exv4w1






Exhibit 4.1




EXECUTION VERSION




 





$600,000,000




CREDIT AGREEMENT




Dated as of November 25, 2008




 






Among




CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC,




as Borrower,




THE BANKS PARTIES HERETO,




BANK OF AMERICA, N.A., and

DEUTSCHE BANK SECURITIES INC.

as Co-Syndication Agents,




HSBC BANK USA, N.A. and

THE BANK OF NOVA SCOTIA

as Co-Documentation Agents,




and




CITICORP NORTH AMERICA, INC.,

as Administrative Agent




 






CITIGROUP GLOBAL MARKETS INC.,

as Sole Lead Arranger and Bookrunner




 





 









 





Table of Contents




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	SECTION 1.1. Certain Defined Terms
	 	 	1	 
	SECTION 1.2. Other Definitional Provisions
	 	 	22	 
	 
	 	 	 	 
	ARTICLE II AMOUNTS AND TERMS OF THE LOANS
	 	 	23	 
	SECTION 2.1. The Commitments
	 	 	23	 
	SECTION 2.2. Procedure for Revolving Loan Borrowing
	 	 	23	 
	SECTION 2.3. Minimum Tranches
	 	 	24	 
	SECTION 2.4. [RESERVED]
	 	 	25	 
	SECTION 2.5. [RESERVED]
	 	 	25	 
	SECTION 2.6. [RESERVED]
	 	 	25	 
	SECTION 2.7. [RESERVED]
	 	 	25	 
	 
	 	 	 	 
	ARTICLE III PROVISIONS RELATING TO ALL LOANS
	 	 	25	 
	SECTION 3.1. Evidence of Loans
	 	 	25	 
	SECTION 3.2. Fees
	 	 	25	 
	SECTION 3.3. Interest
	 	 	26	 
	SECTION 3.4. Reserve Requirements
	 	 	27	 
	SECTION 3.5. Interest Rate Determination and Protection
	 	 	28	 
	SECTION 3.6. Voluntary Interest Conversion or Continuation of Loans
	 	 	28	 
	SECTION 3.7. Funding Losses Relating to LIBOR Rate Loans
	 	 	29	 
	SECTION 3.8. Change in Legality
	 	 	29	 
	SECTION 3.9. Inability to Determine Interest Rate
	 	 	30	 
	SECTION 3.10. Defaulting Banks
	 	 	31	 
	 
	 	 	 	 
	ARTICLE IV INCREASED COSTS, TAXES, PAYMENTS AND PREPAYMENTS
	 	 	32	 
	SECTION 4.1. Increased Costs; Capital Adequacy
	 	 	32	 
	SECTION 4.2. Pro Rata Treatment and Payments and Computations
	 	 	33	 
	SECTION 4.3. Taxes
	 	 	34	 
	SECTION 4.4.
Sharing of Payments, Etc.
	 	 	36	 
	SECTION 4.5. Optional Termination or Reduction of the Commitments
	 	 	36	 
	SECTION 4.6. Voluntary Prepayments; Mandatory Prepayments and Commitment
Reductions
	 	 	37	 
	SECTION 4.7. Mitigation of Losses and Costs
	 	 	38	 
	SECTION 4.8. Determination and Notice of Additional Costs and Other Amounts
	 	 	38	 
	 
	 	 	 	 
	ARTICLE V CONDITIONS OF LENDING
	 	 	38	 
	SECTION 5.1. Conditions Precedent to Loans
	 	 	38	 
	SECTION 5.2. Conditions Precedent to Each Borrowing
	 	 	40	 
	 
	 	 	 	 
	ARTICLE VI REPRESENTATIONS AND WARRANTIES
	 	 	41	 
	SECTION 6.1. Representations and Warranties of the Borrower
	 	 	41	 






i









 






	 	 	 	 	 
	 	 	Page	 
	ARTICLE VII AFFIRMATIVE AND NEGATIVE COVENANTS
	 	 	45	 
	SECTION 7.1. Affirmative Covenants
	 	 	45	 
	SECTION 7.2. Negative Covenants
	 	 	48	 
	 
	 	 	 	 
	ARTICLE VIII EVENTS OF DEFAULT
	 	 	51	 
	SECTION 8.1. Events of Default
	 	 	51	 
	SECTION 8.2. Cancellation/Acceleration
	 	 	54	 
	 
	 	 	 	 
	ARTICLE IX THE ADMINISTRATIVE AGENT
	 	 	54	 
	SECTION 9.1. Appointment
	 	 	54	 
	SECTION 9.2. Delegation of Duties
	 	 	55	 
	SECTION 9.3. Exculpatory Provisions
	 	 	55	 
	SECTION 9.4. Reliance by Administrative Agent
	 	 	55	 
	SECTION 9.5. Notice of Default
	 	 	56	 
	SECTION 9.6. Non-Reliance on Administrative Agent and Other Banks
	 	 	56	 
	SECTION 9.7. Indemnification
	 	 	56	 
	SECTION 9.8. Agent in Its Individual Capacity
	 	 	57	 
	SECTION 9.9. Successor Administrative Agent
	 	 	57	 
	 
	 	 	 	 
	ARTICLE X MISCELLANEOUS
	 	 	58	 
	SECTION 10.1. Amendments and Waivers
	 	 	58	 
	SECTION 10.2. Notices
	 	 	59	 
	SECTION 10.3. No Waiver; Cumulative Remedies
	 	 	60	 
	SECTION 10.4. Survival of Representations and Warranties
	 	 	61	 
	SECTION 10.5. Payment of Expenses and Taxes; Indemnity
	 	 	61	 
	SECTION 10.6. Effectiveness, Successors and Assigns, Participations; Assignments
	 	 	62	 
	SECTION 10.7. Setoff
	 	 	65	 
	SECTION 10.8. Counterparts
	 	 	65	 
	SECTION 10.9. Severability
	 	 	65	 
	SECTION 10.10. Integration
	 	 	66	 
	SECTION 10.11. GOVERNING LAW
	 	 	66	 
	SECTION 10.12. Submission to Jurisdiction; Waivers
	 	 	66	 
	SECTION 10.13. Acknowledgments
	 	 	67	 
	SECTION 10.14. Limitation on Agreements
	 	 	67	 
	SECTION 10.15. Removal of Bank
	 	 	68	 
	SECTION 10.16. Officer’s Certificates
	 	 	69	 
	SECTION 10.17. USA Patriot Act
	 	 	69	 






ii









 






	 	 	 	 	 
	Schedules	 	 	 	 
	Schedule 1.1

	 	-
	 	Schedule of Commitments and Addresses
	Schedule 6.1(p)

	 	-
	 	Ownership of Capital Stock of Subsidiaries; Significant Subsidiaries
	Schedule 6.1(r)

	 	-
	 	Pledge Agreement filings and Filing Offices






	 	 	 	 	 
	Exhibits	 	 	 	 
	Exhibit A

	 	-
	 	Notice of Borrowing
	Exhibit B

	 	-
	 	Notice of Interest Conversion/Continuation
	Exhibit C

	 	-
	 	Assignment and Acceptance
	Exhibit D

	 	-
	 	Note
	Exhibit E

	 	-
	 	Form of Pledge Agreement






iii









 





          This Credit Agreement (this “Agreement”), dated as of November 25, 2008, among
CenterPoint Energy Houston Electric, LLC, a Texas limited liability company (the
“Borrower”), the banks and other financial institutions from time to time parties hereto
(individually, a “Bank” and, collectively, the “Banks”), Bank of America, N.A. and
Deutsche Bank Securities Inc., as co-syndication agents (in such capacities, the “Syndication
Agents”), HSBC Bank USA, N.A. and The Bank of Nova Scotia, as co-documentation agents (in such
capacity, the “Documentation Agents”) and Citicorp North America, Inc., as administrative
agent (in such capacity, together with any successors thereto in such capacity, the
“Administrative Agent”).




          The parties hereto agree as follows:




ARTICLE I




DEFINITIONS AND ACCOUNTING TERMS




     SECTION 1.1. Certain Defined Terms. As used in this Agreement, the following terms shall have the
following meanings:




     “ABR” means for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/64 of 1%) equal to the higher of (a) the Base Rate and (b) the LIBOR Rate for a
one month Interest Period on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1%; provided that, for the avoidance of doubt, the LIBOR Rate
for any day shall be based on the rate appearing on the Reuters Screen LIBOR01 Page as of
11:00 A.M., London time, two Business Days prior to the beginning of such Interest Period.
Any change in the ABR due to a change in the Base Rate, Federal Funds Effective Rate or
LIBOR Rate shall be effective as of the opening of business on the effective day of such
change in the Base Rate, the Federal Funds Effective Rate or the LIBOR Rate, respectively.




     “ABR Loan” means a Loan that bears interest at the ABR as provided in
Section 3.3.




     “Administrative Agent” has the meaning specified in the introduction to this
Agreement.




     “Affiliate” means any Person that, directly or indirectly, Controls or is
Controlled by or is under common Control with another Person.




     “Agent Parties” has the meaning specified in Section 10.2(d).




     “Agents” means the collective reference to the Syndication Agents, the
Documentation Agents and the Administrative Agent.




     “Agreement” has the meaning specified in the introduction to this Agreement.



 









 






     “Applicable Margin” means the rate per annum set forth below opposite the
Designated Rating from time to time in effect during the period for which payment is due:



	 	 	 	 	 
	Designated	 	LIBOR Rate	 	 
	Rating	 	Margin	 	ABR Margin
	Higher than
	 	2.00%	 	1.50%
	BBB+/Baa1/BBB+
	 	 	 	 
	BBB+/Baa1/BBB+
	 	2.25%	 	1.75%
	BBB/Baa2/BBB
	 	2.50%	 	2.00%
	Lower than
	 	2.75%	 	2.25%
	BBB/Baa2/BBB
	 	 	 	 







The Designated Ratings referred to above are issued by S&P, Moody’s and Fitch, respectively.




     “Assignment and Acceptance” has the meaning specified in Section 10.6(c).




     “Available Commitment” means, as to any Bank at any time, an amount equal to
the excess, if any, of (a) such Bank’s Commitment then in effect over (b) such
Bank’s Outstanding Extensions of Credit then outstanding.




     “Bank” and “Banks” have the meanings specified in the introduction to
this Agreement.




     “Bank Affiliate” means, (a) with respect to any Bank, (i) an Affiliate of such
Bank that is a bank or (ii) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank
loans and similar extensions of credit in the ordinary course of its business and is
administered or managed by a Bank or an Affiliate of such Bank and (b) with respect to any
Bank that is a fund which invests in bank loans and similar extensions of credit, any other
fund that invests in bank loans and similar extensions of credit and is managed by such
Bank, an Affiliate of such Bank or the same investment advisor as such Bank or by an
Affiliate of such investment advisor.




     “Base Rate” means, for any Interest Period or any other period, a fluctuating
interest rate per annum as shall be in effect from time to time which rate per annum shall
at all times be equal to the higher of (a) rate of interest announced publicly by Citibank,
N.A. in New York, New York, from time to time, as the base rate for Citibank, N.A or (b) 1/2
of one percent above the Federal Funds Effective Rate as in effect from time to time.




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




     “Borrowed Money” of any Person means any Indebtedness of such Person for or in
respect of money borrowed or raised by whatever means (including acceptances, deposits,
lease obligations under Capital Leases, Mandatory Payment Preferred Stock and



2









 







synthetic leases); provided, however, that Borrowed Money shall not
include (a) any guarantees that may be incurred by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business or similar transactions, (b) any
obligations or guarantees of performance of obligations under a franchise, performance
bonds, franchise bonds, obligations to reimburse drawings under letters of credit issued in
accordance with the terms of any safe harbor lease or franchise or in lieu of performance or
franchise bonds or other obligations that do not represent money borrowed or raised, in each
case to the extent that such reimbursement obligations are payable in full within ten (10)
Business Days after the date upon which such obligation arises, (c) trade payables, (d) any
obligations of such Person under Swap Agreements, (e) customer advance payments and deposits
arising in the ordinary course of business or (f) operating leases.




     “Borrower” has the meaning specified in the introduction to this Agreement.




     “Borrowing” means a borrowing consisting of Loans under Section 2.1 of the same
Type, and having, in the case of LIBOR Rate Loans, the same Interest Period, made on the
same day by the Banks.




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




     “Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close;
provided that when used in connection with a LIBOR Rate Loan, the term “Business
Day” shall also exclude any day on which commercial banks are not open for dealings in
Dollar deposits in the London interbank market.




     “Capital Lease” means a lease that, in accordance with GAAP, would be recorded
as a capital lease on the balance sheet of the lessee.




     “Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, and any and all
equivalent ownership interests in a Person (other than a corporation), including without
limitation, partnership interests in partnerships and member interests in limited liability
companies, and any and all warrants or options to purchase any of the foregoing or
securities convertible into any of the foregoing.




     “CEHE Facility” means the $288,979,592 Second Amended and Restated Credit
Agreement, dated as of June 29, 2007, among Borrower, JPMorgan Chase Bank, N.A., as
administrative agent, and the other financial institutions and agents parties thereto, as
further amended, modified or supplemented from time to time.




     “CenterPoint” means CenterPoint Energy, Inc., a Texas corporation and utility
holding company, and the indirect parent of the Borrower.




     “CenterPoint Facility” means the $1,155,918,367 Second Amended and Restated
Credit Agreement, dated as of June 29, 2007, among CenterPoint, JPMorgan Chase



3









 







Bank, N.A., as administrative agent, and the other financial institutions and agents
parties thereto, as amended, modified or supplemented from time to time.




     “Change in Control” means (i) with respect to CenterPoint, the acquisition by
any Person or “group” (within the meaning of Rule 13d-5 of the Exchange Act) of beneficial
ownership (determined in accordance with Rule 13d-3 of the Exchange Act) of Capital Stock of
CenterPoint, the result of which is that such Person or group beneficially owns 50% or more
of the aggregate voting power of all then issued and outstanding Capital Stock of
CenterPoint or (ii) CenterPoint shall cease to own and control beneficially, directly or
indirectly, 100% of the outstanding common Capital Stock of the Borrower free and clear of
all Liens. For purposes of the foregoing, the phrase “voting power” means, with respect to
an issuer, the power under ordinary circumstances to vote for the election of members of the
board of directors or other governing body of such issuer.




     “Closing Date” means the date all the conditions set forth in Section 6.1 are
satisfied (or waived) in accordance with the terms hereof.




     “Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute.




     “Collateral” has the meaning assigned to such term in the Pledge Agreement.




     “Commitment” means, as to any Bank, the obligation of such Bank, if any, to
make Loans in an aggregate principal amount not to exceed the amount set forth under the
heading “Commitment” opposite such Bank’s name on Schedule 1.1 and/or in the
Assignment and Acceptance pursuant to which such Bank became a party hereto, as the same may
be changed from time to time pursuant to the terms hereof; and “Commitments” shall be the
collective reference to the Commitments of all of the Banks. The original amount of the
Total Commitments is $600,000,000.




     “Commitment Fee” means, as to any Bank, the fee equal to the rate per annum set
forth below opposite the Designated Rating from time to time in effect during the period for
which payment is due on the Available Commitment of such Bank:



	 	 	 
	Designated	 	 
	Rating	 	Commitment Fee
	Higher than
	 	0.375%
	BBB+/Baa1/BBB+
	 	 
	BBB+/Baa1/BBB+
	 	0.50%
	BBB/Baa2/BBB
	 	0.625%
	Lower than
	 	 
	BBB/Baa2/BBB
	 	0.75%







The Designated Ratings referred to above are issued by S&P, Moody’s and Fitch, respectively.



4









 






     “Commonly Controlled Entity” means an entity, whether or not incorporated, that
is under common control with the Borrower within the meaning of Section 4001 of ERISA or is
part of a group that includes the Borrower and that is treated as a single employer under
Section 414 of the Code.




     “Communications” has the meaning specified in Section 10.2(b).




     “Consolidated Capitalization” means, as of any date of determination, the sum
of (a) Consolidated Shareholders’ Equity, (b) Consolidated Indebtedness for Borrowed Money
and, without duplication, (c) Mandatory Payment Preferred Stock; provided that for
the purpose of calculating compliance with Section 7.2(a), Consolidated Capitalization shall
be determined excluding any adjustment, non-cash charge to net income or other non-cash
charges or writeoffs resulting thereto from application of SFAS No. 142.




     “Consolidated Indebtedness” means, as of any date of determination, the sum of




     (i) the total Indebtedness for Borrowed Money of the Borrower and its
Consolidated Subsidiaries as shown on the consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries, determined without duplication of any Guarantee
of Indebtedness of the Borrower by any of its Consolidated Subsidiaries or of any
Guarantee of Indebtedness of any such Consolidated Subsidiary by the Borrower or any
other Consolidated Subsidiary of the Borrower, plus




     (ii) any Mandatory Payment Preferred Stock, less




     (iii) the amount of Indebtedness described in clause (i) attributable to
amounts then outstanding under receivables facilities or arrangements to the extent
that such amounts would not have been shown as Indebtedness on a balance sheet
prepared in accordance with GAAP prior to January 1, 1997, less




     (iv) Non-Recourse Debt.




     “Consolidated Shareholders’ Equity” means, as of any date of determination, the
total assets of the Borrower and its Consolidated Subsidiaries, less all liabilities of the
Borrower and its Consolidated Subsidiaries. As used in this definition, “liabilities” means
all obligations that, in accordance with GAAP consistently applied, would be classified on a
balance sheet as liabilities (including without limitation (to the extent so classified),
(a) Indebtedness; (b) deferred liabilities; and (c) Indebtedness of the Borrower or any of
its Consolidated Subsidiaries that is expressly subordinated in right and priority of
payment to other liabilities of the Borrower or such Consolidated Subsidiary, but in any
case excluding as at such date of determination any Junior Subordinated Debt owned by any
issuer of Hybrid Equity Securities.




     “Consolidated Subsidiary” means, with respect to a specified Person at any
date, any Subsidiary or any other Person (other than with respect to the Borrower, any
Securitization Subsidiary or any Unrestricted Subsidiary), the accounts of which under



5









 







GAAP would be consolidated with those of such specified Person in its consolidated
financial statements as of such date.




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




     “Controlled” means, with respect to any Person, the ability of another Person
(whether directly or indirectly and whether by the ownership of voting securities, contract
or otherwise) to appoint and/or remove the majority of the members of the board of directors
or other governing body of that Person (and “Control” shall be similarly construed).




     “CTC Recoveries” means the principal balance remaining to be collected from
retail electric providers in respect of stranded costs and certain power market price and
fuel cost recovery true-ups.




     “Default” means any event that, with the lapse of time or giving of notice, or
both, or any other condition, would constitute an Event of Default.




     “Default Rate” means with respect to any overdue amount owed hereunder, a rate
per annum equal to (a) in the case of overdue principal with respect to any Loan, the sum of
the interest rate in effect at such time with respect to such Loan under Section 3.3, plus
2%; provided that in the case of overdue principal with respect to any LIBOR Rate
Loan, after the end of the Interest Period with respect to such Loan and in the case of
overdue interest with respect to any Loan, Commitment Fees, Duration Fees or other amounts
payable hereunder, the Default Rate shall equal the sum of the interest rate per annum in
effect at such time with respect to ABR Loans, plus 2%.




     “Defaulting Bank” means any Bank that (a) has failed to fund any portion of its
Loans required to be funded by it hereunder, (b) has notified the Borrower, the
Administrative Agent or any Bank in writing that it does not intend to comply with any of
its funding obligations under this Agreement or has made a public statement to the effect
that it does not intend to comply with its funding obligations under this Agreement or under
any agreement in which it commits to extend credit, (c) has failed, within one Business Day
after request by the Administrative Agent or Borrower, to confirm that it will comply with
the terms of this Agreement relating to its funding obligations in respect of prospective
Loans, (d) has otherwise failed to pay over to the Administrative Agent, Borrower or any
other Bank any other amount required to be paid by it hereunder within three Business Days
of the date when due, unless such amount is the subject of a good faith dispute, or (e) (i)
is insolvent or has a parent company that is insolvent or (ii) has become the subject of a
bankruptcy, receivership or insolvency or similar proceeding, or has had a receiver,
conservator, trustee or custodian or similar entity appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment or has a parent company that has become the subject of a
bankruptcy, receivership or insolvency or similar proceeding, or has had a receiver,
conservator, trustee or custodian or similar entity appointed for it, or



6









 







has taken any action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment.




     “Designated Rating” means (a) if the Ratings are split and all three Ratings
fall in different levels, the level indicated by the middle Rating; (b) if the Ratings are
split and two of the Ratings fall in the same level (the “Majority Level”) and the
third Rating is in a different level, the Majority Level; (c) if only two of the Rating
Agencies issue a Rating, the higher of such Ratings, provided that if the higher
Rating is two or more levels above the lower Rating, the rating next above the lower of the
two Ratings shall be the Designated Rating; and (d) if only one Rating Agency issues a
Rating, such Rating. Any change in the calculation of the Applicable Margin with respect to
the Borrower that is caused by a change in the Designated Rating will become effective on
the date of the change in the Designated Rating. If the rating system of any Rating Agency
shall change, or if any of S&P, Moody’s or Fitch shall cease to be in the business of rating
corporate debt obligations, the Borrower and the Administrative Agent shall negotiate in
good faith if necessary to amend this definition and the definitions of “Rating” and “Rating
Agencies” to reflect such changed rating system or the unavailability of Ratings from such
Rating Agencies and, pending the effectiveness of any such amendment, the Designated Rating
shall be determined by reference to the Rating most recently in effect prior to such change
or cessation.




     “Disposition” means with respect to any Property (excluding cash and cash
equivalents), any sale, lease, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof outside the ordinary course of business. The terms “Dispose”
and “Disposed of” shall have correlative meanings.




     “Documentation Agents” has the meaning specified in the introduction to this
Agreement.




     “Dollars” and the symbol “$” mean the lawful currency of the United
States.




     “Duration Fee” has the meaning specified in Section 3.2(b).




     “Early Funding ABR Loan” has the meaning specified in Section 2.2(a).




     “Eligible Assignee” means (i) a Bank; (ii) an Affiliate of a Bank; and (iii)
any other financial institution that is a “qualified purchaser” as defined under the
Investment Company Act of 1940 and is approved by the Administrative Agent and, unless an
Event of Default has occurred and is continuing at the time any assignment is effected in
accordance with Section 10.6, the Borrower, such approval not to be unreasonably withheld or
delayed.




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




     “Event of Default” has the meaning specified in Section 8.1.




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



7









 






     “Excluded Transactions” means the incurrence or issuance by CenterPoint or the
Borrower and its Subsidiaries of the following:




     (a) Indebtedness in respect of any refinancing, refundings, renewals or
extensions (on or prior to the maturity thereof) of (without any increase in the
principal amount thereof plus any expenses (including any redemption premium
or penalty) incurred in connection therewith or any shortening of the final maturity
thereof) Indebtedness outstanding on the Closing Date




     (b) the reissuance of the Matagorda County Navigation District Number One
Revenue Refunding Bonds (Reliant Energy, Incorporated Project), Series 1999C and the
Brazos River Authority Revenue Refunding Bonds (Reliant Energy, Incorporated
Project), Series 1999B), in each case, held by Centerpoint, the Borrower or any of
their respective Subsidiaries;




     (c) Intercompany Transactions;




     (d) Indebtedness permitted hereunder to the extent constituting (i) the
issuance by CenterPoint or the Borrower or any of its Subsidiaries of commercial
paper, (ii) any backup credit or liquidity facilities in respect of any such
commercial paper issuance, (iii) overdrafts, trade payables, advances or similar
obligations, and other short-term instruments in lieu of the issuance of commercial
paper, (iv) letters of credit issued for the account of CenterPoint or the Borrower
or any of its Subsidiaries in respect of any of the foregoing and (v) drawings on
letters of credit, bonds or similar obligations permitted under this Agreement if
the proceeds are applied to the underlying obligation secured or supported thereby
or related thereto;




     (e) Indebtedness of the Borrower pursuant to the Loan Documents;




     (f) Indebtedness in respect of performance, surety and similar bonds and
completion guarantees or similar obligations provided by CenterPoint or the Borrower
or any of its Subsidiaries in the ordinary course of business;




     (g) Indebtedness of Centerpoint, the Borrower or any of their respective
Subsidiaries (including Capitalized Leases) incurred in the ordinary course of
business to finance the purchase, lease or improvement of property (real or
personal), equipment or other assets (in each case whether through the direct
purchase of assets or the Capital Stock of any Person owning such assets);




     (h) Indebtedness in respect of Swap Agreements entered into in the ordinary
course of business and not entered into for speculative purposes;




     (i) Indebtedness in respect of the CenterPoint Facility and the CEHE Facility
and any refinancings, refundings, renewals or extensions thereof;




     (j) Capital Stock to employees, directors or consultants of Centerpoint, the
Borrower or any of their respective Subsidiaries under, or upon



8









 







the exercise of any warrants, options, conversion rights or other rights in
respect of, any employee stock option plan, other employee benefit or compensation
plans, dividend reinvestment plans, including CenterPoint’s Investors Choice Plan,
or arrangements of Centerpoint, the Borrower or any of their respective Subsidiaries
existing on the Closing Date;




     (k) Capital Stock issued by CenterPoint, Borrower or any of their Subsidiaries
solely to CenterPoint, the Borrower or any of their Subsidiaries;




     (l) Capital Stock of CenterPoint or the Borrower to the extent issued as
consideration to effect acquisitions permitted under this Agreement, the Centerpoint
Facility or the CEHE Facility, and expenses incurred in connection therewith;




     (m) other incurrences and issuances of Indebtedness for Borrowed Money and
Capital Stock with Net Cash Proceeds of up to $300,000,000 in the aggregate for each
of (x) Centerpoint and (y) the Borrower and its Subsidiaries; and




     (n) such other incurrences and issuances as shall be agreed to by the Majority
Banks.




     “Facility” means the Commitments and the extensions of credit made thereunder.




     “Federal Funds Effective Rate” means, for any day, a fluctuating rate per annum
equal 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 on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day that is a Business Day, the average of the quotations for such
day for such transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by the Borrower.




     “Fitch” means Fitch Ratings and any successor rating agency.




     “Funding Office” means the office of the Administrative Agent specified in
Section 10.2(a) or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and the Banks.




     “GAAP” means generally accepted accounting principles in effect from time to
time in the United States of America.




     “General Mortgage Bonds” means the bonds issued pursuant to the General
Mortgage Indenture.




     “General Mortgage Indenture” means the General Mortgage Indenture, dated as of
October 10, 2002, between the Borrower and The Bank of New York Mellon Trust



9









 







Company, National Association (as successor to JPMorgan Chase Bank), as trustee, as
amended, modified or supplemented from time to time.




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




     “Guarantee” means, as to any Person (the “guaranteeing person”), any
obligation of (a) the guaranteeing Person or (b) another Person (including, without
limitation, any bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any principal of any Indebtedness for
Borrowed Money (the “primary obligation”) of any other third Person in any manner,
whether directly or indirectly, including, without limitation, any obligation of the
guaranteeing Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to advance or supply
funds for the purchase or payment of any such primary obligation or (iii) otherwise to
assure or hold harmless the owner of any such primary obligation against loss in respect
thereof. The amount of any Guarantee of any guaranteeing person shall be deemed to be the
lower of (a) an amount equal to the stated or determinable amount of the primary obligation
in respect of which such Guarantee is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument embodying such
Guarantee, unless such primary obligation and the maximum amount for which such guaranteeing
person may be liable are not stated or determinable, in which case the amount of such
Guarantee shall be such guaranteeing person’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith (and “guaranteed” and
“guarantor” shall be construed accordingly).




     “Highest Lawful Rate” means, with respect to each Bank, the maximum nonusurious
interest rate, if any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received with respect to any Loan or on other amounts, if any, due to
such Bank pursuant to this Agreement or any other Loan Document under applicable law.
“Applicable law” as used in this definition means, with respect to each Bank, that law in
effect from time to time that permits the charging and collection by such Bank of the
highest permissible lawful, nonusurious rate of interest on the transactions herein
contemplated including, without limitation, the laws of each State that may be held to be
applicable, and of the United States, if applicable.




     “Hybrid Equity Securities” means, on any date (the “determination date”), any
securities issued by the Borrower or a Restricted Subsidiary, other than common stock, that
meet the following criteria: (a) the Borrower demonstrates that such securities are
classified, at the time they are issued, as possessing a minimum of “intermediate equity
content” by S&P and “Basket C equity credit” by Moody’s (or the equivalent classifications
then in effect by such agencies) and (b) such securities require no repayments or
prepayments and no mandatory redemptions or repurchases, in each case, prior to at least 91
days after the later of the termination of the Commitments and the



10









 







repayment in full of the Obligations. As used in this definition, “mandatory
redemption” shall not include conversion of a security into common stock.




     “Indebtedness” of any Person means the sum of (a) all items (other than Capital
Stock, capital surplus, retained earnings, other comprehensive income, treasury stock and
any other items that would properly be included in shareholder equity) that, in accordance
with GAAP consistently applied, would be included in determining total liabilities as shown
on the liability side of a balance sheet of such Person as at the date on which the
Indebtedness is to be determined, (b) all obligations of such Person, contingent or
otherwise, as account party or applicant (or equivalent status) in respect of any standby
letters of credit or equivalent instruments, and (c) without duplication, the amount of
Guarantees by such Person of items described in clauses (a) and (b); provided,
however, that Indebtedness of a Person shall not include (i) any Junior Subordinated
Debt owned by any issuer of Hybrid Equity Securities, (ii) any Guarantee by the Borrower or
its Subsidiaries of payments with respect to any Hybrid Equity Securities, (iii) any
Securitization Securities or (iv) any Hybrid Equity Securities.




     “Insolvency” means, with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA (and “Insolvent” shall be
construed accordingly for such purposes).




     “Intercompany Transactions” means indebtedness, loans, advances, extensions of
credit, issuances of Capital Stock and other investments or transfers of property, by
CenterPoint or any of its Subsidiaries to CenterPoint or any of its Subsidiaries, in each
case, including Borrower or any of its Subsidiaries to Borrower or any other Subsidiary.




     “Interest Period” means, for each LIBOR Rate Loan comprising part of the same
Borrowing, the period commencing on the date of such LIBOR Rate Loan or the date of the
conversion of any Loan into such LIBOR Rate Loan, as the case may be, and ending on the last
day of the period selected by the Borrower pursuant to Section 2.2 or 3.6, as the case may
be, 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 Section 3.6. The duration of each such Interest Period shall be one, two, three
or six months (or such other period as may be approved by the Administrative Agent), as
Borrower may select by notice pursuant to Section 2.2 or 3.6 hereof, provided,
however, that:




     (i) any Interest Period in respect of a Loan that would otherwise extend beyond
the Termination Date shall end on the Termination Date;




     (ii) 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 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



11









 






     (iii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last Business
Day of a calendar month.




     “Investment” has the meaning specified in Section 7.2(f).




     “Junior Subordinated Debt” means subordinated debt of the Borrower or any
Subsidiary of the Borrower (i) that is issued to an issuer of Hybrid Equity Securities in
connection with the issuance of such Hybrid Equity Securities, (ii) the payment of the
principal of which and interest on which is subordinated (with certain exceptions) to the
prior payment in full in cash or its equivalent of all senior indebtedness of the obligor
thereunder and (iii) that has an original tenor no earlier than 30 years from the issuance
thereof.




     “Lead Arranger” means Citigroup Global Markets Inc., in its capacity as joint
lead arranger and bookrunner.




     “LIBOR Rate” means, with respect to each day during each Interest Period
pertaining to a LIBOR Rate Loan, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing on the first days
of such Interest Period appearing on the Reuters Screen LIBOR01 Page as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest Period. In the event
that such rate does not appear on Reuters Screen LIBOR01 Page (or otherwise on such screen),
the “LIBOR Rate” shall be determined by reference to such other comparable publicly
available service for displaying eurodollar rates as may be selected by the Administrative
Agent or, in the absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York City time,
two Business Days prior to the beginning of such Interest Period in the interbank eurodollar
market where its eurodollar and foreign currency and exchange operations are then being
conducted for delivery on the first day of such Interest Period for the number of days
comprised therein.




     “LIBOR Rate Loan” means a Loan that bears interest at the LIBOR Rate as
provided in Section 3.3(b).




     “Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
deposit arrangement, charge, security interest, encumbrance or lien of any kind whatsoever
(including any Capital Lease).




     “Loans” means the loans made by the Banks to the Borrower pursuant to this
Agreement.




     “Loan Documents” means this Agreement, the Pledge Agreement, any Notes and any
document or instrument executed in connection with the foregoing.



12









 






     “Majority Banks” means, at any time, Banks having in excess of 50% of the Total
Commitments then in effect or, if the Commitments shall have terminated, the Total
Outstanding Extensions of Credit then outstanding.




     “Mandatory Payment Preferred Stock” means any preference or preferred stock of
the Borrower or of any Consolidated Subsidiary (other than (x) any preference or preferred
stock issued to the Borrower or its Subsidiaries, (y) Hybrid Equity Securities, and (z)
Junior Subordinated Debt) that is subject to mandatory redemption, sinking fund or
retirement provisions (regardless of whether any portion thereof is due and payable within
one year).




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




     “Market Disruption Loans” means Loans the rate of interest applicable to which
is based upon the Market Disruption Rate, and the Applicable Margin with respect thereto
shall be the same as the Applicable Margin then applicable to LIBOR Rate Loans; provided,
that, other than with respect to the rate of interest and Applicable Margin applicable
thereto, Market Disruption Loans shall for all purposes hereunder and under the other Loan
Documents be treated as ABR Loans.




     “Market Disruption Rate” means, for any day, a rate per annum (rounded to the
next 1/16 of 1%) equal to the higher of (i) the ABR for such day or (ii) the rate for such
day reasonably determined by the Administrative Agent to be the cost of funds of
representative participating members in the interbank eurodollar market selected by the
Administrative Agent (which may include Banks) for maintaining loans similar to the relevant
Market Disruption Loans. Any change in the Market Disruption Rate shall be effective as of
the opening of business on the effective day of any change in the relevant component of the
Market Disruption Rate.




     “Material Adverse Effect” means any material adverse effect on the ability of
the Borrower to perform its obligations under the Loan Documents on a timely basis (it being
understood that Material Adverse Effect shall not include the effect of any True-Up
Litigation).




     “Maturity Date” means November 24, 2009.




     “Moody’s” means Moody’s Investors Service, Inc. and any successor rating
agency.




     “Multiemployer Plan” means a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.




     “Net Cash Proceeds” means in connection with any issuance or sale of Capital
Stock or any incurrence of Indebtedness, the cash proceeds received from such issuance or
incurrence, net of (i) attorneys’ fees, investment banking fees, accountants’ fees,
underwriting discounts, escrow fees, reserves, reserve accounts and subaccounts, holdbacks,
taxes and other governmental and similar charges, related swap costs and commissions and
other customary fees and expenses actually incurred in connection



13









 







therewith and other similar payment obligations resulting therefrom (other than the
obligations under this Agreement) that are required to be paid concurrently or otherwise as
a result of such issuance or incurrence and (ii) other amounts that are to be refinanced,
refunded, or renewed or otherwise paid with all or part of the proceeds thereof.




     “Net Tangible Assets” means the total assets of the Borrower, its Consolidated
Subsidiaries and the Unrestricted Subsidiaries, minus goodwill and other intangible
assets as shown on the balance sheet of the Borrower, its Consolidated Subsidiaries and the
Unrestricted Subsidiaries delivered pursuant to Section 7.1(a) in respect of the most
recently ended fiscal quarter of the Borrower.




     “Non-Recourse Debt” means (i) any Indebtedness for Borrowed Money incurred by
any Project Financing Subsidiary to finance the acquisition, improvement, installation,
design, engineering, construction, development, completion, maintenance or operation of, or
otherwise to pay costs and expenses relating to or providing financing for any project,
which Indebtedness for Borrowed Money does not provide for recourse against the Borrower or
any Subsidiary of the Borrower (other than a Project Financing Subsidiary and such recourse
as exists under a Performance Guaranty) or any property or asset of the Borrower or any
Subsidiary of the Borrower (other than Capital Stock of, or the property or assets of, a
Project Financing Subsidiary and such recourse as exists under a Performance Guaranty) and
(ii) any refinancing of such Indebtedness for Borrowed Money that does not increase the
outstanding principal amount thereof (other than to pay costs incurred in connection
therewith and the capitalization of any interest, fees, premium or penalties) at the time of
the refinancing or increase the property subject to any Lien securing such Indebtedness for
Borrowed Money or otherwise add additional security or support for such Indebtedness for
Borrowed Money.




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




     “Notice of Borrowing” has the meaning specified in Section 2.2.




     “Notice of Interest Conversion/Continuation” has the meaning specified in
Section 3.6(a).




     “Original Mortgage” means the Mortgage and Deed of Trust, dated as of November
1, 1944, by the Borrower to South Texas Commercial National Bank of Houston, as Trustee (The
Bank of New York Mellon Trust Company, National Association, as successor Trustee), as
amended, modified or supplemented from time to time.




     “Other Taxes” has the meaning specified in Section 4.3(b).




     “Outstanding Extensions of Credit” means, as to any Bank at any time, an amount
equal to the aggregate principal amount of all Loans made by such Bank then outstanding.




     “Participant” has the meaning specified in Section 10.6(b).



14









 






     “PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor.




     “Performance Guaranty” means any guaranty issued in connection with any
Non-Recourse Debt that (i) if secured, is secured only by assets of or Capital Stock of a
Project Financing Subsidiary, and (ii) guarantees to the provider of such Non-Recourse Debt
or any other Person (a) performance of the improvement, installment, design, engineering,
construction, acquisition, development, completion, maintenance or operation of, or
otherwise affects any such act in respect of, all or any portion of the project that is
financed by such Non-Recourse Debt, (b) completion of the minimum agreed equity or other
contributions or support to the relevant Project Financing Subsidiary, or (c) performance by
a Project Financing Subsidiary of obligations to Persons other than the provider of such
Non-Recourse Debt.




     “Permitted Liens” means with respect to any Person:




     (a) Liens for current taxes, assessments or other governmental charges that are
not delinquent or remain payable without any penalty, or the validity or amount of
which is contested in good faith by appropriate proceedings, provided,
however, that adequate reserves with respect thereto are maintained on the
books of such Person in accordance with GAAP, and provided, further,
that any right to seizure, levy, attachment, sequestration, foreclosure or
garnishment with respect to Property of such Person or any Subsidiary of such Person
by reason of such Lien has not matured, or has been, and continues to be,
effectively enjoined or stayed;




     (b) landlord Liens for rent not yet due and payable and Liens for materialmen,
mechanics, warehousemen, carriers, employees, workmen, repairmen and other similar
nonconsensual Liens imposed by operation of law, for current wages or accounts
payable or other sums not yet delinquent, in each case arising in the ordinary
course of business or if overdue, that are being contested in good faith by
appropriate proceedings, provided, however, that any right to
seizure, levy, attachment, sequestration, foreclosure or garnishment with respect to
Property of such Person or any Subsidiary of such Person by reason of such Lien has
not matured, or has been, and continues to be, effectively enjoined or stayed;




     (c) Liens (other than any Lien imposed pursuant to Section 401(a)(29) or 412(n)
of the Code, ERISA or any environmental law, order, rule or regulation) incurred or
deposits made, in each case, in the ordinary course of business, (i) in connection
with workers’ compensation, unemployment insurance and other types of social
security or (ii) to secure (or to obtain letters of credit that secure) the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, performance or payment bonds, purchase, construction, sales contracts and
other similar obligations, in each case not incurred or made in connection with the
borrowing of money, the obtaining of advances or the payment of the deferred
purchase price of property;



15









 






     (d) Liens arising out of or in connection with any litigation or other legal
proceeding that is being contested in good faith by appropriate proceedings;
provided, however, that adequate reserves with respect thereto are
maintained on the books of such Person in accordance with GAAP; and
provided, further, that, subject to Section 8.1(i) (so long as such
Lien is discharged or released within 60 days of attachment thereof), any right to
seizure, levy, attachment, sequestration, foreclosure or garnishment with respect to
Property of such Person or any Subsidiary of such Person by reason of such Lien has
not matured, or has been, and continues to be, effectively enjoined or stayed;




     (e) precautionary filings under the applicable Uniform Commercial Code made by
a lessor with respect to personal property leased to such Person or any Subsidiary
of such Person;




     (f) other non-material Liens or encumbrances none of which secures Indebtedness
for Borrowed Money of the Borrower or any of its Subsidiaries or interferes
materially with the use of the Property affected in the ordinary conduct of
Borrower’s or its Subsidiaries’ business and which individually or in the aggregate
do not have a Material Adverse Effect;




     (g) easements, rights-of-way, restrictions and other similar encumbrances and
exceptions to title existing or incurred in the ordinary course of business that, in
the aggregate, do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the business of
the Borrower and its Subsidiaries, taken as a whole;




     (h) (i) Liens created by Capital Leases, provided that the Liens
created by any such Capital Lease attach only to the Property leased to the Borrower
or one of its Subsidiaries pursuant thereto, (ii) purchase money Liens securing
Indebtedness of the Borrower or any of its Subsidiaries (including such Liens
securing such Indebtedness incurred within twelve months of the date on which such
Property was acquired), provided that all such Liens attach only to the
Property purchased with the proceeds of the Indebtedness secured thereby and only
secure the Indebtedness incurred to finance such purchase, (iii) Liens on
receivables, customer charges, notes, ownership interests, contracts or contract
rights created in connection with a sale, securitization or monetization of such
receivables, customer charges, notes, ownership interests, contracts or contract
rights, and Liens on rights of the Borrower or any Subsidiary related to such
receivables, customer charges, notes, ownership interests, contracts or contract
rights which are transferred to the purchaser of such receivables, customer charges,
notes, ownership interests, contracts or contract rights in connection with such
sale, securitization or monetization, provided that such Liens secure only
the obligations of the Borrower or any of its Subsidiaries in connection with such
sale, securitization or monetization and (iv) Liens created by leases that do not
constitute Capital Leases at the time such leases are entered into, provided
that the Liens created thereby attach only to the Property leased to the Borrower or
one of its Subsidiaries pursuant thereto;



16









 






     (i) Liens on cash and short-term investments (i) deposited by the Borrower or
any of its Subsidiaries in accounts with or on behalf of futures contract brokers or
other counterparties or (ii) pledged by the Borrower or any of its Subsidiaries, in
the case of clause (i) or (ii) to secure its obligations with respect to contracts
(including without limitation, physical delivery, option (whether cash or
financial), exchange, swap and futures contracts) for the purchase or sale of any
energy-related commodity or interest rate or currency rate management contracts;




     (j) Liens on (i) Property owned by a Project Financing Subsidiary or
(ii) equity interests in a Project Financing Subsidiary (including in each case a
pledge of a partnership interest, common stock or a membership interest in a limited
liability company) securing Indebtedness of the Borrower or any of its Subsidiaries
incurred in connection with a Project Financing; and




     (k) Liens on equity interests in an Unrestricted Subsidiary (including in each
case a pledge of a partnership interest, common stock or a membership interest in a
limited liability company) securing, subject to Section 7.2(f), Indebtedness of such
Unrestricted Subsidiary.




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




     “Plan” means, at a particular time with respect to the Borrower, any employee
benefit plan that is covered by ERISA and in respect of which Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.




     “Platform” has the meaning specified in Section 10.2(c).




     “Pledge Agreement” means the Pledge Agreement to be executed and delivered by
the Borrower and the Administrative Agent, substantially in the form of Exhibit F.




     “Project Financing” means any Indebtedness or lease obligations that do not
constitute Capital Leases at the time such leases are entered into, in each case that are
incurred to finance a project or group of projects (including any construction financing) to
the extent that such Indebtedness (or other obligations) expressly are not recourse to the
Borrower or any of its Restricted Subsidiaries (other than a Project Financing Subsidiary)
or any of their respective Property other than the Property of a Project Financing
Subsidiary and equity interests in a Project Financing Subsidiary (including in each case a
pledge of a partnership interest, common stock or a membership interest in a limited
liability company).




     “Project Financing Subsidiary” means any Restricted Subsidiary of the Borrower
(or any other Person in which Borrower directly or indirectly owns a 50% or less interest)
whose principal purpose is to incur Project Financing or to become an owner of interests in
a Person so created to conduct the business activities for which such Project Financing



17









 







was incurred, and substantially all the fixed assets of which Subsidiary or Person are
those fixed assets being financed (or to be financed) in whole or in part by one or more
Project Financings.




     “Property” means any interest or right in any kind of property or asset,
whether real, personal or mixed, owned or leased, tangible or intangible and whether now
held or hereafter acquired.




     “PUC” means the Public Utility Commission of Texas.




     “Purchasing Banks” has the meaning specified in Section 10.6(c).




     “Rating” means the Borrower’s long-term senior secured debt rating for
Borrower’s General Mortgage Bonds (or if such rating is discontinued or unavailable, one
ratings grade higher than the rating for the Borrower’s senior unsecured long-term debt, or
its equivalent) issued by the Rating Agencies (it being understood that a change in outlook
status (e.g., watch status, negative outlook status) is not a change in Rating as
contemplated hereby).




     “Rating Agencies” means (a) S&P, (b) Moody’s and (c) Fitch.




     “Register” has the meaning specified in Section 10.6(d) hereof.




     “Regulation U” means Regulation U of the Board or any other regulation
hereafter promulgated by the Board to replace the prior Regulation U and having
substantially the same function.




     “Reorganization” means, with respect to any Multiemployer Plan, the condition
that such Plan is in reorganization within the meaning of Section 4241 of ERISA.




     “Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA and PBGC Reg. § 4043, other than those events as to which the thirty-day notice period
is waived under PBGC Reg. § 4043 or other regulations, notices or rulings issued by the
PBGC.




     “Requirement of Law” means, as to any Person, any law, statute, ordinance,
decree, requirement, order, judgment, rule or regulation of any Governmental Authority.




     “Requisite Disruption Banks” means the holders of more than 50% of the Total
Commitments.




     “Responsible Officer” means, with respect to any Person, its chief financial
officer, chief accounting officer, assistant treasurer, treasurer or controller of such
Person or any other officer of such Person whose primary duties are similar to the duties of
any of the previously listed officers of such Person.




     “Restricted Subsidiaries” means all Subsidiaries of the Borrower other than
Securitization Subsidiaries and Unrestricted Subsidiaries.



18









 






     “Revolving Percentage” means, as to any Bank at any time, a fraction (expressed
as a percentage) the numerator of which is the amount of such Bank’s Commitment or, if the
Commitments shall have terminated, the Outstanding Extensions of Credit of such Bank then
outstanding, and the denominator of which is the Total Commitments then in effect or, if the
Commitments shall have terminated, the Total Outstanding Extensions of Credit then
outstanding.




     “S&P” means Standard & Poor’s Ratings Group and any successor rating agency.




     “SEC” means the Securities and Exchange Commission and any successor thereto.




     “Secured Indebtedness” means, with respect to any Person, all Indebtedness
secured (or for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured) by any Lien on any Property (including, without limitation,
accounts and contract rights) owned by such Person or any of its Subsidiaries, even though
such Person has not assumed or become liable for the payment of such Indebtedness.




     “Securitization Securities” mean (i) transition bonds issued pursuant to the
Texas Electric Choice Plan if (and only if) no recourse may be had to the Borrower or any of
its Subsidiaries (or to their respective assets) for the payment of such obligations, other
than the issuer of the bonds and its assets, provided that payment of transition charges by
any retail electric provider (“REP”) in accordance with such legislation, whether or not
such REP has collected such charges from the retail electric customers, shall not be deemed
“recourse” hereunder, including any REP that is a Subsidiary of the Borrower or a division
of an Affiliate of the Borrower or any Affiliate of the Borrower and (ii) bonds issued to
securitize the regulatory assets and related rights of the Borrower or any of its
Subsidiaries arising in connection with the recovery of the costs or restoration, repair and
related matters following Hurricane Ike if (and only if) recourse for the payment of debt
service of such bonds is limited to such regulatory assets and related rights; it being
understood that obligations of the “servicer” in the form of standard servicer undertakings
shall not constitute “recourse.”




     “Securitization Subsidiary” means a special purpose subsidiary created to issue
Securitization Securities.




     “Significant Subsidiary” means (i) for the purposes of determining what
constitutes an “Event of Default” under Sections 8.1(f), (g), (h), (i) and (j), a Subsidiary
of the Borrower (other than a Project Financing Subsidiary) whose total assets, as
determined in accordance with GAAP, represent at least 10% of the total assets of the
Borrower, on a consolidated basis, as determined in accordance with GAAP and (ii) for all
other purposes the “Significant Subsidiaries” shall be those Subsidiaries of the Borrower
whose total assets, as determined in accordance with GAAP, represent at least 10% of the
total assets of the Borrower on a consolidated basis, as determined in accordance with GAAP
for the Borrower’s most recently completed fiscal year and identified in the certificate
most recently delivered pursuant to Section 7.1(a)(iv)(C);



19









 







provided that no Securitization Subsidiary or Unrestricted Subsidiary shall be
deemed to be a Significant Subsidiary or subject to the restrictions, covenants or Events of
Default under this Agreement.




     “Single Employer Plan” means any Plan that is covered by Title IV of ERISA, but
that is not a Multiemployer Plan.




     “Storm Recovery Bonds” means any bonds issued to securitize the regulatory
assets and related rights of the Borrower or any of its Subsidiaries arising in connection
with the recovery of the costs of restoration, repair and related matters following
Hurricane Ike.




     “Subsidiary” means, as to any Person, a corporation, partnership, limited
liability company or other entity of which more than 50% of the outstanding shares of
Capital Stock or other ownership interests having ordinary voting power (other than Capital
Stock or such other ownership interests having such power only by reason of the happening of
a contingency) to elect directors or other managers of such corporation, partnership or
other entity are at the time owned, directly or indirectly, through one or more Subsidiaries
of such Person, by such Person; provided, however, that no Securitization
Subsidiary shall be deemed to be a Subsidiary for purposes of this Agreement.




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




     “Syndication Agents” has the meaning specified in the introduction to this
Agreement.




     “Taxes” has the meaning specified in Section 4.3(a).




     “Termination Date” means the Maturity Date or any earlier date on which (a) the
Commitments have been terminated in accordance with this Agreement or (b) all unpaid
principal amounts of the Loans hereunder have been declared due and payable in accordance
with this Agreement.




     “Total Commitments” means, at any time, the aggregate amount of the Commitments
of all Banks then in effect.




     “Total Outstanding Extensions of Credit” means, at any time, the aggregate
amount of the Outstanding Extensions of Credit of all Banks outstanding at such time.



20









 






     “Tranche” means the collective reference to LIBOR Rate Loans, the Interest
Periods with respect to all of which begin on the same date and end on the same later date
(whether or not such Loans shall originally have been made on the same day).




     “Transferee” has the meaning specified in Section 10.6(f).




     “Transfer Effective Date” has the meaning specified in Section 10.6(c).




     “Transition Charges Principal and Interest” means the non-bypassable transition
charges billed to customers for payment of debt service on Securitization Securities.




     “Triggering Event” has the meaning specified in Section 4.8(b).




     “True-Up Litigation” means any litigation or other proceeding in connection
with the determination by the PUC of the recovery by CenterPoint and its Subsidiaries of
stranded costs and other amounts to be recovered in the true-up process.




     “Type” refers to the determination of whether a Loan is an ABR Loan or a LIBOR
Rate Loan (or a Borrowing comprised of such Loans).




     “United States” means the United States of America.




     “Unrestricted Subsidiary” means any Subsidiary of the Borrower and its direct
or indirect Subsidiaries that is designated by a Responsible Officer of the Borrower as an
Unrestricted Subsidiary, but only if (x) the aggregate amount of net tangible assets of all
Unrestricted Subsidiaries at the time of designation does not exceed, or would not exceed as
a result of such designation, 10% of the Net Tangible Assets, (y) such designation and the
Investment of the Borrower in such Subsidiary complies with the limitations in Section
7.2(f) and (z) such Subsidiary: (i) has no Indebtedness with recourse to the Borrower and
the Restricted Subsidiaries except that permitted under Section 7.2(f); (ii) is not party to
any agreement, contract, arrangement or understanding with the Borrower or any Significant
Subsidiary of the Borrower unless the terms of any such agreement, contract, arrangement or
understanding and related transactions are substantially no less favorable to the Borrower
or such Significant Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Borrower; (iii) is a Person with respect to which neither the
Borrower nor any of its Significant Subsidiaries has any direct or indirect obligation that
violates Section 7.2(f) (a) to subscribe for additional Capital Stock of such Person or
(b) to maintain or preserve such Person’s financial condition or to cause such Person to
achieve any specified levels of operating results; and (iv) does not, either alone or in the
aggregate, operate, directly or indirectly, all or substantially all of the business of the
Borrower and its Subsidiaries.




     Any designation of a Subsidiary of the Borrower as an Unrestricted Subsidiary shall be
evidenced by a certificate of a Responsible Officer of the Borrower giving effect to such
designation and a certificate executed by a Responsible Officer certifying that such
designation complied with the preceding conditions and was permitted by Section 7.2(f)
delivered to the Administrative Agent. If, at any time, any Unrestricted Subsidiary would
fail to meet the preceding requirements as an Unrestricted Subsidiary, it shall



21









 







thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement and
any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Borrower as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 7.2(f), the Borrower shall be in default of such
covenant. A Responsible Officer of the Borrower may at any time designate any Unrestricted
Subsidiary to be a Subsidiary of the Borrower that is not an Unrestricted Subsidiary;
provided that such designation shall be deemed to be an incurrence of Indebtedness
by such Subsidiary of any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (1) such Indebtedness is permitted under this
Agreement calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of Default would
be in existence following such designation.




     “Wholly-Owned” means, with respect to any Subsidiary of any Person, all the
outstanding Capital Stock (other than directors’ qualifying and similar shares required by
law) or other ownership interest of such Subsidiary which are at the time owned by such
Person or by one or more Wholly-Owned Subsidiaries of such Person, or both.



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



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



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



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



22









 





ARTICLE II




AMOUNTS AND TERMS OF THE LOANS




     SECTION 2.1. The Commitments. (a) Each Bank severally agrees, on the terms and subject to the
conditions hereinafter set forth, to make revolving credit Loans to the Borrower from time to time
on any Business Day during the period from the Closing Date until the Termination Date in an
aggregate principal amount outstanding which does not exceed at any time such Bank’s Commitment;
provided that no Loan shall be made as a LIBOR Rate Loan with an Interest Period ending
after the Termination Date; and provided, further, that in no event shall the Total
Outstanding Extensions of Credit at any time exceed the Total Commitments at such time.



     (b) Each Borrowing by the Borrower shall be in an aggregate principal amount not less than
$10,000,000 (in the case of LIBOR Rate Loans) or $5,000,000 (in the case of ABR Loans), or an
integral multiple of $1,000,000 in excess thereof and shall consist of Loans of the same Type made
on the same day by the Banks ratably according to their respective Revolving Percentages. Within
the limits of the applicable Commitments, the Borrower may borrow, prepay pursuant to Section 4.6
and reborrow under this Section 2.1. The principal amount outstanding on the Loans shall be due
and payable on the Termination Date, together with accrued and unpaid interest thereon.



     SECTION 2.2. Procedure for Revolving Loan Borrowing. (a) The Borrower may borrow under the
Commitments on any Business Day during the period from and including the Closing Date to and
excluding the Termination Date, provided that the Borrower shall give the Administrative
Agent irrevocable oral notice or written notice pursuant to a notice of borrowing, in substantially
the form of Exhibit A hereto (“Notice of Borrowing”) which shall be signed by the
Borrower and shall specify therein the requested (i) date of such Borrowing, (ii) Type of Loans
comprising such Borrowing, (iii) aggregate amount of such Borrowing and (iv) the Interest Period
for each such Loan, in the case of any LIBOR Rate Loan:




     (i) 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 LIBOR Rate Loan;




     (ii) not later than 11:00 A.M. (New York City time) on the Business Day immediately
preceding the date of the proposed Borrowing in the case of an Early Funding ABR Loan; and




     (iii) not later than 11:00 A.M. (New York City time) on the same Business Day of the
proposed Borrowing in the case of any other ABR Loan.



With respect to any oral notice of borrowing given by the Borrower, the Borrower shall promptly
thereafter confirm such notice in writing pursuant to a Notice of Borrowing. Upon receipt of any
such notice, the Administrative Agent shall promptly notify each Bank thereof. Each Bank shall,
before 1:00 P.M. (New York City time) on the date of such Borrowing, make available to the
Administrative Agent at the Funding Office, in immediately available funds, such Bank’s applicable
Revolving Percentage of such Borrowing; provided, however, that, in the event of a



23









 







requested ABR Loan with respect to which the Borrower has delivered its Notice of Borrowing on the
Business Day immediately preceding the requested Borrowing Date (an “Early Funding ABR
Loan”), each Bank shall make its applicable Revolving Percentage of such Borrowing available
before 10:00 A.M. (New York City time) on the requested Borrowing Date. The Administrative Agent
shall, no later than 2:00 P.M. (New York City time) on such date (or no later than 11:00 A.M. (New
York City time), in the case of an Early Funding ABR Loan), make available to the Borrower the
proceeds of the Loans received by the Administrative Agent hereunder by crediting such account of
the Borrower which the Administrative Agent and the Borrower shall from time to time designate.
Each Notice of Borrowing shall be irrevocable and binding on the Borrower.



     (b) Unless the Administrative Agent shall have received notice from a Bank at least two hours
prior to the applicable time described in clause (a) above by which such Bank is required to
deliver its funds to the Administrative Agent with respect to any Borrowing that such Bank will not
make available to the Administrative Agent such Bank’s applicable Revolving Percentage of such
Borrowing, the Administrative Agent may assume that such Bank has made such portion available to
the Administrative Agent on the date of such Borrowing in accordance with Section 2.2(a) and the
Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If such amount is made available to the Administrative Agent on a
date after such date of Borrowing, such Bank shall pay to the Administrative Agent on demand an
amount equal to the product of (i) the daily average Federal Funds Effective Rate during such
period, times (ii) the amount of such Bank’s applicable Revolving Percentage of such Borrowing,
times (iii) a fraction, the numerator of which is the number of days that elapse from and including
such date of Borrowing to the date on which such Bank’s applicable Revolving Percentage of such
Borrowing shall have become immediately available to the Administrative Agent and the denominator
of which is 360. A certificate of the Administrative Agent submitted to any Bank with respect to
any amounts owing under this Section 2.2(b) shall be conclusive in the absence of manifest error.
If such Bank shall repay to the Administrative Agent such corresponding amount, such amount so
repaid shall constitute such Bank’s Loan as part of such Borrowing for purposes of this Agreement.
If such Bank’s applicable Revolving Percentage of such Borrowing is not in fact made available to
the Administrative Agent by such Bank within one (1) Business Day of such date of Borrowing, the
Administrative Agent shall be entitled to recover such amount with interest thereon at the rate per
annum, equal to (i) the ABR (in the case of ABR Loans) or (ii) the Federal Funds Effective Rate (in
the case of LIBOR Rate Loans), on demand, from the Borrower.



     (c) The failure of any Bank to make the Loan to be made by it as part of any Borrowing shall
not relieve any other Bank of its obligation, if any, hereunder to make its Loan on the date of
such Borrowing or the obligation of the Administrative Agent to advance to Borrower any amounts
funded by the other Banks, but no Bank shall be responsible for the failure of any other Bank to
make the Loan to be made by such other Bank on the date of any Borrowing.



     SECTION 2.3. Minimum Tranches. All Borrowings, prepayments, conversions and
continuations of Loans hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate



24









 







principal amount of the Loans comprising each Tranche of LIBOR Rate Loans shall be equal to
$10,000,000 or an integral multiple of $1,000,000 in excess thereof.



     SECTION 2.4. [RESERVED]



     SECTION 2.5. [RESERVED].



     SECTION 2.6. [RESERVED].



     SECTION 2.7. [RESERVED].



ARTICLE III




PROVISIONS RELATING TO ALL LOANS




     SECTION 3.1. Evidence of Loans. (a) Each Bank shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Borrower to such Bank
resulting from each Loan made by such Bank from time to time, including, without limitation, the
amounts of principal and interest payable and paid to such Bank from time to time under this
Agreement.



     (b) The Administrative Agent shall maintain the Register pursuant to Section 10.6(d) and a
subaccount therein for each Bank, in which shall be recorded (i) the amount of each Loan made by
each Bank through the Administrative Agent hereunder, the type thereof and each Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Bank hereunder and (iii) both the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Bank’s share thereof.



     (c) The entries made in the Register and the accounts of each Bank maintained pursuant to
Section 3.1(a) shall, to the extent permitted by applicable law, be prima facie
evidence of the existence and amount of the obligations of the Borrower therein recorded;
provided, however, that the failure of any Bank or the Administrative Agent to
maintain the Register or any such account, or any error therein, shall not in any manner affect the
obligation
of the Borrower to repay (with applicable interest) the Loans actually made to the Borrower by
such Bank in accordance with the terms of this Agreement.



     SECTION 3.2. Fees. (a) Subject to Section 3.10, the Borrower agrees to pay to the
Administrative Agent for the account of each Bank the Commitment Fee, from the date hereof until
such date that the Loans and other obligations under this Agreement have been paid in full, payable
quarterly in arrears on the last day of each March, June, September and December (or if such day is
not a Business Day, on the next succeeding Business Day) and on the date that the Loans and other
obligations under this Agreement have been paid in full and the Commitments have expired or are
otherwise terminated.



25









 





     (b) Subject to Section 3.10, the Borrower agrees to pay to the Administrative Agent for the
account of each Bank a fee (the “Duration Fee”) equal to .75% of the average Outstanding
Extensions of Credit during each quarter, or portion thereof, until the Loans have been paid in
full. The Duration Fee shall be payable quarterly in arrears on the last day of each March, June,
September and December (or if such day is not a Business Day, on the next succeeding Business Day)
and on the date that the Loans have been paid in full and the Commitments have expired or are
otherwise terminated. For illustrative purposes, if the Total Commitments are fully drawn on the
Closing Date and the remain fully drawn for 364 days, the aggregate Duration Fee for such period
will equal 3% of the Total Commitments.



     (c) The fees payable under Section 3.2(a) shall be calculated by the Administrative Agent on
the basis of a 360-day year for the actual days (including the first day but excluding the last
day) occurring in the period for which such fee is payable.



     (d) The Borrower shall pay to the Administrative Agent, for its own account, the fees in the
amounts and on the dates previously agreed to in writing by the Borrower and the Administrative
Agent.



     SECTION 3.3. Interest. The Borrower shall pay interest on the unpaid principal amount
of each Loan made by each Bank from the date of such Loan until such principal amount shall be paid
in full, at the times and at the rates per annum set forth below:



     (a) ABR Loans. Each ABR Loan shall bear interest at a rate per annum equal at all
times to the lesser of (i) the ABR plus the Applicable Margin and (ii) the Highest Lawful
Rate, payable quarterly in arrears on the last day of each March, June, September and December and
on the Termination Date (or if such day is not a Business Day, on the next succeeding Business
Day).



     (b) LIBOR Rate Loans. Each LIBOR Rate Loan shall bear interest at a rate per annum
equal at all times to, in the case of each LIBOR Rate Loan, the lesser of (A) the sum of the LIBOR
Rate for the applicable Interest Period for such Loan plus the Applicable Margin and
(B) the Highest Lawful Rate, payable on the last day of such Interest Period and, with respect
to Interest Periods of six months or longer, on the ninetieth (90th) day after the commencement of
the Interest Period and on each succeeding ninetieth (90th) day during such Interest Period,
and on the Termination Date.



     (c) [Reserved].



     (d) Calculations. Interest that is determined by reference to the ABR shall be
calculated by the Administrative Agent on the basis of a 365- or 366-day year, as the case may be,
for the actual days (including the first day but excluding the last day) occurring in the period in
which such interest is payable and otherwise shall be calculated by the Administrative Agent on the
basis of a 360-day year for the actual days (including the first day and excluding the last day)
occurring in the period for which such interest is payable.



     (e) Default Rate. Notwithstanding the foregoing, if all or a portion of (i) the
principal amount of any Loan, (ii) any interest payable thereon, or (iii) any Commitment Fee,
Duration Fee or other amount payable hereunder shall not be paid when due (whether at the stated



26









 







maturity, by acceleration or otherwise), such overdue amount shall bear interest, payable from time
to time on demand, at a rate per annum equal to the lesser of (A) the Highest Lawful Rate and (B)
the Default Rate, in each case from the date of such non-payment until such amount is paid in full
(as well after as before judgment).



     (f) Determination Conclusive. Each determination of an interest rate by the
Administrative Agent pursuant to any provisions of this Agreement shall be conclusive and binding
on the Borrower and the Banks in the absence of manifest error. The Administrative Agent shall, at
the request of the Borrower, deliver to the Borrower a statement showing in reasonable detail the
quotations used by the Administrative Agent in determining the LIBOR Rate.



     SECTION 3.4. Reserve Requirements. (a) The Borrower agrees to pay to each Bank that
requests compensation under this Section 3.4 in accordance with the provisions set forth in Section
4.8(b), so long as such Bank shall be required to maintain reserves against “Eurocurrency
liabilities” under Regulation D of the Board (or, so long as such Bank shall be required by the
Board or by any other Governmental Authority to maintain reserves against any other category of
liabilities that includes deposits by reference to which the interest rate on LIBOR Rate Loans is
determined as provided in this Agreement or against any category of extensions of credit or other
assets of such Bank that includes any LIBOR Rate Loans), an additional amount (determined by such
Bank and notified to the Borrower pursuant to the provisions set forth in Section 4.8(b))
representing such Bank’s calculation or, if an accurate calculation is impracticable, reasonable
estimate (using such method of allocation to such Loans of the Borrower as such Bank shall
determine in accordance with Section 4.8(a)) of the actual costs, if any, incurred by such Bank
during the relevant Interest Period as a result of the applicability of the foregoing reserves to
such LIBOR Rate Loans, which amount in any event shall not exceed the product of the following for
each day of such Interest Period:




     (i) the principal amount of the relevant LIBOR Rate Loans made by such Bank outstanding
on such day;




     (ii) the difference between (A) a fraction, the numerator of which is the LIBOR Rate
(expressed as a decimal) applicable to such LIBOR Rate Loan (expressed as a decimal), and
the denominator of which is one minus the maximum rate (expressed as a decimal) at which
such reserve requirements are imposed by the Board or other Governmental Authority on such
date, minus (B) such numerator; and




     (iii) a fraction, the numerator of which is one and the denominator of which is 360.



     (b) The agreements in this Section 3.4 shall survive the termination of this Agreement and the
payment of all amounts payable hereunder; provided, however, that in no event shall
the Borrower be obligated to reimburse or compensate any Bank for amounts contemplated by this
Section 3.4 for any period prior to the date that is 90 days before the date upon which such Bank
requests in writing such reimbursement or compensation from the Borrower.



27









 





     SECTION 3.5. Interest Rate Determination and Protection. (a) The rate of interest
for each LIBOR Rate Loan shall be determined by the Administrative Agent two Business Days before
the first day of each Interest Period applicable to such Loan. The Administrative Agent shall give
prompt notice to the Borrower and the Banks of the applicable interest rate determined by the
Administrative Agent for purposes of Sections 3.3(a) and (b) hereof.



     (b) If, with respect to any LIBOR Rate Loans, prior to the first day of an Interest Period
(i) the Administrative Agent shall have determined (which determination shall be conclusive and
binding upon the Borrower) that, by reason of circumstances affecting the London interbank market,
adequate and reasonable means do not exist for ascertaining the LIBOR Rate for such Interest Period
or (ii) the Administrative Agent shall have received notice from the Majority Banks that the LIBOR
Rate determined or to be determined for such Interest Period will not adequately and fairly reflect
the cost to such Banks (as determined in good faith and certified by such Banks) of making or
maintaining their affected LIBOR Rate Loans during such Interest Period, the Administrative Agent
shall give facsimile or telephonic notice thereof (with written notice to follow promptly) to the
Borrower and the Banks as soon as practicable thereafter. If such notice is given, (A) any LIBOR
Rate Loans requested to be made on the first day of such Interest Period shall be made as ABR
Loans, (B) any Loans that were to have been converted on the first day of such Interest Period to
LIBOR Rate Loans shall be continued as ABR Loans and (C) any outstanding LIBOR Rate Loans shall be
converted, on the first day of such Interest Period, to ABR Loans. Until such notice has been
withdrawn by the Administrative Agent, no further LIBOR Rate Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Loans to LIBOR Rate Loans.



     SECTION 3.6. Voluntary Interest Conversion or Continuation of Loans. (a)
The Borrower may on any Business Day, upon the Borrower’s irrevocable oral or written notice of
interest conversion/continuation given by the Borrower 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
interest conversion or continuation in the case of a LIBOR Rate
Loan, (i) convert Loans of one Type into Loans of another Type; (ii) convert LIBOR Rate Loans
for a specified Interest Period into LIBOR Rate Loans for a different Interest Period; or
(iii) continue LIBOR Rate Loans for a specified Interest Period as LIBOR Rate Loans for the same
Interest Period; provided, however, that (A) any conversion of any LIBOR Rate Loans
into LIBOR Rate Loans for a different Interest Period, or into ABR Loans, or any continuation of
LIBOR Rate Loans for the same Interest Period shall be made on, and only on, the last day of an
Interest Period for such LIBOR Rate Loans; (B) no Loan may be converted into or continued as a
LIBOR Rate Loan by the Borrower so long as an Event of Default has occurred and is continuing, and
(C) no Loan may be converted into or continued as a LIBOR Rate Loan if after giving effect thereto,
Section 2.3 would be contravened. With respect to any oral notice of interest
conversion/continuation given by the Borrower under this Section 3.6(a), the Borrower shall
promptly thereafter confirm such notice in writing. Each written notice of interest
conversion/continuation given by the Borrower under this Section 3.6(a) and each confirmation of an
oral notice of interest conversion/continuation given by the Borrower under this Section 3.6(a)
shall be in substantially the form of Exhibit B hereto (“Notice of Interest
Conversion/Continuation”). Each such Notice of Interest Conversion/Continuation shall specify
therein the requested (x) date of such interest conversion or continuation; (y) the Loans to be
converted or continued; and (z) if such interest conversion or continuation is into LIBOR Rate
Loans, the duration of the Interest Period for each



28









 







such LIBOR Rate Loan. Upon receipt of any such
Notice of Interest Conversion/Continuation, the Administrative Agent shall promptly notify each
Bank thereof. Each Notice of Interest Conversion/ Continuation shall be irrevocable and binding on
the Borrower.



     (b) If the Borrower shall fail to deliver to the Administrative Agent a Notice of Interest
Conversion/Continuation in accordance with Section 3.6(a) hereof, or to select the duration of any
Interest Period for the principal amount outstanding under any LIBOR Rate Loan by 11:00 A.M. (New
York City time) on the third Business Day prior to the last day of the Interest Period applicable
to such Loan in accordance with Section 3.6(a), the Administrative Agent will forthwith so notify
the Borrower and the Banks (provided that the failure to give such notice shall not affect
the conversion referred to below) and such Loans will automatically, on the last day of the then
existing Interest Period therefor, convert into LIBOR Rate Loans with a one month Interest Period.



     SECTION 3.7. Funding Losses Relating to LIBOR Rate Loans. (a) The Borrower agrees,
without duplication of any other provision under this Agreement, to indemnify each Bank and to hold
each Bank harmless from any loss or expense that such Bank may sustain or incur as a consequence of
(i) default by the Borrower in payment when due of the principal amount of or interest on any LIBOR
Rate Loan, (ii) default by the Borrower in making a borrowing of, conversion into or continuation
of any LIBOR Rate Loan after the Borrower has given a notice requesting the same in accordance with
the provisions of this Agreement, (iii) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this Agreement or (iv) the
making of a prepayment of LIBOR Rate Loans or the conversion of LIBOR Rate Loans into ABR Loans, on
a day that is not the last day of an Interest Period with respect thereto (excluding any prepayment
made pursuant to Section 3.8) on a day that is not the scheduled maturity date with respect
thereto, including, without limitation, in each case, any such loss or expense arising from
the reemployment of funds obtained by it or from fees payable to terminate the deposits from
which such funds were obtained. The calculation of all amounts payable to a Bank under this
Section 3.7(a) shall be made pursuant to the method described in Section 4.8(a), but in no event
shall such amounts payable with respect to any LIBOR Rate Loan exceed the amounts that would have
been payable assuming such Bank had actually funded its relevant LIBOR Rate Loan through the
purchase of a deposit bearing interest at the LIBOR Rate in an amount equal to the amount of such
LIBOR Rate Loan and having a maturity comparable to, with respect to any LIBOR Rate Loan, the
relevant Interest Period, provided, that each Bank may fund each of its LIBOR Rate Loans in
any manner it sees fit, and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this Section 3.7(a).



     (b) The agreements in this Section 3.7 shall survive the termination of this Agreement and the
payment of all amounts payable hereunder; provided, however, that in no event shall
the Borrower be obligated to reimburse or compensate any Bank for amounts contemplated by this
Section 3.7 for amounts accruing prior to the date that is 90 days prior to the date upon which
such Bank requests in writing such reimbursement or compensation from the Borrower.



     SECTION 3.8. Change in Legality. (a) Notwithstanding any other provision of this
Agreement, if any Bank shall notify the Administrative Agent that it has determined in good faith
that the introduction of or any change in or in the interpretation or application of any law or



29









 







regulation by any Governmental Authority (in each case occurring after the date of this Agreement)
makes it unlawful, or any central bank or other Governmental Authority asserts after the date of
this Agreement that it is unlawful, for any Bank or its applicable lending office to perform its
obligations hereunder to make LIBOR Rate Loans or to fund or maintain LIBOR Rate Loans hereunder,
(i) the obligation of such Bank to make, or to convert Loans into, or to continue LIBOR Rate Loans
as, LIBOR Rate Loans shall be suspended until the Administrative Agent shall notify the Borrower
that the circumstances causing such suspension no longer exist; (ii) the Borrower shall, at its
option, either prepay in full all LIBOR Rate Loans of such Bank then outstanding, or convert all
such Loans to ABR Loans, on the respective last days of the then current Interest Periods with
respect to such Loans (or within such earlier period as required by law), accompanied, in the case
of any prepayments, by interest accrued thereon and any amounts payable under Section 3.7(a). Each
Bank agrees that it will use reasonable efforts to designate a different lending office for the
LIBOR Rate Loans due to it affected by this Section 3.8, if such designation will avoid the
illegality described in this Section 3.8 so long as such designation will not be disadvantageous to
such Bank as determined by such Bank in its sole discretion acting in good faith.



     (b) For purposes of this Section 3.8, a notice to the Borrower (with a copy to the
Administrative Agent) by any Bank pursuant to paragraph (a) above shall be effective on the date of
receipt thereof by the Borrower.



     SECTION 3.9. Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:




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




     (ii) the Administrative Agent shall have received notice from the Requisite
Disruption Banks that the LIBOR Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Banks (as conclusively
certified by such Banks) of making or maintaining their affected LIBOR Rate Loans
during such Interest Period,


and the Administrative Agent provides to the Borrower reasonable detail of the facts and
circumstances, including market pricing and other data describing the basis for such determination,
the Administrative Agent shall give facsimile or telephonic notice thereof to the Borrower and the
relevant Banks as soon as practicable thereafter. If such notice is given (x) any LIBOR Rate Loan
requested to be made on the first day of such Interest Period shall be made as a Market Disruption
Loan, (y) any Loan that was to have been converted on the first day of such Interest Period to a
LIBOR Rate Loan shall be continued as a Market Disruption Loan and (z) any outstanding LIBOR Rate
Loan shall be converted, on the last day of the then-current Interest Period, to a Market
Disruption Loan. Until such notice has been withdrawn by the Administrative Agent, no further
LIBOR Rate Loans shall be made or continued as such, nor shall the Borrower have the right to
convert Loans to LIBOR Rate Loans.



30









 







     SECTION 3.10. Defaulting Banks. Notwithstanding any provision of this Agreement to the
contrary, if any Bank becomes a Defaulting Bank hereunder (as determined by the Administrative
Agent in consultation with the Borrower), then the following provisions shall apply for so long as
such Defaulting Bank is a Defaulting Bank:




     (a) Commitment Fees shall cease to accrue on the unfunded portion of the
Commitment of such Defaulting Bank.




     (b) The Commitments and outstanding Loans of such Defaulting Bank shall be
disregarded for all purposes of any determination of whether the requisite Banks have
taken or may take any action hereunder (including any consent to any amendment or
waiver pursuant to Section 10.1); provided that any waiver, amendment or modification
requiring the consent of all Banks or each affected Bank which by its terms affects
such Defaulting Bank differently than other affected Banks shall require the consent of
such Defaulting Bank.




     (c) For purposes of determining the amount of the Total Commitments for purposes
of Section 2.1, the Commitment of each Defaulting Bank shall be excluded therefrom
(other than any portion of such Commitment pursuant to which there is then outstanding
a Loan from such Defaulting Bank).




     (d) Any amount payable to such Defaulting Bank pursuant to this Agreement
(whether on account of principal, interest, fees (including the Duration Fee) or
otherwise, and including any amount that would otherwise be payable to
such Defaulting Bank pursuant to Section 4.6 but excluding Section 10.15) shall,
in lieu of being distributed to such Defaulting Bank, be retained by the Administrative
Agent in a segregated, non-interest bearing account and, subject to any applicable
requirements of law, be applied at such time or times as may be determined by the Agent
(in consultation with the Borrower) (i) first, to the payment of any amounts owing by
such Defaulting Bank to the Agent hereunder, (ii) second, to the funding of any Loan in
respect of which such Defaulting Bank has failed to fund its portion thereof as
required by this Agreement, as determined by the Administrative Agent, (iii) third, if
so determined by the Administrative Agent and the Borrower, held in such account as
cash collateral for future funding obligations of the Defaulting Bank under this
Agreement, (iv) fourth, pro rata, to the payment of any amounts owing to the Borrower
or the Banks as a result of any judgment of a court of competent jurisdiction obtained
by the Borrower or any Bank against such Defaulting Bank as a result of such Defaulting
Bank’s breach of its obligations under this Agreement and (v) fifth, to such Defaulting
Bank or as otherwise directed by a court of competent jurisdiction (except that if such
payment is a prepayment of the principal amount of any Loans and is made at a time when
the conditions set forth in Section 5.2 are satisfied, shall be applied solely to
prepay the Loans of all non-Defaulting Banks pro rata prior to being applied to the
prepayment of any Loans owed to any Defaulting Bank). Amounts to be deposited into the
segregated account referenced above shall cease to accrue interest for the account of
the Defaulting Bank (or any other Person) when paid by the Borrower.



31









 






     (e) If such Bank is the Administrative Agent, then the Majority Banks shall have
the right to appoint from among the Banks a successor agent for the Banks, which
successor agent shall, unless an Event of Default shall have occurred and be
continuing, be approved by the Borrower, whereupon such successor agent shall be the
“successor” agent for purposes of Section 9.9.




     (f) For avoidance of doubt, Borrower and each Bank shall retain its other rights
and remedies respecting the Defaulting Bank.



ARTICLE IV




INCREASED COSTS, TAXES, PAYMENTS




AND PREPAYMENTS




     SECTION 4.1. Increased Costs; Capital Adequacy. (a) If after the date of this
Agreement the adoption of or any change in any law or regulation or in the interpretation or
application thereof by any Governmental Authority or application thereof or compliance by any Bank
with any request or directive (whether or not having the force of law) from any central bank or
other Governmental Authority made subsequent to the date of this Agreement:




     (i) shall impose, modify or hold applicable any reserve, special deposit, compulsory
loan or similar requirement against assets held by, deposits or other liabilities in or for
the account of, advances, loans or other extensions of credit by, or any other acquisition
of funds by, any office of such Bank that is not otherwise included in the determination of
the LIBOR Rate hereunder (except for amounts covered by Section 3.4 or any other Section
hereof); or




     (ii) shall impose on such Bank any other condition;


and the result of any of the foregoing is to increase the actual cost to such Bank, by an amount
that such Bank deems to be material, of making, converting into, continuing or maintaining LIBOR
Rate Loans or to reduce any amount receivable hereunder in respect thereof, then, in any such case,
the Borrower shall promptly pay such Bank, upon its demand in the manner set forth in
Section 4.8(b), any additional amounts, computed by such Bank in accordance with Section 4.8(a),
necessary to compensate such Bank for such actual increased cost or reduced amount receivable that
is attributable to Loans or Commitments (to the extent that such Bank has not already been
compensated or reimbursed for such amounts pursuant to any other provision of this Agreement). If
any Bank becomes entitled to claim any additional amounts pursuant to this Section 4.1(a) from the
Borrower, it shall promptly notify the Borrower, through the Administrative Agent, of the event by
reason of which it has become so entitled in the manner set forth in Section 4.8(b).




     (b) If any Bank determines in good faith that the introduction of or any change in or in the
interpretation or application by any Governmental Authority of any law or regulation regarding
capital adequacy after the date of this Agreement or compliance by such Bank or any corporation
controlling such Bank with any law or regulation or any guideline or request from



32









 







any central bank
or other Governmental Authority (whether or not having the force of law) made or issued after the
date of this Agreement does or shall have the effect, as a result of such Bank’s obligations under
this Agreement, of reducing the rate of return on such Bank’s or such corporation’s capital to a
level below that which such Bank or such corporation could have achieved but for such change or
compliance (taking into consideration such Bank’s or such corporation’s policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, the Borrower shall pay to the
Administrative Agent for the account of such Bank, from time to time as specified by such Bank in
the manner set forth in Section 4.8(b), additional amounts, computed by such Bank in accordance
with Section 4.8(a), sufficient to compensate such Bank or such corporation in the light of such
circumstances, to the extent that such Bank reasonably determines such reduction in rate of return
is allocable to the existence of such Bank’s obligations hereunder.



     (c) The agreements contained in this Section 4.1 shall survive the termination of this
Agreement and the payment of all amounts payable hereunder; provided, however, that
in no event shall the Borrower be obligated to reimburse or compensate any Bank for amounts
contemplated by this Section 4.1 for any period prior to the date that is 90 days prior to the date
upon which such Bank requests in writing such reimbursement or compensation from the Borrower.



     SECTION 4.2. Pro Rata Treatment and Payments and Computations. (a) Each Borrowing of
Loans by the Borrower from the Banks hereunder, each payment by the Borrower on account of any
commitment or other fee, any reduction of the Commitments of the Banks and any prepayment on
account of principal and interest on the Loans shall be made pro rata according to
the respective Revolving Percentages of the Banks.



     (b) The Borrower shall make each payment (including each prepayment) hereunder, whether on
account of principal, interest, fees or otherwise, without setoff or counterclaim, not later than
12:00 Noon (New York City time) on the day when due in Dollars to the Administrative Agent at the
Funding Office in immediately available funds. The Administrative Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal, interest or commitment or
other fees (to the extent received by the Administrative Agent) ratably to the Banks according to
the amounts of their respective Loans and Commitments in respect of which such payment is made, and
like funds relating to the payment of any other amount payable to any Bank (to the extent received
by the Administrative Agent) to such Bank, in each case to be applied in accordance with the terms
of this Agreement.



     (c) Whenever any payment hereunder or under the Notes 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 fees,
as the case may be; provided, however, if such extension would cause payment of
interest on or principal of LIBOR Rate Loans to be made in the next following calendar month, such
payment shall be made on the next preceding Business Day.



     (d) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Banks hereunder that the Borrower will not make such
payment in full, the Administrative Agent may assume that the Borrower has made



33









 







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 Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Borrower shall not have so made such payment in
full to the Administrative Agent, each Bank shall pay to the Administrative Agent on demand an
amount equal to the product of (i) the daily average Federal Funds Effective Rate during such
period, times (ii) the amount of such Bank’s Revolving Percentage of such payment, times (iii) a
fraction, the numerator of which is the number of days that elapse from and including the date such
amount is distributed to such Bank to the date on which such Bank’s Revolving Percentage of such
payment shall have become immediately available to the Administrative Agent and the denominator of
which is 360.



     SECTION 4.3. Taxes. (a) Any and all payments by the Borrower hereunder or under the
Loan Documents shall be made free and clear of and without deduction or withholding for or on
account of 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 Bank and the
Administrative Agent, net income taxes, branch profits taxes and franchise taxes imposed on it as a
result of a present or former connection between the jurisdiction (or political subdivision
thereof) of the government or taxing authority imposing such tax and the Administrative Agent
or such Bank other than a connection arising solely from the Administrative Agent or such Bank
having executed, delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any Note (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as “Taxes”). If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or
under any Note to any Bank or the Administrative Agent, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.3) such Bank or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no such deductions been
made; (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance with applicable law;
provided, however, that the Borrower shall not be required to increase any such
sums payable to any Bank with respect to any Taxes (i) that are attributable to such Bank’s failure
to comply with the requirements of Section 4.3(d) or (ii) that are United States withholding taxes
imposed on sums payable to such Bank at the time such Bank becomes a party to this Agreement (or
maintains a lending office), except to the extent that any such Bank’s assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the Borrower with respect
to such Taxes pursuant to this Section 4.3. Whenever any Taxes or Other Taxes (as defined in
Section 4.3(b)) are payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Administrative Agent for the account of the relevant Bank or Administrative Agent, as
the case may be, either (A) official tax receipts or notarized copies of such receipts to such Bank
within thirty (30) days after payment of any applicable tax or (B) a certificate executed by a
Responsible Officer of the Borrower confirming that such Taxes or Other Taxes have been paid,
together with evidence of such payment.



     (b) In addition, the Borrower agrees to pay any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies that arise from any payment made
hereunder or under any Note or from the execution, delivery or registration of or otherwise with
respect to, this Agreement, any other Loan Document, or the Loans and for



34









 







which such Bank or the
Administrative Agent (as the case may be) has not been otherwise reimbursed by the Borrower under
this Agreement (hereinafter referred to as “Other Taxes”).



     (c) The Borrower will indemnify each Bank and the Administrative Agent for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 4.3) paid by such Bank or the Administrative
Agent (as the case may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, including, without limitation or duplication, any incremental
taxes, interest or penalties that may become payable by the Administrative Agent or any Bank as a
result of any failure by the Borrower to pay any Taxes or Other Taxes when due to the appropriate
taxing authority or to remit to any Bank the receipts or other evidence of payment of Taxes or
Other Taxes.



     (d) Each Bank registered in the Register that is not a U.S. Person as defined in Section
7701(a)(30) of the Code agrees that it will deliver to the Borrower and the Administrative Agent on
the date hereof, or on the date which it becomes a party to this Agreement, two duly completed
copies of United States Internal Revenue Service Form W-
8BEN, W-8ECI W-8EXP or W-8IMY (or other appropriate corresponding form) or any successor
applicable form, as the case may be. Each such Bank also agrees to deliver to the Borrower and the
Administrative Agent two further copies of the said Form W-8BEN, W-8ECI, W-8EXP, or W-8IMY or
successor applicable forms or other manner of certification, as the case may be, on or before the
date that any such form expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form or certification previously delivered by it to the Borrower, and
such extensions or renewals thereof as may reasonably be requested by the Borrower or the
Administrative Agent, unless in any such case an event (including, without limitation, any change
in treaty, law or regulation) has occurred prior to the date on which any such delivery would
otherwise be required that renders all such forms inapplicable or that would prevent such Bank from
duly completing and delivering any such form with respect to it and such Bank so advises the
Borrower and the Administrative Agent. Each such Bank shall certify in the case of a Form W-8BEN,
W-8ECI, W-8EXP, or W-8IMY that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, subject to notification to the
Borrower otherwise pursuant to this Section 4.3(d). In the event that any such Bank fails to
deliver any forms required under this Section 4.3(d), the Borrower’s obligation to pay additional
amounts shall be reduced to the amount that it would have been obligated to pay had such forms been
provided.



     (e) If any Taxes or Other Taxes are not correctly or legally asserted and the Administrative
Agent or any Bank determines, in its reasonable discretion, that it has received a refund of those
Taxes or Other Taxes as to which it has been indemnified by the Borrower, the Administrative Agent
or such Bank shall within 20 days after such refund pay to the Borrower the amount of such refund
to the extent that the Borrower indemnified the Administrative Agent or such Bank for such Taxes or
Other Taxes pursuant to this Section 4.3, net of any out-of-pocket costs of the Administrative
Agent or such Bank 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
the Administrative Agent or such Bank, agrees to repay the amount paid over to the Borrower (plus
any penalties, interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Bank in the event the



35









 







Administrative Agent or such Bank is required to
repay such refund to such Governmental Authority. This paragraph shall not be construed to require
the Administrative Agent or any Bank to make available its tax returns (or any other information
relating to its taxes which it deems confidential) to the Borrower or any other Person.



     (f) The agreements in this Section 4.3 shall survive the termination of this Agreement and the
payment of all amounts payable hereunder; provided, however, that (i) in no event
shall the Borrower be obligated to reimburse or compensate any Bank for amounts contemplated by
this Section 4.3 for any period before the date that is 120 days before the date upon which such
Bank requests in writing such reimbursement or compensation from the Borrower (other than any
amounts as to which the ultimate amount of the reimbursement due could not then be determined) and
(ii) nothing contained in this Section 4.3 shall require the Borrower to pay any amount to any Bank
or the Administrative Agent in addition to that for which it has already reimbursed any Bank or the
Administrative Agent under any other provision of this Agreement.



     SECTION 4.4. Sharing of Payments, Etc. If any Bank (a “Benefitted Bank”)
shall at any time receive any payment (other than pursuant to Section 2.7, 3.4, 3.7, 4.1 or 4.3) of
all or part of its Loans owing to it or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by setoff, pursuant to events or proceedings of the
nature referred to in Section 8.1(g) or 8.1(h), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Bank, if any, in respect of such other Bank’s
Loans or interest thereon, such benefitted Bank shall purchase for cash from the other Banks a
participating interest in such portion of each such other Bank’s Loans owing to it, respectively,
or shall provide such other Banks with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefitted Bank to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Banks; provided,
however, that if all or any portion of such excess payment or benefits is thereafter
recovered from such benefitted Bank, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The Borrower agrees that
any Bank so purchasing a participation from another Bank pursuant to this Section 4.4 may, to the
fullest extent permitted by law, exercise all its rights of payment (including the right of setoff)
with respect to such participation as fully as if such Bank were the direct creditor of the
Borrower in the amount of such participation.



     SECTION 4.5. Optional Termination or Reduction of the Commitments. (a) Unless
previously terminated, the Commitments of the Banks to make Loans shall terminate on the
Termination Date.



     (b) The Borrower shall have the right, without penalty or premium, upon at least three (3)
Business Days’ irrevocable written notice to the Administrative Agent (which shall give prompt
notice to each Bank), to terminate in whole the Commitments or permanently, from time to time, to
reduce ratably in part the unused portion of the Commitments, provided that (i) each
partial reduction shall be in the aggregate principal amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof and (ii) no such termination or reduction shall be permitted if,
after giving effect thereto and to any prepayments made under Section 4.6 by the Borrower on the
effective date thereof, the Total Outstanding Extensions of Credit then outstanding would exceed
the Total Commitments then in effect.



36









 





          Each reduction of Commitments pursuant to this Section 4.5 shall be applied pro rata to the
Commitments of each Bank. If at any time, including after giving effect to any reduction of
Commitments pursuant to this Section 4.5, the Total Outstanding Extensions of Credit exceed the
Total Commitments, the Borrower shall be obligated to prepay the Loans in the amount of such
excess.



     SECTION 4.6. Voluntary Prepayments; Mandatory Prepayments and Commitment Reductions. (a)
The Borrower may prepay the outstanding principal amounts of such Loans comprising part of the same
Borrowing in whole or ratably in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however, that losses, if any, to be
reimbursed to any Bank under Section 3.7 shall be payable with respect to each such
prepayment in the manner set forth in Section 3.7. Each such prepayment shall be applied to the
Loans as set forth in Section 4.6(d).



          (b) If any Capital Stock or Indebtedness for Borrowed Money (including any Hybrid Preferred
Securities) shall be issued or incurred by Centerpoint, the Borrower or any of its Subsidiaries
after the Closing Date (other than Excluded Transactions), the Borrower shall be obligated to
prepay the Loans by an amount equal to 100% of the Net Cash Proceeds thereof. Each such prepayment
shall be required within ten (10) Business Days after such issuance or incurrence and shall be
applied to the Loans as set forth in Section 4.6(d). Subject to Section 2.1, the Borrower may
reborrow any Loans so prepaid.



          (c) If Centerpoint, the Borrower, any of their respective Subsidiaries or any Securitization
Subsidiary shall, directly or indirectly (including as a purchase price for transferred assets, but
without duplication) receive Net Cash Proceeds from the issuance of any Storm Recovery Bonds,
within five (5) Business Days after such receipt, the Borrower shall, or shall cause the applicable
Subsidiary or Securitization Subsidiary to, apply 100% of such Net Cash Proceeds toward the
prepayment of the Loans. Each such prepayment shall be applied to the Loans as set forth in
Section 4.6(d). In connection with each such prepayment, the Commitments shall be permanently
reduced (ratably among the Banks, unless otherwise provided herein) by an amount equal to the
principal amount of the Loans so prepaid.



          (d) The Borrower shall give the Administrative Agent (which shall promptly notify each Bank)
written notice, delivered to the Administrative Agent not later than 11:00 A.M. (New York City
time) on the same Business Day (or in the case of LIBOR Rate Loans, five (5) Business Days (or such
shorter or no notice as may be satisfactory to the Administrative Agent) on the date of
prepayment), before the date of any prepayment specified in this Section 4.6, stating the aggregate
principal amount of the prepayment and the Loans to be prepaid. Any such notice provided pursuant
to this Section 4.6 shall be irrevocable, and the payment amount specified in such notice shall be
due and payable on the prepayment date described in such notice, together with accrued and unpaid
interest on the amount prepaid and, in the case of Section 4.6(a), the losses pursuant to Section
3.7 referred to in such Section 4.6(a). Partial prepayments pursuant to this Section 4.6 with
respect to any Tranche of LIBOR Rate Loans shall be in an aggregate principal amount equal to the
lesser of (i) $5,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii) the
aggregate principal amount of such Tranche of LIBOR Rate Loans then outstanding and (iii) such Net
Cash Proceeds, as the case may be; provided that no partial prepayment of any Tranche of
LIBOR Rate Loans may be made if, after



37









 







giving effect thereto, Section 2.3 would be contravened.
Partial prepayments with respect to the ABR Loans shall be made in an aggregate principal amount
equal to the lesser of (i) $5,000,000 or an integral multiple of $1,000,000 in excess thereof,
(ii) the aggregate principal amount of ABR Loans then outstanding and (iii) such Net Cash Proceeds,
as the case may be.



     SECTION 4.7. Mitigation of Losses and Costs. Any Bank claiming reimbursement from the
Borrower under any of Sections 3.4, 3.7, 4.1 and 4.3 hereof shall use reasonable efforts
(including, without limitation, if requested by the Borrower, reasonable efforts to designate a
different lending office of such Bank) to mitigate the amount of such losses, costs, expenses and
liabilities, if such efforts can be made and such mitigation can be accomplished without such
Bank suffering (i) any economic disadvantage for which such Bank does not receive full indemnity
from the Borrower under this Agreement or (ii) any legal or regulatory disadvantage.



     SECTION 4.8. Determination and Notice of Additional Costs and Other Amounts. (a) In
determining the amount of any claim for reimbursement or compensation under Sections 3.4, 3.7 and
4.1, each Bank may use any reasonable averaging, attribution and allocation methods consistent with
such methods customarily employed by such Bank in similar situations.



     (b) Each Bank or, with respect to compensation claimed by it pursuant to Section 4.3, the
Administrative Agent, as the case may be, will (i) use its best efforts to notify the Borrower
through the Administrative Agent (in the case of each Bank) of any event occurring after the date
of this Agreement promptly after the occurrence thereof and (ii) notify the Borrower through the
Administrative Agent (in the case of each Bank) promptly after such Bank or the Administrative
Agent, as the case may be, becomes aware of any event occurring after the date of this Agreement,
in either case if such event (for purposes of this Section 4.8(b), a “Triggering Event”)
will entitle such Bank or the Administrative Agent, as the case may be, to compensation pursuant to
Section 3.4, 3.7, 4.1 or 4.3, as the case may be. Each such notification of a Triggering Event
shall be accompanied by a certificate of such Bank or the Administrative Agent, as the case may be,
setting forth the calculations and justification in reasonable detail such amount or amounts as
shall be necessary to compensate such Bank or the Administrative Agent, as the case may be, as
specified in Section 3.4, 3.7, 4.1 or 4.3, as the case may be, and certifying that such costs are
generally being charged by such Bank to other similarly situated borrowers under similar credit
facilities, which certificate shall be conclusive absent manifest error. The Borrower shall pay to
the Administrative Agent for the account of such Bank or to the Administrative Agent for its own
account, as the case may be, the amount shown as due on any such certificate within ten Business
Days after its receipt of the same.



ARTICLE V




CONDITIONS OF LENDING




     SECTION 5.1. Conditions Precedent to Loans. The agreement of each Bank to make the
initial extension of credit requested to be made by it is subject to the satisfaction, prior to or
concurrently with the making of such extension of credit, of the following conditions precedent:



38









 





     (a) The Administrative Agent (or its counsel) shall have received (i) this Agreement duly
executed by the Borrower and each other party hereto and (ii) the Pledge Agreement executed and
delivered by the Borrower.



     (b) The Administrative Agent (or its counsel) shall have received a certificate dated as of
the Closing Date of the Secretary or an Assistant Secretary of the Borrower certifying (i) the
names and true signatures of the Responsible Officers of the Borrower authorized to sign each Loan
Document to which the Borrower is a party and the notices and other documents to be delivered by
the Borrower pursuant to any such Loan Document; (ii) the operating agreement and certificate of
formation of the Borrower as in effect on the date of such certification; (iii) the
resolutions of the Board of Directors or equivalent thereof of the Borrower approving and
authorizing the execution, delivery and performance by the Borrower of each Loan Document to which
it is a party and any Notes from time to time issued hereunder and authorizing the borrowings and
other transactions contemplated hereunder and (iv) that all material authorizations, approvals and
consents by any Governmental Authority or other Person necessary in connection with the execution,
delivery and performance of the Loan Documents and any other regulatory approvals in respect
thereof required to be obtained prior to the Closing Date, have been obtained and are in full force
and effect.



     (c) The Administrative Agent shall have received an executed legal opinion, dated the Closing
Date, of (i) Baker Botts LLP, special counsel to the Borrower and (ii) Rufus Scott, Esq., deputy
general counsel of the Borrower. Each such legal opinion shall cover such matters incident to the
transactions contemplated by the Loan Documents as the Administrative Agent may reasonably require
and shall otherwise be in form and substance reasonably satisfactory to the Administrative Agent.



     (d) The Administrative Agent (or its counsel) shall have received a certificate dated on or
about the Closing Date of the Secretary of State of the State of Texas as to the existence and good
standing of the Borrower.



     (e) [Reserved].



     (f) The effectiveness, no later than the effectiveness of this Agreement, of amendments to
each of the CenterPoint Facility and the CEHE Facility to modify the financial covenant limiting
indebtedness outstanding contained therein on terms reasonably satisfactory to the Administrative
Agent.



     (g) All governmental and third-party approvals necessary in connection with the execution,
delivery and performance by the Borrower of the Loan Documents shall have been obtained and be in
full force and effect.



     (h) The Administrative Agent shall have received all financial statements and other
information about CenterPoint and its Subsidiaries and the Borrower and its Subsidiaries as the
Administrative Agent shall reasonably request, including detailed monthly projections through the
2009 fiscal year and pro forma balance sheets adjusted, in each case, to give effect to the
financing contemplated hereby, and such financial statements shall not, in the reasonable judgment
of the Banks, reflect any material adverse change in the consolidated financial



39









 







condition of the
Borrower and its Subsidiaries, as reflected in the financial statements or projections posted on
Intralinks in connection with the syndication of this facility.



     (i) The Banks shall have received detailed consolidated annual projections through the 2013
fiscal year of the Borrower and its consolidated Subsidiaries, CenterPoint and its consolidated
Subsidiaries and the Borrower’s affiliate CenterPoint Energy Resources Corporation (including
projected consolidated balance sheets as of each such fiscal year, the related consolidated income
statement and statements of projected cash flow, and a description of the underlying assumptions
applicable thereto) for each entity referenced above. In addition, the Banks shall have received a
monthly liquidity forecast for each entity referenced above for
the remainder of the 2008 and 2009 and 2010 fiscal years. None of the foregoing shall, taken
together, in the reasonable judgment of the Banks, reflect any material adverse change in the
consolidated financial condition of the Borrower and its Subsidiaries, as reflected in the
financial statements or projections posted on Intralinks in connection with the syndication of the
Facility.



     (j) The aggregate Commitments of the Facility shall be no less than $240,000,000.



     (k) (x) The Administrative Agent shall have received General Mortgage Bonds in an aggregate
principal amount equal to the Total Commitments on the Closing Date, pursuant to documentation
reasonably satisfactory to the Administrative Agent; and



          (y) Each document (including any Uniform Commercial Code financing statement) required by the
Pledge Agreement or under law or reasonably requested by the Administrative Agent to be delivered,
filed, registered or recorded in order to create in favor of the Administrative Agent, for the
benefit of the Banks, a perfected Lien on the Collateral described therein, prior and superior in
right to any other Person (other than with respect to Liens expressly permitted by Section 7.2),
shall be in proper form for filing, registration or recordation.




     (l) The Administrative Agent shall have received all fees required to be paid on or before the
Closing Date.



     (m) All corporate and other proceedings, and all documents, instruments and other legal
matters in connection with the Facility shall be in form and substance reasonably satisfactory to
the Administrative Agent.



     The Administrative Agent shall notify the Borrower and the Banks of the Closing Date, and such
notice shall be conclusive and binding.



     SECTION 5.2. Conditions Precedent to Each Borrowing. The obligation of each Bank to
make each extension of credit (including, to the extent relevant, the initial extensions of credit
hereunder) is subject to the satisfaction of the following conditions precedent:



     (a) On or prior to the date of the making of such extension of credit, the Administrative
Agent shall have received from the Borrower a Notice of Borrowing in accordance with the terms of
this Agreement.



40









 





     (b) The representations and warranties of the Borrower contained in Section 6.1 of this
Agreement and in the other Loan Documents shall be true and correct in all material respects on and
as of the date of such extension of credit (except for (i) those representations or warranties or
parts thereof that, by their terms, expressly relate solely to a specific date, in which case such
representations and warranties shall be true and correct in all material respects as of such
specific date and (ii) at any time after the Closing Date, the representations and warranties
contained in Sections 6.1(j) and (k)), before and after giving effect to such extension of credit,
and to the application of the proceeds therefrom, as though made on and as of such date.



     (c) No Default or Event of Default shall have occurred and be continuing or would result from
such extension of credit.



     (d) Each of the giving of any applicable Notice of Borrowing and the acceptance by the
Borrower of the proceeds of each Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such extension of credit that the conditions contained in this Section
5.2 have been satisfied.



ARTICLE VI




REPRESENTATIONS AND WARRANTIES




     SECTION 6.1. Representations and Warranties of the Borrower. The Borrower represents
and warrants as follows:



     (a) Organizational Status of the Borrower. The Borrower (i) is validly organized and
existing and in good standing under the laws of its jurisdiction of formation; (ii) is duly
authorized or qualified to do business in and is in good standing in each other jurisdiction in
which the conduct of its business or the ownership or leasing of its Property requires it to be so
authorized or qualified to do business, except where the failure to be so duly authorized or
qualified or in good standing, individually or in the aggregate, would not have a Material Adverse
Effect, and (iii) has the corporate or other requisite power and authority to conduct its business,
as presently conducted.



     (b) Organizational Status of Significant Subsidiaries of the Borrower. Each
Significant Subsidiary of the Borrower (i) is validly organized and existing and in good standing
under the laws of the jurisdiction of its organization and is duly authorized or qualified to do
business in and is in good standing in each other jurisdiction in which the conduct of its business
or the ownership or leasing of its Property requires it to be so authorized or qualified to do
business, except where the failure to be so validly organized and existing or duly authorized or
qualified or in good standing, individually or in the aggregate, would not have a Material Adverse
Effect and (ii) has the corporate, partnership or other requisite power and authority to conduct
its business, as presently conducted, except where the failure to have such power and authority,
individually or in the aggregate, would not have a Material Adverse Effect.



     (c) Organizational Powers. The Borrower has the corporate or other requisite power to
execute, deliver and perform and comply with its obligations under this Agreement, any Notes and
the other Loan Documents to which it is a party. This Agreement has been, and each other



41









 







Loan
Document to which the Borrower is a party will be, duly executed and delivered on behalf of the
Borrower.



     (d) Authorization, No Conflict, Etc. The borrowings by the Borrower contemplated by
this Agreement, the execution and delivery by the Borrower of this Agreement and the other Loan
Documents to which it is a party and the performance by the Borrower of its obligations hereunder
and thereunder have been duly authorized by all requisite corporate or other requisite action on
the part of the Borrower and do not and will not (i) violate any law, any order to which
the Borrower or any Significant Subsidiary of the Borrower is subject of any court or other
Governmental Authority, or the articles of incorporation or bylaws or other organizational
documents (each as amended from time to time) of the Borrower or any Significant Subsidiary of the
Borrower; (ii) violate, conflict with, result in a breach of or constitute (with due notice or
lapse of time or both, or any other condition) a default under, any indenture, loan agreement or
other agreement to which the Borrower or any Restricted Subsidiary of the Borrower is a party or by
which the Borrower or any Restricted Subsidiary of the Borrower, or any of their respective
Property, is bound (except for such violations, conflicts, breaches or defaults that, individually
or in the aggregate, do not have or would not have a Material Adverse Effect); or (iii) result in,
or require, the creation or imposition of any material Lien upon any of the Properties of the
Borrower or any Significant Subsidiary not permitted under this Agreement.



     (e) Governmental Approvals and Consents. No authorization or approval or action by,
and no notice to or filing with, any Governmental Authority is required for the due execution,
delivery and performance by the Borrower of, or for the Borrowings under, this Agreement and the
other Loan Documents to which it is a party, except those that have been obtained.



     (f) Obligations Binding. This Agreement and the other Loan Documents to which the
Borrower is a party are the legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their respective terms (assuming due and valid
authorization, execution and delivery of this Agreement by any party other than the Borrower),
except as such enforceability may be (i) limited by the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or affecting the
enforcement of creditors’ rights generally and (ii) subject to the effect of general principles of
equity (regardless of whether such enforceability is considered in a proceeding in equity or at
law).



     (g) Use of Proceeds, Margin Stock. The proceeds of the Loans will be used by the
Borrower (i) to support commercial paper issued by the Borrower and (ii) for other general
corporate purposes. Neither the Borrower nor any Restricted Subsidiary of the Borrower is
principally engaged in, or has as one of its important activities, the business of extending credit
for the purpose of purchasing or carrying any Margin Stock, and no part of the proceeds of any Loan
made to the Borrower will be used for any purpose that would violate the provisions of the margin
regulations of the Board.



     (h) Title to Properties. The issued and outstanding Capital Stock owned by the
Borrower of each of its Significant Subsidiaries whether such stock is owned directly or indirectly
through one or more of its Subsidiaries, is owned free and clear of any Lien. In addition, each of
the Borrower and each Significant Subsidiary has good title to the Properties



42









 







reflected in the
financial statements referred to in Section 6.1(m) and in any financial statements delivered
pursuant to Section 7.1(a), except for such Properties that have been disposed of subsequent to the
dates of the balance sheets included in such financial statements and that are no longer used or
useful in the conduct of the business of the Borrower or any Significant Subsidiary or that have
been disposed of pursuant to Section 7.2(c) or (d) or that have been disposed of in the ordinary
course of their respective business, and all such Properties are free and clear of any Lien except
Liens permitted under this Agreement.



     (i) Investment Company Act. Neither the Borrower nor any Restricted Subsidiary of the
Borrower is an “investment company” as defined in, or otherwise subject to regulation under, the
Investment Company Act of 1940, as amended.



     (j) Material Adverse Change. Since December 31, 2007, there has been no event,
development or circumstance that, as of the Closing Date, has or would reasonably be expected to
have a Material Adverse Effect.



     (k) Litigation. As of the Closing Date, there is no litigation, action, suit,
investigation or other legal or governmental proceeding pending or, to the best knowledge of the
Borrower, threatened, at law or in equity, or before or by any arbitrator or Governmental Authority
(i) relating to the transactions under this Agreement or under any other Loan Document or (ii) in
which there is a reasonable possibility of an adverse decision that would have a Material Adverse
Effect.



     (l) ERISA. There is no event or events, individually or in the aggregate, that could
reasonably be expected to have a Material Adverse Effect, arising out of or in connection with
(i) any Reportable Event or “accumulated funding deficiency” (within the meaning of Section 412 of
the Code or Section 302 of ERISA) with respect to any Plan that has occurred during the five-year
period immediately preceding the date on which this representation is made or deemed made, (ii) any
failure of a Plan to comply with the applicable provisions of ERISA and the Code, (iii) any
termination of a Single Employer Plan, (iv) any complete or partial withdrawal by the Borrower or
any Commonly Controlled Entity from any Multiemployer Plan, (v) any Lien in favor of the PBGC or
any Plan that has arisen during the five-year period referred to in clause (i) above or (vi) a
Multiemployer Plan being in Reorganization or being Insolvent.



     (m) Financial Statements. The consolidated financial statements of the Borrower as of
and for the twelve months ended December 31, 2007 and for the three months ended September 30,
2008, in each case filed with the SEC with the Borrower’s 10-K and 10-Q, as applicable, for the
period then ended, copies of which have been delivered to the Banks, present fairly in all material
respects the consolidated financial condition and results of operations of the Borrower, its
Consolidated Subsidiaries, Securitization Subsidiaries and the Unrestricted Subsidiaries as of such
date and for the period then ended, in conformity with, as applicable, GAAP and, except as
otherwise stated therein, consistently applied (in the case of such unaudited statements, subject
to year-end adjustments and the exclusion of detailed footnotes).



     (n) Accuracy of Information. None of the documents or written information (excluding
estimates, financial projections and forecasts) provided by the Borrower to the Banks in connection
with or pursuant to this Agreement or the other Loan Documents contains as of the



43









 







date thereof or
will contain as of the date thereof any untrue statement of a material fact or omits or will omit
to state as of the date thereof a material fact (other than industry-wide risks normally associated
with the types of businesses conducted by the Borrower and its Subsidiaries) necessary to make the
statements therein, in the light of the circumstances under which they were made, not materially
misleading, as a whole. The estimates, financial projections and forecasts furnished to the Banks
by the Borrower with respect to the transactions contemplated under this Agreement were prepared in
good faith and on the basis of information and assumptions that the Borrower believed to be
reasonable as of the date of such information; it being recognized by the
Banks that such estimates, financial projections and forecasts as they relate to future events
are not to be viewed as fact and that actual results during the period or periods covered by such
estimates, financial projections and forecasts may differ from the projected results set forth
therein by a material amount.



     (o) No Violation. The Borrower is not in violation of any order, writ, injunction or
decree of any court or any order, regulation or demand of any Governmental Authority that,
individually or in the aggregate, reasonably could be expected to have a Material Adverse Effect.



     (p) Subsidiaries. Schedule 6.1(p) attached hereto sets forth each Significant
Subsidiary as of the date hereof. Except as disclosed on Schedule 6.1(p), as of the date
hereof the Borrower owns, directly or indirectly through one or more of its Subsidiaries, all of
the outstanding Capital Stock of each Significant Subsidiary, in each case free and clear of any
Liens not permitted under this Agreement.



     (q) Taxes. The Borrower and each of its Subsidiaries has filed or caused to be filed
all Federal, state and other material tax returns that are required to be filed and has paid all
taxes shown to be due and payable on said returns or on any assessments made against it or any of
its Property and all other taxes, fees or other charges imposed on it or any of its Property by any
Governmental Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which reserves in conformity
with GAAP have been provided on the books of the Borrower or its Subsidiaries), except where the
failure to do so could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; no tax Lien has been filed, and, to the knowledge of the Borrower, no
claim is being asserted, with respect to any such tax, fee or other charges (other than any Liens
or claims that could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect).



     (r) Pledge Agreement. The Pledge Agreement is effective to create in favor of the
Administrative Agent, for the benefit of the Banks, a legal, valid and enforceable security
interest in the Collateral described therein and proceeds thereof. When financing statements and
other filings specified on Schedule 6.1(r) in appropriate form are filed in the offices specified
on Schedule 6.1(r), the Pledge Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for the Obligations (as defined in the Pledge Agreement), in each case prior
and superior in right to any other Person.



44









 





ARTICLE VII




AFFIRMATIVE AND NEGATIVE COVENANTS




     SECTION 7.1. Affirmative Covenants. The Borrower covenants that, as long as any
amount is owing hereunder or under any other Loan Documents or any Bank shall have any Commitment
outstanding under this Agreement:



     (a) Delivery of Financial Statements, Notices and Certificates. The Borrower shall
deliver to the Administrative Agent for distribution to the Banks sufficient copies for each of the
Banks of the following:




     (i) as soon as practicable and in any event within 90 days after the end of each fiscal
year of the Borrower (beginning with fiscal 2008), a consolidated balance sheet of the
Borrower, its Consolidated Subsidiaries, Securitization Subsidiaries and the Unrestricted
Subsidiaries as of the end of such fiscal year and the related statements of consolidated
income, retained earnings and cash flows prepared in conformity with GAAP consistently
applied, setting forth in comparative form the figures for the previous fiscal year,
together with a report thereon by independent certified public accountants of nationally
recognized standing selected by the Borrower (which requirement may be satisfied by
delivering the Borrower’s Annual Report on Form 10-K with respect to such fiscal year as
filed with the SEC);




     (ii) as soon as practicable and in any event within 55 days after the end of each of
the first three quarters of each fiscal year of the Borrower (beginning with the quarter
ending March 31, 2009), unaudited consolidated financial statements of the Borrower, its
Consolidated Subsidiaries, Securitization Subsidiaries and the Unrestricted Subsidiaries
consisting of at least consolidated balance sheets as at the close of such quarter and
statements of consolidated income, retained earnings and cash flows for such quarter and for
the period from the beginning of such fiscal year to the close of such quarter (which
requirement may be satisfied by delivering the Borrower’s Quarterly Report on Form 10-Q with
respect to such fiscal quarter as filed with the SEC); such financial statements shall be
accompanied by a certificate of a Responsible Officer of the Borrower to the effect that
such unaudited financial statements present fairly in all material respects the consolidated
financial condition and results of operations of the Borrower, its Consolidated
Subsidiaries, Securitization Subsidiaries and the Unrestricted Subsidiaries as of such date
for the period then ending, and have been prepared in conformity with GAAP in a manner
consistent with the financial statements referred to in paragraph (a)(i) above (subject to
year-end adjustments and exclusion of detailed footnotes);




     (iii) with each set of statements to be delivered pursuant to Sections 7.1(a)(i) and
(ii) above, a certificate in a form reasonably satisfactory to the Administrative Agent,
signed by a Responsible Officer of the Borrower confirming compliance with Section 7.2(a)
and setting out in reasonable detail the calculations necessary to demonstrate such
compliance as at the date of the most recent balance sheet included in such financial
statements and stating that no Default or Event of Default has occurred and



45









 







is continuing
or, if there is any Default or Event of Default, describing it and the steps, if any, being
taken to cure it; and




     (iv) (A) within ten days of the filing thereof, copies of all periodic reports (other
than (x) reports on Form 11-K or any successor form, (y) Current Reports on Form 8-K that
contain no information other than exhibits filed therewith and (z) reports on Form 10-Q or
10-K or any successor forms) under the Exchange Act (in each case other than exhibits
thereto and documents incorporated by reference therein)) filed by the
Borrower with the SEC; (B) promptly, and in any event within seven (7) Business Days
after a Responsible Officer of the Borrower becomes aware of the occurrence thereof, written
notice of (x) any Event of Default or any Default, (y) the institution of (I) any
litigation, action, suit or other legal or governmental proceeding involving the Borrower or
any Restricted Subsidiary of the Borrower as to which there is a reasonable possibility of
an adverse decision that would have a Material Adverse Effect on the Borrower or (II) any
other final adverse determination in any litigation, action, suit or other legal or
governmental proceeding involving the Borrower or any Significant Subsidiary of the Borrower
(1) in the True-Up Litigation or (2) that would have a Material Adverse Effect or (z) the
existence of an event or events, individually or in the aggregate, that could reasonably be
expected to have a Material Adverse Effect, arising out of or in connection with (1) any
Reportable Event with respect to any Plan, (2) the failure to make any required contribution
to a Plan, (3) the creation of any Lien in favor of the PBGC or a Plan, (4) any withdrawal
from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (5) the
institution of proceedings or the taking of any other action by the PBGC or the Borrower or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal
from, or the termination, Reorganization or Insolvency of, any Plan; (C) with each set of
statements delivered pursuant to Section 7.1(a)(i), a certificate signed by a Responsible
Officer of the Borrower identifying those Subsidiaries which, determined as of the date of
such financial statements, are Significant Subsidiaries and Unrestricted Subsidiaries; and
(D) such other information relating to the Borrower or its business, properties, condition
and operations as the Administrative Agent (or any Bank through the Administrative Agent)
may reasonably request.


Information required to be delivered pursuant to the foregoing Sections 7.1(a)(i), (ii), and
(iv)(A) shall be deemed to have been delivered on the date on which the Borrower provides notice
(including notice by e-mail) to the Administrative Agent (which notice the Administrative Agent
will convey promptly to the Banks) that such information has been posted on the SEC website on the
Internet at sec.gov/edgar/searches.htm or at another website identified in such notice and
accessible by the Banks without charge; provided that (i) such notice may be included in a
certificate delivered pursuant to Section 7.1(a)(iii) and (ii) the Borrower shall deliver paper
copies of such information to the Administrative Agent, and the Administrative Agent shall deliver
paper copies of such information to any Bank that requests such delivery.




     (b) Use of Proceeds. The Borrower will use the proceeds of any Loan made by the Banks
to it for the purposes set forth in Section 6.1(g), and it will not use the proceeds of any Loan
made by the Banks for any purpose that would violate the provisions of the margin regulations of
the Board. The Borrower will not, and will not permit any of its Subsidiaries to engage
principally, or as one of its important activities, in the business of extending credit for the



46









 







purpose of purchasing or carrying, within the meaning of Regulation U, any Margin Stock. After
applying the proceeds of any Loan, not more than 25 percent of the value (as determined by any
reasonable method) of the assets of the Borrower shall be represented by Margin Stock.



     (c) Existence; Laws. The Borrower will and will cause each of its Significant
Subsidiaries to, do or cause to be done all things necessary (i) to preserve, renew and keep in
full force and effect its legal existence and all rights, licenses, permits and franchises (except
to the extent otherwise permitted by Sections 7.2(c) or 7.2(d)) and (ii) to comply with all laws
and
regulations applicable to it, except in each case, where the failure to do so, individually or
in the aggregate, would not reasonably be expected to have a Material Adverse Effect.



     (d) Maintenance of Properties. The Borrower will, and will cause each Significant
Subsidiary to, preserve and maintain all of its Property that is material to the conduct of its
business, provided, however, that nothing in this Section 7.1(d) shall prevent (a)
the Borrower or any of its Significant Subsidiaries from selling, abandoning or otherwise disposing
of any Properties (including the Capital Stock of any Subsidiary of the Borrower that is not a
Significant Subsidiary), the retention of which in the good faith judgment of the Borrower or such
Significant Subsidiary is inadvisable or unnecessary to the business of the Borrower and its
Subsidiaries, taken as a whole, or the failure to maintain would not reasonably be expected to have
a Material Adverse Effect or (b) any other transaction that is expressly permitted by the terms of
any other provision of this Agreement.



     (e) Maintenance of Business Line. The Borrower will maintain its fundamental business
of providing services and products in the energy market.



     (f) Books and Records; Access. The Borrower will, and will cause each Significant
Subsidiary to, keep proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and activities as required by
GAAP. The Borrower will, and will cause each of its Significant Subsidiaries to, at any reasonable
time and from time to time, permit up to six representatives of the Banks designated by the
Majority Banks, or representatives of the Administrative Agent, on not less than five Business
Days’ notice, to examine and make copies of and abstracts from the records and books of account of,
and visit the properties of, the Borrower and each Significant Subsidiary and to discuss the
general business affairs of the Borrower and each of its Significant Subsidiaries with their
respective officers and independent certified public accountants; subject, however, in all cases to
the imposition of such conditions as the Borrower and each of its Significant Subsidiaries shall
deem necessary based on reasonable considerations of safety and security; provided,
however, that neither the Borrower nor any of its Significant Subsidiaries shall be
required to disclose to any Agent, any Bank or any agents or representatives thereof any
information which is the subject of attorney-client privilege or attorney work-product privilege
properly asserted by the applicable Person to prevent the loss of such privilege in connection with
such information or which is prevented from disclosure pursuant to a confidentiality agreement with
third parties. Notwithstanding the foregoing, none of the conditions precedent to the exercise of
the right of access described in the preceding sentence that relate to notice requirements or
limitations on the Persons permitted to exercise such right shall apply at any time when a Default
or an Event of Default shall have occurred and be continuing.



47









 





     (g) Insurance. The Borrower will and will cause each of its Significant Subsidiaries
to, maintain insurance with responsible and reputable insurance companies or associations, or to
the extent that the Borrower or such Significant Subsidiary deems it prudent to do so, through its
own program of self-insurance, in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses, of comparable size and financial strength and with
comparable risks.



     (h) Credit Rating. The Borrower will deliver to the Administrative Agent notice of
any change by a Rating Agency in its Rating promptly upon the effectiveness of such change.



     (i) Further Assurances. Without limiting the foregoing, the Borrower will execute and
deliver, or cause to be executed and delivered, to the Administrative Agent such documents,
agreements and instruments, and will take or cause to be taken such further actions (including the
filing and recording of financing statements and other documents and such other actions or
deliveries of the type required by , as applicable), which may be required by law or which the
Administrative Agent or any Bank may, from time to time, reasonably request to carry out the terms
and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority
of the Liens created or intended to be created by the Pledge Agreement or the other Loan Documents,
all at the expense of the Borrower.



     SECTION 7.2. Negative Covenants. The Borrower covenants that, so long as any amount
is owing to the Banks hereunder or under any other Loan Documents to which it is a party, the
Borrower will not:



     (a) Financial Ratios. Permit at any time the ratio of Consolidated Indebtedness at
such time to Consolidated Capitalization for the most recently ended fiscal quarter to exceed 65%.



     (b) Certain Liens. And will not permit any of its Restricted Subsidiaries to, pledge,
mortgage, hypothecate or grant a Lien upon, or permit any mortgage, pledge, security interest or
other Lien upon, any Property of the Borrower or any Restricted Subsidiary of the Borrower now or
hereafter owned directly or indirectly by the Borrower; provided, however, that
this restriction shall neither apply to nor prevent the creation or existence of:




     (i) Permitted Liens;




     (ii) (A) any Lien in existence on the date hereof; provided that no such Lien
described in this clause (ii) encumbers any additional Property after the date hereof and
that the principal amount of Indebtedness of the Borrower and its Subsidiaries secured
thereby is not increased and (B) the Liens in favor of the Administrative Agent for the
benefit of the Banks (including pursuant to the Pledge Agreement);




     (iii) Liens securing bonds issued after the Closing Date pursuant to the Original
Mortgage (to the extent the proceeds thereof are used to replace, refund or refinance first
mortgage bonds outstanding on the date hereof) or the General Mortgage Indenture (or second
or subordinated, as the case may be, Liens in lieu thereof);




48











 






     (iv) Liens required to be granted pursuant to “equal and ratable” clauses existing on
the date hereof under Contractual Obligations of the Borrower and its Restricted
Subsidiaries (and extensions and renewals thereof);




     (v) Liens on fixed or capital assets and related inventory and intangible assets
acquired, constructed, improved, altered or repaired by the Borrower or any Restricted
Subsidiary; provided that (i) such Liens secure Indebtedness otherwise permitted by
this Agreement, (ii) such Liens and the Indebtedness secured thereby are incurred prior to
or within 365 days after such acquisition or the later of the completion of such
construction, improvement, alteration or repair or the date of commercial operation of the
assets constructed, improved, altered or repaired, (iii) the Indebtedness secured thereby
does not exceed the cost of acquiring, constructing, improving, altering or repairing such
fixed or capital assets, as the case may be, and (iv) such Lien shall not apply to any other
property or assets of the Borrower or of its Restricted Subsidiaries (other than repairs,
renewals, replacements, additions, accessions, improvements and betterments thereto);




     (vi) Liens on Property and repairs, renewals, replacements, additions, accessions,
improvements and betterments thereto existing at the time such Property is acquired by the
Borrower or any Restricted Subsidiary and not created in contemplation of such acquisition
(or on repairs, renewals, replacements, additions, accessions and betterments thereto), and
Liens on the Property of any Person at the time such Person becomes a Restricted Subsidiary
of the Borrower and not created in contemplation of such Person becoming a Restricted
Subsidiary of the Borrower (or on repairs, renewals, replacements, additions, accessions and
betterments thereto);




     (vii) rights reserved to or vested in any Governmental Authority by the terms of any
right, power, franchise, grant, license or permit, or by any Requirements of Law, to
terminate such right, power, franchise, grant, license or permit or to purchase, condemn,
expropriate or recapture or to designate a purchaser of any of the Property of the Borrower
or any of its Restricted Subsidiaries;




     (viii) rights reserved to or vested in (or exercised by) any Governmental Authority to
control, regulate or use any Property of a Person or its activities, including zoning,
planning and environmental laws and ordinances and municipal regulations;




     (ix) Liens on Property of the Borrower or any of its Restricted Subsidiaries securing
non-recourse Indebtedness of the Borrower or any such Restricted Subsidiary;




     (x) Liens on the stock or assets of Securitization Subsidiaries;




     (xi) any extension, renewal or refunding of any Lien permitted by clauses (i) through
(x) above on the same Property previously subject thereto; provided that no
extension, renewal or refunding of any such Lien shall increase the principal amount of any
Indebtedness secured thereby immediately prior to such extension, renewal or refunding,
unless such Indebtedness is permitted under Section 7.2(a);



49









 






     (xii) Liens on cash collateral to secure obligations of the Borrower and its Restricted
Subsidiaries in respect of cash management arrangements with any Bank or Affiliate thereof;
and




     (xiii) Liens not otherwise permitted by this Section 7.2(b) securing Indebtedness of
the Borrower and its Restricted Subsidiaries so long as the aggregate outstanding principal
amount of the obligations secured thereby does not at any time exceed at the time of
incurrence of such obligations (including any such incurrence resulting from any
extension, renewal or refunding of such obligations), as to the Borrower and all of its
Restricted Subsidiaries, 10% of Net Tangible Assets.



     (c) Consolidation, Merger or Disposal of Assets. And will not permit any Significant
Subsidiary to, (i) consolidate with, or merge into or amalgamate with or into, any other Person;
(ii) liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution); or (iii)
convey, sell, transfer, lease or otherwise dispose of all or substantially all of its Properties to
any Person; provided, however, that nothing contained in this Section 7.2(c) shall
prohibit (A) a merger involving a Subsidiary of the Borrower (including mergers to reincorporate or
change the domicile of such Subsidiary) if any Wholly-Owned Significant Subsidiary of the Borrower
is the surviving entity thereof; (B) the liquidation, winding up or dissolution of a Significant
Subsidiary of the Borrower if all of the Properties of such Significant Subsidiary are conveyed,
transferred or distributed to the Borrower or a Person that after giving effect to such transaction
is a Wholly-Owned Significant Subsidiary of the Borrower; (C) the conveyance, sale, transfer or
other disposal of all or substantially all (or any lesser portion) of the Properties of any
Significant Subsidiary of the Borrower to the Borrower or a Person that after giving effect to such
transaction is a Wholly-Owned Significant Subsidiary of the Borrower; or (D) the transfer of assets
in connection with the issuance of Securitization Securities; provided that, in each case,
immediately before and after giving effect to any such merger, dissolution or liquidation, or
conveyance, sale, transfer, lease or other disposition, no Default or Event of Default shall have
occurred and be continuing.



     (d) Sale of Significant Subsidiary Stock. And will not permit the sale, assignment,
transfer or other disposal of any of the Capital Stock of any Significant Subsidiary.
Notwithstanding the foregoing provisions of Section 7.2(c) or this Section 7.2(d), (x) the Borrower
or any Significant Subsidiary may sell, assign, transfer or otherwise dispose of (i) any of the
Capital Stock of any Significant Subsidiary to the Borrower or to a Wholly-Owned Subsidiary of the
Borrower that constitutes a Significant Subsidiary after giving effect to such transaction and (ii)
any of the Capital Stock of any Subsidiary that is not a Significant Subsidiary and (y) any
Significant Subsidiary shall have the right to issue, sell, assign, transfer or otherwise dispose
of for value its preference or preferred stock in one or more bona fide transactions to any Person;
provided that immediately before and after giving effect to any such Disposition described
in the foregoing clauses (x) and (y), no Event of Default or Default shall have occurred and be
continuing.



     (e) Agreements Restricting Dividends. And will not permit any Significant Subsidiary
to enter into, incur or permit to exist any agreement or other consensual arrangement that
explicitly prohibits or restricts the payment by any Significant Subsidiary of dividends or other
distributions with respect to any shares of its Capital Stock; provided that the foregoing



50









 




shall not prohibit financial incurrence, maintenance and similar covenants that indirectly have the
practical effect of prohibiting or restricting the ability of a Significant Subsidiary to make such
payments or provisions that require that a certain amount of capital be maintained, or prohibit the
return of capital to shareholders above certain dollar limits; provided further,
that the foregoing shall not apply to (i) restrictions and conditions imposed by law or by this
Agreement, (ii) restrictions and conditions existing on the date hereof, any amendment or
modification thereof (other than an amendment or modification expanding the scope of any such
restriction or condition and any restrictions or conditions) that (x) replace restrictions or
conditions existing on
the date hereof and (y) are substantially similar to such existing restriction or condition,
(iii) restrictions (including any extension of such restrictions that does not expand the scope of
any such restrictions) existing at the time at which any such Subsidiary first becomes a
Significant Subsidiary, so long as such restriction was in existence prior to such time in
accordance with the other provisions of this Agreement and was not agreed to or incurred in
contemplation of such change of status, (iv) any restrictions with respect to a Significant
Subsidiary imposed pursuant to an agreement that has been entered into in connection with a
disposition of all or substantially all of the Capital Stock or assets of such Subsidiary, (v) any
restrictions in respect of preferred or preference stock permitted to be incurred by Significant
Subsidiaries under Section 7.2(d) and (vi) restrictions in respect of Project Financings permitted
hereunder.




     (f) Certain Investments, Loans, Advances, Guarantees and Acquisitions. And will not
permit any of its Significant Subsidiaries to (i) purchase or acquire (including pursuant to any
merger) any Capital Stock, evidence of indebtedness or other securities of or other interest in
(including any option, warrant or other right to acquire any of the foregoing), make any loans or
advances to, Guarantee any obligations of, or make any investment or other interest in or capital
contribution to any Unrestricted Subsidiary or purchase or otherwise acquire (in one transaction or
a series of transactions) any assets of any Unrestricted Subsidiary constituting a business unit,
(any of the foregoing, an “Investment”) at any time if the aggregate amount of net tangible
assets of all Unrestricted Subsidiaries at such time exceeds, or would exceed as a result of any
such Investment, 10% of the Net Tangible Assets and (ii) make Investments in Project Finance
Subsidiaries at any time if the aggregate amount of Investments at such time exceeds, or would
exceed as a result of any such Investments, $400,000,000.



ARTICLE VIII




EVENTS OF DEFAULT




     SECTION 8.1. Events of Default. The occurrence of any of the following events shall constitute an
“Event of Default”:



     (a) Non-Payment of Principal, Interest and Fees. The Borrower fails to pay, in the
manner provided in this Agreement, (i) any principal payable by it hereunder when due or (ii) any
interest payment or any Commitment Fee or Duration Fee payable by it hereunder within five (5)
Business Days after its due date; or



     (b) Non-Payment of Other Amounts. The Borrower fails to pay, in the manner provided
in this Agreement, any other amount (other than the amounts set forth in Section 8.1(a)



51









 




above)
payable by it hereunder within ten (10) Business Days after notice of such payment is received by
the Borrower from the Administrative Agent; or




     (c) Breach of Representation or Warranty. Any representation or warranty by the
Borrower in Section 6.1, in any other Loan Document or in any certificate, document or
instrument delivered by the Borrower under this Agreement shall have been incorrect in any
material respect when made or when deemed hereunder to have been made; or



     (d) Breach of Certain Covenants. Borrower fails to perform or comply with any one or
more of its obligations under Section 7.1(a)(iv)(B)(x) or 7.2; or



     (e) Breach of Other Obligations. Borrower does not perform or comply with any one or
more of its other obligations under this Agreement (other than those set forth in Section 8.1(a),
(b) or (d) above) or under any other Loan Document and such failure to perform or comply shall not
have been remedied within 30 days after the earlier of notice thereof to it by the Administrative
Agent or the Majority Banks or discovery thereof by a Responsible Officer of the Borrower; or



     (f) Other Indebtedness. (i) The Borrower or any Significant Subsidiary fails to pay
when due (either at stated maturity or by acceleration or otherwise but subject to applicable grace
periods) any principal or interest in respect of any Indebtedness for Borrowed Money, Secured
Indebtedness, or Junior Subordinated Debt (other than Indebtedness of the Borrower under this
Agreement) if the aggregate principal amount of all such Indebtedness for which such failure to pay
shall have occurred and be continuing exceeds $50,000,000 or (ii) any default, event or condition
shall have occurred and be continuing with respect to any Indebtedness for Borrowed Money, Secured
Indebtedness, or Junior Subordinated Debt of the Borrower or any Significant Subsidiary (other than
Indebtedness of the Borrower under this Agreement), the effect of which default, event or condition
is to cause, or to permit the holder thereof to cause, (A) such Indebtedness to become due prior to
its stated maturity (other than in respect of mandatory prepayments required thereby) or (B) in the
case of any Guarantee by the Borrower or any Significant Subsidiary of Indebtedness for Borrowed
Money of any Person or Junior Subordinated Debt of the Borrower or any of its Significant
Subsidiaries the primary obligation (as such term is defined in the definition of “Guarantee” in
Section 1.1) to which such Guarantee relates to become due prior to its stated maturity, if the
aggregate amount of all such Indebtedness or primary obligations (as the case may be) that is or
could be caused to be due prior to its stated maturity exceeds $50,000,000; or



     (g) Involuntary Bankruptcy, Etc. (i) There shall be commenced against the Borrower or
any Significant Subsidiary any case, proceeding or other action (A) seeking a decree or order for
relief in respect of the Borrower or any Significant Subsidiary under any applicable domestic or
foreign bankruptcy, insolvency, reorganization or other similar law, (B) seeking a decree or order
adjudging the Borrower or any Significant Subsidiary a bankrupt or insolvent, (C) except as
permitted by Section 7.2(c)(ii), seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other similar relief of or in respect of the Borrower or
any Significant Subsidiary or their respective debts under any applicable domestic or foreign law
or (D) seeking the appointment of a custodian, receiver, conservator, liquidator, assignee,
trustee, sequestrator or other similar official of the Borrower or any Significant Subsidiary or of
any



52









 




substantial part of their respective Properties, or the liquidation of their respective
affairs, and such petition is not dismissed within 90 days or (ii) a decree, order or other
judgment is entered in respect of any of the remedies, reliefs or other matters for which any
petition referred to in (i) above is presented or (iii) there shall be commenced against the
Borrower or any Significant Subsidiary any case, proceeding or other action seeking issuance of a
warrant of attachment,
execution, distraint or similar process against all or any substantial part of its assets that
results in the entry of an order for any such relief that shall not have been vacated, discharged
or stayed or bonded pending appeal within 90 days from the entry thereof; or




     (h) Voluntary Bankruptcy, Etc. (i) The commencement by the Borrower or any
Significant Subsidiary of a voluntary case, proceeding or other action under any applicable
domestic or foreign bankruptcy, insolvency, reorganization or other similar law (A) seeking to have
an order of relief entered with respect to it, (B) seeking to be adjudicated a bankrupt or
insolvent, (C) seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other similar relief with respect to it or its debts under any
applicable domestic or foreign law or (D) seeking the appointment of or the taking possession by a
custodian, receiver, conservator, liquidator, assignee, trustee, sequestrator or similar official
of the Borrower or any Significant Subsidiary of any substantial part of its Properties; or (ii)
the making by the Borrower or any Significant Subsidiary of a general assignment for the benefit of
creditors; or (iii) the Borrower or any Significant Subsidiary shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of the acts described in
clause (i) or (ii) above or in Section 8.1(g); or (iv) the admission by the Borrower or any
Significant Subsidiary in writing of its inability to pay its debts generally as they become due or
the failure by the Borrower or any Significant Subsidiary generally to pay its debts as such debts
become due; or



     (i) Enforcement Proceedings. A final judgment or decree for the payment of money (not
paid or fully covered by insurance as to which the relevant insurance company has acknowledged
coverage) which, together with all other such judgments or decrees against the Borrower or any
Significant Subsidiary then outstanding and unsatisfied, exceeds $50,000,000 in aggregate amount
not covered by insurance shall be rendered against the Borrower or any Significant Subsidiary and
the same shall remain undischarged for a period of 60 days, during which the execution thereon
shall not effectively be stayed, released, bonded or vacated; or



     (j) ERISA Events. The existence of an event or events, individually or, in the
aggregate, that could reasonably be expected to have a Material Adverse Effect arising out of or in
connection with (A) any “prohibited transaction” (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any Plan, (B) the occurrence of any “accumulated funding deficiency”
(within the meaning of Section 412 of the Code or Section 302 of ERISA) by a Plan, whether or not
waived, or any Lien in favor of the PBGC or a Plan on the assets of the Borrower or any Commonly
Controlled Entity, (C) the occurrence of a Reportable Event with respect to, or the commencement of
proceedings under Section 4042 of ERISA to have a trustee appointed, or the appointment of a
trustee under Section 4042 of ERISA, to administer or to terminate any Single Employer Plan, which
Reportable Event, commencement of proceedings or appointment of a trustee which would reasonably be
expected to result in the termination of such Plan for purposes of Title IV of ERISA, (D) the
termination of any Single Employer Plan for purposes of Title IV of ERISA, (E) withdrawal from, or
the Insolvency or Reorganization of, a



53









 




Multiemployer Plan or (F) the occurrence of any other event
or condition with respect to a Plan; or




     (k) Change in Control. A Change in Control shall have occurred.



     (l) Collateral. The Pledge Agreement shall cease, for any reason, to be in full force
and effect, or the Borrower shall so assert, or any Lien created by the Pledge Agreement shall
cease to be enforceable and of the same effect and priority purported to be created thereby.



     SECTION 8.2. Cancellation/Acceleration. If at any time and for any reason (whether within or
beyond the control of any party to this Agreement):



     (a) either of the Events of Default specified in Section 8.1(g) or 8.1(h) occurs with respect
to the Borrower, then automatically:




     (i) the Commitments shall immediately be cancelled; and




     (ii) all Loans made hereunder, all unpaid accrued interest or fees and any other sum
payable under this Agreement or any other Loan Document shall become immediately due and
payable; or



     (b) any other Event of Default specified in Section 8.1 occurs and, while such Event of
Default is continuing, the Administrative Agent, having been so instructed by the Majority Banks,
by notice to the Borrower shall so declare that:




     (i) the Commitments shall immediately be cancelled; and/or




     (ii) either (A) all Loans made hereunder, all unpaid accrued interest or fees and any
other sum payable under this Agreement or any other Loan Document shall become immediately
due and payable or (B) all Loans made hereunder, all unpaid accrued interest or fees and any
other sum payable under this Agreement or any other Loan Document shall become due and
payable at any time thereafter immediately on demand by the Administrative Agent (acting on
the instructions of the Majority Banks).


Except as expressly provided above in this Section 8.2, presentment, demand, protest, notice of
intent to accelerate, notice of acceleration and all other notices of any kind whatsoever are
hereby expressly waived by the Borrower.




ARTICLE IX




THE ADMINISTRATIVE AGENT




     SECTION 9.1. Appointment. Each Bank hereby irrevocably designates and appoints Citicorp North
America, Inc., as the Administrative Agent of such Bank under this Agreement and the other Loan
Documents, and each such Bank irrevocably authorizes Citicorp North America, Inc., as the
Administrative Agent for such Bank, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this



54









 




Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, (a) the
Administrative Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other
Loan Document or otherwise exist against the Administrative Agent and (b) the other Agents and the
Lead Arranger shall not have any duties or responsibilities hereunder, or any fiduciary
relationship with any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the other Agents or the Lead Arranger.




     SECTION 9.2. Delegation of Duties. The Administrative Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.



     SECTION 9.3. Exculpatory Provisions. Neither any Agent nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in connection with this
Agreement or any other Loan Document (except for its or such Person’s own gross negligence or
willful misconduct) or (b) responsible in any manner to any of the Banks for any recitals,
statements, representations or warranties made by the Borrower or any officer thereof contained in
this Agreement or any other Loan Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent or any other Agent
under or in connection with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or any Note or any
other Loan Document or for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Bank to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or records of the
Borrower.



     SECTION 9.4. Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, facsimile, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have been signed, sent or
made by the proper Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat the payee of any Note or any
loan account in the Register as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent.
The Administrative Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such advice or concurrence
of the Majority Banks (or, if so specified by this Agreement, all Banks) as it deems appropriate or
it shall first be indemnified to its satisfaction by the Banks against any and all liability and
expense that may be incurred by it by reason of taking or



55









 




continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request of the Majority
Banks (or, if so specified by this Agreement, all Banks), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Banks and all future holders of the
amounts owing hereunder.




     SECTION 9.5. Notice of Default. The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the Administrative
Agent has received notice from a Bank or the Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a “notice of default”. In the event
that the Administrative Agent receives such a notice, the Administrative Agent shall give notice
thereof to the Banks. The Administrative Agent shall take such action with respect to such Default
or Event of Default as shall be reasonably directed by the Majority Banks; provided that
unless and until the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in the best interests
of the Banks.



     SECTION 9.6. Non-Reliance on Administrative Agent and Other Banks. Each Bank expressly
acknowledges that neither the Agents nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates have made any representations or warranties to it and that
no act by any Agent hereinafter taken, including any review of the affairs of the Borrower, shall
be deemed to constitute any representation or warranty by any Agent to any Bank. Each Bank
represents to the Agents that it has, independently and without reliance upon any Agent or any
other Bank, and based on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents that it will, independently and
without reliance upon any Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement and the other Loan Documents, and to
make such investigation as it deems necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of the Borrower. Except for notices,
reports and other documents expressly required to be furnished to the Banks by the Administrative
Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the
Borrower that may come into the possession of the Administrative Agent or any of its officers,
directors, employees, attorneys-in-fact or Affiliates.



     SECTION 9.7. Indemnification. The Banks agree to indemnify the Agents and the Lead Arranger in
their respective capacities as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their respective applicable
Revolving Percentages in effect on the date on which indemnification is sought under this
Section 9.7, from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any
time (including, without limitation, at any time following the payment of all amounts owing



56









 




hereunder and the termination of the Commitments) be imposed on, incurred by or asserted against
the Agents or the Lead Arranger, as the case may be, in any way relating to or arising out of this
Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the
Agents or the Lead Arranger, as the case may be, under or in connection with any of the foregoing;
provided that no Bank shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agents’ or the Lead Arranger’s, as the case may be, gross
negligence or willful misconduct. The agreements in this Section 9.7 shall survive the payment of
all amounts payable hereunder.




     SECTION 9.8. Agent in Its Individual Capacity. Each Agent and its Affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the Borrower as though such
Agent were not an Agent hereunder and under the other Loan Documents. With respect to its Loans
made or renewed by it and its Commitment hereunder, each Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Bank and may exercise the same as
though it were not an Agent, and the terms “Bank” and “Banks” shall include the each Agent in its
individual capacity.



     SECTION 9.9. Successor Administrative Agent. The Administrative Agent may resign as Administrative
Agent upon 30 days’ notice to the Banks and the Borrower. If the Administrative Agent shall resign
as Administrative Agent under this Agreement and the other Loan Documents, then the Majority Banks
shall appoint from among the Banks a successor agent for the Banks, which successor agent shall be
approved by the Borrower, whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term “Administrative Agent” shall mean such successor
agent effective upon such appointment and approval, and the former Administrative Agent’s rights,
powers and duties as Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Agent or any of the parties to this Agreement or any holders of any
amounts payable hereunder; provided that if an Event of Default has occurred and is
continuing, no consent of the Borrower shall be required. If a successor Administrative Agent
shall not have been so appointed within said 30-day period, the Administrative Agent may
then appoint a successor Administrative Agent who shall be a financial institution engaged or
licensed to conduct banking business under the laws of the United States with an office in New York
City and that has total assets in excess of $500,000,000 and who shall serve as Administrative
Agent until such time, if any, as an Administrative Agent shall have been appointed as provided
above. After any retiring Administrative Agent’s resignation or removal as Administrative Agent,
the provisions of this Article X shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents.



     Notwithstanding anything to the contrary contained herein, no Bank identified as an “Agent” or
“Arranger,” other than the Administrative Agent, shall have the right, power, obligation,
liability, responsibility or duty under this Agreement or any Loan Document other than those
applicable to all Banks as such. Without limiting the foregoing, none of the Banks so identified
shall have or be deemed to have any fiduciary relationship with any Bank. Each Bank acknowledges
that it has not relied, and will not rely, on any of the Banks so identified in deciding to enter
into this Agreement or not taking action hereunder.



57









 





ARTICLE X




MISCELLANEOUS




     SECTION 10.1. Amendments and Waivers. Neither this Agreement, any Note, any other Loan Document,
nor any terms hereof or thereof may be amended, supplemented or modified except pursuant to an
instrument or instruments in writing executed in accordance with the provisions of this Section
10.1. The Majority Banks may, or, with the written consent of the Majority Banks, the
Administrative Agent may, from time to time, (a) enter into with the Borrower written amendments,
supplements or modifications hereto and to any Notes and the other Loan Documents for the purpose
of adding any provisions to this Agreement or any Notes or the other Loan Documents or changing in
any manner the rights of the Banks or of the Borrower hereunder or thereunder or (b) waive, on such
terms and conditions as the Majority Banks or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or any Notes or the other
Loan Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification shall:




     (i) reduce the amount or extend the scheduled date of maturity of any Note or Loan, or
reduce the stated rate of any interest or fee payable hereunder or extend the scheduled date
of any payment thereof, or increase the amount or extend the expiration date of any Bank’s
Commitments, in each case without the consent of each Bank directly affected thereby;




     (ii) amend, modify or waive any provision of this Section or of Section 4.2 in a manner
that would alter the pro rata sharing of payments required thereby, or reduce the
percentage specified in the definition of Majority Banks, or consent to the assignment
or transfer by the Borrower of any of its respective rights and obligations under this
Agreement and the other Loan Documents or release any material portion of the Collateral, in
each case without the written consent of all the Banks except Defaulting Banks;




     (iii) amend, modify or waive any provision of Article IX without the written consent of
the then Administrative Agent; or




     (iv) [Reserved]




     (v) [Reserved]



          Any such waiver and any such amendment, supplement or modification shall apply equally to each
of the Banks and shall be binding upon the Borrower, the Banks, the Administrative Agent and all
future holders of the amounts payable hereunder. In the case of any waiver (to the extent
specified therein), the Borrower, the Banks and the Administrative Agent shall be restored to their
former position and rights hereunder and under any outstanding Notes and any other Loan Documents,
and any Default or Event of Default waived shall be deemed to be cured and not continuing, but no
such waiver shall extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon.




58









 








     SECTION 10.2. Notices. (a) Unless otherwise expressly provided herein, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in writing (including by
facsimile followed by any original sent by mail or delivery), and, shall be deemed to have been
duly given or made when delivered by hand, or three days after being deposited in the mail, postage
prepaid, or, in the case of telecopy notice, when received, addressed as follows in the case of the
Borrower and the Administrative Agent, and as set forth in Schedule 1.1 in the case of the
other parties hereto, or to such other address as may be hereafter notified by the respective
parties hereto and any future holders of the amounts payable hereunder:



	 	 	 	 	 
	 

	 	Borrower:



Attention:
	 	1111 Louisiana

Houston, Texas 77002

Linda Geiger

Assistant Treasurer
	 

	 	Telecopy:
	 	(713) 207-3301
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Marc Kilbride

Treasurer
	 

	 	Telecopy:
	 	(713) 207-3301
	 
	 	 	 	 
	 

	 	Administrative Agent:
	 	Citicorp North America, Inc.,

1615 Brett Road

OPS III

New Castle, DE 19720
	 
	 	 	 	 
	 

	 	Attention:
	 	Charles Huester
	 

	 	Telecopy:
	 	(713) 427-6307
	 

	 	Email:
	 	Charles.Huester@citi.com





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




     (b) The Borrower hereby agrees that it will provide to the Administrative Agent 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 the Credit Agreement prior to the scheduled date therefor, (iii) provides notice of any
default or event of default under the Credit Agreement or (iv) is required to be delivered to
satisfy any condition precedent to the effectiveness of the Credit 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
oploanswebadmin@citigroup.com. In addition, the Borrower agrees to continue to provide the



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Communications to the Administrative Agent in the manner specified in the Loan Documents but only
to the extent requested by the Administrative Agent.




     (c) The Borrower further agrees that the Administrative Agent may make the Communications
available to the Bank by posting the Communications on Intralinks or a substantially similar
electronic transmission systems (the “Platform”).



     (d) 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
BANK OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT
OR 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.



     (e) 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 Bank
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 Bank
for purposes of the Loan Documents. Each Bank agrees to notify the Administrative Agent in writing
(including by electronic communication) from time to time of such Bank’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.



     SECTION 10.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on
the part of the Administrative Agent or any Bank, any right, remedy, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and



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privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided
by law.




     SECTION 10.4. Survival of Representations and Warranties. All representations and warranties made
hereunder and in any document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement.



     SECTION 10.5. Payment of Expenses and Taxes; Indemnity. The Borrower agrees (a) to pay all
reasonable out-of-pocket expenses of the Lead Arranger and the Administrative Agent associated with
the syndication of the Facility, (b) to pay or reimburse the Lead Arranger and the Administrative
Agent for all its reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation, negotiation and execution and delivery of, and any amendment, supplement
or modification to, this Agreement and any Notes and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of Simpson Thacher & Bartlett LLP, special counsel to the Administrative
Agent (but excluding the fees or expenses of any other counsel), (c) to pay or reimburse the
Administrative Agent for all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, any Notes, the other Loan Documents and
any such other documents, including, without limitation, the reasonable fees and disbursements
of the special counsel to the Administrative Agent, (d) to pay or reimburse each Bank for all its
costs and expenses incurred in connection with the enforcement, or at any time after the occurrence
and during the continuance of a Default or an Event of Default the preservation, of any rights
under this Agreement, any Notes, the other Loan Documents and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to such Bank, (e) without
duplication of any other provision contained in this Agreement or any Notes, to pay, indemnify, and
hold each Bank and the Administrative Agent harmless from, any and all recording and filing fees,
if any, and any and all liabilities (for which each Bank has not been otherwise reimbursed under
this Agreement) with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, that may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in respect of, this
Agreement, any Notes, the other Loan Documents and any such other documents, and (f) without
duplication of any other provision contained in this Agreement or any Notes, to pay, indemnify, and
hold the Lead Arranger, each Bank and each Agent together with their respective directors,
officers, employees, agents, trustees, advisors and affiliates (collectively, “Indemnified
Persons”) harmless from and against, any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including without limitation, all fees and expenses of counsel to any
indemnified person) with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, any Notes or the other Loan Documents, the transactions
contemplated by this Agreement, any Notes or the other Loan Documents, or the use, or proposed use,
of proceeds of the Loans (all the foregoing in this clause (f), collectively, the “Indemnified
Liabilities”); provided that the Borrower shall have no obligation hereunder to an
Indemnified Person with respect to Indemnified Liabilities arising from the gross negligence or
willful misconduct of such Indemnified Person, AND PROVIDED



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FURTHER THAT IT IS THE INTENTION OF THE
BORROWER TO INDEMNIFY THE INDEMNIFIED PERSONS AGAINST THE CONSEQUENCES OF THEIR OWN NEGLIGENCE.
The agreements in this Section 10.5 shall survive repayment of the Loans and all other amounts
payable hereunder.




     SECTION 10.6. Effectiveness, Successors and Assigns, Participations; Assignments. (a) This
Agreement shall become effective on the date hereof and thereafter shall be binding upon and inure
to the benefit of the Borrower, the Banks, the Administrative Agent, all future holders of the
Loans and their respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior written consent of
each Bank.



     (b) Any Bank may, in the ordinary course of its business and in accordance with applicable
law, at any time sell to one or more banks or other financial institutions or Bank Affiliates (a
“Participant”) participating interests in any Loan owing to such Bank, any Note held by
such Bank, any Commitment of such Bank or any other interest of such Bank hereunder and under the
other Loan Documents. In the event of any such sale by a Bank of a participating interest to a
Participant, such Bank’s obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Bank shall remain solely responsible for the
performance thereof, such Bank shall remain the holder of any such Loan and Commitment or
other interest for all purposes under this Agreement and the other Loan Documents, the Borrower and
the Administrative Agent shall continue to deal solely and directly with such Bank in connection
with such Bank’s rights and obligations under this Agreement and the other Loan Documents and
except with respect to the matters set forth in Section 10.1, the amendment of which requires the
consent of all of the Banks, the participation agreement between the selling Bank and the
Participant may not restrict such Bank’s voting rights hereunder. The Borrower agrees that each
Participant, to the extent provided in its participation, shall be entitled to the benefits of
Sections 3.4, 3.7, 4.1 and 4.3 with respect to its participation in the Commitments and the Loans
outstanding from time to time; provided that (i) no Participant shall be entitled to
receive any greater amount pursuant to such Sections than the selling Bank would have been entitled
to receive in respect of the amount of the participation sold by such selling Bank to such
Participant had no such sale occurred and (ii) each such sale of participating interests shall be
to a “qualified purchaser”, as such term is defined under the Investment Company Act of 1940.
Except as expressly provided in this Section 10.6(b), no Participant shall be a third-party
beneficiary of or have any rights under this Agreement or under any of the other Loan Documents.



     (c) Except as set forth below, the Banks shall be permitted to assign all or a portion of
their Loans and Commitments to one or more financial institutions (“Purchasing Banks”) with
the consent, not to be unreasonably withheld, of (a) the Borrower, unless (i) the Purchasing Bank
is a Bank or a Bank Affiliate or (ii) an Event of Default has occurred and is continuing and (b)
the Administrative Agent, unless the assignment is from a Bank to its Bank Affiliate, pursuant to
an Assignment and Acceptance, substantially in the form of Exhibit C (an “Assignment
and Acceptance”), executed by such Purchasing Bank and such transferor Bank (and by the
Borrower and the Administrative Agent) and delivered to the Administrative Agent for its acceptance
and recording in the Register; provided that (i) such Purchasing Bank is a “qualified
purchaser” as defined under the Investment Company Act of 1940, (ii) each such sale shall be of a
uniform,



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and not a varying, percentage of all rights and obligations under and in respect of the
Commitment of such Bank, (iii) each such sale shall be in an aggregate amount of not less than
$5,000,000 (or such lesser amount representing the entire Commitment of such transferor Bank) if
such sale is not to an existing Bank and (iv) after giving effect to such sale, the transferor Bank
shall (to the extent that it continues to have any Commitment hereunder) have a Commitment of not
less than $5,000,000, provided that such amounts shall be aggregated in respect of each
Bank and its Bank Affiliates, if any. Upon such execution, delivery, acceptance and recording,
from and after the effective date determined pursuant to such Assignment and Acceptance (the
“Transfer Effective Date”), (i) the Purchasing Bank thereunder shall be a party hereto and,
to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Bank
hereunder with the Commitments as set forth therein and (ii) the transferor Bank thereunder shall,
to the extent provided in such Assignment and Acceptance, be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining
portion of a transferor Bank’s rights and obligations under this Agreement, such transferor Bank
shall cease to be a party hereto). Such Assignment and Acceptance shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the addition of such
Purchasing Bank and the resulting adjustment of Revolving Percentages arising from the purchase by
such Purchasing Bank of all or a portion of the rights and obligations of such transferor Bank
under this Agreement. On or prior to the Transfer Effective Date
determined pursuant to such Assignment and Acceptance, (i) appropriate entries shall be made
in the accounts of the transferor Bank and the Register evidencing such assignment and releasing
the Borrower from any and all obligations to the transferor Bank in respect of the assigned Loan or
Loans and (ii) appropriate entries evidencing the assigned Loan or Loans shall be made in the
accounts of the Purchasing Bank and the Register as required by Section 3.1 hereof. In the event
that any Notes have been issued in respect of the assigned Loan or Loans, such Notes shall be
marked “cancelled” and surrendered by the transferor Bank to the Administrative Agent for return to
the Borrower.




     (d) The Administrative Agent shall maintain at its address referred to in Section 10.2(a) a
copy of each Assignment and Acceptance delivered to it and a register (the “Register”) for
the recordation of the names and addresses of the Banks and the Commitments of, and principal
amount of the Loans owing to, each Bank from time to time. To the extent permitted by applicable
law, the entries in the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Banks may (and, in the case of any Loan or other
obligations hereunder not evidenced by a Note, shall) treat, each Person whose name is recorded in
the Register as the owner of a Loan or other obligation hereunder as the owner thereof for all
purposes of this Agreement and the other Loan Documents, notwithstanding any notice to the
contrary. Any assignment of any Loan or other obligation hereunder not evidenced by a Note shall be
effective only upon appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Bank at any reasonable time and
from time to time upon reasonable prior notice.



     (e) Upon its receipt of an Assignment and Acceptance executed by a transferor Bank and
Purchasing Bank (and, in the case of a Purchasing Bank that is not then a Bank Affiliate, by the
Borrower and the Administrative Agent) together with payment to the Administrative Agent of a
registration and processing fee of $3,500, the Administrative Agent shall promptly accept



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such Assignment and Acceptance on the Transfer Effective Date determined pursuant thereto, record the
information contained therein in the Register and give notice of such acceptance and recordation to
the Banks and the Borrower.




     (f) Each of the Banks and the Administrative Agent agrees to exercise its best efforts to
keep, and to cause any third party recipient of the information described in this Section 10.6(f)
to keep, any information delivered or made available by the Borrower to it (including any
information obtained pursuant to Section 7.1), confidential from anyone other than Persons employed
or retained by such party who are or are expected to become engaged in evaluating, approving,
structuring or administering the transactions contemplated hereunder; provided that nothing
shall prevent any Bank or the Administrative Agent from disclosing such information (i) to any
other Bank or any Affiliate of any Bank, (ii) pursuant to subpoena or upon the order of any court
or administrative agency, (iii) upon the request or demand of any Governmental Authority having
jurisdiction over such Bank or its Affiliates, (iv) if such information has been publicly
disclosed, (v) to the extent reasonably required in connection with any litigation to which either
the Administrative Agent, any Bank, the Borrower or their respective Affiliates may be a party,
(vi) to the extent reasonably required in connection with the exercise of any remedy hereunder,
(vii) to the Administrative Agent’s or such Bank’s, as the case may be, legal counsel, independent
auditors and other professional advisors, or (viii) to any actual or proposed
Participant, Purchasing Bank or pledgee (each, a “Transferee”) or by any direct or
indirect contractual counterparties (or the professional advisors thereto) to any swap or
derivative transaction relating to Borrower’s obligations hereunder that has agreed in writing to
be bound by the provisions of this Section 10.6(f). To the extent permitted by applicable law, in
the event that any Bank or the Administrative Agent is legally requested or required to disclose
any confidential information pursuant to clause (ii), (iii), or (v) of this Section 10.6(f), such
party shall promptly notify the Borrower of such request or requirement prior to disclosure so that
Borrower may seek an appropriate protective order and/or waive compliance with the terms of this
Agreement. If, however, in the opinion of counsel for such party, such party is nonetheless, in
the absence of such order or waiver, compelled to disclose such confidential information or
otherwise stand liable for contempt or suffer possible censure or other penalty or liability, then
such party may disclose such confidential information without liability to the Borrower;
provided, however, that such party will use its best efforts to minimize the disclosure of
such information. Subject to the exceptions above to disclosure of information, each of the Banks
and the Administrative Agent agrees that it shall not publish, publicize, or otherwise make public
any information regarding this Agreement or the transactions contemplated hereby without the
written consent of the Borrower, in its sole discretion.



     (g) If, pursuant to this Section 10.6, any interest in this Agreement or any Loan or is
transferred to any Transferee that is organized under the laws of any jurisdiction other than the
United States or any state thereof, the transferor Bank shall cause such Transferee, concurrently
with the effectiveness of such transfer, (i) to deliver to the transferor Bank (and, in the case of
any Purchasing Bank registered in the Register, the Administrative Agent and the Borrower) either
U.S. Internal Revenue Service Form W-8BEN or U.S. Internal Revenue Service Form W-8ECI, or
successor applicable forms (wherein such Transferee claims entitlement to complete exemption from
U.S. federal withholding tax on all interest payments hereunder) and (ii) to agree (for the benefit
of the transferor Bank, the Administrative Agent and the Borrower) to deliver to the transferor
Bank (and, in the case of any Purchasing Bank registered in the
Register, the



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Administrative Agent and Borrower) a new Form duly executed and completed W-8BEN or W-8ECI, or successor applicable
forms or other manner of certification, as the case may be, upon the expiration or obsolescence of
any previously delivered form in accordance with applicable U.S. laws and regulations and
amendments, unless in any such case any change in treaty, law or regulation has occurred prior to
the date on which any such delivery would otherwise be required that renders all such forms
inapplicable or that would prevent such Transferee from duly completing and delivering any such
form with respect to it and such Transferee so advises the transferor Bank (and, in the case of any
Purchasing Bank registered in the Register, the Administrative Agent and the Borrower).




     (h) Any Bank may at any time pledge or assign a security interest in all or any portion of its
rights under this Agreement to secure obligations of such Bank, including any pledge or assignment
to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such
pledge or assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Bank from any of its obligations hereunder or substitute any
such pledgee or Purchasing Bank for such Bank as a party hereto. The Borrower hereby agrees that,
upon request of any Bank at any time and from time to time after the Borrower has made its initial
Borrowing hereunder, the Borrower shall provide to such Bank, at the Borrower’s own
expense, a promissory note, substantially in the form of Exhibit D evidencing the
Loans owing to such Bank.



     SECTION 10.7. Setoff. In addition to any rights and remedies of the Banks provided by law, each
Bank shall have the right, without prior notice to the Borrower, any such notice being expressly
waived by the Borrower to the extent permitted by applicable law, upon any amount becoming due and
payable by the Borrower hereunder or under the Loans to which it is a party (whether at the stated
maturity, by acceleration or otherwise) to setoff and appropriate and apply against such amount any
and all deposits (general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Bank, or
any branch or agency thereof, or any Affiliate thereof, to or for the credit or the account of the
Borrower. Each Bank agrees promptly to notify the Borrower and the Administrative Agent after any
such setoff and application made by such Bank, provided that the failure to give such notice shall
not affect the validity of such setoff and application.



     SECTION 10.8. Counterparts. This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts taken together shall
be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed
by all the parties shall be maintained with Borrower and the Administrative Agent.



     SECTION 10.9. Severability. Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.



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     SECTION 10.10. Integration. This Agreement and the other Loan Documents represent the agreement of
the Borrower, the Administrative Agent and the Banks with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by the Administrative Agent or
any Bank relative to the subject matter hereof not expressly set forth or referred to herein or in
the other Loan Documents.



     SECTION 10.11. GOVERNING LAW. (a) THIS AGREEMENT AND ANY NOTES OR OTHER LOAN DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND ANY NOTES AND ANY OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.



     (b) Notwithstanding anything in Section 10.11(a) to the contrary, nothing in this Agreement or
in any Note or any other Loan Documents shall be deemed to constitute a waiver of any rights which
any Bank may have under applicable federal law relating to the amount of interest which any Bank
may contract for, take, receive or charge in respect of any Loans, including any right to take,
receive, reserve and charge interest at the rate allowed by the laws of the state where such Bank
is located. To the extent that Texas law is applicable to the determination of the Highest Lawful
Rate, the Banks and the Borrower agree that (i) if Chapter 303 of the Texas Finance Code, as
amended, is applicable to such determination, the weekly rate ceiling (formerly known as the
indicated (weekly) rate ceiling in Article 1.04, Subtitle 1, Title 79, of the Revised Civil
Statutes of Texas, as amended) as computed from time to time shall apply, provided that, to
the extent permitted by such Article, the Administrative Agent may from time to time by notice to
the Borrower revise the election of such interest rate ceiling as such ceiling affects the then
current or future balances of the Loans; and (ii) the provisions of Chapter 346 of the Texas
Finance Code, as amended (formerly found in Chapter 15 of Subtitle 3, Title 79, of the Revised
Civil Statutes of Texas, 1925, as amended) shall not apply to this Agreement or any Note issued
hereunder.



     SECTION 10.12. Submission to Jurisdiction; Waivers. The Borrower hereby irrevocably and
unconditionally:



     (a) submits for itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the Southern District of New
York, and appellate courts from any thereof;



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



     (c) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail), postage
prepaid to the Borrower at its address set forth in Section 10.2 or at such other address of which
the Administrative Agent shall have been notified pursuant thereto;



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



     (e) waives, to the maximum extent permitted by applicable law, any right it may have to claim
or recover in any legal action or proceeding any special, exemplary, punitive or consequential
damages.



     SECTION 10.13. Acknowledgments. The Borrower hereby acknowledges that:



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



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



     (c) no joint venture exists among the Banks or among the Borrower and the Banks.



     SECTION 10.14. Limitation on Agreements. All agreements between the Borrower, the Administrative
Agent or any Bank, whether now existing or hereafter arising and whether written or oral, are
hereby expressly limited so that in no contingency or event whatsoever, whether by reason of demand
being made in respect of an amount due under any Loan Document or otherwise, shall the amount paid,
or agreed to be paid, to the Administrative Agent or any Bank for the use, forbearance, or
detention of the money to be loaned under this Agreement, any Notes or any other Loan Document or
otherwise or for the payment or performance of any covenant or obligation contained herein or in
any other Loan Document exceed the Highest Lawful Rate. If, as a result of any circumstances
whatsoever, fulfillment of any provision hereof or of any of such documents, at the time
performance of such provision shall be due, shall involve transcending the limit of validity
prescribed by applicable usury law, then, ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity, and if, from any such circumstance, the Administrative Agent
or any Bank shall ever receive interest or anything that might be deemed interest under applicable
law that would exceed the Highest Lawful Rate, such amount that would be excessive interest shall
be applied to the reduction of the principal amount owing on account of such Bank’s Loans or the
amounts owing on other obligations of the Borrower to the Administrative Agent or any Bank under
any Loan Document and not to the payment of interest, or if such excessive interest exceeds the
unpaid principal balance of such Bank’s Loans and the amounts owing on other obligations of the
Borrower to the Administrative Agent or any Bank under any Loan Document, as the case may be, such
excess shall be refunded to the Borrower. All sums paid or agreed to be paid to the Administrative
Agent or any Bank for the use, forbearance or detention of the indebtedness of the Borrower to the
Administrative Agent or any Bank shall, to the fullest 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 Highest Lawful Rate.
Notwithstanding anything to the contrary contained in any Loan Document, it is understood and
agreed that if at



67









 




any time the rate of interest that accrues on the outstanding principal balance
of any Loan shall exceed the Highest Lawful Rate, the rate of interest that accrues on the
outstanding principal balance of any Loan shall be limited to the Highest Lawful Rate, but any
subsequent reductions in the rate of interest that accrues on the outstanding principal balance of
any Loan shall not reduce the rate of interest that accrues on the outstanding principal balance of
any Loan below the Highest Lawful Rate until the total amount of interest accrued on the
outstanding principal balance of any Loan equals the amount of interest that would have accrued if
such interest rate had at all times been in effect. The terms
and provisions of this Section 10.14 shall control and supersede every other provision of all
Loan Documents.




     SECTION 10.15. Removal of Bank. (a) Notwithstanding anything herein to the contrary, the Borrower
may, at any time in its sole discretion, remove any Bank upon 15 Business Days’ written notice to
such Bank and the Administrative Agent (the contents of which notice shall be promptly communicated
by the Administrative Agent to each other Bank), such removal to be effective at the expiration of
such 15-day notice period; provided, however, that no Bank may be removed hereunder
at a time when an Event of Default shall have occurred and be continuing. Each notice by the
Borrower under this Section 10.15 shall constitute a representation by the Borrower that the
removal described in such notice is permitted under this Section 10.15. Concurrently with such
removal, the Borrower shall pay to such removed Bank all amounts owing to such Bank hereunder and
under any other Loan Document in immediately available funds. Upon full and final payment hereunder
of all amounts owing to such removed Bank, such Bank shall make appropriate entries in its accounts
evidencing payment of all Loans hereunder and releasing the Borrower from all obligations owing to
the removed Bank in respect of the Loans hereunder and surrender to the Administrative Agent for
return to the Borrower any Notes of the Borrower then held by it. Effective immediately upon such
full and final payment, such removed Bank will not be considered to be a “Bank” for purposes of
this Agreement except for the purposes of any provision hereof that by its terms survives the
termination of this Agreement and the payment of the amounts payable hereunder. Effective
immediately upon such removal, the Commitments of such removed Bank shall immediately terminate and
such Bank’s participation share shall be divided among the remaining Banks according to their
Revolving Percentages. Such removal will not, however, affect the Commitments of any other Bank
hereunder.



          (b) In addition, if (i) any Bank has demanded compensation or additional interest or given
notice of its intention to demand compensation or additional interest under Sections 3.4, 3.7, 4.1,
or 4.3, (ii) the Borrower is required to pay any additional amount to any Bank under Section 4.1 or
4.3, (iii) any Bank is unable to submit any form or certificate required under Section 4.3 or
withdraws or cancels any previously submitted form with no substitution therefor, (iv) any Bank
gives notice of any change in law or regulations, or in the interpretation thereof, pursuant to
Section 3.8 or 4.1, (v) any Bank is a Defaulting Bank, has been declared insolvent or a receiver or
conservator has been appointed for a material portion of its assets, business or properties, (vi)
any Bank shall seek to avoid its obligation to make or maintain Loans hereunder for any reason,
including, without limitation, reliance upon 12 U.S.C. § 1821(e) or (n) (1) (B), (vii) any taxes
referred to in Section 4.3 have been levied or imposed (or the Borrower determines in good faith
that there is a substantial likelihood that such taxes will be levied or imposed) so as to require
withholding or deductions by the Borrower or payment by the Borrower of additional amounts to any
Bank, or other reimbursement or indemnification of any





68









 







Bank, as a result thereof, or (viii) any
Bank shall decline to consent to a modification or waiver of the terms of this Agreement or any
other Loan Documents requested by the Borrower, or then and in such event, upon request from the
Borrower delivered to such Bank and the Administrative Agent, such Bank shall assign, in accordance
with the provisions of Section 10.6 and an appropriately completed Assignment Agreement, all of its
rights and obligations under the Loan Documents to another Bank or a commercial banking institution
selected by the Borrower and (in the case of a commercial banking institution other than a Bank) reasonably
satisfactory to the Administrative Agent, in consideration for the payments set forth in such
Assignment Agreement, which payments shall, unless otherwise agreed by the assigning Bank, not be
less than the Outstanding Extensions of Credit with respect to such Bank, and payment by the
Borrower to such Bank of all other amounts which such Bank may be owed pursuant to this Agreement.




     SECTION 10.16. Officer’s Certificates. It is not intended that any certificate of any officer of the
Borrower delivered to the Administrative Agent or any Bank pursuant to this Agreement shall give
rise to any personal liability on the part of such officer.



     SECTION 10.17. USA Patriot Act. Each Bank and the Administrative Agent (for itself and not on behalf
of any Bank) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is
required to obtain, verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will allow such Bank or
the Administrative Agent, as applicable, to identify the Borrower in accordance with the Patriot
Act. The Borrower shall, and shall cause each of its Subsidiaries to, provide, to the extent
commercially reasonable, such information and take such actions as are reasonably requested by each
Bank and the Administrative Agent to maintain compliance with the Patriot Act.



69









 





          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.




	 	 	 	 	 
	 	CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

 	 
	 	By:  	/s/ Marc Kilbride
 	 
	 	 	Name:  	Marc Kilbride 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 



CEHC Credit Agreement — Signature Page





 









 





	 	 	 	 	 
	 	CITICORP NORTH AMERICA, INC., 

as Administrative Agent and as a Bank

 	 
	 	By:  	/s/ Maureen P. Maroney
 	 
	 	 	Name:  	Maureen P. Maroney 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	CITIGROUP GLOBAL MARKETS INC., 

as Co-Documentation Agent and as a Bank

 	 
	 	By:  	/s/ Maureen P. Maroney
 	 
	 	 	Name:  	Maureen P. Maroney 	 
	 	 	Title:  	Authorized Signatory 	 
	 



CEHC Credit Agreement — Signature Page





 









 





	 	 	 	 	 
	 	BANK OF AMERICA, N.A., 

as a Bank

 	 
	 	By:  	/s/ Richard L. Stein
 	 
	 	 	Name:  	Richard L. Stein 	 
	 	 	Title:  	Senior Vice President 	 
	 



CEHC Credit Agreement — Signature Page





 









 





	 	 	 	 	 
	 	DEUTSCHE BANK AG, NEW YORK BRANCH, 

as a Bank

 	 
	 	By:  	/s/ Ming K. Chu
 	 
	 	 	Name:  	Ming K. Chu 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	                                                     /s/ Heidi Sandquist
 	 
	 	 	Name:  	Heidi Sandquist 	 
	 	 	Title:  	Vice President 	 
	 



CEHC Credit Agreement — Signature Page





 









 





	 	 	 	 	 
	 	GOLDMAN SACHS BANK USA, 

as a Bank

 	 
	 	By:  	/s/ Mark Walton
 	 
	 	 	Name:  	Mark Walton 	 
	 	 	Title:  	Authorized Signatory 	 
	 



CEHC Credit Agreement — Signature Page





 









 





	 	 	 	 	 
	 	HSBC BANK USA, NATIONAL ASSOCIATION, 

as a Bank

 	 
	 	By:  	/s/ Mercedes Ahumada
 	 
	 	 	Name:  	Mercedes Ahumada 	 
	 	 	Title:  	Vice President 	 
	 



CEHC Credit Agreement — Signature Page





 









 





	 	 	 	 	 
	 	MORGAN STANLEY BANK, 

as a Bank

 	 
	 	By:  	/s/ Melissa James
 	 
	 	 	Name:  	Melissa James 	 
	 	 	Title:  	Authorized Signatory 	 
	 



CEHC Credit Agreement — Signature Page





 









 





	 	 	 	 	 
	 	ROYAL BANK OF CANADA, 

as a Bank

 	 
	 	By:  	/s/ Jay T. Sartain
 	 
	 	 	Name:  	Jay T. Sartain 	 
	 	 	Title:  	Authorized Signatory 	 
	 



CEHC Credit Agreement — Signature Page





 









 





	 	 	 	 	 
	 	SUNTRUST BANK, 

as a Bank

 	 
	 	By:  	/s/ Andrew Johnson
 	 
	 	 	Name:  	Andrew Johnson 	 
	 	 	Title:  	Director 	 
	 



CEHC Credit Agreement — Signature Page





 









 





	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA, 

as a Bank

 	 
	 	By:  	/s/ Thane Rattew
 	 
	 	 	Name:  	Thane Rattew 	 
	 	 	Title:  	Managing Director 	 
	 



CEHC Credit Agreement — Signature Page





 









 





	 	 	 	 	 
	 	THE NORTHERN TRUST COMPANY, 

as a Bank

 	 
	 	By:  	/s/ Keith L. Burson
 	 
	 	 	Name:  	Keith L. Burson 	 
	 	 	Title:  	Vice President 	 
	 



CEHC Credit Agreement — Signature Page





 









 





	 	 	 	 	 
	 	UBS LOAN FINANCE LLC, 

as a Bank

 	 
	 	By:  	/s/ Irja R. Otsa
 	 
	 	 	Name:  	Irja R. Otsa 	 
	 	 	Title:  	Associate Director Banking Products Services, US 
	 
	 	 	 
	 	By:  	                                                     /s/ Mary E. Evans
 	 
	 	 	Name:  	Mary E. Evans 	 
	 	 	Title:  	Associate Director Banking Products Services, US 
	 



CEHC Credit Agreement — Signature Page





 









 





	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, 

as a Bank

 	 
	 	By:  	/s/ Scott D. Bjelde
 	 
	 	 	Name:  	Scott D. Bjelde 	 
	 	 	Title:  	Senior Vice President 	 
	 





CEHC Credit Agreement — Signature Page