Exhibit 10.2


 


EXECUTION COPY


 


AMENDMENT NO. 3


 


This Amendment
No. 3, dated as of May 17, 2006 (this “Amendment”), is among
RELIANT ENERGY, INC., a Delaware corporation (the “Borrower”), the other
LOAN PARTIES referred to herein, as Guarantors, and each of the Lenders listed
on the signature pages to this Amendment.


 


INTRODUCTION


 


A.            The Borrower, the
other Loan Parties referred to therein, DEUTSCHE BANK AG, NEW YORK BRANCH, as
Administrative Agent and DEUTSCHE BANK SECURITIES INC., as Sole Lead Arranger,
Sole Bookrunner, and Sole Syndication Agent (collectively, the “Agents”)
and the Lenders are parties to the Credit and Guaranty Agreement dated as of
October 7, 2005 (as amended to date, the “Credit Agreement”).


 


B.            The Borrower and the
other Loan Parties have requested that the Lenders amend the Credit Agreement
as set forth below, and upon the terms and conditions of this Amendment the
Lenders are willing to agree to the requested amendments.


 


THEREFORE, the Borrower, such other Loan Parties and the Lenders hereby
agree as follows:


 


SECTION 1. Definitions. Unless otherwise defined in this
Amendment, terms used in this Amendment which are defined in the Credit
Agreement shall have the meanings assigned to such terms in the Credit
Agreement.


 


SECTION 2. Amendments to Article I. Article I of the Credit
Agreement is hereby amended as set forth in Section 2.1.


 


SECTION 2.1. Section 1.1 of the Credit Agreement is amended by
inserting the following definitions in the appropriate alphabetical order:


 


“Fair Value Certificate” is defined in
the definition of Permitted Sale.


 


“PEDFA Debt”
means Indebtedness permitted pursuant to clause (d) of Section 7.3.


 


“Permitted
Payment” means, on any given date, any voluntary or mandatory repayment,
prepayment, repurchase, retirement, redemption or defeasance of the principal
of any Loans or other Parity Secured Debt (but specifically excluding (i)
Revolving Credit Loans , (ii) PEDFA Debt and (iii) loans outstanding under
other revolving-type credit facilities except, in the case of each of clauses
(i) and (iii), as a result of a Dollar-for-Dollar permanent
reduction in the commitments thereunder).


 


“Permitted
Sale” means one or more sales of any Transferred Asset by the Borrower or
any Restricted Subsidiary to the Purchaser Subsidiary, pursuant to


 

















 


which all of
the following conditions shall be satisfied on or prior to the consummation of
such sale (or, if a later date is specified with respect to any of the
following conditions, such later date with respect to such condition):


 


(i) (a) the Borrower or the applicable
selling Restricted Subsidiary shall have received from the Purchaser Subsidiary
consideration in the form of cash or a Sale Note, or any combination thereof,
in an aggregate amount equal to or greater than the fair value, or within or
above the range of fair values, of such Transferred Asset as determined
pursuant to the applicable Fair Value Certificates, and (b) such consideration
for all Transferred Assets (singly or in the aggregate with all other
consummated Permitted Sales) shall not exceed (x) if there is only one
Transferred Asset, $350,000,000 and (y) if there is more than one Transferred
Asset, $250,000,000;


 


(ii) 
the Revolver Administrative Agent shall have received a certificate or
opinion addressed to the Revolver Administrative Agent of an engineer,
appraiser, or other expert (in each case who is not an Affiliate or employee of
the Borrower or any of its Subsidiaries) setting forth the fair value of the
Transferred Assets (a “Fair Value Certificate”), which certificate or
opinion also shall be in the form required to be delivered to the Secured Debt
Representative for the Secured Notes pursuant to Section 314(d)(1) of the Trust
Indenture Act of 1939 in respect of such Permitted Sale or in such other form as
may be reasonably satisfactory to the Revolver Administrative Agent, and the
Borrower shall have delivered a copy of the Fair Value Certificate to the
Administrative Agent unless it is prohibited from doing so;


 


(iii) the Purchaser Subsidiary shall have executed
and delivered to the Borrower or the applicable selling Restricted Subsidiary
such pledge agreements, security agreements, mortgages, deeds of trust, deeds
to secure debt or other equivalent documents with respect to all such
Transferred Assets to secure all the obligations of the Purchaser Subsidiary
under the applicable Sale Note, which agreements, mortgages, deeds or other
documents shall be in form and substance reasonably satisfactory to the
Revolver Administrative Agent, and shall have executed, delivered and filed all
other documents and instruments and taken all other actions as may be necessary
in the reasonable opinion of the Revolver Administrative Agent and its counsel
to perfect the security interests of the Borrower or the applicable selling
Restricted Subsidiary pursuant to such agreements, mortgages, deeds or other
documents;


 


(iv) within 3 Business Days following the
consummation of such Permitted Sale, the related Sale Note(s) shall have been
duly and validly pledged under the Security Agreement as Separate Collateral to
the Collateral Trustee accompanied by undated instruments of transfer endorsed
in blank, and accompanied by any agreements, mortgages, deeds and other
documents executed and delivered pursuant to clause (iii), and each
shall be in the actual possession of the Collateral Agent;


 


2

















 


(v) the Administrative Agent shall have
received a certificate, dated as of the date of consummation of such Permitted
Sale and duly executed by a Responsible Officer of the Borrower, in which
certificate the Borrower shall certify as to good standing, due authorization,
corporate power and authority, due execution and delivery, valid and binding
obligation, absence of conflicts with organizational documents, contracts, laws
and governmental orders, and validity and perfection of security interests, in
each case with respect to the applicable Sale Note(s) and the other documents
contemplated by clause (iii), and, at the time such certificate is delivered,
such certifications shall in fact be true and correct; and


 


(vi) all material governmental and third
party consents and approvals with respect to such Permitted Sale shall have
been obtained and there shall be no litigation, governmental, administrative or
judicial action that could reasonably be expected to restrain or prevent such
Permitted Sale.


 


“Purchaser
Subsidiary” means a wholly-owned Subsidiary of OPH which is a Restricted
Subsidiary and also a Designated Entity.


 


“Revolving
Credit Loans” has the meaning assigned to it in the Existing Credit
Agreement.


 


 “Sale Note” means one or more secured
promissory notes in substantially the form set forth in Exhibit H to
this Agreement payable by the Purchaser Subsidiary to the Borrower in
consideration of the sale of particular Transferred Assets, the maturity date
of which note shall be no later than the Revolving Credit Termination Date
under the Existing Credit Agreement.


 


“Transferred
Assets” means, collectively, a power generation facility and related
properties which are sold in one or more Permitted Sales to the Purchaser
Subsidiary.


 


“Transferred
Asset Sale Proceeds” means the aggregate cash proceeds received by OPH or
the Purchaser Subsidiary in respect of any Asset Sale (including any cash received
upon the sale or other disposition of any non-cash consideration received in
any Asset Sale) with respect to any Transferred Asset, net of the direct costs
relating to such Asset Sale, including legal, accounting and investment banking
fees, and sales commissions, and any relocation expenses incurred as a result
of the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each
case, after taking into account any available tax credits or deductions and any
tax sharing arrangements, and amounts reserved for adjustment in respect of the
sale price of such asset or assets established in accordance with GAAP.


 


“Trigger
Amount” is defined in clause (b) of Section 6.15.


 


SECTION 3. Amendments to Article VI. Article VI of the Credit
Agreement is hereby amended as set forth in Sections 3.1 through 3.3.


 


3

















 


SECTION 3.1. Section 6.3 is amended by (i) deleting the word “and” at
the end of clause (c), (ii) replacing the period at the end of clause (d) with “;
and”, and (iii) adding a new clause (e), to read in its entirety as follows:


 


(e)  (x) of the occurrence of (i) any Permitted
Sale and (ii) any repayment or prepayment of principal of any Sale Note, (y)
following the occurrence of any event set forth in clause (e)(x), of the
outstanding principal amount of all Sale Notes and calculations to demonstrate
the extent to which a Trigger Amount has accrued, in each case, both
immediately before and after giving effect to such event and (z) following any
Permitted Payment pursuant to Section 6.15(b) or (c), the date and amount of
such Permitted Payment and the Parity Secured Debt to which such Permitted
Payment was applied.


 


SECTION 3.2. Article
VI is further amended by adding a new Section 6.15 to read in its entirety as
follows:


 


6.15. Sale
Note, etc. (a) 
Cause each Sale Note to be pledged to the Secured Parties under the
Security Agreement as Separate Collateral.


 


(b)  No later than the later of (i) the date which
is 90 days after the consummation of any Permitted Sale and (ii) October 31,
2006, apply all cash consideration received by the Borrower or the applicable
Restricted Subsidiary with respect to such Permitted Sale pursuant to clause
(i) of the definition of Permitted Sale to one or more Permitted Payments
at no more than par (it being understood that the foregoing shall not prohibit
the Borrower from paying a premium or amount greater than par otherwise
permitted under this Agreement so long as such premium payment or amount
greater than par is not funded by any cash consideration received by the
Borrower or the applicable Restricted Subsidiary with respect to a Permitted
Sale pursuant to clause (i) of the definition of Permitted Sale or by
any amounts received pursuant to any repayment or prepayment of the principal
of any Sale Note).


 


(c)           Within
90 days following receipt (individually or in the aggregate) of the Trigger
Amount, apply all (and no less than all) of such Trigger Amount (together with
any other repayments or prepayments (that are not attributable to Transferred
Asset Sale Proceeds) of principal of each Sale Note that are received
contemporaneously with such Trigger Amount) to one or more Permitted Payments
at no more than par (it being understood that the foregoing shall not prohibit the
Borrower from paying any premium or amount greater than par otherwise permitted
under this Agreement so long as such premium payment or amount greater than par
is not funded by any cash consideration received by the Borrower or the
applicable Restricted Subsidiary with respect to a Permitted Sale pursuant to clause
(i) of the definition of Permitted Sale or by any amounts received pursuant
to any repayment or prepayment of the principal of any Sale Note). For purposes
of this clause, “Trigger Amount” shall mean repayments or prepayments
(that are not attributable to Transferred Asset Sale Proceeds) of principal of
one or more Sale Notes in an aggregate amount equal to $25,000,000,


 


4

















 


to the extent
such repayments or prepayments have not previously been applied in accordance
with the foregoing provisions of this clause.


 


SECTION 4. Amendments to Article VII. Article VII of the Credit
Agreement is hereby amended as set forth in Sections 4.1 through 4.3.


 


SECTION 4.1. Section 7.13 of the Credit Agreement is amended by (i)
replacing the period at the end of clause (c) with “; and”, and (ii) adding a
new clause (d), to read in its entirety as follows:


 


(d)  any Sale Note in any way that (i) reduces the
rate of interest or extends the date scheduled for payment of principal of or
interest on, or reduces the principal amount (other than as a result of a
Dollar for Dollar repayment) of, such Sale Note, (ii) modifies, waives or
deletes the terms of any Sale Note which provide for a cross-default to
Indebtedness of OPH under the OPH Note Indenture or the OPH Notes, or
(iii) releases collateral securing such Sale Note, except in connection
with any asset disposition that is not prohibited hereunder and the Net Asset
Sale Proceeds of which are applied in accordance herewith.


 


SECTION 4.2. Section 7.17 of the Credit Agreement is hereby amended by
amending and restating clauses (a) and (c) in their entirety, in each case to
read as follows:


 


(a)  The Borrower shall not permit OPH or any of
OPH’s Subsidiaries to distribute any cash (other than (i) Net Asset Sale
Proceeds or (ii) cash paid in consideration for Transferred Assets (whether on
the date of the consummation of any Permitted Sale or thereafter, and whether
in respect of the payment of principal of or interest on the related Sale Note)
to the Borrower or any of its Subsidiaries (other than an OPH Subsidiary),
except as follows:  first, to pay
principal of and interest on the OPH Revolving Notes; second, to the
extent permitted under the OPH Note Indenture, to be distributed by OPH to the
Borrower as a dividend or otherwise; and third, to pay principal of and
interest on the OPMW Term Notes and OPNY Term Note.


 


(c)  The Borrower shall cause OPH and its
Subsidiaries to apply all OPH Asset Sale Proceeds (i) other than in the case of
Transferred Asset Sale Proceeds, to the prepayment of the OPMW Term Notes and
OPNY Term Notes, in each case until repaid in full and (ii) in the case of
Transferred Asset Sale Proceeds, to a Dollar for Dollar repayment or prepayment
of the principal of, and accrued interest on, the Sale Notes and the amount so
paid on the Sale Notes and the remainder, if any, shall be applied in
accordance with Section 2.4 as if such Transferred Asset Sale Proceeds
were Net Asset Sale Proceeds and OPH Asset Sale Proceeds (ignoring payments
made to retire Indebtedness (other than the Loans) required to be repaid in
connection with such Transferred Asset Sale Proceeds).


 


5

















 


SECTION 4.3. Clause (a)(iii) of Section 7.18 of the Credit Agreement is
amended in its entirety to read as follows:


 


(iii)
Investments and transfers of assets (other than cash, Cash Equivalents, or any
power generation facility) and payments for goods and services in the ordinary
course of business; provided, that the Borrower or a Restricted
Subsidiary may sell the Transferred Assets to the Purchaser Subsidiary pursuant
to the terms of any Permitted Sale; and


 


SECTION 4.4. [Intentionally omitted]


 


SECTION 5. Exhibit H (Sale Note). The Credit Agreement is hereby
amended to include the form of Sale Note as an exhibit, in the form attached to
this Amendment.


 


SECTION 6. Representations and Warranties. The Borrower
represents and warrants to the Agents and the Lenders that:


 


(a)  The representations and warranties of the
Borrower and each other Loan Party contained in Article V of the
Credit Agreement and in each other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or therewith,
are true and correct in all material respects on and as of the date of this
Amendment, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they were true and correct
in all material respects as of such earlier date (provided, that
representations and warranties which have Material Adverse Effect qualifiers
shall be true and correct in all respects to the extent such Material Adverse
Effect qualifier is applicable thereto), and except that for purposes of this
clause, the representations and warranties contained in clauses (a) and (b)
of Section 5.5 of the Credit Agreement shall be deemed to refer to
the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.1 of the Credit Agreement;


 


(b) (i) this
Amendment has been duly executed and delivered by each Loan Party that is party
thereto, (ii) this Amendment constitutes a legal, valid and binding obligation
of such Loan Party, enforceable against such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally and by general principles of equity, whether such enforceability is
considered in a proceeding at law or in equity, and (iii) the execution,
delivery and performance by each Loan Party of this Amendment have been duly
authorized by all necessary corporate or other organizational action, and do
not and will not (A) contravene the terms of any of such Person’s Organization
Documents; (B) conflict with or result in any breach or contravention of, or
the creation of any Lien under, or require any payment to be made under (1) any
Contractual Obligation to which such Person is a party or affecting such Person
or the properties of such Person or any of its Subsidiaries, where such
Contractual Obligation (x) evidences Indebtedness of the Borrower or any
of its Subsidiaries or (y) is identified in the exhibit list from time to
time in filings made by the Borrower with the SEC as material to the Borrower,
or (2) any order, injunction, writ or decree of any


 


6

















 


Governmental Authority or any arbitral award
to which such Person or its property is subject, that (in the case of clauses
(b)(iii)(A) and (b)(iii)(B)(2)) could reasonably be expected to
have a Material Adverse Effect; (C) violate any Law that could reasonably be
expected to have a Material Adverse Effect; or (D) result in the creation of
any Lien other than a Permitted Lien; and


 


(c)  as of the date of this Amendment, no Default
or Event of Default has occurred and is continuing.


 


SECTION 7. Effectiveness. This
Amendment (other than Section 4.4) shall become effective as of the date set
forth above, and the Credit Agreement shall be amended as provided in this
Amendment (other than Section 4.4), when (a) the Borrower and each other Loan
Party shall have delivered to the Administrative Agent originals of this Amendment,
duly and validly executed by the Borrower and each such Loan Party, (b) the
Required Lenders shall have approved this Amendment as a result of (i)
approving Amendment No. 3 to the Existing Credit Agreement (as defined below)
and/or (ii) executing and delivering this Amendment to the Administrative Agent
and the Borrower, and (c) Amendment No. 3 dated as of May 17, 2006 to the
Existing Credit Agreement (as amended, restated, supplemented or otherwise
modified prior to the date hereof) (“Amendment No. 3 to the Existing Credit
Agreement”) has become effective by its terms. Section 4.4 of this
Amendment shall become effective, and the Credit Agreement shall be amended as
provided in Section 4.4 of this Amendment, 
when each of the conditions set forth in the preceding sentence have
been met and the Required Agreement Lenders shall have executed and delivered
this Amendment. The Administrative Agent will confirm in writing to the
Borrower when conditions (a) and/or (b)(ii) of the first sentence of this
Section 7 and the second sentence of this Section 7 have been satisfied. The
Borrower will confirm in writing to the Administrative Agent when conditions
(b)(i) and/or (c) of the first sentence of this Section 7 have been satisfied.


 


SECTION 8. Effect on Loan Documents.


 


(a)  Except as amended herein, the Credit
Agreement and the Loan Documents remain in full force and effect as originally
executed. Nothing herein shall act as a waiver of any of the Agents’ or Lenders’
rights under the Loan Documents, as amended.


 


(b)  This Amendment is a Loan Document for the
purposes of the provisions of the other Loan Documents.


 


SECTION 9. Choice
of Law. This Amendment shall be governed by and construed and enforced in
accordance with the laws of the State of New York.


 


SECTION 10. Counterparts. This Amendment may be signed in any
number of counterparts, each of which shall be an original. Delivery of an
executed counterpart of a signature page of this Amendment by telecopy shall be
effective as delivery of a manually executed counterpart of this Amendment.


 


Remainder of this page intentionally left
blank


 


7

















 


EXECUTED to be effective as of the date first
above written.


 


	
   

  	
  RELIANT
  ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Johannesen

  	
   

  
	
   

  	
  Name:

  	
  Andrew Johannesen

  
	
   

  	
  Title:

  	
  Vice
  President and Assistant Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RELIANT
  ENERGY ASSET MANAGEMENT, LLC

  
	
   

  	
  RELIANT
  ENERGY BROADBAND, INC.

  
	
   

  	
  RELIANT
  ENERGY CALIFORNIA HOLDINGS, LLC

  
	
   

  	
  RELIANT
  ENERGY COMMUNICATIONS, INC.

  
	
   

  	
  RELIANT
  ENERGY COOLWATER, INC.

  
	
   

  	
  RELIANT
  ENERGY CORPORATE SERVICES, LLC

  
	
   

  	
  RELIANT
  ENERGY ELLWOOD, INC.

  
	
   

  	
  RELIANT ENERGY ETIWANDA, INC.

  
	
   

  	
  RELIANT
  ENERGY FLORIDA, LLC

  
	
   

  	
  RELIANT
  ENERGY KEY/CON FUELS, LLC

  
	
   

  	
  RELIANT
  ENERGY MANDALAY, INC.

  
	
   

  	
  RELIANT
  ENERGY NORTHEAST GENERATION, INC.

  
	
   

  	
  RELIANT
  ENERGY NORTHEAST HOLDINGS, INC.

  
	
   

  	
  RELIANT
  ENERGY ORMOND BEACH, INC.

  
	
   

  	
  RELIANT
  ENERGY POWER GENERATION, INC.

  
	
   

  	
  RELIANT
  ENERGY RETAIL HOLDINGS, LLC

  
	
   

  	
  RELIANT
  ENERGY SABINE (TEXAS), INC.

  
	
   

  	
  RELIANT
  ENERGY SERVICES DESERT BASIN, LLC

  
	
   

  	
  RELIANT
  ENERGY SERVICES MID-STREAM, LLC

  
	
   

  	
  RELIANT
  ENERGY SEWARD, LLC

  
	
   

  	
  RELIANT
  ENERGY TRADING EXCHANGE, INC.

  
	
   

  	
  RELIANT
  ENERGY VENTURES, INC.

  
	
   

  	
  RELIANT
  ENERGY WHOLESALE GENERATION, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Johannesen

  	
   

  
	
   

  	
  Name:

  	
  Andrew Johannesen

  
	
   

  	
  Title:

  	
  Assistant
  Treasurer of the corporations and

  limited liability companies, and of the

  general partners of the limited partnerships,

  listed above

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RELIANT
  ENERGY SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Johannesen

  	
   

  
	
   

  	
  Name:

  	
  Andrew
  C. Johannesen

  
	
   

  	
  Title:

  	
  Vice
  President and Treasurer

  



 


8

















 


	
   

  	
  RELIANT
  ENERGY RETAIL SERVICES, LLC

  
	
   

  	
  RELIANT
  ENERGY ELECTRIC SOLUTIONS, LLC

  
	
   

  	
  RELIANT
  ENERGY SOLUTIONS EAST, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lloyd A. Whittington

  	
   

  
	
   

  	
  Name:

  	
  Lloyd
  A. Whittington

  
	
   

  	
  Title:

  	
  Vice President and Treasurer of the limited

  liability companies listed above

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RELIANT
  ENERGY CAPTRADES HOLDING CORP.

  
	
   

  	
  RELIANT
  ENERGY SABINE (DELAWARE), INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Patricia F. Genzel

  	
   

  
	
   

  	
  Name:

  	
  Patricia
  F. Genzel

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK AG, NEW YORK BRANCH,

  
	
   

  	
  AS ADMINISTRATIVE AGENT

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marcus M. Tarkington

  	
   

  
	
   

  	
  Name:

  	
  Marcus M. Tarkington

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rainer Meier

  	
   

  
	
   

  	
  Name:

  	
  Rainer Meier

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK AG, NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marcus M. Tarkington

  	
   

  
	
   

  	
  Name: 

  	
  Marcus M. Tarkington

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rainer Meier

  	
   

  
	
   

  	
  Name:

  	
  Rainer Meier

  
	
   

  	
  Title:

  	
  Vice President

  
						



 


9

















 


	
   

  	
  LANDMARK CDO LIMITED

  
	
   

  	
  By:

  	
  Aladdin Capital Management LLC, as Manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Angela Bozorgmir

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Angela Bozorgmir

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LANDMARK II CDO LIMITED

  
	
   

  	
  By:

  	
  Aladdin Capital Management LLC, as Manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Angela Bozorgmir

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Angela Bozorgmir

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LANDMARK III CDO LIMITED

  
	
   

  	
  By:

  	
  Aladdin Capital Management LLC, as Manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Angela Bozorgmir

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Angela Bozorgmir

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LANDMARK IV CDO LIMITED

  
	
   

  	
  By:

  	
  Aladdin Capital Management LLC, as Manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Angela Bozorgmir

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Angela Bozorgmir

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LANDMARK V CDO LIMITED

  
	
   

  	
  By:

  	
  Aladdin Capital Management LLC, as Manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Angela Bozorgmir

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Angela Bozorgmir

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LANDMARK VI CDO LIMITED

  
	
   

  	
  By:

  	
  Aladdin Capital Management LLC, as Manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Angela Bozorgmir

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Angela Bozorgmir

  
	
   

  	
   

  	
  Title:

  	
  Director

  



 


10

















 


	
   

  	
  GREYROCK CDO LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Angela Bozorgmir

  	
   

  
	
   

  	
  Name:

  	
  Angela Bozorgmir

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADDISON CDO, LIMITED

  
	
   

  	
  By:

  	
  Pacific Investment Management Company LLC,

  as its Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mohan V. Phansalkar

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mohan V. Phansalkar

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AMERICAN SKANDIA/PIMCO LTD. MATURITY

  BOND PORTFOLIO

  
	
   

  	
  By:

  	
  Pacific Investment Management Company LLC,

  as its Investment Advisor, acting through PNC Bank

  in the Nominee Name of Barnett & Co.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mohan V. Phansalkar

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mohan V. Phansalkar

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GLOBAL ENHANCED LOAN FUND S.A.

  
	
   

  	
  By:

  	
  Pacific Investment Management Company, LLC

  as its Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mohan V. Phansalkar

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mohan V. Phansalkar

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LOAN FUNDING III LLC

  
	
   

  	
  By:

  	
  Pacific Investment Management Company, LLC

  as its Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mohan V. Phansalkar

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mohan V. Phansalkar

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
							



 


11

















 


	
   

  	
  PIMCO FLOATING RATE INCOME FUND

  
	
   

  	
  By:

  	
  Pacific Investment Management Company, LLC

  as its Investment Advisor, acting through Investors

  Fiduciary Trust company in the Nominee Name

  of IFTCO

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mohan V. Phansalkar

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mohan V. Phansalkar

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PIMCO FLOATING RATE STRATEGY FUND

  
	
   

  	
  By:

  	
  Pacific Investment Management Company, LLC

  as its Investment Advisor, acting through Investors

  Fiduciary Trust company in the Nominee Name of

  IFTCO

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mohan V. Phansalkar

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mohan V. Phansalkar

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SEQUILS-MAGNUM, LTD.

  
	
   

  	
  By:

  	
  Pacific Investment Management Company LLC,

  as its Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mohan V. Phansalkar

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mohan V. Phansalkar

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SOUTHPORT CLO, LIMITED

  
	
   

  	
  By:

  	
  Pacific Investment Management Company, LLC,

  as its Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mohan V. Phansalkar

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mohan V. Phansalkar

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  



 


12

















 


	
   

  	
  WAVELAND – INGOTS, LTD.

  
	
   

  	
  By:

  	
  Pacific Investment Management Company, LLC,

  as its Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mohan V. Phansalkar

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mohan V. Phansalkar

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WRIGLEY CDO, LTD.

  
	
   

  	
  By:

  	
  Pacific Investment Management Company, LLC,

  as its Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mohan V. Phansalkar

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mohan V. Phansalkar

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WB LOAN FUNDING 5, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Diana M. Himes

  	
   

  
	
   

  	
  Name:

  	
  Diana M. Himes

  
	
   

  	
  Title:

  	
  Associate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CANADIAN IMPERIAL BANK OF COMMERCE

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John O’Dowd

  	
   

  
	
   

  	
  Name:

  	
  John O’Dowd

  
	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shira Aschkerasy

  	
   

  
	
   

  	
  Name:

  	
  Shira Aschkerasy

  
	
   

  	
  Title:

  	
  Authorized Signatory

  
							



 


13

















 


EXHIBIT H


 


FORM OF SECURED PROMISSORY NOTE


 


$[                  ]                         [                  ],
2006


 


FOR VALUE RECEIVED,
[                                ],
a [                                    ]
(the “Maker”), hereby promises to pay to the order of
[                  ,
a
                  corporation]
(together with its successors and assigns, the “Payee”), in immediately
available funds, on the Maturity Date, the principal amount of
[                  ]
DOLLARS ($[                      ])
or, if less, the aggregate outstanding principal amount of the term loan made
under this Secured Promissory Note (as amended, amended and restated,
supplemented, or otherwise modified from time to time, the “Note”)
together with any accrued and unpaid interest thereon. All payments hereunder
shall be made in United States Dollars without set-off or counterclaim (all of
which are expressly waived by the Maker), free and clear of all taxes and other
charges, to an account designated by the Payee to the Maker from time to time.


 


1.             Definitions.


 


“Business Day” means
any day other than a Saturday, Sunday or other day on which commercial banks
are authorized to close under the laws of, or are in fact closed in, Houston,
Texas or the State of New York.


 


“Dollar or $” means
lawful money of the United States of America.


 


“Maturity Date” means
the Revolving Credit Termination Date (as defined in the REI Credit Agreement).


 


“Maximum Lawful Rate”
means the highest interest rate permitted under applicable law.


 


“OPH Indenture” means
the Indenture, dated as of April 27, 2000, between Orion Power Holdings, Inc.,
a Delaware corporation, and Wilmington Trust Company, as trustee, as it has
been or may be amended, supplemented or otherwise modified from time to time.


 


 “REI Credit Agreement” means the Second
Amended and Restated Credit and Guaranty Agreement, dated as of December 22,
2004, among Reliant Energy, Inc., as the borrower, the other loan parties
referred to therein, as guarantors, the lenders from time to time party thereto
and Bank of America, N.A., as administrative agent and collateral agent for
such lenders, as the same may be amended, amended and restated, supplemented or
otherwise modified from time to time.


 


“Transferred Assets”
has the meaning assigned to such term in the REI Credit Agreement.


 






(1) Insert
name of Borrower or applicable Restricted Subsidiary.


 

















 


2.             Repayment. The Maker may from time to time prepay
the outstanding principal amount of this Note in whole or in part without
premium or penalty by providing notice to the Payee of such prepayment no later
than 11:00 a.m. Houston time on the Business Day on which the Maker wishes to
make such prepayment. Once given, notices of prepayment shall be irrevocable.
Repayments or prepayments shall be made before 5:00 p.m. Houston time on the
Business Day when due in immediately available funds to such accounts specified
by the Payee. This Note is a term note and, therefore, the Maker may not
reborrow any principal amounts prepaid under this Note.


 


3.             Mandatory Prepayments for Asset Sales. If the
Maker consummates an Asset Sale (as defined in the OPH Indenture) of all or a
portion of the Transferred Assets, then the Net Proceeds (as defined in the OPH
Indenture) of such sale shall be used to prepay the outstanding principal
amount of this Note in an amount equal to the Net Proceeds of such sale.


 


4.             Interest. The Maker promises to pay interest on
the outstanding principal amount of this Note from the date hereof until
payment in full of this Note at a per annum rate equal to
[     ]%. The Maker shall pay to the Payee all accrued
but unpaid interest on the outstanding principal amount of this Note monthly
upon dates selected by the Payee commencing with the calendar month succeeding
the month during which the term loan under this Note was made and on the
Maturity Date.


 


5.             Representations and Warranties. The Maker (i) is
duly formed, validly existing and in good standing under the laws of the
jurisdiction of its [formation/organization/corporation] and (ii) has all
requisite power and authority to execute, deliver and perform its obligations
under this Note. The execution, delivery and performance by the Maker of this
Note have been duly authorized by all necessary [limited partnership/limited
liability company/corporate] action. This Note constitutes the legal, valid and
binding obligation of the Maker, enforceable against the Maker in accordance
with its terms, except as enforcement thereof may be subject to the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors’ rights generally and general principles of equity.


 


6.             Remedies. Upon the occurrence and during the
continuation of any Event of Default (as such term is defined herein), the
Payee may declare the outstanding principal amount of this Note, all accrued
but unpaid interest thereon, and all other amounts payable by the Maker under
this Note to be immediately due and payable, whereupon such amounts shall
become immediately due and payable; provided, that upon the occurrence
of an Event of Default set forth in Section 7(ii) below, the unpaid principal
amount of this Note together with any and all interest and other amounts owed
hereunder shall automatically become due and payable, without further act of
the Payee. The Payee’s remedies under this Note shall be cumulative, and no
delay in enforcing this Note shall act as a waiver of the Payee’s rights
hereunder.


 


7.             Events of Default. It shall be an “Event of
Default” under this Note if:


 


(i)            the Maker fails to pay (x) when and as
required to be paid herein, any amount of principal of this Note, or (y) within
three Business Days (as such term is hereinafter defined) after the same
becomes due, any interest accrued hereunder, or (z)


 


24

















 


within five Business Days
after the same becomes due, any other amount payable hereunder;


 


(ii)           (x) there shall have been filed against the
Maker, without the Maker’s consent, any petition or other request for relief
seeking an arrangement, receivership, reorganization, liquidation, or similar
relief under bankruptcy or other laws for the relief of debtors and such
request for relief (1) remains in effect for 60 or more days, whether or not
consecutive, or (2) is approved by a final nonappealable order, or (y) the
Maker consents to or files any petition or other request for relief of the type
described in clause (x) above seeking relief from creditors, makes any
assignment for the benefit of creditors or other arrangement with creditors, or
admits in writing its inability to pay its debts as they become due; or


 


(iii)          there shall have occurred and be continuing
an Event of Default as defined in the OPH Indenture.


 


8.             Subordination. For so long as required by the REI
Credit Agreement with respect to intercompany indebtedness, the Payee hereby
subordinates any and all debts, liabilities and other obligations of the Maker
under this Note (the “Subordinated Obligations”) to the Credit Agreement
Obligations (as defined in the REI Credit Agreement) of the Maker, if any.
Notwithstanding anything to the contrary in this Section 8, except during the
continuance of a Default (as defined in the REI Credit Agreement) when the
Maker has any Credit Agreement Obligations, the Payee may receive regularly
scheduled payments from the Maker on account of the Subordinated Obligations.
After the occurrence and during the continuance of any Default when the Maker
has any Credit Agreement Obligations, however, the Payee shall not demand,
accept or take any action to collect any payment on account of the Subordinated
Obligations.


 


9.             Security. This Note is the Secured Promissory
Note referred to in
[                        ].


 


10.           Application of Proceeds. Any amounts received by
the Payee hereunder shall be applied to the Maker’s obligations hereunder in
the order determined by the Payee.


 


11.           Waivers. The Maker hereby irrevocably waives notice
of intent to demand, demand, presentment for payment, notice of nonpayment,
protest, notice of set off, notice of protest, notice of dishonor, notice of
intent to accelerate, notice of acceleration, and all other notices in
connection with the delivery, acceptance, collection and/or enforcement of this
Note.


 


12.           Amendments. No amendment of any provision of this
Note shall be effective unless in writing and signed by the Maker and the
Payee.


 


13.           Notices. Unless otherwise specified, all notices
and other communications provided for in this Note shall be in writing,
including fax, and delivered or transmitted to the addresses designated by the
Maker or the Payee in written notice to the other party. Notice sent by fax
shall be deemed to be given and received when receipt of such transmission is
acknowledged, and


 






(2) Inset description of
mortgages and any other security documents securing the obligations under this
Note.


 


25

















 


delivered notice shall be
deemed to be given and received when receipted for by, or actually received by,
an authorized officer of the Maker or the Payee, as the case may be.


 


14.           GOVERNING
LAW. THIS NOTE SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES
OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF
THE STATE OF TEXAS. WHEREVER POSSIBLE EACH PROVISION OF THIS NOTE SHALL BE
INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW,
BUT IF ANY PROVISION OF THIS NOTE SHALL BE PROHIBITED BY OR INVALID UNDER
APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH
PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION
OR THE REMAINING PROVISIONS OF THIS NOTE.


 


15.           Usury. NOTWITHSTANDING the foregoing or any other
term in this Note to the contrary, it is the intention of the Maker and the
Payee to conform strictly to any applicable usury laws. Accordingly, if the
amount of any interest (including fees, charges, or expenses or any other
amounts which, under applicable law, are deemed interest) contracted for,
charged, or received in connection with this Note would exceed the Maximum
Lawful Rate, then, ipso facto, the amount of such interest payable shall be
automatically reduced to such Maximum Lawful Rate, and if, from any such
circumstance, the Payee or the Maker shall ever receive interest or anything
which might be deemed interest under applicable law which would exceed the
Maximum Lawful Rate, such amount which would be excessive interest shall be
applied to the reduction of the principal amount owing and not to the payment
of interest, or if such excessive interest exceeds the principal amount owing,
such excess shall be refunded. In making such determination, all interest
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full term of such indebtedness until
payment in full of the principal (including the period of any renewal or
extension thereof) so that the interest on account of such indebtedness shall
not exceed the Maximum Lawful Rate.


 


16.           Assignment. This Note shall bind and inure to the
benefit of the Payee and the Maker and their respective successors and assigns.
The Maker shall not assign, pledge, or transfer any of its duties under this
Note, but the Payee may assign, collaterally assign, or grant a security
interest in, part or all of the Payee’s interest in this Note.


 


THIS WRITTEN NOTE REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.


 


THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.


 


[Signature page follows]


 


26

















 


EXECUTED as of the date
first above written.


 


	
   

  	
  [MAKER]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title: