments does not exceed the sum of (i) the principal amount of the Revolving Credit
Commitments immediately prior to such refinancing plus (ii) the amount of any accrued and
unpaid interest in respect of such outstanding principal amount plus (iii) the amount of any
reasonable fees and expenses incurred in connection with such refinancing, (b) the maturity
date of the refinanced Revolving Credit Facility is no later than the Termination Date and
(c) the interest rate does not exceed the Eurodollar Rate then in effect plus 3.00%.




     “Permitted Trading Activity” means (a) the daily or forward purchase and/or sale, or
other acquisition or disposition of wholesale or retail electric energy, capacity, ancillary
services, transmission rights, emissions allowances, weather derivatives and/or related
commodities, in each case, whether physical or financial, (b) the daily or forward purchase
and/or sale, or other acquisition or disposition of fuel, mineral rights and/or related
commodities, including, swaps, options and swaptions, in each case, whether physical or
financial, (c) electric energy-related tolling transactions, as seller or tolling services,
(d) price risk management activities or services, (e) other similar electric industry
activities or services or (f) additional services as may be consistent with Prudent Industry
Practice from time to time in support of the marketing and trading related to the
Loan Party Assets, in each case, to the extent (i) the purpose of such activity is to
protect the Borrower and the other Loan Parties against fluctuations in the price or supply
of any commodity, (ii) such activity is structured such that the counterparty’s credit
exposure and actual or projected mark-to-market exposure to the Borrower or any other Loan
Party is positively correlated with the price of the relevant commodity, and (iii) such
activity is conducted in the ordinary course of business of the Borrower and the other Loan
Parties.




     “Person” means an individual, partnership, corporation (including a business trust),
limited liability company, joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency thereof.









 



 


29





     “Plan” means a Single Employer Plan or a Multiple Employer Plan.




     “Pledged Account Bank” has the meaning specified in the Security Agreement.




     “Pledged Debt” has the meaning specified in the Security Agreement.




     “Post Petition Interest” has the meaning specified in Section 8.06.




     “Preferred Interests” means, with respect to any Person, Equity Interests issued by
such Person that are entitled to a preference or priority over any other Equity Interests
issued by such Person upon any distribution of such Person’s property and assets, whether by
dividend or upon liquidation.




     “Properties” shall mean those properties listed on Schedules 4.01(v) and 4.01(w)(i)
hereto.




     “Pro Rata Share” of any amount means, with respect to any Revolving Credit Lender at
any time, the product of such amount times a fraction the numerator of which is the amount
of such Lender’s Revolving Credit Commitment at such time (or, if the Commitments shall have
been terminated pursuant to Section 2.05 or 6.01, such Lender’s Revolving Credit Commitment
as in effect immediately prior to such termination) and the denominator of which is the
Revolving Credit Facility at such time (or, if the Commitments shall have been terminated
pursuant to Section 2.05 or 6.01, the Revolving Credit Facility as in effect immediately
prior to such termination).




     “Prudent Industry Practice” means those practices, methods, techniques, specifications
and standards of safety and performance, as they may be modified from time to time, that (a)
are generally accepted in the electric generating and transmission industry as good, safe
and prudent engineering practices in connection with the design, construction, operation,
maintenance, repair or use of electric generating and transmission facilities and (b) are
otherwise in compliance in all material respects with applicable Law and Governmental
Authorizations.




     “Public Accountant” means Ernst & Young, Deloitte & Touche, Pricewaterhouse Coopers,
KPMG LLP or another independent public accountant of recognized standing acceptable to the
Required Lenders.




     “Purchase Agreement” has the meaning specified in the Preliminary Statements.




     “Redeemable” means, with respect to any Equity Interest, any such Equity Interest that
(a) the issuer has undertaken to redeem at a fixed or determinable date or dates, whether by
operation of a sinking fund or otherwise, or upon the occurrence of a condition not solely
within the control of the issuer or (b) is redeemable at the option of the holder.




     “Reduction Amount” has the meaning specified in Section 2.06(b)(viii).









 



 


30





     “Regional Transmission Organization” means a regional transmission organization,
independent system operator, or similar entity approved by the Federal Energy Regulatory
Commission.




     “Register” has the meaning specified in Section 9.07(d).




     “Regulation U” means Regulation U of the Board of Governors of the Federal Reserve
System, as in effect from time to time.




     “Regulatory Event” means any modification, suspension, repeal, cancellation or
withdrawal of any NYISO Rule, Governmental Authorization, any Law, or any practice of any
interconnecting electric or gas utility or transmission system operator materially affecting
the ownership and/or continuing operation of any of the Loan Party Assets, interconnection
of any Loan Party Assets with the transmission system administered by NYISO or the
furnishing of fuel, other consumables, labor or services necessary for continuing operation
of any Loan Party Asset.




     “Reinvestment and Repair Account” has the meaning specified in the Security Agreement.




     “Reinvestment Commitment Notice” means a written notice executed by a Responsible
Officer of the Borrower on or prior to the date falling 365 days after any Asset Sale or
Equity Issuance, stating that (a) no Event of Default has occurred and is continuing or,
that if an Event of Default has occurred and is continuing, the Asset Sale Proceeds or
Equity Proceeds in respect of which such notice is being delivered have been deposited in
the Reinvestment and Repair Account for further application in accordance with Section 7(b)
of the Security Agreement and (b) that the Borrower (directly or through a Subsidiary) has
entered into a binding commitment to apply all or a specified portion of the related Asset
Sale Proceeds or Equity Proceeds, as the case may be, within two years of such payment to
make a Permitted Investment.




     “Reinvestment Event” means the occurrence of any Asset Sale or Equity Issuance in
respect of which the Borrower has delivered a Reinvestment Notice.




     “Reinvestment Notice” means a written notice executed by a Responsible Officer of the
Borrower in connection with the occurrence of any Asset Sale or Equity Issuance stating that
(a) no Event of Default has occurred and is continuing or, that if an Event of Default has
occurred and is continuing, the Asset Sale Proceeds or Equity Proceeds in
respect of which such notice is being delivered have been deposited in the Reinvestment
and Repair Account for further application in accordance with Section 7(b) of the Security
Agreement and (b) that the Borrower (directly or indirectly through a Subsidiary) intends
and expects to use all or a specified portion of the Asset Sale Proceeds or Equity Proceeds,
as the case may be, to make a Permitted Investment.




     “Related Documents” means the Purchase Agreement, the Special LC Facility Loan
Documents and the Second Lien Loan Documents.









 



 


31





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




     “Repair Event” means the occurrence of any Casualty Event or Event of Eminent Domain
involving a probable loss of $5,000,000 or more.




     “Repair Notice” has the meaning set forth in Section 5.01(p)(i).




     “Required Lenders” means, at any time, Lenders owed or holding at least a majority in
interest of the sum of (a) the aggregate principal amount of the Advances outstanding at
such time, (b) the aggregate Available Amount of all Revolving Letters of Credit outstanding
at such time and (c) the aggregate Unused Revolving Credit Commitments at such time;
provided, however, that if any Lender shall be a Defaulting Lender at such time, there shall
be excluded from the determination of Required Lenders at such time (i) the aggregate
principal amount of the Advances owing to such Lender (in its capacity as a Lender) and
outstanding at such time, (ii) such Lender’s Pro Rata Share of the aggregate Available
Amount of all Revolving Letters of Credit outstanding at such time and (iii) the Unused
Revolving Credit Commitment of such Lender at such time. For purposes of this definition,
the aggregate principal amount of Revolving Letter of Credit Advances owing to the Revolving
Issuing Bank and the Available Amount of each Revolving Letter of Credit shall be considered
to be owed to the Revolving Credit Lenders ratably in accordance with their respective
Revolving Credit Commitments.




     “Responsible Officer” means (a) with respect to any Person that is a corporation, the
President, Vice President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary
of such Person, (b) with respect to any Person that is a partnership, an officer of the
general partner of such Person who complies with either clause (a) (if the general partner
is a corporation) or clause (c) (if the general partner is a limited liability company), (c)
with respect to any Person that is a limited liability company, the manager, the managing
member or a duly appointed officer of such Person and (d) with respect to the Collateral
Agent any officer within the corporate trust department of the Collateral Agent including
any vice president, assistant vice president, treasurer, assistant treasurer, trust officer
or any other officer of the Collateral Agent who (i) customarily performs functions similar
to those performed by the persons who at the time shall be such officers, respectively, or
to whom any corporate trust matter is referred because of such person’s
knowledge of and familiarity with the particular subject and (ii) who shall have direct
responsibility for the administration of this Agreement.




     “Revolving Credit Advance” has the meaning specified in Section 2.01(c).




     “Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving
Credit Advances of the same Type and the same Interest Period made by the Revolving Credit
Lenders.









 



 


32





     “Revolving Credit Commitment” means, with respect to any Revolving Credit Lender at any
time, the amount set forth opposite such Lender’s name on Schedule I hereto under the
caption “Revolving Credit Commitment” or, if such Lender has entered into one or more
Assignment and Acceptances, set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 9.07(d) as such Lender’s “Revolving Credit
Commitment,” as such amount may be reduced at or prior to such time pursuant to Section
2.05.




     “Revolving Credit Facility” means, at any time, the aggregate amount of the Revolving
Credit Lenders’ Revolving Credit Commitments at such time or any Permitted Revolving Credit
Refinancing thereof.




     “Revolving Credit Lender” means any Lender that has a Revolving Credit Commitment.




     “Revolving Credit Note” means a promissory note of the Borrower payable to the order of
any Revolving Credit Lender, in substantially the form of Exhibit A-1 hereto, evidencing the
aggregate indebtedness of the Borrower to such Lender resulting from the Revolving Credit
Advances and Revolving Letter of Credit Advances made by such Lender, as amended.




     “Revolving Issuing Bank” means the Initial Revolving Issuing Bank and any Eligible
Assignee to which the Revolving Letter of Credit Commitment hereunder has been assigned
pursuant to Section 9.07 so long such Eligible Assignee expressly agrees to perform in
accordance with their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Revolving Issuing Bank and notifies the Administrative
Agent of its Applicable Lending Office and the amount of its Revolving Letter of Credit
Commitment (which information shall be recorded by the Administrative Agent in the
Register), for so long as such Initial Revolving Issuing Bank or Eligible
Assignee, as the case may be, shall have a Revolving Letter of Credit Commitment.




     “Revolving LC Collateral Account” has the meaning specified in the Security Agreement.




     “Revolving Letters of Credit” has the meaning specified in Section 2.01(d)(i).




     “Revolving Letter of Credit Advance” means an advance made by the Revolving Issuing
Bank or any Revolving Credit Lender pursuant to Section 2.03(c).




     “Revolving Letter of Credit Commitment” means, with respect to the Revolving Issuing
Bank at any time, the amount set forth opposite the Revolving Issuing Bank’s name on
Schedule I hereto under the caption “Revolving Letter of Credit Commitment” or, if the
Revolving Issuing Bank has entered into an Assignment and Acceptance, set forth for the
Revolving Issuing Bank in the Register maintained by the Administrative Agent pursuant to
Section 9.07(d) as the Revolving Issuing Bank’s “Revolving Letter of Credit Commitment,” as
such amount may be reduced at or prior to such time pursuant to Section 2.05.









 



 


33





     “Revolving Letter of Credit Facility” means, at any time, an amount equal to the amount
of the Revolving Issuing Bank’s Letter of Credit Commitment at such time, as such amount may
be reduced at or prior to such time pursuant to Section 2.05.




     “S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.




     “Second Lien Credit Agreement” means the Second Lien Credit Agreement, dated as of
February 23, 2006, among the Borrower, MSSF, as administrative agent, BONY, as collateral
agent, the lenders party thereto and certain others, as amended (as defined in Section 1.02)
or refinanced pursuant to a Permitted Refinancing.




     “Second Lien Facility” has the meaning specified in preliminary statement (4).




     “Second Lien Loan Documents” means the Second Lien Credit Agreement, the Second Lien
Security Agreement and all other instruments, agreements and other documents evidencing or
governing the Second Lien Obligations or providing for any guaranty or other right in
respect thereof, in each case as amended (as defined in Section 1.02) or refinanced pursuant
to a Permitted Refinancing.




     “Second Lien Obligations” means the “Obligations” under and as defined in the Second
Lien Credit Agreement.




     “Second Lien Security Agreement” means the “Collateral Agreement,” as defined in the
Second Lien Credit Agreement.




     “Secured Hedge Agreement” means any Hedge Agreement required or permitted under Article
V that is entered into by and between the Borrower and any Hedge Bank.




     “Secured Obligations” has the meaning specified in Section 2 of the Security Agreement.




     “Secured Parties” means the Agents, the Lender Parties, the Hedge Banks and the Special
LC Facility Secured Parties.




     “Security Agreement” has the meaning specified in Section 3.01(a)(ii).




     “Seller” has the meaning specified in the Preliminary Statements.




     “Sempra” means Sempra Energy Trading Corp., or its successor.




     “Sempra Account” means an account established in the name of Citibank, N.A., as
collateral agent, for the benefit of Sempra and used for the purpose of receiving Energy
payments received by the Borrower from NYISO, a portion of which will be paid to Sempra
under the terms of the Sempra Security Agreement.




     “Sempra Collateral” means “Collateral” under and as defined in the Sempra Security
Agreement.









 



 


34





     “Sempra Collateral Agent” has the meaning specified in the definition of “NYISO
Account.”




     “Sempra Security Agreement” means the Security Agreement entered into by and among the
Borrower, Sempra and Citibank, N.A., as Collateral Agent dated on or about February 23,
2006, as entered into in form and substance reasonably acceptable to the Administrative
Agent and including any amendments or modifications from time to time thereafter (but only
to the extent that such amendments or modifications are needed as a result of changes in the
NYISO settlement procedures), or any replacement thereof on substantially the same terms
(unless the Administrative Agent otherwise agrees).




     “Single Employer Plan” means a single employer plan, as defined in Section 4001(a)(15)
of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and
no Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and
in respect of which any Loan Party or any ERISA Affiliate would have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.




     “Solvent” and “Solvency” mean, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the total amount
of liabilities, including, without limitation, contingent liabilities, of such Person, (b)
the present fair salable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as
they mature (taking into account the ability to refinance) and (d) such Person is not
engaged in business or a transaction, and is not about to engage in business or a
transaction, for which such Person’s property would constitute an unreasonably small
capital. The amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.




     “Special LC Facility” means a first lien senior secured letter of credit facility in an
initial stated amount of $150,000,000 to be entered into on the Effective Date and any
replacement or extension thereof.




     “Special LC Facility Administrative Agent” means MSCS in its capacity as administrative
agent on behalf of the Special LC Facility Lenders.




     “Special LC Facility Documents” means the Special Letter of Credit Facility dated as of
February 23, 2006 among the Borrower, the Parent and the Special LC Facility Lender Parties,
as amended (as defined in Section 1.02).




     “Special LC Facility Lender Parties” means the Special LC Facility Administrative
Agent, the Special LC Issuing Bank and the Special LC Facility Lenders.




     “Special LC Facility Lenders” means the lenders under the Special LC Facility.









 



 


35





     “Special LC Issuing Bank” means MSCS or any successor appointed pursuant to the Special
LC Facility Documents.




     “Structuring Agent” has the meaning specified in the recital of parties hereto.




     “Subsidiary” of any Person means any corporation, partnership, joint venture, limited
liability company, trust or estate of which (or in which) more than 50% of (a) the issued
and outstanding capital stock having ordinary voting power to elect a majority of the Board
of Directors of such corporation (irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might have voting power upon the
occurrence of any contingency), (b) the interest in the capital or profits of such
partnership, joint venture or limited liability company or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or more of such
Person’s other Subsidiaries; provided, however, that each Non-Recourse Subsidiary shall not
be deemed a Subsidiary of the Borrower hereunder.




     “Subsidiary Guarantors” means the Subsidiaries of the Parent listed on Schedule II
hereto and each other Subsidiary of the Borrower that shall be required to execute and
deliver a guaranty pursuant to Section 5.01(k).




     “Subsidiary Guaranty” means the guaranty of the Subsidiary Guarantors set forth in
Article VIII, together with each other guaranty and guaranty supplement delivered pursuant
to Section 5.01(k), in each case, as amended, amended and restated, modified or otherwise
supplemented.




     “Supplemental NYPSC Order” means an order of the New York State Public Service
Commission that clarifies or otherwise rules that the amount outstanding under the Revolving
Credit Facility may exceed $50,000,000.




     “Syndication Agent” has the meaning specified in the recital of parties to this
Agreement.




     “Synthetic Debt” means, with respect to any Person, without duplication of any clause
within the definition of “Debt,” the principal amount of all (a) Obligations of such Person
under any lease that is treated as an operating lease for financial accounting purposes and
a financing lease for tax purposes (i.e., a “synthetic lease”), (b) Obligations of such
Person in respect of transactions entered into by such Person, the proceeds from which would
be reflected on the financial statements of such Person in accordance with
GAAP as cash flows from financings at the time such transaction was entered into (other
than as a result of the issuance of Equity Interests) and (c) Obligations of such Person in
respect of other transactions entered into by such Person that are not otherwise addressed
in the definition of “Debt” or in clause (a) or (b) above that are intended to function
primarily as a borrowing of funds.




     “Taxes” has the meaning specified in Section 2.12(a).




     “Term B Advance” has the meaning specified in Section 2.01(a).









 



 


36





     “Term B Borrowing” means a borrowing consisting of simultaneous Term B Advances of the
same Type and the same Interest Period made by the Term B Lenders.




     “Term B Commitment” means, with respect to any Term B Lender at any time, the amount
set forth opposite such Lender’s name on Schedule I hereto under the caption “Term B
Commitment” or, if such Lender has entered into one of more Assignment and Acceptances, set
forth for such Lender in the Register maintained by the Administrative Agent pursuant to
Section 9.07(d) as such Lender’s “Term B Commitment,” as such amount may be reduced at or
prior to such time pursuant to Section 2.05.




     “Term B Facility” means, at any time, the aggregate amount of the Term B Lenders’ Term
B Commitments at such time.




     “Term B Lender” means any Lender that has a Term B Commitment.




     “Term B Note” means a promissory note of the Borrower payable to the order of any Term
B Lender, in substantially the form of Exhibit A-2 hereto, evidencing the indebtedness of
the Borrower to such Lender resulting from the Term B Advance made by such Lender, as
amended.




     “Term Facilities” means the Term B Facility and Term LC Facility.




     “Term Issuing Bank” means the Initial Term Issuing Bank and any Eligible Assignee to
which the Term Letter of Credit Commitment hereunder has been assigned pursuant to Section
9.07 so long such Eligible Assignee expressly agrees to perform in accordance with their
terms all of the obligations that by the terms of this Agreement are required to be
performed by it as a Term Issuing Bank and notifies the Administrative Agent of its
Applicable Lending Office and the amount of its Term Letter of Credit Commitment (which
information shall be recorded by the Administrative Agent in the Register), for so long as
such Initial Term Issuing Bank or Eligible Assignee, as the case may be, shall
have a Term Letter of Credit Commitment.




     “Term LC Advance” has the meaning specified in Section 2.01(b).




     “Term LC Borrowing” means a borrowing consisting of simultaneous Term LC Advances of
the same Type and the same Interest Period made by the Term LC Lenders.




     “Term LC Collateral Account” has the meaning specified in the Security Agreement.




     “Term LC Commitment” means, with respect to any Term LC Lender at any time, the amount
set forth opposite such Lender’s name on Schedule I hereto under the caption “Term LC
Commitment” or, if such Lender has entered into one or more Assignment and Acceptances, set
forth for such Lender in the Register maintained by the Administrative Agent pursuant to
Section 9.07(d) as such Lender’s Term LC Commitment”, as such amount may be reduced at or
prior to such time pursuant to Section 2.05.









 



 


37





     “Term LC Facility” means, at any time, the aggregate amount of the Term LC Lenders’
Term LC Commitments at such time.




     “Term LC Lender” means any Lender that has a Term LC Commitment.




     “Term LC Note” means a promissory note of the Borrower payable to the order of any Term
LC Lender, in substantially the form of Exhibit A-3 hereto, evidencing the indebtedness of
the Borrower to such Lender resulting from the Term LC Advance made by such Lender, as
amended.




     “Term Letter of Credit” has the meaning specified in Section 2.01(d)(ii).




     “Term Letter of Credit Advance” means a payment or disbursement made by the Term
Issuing Bank pursuant to a Term Letter of Credit.




     “Term Letter of Credit Commitment” means, with respect to the Term Issuing Bank at any
time, the amount set forth opposite the Term Issuing Bank’s name on Schedule I hereto under
the caption “Term Letter of Credit Commitment” or, if the Term Issuing Bank has entered into
an Assignment and Acceptance, set forth for the Term Issuing Bank in the Register maintained
by the Administrative Agent pursuant to Section 9.07(d) as the Term Issuing Bank’s “Term
Letter of Credit Commitment”, as such amount may be reduced at or prior to such time
pursuant to Section 2.05.




     “Term Letter of Credit Facility” means, at any time, an amount equal to the lesser of
(i) the amount of the Term Issuing Bank’s Term Letter of Credit Commitment at such time and
(ii) the amount on deposit in the Term LC Collateral Account at such time, as such amount
may be reduced at or prior to such time pursuant to Section 2.05.




     “Term Facilities” means the Term B Facility and Term LC Facility.




     “Termination Date” means the earlier of February 23, 2012 and the date of termination
in whole of the Revolving Credit Commitments and the Letter of Credit Commitments pursuant
to Section 2.05 or 6.01.




     “Transaction” means the Acquisition, entry into the MSCG Hedging Facility, the MSCG
Capacity Swap Agreement, the Special LC Facility and the Second Lien Facility,
the Equity Financing and the other transactions contemplated by the Transaction
Documents.




     “Transaction Documents” means, collectively, the Loan Documents and the Related
Documents.




     “Type” refers to the distinction between Advances bearing interest at the Base Rate and
Advances bearing interest at the Eurodollar Rate.




     “Unused Revolving Credit Commitment” means, with respect to any Revolving Credit Lender
at any time, (a) such Lender’s Revolving Credit Commitment at such time minus (b) the sum of
(i) the aggregate principal amount of all Revolving Credit Advances









 



 


38





and Revolving Letter of Credit Advances made by such Lender (in its capacity as a Lender) and outstanding at such
time plus (ii) such Lender’s Pro Rata Share of (A) the aggregate Available Amount of all
Revolving Letters of Credit outstanding at such time and (B) the aggregate principal amount
of all Revolving Letter of Credit Advances made by the Revolving Issuing Banks pursuant to
Section 2.03(c) (to the extent that such Revolving Credit Lender has not made such Lender’s
Pro Rata Share of any LC Disbursement available to the Administrative Agent) and outstanding
at such time.




     “Vessel” has the meaning specified in the Barge Mortgages.




     “Voluntary Prepayments” means, with respect to any Calculation Period, the amount of
all optional prepayments of the Term Facilities made pursuant to Section 2.06(a) during such
Calculation Period plus the amount of all optional prepayments of the Second Lien Facility
made pursuant to Section 2.06(a) thereof during such Calculation Period.




     “Voting Interests” means shares of capital stock issued by a corporation, or equivalent
Equity Interests in any other Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been suspended by the happening
of such a contingency.




     “Welfare Plan” means a welfare plan, as defined in Section 3(1) of ERISA, that is
maintained for employees of any Loan Party or in respect of which any Loan Party would have
liability.




     “Withdrawal Liability” has the meaning specified in Part I of Subtitle E of Title IV of
ERISA.




     “Zone J” means the NYISO pricing zone for generation located in New York City, or any
successor pricing zone.



     SECTION 1.02. Computation of Time Periods; Other Definitional Provisions. In this
Agreement and the other Loan Documents in the computation of periods of time from a specified date
to a later specified date, the word “from” means “from and including” and
the words “to” and “until” each mean “to but excluding.” References in the Loan Documents to
any agreement or contract “as amended” shall mean and be a reference to such agreement or contract
as amended, amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.



     SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements referred to in Section 4.01(h)
(“GAAP”).



     SECTION 1.04. Currency Equivalents Generally. Any amount specified in this Agreement
(other than in Articles II, VII and IX) or any of the other Loan Documents to be in U.S. dollars
shall also include the equivalent of such amount in any currency other than U.S.









 



 


39



dollars, such equivalent amount to be determined at the rate of exchange quoted by the Administrative Agent in
New York, New York at the close of business on the Business Day immediately preceding any date of
determination thereof, to prime banks in New York, New York for the spot purchase in the New York
foreign exchange market of such amount in U.S. dollars with such other currency.




     SECTION 1.05. Certifications, Etc. All certifications, notices, declarations,
representations, warrants and statements made by any officer, director or employee or a Loan Party
pursuant to or in connection with the Agreement shall be made in such person’s capacity as officer,
director or employee on behalf of the Loan Party and not in such Person’s individual capacity.



ARTICLE II




AMOUNTS AND TERMS OF THE ADVANCES

AND THE LETTERS OF CREDIT




     SECTION 2.01. The Advances and the Letters of Credit. (a) The Term B
Advances. Each Term B Lender severally agrees, on the terms and conditions hereinafter set
forth, to make a single advance (a “Term B Advance”) to the Borrower on the Effective Date in an
amount not to exceed such Lender’s Term B Commitment at such time. The Term B Borrowing shall
consist of Term B Advances made simultaneously by the Term B Lenders ratably according to their
Term B Commitments. Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be
reborrowed.



          (b) The Term LC Advances. Each Term LC Lender severally agrees, on the terms and
conditions hereinafter set forth, to make a single advance (a “Term LC Advance”) to the Borrower on
the Effective Date in an amount not to exceed such Lender’s Term LC Commitment at such time. The
Term LC Borrowing shall consist of Term LC Advances made simultaneously by the Term LC Lenders
ratably according to their Term LC Commitments. Amounts borrowed under this Section 2.01(b) and
repaid or prepaid may not be reborrowed.




          (c) The Revolving Credit Advances. Each Revolving Credit Lender severally agrees, on
the terms and conditions hereinafter set forth, to make advances (each a “Revolving Credit
Advance”) to the Borrower from time to time on any Business Day during the period from the
Effective Date until the Termination Date in an amount for each such Advance not to exceed such
Lender’s Unused Revolving Credit Commitment at such time. Each Revolving Credit Borrowing shall be
in an aggregate amount of $5,000,000 in the case of Eurodollar Rate Loans and $1,000,000 in the
case of Base Rate Loans or an integral multiple of $1,000,000 in the case of Eurodollar Rate Loans
and $500,000 in the case of Base Rate Loans in excess thereof (other than a Borrowing the proceeds
of which shall be used solely to repay or prepay in full outstanding Revolving Letter of Credit
Advances) and shall consist of Revolving Credit Advances made simultaneously by the Revolving
Credit Lenders ratably according to their Revolving Credit Commitments. Within the limits of each
Revolving Credit Lender’s Unused Revolving Credit Commitment in effect from time to time, the
Borrower may borrow under this Section 2.01(c), prepay pursuant to Section 2.06 and reborrow under
this Section 2.01(c).











 



 




40




          (d) The Letters of Credit. (i) The Revolving Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue (or cause its Affiliate that is a commercial bank to
issue on its behalf) letters of credit (the “Revolving Letters of Credit”) in U.S. dollars for the
account of the Borrower from time to time on any Business Day during the period from the Effective
Date until 10 days before the Termination Date in an aggregate Available Amount (x) for all
Revolving Letters of Credit not to exceed at any time the Revolving Letter of Credit Facility at
such time and (y) for each such Revolving Letter of Credit not to exceed the Unused Revolving
Credit Commitments of the Revolving Credit Lenders at such time.




          (ii) The Term Issuing Bank agrees, on the terms and conditions hereinafter set forth, to issue
(or cause its Affiliate that is a commercial bank to issue on its behalf) letters of credit (the
“Term Letters of Credit”) in U.S. dollars for the account of the Borrower from time to time on any
Business Day during the period from the Effective Date until 10 days before the Termination Date in
an aggregate Available Amount for all Term Letters of Credit not to exceed at any time the lesser
of (x) the Term Letter of Credit Facility at such time and (y) the amounts on deposit in the Term
LC Collateral Account.




          (iii) No Letter of Credit shall have an expiration date (including all rights of the Borrower
or the beneficiary to require renewal) later than the earlier of 5 days before the Termination Date
and one year after the date of issuance thereof, or such later time as the Revolving Issuing Bank
and the Borrower shall agree.




          (iv) Within the limits of the Revolving Letter of Credit Facility, and subject to the limits
referred to above, the Borrower may request the issuance of Revolving Letters of Credit under this
Section 2.01(d), repay any Revolving Letter of Credit Advances resulting from drawings thereunder
pursuant to Section 2.03(c) and request the issuance of additional Revolving Letters of Credit
under this Section 2.01(d). Within the limits of the Term Letter of Credit Facility, and subject
to the limits referred to above, the Borrower may request the issuance of Term Letters of Credit
under this Section 2.01(d), repay any Term Letter of Credit Advances resulting from drawings
thereunder pursuant to Section 2.03(c) and request the issuance of additional Term Letters of
Credit under this Section 2.01(d).




          (e) Clean-Down. Notwithstanding the provisions of Sections 2.01(c) and 2.01(d), no
Borrowings may be made under Section 2.01(c), and no Revolving Letters of Credit may be issued
under Section 2.01(d), on each Clean-Down Date, unless the sum of the aggregate principal amount of
Revolving Credit Advances and Revolving Letter of Credit Advances plus the aggregate Available
Amount of Revolving Letters of Credit outstanding after giving effect to such Borrowing or the
issuance of such Revolving Letter of Credit, as the case may be, shall not exceed $50,000,000.




     SECTION 2.02. Making the Advances. (a) Except as otherwise provided in Section
2.03, each Borrowing shall be made on notice, given not later than 11:00 A.M. (New York City time)
on the third Business Day prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Eurodollar Rate Advances, or the first Business Day prior to the date of the proposed
Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to the
Administrative Agent, which shall give to each Appropriate Lender prompt notice thereof by
telecopier or electronic communication. Each such notice of a Borrowing (a









 



 


41



“Notice of Borrowing”) shall be by telephone, confirmed immediately in writing, or by telecopier or electronic
communication, in substantially the form of Exhibit B hereto, specifying therein the requested (i)
date of such Borrowing, (ii) Facility under which such Borrowing is to be made, (iii) Type of
Advances comprising such Borrowing, (iv) aggregate amount of such Borrowing and (v) in the case of
a Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Advance.
Each Appropriate Lender shall, before 11:00 A.M. (New York City time) on the date of such
Borrowing, make available for the account of its Applicable Lending Office to the Administrative
Agent at the Administrative Agent’s Account, in same day funds, such Lender’s ratable portion of
such Borrowing in accordance with the respective Commitments under the applicable Facility of such
Lender and the other Appropriate Lenders. After the Administrative Agent’s receipt of such funds
and upon fulfillment of the applicable conditions set forth in Article III, the Administrative
Agent will make such funds available to the Borrower by crediting the Borrower’s Account; provided,
however, that, in the case of any Revolving Credit Borrowing, the Administrative Agent shall first
apply such funds to prepay ratably the aggregate principal amount of any Revolving Letter of Credit
Advances outstanding at such time, together with interest accrued and unpaid thereon to and as of
such date.




          (b) Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not
select Eurodollar Rate Advances for any Borrowing if the aggregate amount of such Borrowing is less
than $5,000,000 or if the obligation of the Appropriate Lenders to make Eurodollar Rate Advances
shall then be suspended pursuant to Section 2.09 or 2.10 and (ii) the Advances may not be
outstanding as part of more than fifteen separate Eurodollar Rate Borrowings and one Base Rate
Borrowing.




          (c) Each Notice of Borrowing shall be irrevocable and binding on the Borrower. In the case of
any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower shall indemnify each Appropriate Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (but excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as
part of such Borrowing when such Advance, as a result of such failure, is not made on such date.




          (d) Unless the Administrative Agent shall have received notice from an Appropriate Lender
prior to the date of any Borrowing that such Lender will not make available to the Administrative
Agent such Lender’s ratable portion of such Borrowing, the Administrative Agent may assume that
such Lender has made such portion available to the Administrative Agent on the date of such
Borrowing in accordance with subsection (a) of this Section 2.02 and the Administrative Agent may,
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 or pay
to the Administrative Agent forthwith on demand such corresponding amount and to pay interest
thereon, for each day from the date such amount is made available to the Borrower until the date
such amount is repaid or paid to the Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable at such time under Section












 



 




42



2.07 to Advances comprising such Borrowing and
(ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall pay to the
Administrative Agent such corresponding amount, such amount so paid shall constitute such Lender’s
Advance as part of such Borrowing for all purposes.




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




     SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit.
(a) Request for Issuance. (i) Each Revolving Letter of Credit shall be issued upon
notice, given not later than 11:00 A.M. (New York City time) on the fifth Business Day (or such
later Business Day as may be agreed by the Revolving Issuing Bank and the Borrower) prior to the
date of the proposed issuance of such Revolving Letter of Credit, by the Borrower to the Revolving
Issuing Bank, which shall give to the Administrative Agent and each Revolving Credit Lender prompt
notice thereof by telecopier or electronic communication.



          (ii) Each Term Letter of Credit shall be issued upon notice, given not later than 11:00 A.M.
(New York City time) on the Business Day prior to the date of the proposed issuance of such Term
Letter of Credit, by the Borrower to the Term Issuing Bank, which shall give to the Administrative
Agent prompt notice thereof by telecopier or electronic communication.




          (iii) Each such notice of issuance of a Letter of Credit (a “Notice of Issuance”) shall be in
writing, or by telephone, confirmed in writing, or by telecopier or electronic communication,
specifying therein the requested (A) date of such issuance (which shall be a Business Day), (B)
Available Amount of such Letter of Credit, (C) expiration date of such Letter
of Credit, (D) name and address of the beneficiary of such Letter of Credit and (E) form of
such Letter of Credit, and shall be accompanied by a Letter of Credit Agreement, and further
specifying whether (F) the Letter of Credit is a Term Letter of Credit or a Revolving Letter of
Credit. If the requested form of such Letter of Credit is acceptable to the Appropriate Issuing
Bank in its reasonable discretion, the Appropriate Issuing Bank will, upon fulfillment of the
applicable conditions set forth in Article III, make such Letter of Credit available to the
Borrower at its office referred to in Section 9.02 or as otherwise agreed with the Borrower in
connection with such issuance. In the event and to the extent that the provisions of any Letter of
Credit Agreement shall conflict with this Agreement, the provisions of this Agreement shall govern.




          (b) Letter of Credit Reports. (i) The Revolving Issuing Bank shall furnish (A) to
the Administrative Agent on the first Business Day of each month a written report summarizing
issuance and expiration dates of Revolving Letters of Credit issued during the previous month and
drawings during such month under all Revolving Letters of Credit, (B) to each Revolving Credit
Lender on the first Business Day of each month a written report summarizing issuance and expiration
dates of Revolving Letters of Credit issued during the preceding month and drawings during such
month under all Revolving Letters of Credit and (C)











 



 




43



to the Administrative Agent and each Revolving Credit Lender on the first Business Day of each calendar quarter a written report setting forth the
average daily aggregate Available Amount during the preceding calendar quarter of all Revolving
Letters of Credit.




          (ii) The Term Issuing Bank shall furnish to the Administrative Agent on the first Business Day
of each month a written report summarizing issuance and expiration dates of Term Letters of Credit
issued during the previous month and drawings during such month under all Term Letters of Credit.




          (iii) The Collateral Agent shall promptly furnish to the Term Issuing Bank copies of all
statements relating to account balances in the Term LC Collateral Account that it receives from
Citibank, N.A. (or any successor thereto), in its capacity as the Pledged Account Bank where the
Term LC Collateral Account is located.




          (c) Participations in Revolving Letters of Credit. Upon the issuance of a Revolving
Letter of Credit by the Revolving Issuing Bank under Section 2.03(a)(i), the Revolving Issuing Bank
shall be deemed, without further action by any party hereto, to have sold to each Revolving Credit
Lender, and each Revolving Credit Lender shall be deemed, without further action by any party
hereto, to have purchased from the Revolving Issuing Bank, a participation in such Revolving Letter
of Credit in an amount for each Revolving Credit Lender equal to such Lender’s Pro Rata Share of
the Available Amount of such Revolving Letter of Credit, effective upon the issuance of such
Revolving Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving
Credit Lender hereby absolutely and unconditionally agrees to pay such Lender’s Pro Rata Share of
each LC Disbursement made by the Revolving Issuing Bank and not reimbursed by the Borrower
forthwith on the date due as provided in Section 2.04(d) by making available for the account of its
Applicable Lending Office to the Administrative Agent for the account of the Revolving Issuing Bank
by deposit to the Administrative Agent’s Account, in same day funds, an amount equal to such
Lender’s Pro Rata Share of such LC Disbursement. Each Revolving Credit Lender acknowledges and
agrees that its obligation to acquire participations pursuant to this Section 2.03(c) in respect of
Revolving Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default or an Event of
Default or the termination of the Commitments, and that each such payment shall be made without any
off-set, abatement, withholding or reduction whatsoever. If and to the extent that any Revolving
Credit Lender shall not have so made the amount of such LC Disbursement available to the
Administrative Agent, such Revolving Credit Lender agrees to pay to the Administrative Agent
forthwith on demand such amount together with interest thereon, for each day from the date such LC
Disbursement is due pursuant to Section 2.04(d) until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate for its account or the account of the Revolving
Issuing Bank, as applicable. If such Lender shall pay to the Administrative Agent such amount for
the account of the Revolving Issuing Bank on any Business Day, such amount so paid in respect of
principal shall constitute a Revolving Letter of Credit Advance made by such Lender on such
Business Day for purposes of this Agreement, and the outstanding principal amount of the Revolving
Letter of Credit Advance made by the Revolving Issuing Bank shall be reduced by such amount on such
Business Day.










 



 




44




          (d) Drawing and Reimbursement. (i) The payment by the Revolving Issuing Bank of a
draft drawn under any Revolving Letter of Credit shall constitute for all purposes of this
Agreement the making by the Revolving Issuing Bank of a Revolving Letter of Credit Advance, which
shall be a Base Rate Advance, in the amount of such draft.




          (ii) The payment by the Term Issuing Bank of a draft drawn under any Term Letter of Credit
shall constitute for all purposes of this Agreement the making by the Term Issuing Bank of a Term
Letter of Credit Advance, which shall be a Base Rate Advance, in the amount of such draft.




          (e) Failure to Make Revolving Letter of Credit Advances. The failure of any Lender to
make the Revolving Letter of Credit Advance to be made by it on the date specified in Section
2.03(c) shall not relieve any other Lender of its obligation hereunder to make its Revolving Letter
of Credit Advance on such date, but no Lender shall be responsible for the failure of any other
Lender to make the Revolving Letter of Credit Advance to be made by such other Lender on such date.




     SECTION 2.04. Repayment of Advances. (a) Term B Advances. The Borrower
shall repay to the Administrative Agent for the ratable account of the Term B Lenders the aggregate
outstanding principal amount of the Term B Advances on the following dates in the amounts indicated
(which amounts shall be reduced as a result of the application of prepayments in accordance with
Section 2.06):



	 	 	 	 	 
	Date	 	Amount	 
	May 23, 2006
	 	$	1,075,000	 
	August 23, 2006
	 	$	1,075,000	 
	November 23, 2006
	 	$	1,075,000	 
	February 23, 2007
	 	$	1,075,000	 
	May 23, 2007
	 	$	1,075,000	 
	August 23, 2007
	 	$	1,075,000	 
	November 23, 2007
	 	$	1,075,000	 
	February 23, 2008
	 	$	1,075,000	 
	May 23, 2008
	 	$	1,075,000	 
	August 23, 2008
	 	$	1,075,000	 
	November 23, 2008
	 	$	1,075,000	 
	February 23, 2009
	 	$	1,075,000	 
	May 23, 2009
	 	$	1,075,000	 
	August 23, 2009
	 	$	1,075,000	 
	November 23, 2009
	 	$	1,075,000	 
	February 23, 2010
	 	$	1,075,000	 
	May 23, 2010
	 	$	1,075,000	 
	August 23, 2010
	 	$	1,075,000	 
	November 23, 2010
	 	$	1,075,000	 
	February 23, 2011
	 	$	1,075,000	 
	May 23, 2011
	 	$	1,075,000	 
	August 23, 2011
	 	$	1,075,000	 
	November 23, 2011
	 	$	1,075,000	 
	February 23, 2012
	 	$	1,075,000	 












 



 


45



provided, however, that the final principal installment shall be repaid on February 23, 2013
(unless paid earlier) and in any event shall be in an amount equal to the aggregate principal
amount of the Term B Advances outstanding on such date.




          (b) Term LC Advances. The Borrower shall repay to the Administrative Agent for the
ratable account of the Term LC Lenders on February 23, 2011, the aggregate principal amount of the
Term LC Advances outstanding on such date.




          (c) Revolving Credit Advances. The Borrower shall repay to the Administrative Agent
for the ratable account of the Revolving Credit Lenders on the Termination Date the aggregate
principal amount of the Revolving Credit Advances then outstanding.




          (d) Letter of Credit Advances. (i) The Borrower shall repay to the Administrative
Agent for the account of the Revolving Issuing Bank and each other Revolving Credit Lender that has
made a Revolving Letter of Credit Advance on the earlier of the first Business Day after the date
on which such Advance was made and the Termination Date the outstanding principal amount of each
Revolving Letter of Credit Advance made by each of them.




          (ii) The Borrower shall repay to the Administrative Agent for the account of the Term Issuing
Bank on the earlier of the first Business Day after the date on which such Advance was made and the
Termination Date the outstanding principal amount of each Term Letter of Credit Advance made by the
Term Issuing Bank. To the extent any Term Letter of Credit Advance shall not have been repaid in
accordance with this Section 2.04(d)(ii), the Term Issuing Bank shall give notice to the
Administrative Agent and to the Collateral Agent to the effect that the Borrower has not repaid
such Term Letter of Credit Advance and shall instruct in writing the Collateral Agent to use any
amounts on deposit in the Term LC Collateral Account
for the repayment in full of any such Term Letter of Credit Advance and the Term Letter of
Credit Facility shall be automatically and permanently reduced in accordance with Section
2.05(b)(ii). So long as any Term Letter of Credit Advance shall be outstanding or the Term Issuing
Bank has any Term Letter of Credit Commitment hereunder, the Collateral Agent shall comply with
such written instructions from the Term Issuing Bank within one Business Day following receipt
thereof and shall not comply with any instructions received by the Administrative Agent or any
other Lender Party with respect to the Term LC Collateral Account.




          (iii) The Obligations of the Borrower under this Agreement, any Letter of Credit Agreement and
any other agreement or instrument relating to any Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this Agreement, such Letter
of Credit Agreement and such other agreement or instrument under all circumstances, including,
without limitation, the following circumstances:




          (A) any lack of validity or enforceability of any Loan Document, any Letter of Credit
Agreement, any Letter of Credit or any other agreement or instrument relating thereto (all
of the foregoing being, collectively, the “LC Related Documents”);











 



 




46





     (B) any change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations of the Borrower in respect of any LC Related Document or any other
amendment or waiver of or any consent to departure from all or any of the LC Related
Documents;




     (C) the existence of any claim, set-off, defense or other right that the Borrower may
have at any time against any beneficiary or any transferee of a Letter of Credit (or any
Persons for which any such beneficiary or any such transferee may be acting), either Issuing
Bank or any other Person, whether in connection with the transactions contemplated by the LC
Related Documents or any unrelated transaction;




     (D) any statement or any 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;




     (E) payment by an Issuing Bank under a Letter of Credit against presentation of a
draft, certificate or other document that does not strictly comply with the terms of such
Letter of Credit;




     (F) any exchange, release or non perfection of any Collateral or other collateral, or
any release or amendment or waiver of or consent to departure from the Guaranties or any
other guarantee, for all or any of the Obligations of the Borrower in respect of the LC
Related Documents; or




     (G) any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, including, without limitation, any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower or a guarantor; provided,
however, that none of the above shall in any way waive or diminish any claim of the Borrower
against an Issuing Bank.



     SECTION 2.05. Termination or Reduction of the Commitments. (a) Optional.
The Borrower may, upon at least three Business Days’ notice to the Administrative Agent, terminate
in whole or reduce in part the unused portions of the Term B Commitments, the Term LC Commitments,
the Revolving Letter of Credit Facility and the Term Letter of Credit Facility and the Unused
Revolving Credit Commitments; provided, however, that each partial reduction of a Facility (i)
shall be in an aggregate amount of $5,000,000 in the case Eurodollar Rate Advances and $1,000,000
in the case of Base Rate Advances or an integral multiple of $1,000,000 in the case of Eurodollar
Rate Advances and $500,000 in the case of Base Rate Advances in excess thereof and (ii) shall be
made ratably among the Appropriate Lenders in accordance with their Commitments with respect to
such Facility.



     (b) Mandatory. (i) The Revolving Letter of Credit Facility shall be permanently
reduced from time to time on the date of each reduction in the Revolving Credit Facility by the
amount, if any, by which the amount of the Revolving Letter of Credit Facility exceeds the
Revolving Credit Facility after giving effect to such reduction of the Revolving Credit Facility.









 



 


47




          (ii) The Term Letter of Credit Facility shall be permanently reduced from time to time by the
amount, if any, by which the amount of the Term Letter of Credit Facility exceeds the amount on
deposit in the Term LC Collateral Account.




          (iii) The Revolving Credit Facility shall be automatically and permanently reduced, on a pro
rata basis, on each date on which prepayment thereof is required to be made pursuant to Section
2.06(b)(i) or (ii) in an amount equal to the applicable Reduction Amount; provided that each such
reduction of the Revolving Credit Facility shall be made ratably among the Revolving Credit Lenders
in accordance with their Revolving Credit Commitments.




     SECTION 2.06. Prepayments. (a) Optional. The Borrower may, upon at least
one Business Day’s notice in the case of Base Rate Advances and three Business Days’ notice in the
case of Eurodollar Rate Advances, in each case to the Administrative Agent stating the proposed
date and aggregate principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding aggregate principal amount of the Advances comprising part of the
same Borrowing in whole or ratably in part, together with accrued interest to the date of such
prepayment on the aggregate principal amount prepaid if any prepayment of a Eurodollar Rate Advance
is made on a date other than the last day of an Interest Period for such Advance, the Borrower
shall also pay any amounts owing pursuant to Section 9.04(c). Each such prepayment of any Term B
Advances shall be applied to the installments thereof pro rata.



          (b) Mandatory. (i) On each Excess Cash Flow Payment Date the Borrower shall prepay
an aggregate principal amount of the Advances comprising part of the same Borrowings and deposit an
amount in the Revolving LC Collateral Account in an amount equal to 75% of the amount of Excess
Cash Flow for the Calculation Period corresponding to such Excess Cash Flow Payment Date minus the
amount of Voluntary Prepayments made during such Calculation Period. Each such prepayment shall be
applied ratably first, to the Term B Facility
and to the installments thereof in direct order of maturity until such Facility is repaid in
full and to any Term Letter of Credit Advance to the extent such Term Letter of Credit Advance has
not been repaid or reimbursed in accordance with Section 2.04(d)(ii), and second, (x) if no Event
of Default has occurred and is continuing, to the Second Lien Obligations or (y) if an Event of
Default has occurred and is continuing, or if such prepayment would have been required to be made
under the Second Lien Credit Agreement and was waived pursuant to the terms thereof, to the
Revolving Credit Facility as set forth in clause (vii) below.




          (ii) (A) If within ten Business Days of the date of receipt of any Asset Sale Proceeds or
Equity Proceeds by any Loan Party or any of its Subsidiaries, the Borrower shall not have delivered
a Reinvestment Notice in respect thereof, then the Borrower shall prepay an aggregate principal
amount of the Advances comprising part of the same Borrowings and deposit an amount in the
Revolving LC Collateral Account in an amount equal to the amount of such Asset Sale Proceeds or
Equity Proceeds, as the case may be.




          (B) If the Borrower shall have delivered a Reinvestment Notice in respect of any Asset Sale
Proceeds or Equity Proceeds and such Reinvestment Notice does not apply to all of such Asset Sale
Proceeds or Equity Proceeds, then on the tenth Business Day following the receipt of such Asset
Sale Proceeds or Equity Proceeds, the Borrower shall prepay an aggregate principal amount of the
Advances comprising part of the same Borrowings and deposit an











 



 




48



amount in the Revolving LC Collateral Account in an amount equal to the amount of such Asset Sale Proceeds or Equity Proceeds,
as the case may be, which is not covered by such Reinvestment Notice.




          (C) If on or prior to the date falling 365 days after any Reinvestment Event, the Borrower
shall not have delivered a Reinvestment Commitment Notice in respect of Asset Sale Proceeds or
Equity Proceeds described in clause (B) above, then the Borrower shall prepay an aggregate
principal amount of the Advances comprising part of the same Borrowings and deposit an amount in
the Revolving LC Collateral Account in an amount equal to the amount of such Asset Sale Proceeds or
Equity Proceeds, as the case may be.




          (D) If on or prior to the date falling 365 days after a Reinvestment Event, the Borrower shall
have delivered a Reinvestment Commitment Notice in respect of any Asset Sale Proceeds or Equity
Proceeds described in clause (B) above, then (1) on the date of such notice, the Borrower shall
prepay an aggregate principal amount of the Advances comprising part of the same Borrowings and
deposit an amount in the Revolving LC Collateral Account equal to the amount, if any, of such Asset
Sale Proceeds or Equity Proceeds that the Borrower or any other Loan Party has not committed in
such Reinvestment Commitment Notice to use to make a Permitted Investment, (2) at any time on or
prior to the date which is two years after the date on which any such Asset Sale Proceeds or Equity
Proceeds were received, so long as no Event of Default shall have occurred and be continuing, the
Borrower shall be permitted to use such Asset Sale Proceeds or Equity Proceeds to make such
Permitted Investment and (3) on the date occurring two years after the date on which any such Asset
Sale Proceeds or Equity Proceeds were received, the Borrower shall prepay an aggregate principal
amount of the Advances comprising part of the same Borrowings and deposit an amount in the
Revolving LC Collateral Account in an amount equal to the remaining amount (if any) of such Asset
Sale Proceeds or Equity Proceeds not otherwise applied pursuant to clauses (1) or (2).




          (E) Each such prepayment pursuant to this clause (ii) shall be applied ratably first to the
Term B Facility to the installments thereof in direct order of maturity, until such Facility is
repaid in full and to any Term Letter of Credit Advance to the extent such Term Letter of Credit
Advance has not been repaid or reimbursed in accordance with Section 2.04(d)(ii) or (y) if an Event
of Default has occurred and is continuing, or if such prepayment would have been required to be
made under the Second Lien Credit Agreement and was waived pursuant to the terms thereof, to the
Revolving Credit Facility as set forth in clause (vii) below.




          (iii) The Borrower shall, on the date of a receipt of any Debt Proceeds by any Loan Party or
any of its Subsidiaries prepay an aggregate principal amount of the Advances comprising part of the
same Borrowings and deposit an amount in the Revolving LC Collateral Account in an amount equal to
the amount of such Debt Proceeds. Each such prepayment shall be applied ratably first to the Term
B Facility to the installments thereof in direct order of maturity, until such Facility is repaid
in full and to any Term Letter of Credit Advance to the extent such Term Letter of Credit Advance
has not been repaid or reimbursed in accordance with Section 2.04(d)(ii) and second (x) if no Event
of Default has occurred and is continuing, to the Second Lien Obligations or (y) if an Event of
Default has occurred and is continuing, or if such prepayment would have been required to be made
under the Second Lien Credit Agreement and










 



 




49



was waived pursuant to the terms thereof, to the Revolving Credit Facility as set forth in clause (vii) below.




          (iv) The Borrower shall, within five Business Days of the receipt of any Insurance Proceeds or
Eminent Domain Proceeds by any Loan Party, prepay an aggregate principal amount of the Advances
comprising part of the same Borrowings and deposit an amount in the Revolving LC Collateral Account
in an amount equal to 100% of such Insurance Proceeds or Eminent Domain Proceeds, unless the
Borrower has delivered a Repair Notice in respect of the related Casualty Event or Event of Eminent
Domain pursuant to Section 5.01(p) in respect of such Insurance Proceeds or Eminent Domain
Proceeds. Each prepayment pursuant to this clause (iv) shall be applied ratably first to the Term
B Facility and to the installments thereof in direct order of maturity, until such Facility is
repaid in full and to any Term Letter of Credit Advance to the extent such Term Letter of Credit
Advance has not been repaid or reimbursed in accordance with Section 2.04(d)(ii) and second (x) if
no Event of Default has occurred and is continuing, to the Second Lien Obligations or (y) if an
Event of Default has occurred and is continuing, or if such prepayment would have been required to
be made under the Second Lien Credit Agreement and was waived pursuant to the terms thereof, to the
Revolving Credit Facility as set forth in clause (vii) below.




          (v) The Borrower shall, on each Business Day, prepay an aggregate principal amount of the
Revolving Credit Advances comprising part of the same Borrowings and the Revolving Letter of Credit
Advances and deposit an amount in the Revolving LC Collateral Account in an amount equal to the
amount by which (A) the sum of the aggregate principal amount of (x) the Revolving Credit Advances
and (y) the Revolving Letter of Credit Advances then outstanding plus the aggregate Available
Amount of all Revolving Letters of Credit then outstanding exceeds (B) the Revolving Credit
Facility on such Business Day.




          (vi) The Borrower shall, on each Business Day, pay to the Administrative Agent for deposit in
the Revolving LC Collateral Account an amount sufficient to cause the
aggregate amount on deposit in the Revolving LC Collateral Account to equal the amount by
which the aggregate Available Amount of all Revolving Letters of Credit then outstanding exceeds
the Revolving Letter of Credit Facility on such Business Day.




          (vii) The Borrower shall pay to the Administrative Agent, on each Clean-Down Date, an amount
equal to the amount by which the aggregate principal amount of all outstanding Revolving Credit
Advances and all outstanding Revolving Letter of Credit Advances plus the aggregate Available
Amount of all outstanding Revolving Letters of Credit exceeds $50,000,000, to be applied first, to
prepay the Revolving Credit Advances and the Revolving Letter of Credit Advances and second, to be
deposited in the Revolving LC Collateral Account. Prepayments made pursuant to this Section
2.06(b)(vii) shall be made without a permanent reduction of the Revolving Credit Commitments.




          (viii) Prepayments of the Revolving Credit Facility made pursuant to clause (i), (ii), (iii),
(iv), (v), (vi) or (vii) above shall be first applied to prepay Revolving Letter of Credit Advances
then outstanding until such Advances are paid in full, second applied to prepay Revolving Credit
Advances then outstanding comprising part of the same Borrowings until such Advances are paid in
full and third deposited in the Revolving LC Collateral Account to cash











 



 




50



collateralize 100% of the Available Amount of the Revolving Letters of Credit then outstanding; and, in the case of
prepayments of the Revolving Credit Facility required pursuant to clause (i) or (ii) above, the
amount remaining (if any) after the prepayment in full of the Advances then outstanding and the
100% cash collateralization of the aggregate Available Amount of Revolving Letters of Credit then
outstanding (the sum of such prepayment amounts in respect of Revolving Credit Advances and
Revolving Letter of Credit Advances, cash collateralization amounts and remaining amount being
referred to herein as the “Reduction Amount”) may be retained by the Borrower and the Revolving
Credit Facility shall be permanently reduced as set forth in Section 2.05(b)(iii). Upon the
drawing of any Revolving Letter of Credit for which funds are on deposit in the Revolving LC
Collateral Account, such funds shall be applied to reimburse the Revolving Issuing Bank or
Revolving Credit Lenders, as applicable.




          (ix) All prepayments of Eurodollar Rate Advances, Base Rate Term B Advances and Base Rate Term
LC Advances under this subsection (b) shall be made together with accrued interest to the date of
such prepayment on the principal amount prepaid, together with any amounts owing pursuant to
Section 9.04(c).




          (x) Notwithstanding anything to the contrary in this Section 2.06(b) or in Section 5.01(p),
with respect to any individual Casualty Event or Event of Eminent Domain in respect of which any
Loan Party receives Insurance Proceeds or Eminent Domain Proceeds (as applicable) in excess of
$300,000,000, the Borrower shall, within three months after the receipt of such Insurance Proceeds
or Eminent Domain Proceeds (as applicable), apply such proceeds, (a) first, on a pro rata basis,
(i) to prepay Advances under the Term B Facility and to the installments thereof in direct order of
maturity and (ii) to repay Reimbursement Obligations under the Special LC Facility and, after the
repayment of any such Reimbursement Obligations, cash collateralize the Special Letter of Credit in
an amount equal to 103% of the maximum amount available to be drawn thereunder at such time
(assuming compliance at such time with all conditions to drawings), (b) second to the Term B
Facility to the installments thereof in direct order of maturity and (c) third (x) if no Event of
Default has occurred and is continuing, to the
Second Lien Obligations or (y) if an Event of Default has occurred and is continuing, or if
such prepayment would have been required to be made under the Second Lien Credit Agreement and was
waived pursuant to the terms thereof, to the Revolving Credit Facility as set forth in clause (vii)
above, in an amount equal to 100% of such Insurance Proceeds or Eminent Domain Proceeds (as
applicable); provided, however, that the Borrower shall not be required to so repay, prepay or cash
collateralize such Obligations if and to the extent such Insurance Proceeds or Eminent Domain
Proceeds (as applicable) are reinvested or designated for reinvestment in accordance with Section
2.06(b) or Section 5.01(p).




     SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to each Lender from the date of such
Advance until such principal amount shall be paid in full, at the following rates per annum:




     (i) Base Rate Advances. During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the sum of (A) the Base Rate in effect from
time to time plus (B) the Applicable Margin in effect from time to time, payable in arrears
quarterly on the last day of each March, June, September and December during




 











 





 51 






such periods and, in the case of Base Rate Term B Advances and Base Rate Term LC Advances,
on the date such Advance shall be paid in full.




(ii) Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for
such Advance to the sum of (A) the Eurodollar Rate for such Interest Period for such Advance
plus (B) the Applicable Margin, payable in arrears on the last day of such Interest Period
and, if such Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day of such Interest
Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.



          (b) Default Interest. Upon the occurrence and during the continuance of an Event of
Default under Section 6.01(a) or 6.01(f), the Administrative Agent, upon the request of the
Required Lenders, shall require that the Borrower pay interest (“Default Interest”) on (i) the
unpaid principal amount of each Advance owing to each Lender Party and not paid when due, payable
in arrears on the dates referred to in clause (i) or (ii) of Section 2.07(a), as applicable, and on
demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to
be paid on such Advance pursuant to clause (i) or (ii) of Section 2.07(a), as applicable, and (ii)
to the fullest extent permitted by applicable law, the amount of any interest, fee or other amount
payable under this Agreement or any other Loan Document to any Agent or any Lender Party that is
not paid when due, from the date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid on Base Rate
Advances pursuant to clause (i) of Section 2.07(a); provided, however, that following the making of
the request or the granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Advances due and payable pursuant to the provisions of Section
6.01, Default Interest shall accrue and be payable hereunder whether or not previously required by
the Required Lenders.




          (c) Notice of Interest Period and Interest Rate. Promptly after receipt of a Notice
of Borrowing pursuant to Section 2.02(a), a notice of Conversion pursuant to Section 2.09 or a
notice of selection of an Interest Period pursuant to the terms of the definition of “Interest
Period,” the Administrative Agent shall give notice to the Borrower and each Appropriate Lender of
the applicable Interest Period and the applicable interest rate determined by the Administrative
Agent for purposes of clause (a)(i) or (a)(ii) above.




     SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay to the
Administrative Agent for the account of the Lenders a commitment fee, from the date hereof in the
case of each Initial Lender and from the effective date specified in the Assignment and Acceptance
pursuant to which it became a Lender in the case of each other Lender until the Termination Date,
payable in arrears quarterly on the last day of each March, June, September and December,
commencing June 30, 2006, and on the Termination Date, at the rate of 1/2 of 1% per annum on the
average daily Unused Revolving Credit Commitment of such Lender during such quarter; provided,
however, that no commitment fee shall accrue on, or be paid to, any of the Commitments of a Defaulting
Lender so long as such Lender shall be a Defaulting Lender.









 



52


          (b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the Administrative
Agent for the account of each Revolving Credit Lender a commission, payable in arrears quarterly on
the last day of each March, June, September and December, commencing June 30, 2006, and on the
Termination Date, on such Lender’s Pro Rata Share of the average daily aggregate Available Amount
during such quarter of all Revolving Letters of Credit outstanding from time to time at the
Applicable Margin for Eurodollar Rate Advances under the Revolving Credit Facility. Upon the
occurrence and during the continuance of an Event of Default under Section 6.01(a) or 6.01(f), the
amount of commission payable by the Borrower under this clause (b)(i) shall be increased by 2% per
annum during any period in which Default Interest applies.




          (ii) The Borrower shall pay to the Appropriate Issuing Bank, for its own account, such
commissions, issuance fees, fronting fees, transfer fees and other fees and charges in connection
with the issuance or administration of each Letter of Credit as the Borrower and the Appropriate
Issuing Bank shall agree.




          (c) Agents’ Fees. The Borrower shall pay to each Agent for its own account such fees
as may from time to time be agreed between the Borrower and such Agent.




     SECTION 2.09. Conversion of Advances. (a) Optional. The Borrower may on
any Business Day, upon notice given to the Administrative Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the proposed Conversion and subject to
the provisions of Section 2.10, Convert all or any portion of the Advances of one Type comprising
the same Borrowing into Advances of the other Type; provided, however, that any Conversion of
Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day of an Interest
Period for such Eurodollar Rate Advances, or, if made on another date, shall be subject to the
provisions of Section 9.04(c), any Conversion of Base Rate Advances into Eurodollar Rate Advances
shall be in an amount not less than the minimum amount specified in Section 2.02(b), no Conversion
of any Advances shall result in more separate Borrowings than permitted under Section 2.02(b) and
each Conversion of Advances comprising part of the same Borrowing under any Facility shall be made
ratably among the Appropriate Lenders in accordance with their Commitments under such Facility.
Each such notice of Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Advances to be Converted and (iii) if such Conversion is into
Eurodollar Rate Advances, the duration of the initial Interest Period for such Advances. Each
notice of Conversion shall be irrevocable and binding on the Borrower.



          (b) Mandatory. (i) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions contained in the
definition of “Interest Period” in Section 1.01, the Administrative Agent will forthwith so notify
the Borrower and the Appropriate Lenders, whereupon each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor, Convert into a Base
Rate Advance.




          (ii) Upon the occurrence and during the continuance of any Event of Default, (x) each
Eurodollar Rate Advance will automatically, on the last day of the then existing Interest











 



53



Period therefor, Convert into a Base Rate Advance and (y) the obligation of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended.




     SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the introduction of
or any change in or in the interpretation of any law or regulation by any central bank or other
government authority or (ii) the compliance with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law), there shall be any increase
in the cost to any Lender Party of agreeing to make or of making, funding or maintaining Eurodollar
Rate Advances or of agreeing to issue or of issuing or maintaining or participating in Letters of
Credit or of agreeing to make or of making or maintaining Letter of Credit Advances (excluding, for
purposes of this Section 2.10, any such increased costs resulting from (x) Taxes or Other Taxes (as
to which Section 2.12 shall govern) and (y) changes in the basis of taxation of overall net income
or overall gross income by the United States or by the foreign jurisdiction or state under the laws
of which such Lender Party is organized or has its Applicable Lending Office or any political
subdivision thereof), then the Borrower shall from time to time, upon demand by such Lender Party
(with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender Party additional amounts sufficient to compensate such Lender Party for such
increased cost; and provided, however, that the Borrower shall not be responsible for costs under
this Section 2.10(a) arising more than 180 days prior to receipt by the Borrower of the demand from
the affected Lender Party pursuant to this Section 2.10(a), unless the requirement resulting in
such increased costs become effective during such 180 day period and retroactively applies to a
date occurring prior to such 180 day period, in which case the Borrower shall be responsible for
all such additional amounts described in this Section 2.10(a) from and after such date of
effectiveness; and provided further that a Lender Party claiming additional amounts under this
Section 2.10(a) agrees to use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending Office if the making of such a
designation would avoid the need for, or reduce the amount of, such increased cost that may
thereafter accrue and would not, in the reasonable judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party. A certificate as to the amount of such increased cost,
submitted to the Borrower by such Lender Party, shall be prima facie evidence of the correct
amount.



          (b) If any Lender Party determines that compliance with any change in law or regulation or any
guideline or request from any central bank or other governmental authority (whether or not having
the force of law) since the date hereof, in the case of each Initial Lender Party and since the
effective date specified in the Assignment and Acceptance pursuant to which it became a Lender
Party in the case of each other Lender Party affects or would affect the amount of capital required
or expected to be maintained by such Lender Party or any corporation controlling such Lender Party
and that the amount of such capital is increased by or based upon the existence of such Lender
Party’s commitment to lend or to issue or participate in Letters of Credit hereunder and other
commitments of such type or the issuance or maintenance of or participation in the Letters of
Credit (or similar Guaranteed Debts), then, upon written certification by such Lender Party or such
corporation (with a copy of such written certification to the Administrative Agent), the Borrower shall pay to the Administrative Agent for the
account of such Lender Party, from time to time as specified by such Lender Party, additional
amounts sufficient to compensate such Lender Party in the light of such circumstances, to the
extent that










 



54



such Lender Party reasonably determines such increase in capital to be allocable to the
existence of such Lender Party’s commitment to lend or to issue or participate in Letters of Credit
hereunder or to the issuance or maintenance of or participation in any Letters of Credit; provided,
however, that the Borrower shall not be responsible for costs under this Section 2.10(b) arising
more than 180 days prior to receipt by the Borrower of the demand from the affected Lender Party
pursuant to this Section 2.10(b), unless such requirement resulting in the increased costs become
effective during such 180 day period and retroactively applies to a date occurring prior to such
180 day period, in which case the Borrower shall be responsible for all such additional amounts
described in this Section 2.10(b) from and after such date of effectiveness. A certificate as to
such amounts submitted to the Borrower by such Lender Party shall be prima facie evidence of the
correct amount.




          (c) If, with respect to any Eurodollar Rate Advances under any Facility, Lenders owed at least
33% of the then aggregate unpaid principal amount thereof notify the Administrative Agent that (i)
the Eurodollar Rate for any Interest Period for such Advances will not adequately reflect the cost
to such Lenders of making, funding or maintaining their Eurodollar Rate Advances for such Interest
Period or (ii) adequate and reasonable means do not exist for determining the Eurodollar Rate for
any requested Interest Period with respect to a proposed Eurodollar Rate Advance, the
Administrative Agent shall forthwith so notify the Borrower and the Appropriate Lenders, whereupon
(x) each such Eurodollar Rate Advance under such Facility will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance and (y) the obligation
of the Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Borrower that such Lenders have
determined that the circumstances causing such suspension no longer exist.




          (d) Notwithstanding any other provision of this Agreement, if the introduction of or any
change in or in the interpretation of any law or regulation shall make it unlawful, or any central
bank or other governmental authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to continue to fund or maintain Eurodollar Rate Advances hereunder, then, on notice thereof and
demand therefor by such Lender to the Borrower through the Administrative Agent, (i) each
Eurodollar Rate Advance under each Facility under which such Lender has a Commitment will
automatically, upon such demand, Convert into a Base Rate Advance and (ii) the obligation of the
Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Borrower that such Lender has determined
that the circumstances causing such suspension no longer exist; provided, however, that, before
making any such demand, such Lender agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to designate a different Eurodollar Lending Office if
the making of such a designation would allow such Lender or its Eurodollar Lending Office to
continue to perform its obligations to make Eurodollar Rate Advances or to continue to fund or
maintain Eurodollar Rate Advances and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender.




          (e) In the event that any Lender Party demands payment of costs or additional amounts pursuant
to this Section 2.10 or Section 2.12 or asserts, pursuant to Section 2.10(d), that it is unlawful
for such Lender Party to make Eurodollar Rate Advances or becomes a Defaulting










 



55



Lender then (subject to such Lender Party’s right to rescind such demand or assertion within 10 days after the notice
from the Borrower referred to below) the Borrower may, upon 20 days’ prior written notice to such
Lender Party and the Administrative Agent, elect to cause such Lender Party to assign its Advances
and Commitments in full to one or more Persons selected by the Borrower so long as (i) each such
Person satisfies the criteria of an Eligible Assignee and is reasonably satisfactory to the
Administrative Agent, (ii) such Lender Party receives payment in full in cash of the outstanding
principal amount of all Advances made by it and all accrued and unpaid interest thereon and all
other amounts due and payable to such Lender Party as of the date of such assignment (including,
without limitation, amounts owing pursuant to Sections 2.10, 2.12 and 9.04) and (iii) each such
assignee agrees to accept such assignment and to assume all obligations of such Lender Party
hereunder in accordance with Section 9.07.




     SECTION 2.11. Payments and Computations. (a) The Borrower shall make each payment
hereunder and under the other Loan Documents, irrespective of any right of counterclaim or set-off
(except as otherwise provided in Section 2.15), not later than noon (New York City time) on the day
when due in U.S. dollars to the Administrative Agent at the Administrative Agent’s Account in same
day funds, with payments being received by the Administrative Agent after such time being deemed to
have been received on the next succeeding Business Day. The Administrative Agent will promptly
thereafter cause like funds to be distributed (i) if such payment by the Borrower is in respect of
principal, interest, commitment fees or any other Obligation then payable hereunder and under the
other Loan Documents to more than one Lender Party, to such Lender Parties for the account of their
respective Applicable Lending Offices ratably in accordance with the amounts of such respective
Obligations then payable to such Lender Parties and (ii) if such payment by the Borrower is in
respect of any Obligation then payable hereunder to one Lender Party, to such Lender Party for the
account of its Applicable Lending Office, in each case to be applied in accordance with the terms
of this Agreement. Upon its acceptance of an Assignment and Acceptance and recording of the
information contained therein in the Register pursuant to Section 9.07(d), from and after the
effective date of such Assignment and Acceptance, the Administrative Agent shall make all payments
hereunder and under the other Loan Documents in respect of the interest assigned thereby to the
assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly between themselves.



          (b) The Borrower hereby authorizes each Lender Party and each of its Affiliates, if and to the
extent payment owed to such Lender Party is not made when due hereunder or under the other Loan
Documents to charge from time to time, to the fullest extent permitted by law, against any or all
of the Borrower’s accounts with such Lender Party or such Affiliate any amount so due; provided
that any such Lender Party will not so charge the Borrower’s accounts without the consent of the
Administrative Agent.




          (c) All computations of interest based on the Base Rate shall be made by the Administrative
Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Eurodollar Rate or the Federal Funds Rate and of fees
and Letter of Credit commissions shall be made by the Administrative Agent on the basis of a year
of 360 days, in each case for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest, fees or commissions are payable. Each










 



56



determination by the Administrative Agent of an interest rate, fee or commission hereunder shall be
conclusive and binding for all purposes, absent manifest error.




          (d) Whenever any payment hereunder or under the other Loan Documents shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of payment of interest
or commitment or letter of credit fee or commission, as the case may be; provided, however, that,
if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be
made in the next following calendar month, such payment shall be made on the next preceding
Business Day.




          (e) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to any Lender Party 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 such Lender Party on such due date an amount equal
to the amount then due such Lender Party. If and to the extent the Borrower shall not have so made
such payment in full to the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender Party together with
interest thereon, for each day from the date such amount is distributed to such Lender Party until
the date such Lender Party repays such amount to the Administrative Agent, at the Federal Funds
Rate.




     SECTION 2.12. Taxes. (a) Any and all payments by any Loan Party to or for the
account of any Lender Party or any Agent hereunder or under any other Loan Document shall be made,
in accordance with Section 2.11 or the applicable provisions of such other Loan Document, if any,
free and clear of and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the
case of each Lender Party and each Agent, taxes (including, without limitation, income taxes and
franchise taxes) that are imposed on or measured by its overall net income by the United States and
taxes (including, without limitation, income taxes and franchise taxes) that are imposed on or
measured by its overall net income by the state, local or foreign jurisdiction under the laws of
which such Lender Party or such Agent, as the case may be, is organized or any political
subdivision or taxing authority thereof or therein and, in the case of each Lender Party, taxes
that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the
state or foreign jurisdiction of such Lender Party’s Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities in respect of payments hereunder or under any other Loan Document
being hereinafter referred to as “Taxes”). If any Loan Party shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder or under any other Loan Document to any
Lender Party or any Agent, (i) the sum payable by such Loan Party shall be increased as may be
necessary so that after such Loan Party and the Administrative Agent have made all required deductions
(including deductions applicable to additional sums payable under this Section 2.12) such Lender
Party or such Agent, as the case may be, receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Loan Party shall make all such deductions and (iii)
such Loan Party shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.









 



57


          (b) In addition, each Loan Party shall pay any present or future stamp, documentary, excise,
property, intangible, mortgage recording or similar taxes, charges or levies that arise from any
payment made by such Loan Party hereunder or under any other Loan Documents or from the execution,
delivery or registration of, performance under, or otherwise with respect to, this Agreement or the
other Loan Documents (hereinafter referred to as “Other Taxes”).




          (c) The Loan Parties shall indemnify each Lender Party and each Agent for and hold them
harmless against the full amount of Taxes and Other Taxes, and for the full amount of taxes of any
kind imposed or asserted by any jurisdiction on amounts payable under this Section 2.12, imposed on
or paid by such Lender Party or such Agent (as the case may be) and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be made within 30 days from the date such Lender Party or such Agent (as
the case may be) makes written demand therefor. Notwithstanding anything contained in this Section
2.12 to the contrary, the Borrower shall be under no obligation to any Agent or any Lender Party
with respect to any additional amounts described in subsections (a) and (c) of this Section 2.12 to
the extent incurred prior to the one hundred-eightieth (180th) day preceding the date on
which the Borrower received notice by such Agent or such Lender Party of such additional amounts,
unless the requirement resulting in such additional amounts becomes effective during such 180 day
period and retroactively applies to a date occurring prior to such 180 day period, in which case
the Borrower shall be responsible for all such additional amounts described in subsections (a) and
(c) of this Section 2.12 from and after such date of effectiveness.




          (d) As soon as practicable after the date of any payment of Taxes, the appropriate Loan Party
shall furnish to the Administrative Agent, at its address referred to in Section 9.02, the original
or a certified copy of a receipt evidencing such payment, to the extent such a receipt is issued
therefor, or other written proof of payment thereof that is reasonably satisfactory to the
Administrative Agent. In the case of any payment hereunder or under the other Loan Documents by or
on behalf of a Loan Party through an account or branch outside the United States or by or on behalf
of a Loan Party by a payor that is not a United States person, if such Loan Party determines that
no Taxes are payable in respect thereof, such Loan Party shall furnish, or shall cause such payor
to furnish, to the Administrative Agent, at such address, an opinion of counsel acceptable to the
Administrative Agent stating that such payment is exempt from Taxes. For purposes of subsections
(d) and (e) of this Section 2.12, the terms “United States” and “United States person” shall have
the meanings specified in Section 7701 of the Internal Revenue Code.




          (e) Each Lender Party organized under the laws of a jurisdiction outside the United States
shall, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Lender Party and on the date of the Assignment and Acceptance pursuant to
which it becomes a Lender Party in the case of each other Lender Party, and from time to time
thereafter as reasonably requested in writing by the Borrower (but only so long thereafter as such
Lender Party remains lawfully able to do so), provide each of the Administrative Agent and the
Borrower with two original Internal Revenue Service Forms W-8BEN or W-8ECI (in the case of a Lender
Party that has certified in writing to the Administrative Agent that it is not (i) a “bank” (within
the meaning of Section 881(c)(3)(A) of the Code), (ii) a 10-percent shareholder (within











 



58



the meaning of Section 871(h)(3)(B) of the Code) of any Loan Party or (iii) a controlled foreign corporation
related to any Loan Party (within the meaning of Section 864(d)(4) of the Code), Internal Revenue
Service Form W-8BEN), as appropriate, or any successor or other form prescribed by the Internal
Revenue Service, certifying that such Lender Party is exempt from or entitled to a reduced rate of
United States withholding tax on payments pursuant to this Agreement or any other Loan Document or,
in the case of a Lender Party that has certified that it is not a “bank” as described above,
certifying that such Lender Party is a foreign corporation, partnership, estate or trust. If the
forms provided by a Lender Party at the time such Lender Party first becomes a party to this
Agreement indicate a United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes unless and until such Lender Party provides
the appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such
lesser rate only shall be considered excluded from Taxes for periods governed by such forms;
provided, however, that if, at the effective date of the Assignment and Acceptance pursuant to
which a Lender Party becomes a party to this Agreement, the Lender Party assignor was entitled to
payments under subsection (a) of this Section 2.12 in respect of United States withholding tax with
respect to interest paid at such date, then, to such extent, the term Taxes shall include (in
addition to withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with respect to the Lender
Party assignee on such date. If any form or document referred to in this subsection (e) requires
the disclosure of information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service Form W-8BEN or W-8ECI or the
related certificate described above, that the applicable Lender Party reasonably considers to be
confidential, such Lender Party shall give notice thereof to the Borrower and shall not be
obligated to include in such form or document such confidential information.




          (f) For any period with respect to which a Lender Party has failed to provide the Borrower
with the appropriate form, certificate or other document described in subsection (e) above (other
than if such failure is due to a change in law, or in the interpretation or application thereof,
occurring after the date on which a form, certificate or other document originally was required to
be provided or if such form, certificate or other document otherwise is not required under
subsection (e) above), such Lender Party shall not be entitled to indemnification under subsection
(a) or (c) of this Section 2.12 with respect to Taxes imposed by the United States by reason of
such failure; provided, however, that should a Lender Party become subject to Taxes because of its
failure to deliver a form, certificate or other document required hereunder, the Loan Parties shall
take such steps as such Lender Party shall reasonably request to assist such Lender Party to
recover such Taxes.




          (g) If any Agent or any Lender Party determines in its discretion that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant this
Section 2.12, it shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section 2.12 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses
of such Agent or such Lender Party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the
request of such Agent or such Lender Party, agrees to repay the amount paid










 



59



over to the Borrower (plus any penalties, interest, or other charges imposed by the relevant Governmental Authority
unless the Governmental Authority assessed such penalties, interest, or other charges due to the
willful misconduct or gross negligence of the Agent or the Lender Party) to the Agent or Lender
Party in the event the Agent or the Lender Party is required to repay such refund to such
Governmental Authority.




          (h) If the Borrower is required to pay additional amounts to any Lender Party or any Agent
pursuant to subsections (a) and (c) of this Section 2.12, then such Lender Party or Agent shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction
of its lending office so as to eliminate or reduce any such additional payment by the Borrower that
may thereafter accrue, unless such change in the sole judgment of such Lender Party or Agent is not
otherwise disadvantageous to such Lender Party or Agent.




     SECTION 2.13. Sharing of Payments, Etc. If any Lender Party shall obtain at any time
any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or
otherwise, other than as a result of an assignment pursuant to Section 9.07) (a) on account of
Obligations due and payable to such Lender Party hereunder and under the other Loan Documents at
such time in excess of its ratable share (according to the proportion of (i) the amount of such
Obligations due and payable to such Lender Party at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lender Parties hereunder and under the other Loan Documents at
such time) of payments on account of the Obligations due and payable to all Lender Parties
hereunder and under the other Loan Documents at such time obtained by all the Lender Parties at
such time or (b) on account of Obligations owing (but not due and payable) to such Lender Party
hereunder and under the other Loan Documents at such time in excess of its ratable share (according
to the proportion of (i) the amount of such Obligations owing to such Lender Party at such time to
(ii) the aggregate amount of the Obligations owing (but not due and payable) to all Lender Parties
hereunder and under the other Loan Documents at such time) of payments on account of the
Obligations owing (but not due and payable) to all Lender Parties hereunder and under the other
Loan Documents at such time obtained by all of the Lender Parties at such time, such Lender Party
shall forthwith purchase from the other Lender Parties such interests or participating interests in
the Obligations due and payable or owing to them, as the case may be, as shall be necessary to
cause such purchasing Lender Party to share the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is thereafter recovered from such
purchasing Lender Party, such purchase from each other Lender Party shall be rescinded and such
other Lender Party shall repay to the purchasing Lender Party the purchase price to the extent of
such Lender Party’s ratable share (according to the proportion of (i) the purchase price paid to
such Lender Party to (ii) the aggregate purchase price paid to all Lender Parties) of such recovery
together with an amount equal to such Lender Party’s ratable share (according to the proportion of (i) the amount of such other Lender Party’s required repayment to (ii) the total
amount so recovered from the purchasing Lender Party) of any interest or other amount paid or
payable by the purchasing Lender Party in respect of the total amount so recovered. The Loan
Parties agree that any Lender Party so purchasing an interest or participating interest from
another Lender Party pursuant to this Section 2.13 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect to such interest
or participating interest, as the case may be, as fully as if such Lender Party were the direct
creditor of the Loan Parties in the amount of such interest or participating interest, as the case
may be.









 



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     SECTION 2.14. Use of Proceeds. (a) The proceeds of the Term B Advances and the
Revolving Credit Advances and issuances of Revolving Letters of Credit shall be available (and the
Borrower agrees that it shall use such proceeds and Letters of Credit) solely to (i) pay to the
Seller the cash consideration for the Equity Interest in the Companies, (ii) pay transaction fees
and expenses, (iii) provide working capital for the Borrower and its Subsidiaries and (iv) be
applied to other corporate purposes of the Borrower and its Subsidiaries. For the avoidance of
doubt, the proceeds of the Revolving Credit Advances may not be used to make optional prepayments
of the Term B Advances hereunder.



          (b) The proceeds of the Term LC Advances shall be available (and the Borrower agrees that it
shall use such proceeds) solely for deposit in the Term LC Collateral Account, and for payment from
the Term LC Collateral Account in accordance with this Agreement.




          (c) The issuances of Term Letters of Credit shall be available (and the Borrower agrees that
shall use such Term Letters of Credit) solely (i) for the benefit of the MSCG Hedging Facility
Counterparty to support the Borrower’s obligations under the MSCG Hedging Facility, up to an
Available Amount not greater than $100,000,000 and (ii) for general corporate purposes of the
Borrower and its Subsidiaries, up to an Available Amount not greater than $20,000,000.




     SECTION 2.15. Defaulting Lenders. (a) In the event that, at any one time, (i) any
Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted
Advance to the Borrower and (iii) the Borrower shall be required to make any payment hereunder or
under any other Loan Document to or for the account of such Defaulting Lender, then the Borrower
may, so long as no Event of Default shall occur or be continuing at such time and to the fullest
extent permitted by applicable law, set off and otherwise apply the Obligation of the Borrower to
make such payment to or for the account of such Defaulting Lender against the obligation of such
Defaulting Lender to make such Defaulted Advance. In the event that, on any date, the Borrower
shall so set off and otherwise apply its obligation to make any such payment against the obligation
of such Defaulting Lender to make any such Defaulted Advance on or prior to such date, the amount
so set off and otherwise applied by the Borrower shall constitute for all purposes of this
Agreement and the other Loan Documents an Advance by such Defaulting Lender made on the date of
such setoff under the Facility pursuant to which such Defaulted Advance was originally required to have been made pursuant to Section 2.01. Such Advance shall be considered, for all purposes
of this Agreement (except calculation of interest, which shall accrue only from the actual date of
such deemed advance), to comprise part of the Borrowing in connection with which such Defaulted
Advance was originally required to have been made pursuant to Section 2.01, even if the other
Advances comprising such Borrowing shall be Eurodollar Rate Advances on the date such Advance is
deemed to be made pursuant to this subsection (a). The Borrower shall notify the Administrative
Agent at any time the Borrower exercises its right of set-off pursuant to this subsection (a) and
shall set forth in such notice (A) the name of the Defaulting Lender and the Defaulted Advance
required to be made by such Defaulting Lender and (B) the amount set off and otherwise applied in
respect of such Defaulted Advance pursuant to this subsection (a). Any portion of such payment
otherwise required to be made by the Borrower to or for the account of such Defaulting Lender which
is paid by the









 



61

Borrower, after giving effect to the amount set off and otherwise applied by the
Borrower pursuant to this subsection (a), shall be applied by the Administrative Agent as specified
in subsection (b) or (c) of this Section 2.15.




          (b) In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender,
(ii) such Defaulting Lender shall owe a Defaulted Amount to any Agent or any of the other Lender
Parties and (iii) the Borrower shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting Lender, then the Administrative Agent
may, on its behalf or on behalf of such other Agents or such other Lender Parties and to the
fullest extent permitted by applicable law, apply at such time the amount so paid by the Borrower
to or for the account of such Defaulting Lender to the payment of each such Defaulted Amount to the
extent required to pay such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date, the amount so
applied by the Administrative Agent shall constitute for all purposes of this Agreement and the
other Loan Documents payment, to such extent, of such Defaulted Amount on such date. Any such
amount so applied by the Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Agents or such other Lender Parties in the
following order of priority:





     (i) first, to the Agents for any Defaulted Amounts then owing to them, in their
capacities as such, ratably in accordance with such respective Defaulted Amounts then owing
to the Agents;




     (ii) second, to the Revolving Issuing Bank for any Defaulted Amounts then owing to it,
in its capacity as such, ratably in accordance with such Defaulted Amounts then owing to the
Revolving Issuing Bank; and




     (iii) third, to any other Lender Parties for any Defaulted Amounts then owing to such
other Lender Parties, ratably in accordance with such respective Defaulted Amounts then
owing to such other Lender Parties.


Any portion of such amount paid by the Borrower for the account of such Defaulting Lender remaining
after giving effect to the amount applied by the Administrative Agent pursuant to this subsection
(b) shall be applied by the Administrative Agent as specified in subsection (c) of this Section
2.15.




          (c) In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender,
(ii) such Defaulting Lender shall not owe a Defaulted Advance or a Defaulted Amount and (iii) the
Borrower, any Agent or any other Lender Party shall be required to pay or distribute any amount
hereunder or under any other Loan Document to or for the account of such Defaulting Lender, then
the Borrower or such Agent or such other Lender Party shall pay such amount to the Administrative
Agent to be held by the Administrative Agent, to the fullest extent permitted by applicable law, in
escrow or the Administrative Agent shall, to the fullest extent permitted by applicable law, hold
in escrow such amount otherwise held by it. Any funds held by the Administrative Agent in escrow
under this subsection (c) shall be deposited by the Administrative Agent in an account with a
commercial bank selected by the Administrative Agent (the “Escrow Bank”), in the name and under the
control of the Administrative Agent, but










 



62



subject to the provisions of this subsection (c). The terms applicable to such account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be the Escrow Bank’s standard terms applicable to
escrow accounts maintained with it. Any interest credited to such account from time to time shall
be held by the Administrative Agent in escrow under, and applied by the Administrative Agent from
time to time in accordance with the provisions of, this subsection (c). The Administrative Agent
shall, to the fullest extent permitted by applicable law, apply all funds so held in escrow from
time to time to the extent necessary to make any Advances required to be made by such Defaulting
Lender and to pay any amount payable by such Defaulting Lender hereunder and under the other Loan
Documents to the Administrative Agent or any other Lender Party, as and when such Advances or
amounts are required to be made or paid and, if the amount so held in escrow shall at any time be
insufficient to make and pay all such Advances and amounts required to be made or paid at such
time, in the following order of priority:





     (i) first, to the Agents for any amounts then due and payable by such Defaulting Lender
to them hereunder, in their capacities as such, ratably in accordance with such respective
amounts then due and payable to the Agents;




     (ii) second, to the Revolving Issuing Bank for any amounts then due and payable to it
hereunder, in its capacity as such, by such Defaulting Lender, ratably in accordance with
such amounts then due and payable to the Revolving Issuing Bank;




     (iii) third, to any other Lender Parties for any amount then due and payable by such
Defaulting Lender to such other Lender Parties hereunder, ratably in accordance with such
respective amounts then due and payable to such other Lender Parties; and




     (iv) fourth, to the Borrower for any Advance then required to be made by such
Defaulting Lender pursuant to a Commitment of such Defaulting Lender.


In the event that any Lender Party that is a Defaulting Lender shall, at any time, cease to be a
Defaulting Lender, any funds held by the Administrative Agent in escrow at such time with respect
to such Lender Party shall be distributed by the Administrative Agent to such Lender Party and
applied by such Lender Party to the Obligations owing to such Lender Party at such time under this
Agreement and the other Loan Documents ratably in accordance with the respective amounts of such
Obligations outstanding at such time.




          (d) The rights and remedies against a Defaulting Lender under this Section 2.15 are in
addition to other rights and remedies that the Borrower may have against such Defaulting Lender
with respect to any Defaulted Advance and that any Agent or any Lender Party may have against such
Defaulting Lender with respect to any Defaulted Amount.




     SECTION 2.16. Evidence of Debt. (a) Each Lender Party shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Advance owing to such Lender Party from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to time hereunder. The
Borrower agrees that upon notice by any Lender Party to the Borrower (with a copy of such notice to
the Administrative Agent) to the effect that a promissory note or









 



63

other evidence of indebtedness is required or appropriate in order for such Lender Party to evidence (whether for purposes of pledge,
enforcement or otherwise) the Advances owing to, or to be made by, such Lender Party, the Borrower
shall promptly execute and deliver to such Lender Party, with a copy to the Administrative Agent, a
Revolving Credit Note, a Term B Note and a Term LC Note, as applicable, in substantially the form
of Exhibits A-1, A-2 and A-3 hereto, respectively, payable to the order of such Lender Party in a
principal amount equal to the Revolving Credit Commitment, the Term B Advances and the Term LC
Advances, respectively, of such Lender Party. All references to Notes in the Loan Documents shall
mean Notes, if any, to the extent issued hereunder.




          (b) The Register maintained by the Administrative Agent pursuant to Section 9.07(d) shall
include a control account, and a subsidiary account for each Lender Party, in which accounts (taken
together) shall be recorded (i) the date and amount of each Borrowing made hereunder, the Type of
Advances comprising such Borrowing and, if appropriate, the Interest Period applicable thereto,
(ii) the terms of each Assignment and Acceptance delivered to and accepted by it, (iii) the amount
of any principal or interest due and payable or to become due and payable from the Borrower to each
Lender Party hereunder and (iv) the amount of any sum received by the Administrative Agent from the
Borrower hereunder and each Lender Party’s share thereof.




          (c) Entries made in good faith by the Administrative Agent in the Register pursuant to
subsection (b) above, and by each Lender Party in its account or accounts pursuant to subsection
(a) above, shall be prima facie evidence of the amount of principal and interest due and payable or
to become due and payable from the Borrower to, in the case of the Register, each Lender Party and,
in the case of such account or accounts, such Lender Party, under this Agreement, absent manifest
error; provided, however, that the failure of the Administrative Agent or such Lender Party to make
an entry, or any finding that an entry is incorrect, in the Register or such account or accounts
shall not limit, increase or otherwise affect the obligations of the Borrower under this Agreement.




ARTICLE III




CONDITIONS TO EFFECTIVENESS AND OF LENDING AND

ISSUANCES OF LETTERS OF CREDIT




     SECTION 3.01. Conditions Precedent. Section 2.01 of this Agreement shall become
effective on and as of the first date (the “Effective Date”) on which the following conditions
precedent have been satisfied (and the obligation of each Lender to make an Advance or of either
Issuing Bank to issue a Letter of Credit on the occasion of the Initial Extension of Credit
hereunder is subject to the satisfaction of such conditions precedent before or concurrently with
the Effective Date):




     (a) The Administrative Agent shall have received on or before the Effective Date the
following, each dated such day (unless otherwise specified), in form and substance
satisfactory to the Administrative Agent (unless otherwise specified) and (except for the
Notes) in sufficient copies for each Lender Party:









 



64



     (i) The Notes payable to the order of the Lenders to the extent requested by
the Lenders pursuant to the terms of Section 2.16.




     (ii) A security agreement in substantially the form of Exhibit D hereto (the
“Security Agreement”), duly executed by each Loan Party, together with:




     (A) certificates representing the Initial Pledged Equity referred to
therein accompanied by undated stock powers executed in blank and
instruments evidencing the Initial Pledged Debt referred to therein,
indorsed in blank,




     (B) proper financing statements in form appropriate for filing under
the Uniform Commercial Code of all jurisdictions necessary in order to
perfect and protect the first priority liens and security interests created
under the Security Agreement, covering the Collateral described in the
Security Agreement,




     (C) completed requests for information, dated on or before the
Effective Date, listing all effective financing statements filed in the
jurisdictions referred to in clause (B) above that name any Loan Party as
debtor, together with copies of such other financing statements,




     (D) evidence of the completion (or preparation for filing) of all other
recordings and filings of or with respect to the Security Agreement that the
Administrative Agent may deem necessary or desirable in order to perfect and
protect the security interest created thereunder,




     (E) a consent to the assignment of the MSCG Hedging Facility Agreement
and the MSCG Capacity Swap Agreement in substantially the form of Exhibit A
to the Security Agreement, duly executed by MSCG, in
its capacity as the MSCG Hedging Facility Counterparty and the Capacity
Swap Counterparty,




     (F) the Deposit Account Control Agreements referred to in the Security
Agreement, duly executed by the applicable Loan Parties and each Pledged
Account Bank referred to in the Security Agreement, and




     (G) evidence that all other action that the Administrative Agent may
reasonably deem necessary in order to perfect and protect the first priority
liens and security interests created under the Security Agreement has been
taken (including, without limitation, receipt of duly executed payoff
letters and UCC-3 termination statements (if necessary)).




     (iii) Deeds of trust, trust deeds, mortgages, leasehold mortgages and leasehold
deeds of trust in substantially the form of Exhibit G-1 hereto (with such changes as
may be satisfactory to the Administrative Agent and its counsel to account for local
law matters) or otherwise in form and substance satisfactory to the Administrative
Agent, covering the Properties (together with each other









 



65



mortgage delivered pursuant
to Section 5.01(k), in each case as amended, the “Mortgages”), duly executed by the
appropriate Loan Party, together with:




     (A) evidence that counterparts of the Mortgages have been either (x)
duly recorded on or before the Effective Date or (y) duly executed,
acknowledged and delivered on or before the Effective Date and are in form
suitable for filing or recording in all filing or recording offices that the
Administrative 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 Secured Parties and that all
filing and recording taxes and fees have been paid,




     (B) fully paid American Land Title Association Lender’s Extended
Coverage title insurance policies (the “Mortgage Policies”) in form and
substance, with endorsements (including zoning endorsements where available)
and in amount acceptable to the Administrative Agent, issued, coinsured and
reinsured by title insurers acceptable to the Administrative 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 materialmen’s Liens) and encumbrances, excepting only
Permitted Encumbrances, and providing for such other affirmative insurance
(including endorsements for future advances under the Loan Documents and for
mechanics’ and materialmen’s Liens) and such coinsurance and direct access
reinsurance as the Administrative Agent may deem necessary or desirable and
with respect to any such property located in a State in which a zoning
endorsement is not available, a zoning compliance letter from the applicable
municipality in a form reasonably acceptable to the Administrative Agent,




     (C) American Land Title Association/American Congress on Surveying and
Mapping form surveys, for which all necessary fees (where applicable) have
been paid, and dated no more than 30 days before the Effective Date,
certified to the Administrative Agent, the Collateral Agent and the issuer
of the Mortgage Policies in a manner satisfactory to the Administrative
Agent by a land surveyor duly registered and licensed in the States in which
the real property described in such surveys is located and acceptable to the
Administrative 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 and the
absence of encroachments, either by such improvements or on to such
property, and other defects, other than encroachments and other defects
acceptable to the Administrative Agent,




     (D) estoppel and consent agreements, in form and substance satisfactory
to the Administrative Agent, executed by each of the lessors of the leased
real properties listed on Schedule 4.01(v)(1) hereto, along









 



66



with (x) a memorandum of lease in recordable form with respect to such leasehold
interest, executed and acknowledged by the owner of the affected real
property, as lessor, or (y) evidence that the applicable lease with respect
to such leasehold interest or a memorandum thereof has been recorded in all
places necessary or desirable, in the Administrative Agent’s reasonable
judgment, to give constructive notice to third-party purchasers of such
leasehold interest, or (z) if such leasehold interest was acquired or
subleased from the holder of a recorded leasehold interest, the applicable
assignment or sublease document, executed and acknowledged by such holder,
in each case in form sufficient to give such constructive notice upon
recordation and otherwise in form satisfactory to the Administrative Agent,




(E) estoppel certificates executed by all tenants of the leased real
properties listed on Schedule 4.01(v)(2) hereto,




(F) evidence of the insurance required by the terms of the Mortgages,
and




(G) such other consents, agreements and confirmations of lessors and
third parties as the Administrative Agent may deem necessary or desirable
and evidence that all other actions that the Administrative Agent may deem
necessary or desirable in order to create valid first and subsisting Liens
on the property described in the Mortgages has been taken.




     (iv) An intercreditor agreement in substantially the form of Exhibit E hereto
(the “Intercreditor Agreement”), duly executed by the Borrower, the Administrative
Agent, the Collateral Agent, the “Administrative Agent” under the
Second Lien Facility, the MSGC Hedging Facility Counterparty, the MSCG Capacity
Swap Counterparty and the Special LC Facility Administrative Agent.




     (v) First preferred fleet mortgages, in substantially the form of Exhibit G-2
hereto (with such changes as may be satisfactory to the Administrative Agent and its
counsel to account for local law matters) or otherwise in form and substance
satisfactory to the Administrative Agent, covering the Properties (together with
each other mortgage delivered pursuant to Section 5.01(s), in each case as amended,
the “Barge Mortgages”), duly executed by the appropriate Loan Party, together with:




     (A) evidence that counterparts of the Barge Mortgages have been either
(x) duly recorded on or before the Effective Date or (y) duly executed,
acknowledged and delivered on or before the Effective Date and are in form
suitable for filing or recording in all filing or recording offices that the
Administrative Agent may deem necessary or desirable in order to create a
valid first and subsisting Lien on the property described therein in









 



67



favor of the Collateral Agent for the benefit of the Secured Parties and that all
filing and recording taxes and fees have been paid,




     (B) evidence of the insurance required by the terms of the Barge
Mortgages, and




     (C) such other consents, agreements and confirmations of lessors and
third parties as the Administrative Agent may deem necessary or desirable
and evidence that all other actions that the Administrative Agent may deem
necessary or desirable in order to create valid first and subsisting Liens
on the property described in the Barge Mortgages has been taken.




     (vi) Certified copies of the resolutions of the Board of Directors of each Loan
Party approving the Transaction and each Transaction Document to which it is or is
to be a party, and of all documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if any, with respect to
the Transaction and each Transaction Document to which it is or is to be a party.




     (vii) A copy of a certificate of the Secretary of State of the jurisdiction of
incorporation of each Loan Party, dated reasonably near the Effective Date
certifying (A) as to a true and correct copy of the charter of such Loan Party and
each amendment thereto on file in such Secretary’s office and (B) that (1) such
amendments are the only amendments to such Loan Party’s charter on file in such
Secretary’s office, (2) such Loan Party has paid all franchise taxes to the date of
such certificate and (3) such Loan Party is duly incorporated and in good standing
or presently subsisting under the laws of the State of the jurisdiction of its
incorporation.




     (viii) A certificate of each Loan Party signed on behalf of such Loan Party by
its President or a Vice President and its Secretary or any Assistant Secretary,
dated the Effective Date (the statements made in which certificate shall be true on
and as of the Effective Date), certifying as to (A) the absence of any amendments to
the charter of such Loan Party since the date of the Secretary of State’s
certificate referred to in Section 3.01(a)(vii), (B) a true and correct copy of the
bylaws of such Loan Party as in effect on the date on which the resolutions referred
to in Section 3.01(a)(vi) were adopted and on the Effective Date, (C) the absence of
any proceeding for the dissolution or liquidation of such Loan Party, (D) the truth
of the representations and warranties contained in the Loan Documents (other than
the Excluded Representations) as though made on and as of the Effective Date, (E)
the absence of any event occurring and continuing, or resulting from the Initial
Extension of Credit, that constitutes a Default, (F) the entering into and full
force and effect of the MSCG Hedging Facility, (G) the entering into and full force
and effect of the MSCG Capacity Swap Agreement, (H) the consummation of the
Acquisition in accordance with the terms of the Purchase Agreement as in effect on
September 30, 2005, with such amendments









 



68



and waivers as do not materially adversely
affect the Lenders and (I) and as to the matters set forth in Sections 3.01(a)(xvi)
and (c).




     (ix) A certificate of the Secretary or an Assistant Secretary of each Loan
Party certifying the names and true signatures of the officers of such Loan Party
authorized to sign each Transaction Document to which it is or is to be a party and
the other documents to be delivered hereunder and thereunder.




     (x) Certified copies of each of the Special LC Facility Documents, the Purchase
Agreement and the Second Lien Loan Documents, duly executed by the parties thereto
and in form and substance satisfactory to the Lender Parties, together with all
agreements, instruments and other documents delivered in connection therewith as the
Administrative Agent shall request.




     (xi) Certificates in substantially the form of Exhibit H, attesting to the
Solvency of the Loan Parties (on a consolidated basis) before and after giving
effect to the Transaction, from its chief executive officer.




     (xii) Audited annual consolidated financial statements of the Companies for the
two Fiscal Years ended mostly recently to the 90th day before the
Effective Date, unaudited consolidated financial statements of the Companies for the
three fiscal quarters ending September 30, 2005, pro forma financial statements as
to the Companies giving effect to the Transactions for the most recently completed
Fiscal Year ending at least 90 days prior to the Effective Date and for the three
fiscal quarters ending September 30, 2005, which in the case of the audited
consolidated financial statements of the Companies for the fiscal year ending
December 31, 2004, shall not indicate an Effective Date Material Adverse Effect in
comparison to the unaudited financial consolidated financial statements of the
Companies for the fiscal year ending December 31, 2004 previously delivered to the
Administrative Agent and in all other cases, shall not indicate an Effective
Date Material Adverse Effect in comparison to the June 30, 2005 unaudited
financial consolidated financial statements of the Companies (disregarding
seasonality).




     (xiii) Copies of all policies, endorsements and other documents required under
Section 5.01(d) to be in effect as of the Effective Date, accompanied by (i) a
certificate of the Borrower signed by its President or Vice President or a Financial
Officer certifying that the copies of each of the policies, endorsements and other
documents delivered pursuant to this Section 3.01(a)(xiii) are true, correct and
complete copies thereof, (ii) letters from the Borrower’s insurance brokers or
insurers (commonly referred to as “undertaking letters”), dated not earlier than
fifteen (15) days prior to the Effective Date, stating with respect to such
insurance policy that (A) such policy is in full force and effect, (B) all premiums
theretofore due and payable thereon have been paid and (C) the underwriters of such
insurance have agreed that the policies, when issued, will contain the provisions
required under Section 5.01(d) and (iii) a report from Moore-McNeil, LLC in form and
substance reasonably satisfactory to the Lenders









 



69



confirming that such required
insurance is in full force and effect in accordance with the terms of this
Agreement.




     (xiv) A favorable opinion of Kirkland & Ellis LLP, counsel for the Loan
Parties, in substantially the form of Exhibit I hereto.




     (xv) A favorable opinion of Thompson Coburn LLP, special counsel to the Loan
Parties in respect of the Barge Mortgages, in substantially the form of Exhibit J
hereto and as to such other matters as any Lender Party through the Administrative
Agent may reasonably request.




     (xvi) Evidence satisfactory to the Administrative Agent that the Leverage
Ratio, determined on a pro forma basis as if the Transactions occurred on January 1,
2005 is less than 5.0:1.0.




     (xvii) Copies of the Governmental Authorizations referred to in Section
3.01(e).




     (b) The Administrative Agent shall be satisfied that all Existing Debt (other than Debt
permitted by Section 5.02(b)) has been (or is being simultaneously) prepaid, redeemed or
defeased in full or otherwise satisfied and extinguished and all commitments relating
thereto terminated.




     (c) Before giving effect to the Transaction, there shall have occurred no Effective
Date Material Adverse Effect since each of June 30, 2005 and September 30, 2005.




     (d) There shall exist no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries pending or threatened in writing before
any Governmental Authority that (i) could be reasonably likely to have an Effective Date
Material Adverse Effect or (ii) purports to affect the legality, validity or
enforceability of any Transaction Document or to prohibit the consummation of the
Transaction.




     (e) All Governmental Authorizations and third party consents and approvals necessary in
connection with the Transaction shall have been obtained (without the imposition of any
conditions that are materially adverse to the interests of the Loan Parties or to the Lender
Parties) and shall remain in effect; all applicable waiting periods in connection with the
Transaction shall have expired without any action being taken by any competent authority,
and no law or regulation shall be applicable, in each case that after giving effect to all
Governmental Authorizations that have been obtained or that apply generally to transfers in
the Loan Parties’ industry, restrains, prevents or imposes materially adverse conditions
upon the Transaction or the rights of the Loan Parties or their Subsidiaries freely to
transfer or otherwise dispose of, or to create any Lien on, any properties now owned or
hereafter acquired by any of them.




     (f) The Borrower shall have paid all accrued fees of the Agents and the Lender Parties
and all accrued expenses of the Agents (including the accrued fees and









 



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expenses of counsel
to the Administrative Agent and the Collateral Agent and special counsel to the Lender
Parties).




     (g) The Acquisition shall have been consummated materially in accordance with the terms
of the Purchase Agreement, without any waiver or amendment not consented to by the Lender
Parties of any material term, provision or condition set forth therein, and in material
compliance with all applicable Laws.




     (h) (i) The ISDA Schedule attached to the Confirmation Agreement referred to in the
definition of “MSCG Hedging Facility Agreement” shall have been executed by the Borrower on
the Effective Date (the “Effective Date ISDA Schedule”) and (ii) the MSCG Hedging Facility
and the ISDA Schedule shall have been entered into and shall be in full force and effect.




     (i) The Borrower shall have received at least $300,000,000 in gross cash proceeds from
advances under the Second Lien Facility and proceeds from an equity contribution by the
Equity Investors (the “Equity Financing”) in an amount equal to $314,400,000 (of which
$313,170,000 shall be funded in cash and $1,230,000 shall be funded through credits to
certain Equity Investors against certain funds owed to them). After giving effect to the
Transactions, no more than $75,000,000 shall have been drawn (or issued) under the Revolving
Credit Facility.




     (j) Each of the representations and warranties of the Seller as to the Companies and
their Subsidiaries contained in the Purchase Agreement (without regard to “materiality,”
“material adverse effect,” “Material Adverse Effect” (as defined in the Purchase Agreement)
or similar qualifiers, without regard to any updates to the Seller’s Disclosure Schedules
(as defined in the Purchase Agreement) and without regard to any notice of any breach of
representation or warranty given to the Borrower or the Equity Investors on or after the
Execution Date (as defined in the Purchase Agreement)) is and was true and correct as of the
date made (except to the extent such representations and
warranties expressly relate to an earlier date, in which case as of such earlier date),
except for failures to be true and correct that would not reasonably be expected to have,
individually or in the aggregate, an Effective Date Material Adverse Effect.



     SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance. The obligation of
each Appropriate Lender to make an Advance (other than a Letter of Credit Advance made by an
Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(c)) on the occasion of each
Borrowing (including the initial Borrowing), and the obligation of each Issuing Bank to issue a
Letter of Credit (including the initial issuance) shall be subject to the further conditions
precedent that on the date of such Borrowing or issuance, the following statements shall be true
and the Administrative Agent shall have received for the account of such Lender or such Issuing
Bank a certificate signed by a duly authorized officer of the Borrower, dated the date of such
Borrowing or issuance, stating that:




     (a) the representations and warranties contained in each Loan Document (other than,
with respect to the Initial Extension of Credit, the Excluded Representations) are correct
in all material respects on and as of such date, before and after giving effect to









 



71



such Borrowing or issuance and to the application of the proceeds therefrom, as though made on
and as of such date, other than any such representations or warranties that, by their terms,
refer to a specific date other than the date of such Borrowing or issuance, in which case as
of such specific date; and




     (b) no Default has occurred and is continuing, or would result from such Borrowing or
issuance or from the application of the proceeds therefrom.



     SECTION 3.03. Determinations Under Section 3.01. For purposes of determining
compliance with the conditions specified in Section 3.01, each Lender Party 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 the Lender Parties
unless an officer of the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender Party prior to the Effective Date
specifying its objection thereto and, if the Initial Extension of Credit consists of a Borrowing,
such Lender Party shall not have made available to the Administrative Agent such Lender Party’s
ratable portion of such Borrowing.



ARTICLE IV




REPRESENTATIONS AND WARRANTIES




     SECTION 4.01. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows (except that the Excluded Representations are not made on the
date hereof):




     (a) Each Loan Party and each of its Subsidiaries (i) is a corporation, limited
liability company or limited partnership duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation, (ii) is duly qualified
and in good standing as a foreign corporation or company in each other jurisdiction in which
it owns or leases property or in which the conduct of its business requires it to so qualify
or be licensed except where the failure to so qualify or be licensed could not be reasonably
likely to have a Material Adverse Effect and (iii) has all requisite corporate, limited
liability company or partnership (as applicable) power and authority (including, without
limitation, all Governmental Authorizations) to own or lease and operate its properties and
to carry on its business as now conducted and as proposed to be conducted. As of the
Effective Date, all of the outstanding Equity Interests in the Parent have been validly
issued, are fully paid and non-assessable and are owned by the Equity Investors in the
amounts specified on Schedule 4.01(a) hereto free and clear of all Liens, except those
created under the Collateral Documents and Permitted Priority Liens.




     (b) Set forth on Schedule 4.01(b) hereto is a complete and accurate list of all Loan
Parties, showing as of the date hereof (as to each Loan Party) the jurisdiction of its
incorporation, the address of its principal place of business and its U.S. taxpayer
identification number or, in the case of any non-U.S. Loan Party that does not have a U.S.
taxpayer identification number, its unique identification number issued to it by the
jurisdiction of its incorporation. The copy of the charter of each Loan Party and each









 



72



amendment thereto provided pursuant to Section 3.01(a)(vi) is a true and correct copy of
each such document, each of which is valid and in full force and effect.




     (c) Set forth on Schedule 4.01(c) hereto is a complete and accurate list of all
Subsidiaries of each Loan Party, showing as of the date hereof (as to each such Subsidiary)
the jurisdiction of its formation, the number of shares, membership interests or partnership
interests (as applicable) of each class of its Equity Interests authorized, and the number
outstanding, on the date hereof and the percentage of each such class of its Equity
Interests owned (directly or indirectly) by such Loan Party and the number of shares covered
by all outstanding options, warrants, rights of conversion or purchase and similar rights at
the date hereof. All of the outstanding Equity Interests in each Loan Party’s Subsidiaries
have been validly issued, are (in the case of a corporation) fully paid and non-assessable
and are owned by such Loan Party or one or more of its Subsidiaries free and clear of all
Liens, except those created under the Collateral Documents and Permitted Liens of the type
described in clauses (ii) through (ix), (xvi), (xvii), (xviii) and (xx) of Section 5.02(a).




     (d) The execution, delivery and performance by each Loan Party of each Transaction
Document to which it is or is to be a party, and the consummation of the Transaction, are
within such Loan Party’s corporate, limited liability company or limited partnership (as
applicable) powers, have been duly authorized by all necessary corporate, limited liability
company or limited partnership (as applicable) action, and do not (i) contravene such Loan
Party’s charter, bylaws, limited liability company agreement, partnership agreement or other
constituent documents, (ii) violate any law, rule, regulation (including, without
limitation, Regulation X of the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in
the breach of, or constitute a default or require any payment to be made under, any
contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument binding on or affecting any Loan Party, any of its
Subsidiaries or any of their properties (other than any conflicts, breaches, defaults or
payments that either individually or in the aggregate, could not reasonably be likely to
have a Material Adverse Effect), or (iv) except for the Liens created under the Loan
Documents, result in or require the creation or imposition of any Lien upon or with respect
to any of the properties of any Loan Party or any of its Subsidiaries. No Loan Party or any
of its Subsidiaries is in violation of any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument, the violation or
breach of which could be reasonably likely to have a Material Adverse Effect.




     (e) No Governmental Authorization, and no notice to or filing with, any Governmental
Authority or any other third party is required for (i) the operation of the business of the
Loan Parties as required by applicable law and the Transaction Documents, (ii) the due
execution, delivery, recordation, filing or performance by any Loan Party of any Transaction
Document to which it is or is to be a party, or for the consummation of the Transaction,
(iii) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral
Documents, (iv) the perfection or maintenance of the









 



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Liens created under the Collateral Documents (including the first priority nature thereof) or (v) the exercise by any Agent or
any Lender Party of its rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents, except for (A) the authorizations,
approvals, actions, notices and filings listed on the Schedule 4.01(e) hereto, all of which
have been (or are being) duly obtained, taken, given or made and are in full force and
effect (other than any authorizations, approvals, actions, notices or filings that either,
individually or in the aggregate, could not reasonably be likely to have a Material Adverse
Effect) and (B) any Governmental Authorization for any Agent or any Lender Party or any
purchaser to acquire control over any of the Generating Stations. All applicable waiting
periods in connection with the Transaction have expired without any action having been taken
by any competent authority restraining, preventing or imposing materially adverse conditions
upon the Transaction or the rights of the Loan Parties or their Subsidiaries freely to
transfer or otherwise dispose of, or to create any Lien on, any properties now owned or
hereafter acquired by any of them. The Acquisition has been consummated materially in
accordance with the Purchase Agreement and applicable law.




     (f) This Agreement has been, and each other Transaction Document when delivered
hereunder will have been, duly executed and delivered by each Loan Party party thereto.
This Agreement is, and each other Transaction Document when delivered hereunder will be, the
legal, valid and binding obligation of each Loan Party party thereto, enforceable against
such Loan Party in accordance with its terms, except as enforceability may be limited by (i)
bankruptcy, insolvency, fraudulent conveyance, reorganization or similar laws relating to or
affecting the enforcement of creditors’ rights generally and (ii) general equitable
principles (whether considered in a proceeding in equity or at law).




     (g) There is no action, suit, investigation, litigation or proceeding against, or to
the best of the Borrower’s knowledge, affecting, any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened in writing before any Governmental
Authority or arbitrator that (i) could be reasonably likely to have a Material Adverse
Effect or (ii) purports to affect the legality, validity or enforceability of any
Transaction Document or the consummation of the Transaction.




     (h) The Consolidated balance sheet of the Companies and their Subsidiaries as at each
of December 31, 2003 and December 31, 2004, and the related Consolidated statement of income
and Consolidated statement of cash flows of the Companies and their Subsidiaries for the
fiscal year then ended, accompanied by an unqualified opinion of Deloitte & Touche,
independent public accountants, and the Consolidated balance sheet of the Companies and
their Subsidiaries as at September 30, 2005 for the nine months then ended, and the related
Consolidated statement of income and Consolidated statement of cash flows of the Companies
and their Subsidiaries for the nine months then ended, copies of which have been furnished
to each Lender Party, fairly present in all material respects, subject, in the case of said
balance sheets as at September 30, 2005 and said statements of income and cash flows for the
nine months then ended, to year end audit adjustments and absence of footnotes, the
Consolidated financial condition of the Companies and their Subsidiaries as at such dates
and the Consolidated results of









 



74



operations of the Companies and their Subsidiaries for the
periods ended on such dates, all in accordance with generally accepted accounting principles
applied on a consistent basis, and since December 31, 2004, there has been no Material
Adverse Change.




     (i) The Consolidated pro forma balance sheets of the Borrower and its Subsidiaries as
at December 31, 2004, and September 30, 2005, and the related Consolidated pro forma
statement of income and cash flows of the Borrower and its Subsidiaries for the fiscal year
and nine months then ended, respectively, copies of which have been furnished to each Lender
Party, fairly present in all material respects the Consolidated pro forma financial
condition of the Borrower and its Subsidiaries as at such date and the Consolidated pro
forma results of operations of the Borrower and its Subsidiaries for the period ended on
such date, in each case giving effect to the Transaction, all in accordance with GAAP
(subject to audit adjustments and absence of footnotes).




     (j) The Consolidated forecasted statement of income and statement of cash flows of the
Borrower and its Subsidiaries delivered to the Lender Parties pursuant to Section 5.03 were
prepared in good faith on the basis of the assumptions stated therein, which assumptions
were believed to be fair in light of the conditions existing at the time of delivery of such
forecasts, and, at the time of delivery, the Borrower believed they represented best
estimate of its future financial performance.




     (k) The Information Memorandum and other information, exhibits or reports furnished by
or on behalf of any Loan Party to any Agent or any Lender Party in connection with the
negotiation and syndication of the Loan Documents or pursuant to the terms of the Loan
Documents, taken as a whole, did not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements
made therein not misleading in light of the other information contained therein.




     (l) The Borrower is not engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock, and no proceeds of any Advance or drawings under any
Letter of Credit will be used to purchase or carry any Margin Stock or to extend credit to
others for the purpose of purchasing or carrying any Margin Stock.




     (m) Neither any Loan Party nor any of its Subsidiaries is an “investment company,” as
such term is defined in the Investment Company Act of 1940, as amended.




     (n) To the extent required by the Collateral Documents and except to the extent that
such actions are not within the Loan Parties’ control, all filings and other actions
necessary to perfect and protect the security interest in the Collateral created under the
Collateral Documents have been duly made or taken and are in full force and effect, and the
Collateral Documents create in favor of the Collateral Agent for the benefit of the Secured
Parties a valid and, together with such filings and other actions, perfected first priority
security interest in the Collateral (subject to Permitted Priority Liens), securing the
payment of the Secured Obligations, and all filings and other actions necessary or desirable
to perfect and protect such security interest have been duly taken. The Loan Parties are
the legal and beneficial owners of, or hold rights in, the Collateral









 



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free and clear of any Lien, except for the liens and security interests created or permitted under the Loan
Documents.




     (o) The Loan Parties are, together with their Subsidiaries on a Consolidated basis,
Solvent.




     (p) (i) Set forth on Schedule 4.01(p) hereto is a complete and accurate list of all
Plans and Multiemployer Plans.




     (ii) No ERISA Event has occurred or is reasonably expected to occur with respect to any
Plan that has resulted in or is reasonably expected to result in a material liability of any
Loan Party or any ERISA Affiliate.




     (iii) Schedule B (Actuarial Information) to the most recent annual report (Form 5500
Series) for each Plan, copies of which have been filed with the Internal Revenue Service
have been made available to the Lender Parties, is, to the knowledge of the Loan Parties,
complete and accurate and fairly presents the funding status of such Plan, and, to the
knowledge of the Loan Parties, since the date of such Schedule B there has been no material
adverse change in such funding status.




     (iv) Neither any Loan Party nor any ERISA Affiliate has incurred or is reasonably
expected to incur any Withdrawal Liability to any Multiemployer Plan that could reasonably
be expected to result in a Material Adverse Effect.




     (v) Neither any Loan Party nor any ERISA Affiliate has been notified by the sponsor of
a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA, and no such Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, within the
meaning of Title IV of ERISA.




     (q) Except as otherwise set forth on Schedule 4.01(q) hereto, (i) the operations and
properties of each Loan Party and each of its Subsidiaries comply with all applicable
Environmental Laws and Environmental Permits, except for any noncompliance that would not
reasonably be expected to have a Material Adverse Effect, all past non-compliance with such
Environmental Laws and Environmental Permits has been resolved without ongoing obligations
or costs or with ongoing obligations or costs that would not reasonably be expected to have
a Material Adverse Effect, and no circumstances exist that would reasonably be expected to
(A) form the basis of an Environmental Action against any Loan Party or any of its
Subsidiaries or any of their properties that would have a Material Adverse Effect or (B)
cause any such property to be subject to any restrictions on ownership or transferability
under any Environmental Law (other than restrictions generally applicable in the Borrower’s
industry).




     (ii) Except as would not reasonably be expected to have a Material Adverse Effect: none
of the properties currently owned or operated by any Loan Party or any of its Subsidiaries
is listed or to the knowledge of Borrower proposed for listing on the NPL or on the CERCLIS
or any analogous state list or, to the knowledge of the Borrower, is adjacent to property
listed on such list; there are no underground storage tanks or surface









 



76



impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated,
stored or disposed (as such terms are defined by the Resource Conservation and Recovery Act
or any analogous state law) on any property currently owned or operated by any Loan Party or
any of its Subsidiaries; there is no asbestos or asbestos-containing material on any
property currently owned or operated by any Loan Party or any of its Subsidiaries that
requires abatement or encapsulation under any Environmental Law; and Hazardous Materials
have not been released, discharged or disposed of in violation of, or that require
investigation or remediation under any, Environmental Law on any property currently owned or
operated by any Loan Party or any of its Subsidiaries.




     (iii) Neither any Loan Party nor any of its Subsidiaries is undertaking, and has not
completed, either individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any actual or
threatened release, discharge or disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any governmental or regulatory
authority or the requirements of any Environmental Law except for any such release,
discharge or disposal that would not reasonably be expected to have a Material Adverse
Effect; and all Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently owned or operated by any Loan Party or any of
its Subsidiaries have been disposed of in a manner that would not reasonably be expected to
have a Material Adverse Effect.




     (r) (i) Except as provided on Part I of Schedule 4.01(r), neither any Loan Party nor
any of its Subsidiaries is party to any tax sharing agreement other than a tax sharing
agreement approved by the Required Lenders.




     (ii) To the extent required by Section 5.01(b), each Loan Party and each of its
Subsidiaries and Affiliates has filed, has caused to be filed or has been included in all
material tax returns (Federal, state, local and foreign) required to be filed and has paid
all material taxes shown thereon to be due, together with applicable interest and penalties.




     (iii) Set forth on Part II of Schedule 4.01(r) hereto is a complete and accurate list,
as of the date hereof, of each taxable year of each Loan Party and each of its Subsidiaries
and Affiliates for which Federal income tax returns have been filed and for which the
expiration of the applicable statute of limitations for assessment or collection has not
occurred by reason of extension or otherwise (an “Open Year”).




     (iv) The aggregate unpaid amount, as of the date hereof, of adjustments to the Federal
income tax liability of each Loan Party and each of its Subsidiaries and Affiliates proposed
by the Internal Revenue Service with respect to Open Years does not exceed $10,000,000. Set
forth on Part III of Schedule 4.01(r) hereto is a complete and accurate description, as of
the date hereof, of each such item that separately, for all such Open Years, together with
applicable interest and penalties, exceeds $2,000,000. No issues have been raised by the
Internal Revenue Service in respect of Open Years that, in the aggregate, could be
reasonably likely to have a Material Adverse Effect.









 



77



     (v) The aggregate unpaid amount, as of the date hereof, of adjustments to the state,
local and foreign tax liability of each Loan Party and its Subsidiaries and Affiliates
proposed by all state, local and foreign taxing authorities (other than amounts arising from
adjustments to Federal income tax returns) does not exceed $10,000,000. No issues have been
raised by such taxing authorities that, in the aggregate, could be reasonably likely to have
a Material Adverse Effect.




     (vi) No “ownership change” as defined in Section 382(g) of the Internal Revenue Code,
and no event that would result in the application of the “separate return limitation year”
or “consolidated return change of ownership” limitations under the Federal income tax
consolidated return regulations, has occurred with respect to the Borrower or the Company.




     (s) Set forth on Schedule 4.01(s) hereto is a complete and accurate list of all
Existing Debt not paid in full on the Effective Date (and in respect of which all
commitments have not been terminated), showing as of the date hereof the obligor and the
principal amount outstanding thereunder.




     (t) Set forth on Schedule 4.01(t) hereto is a complete and accurate list of all Liens
on the property or assets of any Loan Party or any of its Subsidiaries as of the Effective
Date, other than Permitted Priority Liens, showing the lienholder thereof, the principal
amount of the obligations secured thereby and the property or assets of such Loan Party or
such Subsidiary subject thereto.




     (u) Set forth on Schedule 4.01(u) hereto is a complete and accurate list of all real
property owned by any Loan Party or any of its Subsidiaries as of the Effective Date,
showing the street address, county or other relevant jurisdiction, state and record owner
thereof. Each Loan Party or such Subsidiary has good, marketable and insurable fee
simple title to such real property, free and clear of all Liens, other than Liens created or
permitted by the Loan Documents.




     (v) (1) Set forth on Schedule 4.01(v)(1) hereto is a complete and accurate list as of
the Effective Date of all leases of real property under which any Loan Party or any of its
Subsidiaries is the lessee, showing the street address, county or other relevant
jurisdiction, state, lessor, lessee, expiration date and annual rental cost thereof. Each
such lease is the legal, valid and binding obligation of the lessor thereof, enforceable in
accordance with its terms.




          (2) Set forth on Schedule 4.01(v)(2) hereto is a complete and accurate list as of the
Effective Date of all leases of real property under which any Loan Party is the lessor,
showing the street address, county or other relevant jurisdiction, state, lessor, lessee,
expiration date and annual rental cost thereof. Each such lease is the legal, valid and
binding obligation of the lessee thereof, enforceable in accordance with its terms.




     (w) Set forth on Schedule 4.01(w) hereto is a complete and accurate list of all
vessels, which for the avoidance of doubt shall include all barges, owned by the Companies
as of the Effective Date and covered or to be covered by the Barge Mortgage









 



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on the Effective Date; each such vessel is duly documented in the name of Astoria Generating Company, L.P. as
shipowner, and under the laws and flag of the United States of America for the registry
trade, with such vessel located and deployed as therein indicated (or as the Borrower shall
hereafter notify the Administrative Agent in writing promptly).




     (x) The Companies have all Governmental Authorizations and any contractual arrangements
with interconnecting utilities necessary for continuing ownership, qualification, operation
and dispatch of each of each of the Generating Stations, as follows: (i) for Capacity and
Ancillary Services purposes, subject to semi-annual net capacity testing as performed by the
NYISO and except as would not have a Material Adverse Effect (a) as of the date of this
Agreement, the Astoria Generating Facility is qualified with NYISO to provide approximately
1,250 MW of peak summer capacity and those Ancillary Services, as defined in NYISO Rules,
known as ten minute synchronized reserves, ten minute operating reserves and voltage ampere
regulatory, (b) as of the date of this Agreement, the Gowanus Gas Turbine Facility is
qualified with NYISO to provide approximately 538 MW of peak summer capacity and those
Ancillary Services, as defined in NYISO Rules, known as non-synchronized reserves and (c) as
of the date of this Agreement, the Narrows Gas Turbine Facility is qualified with NYISO to
provide approximately 278 MW of peak summer capacity and those Ancillary Services, as
defined in NYISO Rules, known as non-synchronized reserves; (ii) for each of the Generating
Stations to be electrically interconnected with the transmission system administered by
NYISO, directly or through electrical interconnections or switching facilities of electric
utilities in accordance with all applicable NYISO Rules and Governmental Authorizations, and
is qualified and lawfully may provide the foregoing Capacity and Ancillary Services, and
provide Energy in all applicable NYISO Markets up to the foregoing Capacity levels, without
restrictions as to operating time, days or
hours, other than in accordance with Governmental Authorizations, NYISO Rules and
Environmental Laws, except as would not have a Material Adverse Effect; (iii) Capacity
available from the Generating Stations qualifies as Capacity in Zone J, and deliveries of
Energy and Ancillary Services from the Generating Stations at their respective points of
interconnection with the NYISO transmission system qualify as Zone J deliveries pursuant to
NYISO Rules; (iv) the Federal Energy Regulatory Commission has granted Astoria authority to
sell Energy at market-based rates pursuant to Section 205 of the Federal Power Act, 16 U.S.
Code §824d (“Market-Based Rates”); and (v) each of the Generating Stations is interconnected
with regulated natural gas transmission or distribution systems and has adequate
arrangements for the delivery, receipt and storage, as applicable of gas, fuel oil and other
consumables as necessary for operation in the manner and at the Capacities set forth above
as such Generating Stations have been historically operated.




     (y) To the extent that each Vessel covered by each Barge Mortgage is in fact a “vessel”
within the meaning of 46 U.S. Code Chapters 121 and 313, each Barge Mortgage, executed and
delivered, creates in favor of the Mortgagee for the benefit of the Lenders a legal, valid,
and enforceable first preferred mortgage lien over the Vessel, constitutes a “preferred
mortgage” within the meaning of Section 31301(6)(B) of Title 46









 



79



of the United States Code,
entitled to the benefits accorded a preferred mortgage on a vessel registered under the laws
and flag of the United States.




     (z) At the time of the Initial Extension of Credit, and thereafter, Astoria Generating
Company, L.P. will be, qualified to own and operate the Vessels documented under the laws
and flag of the United States, or such other jurisdiction in which any such Vessel is
permitted, or will be permitted, to be registered or operated in accordance with the terms
of the respective Barge Mortgages.



ARTICLE V




COVENANTS OF THE LOAN PARTIES




     SECTION 5.01. Affirmative Covenants. So long as any Advance or any other Obligation
(other than contingent obligations) of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding (unless cash collateralized in an amount acceptable to
the Issuing Banks, but no more than 103% of the face amount of such Letter of Credit) or any Lender
Party shall have any Commitment hereunder, the Parent will:




     (a) Compliance with Laws, Etc. Comply, cause each of its Subsidiaries to
comply, with (i) all applicable Laws (including, without limitation, ERISA and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act of 1970) and
(ii) all Contractual Obligations except, in the case of (i) and (ii), where failure to
comply could not reasonably be expected to have a Material Adverse Effect.




     (b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon it or upon its property and (ii)
all lawful claims that, if unpaid, might by law become a Lien upon its property; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, charge or claim that (x) is being contested in good
faith and by proper proceedings and as to which appropriate reserves are being maintained,
unless and until any Lien resulting therefrom attaches to its property and becomes
enforceable against its other creditors or (y) if such nonpayment, either individually or in
the aggregate, is not reasonably likely to have a Material Adverse Effect.




     (c) Compliance with Environmental Laws. (i) Comply, and cause each of its
Subsidiaries and all lessees and other Persons operating or occupying its properties to
comply with all applicable Environmental Laws and Environmental Permits; (ii) obtain and
renew, and cause each of its Subsidiaries to obtain and renew, all Environmental Permits
necessary for its operations and properties; and (iii) conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and testing, and undertake any
cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous
Materials from any of its properties, in accordance with the requirements of all
Environmental Laws, except in the case of (i), (ii) or (iii) where the failure to do so
could not reasonably be expected to have a Material Adverse Effect; provided, however,









 



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that neither the Borrower nor any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.




     (d) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance companies or associations
against physical loss, public liability, property damage and other insurance, all as set
forth on Schedule 5.01(d).




     (e) Preservation of Corporate Existence, Etc. Preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its existence, legal structure, legal
name and rights (charter and statutory); provided, however, that the Borrower and its
Subsidiaries may consummate any merger or consolidation permitted under Section 5.02(d).




     (f) Visitation Rights. At any reasonable time up to once per year so long as
no Event of Default has occurred and is continuing and from time to time upon reasonable
prior notice after the occurrence and during the continuance of an Event of Default, permit
any of the Agents or any of the Lender Parties, or any agents or representatives thereof, to
examine and make copies of and abstracts from the records and books of account of, and visit
the properties of, the Borrower and any of its Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrower and any of its Subsidiaries with any of their officers
or directors and, in the presence of an officer of the Borrower, with their independent
certified public accountants.




     (g) Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper
books of record and account in accordance with generally accepted accounting principles in
effect from time to time and in compliance in all material respects with all applicable
Laws.



     (h) Obtain and Maintain Governmental Authorizations. Obtain and maintain (and
cause its Subsidiaries to obtain and maintain) in full force and effect, and meet all
requirements in respect of any material Governmental Authorizations necessary in the conduct
by the Loan Parties of their business and operations and the Transactions contemplated
hereby.




     (i) Maintenance of the Properties, Etc. (i) Maintain and cause each of its
Subsidiaries to maintain, (A) all material permits, licenses, approvals, privileges,
franchises and Governmental Authorizations necessary for the operation of its or their
respective businesses, and (B) the Loan Party Assets in accordance with Prudent Industry
Practices and any insurance policies required to be maintained pursuant to Schedule 5.01(d)
and (ii) make such repairs, replacements and improvements to the Loan Party Assets as in the
reasonable judgment of the Borrower are necessary so that the Loan Party Assets may be
operated in accordance with Prudent Industry Practices.









 



81



     (j) Transactions with Affiliates. Conduct, and cause each of its Subsidiaries
to conduct, all transactions otherwise permitted under the Loan Documents with any of their
Affiliates on terms that are fair and reasonable and no less favorable to the Borrower or
such Subsidiary than it would obtain in a comparable arm’s length transaction with a Person
not an Affiliate.




     (k) Covenant to Guarantee Obligations and Give Security. Upon (x) the request
of the Administrative Agent following the occurrence and during the continuance of an Event
of Default, (y) the formation or acquisition of any new direct or indirect Subsidiaries by
any Loan Party (other than any Non-Recourse Subsidiary) or (z) the acquisition of any
property by any Loan Party of a type required by the Loan Documents to be subject to a first
priority (subject to Permitted Priority Liens) security interest in favor of the Collateral
Agent for the benefit of the Secured Parties on the Effective Date, and such property, in
the judgment of the Administrative Agent, shall not already be subject to a perfected first
priority (subject to Permitted Priority Liens) security interest in favor of the Collateral
Agent for the benefit of the Secured Parties, then in each case at the Borrower’s expense:




     (i) in connection with the formation or acquisition of a Subsidiary (other than
any Subsidiary that is a Non-Recourse Subsidiary), within 10 days after such
formation or acquisition, cause each such Subsidiary, and cause each direct and
indirect parent (but only up to the Parent level) of such Subsidiary (if it has not
already done so), to duly execute and deliver to the Administrative Agent a guaranty
or guaranty supplement, in form and substance reasonably satisfactory to the
Collateral Agent, guaranteeing the other Loan Parties’ obligations under the Loan
Documents,




     (ii) within 10 days after (A) such request, furnish to the Administrative Agent
and the Collateral Agent a description of the real and personal properties of the
Loan Parties in detail reasonably satisfactory to the Administrative Agent and (B)
such formation or acquisition, furnish to the Collateral Agent a description of the
real and personal properties of such Subsidiary or the real and personal properties
so acquired, in each case in detail reasonably satisfactory to the Administrative
Agent,




     (iii) within 15 days after (A) such request or acquisition of property by any
Loan Party, duly execute and deliver, and cause each Loan Party to duly execute and
deliver, to the Collateral Agent such additional mortgages, pledges, assignments,
security agreement supplements, intellectual property security agreements,
intellectual property security agreement supplements and other security agreements
as specified by, and in form and substance reasonably satisfactory to the
Administrative Agent, securing payment of all the Obligations of such Loan Party
under the Loan Documents and constituting Liens on all such properties and (B) such
formation or acquisition of any new Subsidiary, duly execute and deliver and cause
such Subsidiary and each Loan Party acquiring Equity Interests in such Subsidiary to
duly execute and deliver to the Collateral Agent mortgages, pledges, assignments,
security agreement supplements,









 



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intellectual property security agreements,
intellectual property security agreement supplements and other security agreements
as reasonably specified by, and in form and substance reasonably satisfactory to,
the Administrative Agent, securing payment of all of the obligations of such
Subsidiary or Loan Party, respectively, under the Loan Documents;




     (iv) within 30 days after such request, formation or acquisition, take, and
cause each Loan Party and each newly acquired or newly formed Subsidiary (other than
any Subsidiary that is a Non-Recourse Subsidiary) to take, whatever action
(including, without limitation, the recording of mortgages, the filing of Uniform
Commercial Code financing statements, the giving of notices and the endorsement of
notices on title documents) may be necessary or advisable in the reasonable opinion
of the Administrative Agent to vest in the Collateral Agent (or in any
representative of the Collateral Agent designated by it) valid and subsisting Liens
on the properties purported to be subject to the mortgages, pledges, assignments,
security agreement supplements, intellectual property security agreements,
intellectual property security agreement supplements and security agreements
delivered pursuant to this Section 5.01(k), enforceable against all third parties in
accordance with their terms,




     (v) within 60 days after such formation or acquisition of a Subsidiary or of
owned real property, deliver to the Collateral Agent, upon the request of the
Administrative Agent in its reasonable discretion, a signed copy of a favorable
opinion (containing customary exceptions and limitations), addressed to the
Collateral Agent and the other Secured Parties, of counsel for the Loan Parties
acceptable to the Administrative Agent as to (A) the matters contained in clauses
(i), (iii) and (iv) above, (B) such guaranties, guaranty supplements, mortgages,
pledges, assignments, security agreement supplements, intellectual property
security agreements, intellectual property security agreement supplements and
security agreements being legal, valid and binding obligations of each Loan Party
party thereto enforceable in accordance with their terms, as to the matters
contained in clause (iv) above, (C) such recordings, filings, notices, endorsements
and other actions being sufficient to create valid perfected Liens on such
properties, and (D) such other matters as the Administrative Agent may reasonably
request,




     (vi) as promptly as practicable after such request, formation or acquisition,
deliver, upon the request of the Administrative Agent in its sole discretion, to the
Collateral Agent with respect to each parcel of real property owned or held by each
Loan Party and each newly acquired or newly formed Subsidiary (other than any
Subsidiary that is a Non-Recourse Subsidiary) title reports, surveys and
engineering, soils and other reports, and environmental assessment reports, each in
scope, form and substance satisfactory to the Administrative Agent, provided,
however, that to the extent that any Loan Party or any of its Subsidiaries shall
have otherwise received any of the foregoing items with respect to such real
property, such items shall, promptly after the receipt thereof, be delivered to the
Collateral Agent, and









 



83



     (vii) at any time and from time to time, promptly execute and deliver, and
cause each Loan Party and each newly acquired or newly formed Subsidiary (other than
any Subsidiary that is a Non-Recourse Subsidiary) to execute and deliver, any and
all further instruments and documents and take, and cause each Loan Party and each
newly acquired or newly formed Subsidiary (other than any Subsidiary that is a
Non-Recourse Subsidiary) to take, all such other action as the Administrative Agent
may reasonably deem necessary or desirable in obtaining the full benefits of, or in
perfecting and preserving the Liens of, such guaranties, mortgages, pledges,
assignments, security agreement supplements, intellectual property security
agreements, intellectual property security agreement supplements and security
agreements.




     (l) Further Assurances. (i) Promptly upon request by any Agent, or any Lender
Party through the Administrative Agent, correct, and cause each of its Subsidiaries promptly
to correct, any material defect or error that may be discovered in any Loan Document or in
the execution, acknowledgment, filing or recordation thereof, and




     (ii) Promptly upon request by any Agent, or any Lender Party through the Administrative
Agent, do, execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, conveyances, pledge agreements, mortgages,
deeds of trust, trust deeds, assignments, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates, assurances and other
instruments as any Agent, or any Lender Party through the Administrative Agent, may
reasonably require from time to time in order to (A) to the fullest extent permitted by
applicable law, subject to a security interest any Loan Party’s
or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents and (B) perfect and
maintain the validity, effectiveness and priority of any of the Collateral Documents and any
of the Liens intended to be created thereunder.




     (m) Interest Rate Hedging. Enter into on or before the date that is 75 days
following the Effective Date, and maintain at all times thereafter, interest rate Hedge
Agreements with Persons acceptable to the Administrative Agent, covering a notional amount
of not less than $425,000,000 and providing for such Persons to make payments thereunder for
a period of no less than three years.




     (n) Regulatory Matters. Cause its Subsidiaries to comply with all Governmental
Authorizations and NYISO Rules except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect, and take all actions necessary to maintain any
Governmental Authorizations to permit the Generating Stations to remain electrically
interconnected with the transmission system administered by NYISO, eligible to provide
Capacity, Energy and Ancillary Services in relevant NYISO Markets in the manner and
quantities set forth in Section 4.01(x) hereof at Market-Based Rates, and to inform
Administrative Agent promptly of any Regulatory Event which upon occurrence, or with the
passage of time following occurrence, will









 



84



have a Material Adverse Effect upon the continued
ownership or operation of the Generating Stations.




     (o) Separateness. Comply (and cause its Subsidiaries and any Non-Recourse
Subsidiary to comply) with the following:




     (i) (A) The Parent and its Subsidiaries (other than any Non-Recourse
Subsidiary) will maintain their own deposit account or accounts, separate from those
of any Non-Recourse Subsidiary or any other Affiliate of the Parent with commercial
banking institutions and will not commingle their funds with those of any
Non-Recourse Subsidiary or any other Affiliate of the Parent; and (B) each
Non-Recourse Subsidiary to the extent that any Non-Recourse Subsidiary has one or
more deposit accounts, will maintain its own deposit account or accounts, separate
from those of the Parent and each of its other Subsidiaries, with commercial banking
institutions and will not commingle its funds with any the Parent or any of its
other Subsidiaries;




     (ii) (A) The Parent and its Subsidiaries (other than any Non-Recourse
Subsidiary) will maintain a separate address from the address of any Non-Recourse
Subsidiary or any other Affiliate of the Parent, or to the extent any Non-Recourse
Subsidiary or other Affiliate of the Parent may have offices in the same location as
any of the Parent and its other Subsidiaries, maintain a fair and appropriate
allocation of overhead costs among them, with each such entity bearing its fair
share of such expense; and (B) each Non-Recourse Subsidiary will maintain a separate
address from the address of each of the Parent and its other Subsidiaries, or to the
extent any Non-Recourse Subsidiary may have offices in the same location as any of
the Parent and its other Subsidiaries, maintain a fair
and appropriate allocation of overhead costs among them, with each such entity
bearing its fair share of such expense;




     (iii) Each Non-Recourse Subsidiary will issue separate financial statements
prepared not less frequently than quarterly, which financial statements need not be
separately audited or reviewed by an independent accounting firm;




     (iv) Each Non-Recourse Subsidiary will be a corporation or limited liability
company and will conduct its affairs in accordance with its certificate of
incorporation or formation and by-laws or limited liability company agreement (or
similar constitutive documents) and observe all necessary, appropriate and customary
company (or corporate) formalities, including, but not limited to, holding all
regular and special members’ and board of managers’ (or stockholders’ and directors’
or other similar Persons) meetings appropriate to authorize all company (or
corporate) action, keeping separate and accurate minutes of its meetings, passing
all resolutions or consents necessary to authorize actions taken or to be taken, and
maintaining accurate and separate books, records and accounts, including, but not
limited to, payroll and intercompany transaction accounts, to the extent applicable;









 



85



     (v) (A) Each Non-Recourse Subsidiary will not assume or guarantee any of the
liabilities of, or pledge any of its assets for the benefit of any of, the Parent
and its other Subsidiaries, (B) each of the Parent and its Subsidiaries (other than
any Non-Recourse Subsidiary) will not assume or guarantee any of the liabilities of,
or pledge any of its assets for, the benefit of any Non-Recourse Subsidiary (except
that the Subsidiary which holds the Equity Interests in any Non-Recourse Subsidiary
may pledge such Equity Interests to the creditors of such Non-Recourse Subsidiary on
a non-recourse basis so long as the Subsidiary which holds such Equity Interests
shall not own any assets other than such Equity Interests) or other Affiliate of the
Parent or hold out its credit as being available to satisfy the obligations of any
Non-Recourse Subsidiary or other Affiliate of the Parent (which shall be deemed not
to refer to any disclosure by the Parent and its Subsidiaries of Investments or
obligations that the Parent or its Subsidiaries are permitted to make in or incur
with respect to any Non-Recourse Subsidiary in compliance with this Agreement) and
(C) no Non-Recourse Subsidiary will hold out the credit of the Parent and its other
Subsidiaries as being able to satisfy the obligations of such Non-Recourse
Subsidiary (which shall be deemed not to refer to any disclosure by such
Non-Recourse Subsidiary of Investments or obligations that the Parent or its
Subsidiaries are permitted to make in or incur with respect to such Non-Recourse
Subsidiary in compliance with this Agreement);




     (vi) (A) the Parent and each of its Subsidiaries (other than any Non-Recourse
Subsidiary) will not authorize the use of its name or trademarks or service marks by
any Non-Recourse Subsidiary or other Affiliate of the Parent except pursuant to a
written license agreement; (B) no Non-Recourse Subsidiary will authorize the use of
its name or trademarks or service marks by the Parent or any of its other
Subsidiaries except pursuant to a written license agreement; and
(C) no Non-Recourse Subsidiary may use the same domain name for electronic mail
as the Parent and its Subsidiaries;




     (vii) (A) None of the Parent or any of its Subsidiaries (other than any
Non-Recourse Subsidiary) will conduct a material amount of its own business in the
name of any Non-Recourse Subsidiary, provided, however, that the Parent and its
Subsidiaries may provide services to any Non-Recourse Subsidiary and may conduct the
business of any Non-Recourse Subsidiary by or on behalf of such Non-Recourse
Subsidiary under a management or services agreement so long as any material business
so conducted is conducted in the name of such Non-Recourse Subsidiary and (B) no
Non-Recourse Subsidiary will conduct a material amount of its own business in the
name of the Parent or any of its other Subsidiaries; and




     (viii) If the Parent or any of its Subsidiaries obtains actual knowledge that
any Non-Recourse Subsidiary has represented or indicated to any Person with which it
conducts business that the credit of the Parent and its Subsidiaries is available to
satisfy the obligations of such Non-Recourse Subsidiary (which shall be deemed not
to refer to any disclosure by such Non-Recourse Subsidiary of Investments or
obligations that the Parent or its Subsidiaries are permitted to









 



86



make in or incur
with respect to such Non-Recourse Subsidiary in compliance with this Agreement)
(other than the non-recourse pledge of the Equity Interests in such Non-Recourse
Subsidiary to the creditors of such Non-Recourse Subsidiary so long as such pledgor
shall own no assets other than such Equity Interests), then the Parent or such
Subsidiary shall take such action as shall be reasonable in the circumstances, which
may include providing written notice any Person to whom such representation or
indication was made, to make clear that the credit of the Parent and its
Subsidiaries is not available to satisfy the obligations of such Non-Recourse
Subsidiary.




     (p) Casualty Events and Events of Eminent Domain. Not more than thirty (30)
days after the occurrence of any Repair Event, the Borrower shall give written notice
thereof to the Administrative Agent and the Collateral Agent and follow the procedures
indicated below as applicable:




     (i) if the aggregate amount of Insurance Proceeds or Eminent Domain Proceeds,
as the case may be, payable in respect of such Repair Event is less than or equal to
$150,000,000, the Borrower shall apply such Insurance Proceeds or Eminent Domain
Proceeds, as applicable, to the payment of the cost of restoration or replacement of
the Affected Property within 18 months from the date of receipt of such Insurance
Proceeds or Eminent Domain Proceeds, as the case may be; provided that the
Administrative Agent and the Collateral Agent receive from the Borrower, within 180
days of such Repair Event, a written notice (a “Repair Notice”) executed by a
Responsible Officer of the Borrower, (A) setting forth in reasonable detail the
nature of such restoration or replacement and the estimated cost and time to
complete such restoration or replacement and (B) stating that (1) no Event of
Default has occurred and is continuing or, that if an Event of Default
has occurred and is continuing, the Insurance Proceeds or Eminent Domain
Proceeds in respect of which such notice is being delivered have been deposited in
the Reinvestment and Repair Account, (2) such restoration or replacement is
technologically and economically feasible, and (3) the Insurance Proceeds or Eminent
Domain Proceeds payable in connection with such Repair Event, together with other
resources available to the Loan Parties in accordance with the terms of the
Transaction Documents, are sufficient to pay the estimated cost of completing such
restoration or replacement.




     (ii) If the aggregate amount of Insurance Proceeds or Eminent Domain Proceeds,
as the case may be, payable in respect of such Repair Event is greater than
$150,000,000, then no later than three months following receipt of such payment, the
Borrower shall either: (A) make a prepayment of the Advances and a deposit into the
Revolving LC Collateral Account in accordance with Section 2.06(b)(iv) or (x), as
applicable; or (B) deliver to the Administrative Agent and the Collateral Agent (1)
a Repair Notice confirming the Borrower’s decision to apply such Insurance Proceeds
or Eminent Domain Proceeds, as applicable, to the payment of the cost of restoration
or replacement of the Affected Property and (2) a report of an Independent Engineer,
such engineer and such report to be reasonably satisfactory to the Administrative
Agent, confirming its agreement









 



87



with (x) the estimated cost and time to complete
such restoration and replacement of the Affected Property as set forth in the
related Repair Notice and (y) that such restoration and replacement is
technologically and economically feasible.




     (q) Account Collateral. Maintain, and cause each other Loan Party to maintain,
the Account Collateral with one or more banks reasonably acceptable to the Administrative
Agent that have accepted the assignment of such accounts to the Collateral Agent for the
benefit of the Secured Parties pursuant to the Security Agreement; maintain the Revolving LC
Collateral Account and the Term LC Collateral Account with the Collateral Agent for the
benefit of the Secured Parties pursuant to the Security Agreement; and fund the Revolving LC
Collateral Account and the Term LC Collateral Account in accordance with the terms of the
Transaction Documents. Notwithstanding anything herein to the contrary, so long as any
Event of Default has occurred or is continuing, the Borrower shall cause any Asset Sale
Proceeds, Equity Proceeds, Insurance Proceeds or Eminent Domain Proceeds that are subject to
any Reinvestment Notice, Reinvestment Commitment Notice or Repair Notice, as applicable, to
be held as cash collateral in the Reinvestment and Repair Account and applied in accordance
with Section 7(b) of the Security Agreement.




     (r) Vessels. The Borrower shall ensure that an original or certified copy of a
Certificate of Financial Responsibility (“COFR”) issued by the United States Coast Guard is
placed on board each Vessel referencing that the operator of such Vessel has established
evidence of financial responsibility in respect of such Vessel in accordance with 33 CFR
138, in order to meet liability under Section 1002 of the Oil Pollution Act of 1990, and
under Section 107 of CERCLA.




     (s) Additional Vessels. Borrower shall cause any vessel, which for the
avoidance of doubt shall include any rig or barge, not listed in Schedule 4.01(w), and which
is owned by Borrower, any of its Subsidiaries or any Subsidiary Guarantor, to become subject
to a Barge Mortgage and to become Collateral hereunder, subject to delivery to the
Administrative Agent of the following items:




     (i) a Barge Mortgage or a supplement to an existing Barge Mortgage for such
newly acquired vessel, together with evidence that each such Barge Mortgage or
supplement has been duly filed for recordation with the National Vessel
Documentation Center or any successor thereto and is in full force and effect as of
the date of addition of such vessel.




     (ii) an assignment of insurance for such vessel.




     (iii) an assignment of earnings for such vessel.




     (iv) Appraisal of the value of such vessel as determined in accordance with the
appraisal procedures set forth in the applicable Barge Mortgage.




     (v) Certificate of each Loan Party, signed on behalf of such Loan Party by a
duly authorized officer of such Loan Party, stating that:









 



88



	 	(A)	 	the representations and
warranties contained in each Loan Document are correct on and as
of the date of addition of such vessel, before and after giving
effect to addition of such vessel; and
	 
	 	(B)	 	no event has occurred and is
continuing, or would result from the addition of such vessel,
that constitutes a Default.






     (vi) Favorable opinion of counsel for the Loan Parties as to such other matters
as the Administrative Agent may reasonably request.




     (vii) a Guaranty Supplement and a Security Agreement duly executed by each
Person who, prior to such execution, was not a Guarantor or not a Grantor under the
Security Agreement, and who has any ownership interest in such vessel.




     (viii) Acknowledgement copies or stamped receipt of credit under the Uniform
Commercial Code and similar filings of all jurisdictions that the Administrative
Agent may deem necessary or desirable in order to perfect and protect the first
priority liens and security interests created under the applicable Assignments of
Insurance, Assignment of Earnings and other applicable Collateral Documents relating
to such vessel, and such other items and legal opinions as the Administrative Agent
may reasonably require, as are referred to in Section 3.01(a).




     (t) NYISO Account. Cause the Borrower or Astoria (as the Borrower’s assignee)
to maintain the Sempra Security Agreement, whereby no later than the
Business Day next succeeding each deposit into the NYISO Account, the full amount of
such deposit not transferred to the Sempra Account, after taking into account any amounts
paid to the Sempra Collateral Agent pursuant to the terms of the Sempra Security Agreement,
shall be transferred into a Pledged Deposit Account (as defined in the Security Agreement).



     SECTION 5.02. Negative Covenants. So long as any Advance or any other Obligation
(other than contingent obligations) of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding (unless such Letters of Credit are cash collateralized in
an amount and on terms satisfactory to the Issuing Banks and the Administrative Agent but which
amount shall not be greater than 103% of the face amount of such Letter of Credit) or any Lender
Party shall have any Commitment hereunder, the Borrower will not, at any time:




     (a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with respect to any
of its properties of any character (including, without limitation, accounts) whether now
owned or hereafter acquired, or sign or file or suffer to exist, or permit any of its
Subsidiaries to sign or file or suffer to exist, under the Uniform Commercial Code of any
jurisdiction, a financing statement that names the Borrower or any of its Subsidiaries as
debtor, or sign or suffer to exist, or permit any of its Subsidiaries to sign or suffer to
exist,









 



89



any security agreement authorizing any secured party thereunder to file such
financing statement, or assign, except:




     (i) Liens created under the Loan Documents;




     (ii) Liens created under the Second Lien Loan Documents and the Special LC
Facility Documents, subject to the terms of the Intercreditor Agreement, to the
extent applicable;




     (iii) Liens securing Debt, other than the Special LC Facility, permitted under
Section 5.02(b)(iii), subject to the terms of the Intercreditor Agreement, to the
extent applicable;




     (iv) Liens for taxes, assessments and governmental charges or levies to the
extent not required to be paid under Section 5.01(b);




     (v) Liens imposed by law, such as materialmen’s, mechanics’, carriers’,
workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary
course of business securing obligations that (x) are not overdue for a period of
more than 30 days and (y) individually or together with all other Permitted Liens
outstanding on any date of determination do not materially adversely affect the use
of the property to which they relate;




     (vi) pledges or deposits in the ordinary course of business to secure
obligations under workers’ compensation laws or similar legislation or to secure
public or statutory obligations;




     (vii) deposits to secure the performance of bids, trade contracts and leases
(other than Debt), statutory obligations, surety bonds (other than bonds related to
judgments or litigation), performance bonds and other obligations of a like nature
incurred in the ordinary course of business;




     (viii) Liens securing judgments or the payment of money not constituting a
Default under Section 6.01(g) or securing appeal or other surety bonds related to
such judgments;




     (ix) Permitted Encumbrances;




     (x) purchase money Liens upon or in real property or equipment acquired or
held by the Borrower or any Loan Party in the ordinary course of business securing
the purchase price of such property or equipment or securing Debt incurred by the
Borrower or any Loan Party solely for the purpose of financing a Permitted
Acquisition; provided, however, (a) no such Lien shall extend to or cover any
property other than the property or equipment that is the subject of the Permitted
Acquisition; (b) the aggregate principal amount of the Debt secured by Liens
permitted by this clause (x) shall not exceed the amount permitted under Section
5.02(b)(xii) at any time outstanding; (c) such Debt when incurred shall not exceed
the purchase price of the property or equipment









 



90



financed; and (d) such Debt shall
not be refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing;




     (xi) Liens existing on the Closing Date and listed on Schedule 4.01(t) and any
modifications, replacements, renewals or extensions thereof; provided that (A) the
Lien does not extend to any additional property and (B) the renewal, extension or
modification of the obligations secured or benefited by such Liens is permitted
under the Loan Documents;




     (xii) Liens arising by virtue of any statutory or common law provision relating
to banker’s liens, rights of set-off or similar rights;




     (xiii) Liens arising from precautionary Uniform Commercial Code financing
statements regarding, and any interest or title of a licensor, lessor or sublesser
under, operating leases;




     (xiv) Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of goods;




     (xv) pledges or deposits of cash or Cash Equivalents securing deductibles,
self-insurance, co-payment, co-insurance, retentions or similar obligations to
providers of property, casualty or liability insurance in the ordinary course of
business;




     (xvi) Liens existing on the assets of any Person that becomes a Loan Party, or
existing on assets acquired, pursuant to a Permitted Acquisition to the extent the
Liens on such assets secured Debt permitted by Section 5.02(b)(vii); provided that
such Liens attach at all times only to the same assets that such Liens attached to,
and secure only the same Debt that such Liens secured, immediately prior to such
Permitted Acquisition;




     (xvii) Liens placed upon the Equity Interests of any Subsidiary acquired pursuant
to a Permitted Acquisition to secure Debt of the Borrower or any other Loan Party
incurred pursuant to Section 5.02(b)(viii) in connection with such Permitted
Acquisition;




     (xviii) Liens placed upon the Equity Interests of any Non-Recourse Subsidiary;




     (xix) Liens on the Sempra Collateral; and




     (xx) Liens permitted by the Barge Mortgages.




     (b) Debt. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries or Non Recourse Subsidiaries to create, incur, assume or suffer to exist any
Debt, except:









 



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     (i) Debt under the Loan Documents, including any Permitted Revolving Credit
Refinancing; provided that (A) the lenders (or agent on behalf of the lenders) of
such Permitted Revolving Credit Refinancing have become a party to the Intercreditor
Agreement as, and have the obligations of, First Lien Secured Parties thereunder and
(B) such Permitted Revolving Credit Financing shall only be secured by the Liens
created by the Collateral Documents;




     (ii) Debt under the Second Lien Loan Documents in an aggregate principal amount
that is not in excess of $300,000,000;




     (iii) secured Debt under any letter of credit facility that either (A) supports
a Permitted Commodity Hedge Agreement (including, without limitation, the Special LC
Facility) or (B) supports working capital obligations, in an aggregate principal
amount not to exceed $384,000,000 at any one time outstanding; provided that (x) any
lender or letter of credit issuer of such Debt has become a party to the
Intercreditor Agreement as, and has obligations of, a First Lien Secured Party
thereunder and (y) such Debt shall only be secured by the Liens created by the
Collateral Documents;




     (iv) Debt under the MSCG Hedging Facility, the MSCG Capacity Swap Agreement or
any other Permitted Commodity Hedging Agreement;




     (v) Debt in respect of Hedge Agreements designed to hedge against fluctuations
in interest rates incurred in the ordinary course of business and consistent with
prudent business practice;




     (vi) Debt owed to the Borrower or a wholly owned Subsidiary of the Borrower,
which Debt shall (x) in the case of Debt owed to a Loan Party, constitute Pledged
Debt, (y) be subordinated to the Facilities and on terms acceptable to the
Administrative Agent and (z) be otherwise permitted under the provisions of Section
5.02(f);




     (vii) (A) Debt of a Person or Debt attaching to assets of a Person that, in
either case, becomes a Loan Party or Debt attaching to assets that are acquired by
the Borrower or any Loan Party as the result of a Permitted Acquisition; provided
that (1) such Debt existed at the time such Person became a Loan Party or at the
time such assets were acquired and, in each case, was not created in anticipation
thereof, (2) such Debt is not guaranteed in any respect by the Parent, the Borrower
or any other Loan Party (other than any such Person that so becomes a Loan Party)
and (3) (x) the Equity Interests in such Person are pledged to the Collateral Agent
to the extent required under Section 5.01(k) and (y) such Person executes a
supplement to the Subsidiary Guaranty and the Security Agreement (or alternative
guarantee and security arrangements in relation to the Obligations) to the extent
required under Section 5.01(k); and (B) any refinancing, refunding, renewal or
extension of any Debt specified in subclause (A) above; provided that (I) the
principal amount of such Debt is not increased above the principal amount thereof
outstanding immediately prior to such refinancing, refunding, renewal or









 



92



extension, (II) the direct and contingent obligors with respect to such Debt are not changed
and (III) the final maturity of such refinancing, refunding, renewal or extension
Debt is no earlier than the existing scheduled maturity date of the Debt being
refinanced, refunded, renewed or extended;




     (viii) (A) unsecured subordinated Debt of the Borrower or any Loan Party
incurred to finance a Permitted Acquisition in an aggregate amount not to exceed
$150,000,000 at any one time outstanding; provided that (1) such Debt is not
guaranteed in any respect by any Loan Party (other than any Person acquired (the
“Acquired Person”) as a result of such Permitted Acquisition or the Loan Party so
incurring such Debt) or, in the case of Debt of any Subsidiary, by the Borrower,
(2)(x) the Borrower pledges the Equity Interests of such acquired Person to the
Collateral Agent to the extent required under Section 5.01(k) and (y) such acquired
Person executes a supplement to the Guarantee and the Security Agreement (or
alternative guarantee and security arrangements in relation to the Obligations) to
the extent required under Section 5.01(k), (3) any such Debt is incurred prior to or
within 90 days after such Permitted Acquisition, (4) both before and after giving
effect to the incurrence of such Debt (x) no Default or Event of Default shall have
occurred and be continuing and (y) the Parent would be in compliance with the
covenants set forth in Section 5.04 as of the most recently completed Measurement
Period ending prior to the incurrence of such Debt for which financial statements
and certificates required by Section 5.03(b) or 5.03(c) were required to be
delivered, after giving pro forma effect to the incurrence of such Debt and the
related Permitted Acquisition and to any other event occurring after such
Measurement Period as to which pro forma recalculation is appropriate as if such
incurrence of Debt and the related Permitted
Acquisition had occurred as of the first day of such Measurement Period and (5)
such Debt is subordinated to the Advances on either customary market terms at the
time such Debt is incurred or otherwise on terms reasonably satisfactory to the
Administrative Agent except to the extent permitted to be secured by a purchase
money lien pursuant to Section 5.02(a)(x); and (B) any refinancing, refunding,
renewal or extension of any Debt specified in subclause (A) above; provided that (I)
the principal amount of such Debt is not increased above the principal amount
thereof outstanding immediately prior to such refinancing, refunding, renewal or
extension plus accrued and unpaid interest and fees, (II) the direct and contingent
obligors with respect to such Debt are not changed, (III) the final maturity of such
refinancing, refunding, renewal or extension Debt is no earlier than the existing
scheduled maturity date of the Debt being refinanced, refunded, renewed or extended
and (IV) such Debt is subordinated to the Advances on either customary market terms
at the time such Debt is incurred or otherwise on terms reasonably satisfactory to
the Administrative Agent except to the extent permitted to be secured by a purchase
money lien pursuant to Section 5.02(a)(x);




     (ix) Debt arising from agreements of the Borrower or any Loan Party providing
for indemnification, adjustment of purchase price, earn-out, non-compete,
consulting, deferred compensation or other similar obligations in connection with
any Permitted Acquisition or asset disposition permitted in









 



93



accordance with Section
5.02(e); provided that (A) such Debt is not reflected on the balance sheet of the
Borrower or such Loan Party (contingent obligations referred to in a footnote to
financial statements and not otherwise reflected on the balance sheet will not be
deemed to be reflected on such balance sheet for purposes of this clause (A)) and
(B) in the case of any asset disposition, the maximum assumable liability in respect
of all such Debt shall at no time exceed the gross proceeds, including noncash
proceeds (the fair market value of such noncash proceeds being measured at the time
received and without giving effect to any subsequent changes in value), actually
received by the Borrower and the Loan Parties in connection with such disposition;




     (x) Non-Recourse Debt; provided that both before and after giving effect to the
incurrence of such Non-Recourse Debt, no Default or Event of Default shall have
occurred and be continuing;




     (xi) (A) Debt arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient funds
in the ordinary course of business; provided that (1) such Debt (other than credit
or purchase cards) is extinguished within five Business Days after receipt of notice
of its incurrence and (2) such Debt in respect of purchase or credit cards is
extinguished within 30 days from its incurrence and (B) contingent indemnification
obligations to financial institutions, in each case to the extent in the ordinary
course of business and on terms and conditions which are within the general
parameters customary in the banking industry, entered into to obtain cash management
services or deposit account overdraft protection services (in amounts similar to
those offered for comparable services in the financial services industry)
or other services in connection with the management or opening of deposit
accounts or incurred as a result of endorsement of negotiable instruments for
deposit or collection purposes;




     (xii) contingent obligations under or in respect of surety bonds, appeal bonds,
performance and return-of-money bonds and other similar obligations incurred in the
ordinary course of business in connection with bids, projects, leases and similar
commercial contracts;




     (xiii) Debt secured by Liens permitted by Section 5.02(a)(x) not to exceed in
the aggregate $250,000,000 at any time outstanding; provided, that, (A)
immediately after giving effect to the incurrence of such Debt, the Parent shall be
in pro forma compliance with the covenants set forth in Section 5.04 hereof, (B) at
the time of the incurrence of such Debt and after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing or would result therefrom,
and (C) in the case of Debt permitted by this Section 5.02(b)(xiii) in a principal
amount in excess of $10,000,000, a Responsible Officer of the Borrower shall have
delivered an officer’s certificate certifying as to the matters set forth in clauses
(A) and (B) above in form and detail reasonably satisfactory to the Administrative
Agent.









 



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Notwithstanding anything to the contrary, only Non-Recourse Subsidiaries may incur Debt
under clause (x) above.




     (c) Change in Nature of Business. Engage or cause any of its Subsidiaries to
engage in any business other than the owning, leasing or operating of electrical generating
or transmission assets and selling or marketing electric power and other products and
services related thereto (including steam or water produced or treated by the Companies at
the Generating Stations) and purchasing and transporting of oil or natural gas within or
into Zone J.




     (d) Mergers, Etc. Merge into or consolidate with any Person or permit any
Person to merge into it, or permit any of its Subsidiaries to do so, except that:




     (i) Any Subsidiary of the Borrower may merge into or consolidate with any other
Subsidiary of the Borrower; provided that, in the case of any such merger or
consolidation, the Person formed by such merger or consolidation shall be a wholly
owned Subsidiary of the Borrower; and provided further that, in the case of any such
merger or consolidation to which a Subsidiary Guarantor is a party, the Person
formed by such merger or consolidation shall be a Subsidiary Guarantor;




     (ii) as part of any sale or other disposition permitted under Section 5.02(e)
(other than clause (ii) thereof), any Subsidiary of the Borrower may merge into or
consolidate with any other Person or permit any other Person to merge into or
consolidate with it; and




     (iii) in connection with any Permitted Acquisition, any Acquisition Subsidiary
may merge into or consolidate with any other Person or permit any other Person to
merge into or consolidate with it, provided that the Person surviving such merger or
consolidation shall be a wholly owned Subsidiary of the Borrower; and provided,
further that in the case of any merger or consolidation to which a Subsidiary
Guarantor is a party, the Person formed by such merger and consolidation shall be a
Subsidiary Guarantor;




provided, however, that in each case, immediately before and after giving effect thereto, no
Default shall have occurred and be continuing and in the case of any such merger to which
the Borrower is a party, the Borrower is the surviving corporation.




     (e) Sales, Etc., of Assets. Sell, lease, transfer or otherwise dispose of, or
permit any of its Subsidiaries to sell, lease, transfer or otherwise dispose of, any assets,
or grant any option or other right to purchase, lease or otherwise acquire, or permit any of
its Subsidiaries to grant any option or other right to purchase, lease or otherwise acquire,
any assets, except:




     (i) sales of (and the granting of any option or other right to purchase, lease
or otherwise acquire) power, natural gas, fuel, capacity or ancillary services or
other inventory in the ordinary course of its business and to Sempra pursuant to the
Energy Management Agreement;









 



95



     (ii) sales, transfers or other dispositions of assets that are obsolete,
damaged or not used or not useful in the business of the Loan Parties;




     (iii) any Loan Party may make any asset disposition to any other Loan Party
(other than the Parent);




     (iv) the liquidation, sale or use of cash and Cash Equivalents;




     (v) any Loan Party may sell or discount without recourse accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof; and




     (vi) sales, transfers or other dispositions of assets for cash consideration
and for fair value in an aggregate amount not to exceed $100,000,000 in any Fiscal
Year; provided that (A) both before and after giving effect to any such sale,
transfer or other disposition (or series of related sales, transfers or
dispositions) in an aggregate amount in excess of $25,000,000, the Parent would be
in compliance, with the covenants set forth in Section 5.04, as of the most recently
computed Measurement Period ending prior to such sale, transfer or other disposition
for which financial statements and certificates required by Section 5.02(b) or
5.03(c) were required to be delivered, after giving pro forma effect to such sale,
transfer or disposition and to any other event occurring after such Measurement
Period as to which pro forma recalculation is appropriate as if such sale, transfer
or disposition had occurred as of the first day of such Measurement Period and (B)
both before and after giving effect to any
such sale, transfer or disposition, no Default or Event of Default shall have
occurred and be continuing;




provided further that in the case of sales of assets pursuant to clause (vi) above, the
Borrower shall, on the date of receipt by any Loan Party or any of its Subsidiaries of the
Net Cash Proceeds from such sale, prepay the Advances pursuant to and in the amount and
order of priority set forth in, Section 2.06(b)(ii).




     (f) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person, except:




     (i) (A) Investments by the Borrower and its Subsidiaries in their Subsidiaries
outstanding on the date hereof and (B) additional Investments by the Borrower and
its Subsidiaries in Loan Parties;




     (ii) Investments by the Borrower and its Subsidiaries in Cash Equivalents;




     (iii) Investments existing on the date hereof and described on Schedule 5.02(f)
hereto;




     (iv) Investments in Hedge Agreements permitted under Section 5.02(b)(v);









 



96



     (v) Guaranteed Debt permitted by Section 5.02(b);




     (vi) Investments in Acquisition Subsidiaries made solely with the proceeds of
capital contributions received from the Equity Investors or the Parent, so long as
such Investment is applied to Permitted Acquisitions;




     (vii) Investments received in connection with the settlement of accounts in
connection with the bankruptcy or reorganization of suppliers or customers and in
settlement of delinquent obligations of, and other disputes with, customers arising
in the ordinary course of business;




     (viii) loans or advances to employees of any Loan Party for reasonable and
customary business related moving, travel and other similar expenses, in each case
in the ordinary course of business, in an aggregate principal amount not to exceed
$5,000,000 at any time outstanding;




     (ix) deposits in the ordinary course of business in connection with obligations
in respect of surety bonds, appeal bonds, statutory obligations to governmental
authorities, tenders, sales, contracts, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations incurred in the
ordinary course of business;




     (x) Permitted Acquisitions in an aggregate amount not to exceed $500,000,000
since the date of this Agreement; and




     (xi) Investments resulting from transactions under the Energy Management
Agreement.




     (g) Restricted Payments. Declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its Equity Interests now or hereafter
outstanding, return any capital to its stockholders, partners or members (or the equivalent
Persons thereof) as such, make any distribution of assets, Equity Interests, obligations or
securities to its stockholders, partners or members (or the equivalent Persons thereof) as
such or issue or sell any Equity Interests or permit any of its Subsidiaries to do any of
the foregoing, or permit any of its Subsidiaries to purchase, redeem, retire, defease or
otherwise acquire for value any Equity Interests in the Borrower, except that, so long as no
Default shall have occurred and be continuing at the time of any action described below or
would result therefrom:




     (i) the Borrower may (A) declare and pay dividends and distributions payable
only in common stock of the Borrower and (B) except to the extent the Net Cash
Proceeds thereof are required to be applied to the prepayment of the Advances
pursuant to Section 2.06(b), purchase, redeem, retire, defease or otherwise acquire shares of its capital stock with the proceeds received contemporaneously from the
issue of new shares of its capital stock with equal or inferior voting powers,
designations, preferences and rights;









 



97



     (ii) the Borrower may accept capital contributions from the Equity Investors
and the Parent and issue common stock to, the Equity Investors and the Parent;
provided, that any common stock so issued shall be pledged as Collateral under the
Collateral Documents;




     (iii) any Subsidiary of the Borrower may (A) declare and pay cash dividends to
the Borrower or to any Loan Party of which it is a Subsidiary and (B) accept capital
contributions from its parent to the extent permitted under Section 5.02(f)(i);




     (iv) the Borrower may make cash dividends or payments to the Parent to enable
the Parent to redeem or repurchase Equity Interests from officers and employees of
the Parent, the Borrower, or any Subsidiary (or their estates, spouses or former
spouses) upon the death, permanent disability, retirement or termination of
employment of any such Person or otherwise; provided that in all such cases the
aggregate amount of all cash paid in respect of all such shares so redeemed or
repurchased does not exceed $5,000,000 in any Fiscal Year;




     (v) on each Excess Cash Flow Payment Date, after making any prepayments
required by Section 2.06(b)(i), the Borrower may make cash dividends or payments to
the Parent and purchase, redeem or otherwise acquire its own Equity Interests, in an
amount equal to the amount of Excess Cash Flow for the Calculation Period
corresponding to such Excess Cash Flow Payment Date that is not required to be used
to prepay the Advances or cash collateralize Letters of Credit pursuant to Section
2.06(b)(i);




     (vi) the Borrower may make cash dividends or payments to the Parent to enable
the Parent to pay (A) fees and expenses of the Parent’s counsel, accountants and
other advisors and consultants, and other operating and administrative expenses of
the Parent (including employee and compensation expenditures, directors’ and
officers’ insurance premiums and other similar costs and expenses) incurred in the
ordinary course of business that are for the benefit of, or are attributable to, or
are related to, including the financing or refinancing of, the Parent’s Investment
in the Borrower and its Subsidiaries, up to an aggregate amount of $5,000,000 for
each fiscal year and (B) whether or not any Default or Event of Default shall have
occurred and be continuing, any tax distributions not otherwise prohibited under
Section 4.2 of the Operating Agreement and taxes (or tax distributions) payable by
Parent solely on account of the income of Parent or its equity holders related to
their respective Investment in the Borrower and its Subsidiaries, or on account of
the income of Borrower and its Subsidiaries; and




     (vii) at any time following repayment in full of any Non-Recourse Debt, the
Borrower may make cash payments or dividends to the Parent to enable the Parent to
make cash payments or dividends, in amounts no more than amounts received by the
Borrower as a payment or dividend from the relevant Non-Recourse Subsidiary.









 



98



     (h) Amendments of Constitutive Documents. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or bylaws or other constitutive
documents other than amendments that could not be reasonably expected to have a Material
Adverse Effect.




     (i) Accounting Changes. Make or permit, or permit any of its Subsidiaries to
make or permit, any change in (i) accounting policies or reporting practices, except as
required or permitted by generally accepted accounting principles, or (ii) Fiscal Year.




     (j) Prepayments, Etc., of Debt. Prepay, redeem, purchase, defease or otherwise
satisfy prior to the scheduled maturity thereof in any manner, or make any payment in
violation of any subordination terms of, any Debt that is expressly subordinated to the
Obligations hereunder or that is secured, and the Liens securing such Debt rank behind the
Liens created by the Collateral Documents, except (i) the prepayment of the Advances in
accordance with the terms of this Agreement and (ii) so long as no Event of Default has
occurred and is continuing, prepayment of Debt under the Second Lien Facility to the extent
contemplated by Section 2.06(b) hereof or, except as permitted by the Intercreditor
Agreement, amend, modify or change in any manner any term or condition of the Second Lien
Loan Documents, or permit any of its Subsidiaries to do any of the foregoing other than to
prepay any Debt payable to the Borrower.




     (k) Negative Pledge. Enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement prohibiting or conditioning the
creation or assumption of any Lien upon any of its property or assets except (i) agreements
in favor of the Secured Parties, (ii) prohibitions or conditions under (A) any
purchase money Debt permitted by Section 5.02(b)(xiii) solely to the extent that the
agreement or instrument governing such Debt prohibits a Lien on the property acquired with
the proceeds of such Debt or (B) the Second Lien Loan Documents and the Special LC Facility
Documents or (iii) agreements in favor of Sempra with regard to any Lien it may have with
respect to the NYISO Account and the Sempra Collateral under the Energy Management Agreement
and the Sempra Security Agreement; or (iv) negative pledges under leases and licenses
entered into in the ordinary course of business applicable to the leased or licensed
property thereunder.




     (l) Partnerships, Etc. Become a general partner in any general or limited
partnership or joint venture, or permit any of its Subsidiaries to do so, other than any
Subsidiary the sole assets of which consist of its interest in such partnership or joint
venture.




     (m) Speculative Transactions. Engage, or permit any of its Subsidiaries to
engage, in any transaction involving commodity options or futures contracts or any similar
transactions entered into solely for speculative purposes, other than any Permitted Trading
Activity.




     (n) Capital Expenditures. Make, or permit any of its Subsidiaries to make, any
Capital Expenditures that would cause the aggregate of all such Capital Expenditures made by
the Borrower and its Subsidiaries to exceed $65,000,000 in any Fiscal Year;









 



99



provided,
however, that if, for any Fiscal Year, the aggregate amount of Capital Expenditures made by
the Borrower and its Subsidiaries during such Fiscal Year is less than $65,000,000, the
Borrower and its Subsidiaries shall be entitled to make additional Capital Expenditures in
the immediately succeeding Fiscal Year in an amount (such amount being referred to herein as
the “Capex Carryover”) equal to the difference between $65,000,000 and such aggregate amount
of Capital Expenditures.




     (o) Payment Restrictions Affecting Subsidiaries. Directly or indirectly, enter
into or suffer to exist, or permit any of its Subsidiaries to enter into or suffer to exist,
any agreement or arrangement limiting the ability of any of its Subsidiaries to declare or
pay dividends or other distributions in respect of its Equity Interests or repay or prepay
any Debt owed to, make loans or advances to, or otherwise transfer assets to or make
Investments in, the Borrower or any Subsidiary of the Borrower (whether through a covenant
restricting dividends, loans, asset transfers or investments, a financial covenant or
otherwise), except (i) the Loan Documents, (ii) the Second Lien Loan Documents and (iii) the
Special LC Facility Documents.




     (p) Amendment, Etc. (i) Except as could not reasonably be expected to have a
Material Adverse Effect or materially impair the interests or rights of any Agent or any
Lender Party, cancel or terminate any Material Agreement to which it is a party or consent
to or accept any cancellation or termination thereof, or, (ii) except as could not
reasonably be expected to have a Material Adverse Effect or materially impair the interests
or rights of any Agent or any Lender Party, amend or otherwise modify any Material Agreement
to which it is a party or give any consent, waiver or approval thereunder, waive any default
under or breach of any Material Agreement to which it is a
party, agree in any manner to any other amendment, modification or change of any term
or condition of any Material Agreement to which it is a party or take any other action in
connection with any Material Agreement to which it is a party, or permit any of its
Subsidiaries to do any of the foregoing in respect of any Material Agreement to which such
Subsidiary is a party.




     (q) Limitation on Actions Resulting in Regulation of Parties. Take any action
relating to a Governmental Authorization or NYISO Rule which results in any prohibition or
loss of authorization of the Generating Stations being electrically interconnected with the
transmission system administered by NYISO, eligible to provide Capacity, Energy and
Ancillary Services in relevant NYISO Markets in the manner and quantities set forth in
Section 4.01(x) hereof at Market-Based Rates.




     (r) Formation of New Subsidiaries. Organize any new Subsidiary, except for any
Acquisition Subsidiary.



     SECTION
5.03. Reporting Requirements. So long as any Advance or any other Obligation
(other than contingent obligations) of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding (unless such Letters of Credit are cash collateralized in
an amount and on terms satisfactory to the Issuing Banks and the Administrative Agent which amount
shall be no more than 103% of the face amount of such Letter of Credit) or









 



100



any Lender Party shall
have any Commitment hereunder, the Borrower will furnish to the Agents and the Lender Parties:




     (a) Default Notice. As soon as possible and in any event within five days
after the occurrence of each Default or any event, development or occurrence reasonably
likely to have a Material Adverse Effect continuing on the date of such statement, a
statement of the senior Financial Officer of the Borrower setting forth details of such
Default or event, development or occurrence and the action that the Borrower has taken and
proposes to take with respect thereto.




     (b) Annual Financials. As soon as available and in any event by June 30, 2006
(unless the team of auditors preparing such annual audit report is not from Deloitte &
Touche or is not comprised of substantially the same individual auditors at Deloitte &
Touche who prepared the annual audit report for Fiscal Year 2004, in which case, by
September 30, 2006) for Fiscal Year 2005 and otherwise, within 90 days after the end of each
Fiscal Year, a copy of the annual audit report for such year, in the case of Fiscal Year
2005, for Astoria and OPOS, and in the case of Fiscal Year 2006 and each year thereafter,
for the Borrower and its Subsidiaries, including therein a Consolidated balance sheet of the
Parent and its Subsidiaries as of the end of such Fiscal Year and a Consolidated statement
of income and a Consolidated statement of cash flows of the Parent and its Subsidiaries for
such Fiscal Year, in each case accompanied by (i) an opinion as to such audit report of a
Public Accountant, (ii) with respect to Fiscal Year 2006 and thereafter, a certificate of
such accounting firm to the Lender Parties stating that in the course of the regular audit
of the business of the Borrower and its Subsidiaries, which audit was conducted by such
accounting firm in accordance with generally
accepted auditing standards, such accounting firm has obtained no knowledge that a
Default under Section 5.04 has occurred and is continuing, or if, in the opinion of such
accounting firm, a Default under Section 5.04 has occurred and is continuing, a statement as
to the nature thereof, together with a schedule in form reasonably satisfactory to the
Administrative Agent of the computations used by the Borrower and checked by such
accountants in determining, as of the end of such Fiscal Year, compliance with the covenants
contained in Section 5.04; provided that, if, as a matter of policy, the Public Accountant
ceases to provide such certificates to clients generally (and not just to the Borrower), the
Borrower shall not be required to provide the certificate described in this clause (ii) but
shall provide a schedule in form reasonably satisfactory to the Administrative Agent of the
computations used by the Parent in determining compliance with the covenants contained in
Section 5.04 and provided further, that in the event of any change in generally accepted
accounting principles used in the preparation of such financial statements, the Borrower
shall also provide a reconciliation of such financial statements to GAAP and (iii) a
certificate of the senior Financial Officer of the Parent stating that no Default has
occurred and is continuing or, if a Default has occurred and is continuing, a statement as
to the nature thereof and the action that the Loan Parties have taken and proposes to take
with respect thereto. If as a result of a change in generally accepted accounting
principles, the Borrower is required to provide a reconciliation of financial statements as
required by clause (ii) hereof or clause (c) below, and the Borrower shall so request, the
Administrative Agent and the Lenders shall negotiate in good faith to amend the financial
covenants in Section 5.04 and any other requirements









 



101



of the Loan Documents affected by such change in generally accepted accounting principles to preserve the original intent thereof
in light of such change in generally accepted accounting principles (subject to the approval
of the Administrative Agent) and thereafter, the Borrower shall not be required to provide
such reconciliations.




     (c) Quarterly Financials. As soon as available and in any event by August 15,
2006 for the first fiscal quarter of 2006, and otherwise, within 45 days after the end of
each of the first three quarters of each Fiscal Year, a Consolidated balance sheet of the
Parent and its Subsidiaries as of the end of such quarter and a Consolidated statement of
income and a Consolidated statement of cash flows of the Parent and its Subsidiaries for the
period commencing at the end of the previous fiscal quarter and ending with the end of such
fiscal quarter and a Consolidated statement of income and a Consolidated statement of cash
flows of the Parent and its Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding date or period of the
preceding Fiscal Year, all in reasonable detail and duly certified by the senior Financial
Officer of the Parent as having been prepared in accordance with generally accepted
accounting principles (subject to normal year-end audit adjustments and absence of
footnotes), together with (i) a certificate of said officer stating that no Default has
occurred and is continuing or, if a Default has occurred and is continuing, a statement as
to the nature thereof and the action that the Loan Parties have taken and proposes to take
with respect thereto and (ii) a schedule in form reasonably satisfactory to the
Administrative Agent of the computations used by the Parent in determining compliance with
the covenants contained in Section 5.04; provided that, in the event of any change in
generally accepted accounting principles used in the preparation of such
financial statements, the Borrower shall also provide a reconciliation of such
financial statements to GAAP.




     (d) Annual Forecasts. As soon as available and in any event no later than 15
days before the end of each Fiscal Year, forecasts prepared by management of the Borrower,
in form satisfactory to the Administrative Agent, of balance sheets, income statements and
cash flow statements on an annual basis for each three Fiscal Year period following such
Fiscal Year until the Termination Date and including the principal assumptions on which such
forecasts are based.




     (e) Litigation. Promptly after the commencement thereof, notice of all
actions, suits, investigations, litigation and proceedings before any Governmental Authority
affecting any Loan Party or any of its Subsidiaries of the type described in Section
4.01(g).




     (f) Securities Reports. Promptly after the sending or filing thereof, copies
of all proxy statements, financial statements and reports that the Parent sends to its
stockholders as such, and copies of all regular, periodic and special reports, and all
registration statements, that any Loan Party or any of its Subsidiaries files with the
Securities and Exchange Commission or any governmental authority that may be substituted
therefor, or with any national securities exchange.









 



102



     (g) Agreement Notices. Promptly upon receipt thereof, copies of all notices,
requests and other documents received by any Loan Party or any of its Subsidiaries under or
pursuant to the Purchase Agreement and any Second Lien Loan Document and, from time to time
upon request by the Administrative Agent, such information and reports regarding any such
document and such instruments, indentures and loan and credit and similar agreements as the
Administrative Agent may reasonably request.




     (h) ERISA. (i) ERISA Events and ERISA Reports. Promptly after any
Loan Party or any ERISA Affiliate knows or has reason to know that any ERISA Event has
occurred that could reasonably be expected to result in a material liability to any Loan
Party, a statement of the Financial Officer of the Borrower describing such ERISA Event and
the action, if any, that such Loan Party or such ERISA Affiliate has taken and proposes to
take with respect thereto.




     (ii) Plan Terminations. Promptly and in any event within ten Business Days
after receipt thereof by any Loan Party or any ERISA Affiliate, copies of each notice from
the PBGC stating its intention to terminate any Plan or to have a trustee appointed to
administer any Plan that could reasonably be expected to result in a material liability to
any Loan Party.




     (iii) Plan Annual Reports. Promptly upon the request of the Collateral Agent,
the Administrative Agent or any Lender Party and after the filing thereof with the Internal
Revenue Service, copies of each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) with respect to each Plan.




     (iv) Multiemployer Plan Notices. Promptly and in any event within ten Business
Days after receipt thereof by any Loan Party or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, copies of each notice concerning (A) the imposition of Withdrawal
Liability by any such Multiemployer Plan, (B) the reorganization or termination, within the
meaning of Title IV of ERISA, of any such Multiemployer Plan or (C) the amount of liability
incurred, or that may be incurred, by such Loan Party or any ERISA Affiliate in connection
with any event described in clause (A) or (B).




     (i) Environmental Conditions. Promptly after the assertion or occurrence
thereof, notice of any Environmental Action against or of any noncompliance by any Loan
Party or any of its Subsidiaries with any Environmental Law or Environmental Permit that
would (i) reasonably be expected to have a Material Adverse Effect or (ii) cause any
property described in the Mortgages to be subject to any restrictions on ownership or
transferability under any Environmental Law (other than restrictions generally applicable to
the Borrower’s industry).




     (j) Real Property. As soon as available and in any event within 30 days after
the end of each Fiscal Year, a report supplementing Schedules 4.01(u) and 4.01(v) hereto,
including an identification of all owned real property disposed of by the Borrower or any of
its Subsidiaries during such Fiscal Year, a list and description (including the street
address, county or other relevant jurisdiction, state, record owner and book value thereof)
of all real property acquired during such Fiscal Year and a description of such other









 



103



changes in the information included in such Schedules as may be necessary for such Schedules
to be accurate and complete.




     (k) Insurance. (i) As soon as available and in any event within 60 days after
the end of each Fiscal Year, a report summarizing the insurance coverage (specifying type,
amount and carrier) in effect for the Borrower and its Subsidiaries and containing such
additional information as any Agent, or any Lender Party through the Administrative Agent,
may reasonably specify.




     (ii) Promptly after the occurrence thereof, notice of any Casualty Event or Event of
Eminent Domain, whether or not insured, through fire, theft, other hazard, casualty or
otherwise involving a probable loss of $5,000,000 or more, or any unscheduled curtailment of
operations that, in the Borrower’s good faith judgment, is reasonably expected to last (A)
in respect of Units 2, 3, 4 and 5 of the Astoria Generating Station, more than 240
consecutive hours in respect of any such unit or (B) in respect of either the Narrows Gas
Turbine Facility in its entirety, or the Gowanus Gas Turbine Facility in its entirety, more
than 240 consecutive hours.




     (iii) Promptly after receipt thereof, copies of any cancellation or receipt of written
notice of threatened cancellation of any property damage insurance required to be maintained
under Section 5.01(d).




     (l) Other Information. Such other information respecting the business,
condition (financial or otherwise), operations, performance, properties or prospects of any
Loan Party or any of its Subsidiaries as any Agent, or any Lender Party through the
Administrative Agent, may from time to time reasonably request, except to the extent
such information is subject to confidentiality arrangements provided that the Borrower shall
use commercially reasonable efforts to have any such confidentiality arrangements waived for
the purposes hereof.



     SECTION
5.04. Financial Covenants. So long as any Advance or any other Obligation
(other than contingent obligations) of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding (unless such Letters of Credit are cash collateralized in
an amount and on terms satisfactory to the Issuing Banks and the Administrative Agent but such
amount shall not be greater than 103% of the face amount of any such Letter of Credit) or any
Lender Party shall have any Commitment hereunder, the Parent will:




     (a) Leverage Ratio. Maintain at the end of each Measurement Period set forth
below a Leverage Ratio of not more than the amount set forth below for such Measurement
Period:



	 	 	 	 	 
	Measurement Period Ending	 	Ratio
	March 31, 2006 through December 31, 2008
	 	 	7.50:1.00	 
	March 31, 2009 through December 31, 2009
	 	 	6.50:1.00	 












 



104


	 	 	 	 	 
	Measurement Period Ending	 	Ratio
	March 31, 2010 through December 31, 2010
	 	 	6.00:1.00	 
	March 31, 2011 and thereafter
	 	 	5.00:1.00	 







     (b) Interest Coverage Ratio. Maintain at the end of each Measurement Period
set forth below an Interest Coverage Ratio of not less than the amount set forth below for
such Measurement Period:



	 	 	 	 	 
	Measurement Period Ending	 	Ratio
	March 31, 2006 through December 31, 2008
	 	 	1.20:1.00	 
	March 31, 2009 through December 31, 2009
	 	 	1.50:1.00	 
	March 31, 2010 through December 31, 2010
	 	 	1.75:1.00	 
	March 31, 2011 and thereafter
	 	 	2.00:1.00	 







     (c) Right to Cure Financial Covenants. (i) Notwithstanding anything to the
contrary contained in Section 5.04(a) or (b), if the Parent fails to comply with the
requirements of either covenant set forth in Section 5.04(a) or (b) (the “Financial
Covenants”), then until the 10th calendar day after delivery of the related certificate
pursuant to Section 5.03(b) or (c) Parent shall have the right to issue capital stock for
cash or otherwise receive cash contributions in an aggregate amount equal to or greater
than the amount that, if added to EBITDA for the relevant Measurement Period, would
have been sufficient to cause compliance with the Financial Covenants for such Measurement
Period (an “Equity Cure”).




     (ii) The Borrower shall give the Administrative Agent written notice (the “Cure
Notice”) of an Equity Cure on or before the day the Equity Cure is consummated. The
Borrower shall not be entitled to exercise the Equity Cure any more than six times during
the term of this Agreement, and the Equity Cure may not be exercised in consecutive fiscal
quarters.




     (iii) Upon the delivery by the Borrower of a Cure Notice, no Event of Default or
Default shall be deemed to exist pursuant to the financial Covenants (and any such Default
or Event of Default shall be retroactively considered not to have existed or occurred). If
the Equity Cure is not consummated within 10 days after delivery of the related certificate
pursuant to Section 5.03(b) or (c), each such Default or Event of Default shall be deemed
reinstated.




     (iv) The cash amount received by the Parent pursuant to exercise of the Equity Cure
Right shall be added to EBITDA for the last quarter of the immediately preceding Measurement
Period solely for purposes of recalculating compliance with the Financial Covenants for such
Measurement Period and of calculating the Financial Covenants as of the end of the next
three following Measurement Periods.









 



105


     SECTION 2.07. Covenant of Parent. So long as any Advance or any other Obligation
(other than contingent obligations) of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding (unless such Letters of Credit are cash collateralized in
an amount and on terms satisfactory to the Issuing Banks and the Administrative Agent, but no more
than 103%) or any Lender Party shall have any Commitment hereunder the Parent will not, at any time
engage in any business or activity other than (i) the ownership of all outstanding Equity Interests
in the Borrower, (ii) maintaining its corporate existence, (iii) participating in tax, accounting
and other administrative activities as the parent of the consolidated group of companies including
the Loan Parties, (iv) the performance of obligations under the Loan Documents to which it is a
party, (v) issuing and repurchasing Equity Interests of itself and (vi) activities incidental to
the businesses or activities described in clauses (i)-(v).



ARTICLE
VI




EVENTS OF DEFAULT




     SECTION
6.01. Events of Default. If any of the following events (“Events of
Default”) shall occur and be continuing:




     (a) (i) the Borrower shall fail to pay any principal of any Advance when the same shall
become due and payable or (ii) the Borrower shall fail to pay any interest on any Advance,
or any Loan Party shall fail to make any other payment under any Loan
Document, in each case under this clause (ii) within three Business Days after the same
shall become due and payable; or




     (b) any representation or warranty made by any Loan Party under or in connection with
any Loan Document shall prove to have been incorrect in any material respect when made; or




     (c) the Borrower shall fail to perform or observe any term, covenant or agreement
contained in Section 2.14, 5.01(e), (f), (k), (l) or (m), 5.02, 5.03(a) or 5.04; or




     (d) any Loan Party shall fail to perform or observe any other term, covenant or
agreement contained in any Loan Document on its part to be performed or observed if such
failure shall remain unremedied for 30 days after the earlier of the date on which (i) any
officer of a Loan Party becomes aware of such failure or (ii) written notice thereof shall
have been given to the Borrower by any Agent or any Lender Party; or




     (e) any Loan Party or any of its Subsidiaries shall fail to pay any principal of,
premium or interest on or any other amount payable in respect of any Debt of such Loan Party
or such Subsidiary (as the case may be) that is outstanding in a principal amount (or, in
the case of any Hedge Agreement or Commodity Hedge Agreement, an Agreement Value) of at
least $25,000,000 either individually or in the aggregate for all such Loan Parties and
Subsidiaries (but excluding Debt outstanding hereunder), when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or









 



106



any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt
and shall continue after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt or otherwise to cause, or to permit the holder
thereof to cause, such Debt to mature; or any such Debt shall be declared to be due and
payable or required to be prepaid or redeemed (other than by a regularly scheduled or
required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior to the stated
maturity thereof; or




     (f) any Loan Party or any of its material Subsidiaries shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Loan Party or any of its
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts, in each case 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 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) that is being diligently contested by it in good faith, either such
proceeding shall remain undismissed or unstayed for a period of 60 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 any substantial part of its property) shall occur; or any Loan Party or
any of its Subsidiaries shall take any corporate action to authorize any of the actions set
forth above in this subsection (f); or




     (g) any judgments or orders, either individually or in the aggregate, for the payment
of money in excess of $25,000,000 shall be rendered against any Loan Party or any of its
Subsidiaries 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 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; provided, however, that any judgment or order
shall not give rise to an Event of Default under this Section 6.01(g)(ii) if and for so long
as (A) the amount of such judgment or order is covered by a valid and binding policy of
insurance in favor of such Loan Party or Subsidiary from an insurer that is rated at least
“A” by A.M. Best Company, which policy covers full payment thereof and (B) such insurer has
been notified, and has not disputed the claim made for payment, of the amount of such
judgment or order; or




     (h) any Loan Party or any of its material Subsidiaries shall generally not pay its
debts as such debts become due; or




     (i) any provision of any Loan Document after delivery thereof pursuant to Section 3.01
or 5.01(l) shall for any reason cease to be valid and binding on or enforceable against any
Loan Party party to it (other than in accordance with its terms), or any such Loan Party
shall so state in writing; or









 



107



     (j) any Collateral Document or financing statement after delivery thereof pursuant to
Section 3.01 or 5.01(l) shall for any reason (other than pursuant to the terms thereof)
cease to create a valid and perfected first priority lien (subject to Permitted Priority
Liens) on and security interest in the Collateral purported to be covered thereby, or any
Loan Party shall so state in writing; or




     (k) a Change of Control shall occur; or




     (l) any ERISA Event shall have occurred with respect to a Plan and the sum (determined
as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or the liability of the Loan Parties and the ERISA Affiliates
related to such ERISA Event) exceeds $25,000,000; or




     (m) any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in
an amount that, when aggregated with all other amounts required to be paid to Multiemployer
Plans by the Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined as of
the date of such notification), exceeds $25,000,000 or requires payments exceeding
$25,000,000 per annum; or




     (n) any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, and as a result of such reorganization or
termination the aggregate annual contributions of the Loan Parties and the ERISA Affiliates
to all Multiemployer Plans that are then in reorganization or being terminated have been or
will be increased over the amounts contributed to such Multiemployer Plans for the plan
years of such Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $25,000,000; or




     (o) an “Event of Default” (as defined in any Mortgage) shall have occurred and be
continuing; or




     (p) on or prior to December 31, 2007 the MSCG Hedging Facility or an MSCG Replacement
Facility shall cease to be in full force and effect for a period of 60 days or greater; or




     (q) on or prior to December 31, 2007, the MSCG Hedging Facility Counterparty or the
counterparty in respect of any MSCG Replacement Facility shall generally not pay its debts
as such debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the MSCG Hedging Facility Counterparty or the
counterparty in respect of any MSCG Replacement Facility seeking to adjudicate it 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









 



108



debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee 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) that is being diligently contested by it in good faith, 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 any substantial part of its property) shall occur; or the MSCG Hedging
Facility Counterparty or the counterparty in respect of any MSCG Replacement Facility shall
take any corporate action to authorize any of the actions set forth above in this subsection
(q) and in each case, within 90 days of such event, the Borrower shall not have entered into
an MSCG Replacement Facility with a Person other than the counterparty in respect of which
such event has occurred; or




     (r) on or prior to April 30, 2009, the MSCG Capacity Swap Agreement or an MSCG Capacity
Swap Replacement Facility shall cease to be in full force and effect for a period of 60 days
or greater; or




     (s) on or prior to April 30, 2009, the MSCG Capacity Swap Counterparty or the
counterparty in respect of any MSCG Capacity Swap Replacement Facility shall generally not
pay its debts as such debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the MSCG Capacity Swap
Counterparty or the counterparty in respect of any MSCG Capacity Swap Replacement Facility
seeking to adjudicate it 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 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) that is
being diligently contested by it in good faith, 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 any
substantial part of its property) shall occur; or the MSCG Capacity Swap Counterparty or the
counterparty in respect of any MSCG Capacity Swap Replacement Facility shall take any
corporate action to authorize any of the actions set forth above in this subsection (s) and
in each case, within 90 days of such event, the Borrower shall not have entered into an MSCG
Capacity Swap Replacement Facility with a Person other than the counterparty in respect of
which such event has occurred;


then, and in any such event, the Administrative Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Commitments of each Lender
Party and the obligation of each Lender Party to make Advances (other than Letter of Credit
Advances by the Issuing Banks or a Revolving Credit Lender pursuant to Section 2.03(c)) and of each
Issuing Banks to issue Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, by
notice to the Borrower, declare the Advances, all interest thereon and all other








 



109


 amounts payable under this Agreement and the other Loan Documents to be forthwith due and payable, whereupon the
Advances, all such interest and all such 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, in the event of an actual or deemed
entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code, (x)
the Commitments of each Lender Party and the obligation of each Lender Party to make Advances
(other than Letter of Credit Advances by the Issuing Banks or a Revolving Credit Lender pursuant to
Section 2.03(c)) and of each Issuing Bank to issue Letters of Credit shall automatically be
terminated and (y) the Advances, all such interest and all such 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.




     SECTION
6.02. Actions in Respect of the Letters of Credit upon Default. If any Event
of Default shall have occurred and be continuing, the Administrative Agent may with the consent, or
shall at the request, of the Required Lenders, irrespective of whether it is taking any of the
actions described in Section 6.01 or otherwise, make demand upon the Borrower to, and forthwith
upon such demand the Borrower will, pay to the Collateral Agent on behalf of the Lender Parties in
same day funds at the Collateral Agent’s Office, (i) for deposit in the Revolving LC Collateral
Account, an amount equal to up to 103% of the face amount of the aggregate Available Amount of all
Revolving Letters of Credit then outstanding less the
amount of cash and Cash Equivalents on deposit in the Revolving LC Collateral Account and (ii)
for deposit in the Term LC Collateral Account, an amount equal to up to 103% of the face amount of
the aggregate Available Amount of all Term Letters of Credit then outstanding less the amount of
cash and Cash Equivalents on deposit in the Term LC Collateral Account; provided, however, that in
the event of an actual or deemed entry of an order for relief with respect to the Borrower under
the Federal Bankruptcy Code, the Borrower shall be obligated to pay to the Collateral Agent on
behalf of the Lender Parties in same day funds at the Collateral Agent’s Office, (i) for deposit in
the Collateral Account, an amount equal to up to 103% of the face amount of the aggregate Available
Amount of all Letters of Credit then outstanding less the amount of cash and Cash Equivalents on
deposit in the Revolving LC Collateral Account and (ii) for deposit in the Term LC Collateral
Account, an amount equal to up to 103% of the face amount of the aggregate Available Amount of all
Term Letters of Credit then outstanding less the amount of cash and Cash Equivalents on deposit in
the Term LC Collateral Account, without presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrower. If at any time the Administrative Agent
reasonably determines that any funds held in either of the LC Collateral Accounts are subject to
any right or claim of any Person other than the Agents and the Lender Parties (subject to Permitted
Priority Liens) or that the total amount of funds in an LC Collateral Account is less than the
aggregate Available Amount of all corresponding Letters of Credit, the Borrower will, forthwith
upon demand by the Administrative Agent, pay to the Collateral Agent, as additional funds to be
deposited and held in the applicable LC Collateral Account, an amount equal to the excess of (a)
such aggregate Available Amount over (b) the total amount of funds, if any, then held in such LC
Collateral Account that the Administrative Agent determines to be free and clear of any such right
and claim. Upon the drawing of any Letter of Credit for which funds are on deposit in an LC
Collateral Account, such funds shall be applied to reimburse the Appropriate Issuing Bank or
Revolving Credit Lenders, as applicable, to the extent permitted by applicable law. Each Lender
Party hereby authorizes the Administrative









 



110

Agent to enter into the Intercreditor Agreement on its behalf and agrees to be bound by the provisions hereof.




ARTICLE
VII




THE ADMINISTRATIVE AGENT




     SECTION
7.01. Authorization and Action. (a) Each Lender Party (in its capacities as
a Lender, the Issuing Banks (if applicable) and on behalf of itself and its Affiliates as potential
Hedge Banks) hereby appoints and authorizes the Administrative Agent to take such action as agent
on its behalf and to exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms hereof and thereof, together
with such powers and discretion as are reasonably incidental thereto. As to any matters not
expressly provided for by the Loan Documents (including, without limitation, enforcement or
collection of the Obligations of the Loan Parties), the Administrative Agent shall not be required
to exercise any discretion or take any action, but shall be required 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 Lender Parties, all Hedge
Banks and all holders of Notes; provided, however, that the Administrative Agent shall not be
required to take any action that exposes the Administrative Agent to personal liability or that is contrary to this Agreement
or applicable law.



          (b) The Administrative Agent may execute any of its duties under this Agreement or any other
Loan Document (including for purposes of holding or enforcing any Lien on the Collateral (or any
portion thereof) granted under the Collateral Documents or of exercising any rights and remedies
thereunder at the direction of the Collateral Agent) by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in
accordance with the foregoing provisions of this Section 7.01(b) in the absence of the
Administrative Agent’s gross negligence or willful misconduct.




     SECTION
7.02. Administrative Agent’s Reliance, Etc. Neither the Administrative Agent
nor any of its directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with the Loan Documents, except for its or
their own gross negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (a) may consult with legal counsel (including counsel for any
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; (b) makes no warranty or representation to any
Lender Party and shall not be responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan Documents; (c)
shall not have any duty to ascertain or to inquire as to the performance, observance or
satisfaction of any of the terms, covenants or conditions of any Loan Document on the part of any
Loan Party or the existence at any time of any Default under the Loan Documents or to inspect the
property (including the books and records) of any Loan Party; (d) shall not be responsible to any
Lender Party for the due execution, legality, validity, enforceability,









 



111

genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest created or purported to be
created under or in connection with, any Loan Document or any other instrument or document
furnished pursuant thereto; and (e) shall incur no liability under or in respect of any Loan
Document by acting upon any notice, consent, certificate or other instrument or writing (which may
be by telegram, telecopy or electronic communication) believed by it to be genuine and signed or
sent by the proper party or parties.




     SECTION
7.03. Initial Banks and Affiliates. With respect to its Commitments, the
Advances made by it and any Notes issued to it, each Initial Bank shall each have the same rights
and powers under the Loan Documents as any other Lender Party and may exercise the same as though
each were not an Agent; and the term “Lender Party” or “Lender Parties” shall, unless otherwise
expressly indicated, include each Initial Bank in their respective individual capacities. Each
Initial Bank and their respective affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and generally engage in any
kind of business with, any Loan Party, any of its Subsidiaries and any Person that may do business
with or own securities of any Loan Party or any such Subsidiary, all as if the Initial Banks were
not Agents and without
any duty to account therefor to the Lender Parties. No Initial Bank shall have any duty to
disclose any information obtained or received by it or any of its Affiliates relating to any Loan
Party or any of its Subsidiaries to the extent such information was obtained or received in any
capacity other than as such Initial Bank.



     SECTION
7.04. Lender Party Credit Decision. Each Lender Party acknowledges that it
has, independently and without reliance upon any Agent or any other Lender Party and based on the
financial statements referred to in Section 4.01 and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender Party also acknowledges that it will, independently and without reliance upon any Agent or
any other Lender Party 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.



     SECTION
7.05. Indemnification. (a) Each Lender Party severally agrees to indemnify
the Administrative Agent (to the extent not promptly reimbursed by the Borrower and without
limiting its obligation to do so) from and against such Lender Party’s ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against such Agent in any way relating to or arising out of
the Loan Documents or any action taken or omitted by the Administrative Agent under the Loan
Documents (collectively, the “Indemnified Costs”); provided, however, that no Lender Party shall be
liable for any portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent’s gross
negligence or willful misconduct as found in a final, non-appealable judgment by a court of
competent jurisdiction. Without limitation of the foregoing, each Lender Party agrees to reimburse
the Administrative Agent promptly upon demand for its ratable share of any costs and expenses
(including, without limitation, reasonable fees and expenses of counsel) payable by the Borrower
under Section 9.04, to the extent that the Administrative Agent is not promptly reimbursed for such
costs and expenses by the Borrower. In the case of any investigation, litigation or proceeding
giving rise to any Indemnified Costs, this Section 7.05 applies whether









 



112



any such investigation, litigation or proceeding is brought by any Lender Party or any other Person.



          (b) Each Revolving Credit Lender and each Term LC Lender severally agrees to indemnify each
applicable Issuing Bank (to the extent not promptly reimbursed by the Borrower and without limiting
its obligation to do so) from and against such Lender’s ratable share (determined as provided
below) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on,
incurred by, or asserted against such Issuing Bank in any way relating to or arising out of the
Loan Documents or any action taken or omitted by such Issuing Bank under the Loan Documents;
provided, however, that no such Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Issuing Bank’s gross negligence or willful misconduct as found in
a final, non-appealable judgment by a court of competent jurisdiction. Without limitation of the foregoing, each Revolving Credit Lender and each Term
LC Lender agrees to reimburse each applicable Issuing Bank promptly upon demand for its ratable
share of any costs and expenses (including, without limitation, reasonable fees and expenses of
counsel) payable by the Borrower under Section 9.04, to the extent that such Issuing Bank is not
promptly reimbursed for such costs and expenses by the Borrower.




          (c) For purposes of (i) Section 7.05(a), each Lender Party’s ratable share of any amount shall
be determined, at any time, according to the sum of (A) the aggregate principal amount of the
Advances outstanding at such time and owing to such Lender Party, (B) such Lender Party’s Pro Rata
Share of the aggregate Available Amount of all Letters of Credit outstanding at such time, (C) the
aggregate unused portions of such Lender Party’s Term Commitments at such time and (D) such Lender
Party’s Unused Revolving Credit Commitments at such time; provided that the aggregate principal
amount of Revolving Letter of Credit Advances owing to the Revolving Issuing Bank shall be
considered to be owed to the Revolving Credit Lenders ratably in accordance with their respective
Revolving Credit Commitments, (ii) Section 7.05(b), each Revolving Credit Lender’s ratable share of
any amount shall be determined, at any time, according to the sum of (A) the aggregate principal
amount of the Revolving Credit Advances outstanding at such time and owing to such Lender, (B) such
Lender’s Pro Rata Share of the aggregate Available Amount of all Revolving Letters of Credit
outstanding at such time and (C) such Lender’s Unused Revolving Credit Commitments at such time;
provided that the aggregate principal amount of Revolving Letter of Credit Advances owing to the
Revolving Issuing Bank shall be considered to be owed to the Revolving Credit Lenders ratably in
accordance with their respective Revolving Credit Commitments, and (iii) Section 7.05(b), each Term
LC Lender’s ratable share of any amount shall be determined, at any time, according to the sum of
(A) the aggregate principal amount of the Term LC Advances outstanding at such time and owing to
such Lender and (B) the aggregate unused portions of such Lender’s Term LC Commitments, if any, at
such time. The failure of any Lender Party to reimburse the Administrative Agent or any applicable
Issuing Bank, as the case may be, promptly upon demand for its ratable share of any amount required
to be paid by the Lender Parties to the Administrative Agent or such applicable Issuing Bank, as
the case may be, as provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse the Administrative Agent or such applicable Issuing Bank, as the case may
be, for its ratable share of such amount, but no Lender Party shall be responsible for the failure
of any other









 



113


Lender Party to reimburse such Agent or such applicable Issuing Bank, as the case may
be, for such other Lender Party’s ratable share of such amount. Without prejudice to the survival
of any other agreement of any Lender Party hereunder, the agreement and obligations of each Lender
Party contained in this Section 7.05 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under the other Loan Documents.




     SECTION 7.06. Successor Agents. The Administrative Agent may resign as to any or all
of the Facilities at any time by giving written notice thereof to the Lender Parties and the
Borrower and may be removed at any time with or without cause by the Required Lenders; provided,
however, that any removal of the Administrative Agent will not be effective until it has also been
replaced as Revolving Issuing Bank and Term Issuing Bank and released from all of its obligations
in respect thereof. Upon any such resignation or removal, the Required Lenders shall have the
right to appoint a successor Administrative Agent as to such of the Facilities as to which the Administrative Agent has
resigned or been removed; provided, that the Borrower shall have the right to approve any such
Successor Agent, such approval not to be unreasonably withheld or delayed) so long as no Event of
Default shall have occurred or be continuing. If no successor Administrative Agent shall have been
so appointed by the Required Lenders, and, to the extent applicable, the Borrower, and shall have
accepted such appointment, within 30 days after the retiring Administrative Agent’s giving of
notice of resignation or the Required Lenders’ removal of the retiring Administrative Agent, then
the retiring Administrative Agent may, on behalf of the Lender Parties, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws of the United
States or of any State thereof and having a combined capital and surplus of at least
$1,000,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent as to less than all of the Facilities, such
successor Administrative Agent shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Administrative Agent as to such Facilities, other
than with respect to funds transfers and other similar aspects of the administration of Borrowings
under such Facilities, issuances of Letters of Credit (notwithstanding any resignation as Agent
with respect to the Letter of Credit Facilities) and payments by the Borrower in respect of such
Facilities, and the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement as to such Facilities, other than as aforesaid. If within 45 days
after written notice is given of the retiring Administrative Agent’s resignation or removal under
this Section 7.06 no successor Administrative Agent shall have been appointed and shall have
accepted such appointment, then on such 45th day (a) the retiring Administrative Agent’s
resignation or removal shall become effective, (b) the retiring Administrative Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents and (c) the
Required Lenders shall thereafter perform all duties of the retiring Administrative Agent under the
Loan Documents until such time, if any, as the Required Lenders appoint a successor Agent as
provided above. After any retiring Administrative Agent’s resignation or removal hereunder as
Administrative Agent as to any of the Facilities shall have become effective, the provisions of
this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent as to such Facilities under this Agreement.









 



114


ARTICLE VIII




GUARANTY




     SECTION 8.01. Guaranty; Limitation of Liability. (a) Each Guarantor, jointly and
severally, hereby absolutely, unconditionally and irrevocably guarantees the punctual payment when
due, whether at scheduled maturity or on any date of a required prepayment or by acceleration,
demand or otherwise, of all Obligations of each other Loan Party now or hereafter existing under or
in respect of the Loan Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premiums, fees, indemnities, contract causes of action, costs,
expenses or otherwise (such Obligations being the “Guaranteed Obligations”), and agrees to pay any
and all expenses (including, without limitation, fees and expenses of counsel) incurred by any
Agent or any other Lender Party in enforcing any rights under this Guaranty or any other Loan
Document. Without limiting the generality of the foregoing, each Guarantor’s liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any
other Loan Party to any Lender Party under or in respect of the Loan Documents but for the fact
that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization
or similar proceeding involving such other Loan Party.



          (b) Each Guarantor, and by its acceptance of this Guaranty, the Administrative Agent and each
other Lender Party, hereby confirms that it is the intention of all such Persons that this Guaranty
and the Obligations of each Subsidiary Guarantor hereunder not constitute a fraudulent transfer or
conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to
this Guaranty and the Obligations of each Subsidiary Guarantor hereunder. To effectuate the
foregoing intention, the Agents, the other Lender Parties and the Guarantors hereby irrevocably
agree that the Obligations of each Subsidiary Guarantor under this Guaranty at any time shall be
limited to the maximum amount as will result in the Obligations of such Guarantor under this
Guaranty not constituting a fraudulent transfer or conveyance.




          (c) Each Guarantor hereby unconditionally and irrevocably agrees that in the event any payment
shall be required to be made to any Lender Party under this Guaranty or any other guaranty, such
Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other
Guarantor and each other guarantor so as to maximize the aggregate amount paid to the Agents and
the Lender Parties under or in respect of the Loan Documents.




     SECTION 8.02. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of any Lender Party with respect thereto. The Obligations of each Guarantor
under or in respect of this Guaranty are independent of the Guaranteed Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan Documents, and a separate
action or actions may be brought and prosecuted against each Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against the Borrower or any other Loan









 



115

Party or whether the Borrower or any other Loan Party is joined in any such action or actions. The
liability of each Guarantor under this Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now have or
hereafter acquire in any way relating to, any or all of the following:





     (a) any lack of validity or enforceability of any Loan Document or any agreement or
instrument relating thereto;




     (b) any change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations or any other Obligations of any other Loan Party under
or in respect of the Loan Documents, or any other amendment or waiver of or any consent to
departure from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to any Loan Party
or any of its Subsidiaries or otherwise;




     (c) any taking, exchange, release or non-perfection of any Collateral or any other
collateral, or any taking, release or amendment or waiver of, or consent to departure from,
any other guaranty, for all or any of the Guaranteed Obligations;




     (d) any manner of application of Collateral or any other collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any Collateral or any other collateral for all or any of the Guaranteed
Obligations or any other Obligations of any Loan Party under the Loan Documents or any other
assets of any Loan Party or any of its Subsidiaries;




     (e) any change, restructuring or termination of the corporate structure or existence of
any Loan Party or any of its Subsidiaries;




     (f) any failure of any Lender Party to disclose to any Loan Party any information
relating to the business, condition (financial or otherwise), operations, performance,
properties or prospects of any other Loan Party now or hereafter known to such Lender Party
(each Guarantor waiving any duty on the part of the Lender Parties to disclose such
information);




     (g) the failure of any other Person to execute or deliver this Agreement, any Guaranty
Supplement or any other guaranty or agreement or the release or reduction of liability of
any Guarantor or other guarantor or surety with respect to the Guaranteed Obligations; or




     (h) any other circumstance (including, without limitation, any statute of limitations)
or any existence of or reliance on any representation by any Lender Party that might
otherwise constitute a defense available to, or a discharge of, any Loan Party or any other
guarantor or surety.


This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any
Lender Party or any other Person upon the insolvency, bankruptcy or reorganization of the Borrower
or any other Loan Party or otherwise, all as though such payment had not been made.











 



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     SECTION 8.03. Waivers and Acknowledgments. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment,
demand for performance, notice of nonperformance, default, acceleration, protest or dishonor and
any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that any Lender Party protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any
right or take any action against any Loan Party or any other Person or any Collateral.



          (b) Each Guarantor hereby unconditionally and irrevocably waives any right to revoke this
Guaranty and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed
Obligations, whether existing now or in the future.




          (c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by
reason of any claim or defense based upon an election of remedies by any Lender Party that in any
manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement,
exoneration, contribution or indemnification rights of such Guarantor or other rights of such
Guarantor to proceed against any of the other Loan Parties, any other guarantor or any other Person
or any Collateral and (ii) any defense based on any right of set-off or counterclaim against or in
respect of the Obligations of such Guarantor hereunder.




          (d) Each Guarantor acknowledges that the Collateral Agent may, without notice to or demand
upon such Guarantor and without affecting the liability of such Guarantor under this Guaranty,
foreclose under any mortgage by nonjudicial sale, and each Guarantor hereby waives any defense to
its Obligations under this Guaranty of any deficiency after such nonjudicial sale and any defense
or benefits that may be afforded by applicable law.




          (e) Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of any
Lender Party to disclose to such Guarantor any matter, fact or thing relating to the business,
condition (financial or otherwise), operations, performance, properties or prospects of any other
Loan Party or any of its Subsidiaries now or hereafter known by such Lender Party.




          (f) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits
from the financing arrangements contemplated by the Loan Documents and that the waivers set forth
in Section 8.02 and this Section 8.03 are knowingly made in contemplation of such benefits.




     SECTION 8.04. Subrogation. Each Guarantor hereby unconditionally and irrevocably
agrees not to exercise any rights that it may now have or hereafter acquire against the Borrower,
any other Loan Party or any other insider guarantor that arise from the existence, payment,
performance or enforcement of such Guarantor’s Obligations under or in respect of this Guaranty or
any other Loan Document, including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any claim or remedy of
any Lender Party against the Borrower, any other Loan Party or any other insider guarantor or any
Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from the Borrower, any
other Loan Party or any other insider guarantor, directly or indirectly, in cash or other property
or by set-off or in any other manner, payment or security on account of









 



117

such claim, remedy or right, unless and until all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash (other than contingent obligations), all Letters of
Credit, the Special LC Facility and all Secured Hedge Agreements shall have expired or been terminated (unless such Letters of Credit are cash collateralized in an amount (up to 103% of
the face amount thereof) and on terms satisfactory to the Issuing Banks and the Administrative
Agent) and the Commitments shall have expired or been terminated. If any amount shall be paid to
any Guarantor in violation of the immediately preceding sentence at any time prior to the latest of
(a) the payment in full in cash of the Guaranteed Obligations and all other amounts payable under
this Guaranty (other than contingent obligations), (b) the Termination Date and (c) the latest date
of expiration or termination of all Letters of Credit (unless such Letters of Credit are cash
collateralized in an amount (up to 103% of the face amount thereof) and on terms satisfactory to
the Issuing Banks and the Administrative Agent), the Special LC Facility and all Secured Hedge
Agreements, such amount shall be received and held in trust for the benefit of the Lender Parties,
shall be segregated from other property and funds of such Guarantor and shall forthwith be paid or
delivered to the Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Guaranteed Obligations and all other
amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of
the Loan Documents, or to be held as Collateral for any Guaranteed Obligations or other amounts
payable under this Guaranty thereafter arising. If (i) any Guarantor shall make payment to any
Lender Party of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash
(other than contingent obligations), (iii) the Termination Date shall have occurred and (iv) all
Letters of Credit, the Special LC Facility and all Secured Hedge Agreements shall have expired or
been terminated (unless such Letters of Credit are cash collateralized in an amount (up to 103% of
the face amount thereof) and on terms satisfactory to the Issuing Banks and the Administrative
Agent), the Lender Parties will, at such Guarantor’s request and expense, execute and deliver to
such Guarantor appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an interest in the
Guaranteed Obligations resulting from such payment made by such Guarantor pursuant to this
Guaranty.




     SECTION 8.05. Guaranty Supplements. Upon the execution and delivery by any Person of
a guaranty supplement in substantially the form of Exhibit F hereto (each, a “Guaranty
Supplement”), (a) such Person shall be referred to as an “Additional Guarantor” and shall become
and be a Guarantor hereunder, and each reference in this Guaranty to a “Guarantor” shall also mean
and be a reference to such Additional Guarantor, and each reference in any other Loan Document to a
“Subsidiary Guarantor” shall also mean and be a reference to such Additional Guarantor, and (b)
each reference herein to “this Guaranty,” “hereunder,” “hereof” or words of like import referring
to this Guaranty, and each reference in any other Loan Document to the “Guaranty,” “thereunder,”
“thereof” or words of like import referring to this Guaranty, shall mean and be a reference to this
Guaranty as supplemented by such Guaranty Supplement.



     SECTION 8.06. Subordination. Each Guarantor hereby subordinates any and all debts,
liabilities and other Obligations owed to such Guarantor by each other Loan Party (the
“Subordinated Obligations”) to the Guaranteed Obligations to the extent and in the manner
hereinafter set forth in this Section 8.06:









 



118



     (a) Prohibited Payments, Etc. Except during the continuance of an Event of
Default that has resulted in acceleration, each Guarantor may receive (and pay) regularly
scheduled payments from (or to) any other Loan Party on account of the Subordinated
Obligations. After the occurrence and during the continuance of any Event of Default that
has resulted in acceleration, however, unless the Required Lenders otherwise agree, no
Guarantor shall demand, accept or take any action to collect any payment on account of the
Subordinated Obligations.




     (b) Prior Payment of Guaranteed Obligations. In any proceeding under any
Bankruptcy Law relating to any other Loan Party, each Guarantor agrees that the Lender
Parties shall be entitled to receive payment in full in cash of all Guaranteed Obligations
(including all interest and expenses accruing after the commencement of a proceeding under
any Bankruptcy Law, whether or not constituting an allowed claim in such proceeding
(“Post-Petition Interest”)) before such Guarantor receives payment of any Subordinated
Obligations.




     (c) Turn-Over. After the occurrence and during the continuance of any Event of
Default, each Guarantor shall, if the Administrative Agent so requests, collect, enforce and
receive payments on account of the Subordinated Obligations as trustee for the Lender
Parties and deliver such payments to the Administrative Agent on account of the Guaranteed
Obligations (including all Post-Petition Interest), together with any necessary endorsements
or other instruments of transfer, but without reducing or affecting in any manner the
liability of such Guarantor under the other provisions of this Guaranty.




     (d) Administrative Agent Authorization. After the occurrence and during the
continuance of any Event of Default, the Administrative Agent is authorized and empowered
(but without any obligation to so do), in its discretion, (i) in the name of each Guarantor,
to collect and enforce, and to submit claims in respect of, the Subordinated Obligations and
to apply any amounts received thereon to the Guaranteed Obligations (including any and all
Post-Petition Interest), and (ii) to require each Guarantor (A) to collect and enforce, and
to submit claims in respect of, the Subordinated Obligations and (B) to pay any amounts
received on such obligations to the Administrative Agent for application to the Guaranteed
Obligations (including any and all Post-Petition Interest).



     SECTION 8.07. Continuing Guaranty; Assignments. This Guaranty is a continuing
guaranty and shall (a) remain in full force and effect until the latest of (i) the payment in full
in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty (other than
contingent obligations), (ii) the Termination Date and (iii) the latest date of expiration or
termination of all Letters of Credit (unless such Letters of Credit are cash collateralized in an
amount (up to 103% of the face amount thereof) and on terms satisfactory to the Issuing Banks and
the Administrative Agent), (b) be binding upon each Guarantor, its successors and assigns and (c)
inure to the benefit of and be enforceable by the Lender Parties and their successors, transferees
and assigns. Without limiting the generality of clause (c) of the immediately preceding sentence,
any Lender Party may assign or otherwise transfer all or any portion of its rights and obligations
under this Agreement (including, without limitation, all or any portion of its Commitments, the
Advances owing to it and any Note or Notes held by it) to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect









 



119



thereof granted to such Lender Party herein or otherwise, in each
case as and only to the extent provided in Section 9.07. No Guarantor shall have the right to
assign its rights hereunder or any interest herein without the prior written consent of the Lender
Parties.



ARTICLE IX




MISCELLANEOUS




     SECTION 9.01. Amendments, Etc. No amendment or waiver of any provision of this
Agreement or the Notes, nor consent to any departure by any Loan Party therefrom, shall in any
event be effective unless the same shall be in writing and signed by the Borrower and the Required
Lenders, and then such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that (a) no amendment, waiver or consent
shall, unless in writing and signed by the Borrower and all of the Lender Parties (other than any
Lender Party that is, at such time, a Defaulting Lender), do any of the following at any time:




     (i) waive any of the conditions specified in Section 3.01 or, in the case of the
Initial Extension of Credit, Section 3.02,




     (ii) change (A) the definition of “Required Lenders” or (B) the number of Lenders or
the percentage of (x) the Commitments, (y) the aggregate unpaid principal amount of the
Advances or (z) the aggregate Available Amount of outstanding Letters of Credit that, in
each case, shall be required for the Lenders or any of them to take any action hereunder,




     (iii) release one or more Guarantors (or otherwise limit such Guarantors’ liability
with respect to the Obligations owing to the Agents and the Lender Parties under the
Guaranties) if such release or limitation is in respect of all or substantially all of the
value of the Guaranties to the Lender Parties (other than a release in respect of a sale or
transfer of such Guarantor in a transaction otherwise permitted hereunder),




     (iv) release any material portion of the Collateral in any transaction or series of
related transactions, or




     (v) amend this Section 9.01,


and (b) no amendment, waiver or consent shall, unless in writing and signed by the Borrower, the
Required Lenders and each Lender Party specified below for such amendment, waiver or consent:





     (i) increase or extend the Commitments of a Lender Party without the consent of such
Lender Party;




     (ii) reduce or forgive the principal of, or stated rate of interest on, the Advances
owed to a Lender Party or any fees or other amounts stated to be payable hereunder or under the other Loan Documents to such Lender Party without the consent of
such Lender Party;









 



120



     (iii) postpone any date scheduled for any payment of principal of, or interest on, the
Advances pursuant to Section 2.04 or 2.07 or any date fixed for any payment of fees or other
amounts hereunder in each case payable to a Lender Party without the consent of such Lender
Party;




     (iv) change the order of application of any reduction in the Commitments or any
prepayment of Advances among the Facilities from the application thereof set forth in the
applicable provisions of Section 2.05(b) or 2.06(b), respectively, in any manner that
materially adversely affects the Lenders under a Facility without the consent of holders of
a majority of the Commitments or Advances outstanding under such Facility;




     (v) change Section 2.11(a) or 2.13 in a manner that would alter the pro rata sharing of
payments required thereby without the consent of each Lender Party affected thereby; or




     (vi) require any Lender to make available Interest Periods with a duration longer than
six months without the consent of each affected Lender;


provided further that no amendment, waiver or consent shall, unless in writing and signed by the
Borrower and the Revolving Issuing Bank or the Term Issuing Bank, as the case may be, in addition
to the Lenders required above to take such action, affect the rights or obligations of such Issuing
Bank under this Agreement; and provided further that no amendment, waiver or consent shall, unless
in writing and signed by the Borrower, an Agent in addition to the Lenders required above to take
such action, affect the rights or duties of such Agent under this Agreement or the other Loan
Documents. Notwithstanding the foregoing, each Lender hereby authorizes the Administrative Agent
to enter into any amendments to the Collateral Documents or to the Intercreditor Agreement that are
necessary to effect a Permitted Revolving Credit Refinancing.




     SECTION 9.02. Notices, Etc. (a) All notices and other communications provided for
hereunder shall be either (x) in writing (including telegraphic, telecopy or electronic
communication) and mailed, telegraphed, telecopied or delivered or (y) as and to the extent set
forth in Section 9.02(b) and in the proviso to this Section 9.02(a), in an electronic medium and
delivered as set forth in Section 9.02(b), if to any Loan Party, to the Borrower at its address at
c/o US Power Generating Company, 400 Madison Avenue, New York, New York 10017, Attention: Jacob
Worenklein, Fax: 212-223-8295; E-mail Address: jworenklein@uspowergen.com, with copies to Madison
Dearborn Partners, LLC, Three First National Plaza, Suite 3800, Chicago, Illinois 60602, Attention:
Zaid Alsikafi, Fax: 312-895-1001; E-mail Address: zalsikafi@mdcp.com and Kirkland & Ellis LLP, 200
East Randolph Drive, Chicago, Illinois 60601, Attention: Mitchell Hertz / Andrew M. Kaufman, P.C.,
Fax: 202-879-5200 / 312-861-2200; E-mail Address: mhertz@kirkland.com / akaufman@kirkland.com; if
to any Initial Lender Party, at its Domestic Lending Office specified opposite its name on Schedule
I hereto; if to any other Lender Party, at its Domestic Lending Office specified in the Assignment
and Acceptance pursuant to which it became a Lender Party; if to the Collateral Agent, at its address at 101 Barclay Street, Floor 8W, New York, New York
10286, Attention: Corporate Trust Administration, Fax: 646-835-8457; and if to the Administrative
Agent, at its address at One Pierrepont Plaza, 7th Floor, 300 Cadman Plaza West,
Brooklyn, New York 11201, Attention: Larry Benison / Eric DeSantis, Fax: 718-754-7249 /
718-754-7250, E-mail Address:









 



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larry.benison@morganstanley.com / eric.desantis@morganstanley.com;
or, as to the Borrower or the Administrative Agent, at such other address as shall be designated by
such party in a written notice to the other parties and, as to each other party, at such other
address as shall be designated by such party in a written notice to the Borrower and the
Administrative Agent; provided, however, that materials and information described in Section
9.02(b) shall be delivered to the Administrative Agent in accordance with the provisions thereof or
as otherwise specified to the Borrower by the Administrative Agent. All such notices and other
communications shall, when mailed, telegraphed, telecopied, or e-mailed, be effective when
received. Delivery by telecopier of an executed counterpart of a signature page to any amendment
or waiver of any provision of this Agreement or the Notes shall be effective as delivery of an
original executed counterpart thereof.




          (b) The Borrower hereby agrees that it may provide to the Administrative Agent any or all
information, documents and other materials that it is obligated to furnish to the Administrative
Agent pursuant to the Loan Documents, including, without limitation, all notices, requests,
financial statements, financial and other reports, certificates and other information materials,
but excluding any such communication that (i) relates to a request for a new, or a Conversion of an
existing, Borrowing or other Extension of Credit (including any election of an interest rate or
interest period relating thereto), (ii) relates to the payment of any principal or other amount due
under this Agreement prior to the scheduled date therefor, (iii) provides notice of any Default or
Event of Default under this Agreement or (iv) is required to be delivered to satisfy any condition
precedent to the effectiveness of this Agreement and/or any Borrowing or other Extension of Credit
thereunder (all such non-excluded communications being referred to herein collectively as
“Communications”), by transmitting the Communications in an electronic/soft medium in a format
acceptable to the Administrative Agent to an electronic mail address specified by the
Administrative Agent to the Borrower. In addition, the Borrower agrees to continue to provide the
Communications to the Administrative Agent in the manner specified in the Loan Documents but only
to the extent requested by the Administrative Agent. The Borrower further agrees that the
Administrative Agent may make the Communications available to the Lenders by posting the
Communications on IntraLinks or a substantially similar electronic transmission system (the
“Platform”).




          (c) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS DEFINED BELOW)
DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM
AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE 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 PARTIES IN CONNECTION WITH THE
COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS
AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY,
“AGENT PARTIES”) HAVE ANY LIABILITY TO THE BORROWER, ANY LENDER PARTY OR ANY OTHER PERSON OR ENTITY
FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR









 



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INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF
THE BORROWER’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET,
EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT
BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.




          (d) The Administrative Agent agrees that the receipt of the Communications by the
Administrative Agent at its e-mail address set forth above shall constitute effective delivery of
the Communications to the Administrative Agent for purposes of the Loan Documents. Each Lender
Party agrees that notice to it (as provided in the next sentence) specifying that the
Communications have been posted to the Platform shall constitute effective delivery of the
Communications to such Lender Party for purposes of the Loan Documents. Each Lender Party agrees
to notify the Administrative Agent in writing (including by electronic communication) from time to
time of such Lender Party’s e-mail address to which the foregoing notice may be sent by electronic
transmission and (ii) that the foregoing notice may be sent to such e-mail address. Nothing herein
shall prejudice the right of the Borrower, Administrative Agent or any Lender Party to give any
notice or other communication pursuant to any Loan Document in any other manner specified in such
Loan Document.




     SECTION 9.03. No Waiver; Remedies. No failure on the part of any Lender Party or any
Agent to exercise, and no delay in exercising, any right hereunder or under any Note or any other
Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies provided by law.



     SECTION 9.04. Costs and Expenses. (a) The Borrower agrees to pay on demand (i) all
reasonable out of pocket costs and expenses of each Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of, or any consent or waiver under,
the Loan Documents (including, without limitation, (A) all due diligence, collateral review,
syndication, transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees and expenses of one
counsel for the Agents, and of one local or special counsel in each jurisdiction and for each
specialty in which the Agents reasonably determine if it is necessary or desirable to retain such
counsel, with respect thereto, with respect to advising such Agent as to its rights and
responsibilities, or the perfection, protection or preservation of rights or interests, under the
Loan Documents, with respect to negotiations with any Loan Party or with other creditors of any
Loan Party or any of
its Subsidiaries arising out of any Default or any events or circumstances that may give rise
to a Default and with respect to presenting claims in or otherwise participating in or monitoring
any bankruptcy, insolvency or other similar proceeding involving creditors’ rights generally and
any proceeding ancillary thereto) and (ii) all costs and expenses of each Agent and each Lender
Party in connection with the enforcement of the Loan Documents, whether in any action, suit or
litigation, or any bankruptcy, insolvency or other similar proceeding affecting









 



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creditors’ rights generally (including, without limitation, the reasonable fees and expenses of one counsel for the
Administrative Agent and all Lender Parties with respect thereto).




          (b) The Borrower agrees to indemnify, defend and save and hold harmless each Agent, each
Lender Party and each of their Affiliates and their respective officers, directors, employees,
agents, trustees and advisors (each, an “Indemnified Party”) from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or in connection with or by reason of
any investigation, litigation or proceeding or preparation of a defense in connection with, arising
from or regarding (i) the Facilities, the actual or proposed use of the proceeds of the Advances or
the Letters of Credit, the Transaction Documents or any of the transactions contemplated thereby,
including, without limitation, any acquisition or proposed acquisition (including, without
limitation, the Transaction) by the Equity Investors or any of their Subsidiaries or Affiliates of
all or any portion of the Equity Interests in or Debt securities or substantially all of the assets
of the Company or any of its Subsidiaries or (ii) the actual or alleged presence of Hazardous
Materials on any property of any Loan Party or any of its Subsidiaries or any Environmental Action
relating in any way to any Loan Party or any of its Subsidiaries, except to the extent such claim,
damage, loss, liability or expense resulted from such Indemnified Party’s gross negligence, bad
faith or willful misconduct. In the case of an investigation, litigation or other proceeding to
which the indemnity in this Section 9.04(b) applies, such indemnity shall be effective whether or
not such investigation, litigation or proceeding is brought by any Loan Party, its directors,
shareholders or creditors, any Indemnified Party or any other Person, whether or not any
Indemnified Party is otherwise a party thereto and whether or not the Transaction is consummated.
The Borrower also agrees not to assert any claim against any Agent, any Lender Party or any of
their Affiliates, or any of their respective officers, directors, employees, agents, trustees and
advisors, on any theory of liability, for special, indirect, consequential or punitive damages
arising out of or otherwise relating to the Facilities, the actual or proposed use of the proceeds
of the Advances or the Letters of Credit, the Transaction Documents or any of the transactions
contemplated by the Transaction Documents (except in the case of gross negligence, bad faith or
willful misconduct).




          (c) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by
the Borrower to or for the account of a Lender Party other than on the last day of the Interest
Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.06 or
2.10(d), acceleration of the maturity of the Advances pursuant to Section 6.01 or for any other
reason, or by an Eligible Assignee to a Lender Party other than on the last day of the Interest
Period for such Advance upon an assignment of rights and obligations under this Agreement pursuant
to Section 9.07 as a result of a demand by the Borrower pursuant to Section 2.10(e), or if the
Borrower fails to make any payment or prepayment of a Eurodollar Rate Advance for which a notice of
prepayment has been given or that is otherwise required to be
made, whether pursuant to Section 2.04, 2.06 or 6.01 or otherwise, the Borrower shall, upon
written certification by such Lender Party (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender Party any amounts required
to compensate such Lender Party for any additional losses, costs or expenses that it may reasonably
incur as a result of such payment or Conversion or such failure to pay or prepay, as the case may
be, including, without limitation, any loss (but excluding loss of anticipated









 



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profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired
by any Lender Party to fund or maintain such Advance.




          (d) If any Loan Party fails to pay when due any costs, expenses or other amounts payable by it
under any Loan Document, including, without limitation, fees and expenses of counsel and
indemnities, such amount may be paid on behalf of such Loan Party by the Administrative Agent or
any Lender Party, in its sole discretion.




          (e) Without prejudice to the survival of any other agreement of any Loan Party hereunder or
under any other Loan Document, the agreements and obligations of the Borrower contained in Sections
2.10 and 2.12 and this Section 9.04 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under any of the other Loan Documents.




     SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during the continuance
of any Event of Default and (b) the making of the request or the granting of the consent specified
by Section 6.01 to authorize the Administrative Agent to declare the Advances due and payable
pursuant to the provisions of Section 6.01, each Agent and each Lender Party and each of their
respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and otherwise 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
Agent, such Lender Party or such Affiliate to or for the credit or the account of the Borrower
against any and all of the Obligations of the Borrower now or hereafter existing under the Loan
Documents, irrespective of whether such Agent or such Lender Party shall have made any demand under
this Agreement and although such Obligations may be unmatured. Each Agent and each Lender Party
agrees promptly to notify the Borrower after any such set-off and application; provided, however,
that the failure to give such notice shall not affect the validity of such set-off and application.
The rights of each Agent and each Lender Party and their respective Affiliates under this Section
are in addition to other rights and remedies (including, without limitation, other rights of
set-off) that such Agent, such Lender Party and their respective Affiliates may have.



     SECTION 9.06. Binding Effect. This Agreement shall become effective when it shall
have been executed by the Borrower and each Agent and the Administrative Agent shall have been
notified by each Initial Lender Party that such Initial Lender Party has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrower, each Agent and each Lender Party
and their respective successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written consent of each Lender
Party.



     SECTION 9.07. Assignments and Participations. (a) Each Lender may and, so long as
no Default shall have occurred and be continuing, if demanded by the Borrower pursuant to Section
2.10(e) upon at least five Business Days’ notice to such Lender and the Administrative Agent, will
assign to one or more Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment or Commitments, the
Advances owing to it and the Note or Notes held by it); provided, however, that (i) each such
assignment shall be of a uniform, and not a varying, percentage of all rights









 



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and obligations under and in respect of any or all of the Facilities, (ii) except in the case of an assignment to a
Person that, immediately prior to such assignment, was a Lender, an Affiliate of any Lender or an
Approved Fund of any Lender or an assignment of all of a Lender’s rights and obligations under this
Agreement, the aggregate amount of the Commitments being assigned to such Eligible Assignee
pursuant to such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $1,000,000 (or such lesser amount as
shall be approved by the Administrative Agent and, so long as no Default shall have occurred and be
continuing at the time of effectiveness of such assignment, the Borrower) under each Facility for
which a Commitment is being assigned; provided, that simultaneous assignments to or by two or more
Related Funds shall be treated as one assignment for purposes of the minimum assignment
requirement, (iii) each such assignment shall be to an Eligible Assignee, (iv) each such assignment
made as a result of a demand by the Borrower pursuant to Section 2.10(e) shall be arranged by the
Borrower after consultation with the Administrative Agent and shall be either an assignment of all
of the rights and obligations of the assigning Lender under this Agreement or an assignment of a
portion of such rights and obligations made concurrently with another such assignment or other such
assignments that together cover all of the rights and obligations of the assigning Lender under
this Agreement, (v) no Lender shall be obligated to make any such assignment as a result of a
demand by the Borrower pursuant to Section 2.10(e) unless and until such Lender shall have received
one or more payments from either the Borrower or one or more Eligible Assignees in an aggregate
amount at least equal to the aggregate outstanding principal amount of the Advances owing to such
Lender, together with accrued interest thereon to the date of payment of such principal amount and
all other amounts payable to such Lender under this Agreement, (vi) no such assignments shall be
permitted without the consent of the Administrative Agent until the Administrative Agent shall have
notified the Lender Parties that syndication of the Commitments hereunder has been completed and
(vii) the parties to each such assignment shall execute and deliver to the Administrative Agent,
for its acceptance and recording in the Register, an Assignment and Acceptance, together with any
Note or Notes (if any) subject to such assignment.




          (b) Upon such execution, delivery, acceptance and recording, from and after the effective date
specified in such Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender or Issuing Bank, as the case
may be, hereunder and (ii) the Lender or Issuing Bank assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (other than its rights under Sections 2.10, 2.12 and 9.04 to the
extent any claim thereunder relates to an event arising prior to such assignment) and be released
from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the remaining portion of an assigning Lender’s or
Issuing Bank’s rights and obligations under this Agreement, such Lender or Issuing Bank shall cease
to be a party hereto).




          (c) By executing and delivering an Assignment and Acceptance, each Lender Party assignor
thereunder and each assignee thereunder confirm to and agree with each other and the other parties
thereto and hereto as follows: (i) other than as provided in such Assignment and Acceptance, such
assigning Lender Party makes no representation or warranty and assumes no









 



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responsibility with respect to any statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or purported to be
created under or in connection with, any Loan Document or any other instrument or document
furnished pursuant thereto; (ii) such assigning Lender Party makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under any Loan Document or
any other instrument or document furnished pursuant thereto; (iii) such assignee confirms that it
has received a copy of this Agreement, together with copies of the financial statements referred to
in Section 4.01 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; (iv) such assignee
will, independently and without reliance upon any Agent, such assigning Lender Party or any other
Lender Party 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; (v)
such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes
each Agent to take such action as agent on its behalf and to exercise such powers and discretion
under the Loan Documents as are delegated to such Agent by the terms hereof and thereof, together
with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as a Lender or Issuing Bank, as the case may
be.




          (d) The Administrative Agent, acting for this purpose (but only for this purpose) as the agent
of the Borrower, shall maintain at its address referred to in Section 9.02 a copy of each
Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the
names and addresses of the Lender Parties and the Commitment under each Facility of, and principal
amount of the Advances owing under each Facility to, each Lender Party from time to time (the
“Register”). The Borrower, the Agents and the Lender Parties shall treat each Person whose name is
recorded in the Register as a Lender Party hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Agent or any Lender Party at any
reasonable time and from time to time upon reasonable prior notice.




          (e) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender Party and
an assignee, together with any Note or Notes (if any) subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice thereof to the
Borrower and each other Agent. In the case of any assignment by a Lender,
within five Business Days after its receipt of such notice, the Borrower, at its own expense,
shall execute and deliver to the Administrative Agent in exchange for the surrendered Note or Notes
(if any) an amended and restated Note to the order of such Eligible Assignee in an amount equal to
the Commitment assumed by it under each Facility pursuant to such Assignment and Acceptance and, if
any assigning Lender that had a Note or Notes prior to such assignment has retained a Commitment
hereunder under such Facility, an amended and restated Note to the order of such assigning Lender
in an amount equal to the Commitment retained by it hereunder. Such amended and restated Note or
Notes shall be dated the effective date of such Assignment










 



127



and Acceptance and shall otherwise be in substantially the form of Exhibit A-1, A-2 or A-3 hereto, as the case may be.




          (f) Each Issuing Bank may assign to an Eligible Assignee all of its rights and obligations
under the undrawn portion of its Letter of Credit Commitment at any time; provided, however, that
(i) each such assignment shall be to an Eligible Assignee and (ii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording
in the Register, an Assignment and Acceptance.




          (g) Each Lender Party may sell participations to one or more Persons (other than any Loan
Party or any of its Affiliates) in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitments, the Advances owing
to it and the Note or Notes (if any) held by it); provided, however, that (i) such Lender Party’s
obligations under this Agreement (including, without limitation, its Commitments) shall remain
unchanged, (ii) such Lender Party shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender Party shall remain the holder of any such
Note for all purposes of this Agreement, (iv) the Borrower, the Agents and the other Lender Parties
shall continue to deal solely and directly with such Lender Party in connection with such Lender
Party’s rights and obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on, the Advances or
any fees or other amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or interest on, the
Advances or any fees or other amounts payable hereunder, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral or the value of the
Guaranties.




          (h) Any Lender Party may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 9.07, disclose to the assignee or participant
or proposed assignee or participant any information relating to the Borrower furnished to such
Lender Party by or on behalf of the Borrower; provided, however, that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant shall agree to preserve
the confidentiality of any Confidential Information received by it from such Lender Party.




          (i) Notwithstanding any other provision set forth in this Agreement, any Lender Party may at
any time create a security interest in all or any portion of its rights under this Agreement
(including, without limitation, the Advances owing to it and the Note or Notes (if
any) held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the
Board of Governors of the Federal Reserve System.




          (j) Notwithstanding anything to the contrary contained herein, any Lender that is a Fund may,
without the consent of the Borrower or the Administrative Agent, create a security interest in all
or any portion of the Advances owing to it and any Note or Notes held by it to the trustee or other
holders of obligations owed, or securities issued, by such Fund as security for such obligations or
securities; provided that, unless and until such creditor, holder or









 



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trustee actually becomes a Lender in compliance with the other provisions of this Section 9.07, (i) no such pledge shall
release the pledging Lender from any of its obligations under the Loan Documents and (ii) such
trustee shall not be entitled to exercise any of the rights of a Lender under the Loan Documents
even though such trustee may have acquired ownership rights with respect to the pledged interest
through foreclosure or otherwise.




          (k) Notwithstanding anything to the contrary contained herein, any Lender Party (a “Granting
Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to
time by the Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the option to
provide all or any part of any Advance that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by
any SPC to fund any Advance and (ii) if an SPC elects not to exercise such option or otherwise
fails to make all or any part of such Advance, the Granting Lender shall be obligated to make such
Advance pursuant to the terms hereof. The making of an Advance by an SPC hereunder shall utilize
the Commitment of the Granting Lender to the same extent, and as if, such Advance were made by such
Granting Lender. Each party hereto hereby agrees that (i) no SPC shall be liable for any indemnity
or similar payment obligation under this Agreement for which a Lender Party would be liable, (ii)
no SPC shall be entitled to the benefits of Sections 2.10 and 2.12 (or any other increased costs
protection provision) and (iii) the Granting Lender shall for all purposes, including, without
limitation, the approval of any amendment or waiver of any provision of any Loan Document, remain
the Lender Party of record hereunder. Notwithstanding anything to the contrary contained in this
Agreement, any SPC may (i) with notice to, but without prior consent of, the Borrower and the
Administrative Agent and with the payment of a processing fee of $500, assign all or any portion of
its interest in any Advance to the Granting Lender and (ii) disclose on a confidential basis any
non-public information relating to its funding of Advances to any rating agency, commercial paper
dealer or provider of any surety or guarantee or credit or liquidity enhancement to such SPC. This
subsection (k) may not be amended without the prior written consent of each Granting Lender, all or
any part of whose Advances are being funded by the SPC at the time of such amendment.




     SECTION 9.08. Execution in Counterparts. This Agreement 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. Delivery by telecopier of an executed counterpart of a signature page to
this Agreement shall be effective as delivery of an original executed counterpart of this
Agreement.



     SECTION 9.09. No Liability of the Issuing Banks. The Borrower assumes all risks of
the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its
use of such Letter of Credit. Neither any Issuing Bank nor any of its officers or directors shall
be liable or responsible for: (a) the use that may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith; (b) the validity, sufficiency
or genuineness of documents, or of any endorsement thereon, even if such documents should prove to
be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by such Issuing
Bank against presentation of documents that do not comply with the terms of a Letter of Credit,
including failure of any documents to bear any reference or adequate reference to the Letter of









 



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Credit; or (d) any other circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrower shall have a claim against such Issuing Bank, and such
Issuing Bank shall be liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by (i) such Issuing Bank’s
willful misconduct or gross negligence as determined in a final, non-appealable judgment by a court
of competent jurisdiction in determining whether documents presented under any Letter of Credit
comply with the terms of the Letter of Credit or (ii) such Issuing Bank’s willful failure to make
lawful payment under a Letter of Credit after the presentation to it of a draft and certificates
strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not
in limitation of the foregoing, such Issuing Bank may accept documents that appear on their face to
be in order, without responsibility for further investigation, regardless of any notice or
information to the contrary.



     SECTION 9.10. Confidentiality. Neither any Agent nor any Lender Party shall disclose
any Confidential Information to any Person without the consent of the Borrower, other than (a) to
such Agent’s or such Lender Party’s Affiliates and their officers, directors, employees, agents,
auditors, accountants, representatives, trustees and advisors and to actual or prospective Eligible
Assignees, participants and swap counterparties, and then only on a confidential basis, (b) as
required by any law, rule or regulation or judicial process, (c) as requested or required by any
state, Federal or foreign government, authority or examiner (including the National Association of
Insurance Commissioners or any similar organization or quasi-regulatory authority) regulating or
with jurisdiction over such Agent or Lender Party, (d) to any rating agency when required by it,
provided that, prior to any such disclosure, such rating agency shall undertake to preserve the
confidentiality of any Confidential Information relating to the Loan Parties received by it from
such Lender Party, (e) in connection with any litigation or proceeding to which such Agent or such
Lender Party or any of its Affiliates may be a party or (f) in connection with the exercise of any
right or remedy under this Agreement or any other Loan Document.



     SECTION 9.11. Release of Collateral. Upon (a) the sale, lease, transfer or other
disposition of any item of Collateral of any Loan Party (including, without limitation, as a result
of the sale, in accordance with the terms of the Loan Documents, of the Loan Party that owns such
Collateral) in accordance with the terms of the Loan Documents or (b) the latest of (i) payment in
full in cash of the Obligations (other than contingent Obligations), (ii) the Termination Date and (iii) the latest date of
expiration or termination of all Letters of Credit (unless such Letters of Credit are cash
collateralized in an amount (up to 103% of the face amount thereof) and on terms satisfactory to
the Administrative Agent and the Issuing Banks) and the Special LC Facility, the Collateral Agent
will, at the Borrower’s expense, execute and deliver to such Loan Party such documents as such Loan
Party may reasonably request to evidence the release of such item of Collateral from the assignment
and security interest granted under the Collateral Documents in accordance with the terms of the
Loan Documents.



     SECTION 9.12. Patriot Act Notice. Each Lender Party and each Agent (for itself and
not on behalf of any Lender Party) hereby notifies the Loan Parties that pursuant to the
requirements of the Patriot Act, it is required to obtain, verify and record information that
identifies each Loan Party, which information includes the name and address of such Loan Party and
other information that will allow such Lender Party or such Agent, as applicable, to identify such
Loan Party in accordance with the Patriot Act. The Borrower shall, and shall cause each of









 



130

its Subsidiaries to, provide such information and take such actions as are reasonably requested by any
Agent or any Lender Party in order to assist the Agents and the Lender Parties in maintaining
compliance with the Patriot Act.




     SECTION 9.13. Jurisdiction, Etc. (a) Each of the parties hereto 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 any of the other Loan Documents to which it is a party, 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
any such New York State court or, to the fullest 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 any party may
otherwise have to bring any action or proceeding relating to this Agreement or any of the other
Loan Documents in the courts of any jurisdiction.



          (b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that 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 any of
the other Loan Documents to which it is a party 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.




     SECTION 9.14. Governing Law. This Agreement and the Notes shall be governed by, and construed in accordance with, the
laws of the State of New York.



     SECTION 9.15. Hedge Banks. Each Lender Party hereby agrees that in its capacity as a
Hedge Bank it shall, and shall cause its Affiliates in their capacity as Hedge Banks, to comply
with all obligations of such party as a Hedge Bank under the Intercreditor Agreement.



     SECTION 9.16. Waiver of Jury Trial. Each of the Borrower, the Agents and the Lender
Parties irrevocably waives all right to trial by jury in any action, proceeding or counterclaim
(whether based on contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances, the Letters of Credit or the actions of any Agent or any Lender Party in
the negotiation, administration, performance or enforcement thereof.









 



 


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




	 	 	 	 	 
	 	ASTORIA GENERATING COMPANY ACQUISITIONS, L.L.C.,

as Borrower

 	 
	 	By:  	/s/ Jacob Worenklein	 
	 	 	Title: Chief Executive Officer	 
	 	 	 	 
	 
	 	ASTORIA GENERATING COMPANY HOLDINGS, L.L.C.,

as Parent

 	 
	 	By  	/s/ Jacob Worenklein	 
	 	 	Title: Chief Executive Officer	 
	 	 	 	 
	 
	 	ASTORIA GENERATING COMPANY GP, L.L.C.,

as Guarantor

 	 
	 	By  	/s/ Jacob Worenklein	 
	 	 	Title: Chief Executive Officer	 
	 	 	 	 
	 
	 	ASTORIA MERGER SUB, L.P.,

as Subsidiary Guarantor



By: ASTORIA GENERATING COMPANY GP, L.L.C.,

Its General Partner

 	 
	 	By  	/s/ Jacob Worenklein
 	 
	 	 	Title: Chief Executive Officer	 
	 	 	 	 
	 	OPOS MERGER SUB, INC.,

as Guarantor

 	 
	 	By  	/s/ Jacob Worenklein	 
	 	 	Title: Chief Executive Officer	 
	 	 		 









 



 

	 	 	 	 	 



	 	 	 	 	 
	 	THE BANK OF NEW YORK,

as Collateral Agent

 	 
	 	By  	/s/ Mary LaGumina	 
	 	 	Name:  Mary LaGumina	 
	 	 	Title:    Vice President