**Exhibit 10.33**

 

 

$1,500,000,000

 

CREDIT AGREEMENT

 

among

 

MIRANT NORTH AMERICA, LLC,as Borrower,

 

The Several Lenders from Timeto Time Parties Hereto,

 

JPMORGAN CHASE BANK, N.A.,as Administrative Agent,

 

and

 

DEUTSCHE BANK SECURITIES INC. andGOLDMAN SACHS CREDIT PARTNERS L.P.,

as Co-Syndication Agents

 

 

Dated as of January 3,2006

 

 

 

J.P. MORGAN SECURITIES INC.,DEUTSCHE BANK SECURITIES INC.and GOLDMAN SACHS CREDIT PARTNERS L.P.,as Joint Bookrunners

 

J.P. MORGAN SECURITIES INC. andDEUTSCHE BANK SECURITIES INC.,as Co-Lead Arrangers in respect of the Revolving Facility

 

J.P. MORGAN SECURITIES INC. andGOLDMAN SACHS CREDIT PARTNERS L.P.,as Co-Lead Arrangers in respect of the Term Facility

 

CREDIT SUISSE, LEHMANCOMMERCIAL PAPER INC. and THE ROYAL BANK OFSCOTLAND PLC, as Senior Managing Agents

 

CREDIT SUISSE and THE ROYALBANK OF SCOTLAND PLC,

as Co-Documentation Agents

 

----

 

$800,000,000 Revolving Facility$700,000,000 Term Facility

 

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TABLE OFCONTENTS

 
| ** **      | ** **                      | ** **                                                      | **Page** |
|-----------------|---------------------------------|-----------------------------------------------------------------|----------|
|            |                            |                                                            |     |
| SECTION 1. | DEFINITIONS                     | 6                                                               |
|            |                            |                                                            |     |
| 1.1.            |                            | Defined Terms                                                   | 6        |
| 1.2.            |                            | Other Definitional Provisions                                   | 30       |
|            |                            |                                                            |     |
| SECTION 2. | AMOUNT AND TERMS OF COMMITMENTS | 30                                                              |
|            |                            |                                                            |     |
| 2.1.            |                            | Term Commitments                                                | 30       |
| 2.2.            |                            | Procedure for Term Loan Borrowing                               | 30       |
| 2.3.            |                            | Repayment of Term Loans                                         | 31       |
| 2.4.            |                            | Revolving Commitments                                           | 31       |
| 2.5.            |                            | Procedure for Revolving Loan Borrowing                          | 31       |
| 2.6.            |                            | Swingline Commitment                                            | 32       |
| 2.7.            |                            | Procedure for Swingline Borrowing;  Refunding of SwinglineLoans | 32       |
| 2.8.            |                            | Commitment Fees, etc.                                           | 34       |
| 2.9.            |                            | Termination or Reduction of Revolving  Commitments              | 34       |
| 2.10.           |                            | Optional Prepayments                                            | 34       |
| 2.11.           |                            | Mandatory Prepayments and Commitment  Reductions                | 35       |
| 2.12.           |                            | Conversion and Continuation Options                             | 36       |
| 2.13.           |                            | Limitations on Eurodollar Tranches                              | 37       |
| 2.14.           |                            | Interest Rates and Payment Dates                                | 37       |
| 2.15.           |                            | Computation of Interest and Fees                                | 38       |
| 2.16.           |                            | Inability to Determine Interest Rate                            | 38       |
| 2.17.           |                            | Pro Rata Treatment and Payments                                 | 39       |
| 2.18.           |                            | Requirements of Law                                             | 40       |
| 2.19.           |                            | Taxes                                                           | 41       |
| 2.20.           |                            | Indemnity                                                       | 43       |
| 2.21.           |                            | Change of Lending Office                                        | 44       |
| 2.22.           |                            | Replacement of Lenders                                          | 44       |
|            |                            |                                                            |     |
| SECTION 3. | LETTERS OF CREDIT               | 44                                                              |
|            |                            |                                                            |     |
| 3.1.            |                            | Revolving L/C Commitment                                        | 44       |
| 3.2.            |                            | Procedure for Issuance of Revolving Letters  of Credit          | 45       |
| 3.3.            |                            | Revolving L/C Fees and Other Charges                            | 45       |
| 3.4.            |                            | Revolving L/C Participations                                    | 46       |
| 3.5.            |                            | Revolver L/C Reimbursement Obligation of  the Borrower          | 47       |
| 3.6.            |                            | Synthetic L/C Letters of Credit                                 | 47       |

 

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| 3.7.            |                           | Procedure for Issuance of Synthetic Letters  of Credit      | 48     |
|-----------------|--------------------------------|-------------------------------------------------------------|--------|
| 3.8.            |                           | Synthetic L/C Deposit Account                               | 48     |
| 3.9.            |                           | Synthetic L/C Deposit Fees and Other Charges                | 49     |
| 3.10.           |                           | Synthetic L/C Reimbursement Obligations                     | 50     |
| 3.11.           |                           | Obligations Absolute                                        | 50     |
| 3.12.           |                           | Letter of Credit Payments                                   | 50     |
| 3.13.           |                           | Applications                                                | 51     |
|            |                           |                                                        |   |
| SECTION 4. | REPRESENTATIONS AND WARRANTIES | 51                                                          |
|            |                           |                                                        |   |
| 4.1.            |                           | Organization; Power and Authority                           | 51     |
| 4.2.            |                           | Due Authorization                                           | 51     |
| 4.3.            |                           | Governmental Approval                                       | 51     |
| 4.4.            |                           | Binding and Enforceable                                     | 52     |
| 4.5.            |                           | No Violation                                                | 52     |
| 4.6.            |                           | No Default                                                  | 52     |
| 4.7.            |                           | Litigation                                                  | 52     |
| 4.8.            |                           | Financial Condition                                         | 52     |
| 4.9.            |                           | Material Adverse Change                                     | 53     |
| 4.10.           |                           | Investment Company Act; Public Utility  Holding Company Act | 53     |
| 4.11.           |                           | Environmental Matters                                       | 53     |
| 4.12.           |                           | Accuracy of Information, etc                                | 53     |
| 4.13.           |                           | Employee Benefit Plans                                      | 53     |
| 4.14.           |                           | Tax Returns and Payments                                    | 53     |
| 4.15.           |                           | Security Documents                                          | 54     |
| 4.16.           |                           | Ownership of Property                                       | 54     |
| 4.17.           |                           | Labor Matters                                               | 54     |
| 4.18.           |                           | Subsidiaries                                                | 54     |
|            |                           |                                                        |   |
| SECTION 5. | CONDITIONS PRECEDENT           | 55                                                          |
|            |                           |                                                        |   |
| 5.1.            |                           | Conditions to Initial Extension of Credit                   | 55     |
| 5.2.            |                           | Conditions to Each Extension of Credit                      | 58     |
|            |                           |                                                        |   |
| SECTION 6. | AFFIRMATIVE COVENANTS          | 58                                                          |
|            |                           |                                                        |   |
| 6.1.            |                           | Compliance with Law; Maintenance of  Existence              | 58     |
| 6.2.            |                           | Financial Statements                                        | 58     |
| 6.3.            |                           | Certificates; Other Information                             | 59     |
| 6.4.            |                           | Notices                                                     | 60     |
| 6.5.            |                           | Inspection                                                  | 61     |

 

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| 6.6.             |                | Maintenance of Property; Insurance              | 61     |
|------------------|---------------------|-------------------------------------------------|--------|
| 6.7.             |                | Subsequent Acquired Property; New  Subsidiaries | 61     |
| 6.8.             |                | Collateral Information                          | 63     |
| 6.9.             |                | Further Assurances                              | 63     |
| 6.10.            |                | Use of Proceeds                                 | 63     |
|             |                |                                            |   |
| SECTION 7.  | FINANCIAL COVENANTS | 64                                              |
|             |                |                                            |   |
| 7.1.             |                | Interest Coverage Ratio                         | 64     |
| 7.2.             |                | Leverage Ratio                                  | 64     |
| 7.3.             |                | Capital Expenditures                            | 64     |
|             |                |                                            |   |
| SECTION 8.  | NEGATIVE COVENANTS  | 65                                              |
|             |                |                                            |   |
| 8.1.             |                | Debt                                            | 65     |
| 8.2.             |                | Restricted Payments                             | 65     |
| 8.3.             |                | Liens                                           | 66     |
| 8.4.             |                | Mergers                                         | 68     |
| 8.5.             |                | Asset Sales                                     | 68     |
| 8.6.             |                | Investments                                     | 69     |
| 8.7.             |                | Transactions with Affiliates                    | 70     |
| 8.8.             |                | Sales and Leasebacks                            | 71     |
| 8.9.             |                | Changes in Fiscal Periods                       | 71     |
|             |                |                                            |   |
| SECTION 9.  | EVENTS OF DEFAULT   | 71                                              |
|             |                |                                            |   |
| SECTION 10. | THE AGENTS          | 74                                              |
|             |                |                                            |   |
| 10.1.            |                | Appointment                                     | 74     |
| 10.2.            |                | Delegation of Duties                            | 74     |
| 10.3.            |                | Exculpatory Provisions                          | 74     |
| 10.4.            |                | Reliance by Administrative Agent                | 75     |
| 10.5.            |                | Notice of Default                               | 75     |
| 10.6.            |                | Non-Reliance on Agents and Other Lenders        | 75     |
| 10.7.            |                | Indemnification                                 | 76     |
| 10.8.            |                | Agent in Its Individual Capacity                | 76     |
| 10.9.            |                | Successor Administrative Agent                  | 76     |
| 10.10.           |                | Co- Syndication Agents                          | 77     |
| 10.11.           |                | Intercreditor Agreements                        | 77     |

 

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| SECTION 11. | MISCELLANEOUS | 77                                                      |
|------------------|---------------|---------------------------------------------------------|
|             |          |                                                    |   |
| 11.1.            |          | Amendments and Waivers                                  | 77 |
| 11.2.            |          | Notices                                                 | 79 |
| 11.3.            |          | No Waiver; Cumulative Remedies                          | 81 |
| 11.4.            |          | Survival of Representations and Warranties              | 81 |
| 11.5.            |          | Payment of Expenses and Taxes                           | 81 |
| 11.6.            |          | Successors and Assigns; Participations and  Assignments | 83 |
| 11.7.            |          | Adjustments; Set-off                                    | 86 |
| 11.8.            |          | Counterparts                                            | 87 |
| 11.9.            |          | Severability                                            | 87 |
| 11.10.           |          | Integration                                             | 87 |
| 11.11.           |          | **GOVERNING LAW**                                       | 87 |
| 11.12.           |          | Submission To Jurisdiction; Waivers                     | 87 |
| 11.13.           |          | Acknowledgements                                        | 88 |
| 11.14.           |          | Releases of Guarantees and Liens                        | 88 |
| 11.15.           |          | Confidentiality                                         | 89 |
| 11.16.           |          | **WAIVERS OF JURY TRIAL**                               | 89 |
| 11.17.           |          | Delivery of Addenda                                     | 89 |

 

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| SCHEDULES: |                                                           |
|------------|----------------------------------------------------------------|
|       |                                                           |   |
| 1.1A       | Commitments                                                    |   |
| 1.1B       | Mortgaged Property                                             |   |
| 1.1C       | Existing Debt                                                  |   |
| 4.15(a)    | UCC Filing Jurisdictions                                       |   |
| 4.15(b)    | Mortgage Filing Jurisdictions                                  |   |
| 4.18       | Subsidiaries                                                   |   |
| 8.1        | Subordinated Indebtedness                                      |   |
| 8.3(l)     | Existing Liens                                                 |   |
| 8.6(l)     | Existing Investments                                           |   |
| 8.7        | MET Agreements                                                 |   |
|       |                                                           |   |
| EXHIBITS:  |                                                           |
|       |                                                           |   |
| A          | Form of Guarantee and Collateral Agreement                |   |
| B          | Form of Compliance Certificate                            |   |
| C          | Form of Closing Certificate                               |   |
| D          | Form of Mortgage                                          |   |
| E          | Form of Assignment and Assumption                         |   |
| F          | Form of Legal Opinion of White & Case LLP        |   |
| G          | Form of Exemption Certificate                             |   |
| H          | Form of Addendum                                          |   |
| I          | Form of First Lien/Second Lien Intercreditor Agreement    |   |
| J-1        | Form of Letter of Credit Application of JPMCB             |   |
| J-2        | Form of Letter of Credit Application of DBTCA             |   |
| K          | Form of Permitted Pari Passu Debt Intercreditor Agreement |   |

 

 

v

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CREDIT AGREEMENT (this “Agreement”),dated as of January 3, 2006, among MIRANT NORTH AMERICA, LLC, a Delawarelimited liability company (the “Borrower”), the several banks and otherfinancial institutions or entities from time to time parties to this Agreement(the “Lenders”), DEUTSCHE BANK SECURITIES INC. and GOLDMAN SACHS CREDITPARTNERS L.P., as co-syndication agents (in such capacity, the “Co-SyndicationAgents”), and JPMORGAN CHASE BANK, N.A. (“JPMCB”), as administrativeagent.

 

RECITALS

 

WHEREAS, on July 14, 2003, MirantCorporation and certain of its Domestic Subsidiaries and Affiliates (each asdefined below) filed voluntary petitions for relief (the “Chapter 11 Cases”)under Chapter 11 of Title 11 of the United States Code (as amended, the “BankruptcyCode”) with the United States Bankruptcy Court for the Northern District ofTexas, Fort Worth Division (the “Bankruptcy Court”), and continued inpossession of their property and in the management of their businesses pursuantto Bankruptcy Code Sections 1107 and 1108;

 

WHEREAS, on December 9, 2005, theBankruptcy Court entered an order (the “Confirmation Order”) confirmingthe Plan of Reorganization (as defined below); and

 

WHEREAS, in connection with confirmation andimplementation of the Plan of Reorganization, the Borrower has requested theLenders to make loans and other extensions of credit available to it to enableit to finance a part of the Plan of Reorganization and pay related fees andexpenses, and the Lenders have agreed, subject to the terms and conditionshereof, to enter into this Agreement.

 

Accordingly, the parties hereto hereby agreeas follows:

 

# SECTION 1.  DEFINITIONS

#  

1.1.                              DefinedTerms.  As used in this Agreement,the terms listed in this Section 1.1 shall have the respective meaningsset forth in this Section 1.1.

 

“ABR”: for any day, a rate per annum (rounded upwards, if necessary, to thenext 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect onsuch day and (b) the Federal Funds Effective Rate in effect on such dayplus 1⁄2 of 1%. For purposes hereof, “Prime Rate” shall mean the rate ofinterest per annum publicly announced from time to time by JPMCB, as its primerate in effect at its principal office in New York City (the Prime Rate notbeing intended to be the lowest rate of interest charged by JPMCB, inconnection with extensions of credit to debtors). Any change in the ABR due toa change in the Prime Rate or the Federal Funds Effective Rate shall beeffective as of the opening of business on the effective day of such change inthe Prime Rate or the Federal Funds Effective Rate, respectively.

 

“ABR Loans”:  Loans the rate of interest applicable towhich is based upon the ABR.

 

“Addendum”:  an instrument, substantially in the form of Exhibit H,by which a Lender becomes a party to this Agreement as of the Closing Date.

 

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“Adjustment Date”:  as defined in the Pricing Grid.

 

“Administrative Agent”:  JPMCB, together with its affiliates, as thearranger of the Commitments and as the administrative agent for the Lendersunder this Agreement and the other Loan Documents, together with any of itssuccessors.

 

“Affiliate”:  as to any Person (other than an individual),any other Person (other than an individual) that, directly or indirectlythrough one or more intermediaries, is in Control of, is Controlled by, or isunder common Control with, such Person.

 

“Affiliate Subordinated Debt”:  Subordinated Debt of the Borrower which isowed to or held by an Affiliate of the Borrower other than a Subsidiary of theBorrower.

 

“Agents”:  the collective reference to theCo-Syndication Agents and the Administrative Agent.

 

“Aggregate Exposure”:  with respect to any Lender at any time, anamount equal to (a) until the Closing Date, the aggregate amount of suchLender’s Commitments at such time and (b) thereafter, the sum of (i) theaggregate then unpaid principal amount of such Lender’s Term Loans and (ii) theamount of such Lender’s Revolving Commitment then in effect or, if theRevolving Commitments have been terminated, the amount of such Lender’sRevolving Extensions of Credit then outstanding.

 

“Aggregate Exposure Percentage”:  with respect to any Lender at any time, theratio (expressed as a percentage) of such Lender’s Aggregate Exposure at suchtime to the Aggregate Exposure of all Lenders at such time.

 

“Agreement”:  as defined in the preamble hereto.

 

“Applicable Margin”:  for each Type of Loan, the rate per annum setforth under the relevant column heading below:

 
| ** **                           | ** ** | **ABR Loans** | ** ** | **Eurodollar Loans** | ** ** |
|--------------------------------------|------------|--------------------|------------|---------------------------|------------|
| Revolving  Loans and Swingline Loans |       | 1.25               | %          | 2.25                      | %          |
| Term Loans                           |       | 0.75               | %          | 1.75                      | %          |

 

provided, that onand after the first Adjustment Date occurring after the completion of one fullfiscal quarter of the Borrower after the Closing Date, the Applicable Marginwith respect to Revolving Loans and Swingline Loans will be determined pursuantto the Pricing Grid.

 

“Application”:  an application in the form attached hereto asExhibit J-1 with respect to JPMCB, in the form attached hereto as Exhibit J-2with respect to DBTCA or, with respect to any other Issuing Lender, in suchform as such Issuing Lender may specify from time to time, requesting suchIssuing Lender to open a Letter of Credit.

 

“Approved Fund”:  as defined in Section 11.6(b).

 

7

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“Arrangers”:  the collective reference to J.P. MorganSecurities Inc., Deutsche Bank Securities Inc. and Goldman Sachs CreditPartners L.P.

 

“Assets”:  with respect to any Person, all or any partof its business, property and assets, both tangible and intangible, whereversituated.

 

“Asset Sale”: any Disposition orseries of related Dispositions other than any Excluded Asset Sale.

 

“Assignee”:  as defined in Section 11.6(b).

 

“Assignment and Assumption”:  an Assignment and Assumption, substantiallyin the form of Exhibit E.

 

“Available Revolving Commitment”:  as to any Revolving Lender at any time, anamount equal to the excess, if any, of (a) such Lender’s RevolvingCommitment then in effect over (b) such Lender’s RevolvingExtensions of Credit then outstanding; provided, that in calculating anyLender’s Revolving Extensions of Credit for the purpose of determining suchLender’s Available Revolving Commitment pursuant to Section 2.8(a), theaggregate principal amount of Swingline Loans then outstanding shall be deemedto be zero.

 

“Bankruptcy Code”: as defined in therecitals hereto.

 

“Bankruptcy Court”: as defined in therecitals hereto.

 

“Benefitted Lender”:  as defined in Section 11.7(a).

 

“Board”:  the Board of Governors of the Federal ReserveSystem of the United States (or any successor).

 

“Borrower”:  as defined in the preamble hereto.

 

“Borrowing Date”:  any Business Day specified by the Borrower asa date on which the Borrower requests the relevant Lenders to make Loanshereunder.

 

“Business Day”:  a day other than a Saturday, Sunday or otherday on which commercial banks in New York City are authorized or required bylaw to close, provided, that with respect to notices and determinationsin connection with, and payments of principal and interest on, EurodollarLoans, such day is also a day for trading by and between banks in Dollardeposits in the interbank eurodollar market.

 

“Capital Expenditures”:  for any period, with respect to any Person,the aggregate of all expenditures by such Person and its Subsidiaries for theacquisition or leasing (pursuant to a capital lease) of fixed or capital assetsor additions to equipment (including replacements, repairs and improvementsduring such period) that should be capitalized under GAAP on a consolidatedbalance sheet of such Person and its Subsidiaries. For purposes of thisdefinition, the purchase price of equipment that is purchased simultaneouslywith the trade-in of existing equipment or with insurance proceeds shall beincluded in Capital Expenditures only to the

 

8

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extent of the gross amount of such purchase price less the creditgranted by the seller of such equipment for the equipment being traded in atsuch time or the amount of such proceeds, as the case may be.

 

“Capital Stock”:  any and all shares, interests, participationsor other equivalents (however designated) of capital stock of a corporation,any and all equivalent ownership interests in a Person (other than acorporation) and any and all warrants, rights or options to purchase any of theforegoing.

 

“Cash Equivalents”:  (a) marketable direct obligations issuedby, or unconditionally guaranteed by, the United States Government or issued byany agency thereof and backed by the full faith and credit of the UnitedStates, in each case maturing within one year from the date of acquisition; (b) certificatesof deposit, time deposits, eurodollar time deposits or overnight bank depositshaving maturities of six months or less from the date of acquisition issued byany Lender or by any commercial bank organized under the laws of the UnitedStates or any state thereof having combined capital and surplus of not lessthan $500,000,000; (c) commercial paper of an issuer rated at least A-1 byS&P or P-1 by Moody’s, or carrying an equivalent rating by a nationallyrecognized rating agency, if both of the two named rating agencies ceasepublishing ratings of commercial paper issuers generally, and maturing withinsix months from the date of acquisition; (d) repurchase obligations of anyLender or of any commercial bank satisfying the requirements of clause (b) ofthis definition, having a term of not more than 30 days, with respect tosecurities issued or fully guaranteed or insured by the United Statesgovernment; (e) securities with maturities of one year or less from thedate of acquisition issued or fully guaranteed by any state, commonwealth orterritory of the United States, by any political subdivision or taxing authorityof any such state, commonwealth or territory or by any foreign government, thesecurities of which state, commonwealth, territory, political subdivision,taxing authority or foreign government (as the case may be) are rated at leastA by S&P or A by Moody’s; (f) securities with maturities of six monthsor less from the date of acquisition backed by standby letters of credit issuedby any Lender or any commercial bank satisfying the requirements of clause (b) ofthis definition; (g) money market mutual or similar funds that investexclusively in assets satisfying the requirements of clauses (a) through (f) ofthis definition; or (h) money market funds that (i) (x) comply withthe criteria set forth in SEC Rule 2a-7 under the Investment Company Actof 1940, as amended and are rated A by S&P and A by Moody’s or (y) arerated AAA by S&P and Aaa by Moody’s and (ii) have portfolio assets ofat least $2,500,000,000.

 

“Chapter 11 Cases”:  as defined in the recitals hereto.

 

“Closing Date”:  the date on which the conditions precedentset forth in Section 5.1 shall have been satisfied or waived, which dateis January 3, 2006.

 

“Co-Syndication Agents”:  as defined in the preamble hereto.

 

“Code”:  the Internal Revenue Code of 1986, as amendedfrom time to time, and the regulations promulgated thereunder.

 

9

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“Collateral”:  all property of the Loan Parties, now ownedor hereafter acquired, upon which a Lien is purported to be created by anySecurity Document.

 

“Commitment”:  as to any Lender, the sum of the TermCommitment and the Revolving Commitment of such Lender.

 

“Commitment Fee Rate”:  0.375% per annum; provided, that onand after the first Adjustment Date occurring after the completion of one fullfiscal quarter of the Borrower after the Closing Date, the Commitment Fee Ratewill be determined pursuant to the Pricing Grid.

 

“Common Stock”: with respect to anyPerson, any and all shares, interests or other participations in, and otherequivalents (however designated and whether voting or non-voting) of suchPerson’s common stock whether or not outstanding on the Closing Date, includingall series and classes of such common stock.

 

“Compliance Certificate”:  a certificate duly executed by a ResponsibleOfficer substantially in the form of Exhibit B.

 

“Conduit Lender”:  any special purpose corporation organized andadministered by any Lender for the purpose of making Loans otherwise requiredto be made by such Lender and designated by such Lender in a writteninstrument; provided, that the designation by any Lender of a ConduitLender shall not relieve the designating Lender of any of its obligations tofund a Loan under this Agreement if, for any reason, its Conduit Lender failsto fund any such Loan, and the designating Lender (and not the Conduit Lender)shall have the sole right and responsibility to deliver all consents andwaivers required or requested under this Agreement with respect to its ConduitLender, and provided, further, that no Conduit Lender shall (a) beentitled to receive any greater amount pursuant to Section 2.18, 2.19,2.20 or 11.5 than the designating Lender would have been entitled to receive inrespect of the extensions of credit made by such Conduit Lender or (b) bedeemed to have any Commitment.

 

“Confidential Information Memorandum”:  the Confidential Information Memorandum datedDecember 2005 and furnished to certain Lenders.

 

“Confirmation Order”:  as defined in the recitals hereto.

 

“Consolidated Capitalization”: the sumof Consolidated Total Debt and Consolidated Net Worth.

 

“Consolidated Net Worth”:  at any date, all amounts that would, inconformity with GAAP, be included on a consolidated balance sheet of theBorrower and its Subsidiaries in the Capital Stock and other equity accounts(including, without limitation, retained earnings and paid-in capital butexcluding accumulated other comprehensive income) at such date.

 

“Consolidated Total Debt”:  at any date, the aggregate principal amountof all Debt of the Borrower and its Subsidiaries at such date, determined on aconsolidated basis in accordance with GAAP.

 

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“Contractual Obligation”:  as to any Person, any provision of anysecurity issued by such Person or of any agreement, instrument or otherundertaking to which such Person is a party or by which it or any of itsproperty is bound.

 

“Control”: has the meaning set forthin Rule 12b-2 under the Exchange Act.

 

“Corporate Interest”: for any period,the aggregate of interest expense accrued during such period by the Borrowerand its consolidated Subsidiaries on Debt less the sum of (a) the amountof interest, if any, included in such interest expense which was capitalized inaccordance with GAAP, (b) an amount equal to the percentage of the interestexpense of any Subsidiary corresponding to the percentage of the EBITDA of suchSubsidiary not taken into account in determining EBITDA for such periodpursuant to the proviso to the first sentence of the definition thereof and (c) interestincome accrued on the Synthetic L/C Deposit, subject to the last sentence ofthe definition of EBITDA.

 

“DBTCA”:  Deutsche Bank Trust Company Americas.

 

“Debt”:  for any Person, any obligations of suchPerson for or in respect of (a) moneys borrowed or raised (whether or notfor cash) by whatever means including acceptances, deposits, discounting,reimbursement obligations for drawn letters of credit, factoring (other than ona non-recourse basis), Finance Leases, hire purchase, conditional sale or otherform of title retention agreement, sale-and-lease back, sale and repurchase andany other form of financing which is recognized in such Person’s financialstatements as being in the nature of a borrowing (excluding for the avoidanceof doubt, asset retirement obligations, share capital, share premium accountand any capital prepayment reserve), (b) the deferred purchase price ofAssets or services (other than goods and services obtained on normal commercialterms in the ordinary course of business or operations), and (c) allGuarantee Obligations of such Person in respect of obligations of the kindreferred to in clauses (a) and (b) above. Notwithstanding theforegoing, (x) any of the obligations identified in the immediately foregoingsentence owed by any Subsidiary of the Borrower to the Borrower or to any otherSubsidiary of the Borrower shall not constitute “Debt”, (y) AffiliateSubordinated Debt shall not constitute “Debt” and (z) notwithstanding thatafter the Closing Date the obligations under the Facility Lease Documents shallbe required to be accounted for as a Finance Lease (other than as a result ofany amendment to the Facility Lease Documents), such obligations shall notconstitute “Debt” for purposes of this Agreement.

 

“Default”:  any of the events specified in Section 9,whether or not any requirement for the giving of notice, the lapse of time, orboth, has been satisfied.

 

“Designated Party”:  has the meaning set forth in Section 9(g).

 

“Disposition”:  (a) with respect to any Assets, anysale, lease conveyance or other disposition thereof and (b) the sale orissuance of Capital Stock in any of the Restricted Subsidiaries. The terms “Dispose”and “Disposed of” shall have correlative meanings.

 

“Disqualified Stock”: means, withrespect to any Person, any Capital Stock of such Person which by its terms (orby the terms of any security into which it is convertible or for which it isexchangeable) or upon the happening of any event:

 

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(1)                                  maturesor is mandatorily redeemable pursuant to a sinking fund obligation orotherwise;

 

(2)                                  isconvertible or exchangeable for Debt or Disqualified Stock (excluding CapitalStock which is convertible or exchangeable solely at the option of the Companyor a Restricted Subsidiary); or

 

(3)                                  isredeemable at the option of the holder of the Capital Stock in whole or inpart,

 

in each case on or prior to the date that is 91 days after the earlierof (x) the date on which there are no Loans outstanding and the Commitmentshave been terminated and (y) the seventh anniversary of the Closing Date, providedthat only the portion of Capital Stock which so matures or is mandatorilyredeemable, is so convertible or exchangeable or is so redeemable at the optionof the holder thereof prior to such date will be deemed to be DisqualifiedStock; provided*,*further**that any Capital Stock that wouldconstitute Disqualified Stock solely because the holders thereof have the rightto require the Company to repurchase such Capital Stock upon the occurrence ofa change of control or asset sale (each defined in a substantially identicalmanner to the corresponding definitions herein) shall not constituteDisqualified Stock if the terms of such Capital Stock (and all such securitiesinto which it is convertible or for which it is ratable or exchangeable)  provide that the Company may not repurchaseor redeem any such Capital Stock (and all such securities into which it isconvertible or for which it is ratable or exchangeable) pursuant to suchprovision prior to compliance by the Borrower with Section 7, Section 8.2and Section 8.5.

 

“Dollars” and “$”:  dollars in lawful currency of the UnitedStates.

 

“Domestic Subsidiary”:  any Subsidiary of the Borrower organizedunder the laws of any jurisdiction within the United States.

 

“EBITDA”:  for any period, with reference to theBorrower’s consolidated financial statements (a) income from continuingoperations before income taxes and minority interest; plus (b) depreciationand amortization; plus (c) Corporate Interest; provided, howeverthat in determining EBITDA for the purposes of the Interest Coverage Ratiounder Sections 7.1, 7.4(b) and 8.2 and the definition of “Free Cash Flow”only,  the amounts referred to in (a), (b) and(c) above for a consolidated Subsidiary of the Borrower will not beincluded to the extent that such Subsidiary is prohibited from makingdistributions or dividends as of the date of determination (unless suchprohibition arises solely from the requirement under the Facility Lease Documentsthat MIRMA and its Subsidiaries deliver financial statements for the mostrecently completed fiscal year or fiscal quarter, as the case may be, and thedate of determination is less than 90 or 60 days, as the case may be, from theend of such fiscal year or fiscal quarter). “EBITDA” shall not include theeffect of (i) gains or losses on sales or dispositions of Assets; (ii) non-recurringitems (including, for the avoidance of doubt, restructuring expenses) or (iii) non-cashexpenses and non-cash gains or losses, including as a result of Swap Agreementsbeing marked to market and the effects of “fresh start” accounting under SOP90-7, but shall include cash payments and receipts from and in respect ofsettlement of Swap Agreements. In addition, if, but for clause (z) of the lastsentence in the definition of “Debt”, the obligations under the Facility LeaseDocuments would otherwise constitute Debt hereunder, for purposes of

 

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calculating EBITDA, the amounts paid under the Facility Lease Documentsshall be treated as expenses for purposes of determining income from continuingoperations, and no portion of such amounts shall be treated as CorporateInterest or principal amortization, such that, to the extent possible, thetreatment of the obligations under the Facility Lease Documents as suchobligations are treated on the date hereof is preserved.

 

For the purposes of calculating EBITDA forany period of four consecutive fiscal quarters (each, a “Reference Period”)pursuant to any determination of the Leverage Ratio, (i) if at any timeduring such Reference Period the Borrower or any Subsidiary shall have made anyMaterial Disposition, the EBITDA for such Reference Period shall be reduced byan amount equal to the EBITDA (if positive) attributable to the property thatis the subject of such Material Disposition for such Reference Period orincreased by an amount equal to the EBITDA (if negative) attributable theretofor such Reference Period and (ii) if during such Reference Period theBorrower or any Subsidiary shall have made a Material Acquisition, EBITDA forsuch Reference Period shall be calculated after giving proformaeffect thereto as if such Material Acquisition occurred on the first day ofsuch Reference Period. As used in this definition, “Material Acquisition” meansany acquisition of property or series of related acquisitions of property that (a) constitutesassets comprising all or substantially all of an operating unit of a businessor constitutes all or substantially all of the common stock of a Person and (b) involvesthe payment of consideration by the Borrower and its Subsidiaries in excess of$20,000,000; and “Material Disposition” means any Disposition of property orseries of related Dispositions of property that yields gross proceeds to theBorrower or any of its Subsidiaries in excess of $20,000,000.

 

“Environmental Capital Expenditures”:capital expenditures required by, or reasonably related to the Borrower’s orits Subsidiaries’ compliance with, Environmental Laws.

 

“Environmental Laws”:  any and all foreign, Federal, state, local ormunicipal laws, rules, orders, regulations, statutes, ordinances, codes,decrees, requirements of any Governmental Authority or other Requirements ofLaw (including common law) regulating, relating to or imposing liability orstandards of conduct concerning protection of human health or the environment,as now or may at any time hereafter be in effect.

 

“ERISA”:  the Employee Retirement Income Security Actof 1974, as amended from time to time, and the regulations promulgatedthereunder.

 

“ERISA Affiliate”:  all members of a group of corporations andall members of a group of trades or businesses (whether or not incorporated)under common control which, together with the Borrower, are treated as a singleemployer under Section 414(b) or (c) of the Code.

 

“ERISA Event”:  any of the following events: (i) theappointment of a trustee to administer or terminate any Plan, (ii) thetermination of a Plan, (iii) the existence of any “accumulated fundingdeficiency” (as defined in Section 302 of ERISA) with respect to a Plan, (iv) theimposition of a Lien under the Code or ERISA on the assets of the Borrower onaccount of any Plan, (v) the occurrence of a reportable event described inSection 4043(c) of ERISA (other than those events as to which the30-day notice period is waived) with respect to a Plan, or

 

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(vi) the incurrence by the Borrower of any liability in connectionwith a withdrawal from, or the insolvency or reorganization of, a multiemployerpension plan.

 

“Eurocurrency Reserve Requirements”:  for any day as applied to a Eurodollar Loan,the aggregate (without duplication) of the maximum rates (expressed as a decimalfraction) of reserve requirements in effect on such day (including basic,supplemental, marginal and emergency reserves) under any regulations of theBoard or other Governmental Authority having jurisdiction with respect theretodealing with reserve requirements prescribed for eurocurrency funding(currently referred to as “Eurocurrency Liabilities” in Regulation D of theBoard) maintained by a member bank of the Federal Reserve System.

 

“Eurodollar Rate”:  with respect to each day during each InterestPeriod pertaining to a Eurodollar Loan, the rate per annum determined on thebasis of the rate for deposits in Dollars for a period equal to such InterestPeriod commencing on the first day of such Interest Period appearing on Page 3750of the Telerate screen as of 11:00 A.M., London time, two Business Daysprior to the beginning of such Interest Period. In the event that such ratedoes not appear on Page 3750 of the Telerate screen (or otherwise on suchscreen), the “Eurodollar Rate” shall be determined by reference to suchother comparable publicly available service for displaying eurodollar rates asmay be selected by the Administrative Agent or, in the absence of suchavailability, by reference to the rate at which the Administrative Agent isoffered Dollar deposits at or about 11:00 A.M., New York City time, twoBusiness Days prior to the beginning of such Interest Period in the interbankeurodollar market where its eurodollar and foreign currency and exchangeoperations are then being conducted for delivery on the first day of suchInterest Period for the number of days comprised therein.

 

“Eurodollar Loans”:  Loans the rate of interest applicable towhich is based upon the Eurodollar Rate.

 

“Eurodollar Tranche”:  the collective reference to Eurodollar Loansunder a particular Facility the then current Interest Periods with respect toall of which begin on the same date and end on the same later date (whether ornot such Loans shall originally have been made on the same day).

 

“Event of Default”:  any of the events specified in Section 9,provided that any requirement for the giving of notice, the lapse oftime, or both, has been satisfied.

 

“Exchange Act”:  the Securities Exchange Act of 1934, asamended from time to time.

 

“Excluded Asset Sale”:  each of the following transactions:

 

(i)                                     theDisposition of obsolete, uneconomic or worn out property, or property which inthe good faith judgment of the Borrower is no longer useful in its business, ineach case, in the ordinary course of business;

 

(ii)                                  theDisposition of inventory in the ordinary course of business;

 

(iii)                               Dispositionsto the Borrower or any Subsidiary Guarantor;

 

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(iv)                              Dispositionsof Cash Equivalents or other short-term investments;

 

(v)                                 theDisposition by the Borrower or any Subsidiary of power, capacity, fuel andother products or services, in each case in the ordinary course of business (itbeing understood that a Disposition of a quantity of power, capacity or fuelthat is material to the Borrower or such Subsidiary, as the case may be, shallnot alone cause such Disposition to be not in the ordinary course of business);

 

(vi)                              salesby the Borrower or any Subsidiary of emission credits in the ordinary course ofbusiness (it being understood that a Disposition of a quantity of emissionscredits that is material to the Borrower or such Subsidiary, as the case maybe, shall not alone cause such Disposition to be not in the ordinary course ofbusiness);

 

(vii)                           anyDisposition of Assets or series of related Dispositions of Assets having avalue not in excess of $10,000,000;

 

(viii)                        RestrictedPayments permitted by the Section 8.2;

 

(ix)                                Dispositionof Assets in connection with a foreclosure, transfer or deed in lieu offoreclosure or other exercise of remedial action;

 

(x)                                   Compromisesand settlements of claims against third-parties and, in an amount not to exceed$10,000,000, Dispositions of Assets in connection with the settlement of claimsand litigation;

 

(xi)                                Dispositionsmade pursuant to the Plan of Reorganization; and

 

(xii)                             Grantsby the Borrower or any of its Subsidiaries of licenses, sublicenses, leases orsubleases or easements to other Persons not materially interfering with theconduct by the Borrower or such Subsidiary of its business on or at theproperty that is the subject of such license, sublicense, lease or sublease oreasement.

 

“Excluded Foreign Subsidiary”:  any Foreign Subsidiary in respect of whicheither (a) the pledge of all of the Capital Stock of such Subsidiary asCollateral or (b) the guaranteeing by such Subsidiary of the Obligations,would, in the good faith judgment of the Borrower, result in adverse taxconsequences to the Borrower.

 

“Facility”:  each of (a) the Term Commitments and theTerm Loans made thereunder (the “Term Facility”) and (b) theRevolving Commitments and the extensions of credit made thereunder (the “RevolvingFacility”).

 

“Facility Lease Documents”:  the eleven Facility Lease Agreements, dated December 19,2000, the related Participation Agreements and all other agreements enteredinto in connection therewith and related thereto, in each case as amended,modified, or supplemented from time to time.

 

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“FCF Percentage”:  50%; provided that, with respect toeach fiscal year of the Borrower, the FCF Percentage shall be reduced to 25% ifthe Leverage Ratio as of the last day of such fiscal year is not greater than2.0 to 1.0.

 

“Federal Funds Effective Rate”:  for any day, the weighted average of therates on overnight federal funds transactions with members of the FederalReserve System arranged by federal funds brokers, as published on the nextsucceeding Business Day by the Federal Reserve Bank of New York, or, ifsuch rate is not so published for any day that is a Business Day, the averageof the quotations for the day of such transactions received by JPMCB from threefederal funds brokers of recognized standing selected by it.

 

“Fee Payment Date”:  (a) the third Business Day following thelast day of each March, June, September and December and (b) thelast day of the Revolving Commitment Period.

 

“Finance Leases”:  as to any Person, the obligations of suchPerson to pay rent or other amounts under any lease of (or other arrangementconveying the right to use) real or personal property, or a combinationthereof, which obligations are required to be classified and accounted for ascapital leases on a balance sheet of such Person under GAAP and, for thepurposes of this Agreement, the amount of such obligations at any time shall bethe capitalized amount thereof at such time determined in accordance with GAAP.

 

“Foreign Subsidiary”:  any Subsidiary of the Borrower that is not aDomestic Subsidiary.

 

“Free Cash Flow”:  for any fiscal period of the Borrower, withoutduplication, (a) EBITDA for such period minus**(b) Corporate Interest for suchperiod minus (c) the aggregate amount of any cash payments made inrespect of taxes during such period by the Borrower or any of its consolidatedSubsidiaries net of cash tax refunds for such period minus**(d) the aggregate amount of allscheduled principal payments of Debt, if any, of the Borrower and itsconsolidated Subsidiaries made during such period minus (e) CapitalExpenditures made by the Borrower and its consolidated Subsidiaries for suchperiod (other than Capital Expenditures made with (w) Net Cash Proceeds ofAsset Sales, (x) Net Cash Proceeds of Recovery Events, (y) amounts reserved ina prior period for Capital Expenditures (to the extent deducted from Free CashFlow in such period in accordance with clause (f) of this definition) and(z) the proceeds of the incurrence of Permitted Debt) minus (f) amountsreserved by the Borrower and its consolidated Subsidiaries during such periodfor Capital Expenditures to be made by the Borrower and its consolidatedSubsidiaries in any subsequent period plus (g) amounts received bythe Borrower or its consolidated Subsidiaries during such period with respectto equity contributions made by an Affiliate of the Borrower or AffiliateSubordinated Debt plus (h) amounts received by the Borrower or itsconsolidated Subsidiaries during such period pursuant to the MAI Series APreferred Shares plus**(i) theNet Cash Proceeds of Asset Sales and Recovery Events (to the extent notreflected in clauses (e) and (f) above or otherwise required to beapplied to the prepayment of the Loans pursuant to Section 2.11); providedthat, in the case of any consolidated Subsidiary of the Borrower whosecontribution to EBITDA is reduced in accordance with the proviso to the firstsentence of the definition of “EBITDA”, the amounts deducted from Free CashFlow in accordance with clauses (c), (d), (e) and (f) above for such

 

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Subsidiary shall, in each case, be reduced by an amount equal to thepercentage of such deduction corresponding to the percentage of the EBITDA ofsuch Subsidiary not taken into account in determining EBITDA for such period.

 

“Free Cash Flow Application Date”:  as defined in Section 2.11(b).

 

“FSA” means (a) an arms-length,executed, valid and binding agreement (including, without limitation, a tollingagreement) that is then in full force and effect and not in default in anymaterial respect and which is not terminable without cause between the Borroweror any Subsidiary and either:

 

(i)                                     athird party purchaser whose, or whose obligations are unconditionallyguaranteed by an entity whose, long-term senior unsecured debt is rated no lessthan Baa3 by Moody’s and BBB- by S&P on the date the relevant transactionis entered into by the Borrower or such Subsidiary; or

 

(ii)                                  anAffiliate of the Borrower, so long as such Affiliate has executed a valid andbinding agreement with a third party purchaser whose, or whose obligations areunconditionally guaranteed by an entity whose, long-term senior unsecured debtis rated no less than Baa3 by Moody’s and BBB- by S&P on the date therelevant transaction is entered into by the Borrower or such Subsidiary withsubstantially the same terms (other than any pricing spread) as the Affiliate’sagreement with the Borrower or such Subsidiary;

 

in each case, for the purchase of fuel (on a take or pay, take and pay,or take, if tendered basis) at prices established at a formula, index or otherprice risk management methodology not based on spot market prices by theBorrower or such Subsidiary to the third party or Affiliate; or

 

(b)                                 financial hedgeagreements relating to fuel pricing that are:

 

(i)                                     fullysupported by available fuel of the Borrower and its Subsidiaries; and

 

(ii)                                  withcounterparties having, or whose obligations are unconditionally guaranteed byan entity having, long-term senior unsecured debt that is rated no less thanBaa2 by Moody’s and BBB by S&P on the date the relevant transaction isentered into by the Borrower or such Subsidiary.

 

“Funding Office”:  the office of the Administrative Agentspecified in Section 11.2 or such other office as may be specified fromtime to time by the Administrative Agent as its funding office by writtennotice to the Borrower and the Lenders.

 

“GAAP”:  those accounting principles, standards andpractices generally accepted in the United States as in effect on the datehereof.

 

“Governmental Authority”:  any nation or government, any state or otherpolitical subdivision thereof, any agency, authority, instrumentality,regulatory body, court, central bank

 

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or other entity exercising executive, legislative, judicial, taxing,regulatory or administrative functions of or pertaining to government, anysecurities exchange and any self-regulatory organization (including theNational Association of Insurance Commissioners).

 

“Group Members”:  the collective reference to the Borrower andits Restricted Subsidiaries.

 

“Guarantee and Collateral Agreement”:  the Guarantee and Collateral Agreement to beexecuted and delivered by the Borrower and each Subsidiary Guarantor,substantially in the form of Exhibit A.

 

“Guarantee Obligation”:  as to any Person (the “guaranteeing person”),any obligation, including a reimbursement, counterindemnity or similarobligation, of the guaranteeing Person that guarantees or in effect guarantees,or which is given to induce the creation of a separate obligation by anotherPerson (including any bank under any letter of credit) that guarantees or ineffect guarantees, any Debt, leases, dividends or other obligations (the “primaryobligations”) of any other third Person (the “primary obligor”) inany manner, whether directly or indirectly, including any obligation of theguaranteeing person, whether or not contingent, (i) to purchase any suchprimary obligation or any property constituting direct or indirect securitytherefor, (ii) to advance or supply funds (1) for the purchase orpayment of any such primary obligation or (2) to maintain working capitalor equity capital of the primary obligor or otherwise to maintain the net worthor solvency of the primary obligor or (iii) otherwise to assure or holdharmless the owner of any such primary obligation against loss in respectthereof; provided, however, that the term Guarantee Obligationshall not include endorsements of instruments for deposit or collection in theordinary course of business. The amount of any Guarantee Obligation of anyguaranteeing person shall be deemed to be the lower of (a) an amount equalto the stated or determinable amount of the primary obligation in respect ofwhich such Guarantee Obligation is made and (b) the maximum amount forwhich such guaranteeing person may be liable pursuant to the terms of theinstrument embodying such Guarantee Obligation, unless such primary obligationand the maximum amount for which such guaranteeing person may be liable are notstated or determinable, in which case the amount of such Guarantee Obligationshall be such guaranteeing person’s maximum reasonably anticipated liability inrespect thereof as determined by the Borrower in good faith.

 

“Hedging Arrangement”:  any Swap Agreement in respect of interestrates or currency exchange rates entered into by any Loan Party and theAdministrative Agent or any Person which at the time such Swap Agreement isentered into is a Lender or Affiliate thereof.

 

“Intercreditor Agreement”:  any intercreditor agreement in the form of Exhibit Ior Exhibit K hereto, as applicable, or otherwise on terms reasonablysatisfactory to the Administrative Agent, entered into pursuant hereto inrespect of (i) Permitted Pari Passu Debt or (ii) junior Lienspermitted under Section 8.3(i)(x).

 

“Interest Coverage Ratio”:  for any period, the ratio of (a) EBITDAfor such period to (b) Corporate Interest for such period.

 

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“Interest Payment Date”:  (a) as to any ABR Loan (other than anySwingline Loan), the last day of each March, June, September and December tooccur while such Loan is outstanding and the final maturity date of such Loan, (b) asto any Eurodollar Loan having an Interest Period of three months or less, thelast day of such Interest Period, (c) as to any Eurodollar Loan having anInterest Period longer than three months, each day that is three months, or awhole multiple thereof, after the first day of such Interest Period and thelast day of such Interest Period, (d) as to any Loan (other than anyRevolving Loan that is an ABR Loan and any Swingline Loan), the date of anyrepayment or prepayment made in respect thereof and (e) as to anySwingline Loan, the day that such Loan is required to be repaid.

 

“Interest Period”:  as to any Eurodollar Loan, (a) initially,the period commencing on the borrowing or conversion date, as the case may be,with respect to such Eurodollar Loan and ending one, two, three or six monthsthereafter (or such other period as the Borrower and all Lenders of therelevant Facility may agree), as selected by the Borrower in its notice ofborrowing or notice of conversion, as the case may be, given with respectthereto; and (b) thereafter, each period commencing on the last day of thenext preceding Interest Period applicable to such Eurodollar Loan and endingone, two, three or six months (or such other period as the Borrower and allLenders of the relevant Facility may agree) thereafter, as selected by theBorrower by irrevocable notice to the Administrative Agent not later than 11:00 A.M.,New York City time, on the date that is three Business Days prior to the lastday of the then current Interest Period with respect thereto; providedthat, all of the foregoing provisions relating to Interest Periods are subjectto the following:

 

(i)                                     ifany Interest Period would otherwise end on a day that is not a Business Day,such Interest Period shall be extended to the next succeeding Business Dayunless the result of such extension would be to carry such Interest Period intoanother calendar month in which event such Interest Period shall end on theimmediately preceding Business Day;

 

(ii)                                  theBorrower may not select an Interest Period under a particular Facility thatwould extend beyond, with respect to Revolving Loans, the Revolving TerminationDate or, with respect to Term Loans, beyond the date final payment is due onthe Term Loans, as the case may be; and

 

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

 

“Investments”:  as defined in Section 8.6.

 

“Issuing Lenders”: collectively, theRevolving Issuing Lenders and the Synthetic Issuing Lender.

 

“JPMCB”: as defined in the preamblehereto.

 

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“Lenders”:  as defined in the preamble hereto; provided,that unless the context otherwise requires, each reference herein to theLenders shall be deemed to include any Conduit Lender.

 

“Letters of Credit”:  collectively, the Revolving Letters of Creditand the Synthetic Letters of Credit.

 

“Leverage Ratio”:  as at the last day of any period, the ratioof (a) Net Debt on such day to (b) EBITDA for such period.

 

“Lien”:  any mortgage, pledge, lien, hypothecation,security interest or other charge, encumbrance or other arrangement in thenature of a security interest in property; provided, however,that the term “Lien” shall not mean any easements, rights-of-way, zoningrestrictions, encroachments, minor title deficiencies, leases, subleases,licenses, sublicenses, or other restrictions on the use of property or othersimilar encumbrances.

 

“Loan”:  any loan made by any Lender pursuant to thisAgreement.

 

“Loan Documents”:  this Agreement, the Security Documents, theNotes and any amendment, waiver, supplement or other modification to any of theforegoing.

 

“Loan Parties”:  the Borrower and each of its Subsidiariesthat is a party to a Loan Document.

 

“MAG”: Mirant Americas Generation, LLC, a Delaware limited liability company.

 

“MAG Interest Distribution”: for anyperiod, the aggregate amount of cash the Borrower paid or otherwise distributedto MAG during such period that MAG applied during such period to the payment ofaccrued interest on the MAG Senior Notes that was due and payable during suchperiod.

 

“MAG Senior Notes”:  the following series of notes issued by MAG:the $850,000,000 of Senior Notes due 2011, the $450,000,000 of Senior Notes due2021, and the $400,000,000 of Senior Notes due 2031.

 

“MAI Series A Preferred Shares”:  as defined in the Plan of Reorganization.

 

“MAI Series B Preferred Shares”:  as defined in the Plan of Reorganization.

 

“Majority Facility Lenders”:  with respect to any Facility, the holders ofmore than 50% of the aggregate unpaid principal amount of the Term Loans or theTotal Revolving Extensions of Credit, as the case may be, outstanding undersuch Facility (or, in the case of the Revolving Facility, prior to anytermination of the Revolving Commitments, the holders of more than 50% of theTotal Revolving Commitments).

 

“Majority Lenders”:  at any time, the holders of more than 50% of (a) untilthe Closing Date, the Commitments then in effect and (b) thereafter, thesum of (i) the aggregate

 

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unpaid principal amount of the Term Loans then outstanding and (ii) theTotal Revolving Commitments then in effect or, if the Revolving Commitmentshave been terminated, the Total Revolving Extensions of Credit thenoutstanding.

 

“Material Adverse Effect”:  a material adverse change in, or materialadverse effect on, (i) the financial condition, operations, business orAssets of the Borrower or its Subsidiaries, which would have a material adverseeffect on the ability of the Borrower to pay amounts owed by it from time totime hereunder, or (ii) the validity or enforceability of this Agreementor any of the other Loan Documents against the Borrower or any SubsidiaryGuarantor which would have a material adverse effect on the rights, remediesand benefits available to, or conferred upon, the Administrative Agent or theLenders, taken as a whole.

 

“MET”: Mirant Energy Trading, LLC, aDelaware limited liability company.

 

“MIRMA”:  Mirant Mid-Atlantic, LLC, a Delaware limitedliability company.

 

“Moody’s”:  Moody’s Investors Service, Inc. or anysuccessor thereto.

 

“Moody’s Rating”: at any time, therating issued by Moody’s and then in effect with respect to a Person’s seniorunsecured long-term debt securities without third party credit enhancement.

 

“Mortgaged Properties”:  the real properties listed on Schedule 1.1Band designated as properties for which a Mortgage will be delivered and anyreal property with respect to which a Mortgage is granted pursuant to Section 6.7(b).

 

“Mortgages”:  each of the mortgages and deeds of trust madeby any Loan Party in favor of, or for the benefit of, the Administrative Agentfor the benefit of the Lenders, substantially in the form of Exhibit D(with such changes thereto as shall be advisable under the law of thejurisdiction in which such mortgage or deed of trust is to be recorded).

 

“Net Cash Proceeds”:  (a) in connection with any Asset Sale orany Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents(including any such proceeds received by way of deferred payment of principalpursuant to a note or installment receivable or purchase price adjustmentreceivable or otherwise, but only as and when received), net of attorneys’fees, accountants’ fees, investment banking fees, amounts required to beapplied to the repayment of Debt secured by a Lien expressly permittedhereunder on any asset that is the subject of such Asset Sale or Recovery Event(other than any Lien pursuant to a Security Document) and other customary feesand expenses actually incurred in connection therewith and net of taxes paid orreasonably estimated to be payable as a result thereof (after taking intoaccount any available tax credits or deductions and any tax sharing arrangements)and (b) in connection with any issuance or sale of Capital Stock or anyincurrence of Debt, the cash proceeds received from such issuance orincurrence, net of attorneys’ fees, investment banking fees, accountants’ fees,underwriting discounts and commissions and other customary fees and expensesactually incurred in connection therewith.

 

“Net Debt”:  at any time, the aggregate principal amountof Debt of the Borrower and its Subsidiaries at such time outstanding less(i) cash and deposits restricted pursuant to

 

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agreements with a Person other than an Affiliate of the Borrower, and (ii) broker,counterparty, and customer margin/collateral assets and deposits advanced to orheld on behalf of such broker, counterparty or customer, as each of theforegoing items described in clauses (i) and (ii) appears on theconsolidated balance sheet of the Borrower and its Subsidiaries, as eitherrestricted deposits or deposits with brokers and in any event shall include theSynthetic L/C Deposit.

 

“New Mirant”: Mirant Corporation(formerly known as Newco 2005 Corporation), a Delaware corporation.

 

“Non-Excluded Taxes”:  as defined in Section 2.19(a).

 

“Non-U.S. Lender”:  as defined in Section 2.19(d).

 

“Notes”:  the collective reference to any promissorynote evidencing Loans.

 

“Obligations”:  the unpaid principal of and interest on(including interest accruing after the maturity of the Loans and ReimbursementObligations and interest accruing after the filing of any petition inbankruptcy, or the commencement of any insolvency, reorganization or likeproceeding, relating to the Borrower, whether or not a claim for post-filing orpost-petition interest is allowed in such proceeding) the Loans and all otherobligations and liabilities of the Borrower to the Administrative Agent or toany Lender (or, in the case of Hedging Arrangements or Specified CashManagement Programs, any affiliate of any Lender or any other Person which, atthe time any such Hedging Arrangement was entered into, was a Lender or anaffiliate thereof), whether direct or indirect, absolute or contingent, due orto become due, or now existing or hereafter incurred, which may arise under,out of, or in connection with, this Agreement, any other Loan Document, theLetters of Credit, any Hedging Arrangement, any Specified Cash ManagementProgram or any other document made, delivered or given in connection herewithor therewith, whether on account of principal, interest, reimbursementobligations, fees, indemnities, costs, expenses (including all fees, chargesand disbursements of counsel to the Administrative Agent or to any Lender thatare required to be paid by the Borrower pursuant hereto) or otherwise.

 

“Other Taxes”:  any and all present or future stamp ordocumentary taxes or any other excise or property taxes, charges or similarlevies arising from any payment made hereunder or from the execution, deliveryor enforcement of, or otherwise with respect to, this Agreement or any otherLoan Document.

 

“Participant”:  as defined in Section 11.6(c).

 

“Permitted Debt”: (i) the Loansand other obligations of any Loan Party under any Loan Document and Debtoutstanding on the date hereof and listed on Schedule 1.1C (which may besecured to the extent currently secured on the date hereof); (ii) PermittedPari Passu Debt; (iii) Subordinated Debt; (iv) Project Finance Debtand Debt secured by Liens permitted pursuant to clauses (f) and (g) ofSection 8.3; (v) Debt incurred (x) to finance Environmental CapitalExpenditures and other capital expenditures made to comply with Requirements ofLaw and (y) with respect to MIRMA and its Subsidiaries, to finance RequiredImprovements (as such term is used in the Facility Lease Documents), which Debtmay be secured by the capital assets or Required Improvements and relatedassets financed by such Debt; and (vi) refinancings or

 

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renewals of the Debt permitted to be incurred pursuant to the termshereof (which may be secured by the same assets as the refinanced or renewedDebt); provided, that any such refinancing or renewal of Debt is (x)either in an amount not in excess of the principal amount outstanding orcommitted under the Debt being refinanced or renewed immediately prior to suchrefinancing (plus any applicable fees or expenses and redemption or repurchasepremiums or penalties) or renewal, or such excess amount can otherwise beincurred hereunder, and (y) provides for a final maturity date no earlier thanthe existing scheduled maturity date of the Debt being refinanced or renewed.

 

“Permitted Pari Passu Debt”: Debt ofthe Borrower or any Subsidiary Guarantor not to exceed $250,000,000 in theaggregate that is paripassu, including with respect to theCollateral, with the Obligations (as defined in the Guarantee and CollateralAgreement) pursuant to a security agreement in form and substance satisfactoryto the Administrative Agent and an intercreditor agreement in the form of Exhibit Kor otherwise on terms reasonably satisfactory to the Administrative Agent.

 

“Person”:  an individual, company, corporation, firm,partnership, joint venture, undertaking, association, organization, trust,state or agency of a state or limited liability company (in each case whetheror not having separate legal personality).

 

“Plan”:  any plan described in Section 3(2) ofERISA that is subject to Title IV of ERISA, maintained or contributed to by theBorrower or any ERISA Affiliate.

 

“Plan of Reorganization”: the Amendedand Restated Second Amended Joint Chapter 11 Plan of Reorganization for MirantCorporation and its Affiliated Debtors, dated December 9, 2005, In reMirant Corporation, et al., Debtors, as amended, modified or waived either (x)with the consent of the Administrative Agent, such consent not to beunreasonably withheld or (y) as would not reasonably be expected to have aMaterial Adverse Effect.

 

“Plan Secured Note”: as defined in thePlan of Reorganization.

 

“PPA”: (a) an arms-length, executed, valid and binding agreement(including, without limitation, a tolling agreement) that is then in full forceand effect and not in default in any material respect and which is notterminable without cause between the Borrower or any Subsidiary and either:

 

(i)                                     athird party purchaser whose, or whose obligations are unconditionallyguaranteed by an entity whose, long-term senior unsecured debt is rated no lessthan Baa3 by Moody’s and BBB- by S&P on the date the relevant transactionis entered into by the Borrower or such Subsidiary; or

 

(ii)                                  anAffiliate of the Borrower, so long as such Affiliate has executed a valid andbinding agreement with a third party purchaser whose, or whose obligations areunconditionally guaranteed by an entity whose, long-term senior unsecured debtis rated no less than Baa3 by Moody’s and BBB- by S&P on the date therelevant transaction is entered into by the Borrower or such Subsidiary withsubstantially the same terms (other than any pricing spread) as the Affiliate’sagreement with the Borrower or such Subsidiary;

 

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in each case, for the sale of electric energy or capacity (in the caseof both energy and capacity, on a take or pay, take and pay, or take, iftendered basis) at prices established at a formula, index or other price riskmanagement methodology not based on spot market prices by the Borrower or suchSubsidiary to the third party or Affiliate; or

 

(b)                                 financial hedgeagreements relating to energy or capacity pricing that are:

 

(i)                                     fullysupported by available energy or capacity of the Borrower and its Subsidiaries;and

 

(ii)                                  withcounterparties having, or whose obligations are unconditionally guaranteed byan entity having, long-term senior unsecured debt that is rated no less thanBaa2 by Moody’s and BBB by S&P on the date the relevant transaction isentered into by the Borrower or such Subsidiary.

 

“Pricing Grid”:  the table set forth below.

 
| **Leverage Ratio**                    | ** ** | **Applicable Margin  for Revolving Loans  that are Eurodollar  Loans** | ** ** | **Applicable Margin  for Revolving Loans  that are ABR Loans** | ** ** | **Commitment Fee Rate** | ** ** |
|---------------------------------------|------------|------------------------------------------------------------------------|------------|----------------------------------------------------------------|------------|-------------------------|------------|
| > 2.5 to  1.0                      |       | 2.25                                                                   | %          | 1.25                                                           | %          | 0.375                   | %          |
| <  2.5 to 1.0 and  > 2.0 to 1.0 |       | 2.00                                                                   | %          | 1.00                                                           | %          | 0.375                   | %          |
| <  2.0 to 1.0                      |       | 1.75                                                                   | %          | 0.75                                                           |       | 0.250                   | %          |

 

For the purposes of the Pricing Grid, changesin the Applicable Margin for Revolving Loans resulting from changes in theLeverage Ratio shall become effective on the date (the “Adjustment Date”)that is three Business Days after the date on which financial statements aredelivered to the Lenders pursuant to Section 6.2 and shall remain ineffect until the next change to be effected pursuant to this paragraph. If anyfinancial statements referred to above are not delivered within the timeperiods specified in Section 6.2, then, from the latest date on which suchfinancial statements are required to be delivered until the date that is threeBusiness Days after the date on which such financial statements are delivered,the highest rate set forth in each column of the Pricing Grid shall apply. Eachdetermination of the Leverage Ratio pursuant to the Pricing Grid shall be madein a manner consistent with the determination thereof pursuant to Section 7.2.

 

“Project Finance Debt”:  Debt (not exceeding the cost of theacquisition, construction or creation of the relevant Asset or project) of anySubsidiary incurred or existing in connection with the financing or refinancingof any Asset or project, the repayment of which Debt is to be made from therevenues arising out of, or other proceeds of realization from, the acquired orcreated Asset or project, with recourse to those revenues and proceeds andAssets forming the subject matter of such Asset or project (including, withoutlimitation, insurance, contracts and Capital Stock or other rights of ownershipin the entity(ies) which own the relevant

 

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Assets or project) and other Assets ancillary thereto but withoutsubstantial recourse to any other Asset or otherwise to the Borrower or aRestricted Subsidiary; provided that substantial recourse shall not be deemedto exist by reason of normal and customary sponsor support arrangements.

 

“Projections”:  as defined in Section 6.3(c).

 

“Recovery Event”:  any settlement of or payment in respect ofany property or casualty insurance claim or any condemnation proceedingrelating to any asset of any Group Member.

 

“Refunded Swingline Loans”:  as defined in Section 2.7(b).

 

“Register”:  as defined in Section 11.6(b).

 

“Regulation U”:  Regulation U of the Board as in effect fromtime to time.

 

“Reimbursement Obligation”:  the obligation of the Borrower to reimburseany Issuing Lender pursuant to Section 3.5 or Section 3.10 foramounts drawn under Letters of Credit.

 

“Reinvestment Commitment Notice” awritten notice executed by a Responsible Officer on or prior to the datefalling 365 days after an Asset Sale or Recovery Event, stating (x) that, inthe case of an Asset Sale only, no Event of Default has occurred and iscontinuing and (y) that the Borrower (directly or through a RestrictedSubsidiary) has committed to use all or a specified portion of the Net CashProceeds of (i) an Asset Sale within 180 days after the date of suchnotice or (ii) a Recovery Event within 24 months after the date of suchnotice to acquire or repair assets useful in its business.

 

“Reinvestment Event”:  any Asset Sale or Recovery Event in respectof which the Borrower has delivered a Reinvestment Notice.

 

“Reinvestment Notice”:  a written notice executed by a ResponsibleOfficer stating (i) in the case of an Asset Sale only, that no Event ofDefault has occurred and is continuing and (ii) that the Borrower(directly or indirectly through a Restricted Subsidiary) intends and expects touse all or a specified portion of the Net Cash Proceeds of an Asset Sale orRecovery Event to acquire or repair assets useful in its business.

 

“Requirement of Law”:  as to any Person, any law, treaty, rule orregulation or determination of an arbitrator or a court or other GovernmentalAuthority, in each case applicable to or binding upon such Person or any of itsproperty or to which such Person or any of its property is subject.

 

“Responsible Officer”:  the chief executive officer, president, chieffinancial officer treasurer or controller of the Borrower.

 

“Restricted Payment”:  as defined in Section 8.2.

 

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“Restricted Subsidiaries”:  all Subsidiaries of the Borrower other thanUnrestricted Subsidiaries.

 

“Revolving Commitment”:  as to any Lender, the obligation of suchLender, if any, to make Revolving Loans and participate in Swingline Loans andRevolving Letters of Credit in an aggregate principal and/or face amount not toexceed the amount set forth under the heading “Revolving Commitment” oppositesuch Lender’s name on Schedule 1.1A or in the Assignment and Assumptionpursuant to which such Lender became a party hereto, as the same may be changedfrom time to time pursuant to the terms hereof.

 

“Revolving Commitment Period”:  the period from and including the ClosingDate to the Revolving Termination Date.

 

“Revolving Extensions of Credit”:  as to any Revolving Lender at any time, anamount equal to the sum of (a) the aggregate principal amount of allRevolving Loans held by such Lender then outstanding, (b) such Lender’sRevolving Percentage of the Revolving L/C Obligations then outstanding and (c) suchLender’s Revolving Percentage of the aggregate principal amount of SwinglineLoans then outstanding.

 

“Revolving Issuing Lender”:  any of JPMCB, DBTCA and any other RevolvingLender from time to time designated by the Borrower as a Revolving IssuingLender with the consent of such other Revolving Lender and the AdministrativeAgent, or any Affiliate thereof, in its capacity as issuer of any RevolvingLetter of Credit; collectively, the “Revolving Issuing Lenders”.

 

“Revolving L/C Commitment”:  $800,000,000.

 

“Revolving L/C Obligations”:  at any time, an amount equal to the sum of (a) theaggregate then undrawn and unexpired amount of the then outstanding RevolvingLetters of Credit and (b) the aggregate amount of drawings under RevolvingLetters of Credit that have not then been reimbursed pursuant to Section 3.5.

 

“Revolving L/C Participants”:  as to any Revolving Letter of Credit, thecollective reference to all the Revolving Lenders other than the RevolvingIssuing Lender of such Letter of Credit.

 

“Revolving Lender”:  each Lender that has a Revolving Commitmentor that holds Revolving Loans.

 

“Revolving Letters of Credit”:  as defined in Section 3.1(a).

 

“Revolving Loans”:  as defined in Section 2.4(a).

 

“Revolving Percentage”:  as to any Revolving Lender at any time, thepercentage which such Lender’s Revolving Commitment then constitutes of the TotalRevolving Commitments or, at any time after the Revolving Commitments shallhave expired or terminated, the percentage which the aggregate principal amountof such Lender’s Revolving Loans then

 

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outstanding constitutes of the aggregate principal amount of theRevolving Loans then outstanding, provided, that, in the event that theRevolving Loans are paid in full prior to the reduction to zero of the TotalRevolving Extensions of Credit, the Revolving Percentages shall be determinedin a manner designed to ensure that the other outstanding Revolving Extensionsof Credit shall be held by the Revolving Lenders on a comparable basis.

 

“Revolving Termination Date”:  the sixth anniversary of the Closing Date.

 

“S&P”:  Standard & Poor’s Ratings Services,a division of the McGraw Hill Companies, Inc., or any successor thereto.

 

“S&P Rating”: at any time, therating issued by S&P and then in effect with respect to a Person’s seniorunsecured long-term debt securities without third party credit enhancement.

 

“SEC”: the Securities and Exchange Commission, any successor thereto and anyanalogous Governmental Authority.

 

“Security Documents”:  the collective reference to the Guarantee andCollateral Agreement, the Mortgages, any Intercreditor Agreements, theSynthetic L/C Deposit Agreement and all other security documents hereafterdelivered to the Administrative Agent granting a Lien on any property of anyPerson to secure the obligations and liabilities of any Loan Party under anyLoan Document.

 

“Specified Cash Management Program”:  any cash management arrangement between theBorrower and any Lender or any Affiliate thereof (to the extent designated bythe Borrower).

 

“Specified Issuing Lender Commitment”:with respect to JPMCB, its commitment to act as Revolving Issuing Lender for upto $300,000,000 of the Revolving L/C Commitment; with respect to DBTCA, itscommitment to act as Revolving Issuing Lender for up to $250,000,000 of theRevolving L/C Commitment; and with respect to any other Revolving IssuingLender, its commitment to act as Revolving Issuing Lender for up to apercentage of the Revolving L/C Commitment agreed by the Borrower and suchRevolving Issuing Lender.

 

“Step-In Rights”: Liens in favor ofcounterparties to any PPA (other than Affiliates of the Borrower) that createrights the exercise of which are limited to the taking of actions pursuant toany provisions of such PPA designed to enable the counterparty to assumeoperational control of the relevant facility or facilities (e.g., step-inrights) or otherwise necessary to continue performance of the Borrower’s or theapplicable Subsidiary’s obligations under such PPA.

 

“Subordinated Debt”:  unsecured Debt of the Borrower and/or anySubsidiary Guarantor that is subordinated and junior in right of payment to theObligations (as defined in the Guarantee and Collateral Agreement) and isissued solely for cash proceeds where either (i) the subordinationprovisions of such Debt shall be at least as favorable to the Lenders as thesubordination provisions set forth in Schedule 8.1 or (ii) thesubordination provisions shall be in all respects reasonably satisfactory tothe Administrative Agent.

 

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“Subsidiary”:  as to any Person, any corporation,partnership, joint venture, limited liability company, trust or estate of which(or in which) more than 50% of (a) the voting stock, (b) the interestin the capital or profits of such limited liability company, partnership orjoint venture or (c) the beneficial interest in such trust or estate is atthe time directly or indirectly owned or controlled by such Person, by suchPerson and one or more of its Subsidiaries or by one or more of such Person’sother Subsidiaries. Unless otherwise qualified, all references to a “Subsidiary”or to “Subsidiaries” in this Agreement shall refer to a Subsidiary orSubsidiaries of the Borrower.

 

“Subsidiary Guarantor”:  each Restricted Subsidiary of the Borrowerother than (a) any Excluded Foreign Subsidiary, (b) MET and anySubsidiaries of MET, (c) MIRMA and any Subsidiaries of MIRMA and (d) NewMAEM Holdco, LLC and any Subsidiaries of New MAEM Holdco, LLC, which theBorrower shall Dispose of within 60 days after the Closing Date in accordancewith the Plan of Reorganization.

 

 “SwapAgreement”:  any agreement, includingany Hedging Arrangement, with respect to any swap, forward, future orderivative transaction or option or similar agreement involving, or settled byreference to, one or more rates, currencies, commodities, equity or debtinstruments or securities, or economic, financial or pricing indices ormeasures of economic, financial or pricing risk or value or any similartransaction or any combination of these transactions; provided that nophantom stock or similar plan providing for payments only on account ofservices provided by current or former directors, officers, employees orconsultants of the Borrower or any of its Subsidiaries shall be a “SwapAgreement”.

 

“Swingline Commitment”:  the obligation of the Swingline Lender tomake Swingline Loans pursuant to Section 2.6 in an aggregate principalamount at any one time outstanding not to exceed $25,000,000.

 

“Swingline Lender”:  JPMCB, in its capacity as the lender ofSwingline Loans.

 

“Swingline Loans”:  as defined in Section 2.6.

 

“Swingline Participation Amount”:  as defined in Section 2.7.

 

“Synthetic Issuing Lender”:  JPMCB or any Affiliate thereof, in itscapacity as issuer of any Synthetic Letter of Credit.

 

“Synthetic L/C Deposit”:  at any time, the amounts then actually ondeposit in the Synthetic L/C Deposit Account.

 

“Synthetic L/C Deposit Account”:  the account established by the Borrower inthe name of the Synthetic Issuing Lender pursuant to Section 3.8.

 

“Synthetic L/C Deposit Agreement”:  as defined in Section 3.8(a).

 

“Synthetic L/C Termination Date”:  the seventh anniversary of the Closing Date.

 

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“Synthetic Letter of Credit Outstandings”:  at any time, the sum of (i) theaggregate undrawn stated amount of all Synthetic Letters of Credit issued thenoutstanding at such time and plus (ii) the aggregate amount ofdrawings under Synthetic Letters of Credit that have not then been reimbursedpursuant to Section 3.10.

 

“Synthetic Letters of Credit”:  as defined in Section 3.6.

 

“Term Commitment”:  as to any Lender, the obligation of suchLender, if any, to make a Term Loan to the Borrower on the Closing Date in aprincipal amount not to exceed the amount set forth under the heading “TermCommitment” opposite such Lender’s name on Schedule 1.1A. The aggregateamount of the Term Commitments is $700,000,000.

 

“Term Lender”:  each Lender that has a Term Commitment orthat holds a Term Loan.

 

“Term Loans”:  as defined in Section 2.1.

 

“Term Percentage”:  as to any Term Lender at any time, thepercentage which such Lender’s Term Commitment then constitutes of theaggregate Term Commitments (or, at any time after the Closing Date, thepercentage which the aggregate principal amount of such Lender’s Term Loansthen outstanding constitutes of the aggregate principal amount of the TermLoans then outstanding).

 

“Total Revolving Commitments”:  at any time, the aggregate amount of theRevolving Commitments then in effect. The original amount of the TotalRevolving Commitments is $800,000,000.

 

“Total Revolving Extensions of Credit”:  at any time, the aggregate amount of theRevolving Extensions of Credit of the Revolving Lenders outstanding at suchtime.

 

“Transferee”:  any Assignee or Participant.

 

“Type”:  as to any Loan, its nature as an ABR Loan ora Eurodollar Loan.

 

“United States”:  the United States of America.

 

“Unrestricted Subsidiaries”:  (a) until such time as such entitiesemerge from the Chapter 11 Cases, Mirant New York, Inc., Mirant Lovett,LLC, Mirant Bowline, LLC, Mirant NY-Gen, LLC and Hudson Valley Gas Corporationand (b) any Subsidiary of the Borrower that is designated by the Board ofDirectors of the Borrower as an Unrestricted Subsidiary, but only to the extentthat such Subsidiary (i) has no Assets other than Assets acquired after,or immaterial or unproductive Assets owned prior to, the date of thisAgreement, (ii) has no Debt other than Debt that is non-recourse to theBorrower or the Restricted Subsidiaries, (iii) is not party to anyagreement or contract with the Borrower or a Restricted Subsidiary unless theterms of such agreement are no less favorable to the Borrower or suchRestricted Subsidiary than those that might be obtained from an unaffiliatedthird-party, and (iv) is a Person with respect to which neither theBorrower nor any Restricted Subsidiary has any direct or indirect obligation tomake capital contributions or to maintain such Subsidiary’s financialcondition.

 

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1.2.                              Other DefinitionalProvisions.  (a)  Unless otherwise specifiedtherein, all terms defined in this Agreement shall have the defined meaningswhen used in the other Loan Documents or any certificate or other document madeor delivered pursuant hereto or thereto.

 

### (b)                                 As used herein and in the other LoanDocuments, and any certificate or other document made or delivered pursuanthereto or thereto, (i) accounting terms relating to any Group Member notdefined 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 themunder GAAP, (ii) the words “include”, “includes” and “including” shall bedeemed to be followed by the phrase “without limitation”, (iii) the word “incur”shall be construed to mean incur, create, issue, assume, become liable inrespect of or suffer to exist (and the words “incurred” and “incurrence” shallhave correlative meanings), (iv) the words “asset” and “property” shall beconstrued to have the same meaning and effect and to refer to any and alltangible and intangible assets and properties, including cash, Capital Stock,securities, revenues, accounts, leasehold interests and contract rights, and (v) referencesto agreements or other Contractual Obligations shall, unless otherwisespecified, be deemed to refer to such agreements or Contractual Obligations asamended, 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 thisAgreement as a whole and not to any particular provision of this Agreement, andSection, Schedule and Exhibit references are to this Agreement unlessotherwise specified.

###  

### (d)                                 The meanings given to terms definedherein shall be equally applicable to both the singular and plural forms ofsuch terms.

###  

SECTION 2.  AMOUNTAND TERMS OF COMMITMENTS

 

2.1.                              Term Commitments. Subject to the terms and conditions hereof, each Term Lender severallyagrees to make a term loan (a “Term Loan”) to the Borrower on theClosing Date in an amount not to exceed the amount of the Term Commitment ofsuch Lender.  The Term Loans may fromtime to time be Eurodollar Loans or ABR Loans, as determined by the Borrower andnotified to the Administrative Agent in accordance with Sections 2.2and 2.12.

 

2.2.                              Procedure for TermLoan Borrowing.  The Borrower shall give the AdministrativeAgent irrevocable notice (which notice must be received by the AdministrativeAgent prior to 10:00 A.M., New York City time, one Business Day prior tothe anticipated Closing Date) requesting that the Term Lenders make the TermLoans on the Closing Date and specifying the amount to be borrowed.  The Term Loans made on the Closing Date shallinitially be ABR Loans and, unless otherwise agreed by the Administrative Agentin its sole discretion, no Term Loan may be converted into or continued as aEurodollar Loan having an Interest Period in excess of one month prior to theearlier of (i) the date the Administrative Agent determines that theprimary syndication of Term Loans has been completed or (ii) the date thatis 30 days after the Closing Date.  Uponreceipt of such notice the Administrative Agent shall promptly notify each TermLender thereof.  Not later than 12:00Noon, New York City time, on the Closing Date each Term Lender shall makeavailable to the Administrative Agent at the Funding Office an amount inimmediately available funds equal to the Term Loan or Term

 

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Loansto be made by such Lender.  TheAdministrative Agent shall credit the account of the Borrower on the books ofsuch office of the Administrative Agent with the aggregate of the amounts madeavailable to the Administrative Agent by the Term Lenders in immediatelyavailable funds.

 

2.3.                              Repayment of TermLoans.  The principal amount of the Term Loan of eachTerm Lender shall mature in 28 consecutive installments (each due on the lastday of each calendar quarter, except for the last such installment), commencingon March 31, 2006, each of which shall be in an amount equal to suchLender’s Term Percentage multiplied by (i) in the case of the first 27such installments, $1,750,000 and (ii) in the case of the last suchinstallment (which shall be due on the seventh anniversary of the ClosingDate), the remaining aggregate principal amount of the Term Loans.

 

2.4.                              Revolving Commitments.  (a) Subject to the terms and conditions hereof, each Revolving Lender severallyagrees to make revolving credit loans (“Revolving Loans”) to theBorrower from time to time during the Revolving Commitment Period in anaggregate principal amount at any one time outstanding which, when added tosuch Lender’s Revolving Percentage of the sum of (i) the Revolving L/CObligations then outstanding and (ii) the aggregate principal amount ofthe Swingline Loans then outstanding, does not exceed the amount of such Lender’sRevolving Commitment.  During theRevolving Commitment Period the Borrower may use the Revolving Commitments byborrowing, prepaying the Revolving Loans in whole or in part, and reborrowing,all in accordance with the terms and conditions hereof.  The Revolving Loans may from time to time beEurodollar Loans or ABR Loans, as determined by the Borrower and notified tothe Administrative Agent in accordance with Sections 2.5 and 2.12.

 

### (b)                                 The Borrower shall repay all outstandingRevolving Loans on the Revolving Termination Date.

###  

2.5.                              Procedure forRevolving Loan Borrowing.  (a)  The Borrower may borrow under theRevolving Commitments during the Revolving Commitment Period on any BusinessDay, provided that the Borrower shall give the Administrative Agent irrevocablenotice (which notice must be received by the Administrative Agent (i) priorto 11:00 A.M., New York City time, three Business Days prior to therequested Borrowing Date, in the case of Eurodollar Loans, or (ii) priorto 10:00 A.M., New York City time on the requested Borrowing Date, in thecase of ABR Loans (including for purposes of financing payments required by Section 3.5),specifying (A) the amount and Type of Revolving Loans to be borrowed, (B) therequested Borrowing Date and (C) in the case of Eurodollar Loans, therespective amounts of each such Type of Loan and the respective lengths of theinitial Interest Period therefor.  AnyRevolving Loans made on the Closing Date shall initially be ABR Loans.  Each borrowing under the RevolvingCommitments shall be in an amount equal to (x) in the case of ABR Loans,$1,000,000 or a whole multiple thereof (or, if the then aggregate AvailableRevolving Commitments are less than $1,000,000, such lesser amount) and (y) inthe case of Eurodollar Loans, $5,000,000 or a whole multiple of $1,000,000 inexcess thereof; provided, that the Swingline Lender may request, on behalf ofthe Borrower, borrowings under the Revolving Commitments that are ABR Loans inother amounts pursuant to Section 2.7. Upon receipt of any such notice from the Borrower, the AdministrativeAgent shall promptly notify each Revolving Lender thereof.  Each Revolving Lender will make the amount ofits pro rata share of

 

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eachborrowing available to the Administrative Agent for the account of the Borrowerat the Funding Office prior to 12:00 Noon, New York City time, on the BorrowingDate requested by the Borrower in funds immediately available to theAdministrative Agent.  Such borrowingwill then be made available to the Borrower by the Administrative Agentcrediting the account of the Borrower on the books of such office with theaggregate of the amounts made available to the Administrative Agent by theRevolving Lenders and in like funds as received by the Administrative Agent.

 

### (b)                                 In the event that the Borrower fails to reimburseany Revolving Issuing Lender in accordance with Section 3.5 for the amountof any draft paid by such Revolving Issuing Lender under any Revolving Letterof Credit issued by it, and for all other amounts due in connection therewithpursuant to Section 3.5 (the “Reimbursement Payment”), then on thedate that the Reimbursement Payment is due, the Borrower shall be deemed tohave made a request for a borrowing of ABR Loans in an amount equal to theReimbursement Payment, which deemed request shall not be subject to anycondition precedent set forth in Section 5.2 and shall beirrevocable.  Each Revolving Lenderacknowledges and agrees that its obligation to make its pro rata share of anysuch borrowing available to the Administrative Agent is absolute andunconditional and shall not be affected by any event, happening or circumstancewhatsoever, including the failure of any condition precedent set forth in Section 5to be satisfied at the time of such deemed request.

###  

2.6.                              Swingline Commitment.  (a) Subject to the terms and conditions hereof, the Swingline Lender agrees to makea portion of the credit otherwise available to the Borrower under the RevolvingCommitments from time to time during the Revolving Commitment Period by makingswing line loans (“Swingline Loans”) to the Borrower; providedthat (i) the aggregate principal amount of Swingline Loans outstanding atany time shall not exceed the Swingline Commitment then in effect(notwithstanding that the Swingline Loans outstanding at any time, when aggregatedwith the Swingline Lender’s other outstanding Revolving Loans, may exceed theSwingline Commitment then in effect) and (ii) the Borrower shall notrequest, and the Swingline Lender shall not make, any Swingline Loan if, aftergiving effect to the making of such Swingline Loan, the aggregate amount of theAvailable Revolving Commitments would be less than zero.  During the Revolving Commitment Period, theBorrower may use the Swingline Commitment by borrowing, repaying andreborrowing, all in accordance with the terms and conditions hereof.  Swingline Loans shall be ABR Loans only.

 

### (b)                                 The Borrower shall repay to the SwinglineLender the then unpaid principal amount of each Swingline Loan on the earlierof the Revolving Termination Date and the first date after such Swingline Loanis made that is the 15th or last day of a calendar month and is at least twoBusiness Days after such Swingline Loan is made; provided that on eachdate that a Revolving Loan is borrowed, the Borrower shall repay all SwinglineLoans then outstanding.

###  

2.7.                              Procedure forSwingline Borrowing; Refunding of Swingline Loans.  (a)  Whenever theBorrower desires that the Swingline Lender make Swingline Loans it shall givethe Swingline Lender irrevocable telephonic notice confirmed promptly inwriting (which telephonic notice must be received by the Swingline Lender notlater than 1:00 P.M., New York City time, on the proposed Borrowing Date),specifying (i) the amount to be borrowed and (ii)

 

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therequested Borrowing Date (which shall be a Business Day during the RevolvingCommitment Period).  Each borrowing underthe Swingline Commitment shall be in an amount equal to $500,000 or a wholemultiple of $100,000 in excess thereof. Not later than 3:00 P.M., New York City time, on the Borrowing Datespecified in a notice in respect of Swingline Loans, the Swingline Lender shallmake available to the Administrative Agent at the Funding Office an amount inimmediately available funds equal to the amount of the Swingline Loan to bemade by the Swingline Lender.  TheAdministrative Agent shall make the proceeds of such Swingline Loan availableto the Borrower on such Borrowing Date by depositing such proceeds in theaccount of the Borrower with the Administrative Agent on such Borrowing Date inimmediately available funds.

 

### (b)                                 The Swingline Lender, at any time andfrom time to time in its sole and absolute discretion may, on behalf of theBorrower (which hereby irrevocably directs the Swingline Lender to act on itsbehalf), on one Business Day’s notice given by the Swingline Lender no laterthan 12:00 Noon, New York City time, request each Revolving Lender to make, andeach Revolving Lender hereby agrees to make, a Revolving Loan, in an amountequal to such Revolving Lender’s Revolving Percentage of the aggregate amountof the Swingline Loans (the “Refunded Swingline Loans”) outstanding onthe date of such notice, to repay the Swingline Lender.  Each Revolving Lender shall make the amountof such Revolving Loan available to the Administrative Agent at the FundingOffice in immediately available funds, not later than 10:00 A.M., New YorkCity time, one Business Day after the date of such notice.  The proceeds of such Revolving Loans shall beimmediately made available by the Administrative Agent to the Swingline Lenderfor application by the Swingline Lender to the repayment of the RefundedSwingline Loans.  The Borrowerirrevocably authorizes the Swingline Lender to charge the Borrower’s accountswith the Administrative Agent (up to the amount available in each such account)in order to immediately pay the amount of such Refunded Swingline Loans to theextent amounts received from the Revolving Lenders are not sufficient to repayin full such Refunded Swingline Loans.

###  

### (c)                                  If prior to the time a Revolving Loanwould have otherwise been made pursuant to Section 2.7(b), one of theevents described in Section 9(g) shall have occurred and becontinuing with respect to the Borrower or if for any other reason, asdetermined by the Swingline Lender in its sole discretion, Revolving Loans maynot be made as contemplated by Section 2.7(b), each Revolving Lendershall, on the date such Revolving Loan was to have been made pursuant to thenotice referred to in Section 2.7(b), purchase for cash an undividedparticipating interest in the then outstanding Swingline Loans by paying to theSwingline Lender an amount (the “Swingline Participation Amount”) equalto (i) such Revolving Lender’s Revolving Percentage times (ii) thesum of the aggregate principal amount of Swingline Loans then outstanding thatwere to have been repaid with such Revolving Loans.

###  

### (d)                                 Whenever, at any time after the SwinglineLender has received from any Revolving Lender such Lender’s SwinglineParticipation Amount, the Swingline Lender receives any payment on account ofthe Swingline Loans, the Swingline Lender will distribute to such Lender itsSwingline Participation Amount (appropriately adjusted, in the case of interestpayments, to reflect the period of time during which such Lender’sparticipating interest was outstanding and funded and, in the case of principaland interest payments, to reflect such Lender’s prorata portionof such payment if such payment is not sufficient to pay the principal

 

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### of and interest on allSwingline Loans then due); provided, however, that in the eventthat such payment received by the Swingline Lender is required to be returned,such Revolving Lender will return to the Swingline Lender any portion thereofpreviously distributed to it by the Swingline Lender.

###  

### (e)                                  Each Revolving Lender’s obligation tomake the Loans referred to in Section 2.7(b) and to purchaseparticipating interests pursuant to Section 2.7(c) shall be absoluteand unconditional and shall not be affected by any circumstance, including (i) anysetoff, counterclaim, recoupment, defense or other right that such RevolvingLender or the Borrower may have against the Swingline Lender, the Borrower orany other Person for any reason whatsoever, (ii) the occurrence orcontinuance of a Default or an Event of Default or the failure to satisfy anyof the other conditions specified in Section 5, (iii) any adversechange in the condition (financial or otherwise) of the Borrower, (iv) anybreach of this Agreement or any other Loan Document by the Borrower, any otherLoan Party or any other Revolving Lender or (v) any other circumstance,happening or event whatsoever, whether or not similar to any of the foregoing.

###  

2.8.                              Commitment Fees, etc.  (a) The Borrower agrees to pay to the Administrative Agent for the account of eachRevolving Lender a commitment fee for the period from and including the datehereof to the last day of the Revolving Commitment Period, computed at theCommitment Fee Rate on the average daily amount of the Available RevolvingCommitment of such Lender during the period for which payment is made, payablequarterly in arrears on each Fee Payment Date, commencing on the first suchdate to occur after the date hereof.

 

### (b)                                 The Borrower agrees to pay to theAdministrative Agent the fees in the amounts and on the dates as set forth inany fee agreements with the Administrative Agent and to perform any otherobligations contained therein.

###  

2.9.                              Termination orReduction of Revolving Commitments.  The Borrower shall have the right, upon notless than three Business Days’ notice to the Administrative Agent, to terminatethe Revolving Commitments or, from time to time, to reduce the amount of theRevolving Commitments; provided that no such termination or reduction ofRevolving Commitments shall be permitted if, after giving effect thereto and toany prepayments of the Revolving Loans and Swingline Loans made on theeffective date thereof, the Total Revolving Extensions of Credit would exceedthe Total Revolving Commitments.  Anysuch reduction shall be in an amount equal to $1,000,000, or a whole multiplethereof, and shall reduce permanently the Revolving Commitments then in effect.

 

2.10.                        Optional Prepayments.  TheBorrower may at any time and from time to time prepay the Loans, in whole or inpart, without premium or penalty, upon irrevocable notice delivered to theAdministrative Agent no later than 11:00 A,M., New York City time, one BusinessDay prior thereto, in the case of Eurodollar Loans, and no later than 11:00 A.M.,New York City time, on the same Business Day, in the case of ABR Loans, whichnotice shall specify the date and amount of prepayment and whether theprepayment is of Eurodollar Loans or ABR Loans; provided, that if aEurodollar Loan is prepaid on any day other than the last day of the InterestPeriod applicable thereto, the Borrower shall also pay any amounts owingpursuant to

 

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Section 2.20.  Upon receipt of any such notice theAdministrative Agent shall promptly notify each relevant Lender thereof.  If any such notice is given, the amountspecified in such notice shall be due and payable on the date specifiedtherein, together with (except in the case of Revolving Loans that are ABRLoans and Swingline Loans) accrued interest to such date on the amountprepaid.  Partial prepayments of TermLoans and Revolving Loans shall be in an aggregate principal amount of$1,000,000 or a whole multiple thereof. Partial prepayments of Swingline Loans shall be in an aggregateprincipal amount of $100,000 or a whole multiple thereof.

 

2.11.                        Mandatory Prepayments andCommitment Reductions.  (a)  (i)  If within ten (10) BusinessDays of any date the Borrower or any Restricted Subsidiary shall receive NetCash Proceeds (x) in excess of $50,000,000 from any Asset Sale or (y) in excessof $20,000,000 from any Recovery Event, then, if the Borrower shall not havedelivered a Reinvestment Notice in respect thereof on or prior to such date,the Borrower shall apply such Net Cash Proceeds on such date to the prepaymentof the Term Loans and the reduction of the Revolving Commitments as set forthin Section 2.11(c).  If the Borrowershall have delivered a Reinvestment Notice in respect thereof, then on thetenth (10th) Business Day after the date of receipt of such Net CashProceeds, the Borrower shall apply the portion thereof, if any, that neitherthe Borrower nor any Restricted Subsidiary intends to use to acquire or repairassets useful in its business to such prepayment and reduction. 

 

##### (ii)                                  If on or prior to the date falling 365days after a Reinvestment Event, the Borrower shall not have delivered aReinvestment Commitment Notice in respect of the Net Cash Proceeds described inclause (i) above, the Borrower shall apply such Net Cash Proceeds on suchdate (to the extent not previously so applied or expended) to the prepayment ofthe Term Loans and the reduction of the Revolving Commitments as set forth in Section 2.11(c).  If on or prior to the date falling 365 daysafter a Reinvestment Event, the Borrower shall have delivered a ReinvestmentCommitment Notice in respect of the Net Cash Proceeds described in clause (i) above,then (x) on the date of such notice, the Borrower shall apply (to the extentnot previously so applied or expended) the portion, if any, of such Net CashProceeds that the Borrower or any Restricted Subsidiary has not committed insuch notice to use to acquire or to repair assets useful in its business tosuch prepayment and reduction and (y) on the date falling 180 days after suchnotice in the case of Net Cash Proceeds from an Asset Sale described in clause (i) aboveand 24 months after such notice in the case of Net Cash Proceeds from aRecovery Event described in clause (i) above, the Borrower shall apply anyNet Cash Proceeds not applied to the acquisition or repair of assets useful inits business to such prepayment and reduction as set forth in Section 2.11(c) (tothe extent not previously so applied).

#####  

### (b)                                 If, for any fiscal year of the Borrowercommencing with the fiscal year ending December 31, 2006, there shall beFree Cash Flow, the Borrower shall, on the relevant Free Cash Flow ApplicationDate, prepay the Term Loans as set forth in Section 2.11(c) by anamount equal to (x) the FCF Percentage times (y) such Free Cash Flow minusthe MAG Interest Distribution for such fiscal year.  Each such prepayment shall be made on a date(a “Free Cash Flow Application Date”) no later than ten (10) BusinessDays after the earlier of (i) the date on which the financial statementsof the Borrower referred to in Section 6.2(a), for the fiscal year withrespect to which such prepayment is made, are required to be delivered to theLenders and (ii) the date such financial statements are actuallydelivered.

 

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### (c)                                  Amounts to be applied in connection withprepayments and Commitment reductions made pursuant to Section 2.11 shallbe applied, first, to the prepayment of the Term Loans in accordancewith Section 2.17(b) and, second, in the case of amountsapplied pursuant to clause (a) above, to reduce permanently the RevolvingCommitments.  Any such reduction of theRevolving Commitments shall be accompanied by prepayment of the Revolving Loansand/or Swingline Loans to the extent, if any, that the Total RevolvingExtensions of Credit exceed the amount of the Total Revolving Commitments as soreduced, provided that if the aggregate principal amount of RevolvingLoans and Swingline Loans then outstanding is less than the amount of suchexcess (because Revolving L/C Obligations constitute a portion thereof), theBorrower shall, to the extent of the balance of such excess, replaceoutstanding Revolving Letters of Credit and/or deposit an amount in cash in acash collateral account established with the Administrative Agent for thebenefit of the Lenders pursuant to an account control agreement in form andsubstance reasonably satisfactory to the Administrative Agent.  The application of any prepayment pursuant toSection 2.11 shall be made, first, to ABR Loans and, second,to Eurodollar Loans.  Each prepayment ofthe Loans under Section 2.11 (except in the case of Revolving Loans thatare ABR Loans and Swingline Loans) shall be accompanied by accrued interest tothe date of such prepayment on the amount prepaid.

###  

### (d)                                 If the Borrower is required by this Section 2.11to prepay any Eurodollar Loans and such prepayment will result in the Borrowerbeing required to pay breakage costs under Section 2.20 (any suchEurodollar Loans, “Affected Loans”), the Borrower may elect, by writtennotice to the Administrative Agent so long as no Default or Event of Defaultshall have occurred and be continuing, to deposit with the AdministrativeAgent, on or prior to the date of prepayment of such Affected Loans, 100% (orsuch lesser percentage elected by the Borrower) of the principal amounts thatotherwise would have been paid in respect of the Affected Loans and defer thedate of prepayment of such Affected Loans to the extent such Loans are cashcollateralized as provided in this Section 2.11(d).  Such amounts will be held as security for theobligations of the Borrower hereunder pursuant to an account control agreementto be entered into in form and substance reasonably satisfactory to theAdministrative Agent, with such cash collateral to be released from such cashcollateral account (and applied to repay the principal amount of AffectedLoans) upon each occurrence thereafter of the last day of an Interest Periodapplicable to the relevant Loans (or such earlier date or dates as shall berequested by the Borrower), with the amount to be so released and applied onthe last day of each Interest Period to be the amount of the relevant Loans towhich such Interest Period applies (or, if less, the amount remaining in suchcash collateral account); provided that, notwithstanding anything inthis Agreement to the contrary, the Borrower acknowledges and agrees that incalculating the Available Revolving Commitments, such Eurodollar Loans thathave not been prepaid in accordance with this Section 2.11(d) shallbe treated as Revolving Extensions of Credit until such unpaid Eurodollar Loansare actually prepaid; and providedfurther that such unpaidEurodollar Loans shall continue to bear interest in accordance with Section 2.14until such unpaid Eurodollar Loans or the related portion of such EurodollarLoans, as the case may be, have or has been prepaid.

###  

2.12.                        Conversion and ContinuationOptions.  (a)  The Borrower may elect from time totime to convert Eurodollar Loans to ABR Loans by giving the AdministrativeAgent prior irrevocable notice of such election no later than 11:00 A.M.,New York City time, on the Business Day preceding the proposed conversion date,provided that any such conversion of

 

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EurodollarLoans may only be made on the last day of an Interest Period with respectthereto.  The Borrower may elect fromtime to time to convert ABR Loans to Eurodollar Loans by giving theAdministrative Agent prior irrevocable notice of such election no later than11:00 A.M., New York City time, on the third Business Day preceding theproposed conversion date (which notice shall specify the length of the initialInterest Period therefor), provided that no ABR Loan under a particularFacility may be converted into a Eurodollar Loan when any Event of Default hasoccurred and is continuing and the Administrative Agent or the MajorityFacility Lenders in respect of such Facility have determined in its or theirsole discretion not to permit such conversions. Upon receipt of any such notice the Administrative Agent shall promptlynotify each relevant Lender thereof.

 

### (b)                                 Any Eurodollar Loan may be continued assuch upon the expiration of the then current Interest Period with respectthereto by the Borrower giving irrevocable notice to the Administrative Agent,in accordance with the applicable provisions of the term “Interest Period” setforth in Section 1.1, of the length of the next Interest Period to beapplicable to such Loans, provided that no Eurodollar Loan under aparticular Facility may be continued as such when any Event of Default hasoccurred and is continuing and the Administrative Agent has or the MajorityFacility Lenders in respect of such Facility have determined in its or theirsole discretion not to permit such continuations, and provided, further,that if the Borrower shall fail to give any required notice as described abovein this paragraph or if such continuation is not permitted pursuant to thepreceding proviso such Loans shall be automatically converted to ABR Loans onthe last day of such then expiring Interest Period.  Upon receipt of any such notice theAdministrative Agent shall promptly notify each relevant Lender thereof.

###  

2.13.                        Limitations on EurodollarTranches.  Notwithstanding anything to the contrary inthis Agreement, all borrowings, conversions and continuations of EurodollarLoans and all selections of Interest Periods shall be in such amounts and bemade pursuant to such elections so that, (a) after giving effect thereto,the aggregate principal amount of the Eurodollar Loans comprising eachEurodollar Tranche shall be equal to $5,000,000 or a whole multiple of$1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranchesshall be outstanding at any one time.

 

2.14.                        Interest Rates and PaymentDates.  (a)  Each Eurodollar Loan shall bearinterest for each day during each Interest Period with respect thereto at arate per annum equal to the Eurodollar Rate determined for such day plus theApplicable Margin.

 

### (b)                                 Each ABR Loan shall bear interest at arate per annum equal to the ABR plus the Applicable Margin.

###  

### (c)                                  (i) If all or a portion of theprincipal amount of any Loan or Reimbursement Obligation shall not be paid whendue (whether at the stated maturity, by acceleration or otherwise), suchoverdue amount shall bear interest at a rate per annum equal to (x) in the caseof the Loans, the rate that would otherwise be applicable thereto pursuant tothe foregoing provisions of this Section plus 2% or (y) in the caseof Reimbursement Obligations, the rate applicable to ABR Loans under theRevolving Facility plus 2%, and (ii) if all or a portion of anyinterest payable on any Loan or Reimbursement Obligation or any commitment feeor other amount payable hereunder shall not be paid when due (whether at thestated

 

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### maturity, by accelerationor otherwise), such overdue amount shall bear interest at a rate per annumequal to the rate then applicable to ABR Loans under the relevant Facility plus2% (or, in the case of any such other amounts that do not relate to aparticular Facility, the rate then applicable to ABR Loans under the RevolvingFacility plus 2%), in each case, with respect to clauses (i) and (ii) above,from the date of such non-payment until such amount is paid in full (as wellafter as before judgment).

###  

### (d)                                 Interest shall be payable in arrears oneach Interest Payment Date, provided that interest accruing pursuant toparagraph (c) of this Section shall be payable from time to time ondemand.

###  

2.15.                        Computation of Interest andFees.  (a)  Interest and fees payable pursuanthereto shall be calculated on the basis of a 360-day year for the actual dayselapsed, except that, with respect to ABR Loans the rate of interest on whichis calculated on the basis of the Prime Rate, the interest thereon shall becalculated on the basis of a 365- (or 366-, as the case may be) day year forthe actual days elapsed.  TheAdministrative Agent shall as soon as practicable notify the Borrower and therelevant Lenders of each determination of a Eurodollar Rate.  Any change in the interest rate on a Loanresulting from a change in the ABR or the Eurocurrency Reserve Requirementsshall become effective as of the opening of business on the day on which suchchange becomes effective.  TheAdministrative Agent shall as soon as practicable notify the Borrower and therelevant Lenders of the effective date and the amount of each such change ininterest rate.

 

### (b)                                 Each determination of an interest rate bythe Administrative Agent pursuant to any provision of this Agreement shall beconclusive and binding on the Borrower and the Lenders in the absence ofmanifest error.  The Administrative Agentshall, at the request of the Borrower, deliver to the Borrower a statementshowing the quotations used by the Administrative Agent in determining anyinterest rate pursuant to Section 2.14(a).

###  

2.16.                        Inability to DetermineInterest Rate.  If prior to the first day of any InterestPeriod:

 

#### (a)                                  the Administrative Agent shall havedetermined (which determination shall be conclusive and binding upon theBorrower) that, by reason of circumstances affecting the relevant market,adequate and reasonable means do not exist for ascertaining the Eurodollar Ratefor such Interest Period, or

####  

#### (b)                                 the Administrative Agent shall havereceived notice from the Majority Facility Lenders in respect of the relevantFacility that the Eurodollar Rate determined or to be determined for suchInterest Period will not adequately and fairly reflect the cost to such Lenders(as conclusively certified by such Lenders) of making or maintaining theiraffected Loans during such Interest Period,

####  

theAdministrative Agent shall give telecopy or telephonic notice thereof to theBorrower and the relevant Lenders as soon as practicable thereafter.  If such notice is given (x) any EurodollarLoans under the relevant Facility requested to be made on the first day of suchInterest Period shall be made as ABR Loans, (y) any Loans under therelevant Facility that were to have been

 

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convertedon the first day of such Interest Period to Eurodollar Loans shall be continuedas ABR Loans and (z) any outstanding Eurodollar Loans under the relevantFacility shall be converted, on the last day of the then-current InterestPeriod, to ABR Loans.  Until such noticehas been withdrawn by the Administrative Agent, no further Eurodollar Loansunder the relevant Facility shall be made or continued as such, nor shall theBorrower have the right to convert Loans under the relevant Facility toEurodollar Loans.

 

2.17.                        Pro Rata Treatment andPayments.  (a)  Each borrowing by the Borrower fromthe Lenders hereunder, each payment by the Borrower on account of anycommitment fee and any reduction of the Commitments of the Lenders shall bemade prorata according to the respective Term Percentages orRevolving Percentages, as the case may be, of the relevant Lenders.

 

### (b)                                 Each payment (including each prepayment)by the Borrower on account of principal of and interest on the Term Loans shallbe made prorata according to the respective outstandingprincipal amounts of the Term Loans then held by the Term Lenders.  The amount of each principal prepayment ofthe Term Loans shall be applied to reduce the then remaining installments ofthe Term Loans prorata based upon the respective then remainingprincipal amounts thereof, provided that, in the case of any optionalprepayment of Term Loans pursuant to Section 2.10, the amount of principalprepayment shall be applied as directed by the Borrower in its notice issuedpursuant to such Section.  Amountsprepaid or repaid on account of the Term Loans may not be reborrowed.

###  

### (c)                                  Each payment (including each prepayment)by the Borrower on account of principal of and interest on the Revolving Loansshall be made prorata according to the respective outstandingprincipal amounts of the Revolving Loans then held by the Revolving Lenders.

###  

### (d)                                 All payments (including prepayments) tobe made by the Borrower hereunder, whether on account of principal, interest,fees or otherwise, shall be made without setoff or counterclaim and shall bemade prior to 12:00 Noon, New York City time, on the due date thereof to theAdministrative Agent, for the account of the Lenders, at the Funding Office, inDollars and in immediately available funds. The Administrative Agent shall distribute such payments to the Lenderspromptly upon receipt in like funds as received.  If any payment hereunder (other than paymentson the Eurodollar Loans) becomes due and payable on a day other than a BusinessDay, such payment shall be extended to the next succeeding Business Day.  If any payment on a Eurodollar Loan becomesdue and payable on a day other than a Business Day, the maturity thereof shallbe extended to the next succeeding Business Day unless the result of suchextension would be to extend such payment into another calendar month, in whichevent such payment shall be made on the immediately preceding BusinessDay.  In the case of any extension of anypayment of principal pursuant to the preceding two sentences, interest thereonshall be payable at the then applicable rate during such extension.

###  

### (e)                                  Unless the Administrative Agent shallhave been notified in writing by any Lender prior to a borrowing that suchLender will not make the amount that would constitute its share of suchborrowing available to the Administrative Agent, the Administrative Agent mayassume that such Lender is making such amount available to the AdministrativeAgent, and the

 

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### Administrative Agent may,in reliance upon such assumption, make available to the Borrower acorresponding amount.  If such amount isnot made available to the Administrative Agent by the required time on theBorrowing Date therefor, such Lender shall pay to the Administrative Agent, ondemand, such amount with interest thereon, at a rate equal to the greater of (i) theFederal Funds Effective Rate and (ii) a rate determined by theAdministrative Agent in accordance with banking industry rules oninterbank compensation, for the period until such Lender makes such amount immediatelyavailable to the Administrative Agent.  Acertificate of the Administrative Agent submitted to any Lender with respect toany amounts owing under this paragraph shall be conclusive in the absence ofmanifest error.  If such Lender’s shareof such borrowing is not made available to the Administrative Agent by suchLender within three Business Days after such Borrowing Date, the AdministrativeAgent shall also be entitled to recover such amount with interest thereon atthe rate per annum applicable to ABR Loans under the relevant Facility, ondemand, from the Borrower.

###  

### (f)                                    Unless the Administrative Agent shallhave been notified in writing by the Borrower prior to the date of any paymentdue to be made by the Borrower hereunder that the Borrower will not make suchpayment to the Administrative Agent, the Administrative Agent may assume thatthe Borrower is making such payment, and the Administrative Agent may, butshall not be required to, in reliance upon such assumption, make available tothe Lenders their respective prorata shares of a correspondingamount.  If such payment is not made tothe Administrative Agent by the Borrower within three Business Days after suchdue date, the Administrative Agent shall be entitled to recover, on demand,from each Lender to which any amount which was made available pursuant to thepreceding sentence, such amount with interest thereon at the rate per annumequal to the daily average Federal Funds Effective Rate.  Nothing herein shall be deemed to limit therights of the Administrative Agent or any Lender against the Borrower.

###  

2.18.                        Requirements of Law.  (a) If the adoption of or any change in any Requirement of Law or in theinterpretation or application thereof or compliance by any Lender with anyrequest or directive (whether or not having the force of law) from any centralbank or other Governmental Authority made subsequent to the date hereof:

 

###### (i)                                     shall change the basis of taxation ofpayments to such Lender in respect of this Agreement, any Letter of Credit, anyApplication or any Eurodollar Loan made by it (except for changes in the rateof tax on, or determined by reference to, the overall net income or grossincome of such Lender); or

######  

###### (ii)                                  shall impose, modify or hold applicableany reserve, special deposit, compulsory loan or similar requirement againstassets held by, deposits or other liabilities in or for the account of,advances, loans or other extensions of credit by, or any other acquisition offunds by, any office of such Lender that is not otherwise included in thedetermination of the Eurodollar Rate.

######  

andthe result of any of the foregoing is to increase the cost to such Lender, byan amount that such Lender deems to be material, of making, converting into,continuing or maintaining Eurodollar Loans or issuing or participating inLetters of Credit, or to reduce any amount receivable hereunder in respectthereof, then, in any such case, the Borrower shall promptly pay

 

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suchLender, upon its demand, any additional amounts necessary to compensate suchLender for such increased cost or reduced amount receivable.  If any Lender becomes entitled to claim anyadditional amounts pursuant to this paragraph, it shall promptly notify theBorrower (with a copy to the Administrative Agent) of the event by reason ofwhich it has become so entitled.

 

### (b)                                 If any Lender shall have determined thatthe adoption of or any change in any Requirement of Law regarding capitaladequacy or in the interpretation or application thereof or compliance by suchLender or any corporation controlling such Lender with any request or directiveregarding capital adequacy (whether or not having the force of law) from anyGovernmental Authority made subsequent to the date hereof shall have the effectof reducing the rate of return on such Lender’s or such corporation’s capitalas a consequence of its obligations hereunder or under or in respect of anyLetter of Credit to a level below that which such Lender or such corporationcould have achieved but for such adoption, change or compliance (taking intoconsideration such Lender’s or such corporation’s policies with respect tocapital adequacy) by an amount deemed by such Lender to be material, then fromtime to time, after submission by such Lender to the Borrower (with a copy tothe Administrative Agent) of a written request therefor, the Borrower shall payto such Lender such additional amount or amounts as will compensate such Lenderor such corporation for such reduction.

###  

### (c)                                  A certificate as to any additionalamounts payable pursuant to this Section submitted by any Lender to theBorrower (with a copy to the Administrative Agent) shall be conclusive in theabsence of manifest error. Notwithstanding anything to the contrary in this Section, the Borrowershall not be required to compensate a Lender pursuant to this Section forany amounts incurred more than four months prior to the date that such Lendernotifies the Borrower of such Lender’s intention to claim compensationtherefor; provided that, if the circumstances giving rise to such claimhave a retroactive effect, then such four-month period shall be extended toinclude the period of such retroactive effect. The obligations of the Borrower pursuant to this Section shallsurvive the termination of this Agreement and the payment of the Loans and allother amounts payable hereunder.

###  

2.19.                        Taxes.  (a) All payments made by the Borrower under this Agreement shall be made free andclear of, and without deduction or withholding for or on account of, anypresent or future income, stamp or other taxes, levies, imposts, duties,charges, fees, deductions or withholdings, now or hereafter imposed, levied,collected, withheld or assessed by any Governmental Authority, excluding anytax imposed on or measured by the net income or net profits or capital (or anyfranchise or similar tax imposed in lieu thereof) of the Administrative Agentor any Lender as a result of a present or former connection between theAdministrative Agent or such Lender or the principal office or applicablelending office of such Lender or any subdivision thereof or therein and thejurisdiction of the Governmental Authority imposing such tax or any politicalsubdivision or taxing authority thereof or therein (other than any suchconnection arising solely from the Administrative Agent or such Lender havingexecuted, delivered or performed its obligations or received a payment under,or enforced, this Agreement or any other Loan Document).  If any such non-excluded taxes, levies,imposts, duties, charges, fees, deductions or withholdings (“Non-ExcludedTaxes”) or Other Taxes are required to be withheld from any amounts payableto the Administrative Agent or any Lender hereunder, the amounts so payable tothe Administrative Agent or such Lender shall be increased to the extentnecessary to yield to the Administrative Agent or such Lender (after payment ofall Non-

 

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ExcludedTaxes and Other Taxes) interest or any such other amounts payable hereunder atthe rates or in the amounts specified in this Agreement, provided, however,that the Borrower shall be entitled, to the extent it is required to do so bylaw, to deduct or withhold income or similar taxes imposed by the United States(or any political subdivision or taxing authority thereof or therein) frominterest, fees or other amounts payable hereunder for the account of any Lenderwhich is not a United States person (as such term is defined in Section 7701(a)(30)of the Code) for U.S. federal income tax purposes, and the Borrower shall notbe required to increase any such amounts payable to any Lender with respect toany Non-Excluded Taxes (i) that are attributable to such Lender’s failureto comply with the requirements of paragraph (d) or (e) of this Section or(ii) that are United States withholding taxes imposed on amounts payableto such Lender at the time such Lender becomes a party to this Agreement,except to the extent that such Lender’s assignor (if any) was entitled, at thetime of assignment, to receive additional amounts from the Borrower withrespect to such Non-Excluded Taxes pursuant to this paragraph.

 

### (b)                                 In addition, the Borrower shall pay anyOther Taxes to the relevant Governmental Authority in accordance with applicablelaw.

###  

### (c)                                  Whenever any Non-Excluded Taxes or OtherTaxes are payable by the Borrower, within thirty (30) days thereafter theBorrower shall send to the Administrative Agent for its own account or for theaccount of the relevant Lender, as the case may be, a certified copy of a taxreceipt received by the Borrower showing payment thereof or such other documentreasonably satisfactory to the Administrative Agent showing paymentthereof.  If the Borrower fails to payany Non-Excluded Taxes or Other Taxes when due to the appropriate taxingauthority, the Borrower shall indemnify the Administrative Agent and theLenders upon their written request for any incremental taxes, interest orpenalties that may become payable by the Administrative Agent or any Lender asa result of any such failure.

###  

### (d)                                 Each Lender (or Transferee) that is not a“U.S. Person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S.Lender”) shall deliver to the Borrower and the Administrative Agent (or, inthe case of a Participant, to the Lender from which the related participationshall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN(with respect to a complete exemption under an income tax treaty) or Form W-8ECI,or any successors thereto, or, in the case of a Non-U.S. Lender claimingexemption from U.S. federal withholding tax under Section 871(h) or881(c) of the Code with respect to payments of “portfolio interest”, astatement substantially in the form of Exhibit G and a Form W-8BEN,or any subsequent versions thereof or successors thereto, properly completedand duly signed and executed by such Non-U.S. Lender claiming completeexemption from U.S. federal withholding tax on all payments by the Borrowerunder this Agreement and the other Loan Documents.  Such forms shall be delivered by eachNon-U.S. Lender on or before the date it becomes a party to this Agreement (or,in the case of any Participant, on or before the date such Participantpurchases the related participation).  Inaddition, each Non-U.S. Lender shall deliver such forms promptly upon theobsolescence or invalidity of any form previously delivered by such Non-U.S.Lender.  Each Non-U.S. Lender shallpromptly notify the Borrower at any time it determines that it is no longer ina position to provide any previously delivered certificate to the Borrower (orany other form of certification adopted by the U.S. taxing authorities for suchpurpose).  Notwithstanding any otherprovision of this paragraph, a Non-U.S. Lender shall not be required to deliverany form pursuant to this paragraph that such Non-U.S. Lender is not legally

 

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### able to deliver as aresult of a change in applicable law after the date such Lender becomes a partyto this Agreement (or, in the case of any Participant, after the date suchParticipant purchases the related participation).

###  

### (e)                                  A Lender that is entitled to an exemptionfrom or reduction of non-U.S. withholding tax under the law of the jurisdictionin which the Borrower is located, or any treaty to which such jurisdiction is aparty, with respect to payments under this Agreement shall deliver to theBorrower (with a copy to the Administrative Agent), at the time or timesprescribed by applicable law or reasonably requested by the Borrower, suchproperly completed and executed documentation prescribed by applicable law aswill permit such payments to be made without withholding or at a reduced rate, providedthat such Lender is legally entitled to complete, execute and deliver suchdocumentation and in such Lender’s judgment such completion, execution orsubmission would not materially prejudice the legal position of such Lender.

###  

### (f)                                    If the Administrative Agent or any Lenderdetermines, in its sole discretion, that it has received a refund or credit ofany Non-Excluded Taxes or Other Taxes as to which it has been indemnified bythe Borrower or with respect to which the Borrower has paid additional amountspursuant to this Section 2.19, it shall pay over such refund or credit tothe Borrower (but only to the extent of indemnity payments made, or additionalamounts paid, by the Borrower under this Section 2.19 with respect to theNon-Excluded Taxes or Other Taxes giving rise to such refund or credit), net ofall out-of-pocket expenses of the Administrative Agent or such Lender andwithout interest (other than any interest paid by the relevant GovernmentalAuthority with respect to such refund or credit); provided, that theBorrower, upon the written request of the Administrative Agent or such Lender,agrees to repay the amount paid over to the Borrower (plus any penalties,interest or other charges imposed by the relevant Governmental Authority) tothe Administrative Agent or such Lender in the event the Administrative Agentor such Lender is required to repay such refund to such Governmental Authority.This paragraph shall not be construed to require the Administrative Agent orany Lender to make available its tax returns (or any other information relatingto its taxes which it deems confidential) to the Borrower or any other Person.

###  

### (g)                                 The agreements in this Section shallsurvive the termination of this Agreement and the payment of the Loans and allother amounts payable hereunder.

###  

2.20.                        Indemnity.  TheBorrower agrees to indemnify each Lender for, and to hold each Lender harmlessfrom, any actual and documented loss or expense determined in accordance withthis Section 2.20 that such Lender may sustain or incur as a consequenceof (a) default by the Borrower in making a borrowing of, conversion intoor continuation of Eurodollar Loans after the Borrower has given a noticerequesting the same in accordance with the provisions of this Agreement, (b) defaultby the Borrower in making any prepayment of or conversion from Eurodollar Loansafter the Borrower has given a notice thereof in accordance with the provisionsof this Agreement or (c) the making of a prepayment of Eurodollar Loans ona day that is not the last day of an Interest Period with respect thereto.  Such indemnification may include an amountequal to the excess, if any, of (i) the amount of interest that would haveaccrued on the amount so prepaid, or not so borrowed, converted or continued,for the period from the date of such prepayment or of such failure to borrow,convert or continue to the last day of such Interest Period (or, in the case ofa failure to borrow, convert or continue, the Interest

 

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Periodthat would have commenced on the date of such failure) in each case at theapplicable rate of interest for such Loans provided for herein (excluding,however, the Applicable Margin included therein, if any) over (ii) theamount of interest (as reasonably determined by such Lender) that would haveaccrued to such Lender on such amount by placing such amount on deposit for acomparable period with leading banks in the interbank eurodollar market.  A certificate as to any amounts payablepursuant to this Section submitted to the Borrower by any Lender shall beconclusive in the absence of manifest error. Notwithstanding anything to the contrary in this Section, the Borrowershall not be required to compensate a Lender pursuant to this Section forany loss or expense resulting from any event set forth in clauses (a), (b) or(c) of the first sentence of this Section if such event occurred morethan sixty (60) days prior to any demand for indemnification by suchLender.  This covenant shall survive thetermination of this Agreement and the payment of the Loans and all otheramounts payable hereunder.

 

2.21.                        Change of Lending Office.  EachLender agrees that, upon the occurrence of any event giving rise to theoperation of Section 2.18 or 2.19(a) with respect to such Lender, itwill, if requested by the Borrower, use reasonable efforts (subject to overallpolicy considerations of such Lender) to designate another lending office forany Loans affected by such event with the object of avoiding the consequencesof such event; provided, that such designation is made on terms that, inthe sole judgment of such Lender, cause such Lender and its lending office(s)to suffer no economic, legal or regulatory disadvantage, and provided, further,that nothing in this Section shall affect or postpone any of theobligations of the Borrower or the rights of any Lender pursuant to Section 2.18or 2.19(a).

 

2.22.                        Replacement of Lenders.  TheBorrower shall be permitted to replace any Lender in accordance with Section 11.6that (a) requests reimbursement for amounts owing pursuant to Section 2.18or 2.19(a) or (b) defaults in its obligation to make Loans hereunder,with a replacement financial institution; provided that (i) suchreplacement does not conflict with any Requirement of Law, (ii) thereplacement financial institution shall purchase, at par, all Loans and otheramounts owing to such replaced Lender on or prior to the date of replacement inaccordance with Section 11.6, (iii) the Borrower shall be liable tosuch replaced Lender under Section 2.20 if any Eurodollar Loan owing tosuch replaced Lender shall be purchased other than on the last day of theInterest Period relating thereto, (iv) the Administrative Agent and eachIssuing Lender shall have consented to the replacement financial institution(such consent not to be unreasonably withheld), (v) the replaced Lendershall be obligated to make such replacement in accordance with the provisionsof Section 11.6 (provided that the Borrower shall be obligated to pay theregistration and processing fee referred to therein), (vi) until such timeas such replacement shall be consummated, the Borrower shall pay all additionalamounts (if any) required pursuant to Section 2.18 or 2.19(a), as the casemay be, and (vii) any such replacement shall not be deemed to be a waiverof any rights that the Borrower, the Administrative Agent or any other Lendershall have against the replaced Lender.

 

SECTION 3.  LETTERSOF CREDIT

 

3.1.                              Revolving L/CCommitment.  (a)  Subject to the terms and conditionshereof, each Revolving Issuing Lender, in reliance on the agreements of theother Revolving Lenders set forth in Section 3.4(a), agrees to issueletters of credit (“Revolving Letters of Credit”) for the account of theBorrower on any Business Day during the Revolving

 

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CommitmentPeriod in such form as may be approved from time to time by such RevolvingIssuing Lender (such approval not to be unreasonably withheld); providedthat no Revolving Issuing Lender shall have any obligation to issue any RevolvingLetter of Credit if, after giving effect to such issuance, (i) theRevolving L/C Obligations would exceed the Revolving L/C Commitment, (ii) theaggregate amount of the Available Revolving Commitments would be less than zeroor (iii) the Revolving L/C Obligations with respect to all RevolvingLetters of Credit issued by such Revolving Issuing Lender would exceed suchRevolving Issuing Lender’s Specified Issuing Lender Commitment.  Each Revolving Letter of Credit shall (i) bedenominated in Dollars and payable on an “at sight” basis and (ii) expireno later than the earlier of (x) the first anniversary of its date of issuanceand (y) the date that is five Business Days prior to the Revolving TerminationDate, provided that any Revolving Letter of Credit with a one-year termmay provide for the automatic renewal thereof for additional one-year periods(which shall in no event extend beyond the date referred to in clause (y)above).

 

### (b)                                 No Revolving Issuing Lender shall at anytime be obligated to issue any Revolving Letter of Credit if such issuancewould conflict with, or cause such Revolving Issuing Lender or any RevolvingL/C Participant to exceed any limits imposed by, any applicable Requirement ofLaw.

###  

3.2.                              Procedure for Issuanceof Revolving Letters of Credit.  The Borrower may from time to time requestthat the relevant Revolving Issuing Lender issue a Revolving Letter of Creditby delivering to such Revolving Issuing Lender at its address for noticesspecified herein an Application therefor. Upon receipt of a duly completed and executed Application and anycertificates, documents and other papers and information (referred to herein orin the Application) delivered to the Revolving Issuing Lender in connectiontherewith, the relevant Revolving Issuing Lender shall process such Applicationin accordance with its customary procedures and promptly issue the RevolvingLetter of Credit requested thereby (but in no event shall any Revolving IssuingLender be required to issue any Revolving Letter of Credit earlier than three (3) BusinessDays (or such shorter period as such Revolving Issuing Lender may agree) afterits receipt of the duly completed and executed Application therefor and allsuch other certificates, documents and other papers and information referred toherein and therein and relating thereto) by issuing the original of suchRevolving Letter of Credit to the beneficiary thereof or as otherwise may beagreed to by such Revolving Issuing Lender and the Borrower.  Such Revolving Issuing Lender shall furnish acopy of such Revolving Letter of Credit to the Borrower promptly following theissuance thereof.  Each Revolving IssuingLender shall promptly furnish to the Administrative Agent, which shall in turnpromptly furnish to the Lenders, notice of the issuance of each RevolvingLetter of Credit (including the amount thereof).

 

3.3.                              Revolving L/C Fees andOther Charges.  (a)  The Borrower will pay a fee on allthe average daily aggregate maximum amount available to be drawn under alloutstanding Revolving Letters of Credit at a per annum rate equal to theApplicable Margin then in effect with respect to Eurodollar Loans under theRevolving Facility, less any fees paid pursuant to the second sentence of thisparagraph, shared ratably among the Revolving Lenders and payable quarterly inarrears on each Fee Payment Date after the issuance date.  In addition, the Borrower shall pay to eachRevolving Issuing Lender for its own account a fronting fee of 0.125% per

 

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annumon the stated amount of each Revolving Letter of Credit issued by suchRevolving Issuing Lender, payable quarterly in arrears on each Fee Payment Dateafter the issuance date.

 

### (b)                                 In addition to the foregoing fees, theBorrower shall pay or reimburse each Revolving Issuing Lender for such normaland customary costs and expenses as are incurred or charged by such RevolvingIssuing Lender in issuing, negotiating, effecting payment under, amending orotherwise administering any Revolving Letter of Credit.

###  

3.4.                              Revolving L/CParticipations.  (a)  Each Revolving Issuing Lenderirrevocably agrees to grant and hereby grants to each Revolving L/CParticipant, and, to induce such Revolving Issuing Lender to issue RevolvingLetters of Credit, each Revolving L/C Participant irrevocably agrees to acceptand purchase and hereby accepts and purchases from such Revolving IssuingLender, on the terms and conditions set forth below, for such Revolving L/CParticipant’s own account and risk an undivided interest equal to suchRevolving L/C Participant’s Revolving Percentage in such Revolving IssuingLender’s obligations and rights under and in respect of each Revolving Letterof Credit issued by such Revolving Issuing Lender and the amount of each draftpaid by such Revolving Issuing Lender thereunder.  Each Revolving L/C Participant agrees witheach Revolving Issuing Lender that, if a draft is paid under any RevolvingLetter of Credit issued by such Revolving Issuing Lender for which suchRevolving Issuing Lender is not reimbursed in full by the Borrower inaccordance with the terms of this Agreement, such Revolving L/C Participantshall pay to such Revolving Issuing Lender upon demand at such RevolvingIssuing Lender’s address for notices specified herein an amount equal to suchRevolving L/C Participant’s Revolving Percentage of the amount of such draft,or any part thereof, that is not so reimbursed. Each Revolving L/C Participant’s obligation to pay such amount shall beabsolute and unconditional and shall not be affected by any circumstance,including (i) any setoff, counterclaim, recoupment, defense or other rightthat such Revolving L/C Participant may have against any Revolving IssuingLender, the Borrower or any other Person for any reason whatsoever, (ii) theoccurrence or continuance of a Default or an Event of Default or the failure tosatisfy any of the other conditions specified in Section 5, (iii) anyadverse change in the condition (financial or otherwise) of the Borrower, (iv) anybreach of this Agreement or any other Loan Document by the Borrower, any otherLoan Party or any other Revolving L/C Participant or (v) any othercircumstance, happening or event whatsoever, whether or not similar to any ofthe foregoing.

 

### (b)                                 If any amount required to be paid by anyRevolving L/C Participant to any Revolving Issuing Lender pursuant to Section 3.4(a) inrespect of any unreimbursed portion of any payment made by such RevolvingIssuing Lender under any Revolving Letter of Credit is paid to such Revolving IssuingLender within three Business Days after the date such payment is due, suchRevolving L/C Participant shall pay to such Revolving Issuing Lender on demandan amount equal to the product of (i) such amount, times (ii) thedaily average Federal Funds Effective Rate during the period from and includingthe date such payment is required to the date on which such payment isimmediately available to such Revolving Issuing Lender, times (iii) afraction the numerator of which is the number of days that elapse during suchperiod and the denominator of which is 360. If any such amount required to be paid by any Revolving L/C Participantpursuant to Section 3.4(a) is not made available to the relevantRevolving Issuing Lender by such Revolving L/C Participant within threeBusiness Days after the date such payment is due, such Revolving Issuing Lendershall be entitled to recover from such Revolving

 

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### L/C Participant, ondemand, such amount with interest thereon calculated from such due date at therate per annum applicable to ABR Loans under the Revolving Facility.  A certificate of the relevant RevolvingIssuing Lender submitted to any Revolving L/C Participant with respect to anyamounts owing under this Section shall be conclusive in the absence ofmanifest error.

###  

### (c)                                  Whenever, at any time after any RevolvingIssuing Lender has made payment under any Revolving Letter of Credit and hasreceived from any Revolving L/C Participant its prorata share ofsuch payment in accordance with Section 3.4(a), such Revolving IssuingLender receives any payment related to such Revolving Letter of Credit (whetherdirectly from the Borrower or otherwise, including proceeds of collateralapplied thereto by such Revolving Issuing Lender), or any payment of intereston account thereof, such Revolving Issuing Lender will distribute to suchRevolving L/C Participant its prorata share thereof; provided,however, that in the event that any such payment received by suchRevolving Issuing Lender shall be required to be returned by such RevolvingIssuing Lender, such Revolving L/C Participant shall return to such RevolvingIssuing Lender the portion thereof previously distributed by such RevolvingIssuing Lender to it.

###  

3.5.                              Revolver L/C ReimbursementObligation of the Borrower.  If any draft is paid under any RevolvingLetter of Credit, the Borrower shall reimburse the relevant Revolving IssuingLender for the amount of (a) the draft so paid and (b) any taxes,fees, charges or other costs or expenses incurred by such Revolving IssuingLender in connection with such payment, not later than 12:00 Noon, New YorkCity time, on (i) the Business Day that the Borrower receives notice ofsuch draft, if such notice is received on such day prior to 10:00 A.M.,New York City time, or (ii) if clause (i) above does not apply, theBusiness Day immediately following the day that the Borrower receives suchnotice.  Each such payment shall be madeto the relevant Revolving Issuing Lender at its address for notices referred toherein in Dollars and in immediately available funds.  Interest shall be payable on any such amountsfrom the date on which the relevant draft is paid until payment in full at therate set forth in (x) until the Business Day next succeeding the date of therelevant notice, Section 2.14(b) and (y) thereafter, Section 2.14(c).  If the Borrower fails to reimburse anyRevolving Issuing Lender in accordance with this Section 3.5, the Borrowershall be deemed to have made a request for a borrowing of ABR Loans pursuant toSection 2.5(b) as provided in such Section.

 

3.6.                              Synthetic L/C Lettersof Credit.  (a)  Subject to the terms and conditions hereof, the Synthetic IssuingLender, in reliance on the agreement of the Borrower set forth in Section 3.8(b),agrees to issue letters of credit (the “Synthetic Letters of Credit “)for the account of the Borrower on any Business Day prior to the date set forthin clause (y) of the next succeeding sentence in such form as may be approvedfrom time to time by the Synthetic Issuing Lender (such approval not to beunreasonably withheld); provided, that the Synthetic Issuing Lendershall have no obligation to issue any Synthetic Letter of Credit if, aftergiving effect to such issuance, the aggregate principal amount of Synthetic L/CLetter of Credit Outstandings would exceed the Synthetic L/C DepositAmount.  Each Synthetic Letter of Creditshall (i) be denominated in Dollars and payable on an “at sight” basis and(ii) expire no later than the earlier of (x) the first anniversary of itsdate of issuance and (y) the date that is five Business Days prior to theSynthetic L/C Termination Date, provided that any Synthetic Letter ofCredit with a one-year term may provide for the automatic renewal thereof foradditional one-year periods (which shall in no event extend beyond the datereferred to in clause (y) above).

 

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### (b)                                 The Synthetic Issuing Lender shall not atany time be obligated to issue any Synthetic Letter of Credit hereunder if (i) suchissuance would conflict with, or cause the Synthetic Issuing Lender to exceedany limits imposed by, any applicable Requirement of Law or (iii) theSynthetic L/C Termination Date shall have occurred.

###  

3.7.                              Procedure for Issuanceof Synthetic Letters of Credit.  The Borrower may from time to time requestthat the Synthetic Issuing Lender issue a Synthetic Letter of Credit by deliveringto the Synthetic Issuing Lender at its address for notices specified herein anApplication therefor.  Upon receipt of aduly completed and executed Application and any certificates, documents andother papers and information (referred to herein or in the Application)delivered to the Synthetic Issuing Lender in connection therewith, theSynthetic Issuing Lender shall process such Application in accordance with itscustomary procedures and promptly issue the Synthetic Letter of Creditrequested thereby (but in no event shall the Synthetic Issuing Lender berequired to issue any Synthetic Letter of Credit earlier than three (3) BusinessDays (or such shorter period as the Synthetic Issuing Lender may agree) afterits receipt of the duly completed and executed Application therefor and allsuch other certificates, documents and other papers and information referred toherein and therein and relating thereto) by issuing the original of suchSynthetic Letter of Credit to the beneficiary thereof or as otherwise may beagreed to by the Synthetic Issuing Lender and the Borrower.  The Synthetic Issuing Lender shall furnish acopy of such Synthetic Letter of Credit to the Borrower promptly following theissuance thereof.  The Synthetic IssuingLender shall promptly furnish to the Administrative Agent, which shall in turnpromptly furnish to the Lenders, notice of the issuance of each SyntheticLetter of Credit (including the amount thereof).

 

3.8.                              Synthetic L/C DepositAccount.  (a)  Establishment of Synthetic L/C DepositAccount.  On or prior to the ClosingDate, the Borrower shall establish and maintain the Synthetic L/C DepositAccount at the Synthetic Issuing Lender in the name of the Synthetic IssuingLender for the benefit of the Synthetic Issuing Lender and the other SecuredParties (as defined in the Guarantee and Collateral Agreement) and shall enterinto a synthetic letter of credit deposit and account control agreement (the “SyntheticL/C Deposit Agreement”) with the Synthetic Issuing Lender in form and substancesatisfactory to it.  Amounts on depositin the Synthetic L/C Deposit Account shall be invested, or caused to beinvested, by the Synthetic Issuing Lender as set forth in Section 3.8(d),and no Person (other than the Synthetic Issuing Lender or any of its respectivesub-agents) shall have the right to make any withdrawals from the Synthetic L/CDeposit Account or exercise any other right or power with respect thereto,except as expressly provided in Section 3.8(c).  Without limiting the generality of theforegoing, each party hereto acknowledges and agrees that the amount on depositat any time in the Synthetic L/C Deposit Account shall constitute “Collateral”under the Loan Documents and shall be available, subject to the terms of theLoan Documents, to satisfy any Obligation of any Loan Party under the LoanDocuments to the extent that such amount exceeds the Synthetic Letter of CreditOutstandings.

 

### (b)                                 Deposits in Synthetic L/C Deposit Account.  

###  

(1)                                  On the Closing Date, the Borrower shalldeposit $200,000,000 of proceeds of Term Loans made on the Closing Date in the SyntheticL/C Deposit Account.

 

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(2)                                  At any time after the Closing Date, theBorrower shall be permitted to deposit additional amounts in the Synthetic L/CDeposit Account to the extent amounts have been withdrawn from the SyntheticL/C Deposit Account pursuant to Section 3.8(c) (1) or (3) below,provided that after giving effect to any such deposit, the aggregate amount ondeposit shall not exceed $200,000,000.

 

### (c)                                  Withdrawals from and Closing of SyntheticL/C Deposit Account.  Amounts on deposit in the Synthetic L/CDeposit Account shall be withdrawn and distributed as follows:

###  

(1)                                  on any date on which the Borrower failsto reimburse the Synthetic Issuing Lender for any payment made by the SyntheticIssuing Lender with respect to any Synthetic Letter of Credit, the SyntheticIssuing Lender shall withdraw from the Synthetic L/C Deposit Account an amountequal to the amount of such unreimbursed payment, in accordance with Section 3.10;

 

(2)                                  following the occurrence of an Event ofDefault, the Synthetic Issuing Lender shall permit the Administrative Agent towithdraw from the Synthetic L/C Deposit Account an amount equal to the amountby which the Synthetic L/C Deposit exceeds the Synthetic Letter of CreditOutstandings, pursuant to and to be applied in accordance with the SecurityDocuments; 

 

(3)                                  at any time prior to the Synthetic L/CTermination Date, upon three (3) Business Days’ prior written notice tothe Synthetic Issuing Bank and so long as no Default or Event of Default hasoccurred and is continuing, the Borrower may withdraw a portion of theSynthetic L/C Deposit (including any accrued income on the Synthetic L/CDeposit) that is in excess of the Synthetic L/C Letter of Credit Outstandings;and

 

(4)                                  upon (A) the reduction ortermination of the Synthetic L/C Deposit Amount to $0 and (B) theexpiration or cancellation of all outstanding Synthetic Letters of Credit tothe satisfaction of the Synthetic Issuing Lender, the Synthetic Issuing Lendershall permit the Borrower to withdraw all remaining amounts from the SyntheticL/C Deposit Account and shall close the Synthetic L/C Deposit Account.

 

Thecommitment of the Synthetic Issuing Lender shall never exceed the Synthetic L/CDeposit, after giving effect to outstanding Synthetic Letters of Credit,withdrawals and deposits.

 

### (d)                                 Investment of Synthetic L/C Amount. The Synthetic Issuing Lender shall invest, or cause to be invested, theamount on deposit in the Synthetic L/C Deposit Account in certain CashEquivalents reasonably approved by the Borrower and the Synthetic IssuingLender.  Any return on the Synthetic L/CDeposit shall accrue for the benefit of the Borrower.  The Borrower acknowledges and agrees that thereturn earned on the Synthetic L/C Deposit shall not in any way affect theBorrower’s obligations with respect to the Term Loans.  

###  

3.9.                              Synthetic L/C DepositFees and Other Charges.  (a)  The Borrower shall pay to the SyntheticIssuing Lender for its own account a fronting fee of 0.125% per annum on

 

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theundrawn and unexpired amount of each Synthetic Letter of Credit issued by theSynthetic Issuing Lender, payable quarterly in arrears on each Fee Payment Dateafter the issuance date.

 

### (b)                                 In addition to the foregoing fee, theBorrower shall pay or reimburse the Synthetic Issuing Lender for such normaland customary costs and expenses as are incurred or charged by the SyntheticIssuing Lender in issuing, negotiating, effecting payment under, amending orotherwise administering any Synthetic Letter of Credit.

###  

3.10.                        Synthetic L/C ReimbursementObligations.  If any draft is paid under the SyntheticLetter of Credit, the Borrower shall reimburse the Synthetic Issuing Lender forthe amount of (a) the draft so paid and (b) any taxes, fees, chargesor other costs or expenses incurred by the Synthetic Issuing Lender inconnection with such payment, not later than 12:00 Noon, New York City time, onthe second Business Day following the Business Day on which the Borrowerreceives notice of such draft.  Each suchpayment shall be made to the Synthetic Issuing Lender at its address fornotices referred to herein in Dollars and in immediately available funds.  Interest shall be payable on any such amountsfrom the date the relevant draft is paid until payment in full at the rate setforth in (x) until the Business Day next succeeding the date of the relevantdraw notice, Section 2.14(b) and (y) thereafter, Section 2.14(c).  If the Borrower fails to reimburse theSynthetic Issuing Lender at the time and place and in the manner describedabove in this Section 3.10, the Synthetic Issuing Lender shall withdrawfrom the Synthetic L/C Deposit Account an amount equal to the amount of suchunreimbursed payment.  Drawings under aSynthetic Letters of Credit shall be deemed to be reimbursed to the extentfunds on deposit in the Synthetic L/C Deposit Account are withdrawn and appliedthereto in accordance with Sections 3.8(c)(1).    

 

3.11.                        Obligations Absolute.  TheBorrower’s obligations under this Section 3 shall be absolute andunconditional under any and all circumstances and irrespective of any setoff,counterclaim or defense to payment that the Borrower may have or have hadagainst any Issuing Lender, any beneficiary of a Letter of Credit or any otherPerson.  The Borrower also agrees witheach Issuing Lender that such Issuing Lender shall not be responsible for, andthe Borrower’s Reimbursement Obligations under Sections 3.5 and 3.10 shall notbe affected by, among other things, the validity or genuineness of documents orof any endorsements thereon, even though such documents shall in fact prove tobe invalid, fraudulent or forged, or any dispute between or among the Borrowerand any beneficiary of any Letter of Credit or any other party to which suchLetter of Credit may be transferred or any claims whatsoever of the Borroweragainst any beneficiary of such Letter of Credit or any such transferee.  No Issuing Lender shall be liable for anyerror, omission, interruption or delay in transmission, dispatch or delivery ofany message or advice, however transmitted, in connection with any Letter ofCredit, except for errors or omissions found by a final and nonappealabledecision of a court of competent jurisdiction to have resulted from the grossnegligence or willful misconduct of such Issuing Lender.  The Borrower agrees that any action taken oromitted by any Issuing Lender under or in connection with any Letter of Creditor the related drafts or documents, if done in the absence of gross negligenceor willful misconduct, shall be binding on the Borrower and shall not result inany liability of such Issuing Lender to the Borrower.

 

3.12.                        Letter of Credit Payments.  Ifany draft shall be presented for payment under any Letter of Credit, theIssuing Lender that issued such Letter of Credit shall promptly

 

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notifythe Borrower of the date and amount thereof. The responsibility of each Issuing Lender to the Borrower in connectionwith any draft presented for payment under any Letter of Credit shall, inaddition to any payment obligation expressly provided for in such Letter ofCredit, be limited to determining that the documents (including each draft)delivered under such Letter of Credit in connection with such presentment aresubstantially in conformity with such Letter of Credit.

 

3.13.                        Applications.  Tothe extent that any provision of any Application related to any Letter ofCredit is inconsistent with the relevant provisions of this Section 3, theprovisions of this Section 3 shall apply.

 

SECTION 4.  REPRESENTATIONSAND WARRANTIES

 

To induce the Administrative Agent and the Lendersto enter into this Agreement and to make the Loans and issue or participate inthe Letters of Credit, the Borrower hereby represents and warrants to theAdministrative Agent and each Lender that:

 

4.1.                              Organization; Powerand Authority.  The Borrower and each Group Member (a) isduly organized, validly existing and in good standing under the laws of thestate of its organization and (b) has all requisite corporate or limitedliability company power and authority to own its property and assets, to leasethe property it operates as lessee and to carry on its business as nowconducted and as proposed to be conducted, and is qualified to do business, andis in good standing, in every jurisdiction where such qualification isrequired, except where the failure to have such power and authority and so toqualify would not reasonably be expected to result in a Material AdverseEffect.  Each Loan Party has thecorporate or limited liability company power to execute, deliver and performits obligations under each Loan Document to which it is a party, and each LoanParty has the corporate or limited liability company power to take all actionnecessary to consummate the transactions contemplated by the Loan Documents towhich it is a party.

 

4.2.                              Due Authorization.  EachLoan Party has taken all necessary corporate or limited liability companyaction to authorize the execution, delivery and performance of the LoanDocuments to which it is a party and, in the case of the Borrower, to authorizethe extensions of credit on the terms and conditions of this Agreement.  Each Loan Document has been duly executed anddelivered on behalf of each Loan Party party thereto. 

 

4.3.                              Governmental Approval. Except for (i) the Confirmation Order, (ii) the filingsreferred to in Section 4.15, (iii) such consents, authorizations,filings and notices which have been duly obtained or made and are in full forceand effect or (iv) as would not reasonably be expected to have a MaterialAdverse Effect, no consent or authorization of, filing with, notice to or otheract by or in respect of, any Governmental Authority is required in connectionwith the extensions of credit hereunder or with the execution, delivery,performance by any Loan Party of, or the validity or enforceability of, thisAgreement or any of the Loan Documents (to which it is a party) or the conductby any Loan Party of its business (as conducted on the date this representationis made or deemed made). The Borrower has delivered to the Administrative Agenta complete and correct copy of the Plan of Reorganization, the ConfirmationOrder and

 

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PlanSecured Notes, if any, including any amendments, supplements or modificationswith respect to any of the foregoing.

 

4.4.                              Binding andEnforceable. This Agreementconstitutes, and each other Loan Document upon execution will constitute, alegal, valid and binding obligation of each Loan Party party thereto,enforceable against each such Loan party in accordance with its terms, exceptas enforceability may be limited by applicable bankruptcy, insolvency,reorganization, moratorium or similar laws affecting the enforcement ofcreditors’ rights generally and by general equitable principles (whetherenforcement is sought by proceedings in equity or at law).

 

4.5.                              No Violation.  Theexecution, delivery and performance by any Loan Party of this Agreement and theother Loan Documents to which it is a party, the issuance of Letters of Credit,the borrowings hereunder and the use of the proceeds thereof will not violate (i) itsorganizational documents or (ii) in any manner which has had or wouldreasonably be expected to have a Material Adverse Effect, any Requirement ofLaw or any Contractual Obligation of such Loan Party.

 

4.6.                              No Default.  NoDefault or Event of Default has occurred and is continuing, other than anyDefault or Event of Default which has been waived pursuant to Section 11.1.  As of the Closing Date, no Group Member is indefault (and, for purposes of making this representation on any date after theClosing Date, has not been in default for more than 45 days) in any materialrespect under or with respect to any of its material Contractual Obligations(other than in respect of Debt) that, in the aggregate with other suchdefaults, would reasonably be expected to have a Material Adverse Effect.

 

4.7.                              Litigation.  Nolitigation, investigation, arbitration, or administrative proceeding iscurrently pending or, to the Borrower’s knowledge, threatened against it or anyRestricted Subsidiary or against any of their respective properties or revenues(i) to restrain the entry by any Loan Party into, the enforcement of orexercise of any rights by the Lenders or the Administrative Agent under, or theperformance or compliance by any Loan Party with any obligations under, theLoan Documents to which it is a party or (ii) which has had or wouldreasonably be expected to have a Material Adverse Effect.

 

4.8.                              Financial Condition.  Theunaudited pro forma consolidated balance sheet of the Borrower and itsconsolidated Subsidiaries as at December 31, 2004 and the related proforma consolidated statement of income for the fiscal year then ended(including the notes thereto), copies of which have heretofore been deliveredto the Lenders, present fairly the pro forma consolidated financial conditionof the Borrower and its consolidated Subsidiaries as at said date and the proforma consolidated results of its operations for said fiscal year in accordancewith GAAP, excluding (i) the effects of “fresh start” accounting under SOP90-7 and (ii) the issuance of securities and the incurrence of Debtpursuant to the Plan of Reorganization. As of the Closing Date and except as would not reasonably be expected tohave a Material Adverse Effect, neither the Borrower nor any of its Subsidiarieswill have any material debt or Guarantee Obligations, contingent liabilities orliabilities for taxes, or any long-term leases including any interest rate orforeign currency swap or exchange transaction, that are not reflected in theforegoing financial statements referred to in this Section 4.8, reflectedin the 

 

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disclosurestatement for the Plan of Reorganization or otherwise expressly disclosed tothe Administrative Agent prior to the Closing Date.

 

4.9.                              Material AdverseChange.  Since December 31, 2004, there has beenno material adverse change in the financial condition, operations, business orAssets of the Borrower or its Subsidiaries, which would have a material adverseeffect on the ability of the Borrower to pay when due amounts owed by it fromtime to time under this Agreement.

 

4.10.                        Investment Company Act;Public Utility Holding Company Act.  No Loan Party is an “investment company”,within the meaning of the Investment Company Act of 1940, as amended.  Prior to the effectiveness of the repeal ofthe Public Utility Holding Company Act of 1935, as amended (“PUHCA”), no LoanParty is a “holding company” or a “subsidiary company” of a “holding company”as defined in PUHCA subject to any regulation under PUHCA restricting itsability to incur Debt or execute or perform its obligations under the LoanDocuments to which it is a party.  NoLoan Party is subject to any regulation under the Federal Power Act restrictingits ability to incur Debt or execute or perform its obligations under the LoanDocuments to which it is a party.

 

4.11.                        Environmental Matters. There has been no matter with respect to environmental compliance whichhas had or would reasonably be expected to have a Material Adverse Effect.

 

4.12.                        Accuracy of Information, etc.  Nostatement or information contained in the Confidential Information Memorandum(other than projections and proforma financial information) asof the date of the Confidential Information Memorandum or as of the ClosingDate, contained any untrue statement of a material fact or omitted to state amaterial fact necessary to make the statements contained herein or therein notmisleading in light of the circumstances under which such statements are made.  The projections and proformafinancial information contained in the Confidential Information Memorandum wereprepared in good faith based upon estimates and assumptions believed bymanagement of the Borrower to be reasonable at the time made, which arebelieved by management to remain reasonable as of the Closing Date, it beingrecognized by the Lenders that such financial information as it relates tofuture events is not to be viewed as fact and that actual results during theperiod or periods covered by such financial information may differ from theprojected results set forth therein by a material amount.

 

4.13.                        Employee Benefit Plans.  EachPlan is in compliance in all material respects with the applicable provisionsof ERISA and the Code and the regulations and published interpretationsthereunder, except as would not result in a Material Adverse Effect.  No ERISA Event has occurred that, when takentogether with all other such ERISA Events, would result in a Material AdverseEffect.

 

4.14.                        Tax Returns and Payments.  Eachof the Borrower and its Restricted Subsidiaries has filed or caused to be filedwith the appropriate taxing authorities, all Federal, state and other taxreturns, statements, forms and reports for taxes (the “Returns”) thatare required to be filed by or with respect to the income, property oroperations of the Borrower and/or any of its Restricted Subsidiaries and haspaid or caused to be paid, all taxes shown to be

 

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dueand payable on said Returns (other than any the amount or validity of which iscurrently being contested in good faith by appropriate proceedings and withrespect to which reserves in conformity with GAAP have been provided on thebooks and records of the relevant entities), except where failure to take anysuch action is excused by the filing of the Chapter 11 Cases or would notreasonably be expected to have a Material Adverse Effect.

 

4.15.                        Security Documents.  (a) The Guarantee and Collateral Agreement is effective to create in favor of theAdministrative Agent, for the benefit of the Lenders, a legal, valid andenforceable security interest in the Collateral described therein and proceedsthereof.  In the case of the PledgedStock described in the Guarantee and Collateral Agreement, when stockcertificates representing such Pledged Stock are delivered to theAdministrative Agent, and in the case of the other Collateral described in theGuarantee and Collateral Agreement, when financing statements and other filingsspecified on Schedule 4.15(a) in appropriate form are filed in theoffices specified on Schedule 4.15(a), the Guarantee and CollateralAgreement shall constitute a fully perfected Lien on, and security interest in,all right, title and interest of the Loan Parties in such Collateral and theproceeds thereof, as security for the Obligations (as defined in the Guaranteeand Collateral Agreement), in each case prior and superior in right to anyother Person (except, in the case of Collateral other than Pledged Stock, Lienspermitted by Section 8.3).

 

### (b)                                 Each of the Mortgages is effective tocreate in favor of the Administrative Agent, for the benefit of the Lenders, alegal, valid and enforceable Lien on the Mortgaged Properties described thereinand proceeds thereof, and when the Mortgages are filed in the offices specifiedon Schedule 4.15(b), each such Mortgage shall constitute a fully perfectedLien on, and security interest in, all right, title and interest of the LoanParties in the Mortgaged Properties and the proceeds thereof, as security forthe Obligations (as defined in the relevant Mortgage), in each case prior inright to any other Person other than Liens permitted by Section 8.3 andthose Persons claiming through exceptions shown on title.  Schedule 1.1B lists, as of the ClosingDate, each parcel of owned real property and each leasehold interest in realproperty located in the United States and held by the Borrower or any of itsSubsidiaries.

###  

4.16.                        Ownership of Property. Except as would not reasonably be expected to have a Material AdverseEffect, the Borrower and each Restricted Subsidiary has good and marketabletitle to, or a subsisting leasehold interest in or right to use, all materialitems of real and personal property necessary for its operations free and clearof all Liens, except as permitted by Section 8.3.

 

4.17.                        Labor Matters. Except as, in the aggregate, would not reasonably be expected to have aMaterial Adverse Effect, there are no strikes against or other work stoppages byemployees of any Group Member pending. 

 

4.18.                        Subsidiaries.  Schedule 4.18sets forth as of the Closing Date the name and jurisdiction of incorporation ofeach Subsidiary and, as to each such Subsidiary, the percentage of each classof Capital Stock owned by any Loan Party. The shares of Capital Stock or other ownership interests so indicated onSchedule 4.18 are fully paid and non-assessable and are owned by such LoanParty, directly or indirectly, free and clear of all Liens (other than aspermitted by Section 8.3).

 

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SECTION 5.  CONDITIONSPRECEDENT

 

5.1.                              Conditions to InitialExtension of Credit.  The agreement of each Lender to make theinitial extension of credit requested to be made by it is subject to thesatisfaction, prior to or concurrently with the making of such extension ofcredit on the Closing Date, of the following conditions precedent:

 

#### (a)                                  Credit Agreement; Guarantee andCollateral Agreement.  The Administrative Agent shall have received (i) thisAgreement or, in the case of the Lenders, an Addendum, executed and deliveredby the Administrative Agent, the Borrower and each Person listed on Schedule 1.1A,(ii) the Guarantee and Collateral Agreement, executed and delivered by theBorrower and each Subsidiary Guarantor and (iii) an Acknowledgement andConsent in the form attached to the Guarantee and Collateral Agreement,executed and delivered by each Issuer (as defined therein) that is a Subsidiaryof the Borrower, if any, that is not a Loan Party.  

####  

In the event that any one ormore Persons listed on Schedule 1.1A have not executed and delivered anAddendum on the date scheduled to be the Closing Date (each such Person beingreferred to herein as a “Non-Executing Person”), the condition referredto in clause (i) above shall nevertheless be deemed satisfied if on suchdate the Borrower and the Administrative Agent shall have designated one ormore Persons (the “Designated Lenders”) to assume, in the aggregate, allof the Commitments that would have been held by the Non-Executing Persons(subject to each such Designated Lender’s consent and its execution anddelivery of an Addendum).  Schedule 1.1Ashall automatically be deemed to be amended to reflect the respectiveCommitments of the Designated Lenders and the omission of the Non-ExecutingPersons as Lenders hereunder.

 

#### (b)                                 Closing Certificate; CertifiedCertificate of Formation; Good Standing Certificates. The Administrative Agent shall have received (i) a certificate ofeach Loan Party, dated the Closing Date, substantially in the form of Exhibit C,with appropriate insertions and attachments, including the certificate ofincorporation of each Loan Party that is a corporation certified by therelevant authority of the jurisdiction of organization of such Loan Party orthe certificate of formation and limited liability company agreement of eachLoan party that is a limited liability company, and (ii) a long form goodstanding certificate for each Loan Party from its jurisdiction of organization(where available).

####  

#### (c)                                  Legal Opinions. The Administrative Agent shall have received the following executedlegal opinions:

####  

(i)                                     the legal opinion of White & CaseLLP counsel to the Borrower and its Subsidiaries, substantially in the form of Exhibit F;and

 

(ii)                                  the legal opinion of local counsel in each ofCalifornia, Texas, Michigan and Massachusetts and of such other special andlocal counsel as may be required by the Administrative Agent.

 

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Each such legal opinion shall cover such othermatters incident to the transactions contemplated by this Agreement as theAdministrative Agent may reasonably require.

 

#### (d)                                 Representations and Warranties. Each of the representation and warranties made by any Loan Party in orpursuant to the Loan Documents shall be true and correct in all materialrespects on and as of the Closing Date. No Default or Event of Default shall have occurred and be continuing onthe Closing Date or after giving effect to the extensions of credit requestedto be made on the Closing Date and the application of proceeds therefrom.

####  

#### (e)                                  Fees.  The Lendersand the Administrative Agent shall have received all fees required to be paid,and all reasonable and documented expenses for which invoices have been presented(including the reasonable fees and expenses of legal counsel), at least one (1) dayprior to the Closing Date.  All suchamounts will be paid with proceeds of Loans made on the Closing Date and willbe reflected in the funding instructions given by the Borrower to theAdministrative Agent on or before the Closing Date.

####  

#### (f)                                    Plan of Reorganization.  (i) All conditions precedent to the confirmation of the Plan of Reorganization andthe Effective Date (as defined and described in the Plan of Reorganization) inrespect thereof shall have been met or waived (and the waiver thereof, ifmaterial and adverse to the Lenders, shall have been consented to by theAdministrative Agent), (ii) each of the Effective Date and the substantialconsummation of the Plan of Reorganization shall have occurred and the Plan ofReorganization, as confirmed by the Confirmation Order, shall be in full forceand effect and (iii) the Arrangers shall have received a certificate,dated the Closing Date and signed by a financial officer of the Borrower,confirming compliance with this condition. The Arrangers shall have received a certified copy of the ConfirmationOrder and, except as would not reasonably be expected to have a MaterialAdverse Effect, such Confirmation Order shall not have been reversed, modified,stayed or amended or be the subject of a pending appeal and at least ten (10) daysshall have passed since the entry of the Confirmation Order.

####  

#### (g)                                 Financial Statements. The Lenders shall have received (i) audited financial statements ofMAG for the 2002, 2003 and 2004 fiscal years, (ii) unaudited interimconsolidated financial statements of MAG for each quarterly period ended afterthe latest fiscal year referred to in clause (i) above if such period endson a date falling 60 days or more prior to the Closing Date or is otherwiseavailable and such unaudited consolidated financial statements for the sameperiod of the prior fiscal year and (iii) as soon as available tomanagement, monthly financial data generated by MAG’s internal accountingsystems for use by senior and financial management for each month ended afterthe latest fiscal quarter referred to in clause (ii) above

####  

#### (h)                                 Pro Forma Balance Sheet. The Lenders shall have received a pro forma condensed combined balancesheet of the Borrower and its Subsidiaries as at the date of the most recentconsolidated balance sheet delivered pursuant to Section 5.1(g) and apro forma condensed combined statement of operations for the year ended December 31,2004, in each case adjusted to give effect to the consummation of the Plan of

 

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#### Reorganization andthe financings contemplated hereby as if such transactions, with respect to thepro forma balance sheet, had occurred on such date or with respect to the proforma statements of operations, had occurred on the first day of the year endedDecember 31, 2004.

####  

#### (i)                                     Environmental Assessment. ENVIRON shall have delivered an original copy of its environmentalreport, dated September 2005 to the Administrative Agent, and such reportshall be reasonably satisfactory to the Administrative Agent.

####  

#### (j)                                     Restructuring of Debt. The Administrative Agent shall have received evidence satisfactory to itthat substantially all of the existing Debt of the Borrower and itsSubsidiaries (other than Permitted Debt) shall have been repaid or restructuredas expressly contemplated in the Plan of Reorganization or otherwise on termssatisfactory to the Administrative Agent. 

####  

#### (k)                                  Lien Searches. The Administrative Agent shall have received the results of a recentlien search in each of the jurisdictions where assets of the Loan Parties arelocated, and such search shall reveal no liens on any of the assets of the LoanParties except for liens permitted by Section 8.3 or discharged on orprior to the Closing Date pursuant to documentation satisfactory to theAdministrative Agent.

####  

#### (l)                                     Pledged Stock; Stock Powers. The Administrative Agent shall have received the certificatesrepresenting the shares of Capital Stock pledged pursuant to the Guarantee andCollateral Agreement, together with an undated stock power for each suchcertificate executed in blank by a duly authorized officer of the pledgorthereof. 

####  

#### (m)                               Filings, Registrations and Recordings. Each document (including any Uniform Commercial Code financingstatement) required by the Security Documents or under law or reasonablyrequested by the Administrative Agent to be filed, registered or recorded inorder to create in favor of the Administrative Agent, for the benefit of theLenders, a perfected Lien on the Collateral described therein, prior andsuperior in right to any other Person (other than with respect to Liensexpressly permitted by Section 8.3), shall be in proper form for filing,registration or recordation.

####  

#### (n)                                 Mortgages, etc. The Administrative Agent shall have received a Mortgage with respect toeach Mortgaged Property, executed and delivered by a duly authorized officer ofeach party thereto.  The AdministrativeAgent shall have received in respect of each Mortgaged Property a mortgagee’stitle insurance policy (or policies), and each such policy shall (i) be inan amount satisfactory to the Administrative Agent, (ii) insure that theMortgage insured thereby creates a valid first Lien on such Mortgaged Propertyfree and clear of all Liens, defects and encumbrances, except for Lienspermitted by Section 8.3 or exceptions shown on title, (iii) be inthe form reasonably acceptable to the Administrative Agent, (iv) name theAdministrative Agent for the benefit of the Lenders as the insured thereunderand (v) contain such endorsements and affirmative coverage as reasonablyrequired by the Administrative Agent.

 

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#### (o)                                 MIRMA.  The Lendersshall have received (i) certification from the Borrower that MIRMA is notprohibited from making distributions or dividends as of the Closing Date and,based upon financial projections of MIRMA and its Subsidiaries prepared in goodfaith and based upon estimates and assumptions that the Borrower believes to bereasonable at the time delivered, MIRMA is not projected to be prohibited frommaking distributions and dividends during the term of the Loans (unless suchprohibition arises solely from the requirement under the Facility LeaseDocuments with respect to MIRMA and its Subsidiaries that MIRMA and itsSubsidiaries deliver financial statements for the most recently completedfiscal year or fiscal quarter, as the case may be, and the date ofdetermination is less than 90 or 60 days, as the case may be, from the end ofsuch fiscal year or fiscal quarter) and (ii) reasonably detailedcomputations that demonstrate to the reasonable satisfaction of the Arrangerscompliance with any restrictions on restricted payments applicable to MIRMA.

####  

5.2.                              Conditions to EachExtension of Credit.  The agreement of each Lender to make anyextension of credit requested to be made by it on any date (including itsinitial extension of credit) is subject to the satisfaction of the followingconditions precedent:

 

#### (a)                                  Representations and Warranties. Each of the representations and warranties made by any Loan Party in orpursuant to the Loan Documents (other than those set forth in Sections 4.7, 4.9and 4.12 of this Agreement) shall be true and correct in all material respectson and as of such date as if made on and as of such date.

####  

#### (b)                                 No Default.  No Default orEvent of Default shall have occurred and be continuing on such date or aftergiving effect to the extensions of credit requested to be made on such date andthe application of proceeds therefrom.

####  

Eachborrowing by and issuance of a Letter of Credit on behalf of the Borrowerhereunder shall constitute a representation and warranty by the Borrower as ofthe date of such extension of credit that the conditions contained in this Section 5.2have been satisfied.

 

SECTION 6.  AFFIRMATIVECOVENANTS

 

The Borrower hereby agrees that, so long as theCommitments remain in effect, any Letter of Credit remains outstanding or anyLoan or other amount is due and owing to any Lender or the Administrative Agenthereunder:

 

6.1.                              Compliance with Law;Maintenance of Existence.  (a)  Each Loan Party and itsSubsidiaries shall comply with all Requirements of Law (including EnvironmentalLaws) applicable to such Loan Party and such Subsidiaries in the conduct oftheir respective businesses except to the extent that failure to complytherewith would not reasonably be expected to have a Material Adverse Effect;and (b) each Loan Party shall preserve, renew and keep in full force andeffect its organizational existence except as otherwise permitted by Section 8.4.

 

6.2.                              Financial Statements.  TheBorrower shall furnish to the Administrative Agent with copies for each Lender:

 

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#### (a)                                  within the earlier of (x) ninety (90)days after the end of each fiscal year of the Borrower (beginning with thefiscal year ended December 31, 2005) and (y) five (5) Business Daysof the date on which such financial statements are filed with the SEC (theBorrower shall be deemed to have delivered such financial statements if theBorrower provides written notice (which may be in electronic form) of themaking or filing of any financial statements required in this clause (a) andthe same are continuously available on “EDGAR,” the Electronic Data GatheringAnalysis and Retrieval system of the SEC), a copy of the audited consolidatedbalance sheet of the Borrower and its consolidated Subsidiaries as at the endof such year and the related audited consolidated statements of income and ofcash flows for such year, certified by KPMG or other independent certifiedpublic accountants of nationally recognized standing; and

####  

#### (b)                                 within the earlier of (x) sixty (60) daysafter the end of each fiscal quarter (other than the last fiscal quarter) ofeach fiscal year of the Borrower (commencing with the fiscal quarter ending March 31,2006) and (y) five (5) Business Days of the date on which such financialstatements are filed with the SEC (the Borrower shall be deemed to havedelivered such financial statements if the Borrower provides written notice(which may be in electronic form) of the making or filing of any financialstatements required in this clause (b) and the same are continuouslyavailable on “EDGAR,” the Electronic Data Gathering Analysis and Retrievalsystem of the SEC), the unaudited consolidated balance sheet of the Borrowerand its consolidated Subsidiaries as at the end of such quarter, certified by aResponsible Officer as being prepared in accordance with GAAP (subject tonormal year-end audit adjustments).

####  

All such financial statements shall present fairlythe financial condition of the Borrower and its consolidated Subsidiaries andshall be prepared in reasonable detail and in accordance with GAAP.

 

6.3.                              Certificates; OtherInformation.  The Borrower shall furnish to theAdministrative Agent with copies for each Lender (or, in the case of clause(c), to such Lender or, in the case of clause (d) and (e), to theAdministrative Agent):

 

#### (a)                                  concurrently with the delivery of anyfinancial statements pursuant to Section 6.2, in the case of quarterly orannual financial statements, (i) a certificate of a Responsible Officerstating that each Loan Party during such period has complied with the terms ofthis Agreement and the other Loan Documents to which it is a party, and thatsuch Responsible Officer has obtained no knowledge of any Default or Event ofDefault except as specified in such certificate (and if such certificatespecifies any Default or Event of Default has occurred, specifying the natureand extent thereof and any corrective action taken or proposed to be taken withrespect thereto) and (ii) a Compliance Certificate containing allinformation and calculations necessary for determining compliance by each GroupMember with the provisions of this Agreement referred to therein as of the lastday of the fiscal quarter or fiscal year of the Borrower, as the case may be;

####  

#### (b)                                 as soon as available, and in any event nolater than sixty (60) days (or, in the case of the initial Projectionsdelivered after the fiscal year ended December 31, 2005,

 

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#### ninety (90) days)after the end of each fiscal year of the Borrower, a detailed consolidatedbudget for the following fiscal year prepared on a quarterly basis (including aprojected consolidated balance sheet of the Borrower and its Subsidiaries as ofthe end of the following fiscal year, the related consolidated statements ofprojected cash flow, projected changes in financial position and projectedincome and a description of the underlying assumptions applicable thereto)(collectively, the “Projections”), which Projections shall in each casebe accompanied by a certificate of a Responsible Officer stating that suchProjections are prepared in good faith based on estimates, information andassumptions that such Responsible Officer believes to be reasonable at the timethey are prepared;

####  

#### (c)                                  promptly after the request by any Lender,all documentation and other information that such Lender reasonably requests inorder to comply with its ongoing obligations under applicable “know yourcustomer” and anti-money laundering rules and regulations, including theUniting and Strengthening America by Providing Appropriate Tools Required toIntercept and Obstruct Terrorism Act of 2001, as amended (the “USA PATRIOTAct”); 

####  

#### (d)                                 as soon as reasonably practicable, suchadditional financial and other information relating to the then existingfinancial condition of the Borrower and its Restricted Subsidiaries as theAdministrative Agent may from time to time reasonably request, subject to anagreed upon confidentiality provision or except where the disclosure of suchinformation is prohibited by law or by regulatory requirement; and,

####  

#### (e)                                  copies of compliance certificates in theform of Exhibit GG to the Participation Agreements constituting FacilityLease Documents required to be delivered thereunder, together with allinformation delivered pursuant to Exhibit Three to Exhibit F to thePlan of Reorganization that supports the calculations set forth in suchcompliance certificates, at the times such compliance certificates andinformation are required to be delivered under the Facility Lease Documents.

####  

6.4.                              Notices. Within five (5) Business Days of a Responsible Officer obtainingknowledge thereof, the Borrower shall give notice to the Administrative Agentand each Lender of:

 

#### (a)                                  the occurrence of any Default or Event ofDefault;

####  

#### (b)                                 the occurrence of any ERISA Event that,alone or together with any other ERISA Event, would result in a MaterialAdverse Effect; 

####  

#### (c)                                  any change in the Borrower’s S&PRating or Moody’s Rating; and

####  

#### (d)                                 any litigation, investigation orproceeding affecting any Loan Party that may exist at any time that wouldreasonably be expected to have a Material Adverse Effect.

####  

Each notice pursuant to this Section 6.4 (otherthan clause (c)) shall be accompanied by a statement of a Responsible Officersetting forth details of the occurrence

 

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referredto therein and stating what action the relevant Group Member or otherSubsidiary of the Borrower proposes to take with respect thereto.

 

6.5.                              Inspection.  TheBorrower shall permit the Administrative Agent or any other Lender or anyagents or representatives thereof (at the expense of the Administrative Agentand/or such Lender unless an Event of Default has occurred and is continuing),to examine and make copies of and abstracts from records and books of, andvisit the properties of, the Borrower to discuss the affairs, finances andaccounts of the Borrower with any of its officers or directors and with itsindependent certified public accountants (in the presence of the Borrower) fromtime to time during normal business hours upon reasonable notice.  The Administrative Agent agrees to coordinateand consolidate visits pursuant to this Section 6.5 by Lenders and theiragents and representatives (including the examination of books and records andthe making of copies and abstracts of books and records) at mutually convenienttimes and in such a manner so as to cause minimum disruption to the operationsof the Borrower and to minimize costs associated with such visits. 

 

6.6.                              Maintenance ofProperty; Insurance.  The Borrower shall, and shall cause eachRestricted Subsidiary to (a) keep all material property useful andnecessary in its business in good working order and condition, ordinary wearand tear excepted except (x) if in the good faith business judgment of theBorrower it is in its economic interest not to preserve and maintain suchproperty or (y) the failure to do so would not reasonably be expected to have aMaterial Adverse Effect and (b) maintain with financially sound andreputable insurance companies insurance on all its property in at least suchamounts and against at least such risks as are usually insured against in thesame general area by companies engaged in the same or a similar business to theextent available on commercially reasonable terms.

 

6.7.                              Subsequent AcquiredProperty; New Subsidiaries.  (a)  The Borrower shall with respect toany material property acquired after the Closing Date by any Loan Party (otherthan (x) any property described in paragraph (b), (c) or (d) below,(y) any property subject to a Lien expressly permitted by Section 8.3(c), (f) and(g), and in which and to the extent that the Administrative Agent is prohibitedfrom taking a security interest by the terms of the agreement imposing suchLien and (z) property acquired by any Excluded Foreign Subsidiary) as to whichthe Administrative Agent, for the benefit of the Lenders, does not have aperfected Lien, promptly (i) execute and deliver to the AdministrativeAgent such amendments to the Guarantee and Collateral Agreement or such otherdocuments as the Administrative Agent reasonably deems necessary or advisableto grant to the Administrative Agent, for the benefit of the Lenders, asecurity interest in such property and (ii) take all actions necessary oradvisable to grant to the Administrative Agent, for the benefit of the Lenders,a perfected first priority security interest in such property, including thefiling of Uniform Commercial Code financing statements in such jurisdictions asmay be required by the Guarantee and Collateral Agreement or by law or as maybe requested by the Administrative Agent; provided that the Borrower andits Subsidiaries shall not be required (A) to perfect the securityinterests in deposits and investment accounts by entering into separate lockboxor account control agreements; (B) to perfect any security interest inmotor vehicles or (C) to perfect any security interests in any Collateral(other than Capital Stock of Subsidiaries) by possession except as otherwiseagreed or required pursuant to the Loan Documents.

 

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### (b)                                 The Borrower shall with respect to anyfee interest in any real property having a value (together with improvementsthereof) of at least $25,000,000 (i) acquired after the Closing Date bythe Borrower or any Subsidiary Guarantor or (ii) owned by any Subsidiarythat becomes a Subsidiary Guarantor after the Closing Date (other than (x) anysuch real property subject to a Lien expressly permitted by Section 8.3and (y) real property acquired by any Excluded Foreign Subsidiary), promptly (1) executeand deliver a first priority Mortgage, in favor of the Administrative Agent,for the benefit of the Lenders, covering such real property, which in the caseof each of: (A) the Hydros (Rio, Mongap and Swingline Bridge) includingHillburn Generating Plant; (B) Lovett Generating Plant; and (C) BowlineGenerating Plant (including West Haverstraw) shall be “capped” at $10,000,000each, (2) if reasonably requested by the Administrative Agent, provide theLenders with title and extended coverage insurance covering such real propertyin an amount at least equal to the purchase price of such real property (orsuch other amount as shall be reasonably specified by the Administrative Agent;provided, however, that the Borrower shall be required to deliver titlepolicies for the following properties only in the amount of $10,000,000each:  (i) the Hydros (Rio, Mongapand Swinging Bridge), including Hillburn Generating Plant; (ii) LovettGenerating Plant; and (iii) Bowline Generating Plant (including WestHaverstraw) and otherwise conforming to the requirements set forth in Section 5.1(n)and (3) if requested by the Administrative Agent, deliver to theAdministrative Agent legal opinions related to the matters described above,which opinions shall be in form and substance, and from counsel, reasonablysatisfactory to the Administrative Agent. 

###  

### (c)                                  If any additional Subsidiary is formed oracquired after the Closing Date or any Subsidiary ceases to be an UnrestrictedSubsidiary, the Borrower shall promptly notify the Administrative Agentthereof.  The Borrower shall with respectto any new Subsidiary (other than an Excluded Foreign Subsidiary or a newSubsidiary substantially all of the Assets and the Capital Stock of which aresubject to Liens permitted by Section 8.3) created or acquired after theClosing Date by any Group Member (which, for the purposes of this paragraph(c), shall include (x) any existing Subsidiary that ceases to be an ExcludedForeign Subsidiary and (y) any existing Subsidiary that is no longer anUnrestricted Subsidiary), promptly (i) execute and deliver to theAdministrative Agent such amendments to the Guarantee and Collateral Agreementas the Administrative Agent deems necessary or advisable to grant to theAdministrative Agent, for the benefit of the Lenders, a perfected firstpriority security interest in the Capital Stock of such new Subsidiary that isowned by any Group Member, (ii) deliver to the Administrative Agent thecertificates representing such Capital Stock, together with undated stockpowers, in blank, executed and delivered by a duly authorized officer of therelevant Group Member, and (iii) if such new Subsidiary is a RestrictedSubsidiary (other than any new Subsidiary of MIRMA, MET, or New MAEM Holdco,LLC), cause such new Restricted Subsidiary (A) to become a party to theGuarantee and Collateral Agreement as a Subsidiary Guarantor, (B) to takesuch actions necessary or advisable to grant to the Administrative Agent forthe benefit of the Lenders a perfected first priority security interest in theCollateral described in the Guarantee and Collateral Agreement with respect tosuch new Restricted Subsidiary, including the filing of Uniform Commercial Codefinancing statements in such jurisdictions as may be required by the Guaranteeand Collateral Agreement or by law or as may be reasonably requested by theAdministrative Agent and (C) to deliver to the Administrative Agent acertificate of such Subsidiary, substantially in the form of Exhibit C,with appropriate insertions and attachments.

 

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### (d)                                 With respect to any new Excluded ForeignSubsidiary created or acquired after the Closing Date by any Group Member(other than by any Group Member that is an Excluded Foreign Subsidiary),promptly (i) execute and deliver to the Administrative Agent suchamendments to the Guarantee and Collateral Agreement as the AdministrativeAgent deems necessary or advisable to grant to the Administrative Agent, forthe benefit of the Lenders, a perfected first priority security interest in theCapital Stock of such new Subsidiary that is owned by any such Group Member(provided that in no event shall more than 66% of the total outstanding voting CapitalStock of any such new Subsidiary be required to be so pledged), (ii) deliverto the Administrative Agent the certificates representing such Capital Stock,together with undated stock powers, in blank, executed and delivered by a dulyauthorized officer of the relevant Group Member, and take such other action asmay be necessary or, in the opinion of the Administrative Agent, desirable toperfect the Administrative Agent’s security interest therein, and (iii) ifrequested by the Administrative Agent, deliver to the Administrative Agentlegal opinions relating to the matters described above, which opinions shall bein form and substance, and from counsel, reasonably satisfactory to theAdministrative Agent.

###  

### (e)                                  The Borrower shall promptly (i) notifythe Administrative Agent in writing of the designation of any Subsidiary as an “UnrestrictedSubsidiary” and (ii) deliver to the Administrative Agent a certificatesigned by a Responsible Officer certifying that such designation complied withthe conditions set forth in the definition of “Unrestricted Subsidiary”.

###  

6.8.                              Collateral Information.  TheBorrower shall, and shall cause each Restricted Subsidiary to, furnish to theAdministrative Agent prompt written notice of any change (i) in any LoanParty’s corporate name, (ii) in the jurisdiction of organization orformation or the location of the chief executive office or sole place ofbusiness or principal residence of any Loan Party from that referred to in Section 4.2of the Guarantee and Collateral Agreement, or (iii) in any Loan Party’sFederal Taxpayer Identification Number. The Borrower agrees not to effect orpermit any change referred to in the preceding sentence unless all filings havebeen made under the Uniform Commercial Code or otherwise that are required inorder for the Administrative Agent to continue at all times following suchchange to have a valid, legal and perfected security interest in all of theCollateral.

 

6.9.                              Further Assurances.  TheBorrower shall, and shall cause each Restricted Subsidiary to, execute any andall further documents, financing statements, agreements and instruments, andtake all further action (including filing Uniform Commercial Code and otherfinancing statements, mortgages and deeds of trust and delivering to the AdministrativeAgent certificates representing securities pledged under the SecurityDocuments) that may be required under applicable law, or that the MajorityLenders or the Administrative Agent may reasonably request, in order to grant,preserve, protect and perfect the validity and priority of the securityinterests created or intended to be created by the Security Documents.

 

6.10.                        Use of Proceeds. The Borrower shall deposit $200,000,000 ofthe proceeds of the Term Loans made on the Closing Date in the Synthetic L/CDeposit Account in accordance with Section 3.8(b).  The remaining proceeds of the Loans and theLetters of Credit shall be used for general corporate purposes.  No part of the proceeds of any Loans or otherextension of credit under this Agreement, shall be used for any purpose thatviolates the provisions of Regulation U of the Board.  If requested by any Lender or theAdministrative

 

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Agent,the Borrower shall furnish to the Administrative Agent and each Lender astatement to the foregoing effect in conformity with the requirements of FR Form G-3or FR Form U-1, as applicable, referred to in Regulation U.

 

SECTION 7.  FINANCIALCOVENANTS

 

The Borrower hereby agrees that, so long as theCommitments remain in effect, any Letter of Credit remains outstanding or anyLoan or other amount is due and owing to any Lender or the Administrative Agenthereunder:

 

7.1.                              Interest CoverageRatio.  The Borrower shall not permit the InterestCoverage Ratio for any period of four consecutive fiscal quarters of theBorrower (including the fourth fiscal quarter) (or, if less than four fiscalquarters have ended since the Closing Date, the number of full fiscal quarterscommencing with the fiscal quarter ending March 31, 2006) to be less than2.0 to 1.0. 

 

7.2.                              Leverage Ratio.  TheBorrower shall not permit the Leverage Ratio as at the last day of any periodof four consecutive fiscal quarters of the Borrower (including the fourthfiscal quarter) to exceed 6.0 to 1.0 (or, if less than four fiscal quartershave ended since the Closing Date, EBITDA for the relevant period shall bedeemed to equal EBITDA for the one, two or three immediately precedingcompleted fiscal quarters commencing with the fiscal quarter ending March 31,2006, multiplied by 4, 2 and 4/3 respectively). 

 

7.3.                              Capital Expenditures.  TheBorrower shall not, and shall not permit any Restricted Subsidiary to, makeCapital Expenditures during any fiscal year of the Borrower (not including anyamount of (i) Environmental Capital Expenditures and other CapitalExpenditures made to comply with Requirements of Law, (ii) CapitalExpenditures incurred under long-term service agreements or (iii) withoutduplication, Capital Expenditures financed with Debt referred to in clauses (iv) and(v) of the definition of Permitted Debt or from Net Cash Proceeds fromAsset Sales, Recovery Events or from the proceeds of equity contributions orAffiliate Subordinated Debt) exceeding $200,000,000 in the aggregate for theBorrower and its Restricted Subsidiaries; provided, that (a) anysuch amount referred to above, if not so expended in the fiscal year for whichit is permitted, may be carried over for expenditure in the next succeedingfiscal year, and (b) the Borrower shall be permitted to increase thepermitted amount of Capital Expenditures in any fiscal year by reducing suchpermitted amount with respect to the next succeeding fiscal year by an amountequal to such increase.  For purposes ofdetermining any carry-over amount pursuant to clause (a) of the provisoabove, Capital Expenditures made pursuant to this Section during anyfiscal year shall be deemed made first, in respect of amounts permitted forsuch fiscal year as provided above and second, in respect of amounts carriedover from the prior fiscal year pursuant to such clause (a).

 

7.4.                              Notwithstanding any financial covenant set forth above in Sections 7.1,7.2 and 7.3 in this Section 7, if the Borrower’s Moody’s Rating is notless than Baa3 and the Borrower’s S&P rating is not less than BBB- , ineach case with a stable or better outlook, such financial covenants shall bedeemed replaced with the following for so long as such ratings are maintained(without regard to outlook):

 

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#### (a)                                  Capitalization Ratio. The Borrower shall not permit the ratio of (i) Consolidated TotalDebt to (ii) Consolidated Capitalization for any period of fourconsecutive fiscal quarters of the Borrower (including the fourth fiscalquarter) to be greater than 0.65 to 1.0; and 

####  

#### (b)                                 Interest Coverage Ratio. The Borrower shall not permit the Interest Coverage Ratio for any periodof four consecutive fiscal quarters of the Borrower (including the fourthfiscal quarter) to be less than 2.5 to 1.0.

####  

SECTION 8.  NEGATIVECOVENANTS

 

The Borrower hereby agrees that, so long as theCommitments remain in effect, any Letter of Credit remains outstanding or anyLoan or other amount is due and owing to any Lender or the Administrative Agenthereunder (provided that if the Borrower’s Moody’s Rating is not lessthan Baa3 and the Borrower’s S&P Rating is not less than BBB-, in each casewith a stable or better outlook, Section 8.1, 8.2, 8.5 and 8.6 below shallnot be effective so long as such ratings are maintained (without regard tooutlook)): 

 

8.1.                              Debt.  TheBorrower shall not, and shall not permit any Restricted Subsidiary to, create,issue, incur, assume, become liable in respect of or suffer to exist any Debt,except Permitted Debt; unless, in the case of the Borrower or anySubsidiary Guarantor only, at the end of the fiscal quarter (including thefourth fiscal quarter) of the Borrower for which financial statements have beendelivered to the Administrative Agent immediately preceding the date on whichsuch Debt is incurred, the Leverage Ratio was less than 4.0 to 1.0, calculated,in the case of EBITDA, on a rolling four fiscal quarter basis ending on thelast day of such fiscal quarter and giving pro forma effect to the incurrenceof such Debt as of the first date of such period (or, if at such time less thanfour fiscal quarters have ended since the Closing Date, EBITDA shall becalculated as EBITDA for one, two or three immediately preceding completedfiscal quarters commencing with the fiscal quarter ending March 31, 2006,multiplied by 4, 2 and 4/3 respectively).

 

8.2.                              Restricted Payments.  TheBorrower shall not, and shall not permit any Restricted Subsidiary, to (i) declareor make any dividend payment or other distribution of assets, properties, cash,rights, obligations or securities on account of any shares of any class ofCapital Stock of the Borrower or such Restricted Subsidiary, (ii) make anypayments with respect to Affiliate Subordinated Debt or make any redemption orrepurchase of any Affiliate Subordinated Debt or (iii) purchase, redeem orotherwise acquire for value any shares of any class of Capital Stock of theBorrower or Restricted Subsidiary or any warrants, rights or options to acquireany such shares, now or hereafter outstanding, or reduce its capital (each, a “RestrictedPayment”); provided, however, that the Borrower may, and maypermit its Restricted Subsidiaries to (w) declare and pay dividends and otherdistributions within five (5) Business Days of the Closing Date, ascontemplated by the Plan of Reorganization, in an amount not to exceed$250,000,000, (x) declare and make any dividend payment or otherdistribution payable in Common Stock of the Borrower, (y) with respect toany Restricted Subsidiary, declare and make any dividend payment or otherdistribution (A) payable to the Borrower or any Restricted Subsidiary, or (B) wherethe Borrower or the Restricted Subsidiary which owns the Capital Stock in thepayor receives at least its proportionate share thereof (after giving effect tothe relative rights and

 

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preferencesof the various classes of Capital Stock of such payor), and (z) withrespect to the Borrower, if there is no Default or Event of Default and nonewould result therefrom, take action specified in clause (i), (ii) and (iii) above(I) if, at the end of the fiscal quarter (including the fourth fiscal quarter)of the Borrower for which financial statements have been delivered to theAdministrative Agent, most recently preceding the date on which the Borrowertakes such action, the Interest Coverage Ratio was at least 3.0 to 1.0,calculated on a rolling four fiscal quarter basis ending on the date of suchfinancial statements and with effect from the date of such delivery of suchfinancial statements (or, if at such time less than four fiscal quarters haveended since the Closing Date, the immediately preceding fiscal quarterscommencing with the fiscal quarter ending March 31, 2006), and theaggregate amount of payments made under this clause (z) of this Section 8.2since the Closing Date (including the contemplated Restricted Payment and underclause (II) of this Section 8.2) is less than the sum of (a) 100% ofcash on hand on the Closing Date (after giving effect to all cash payments anddistributions made or to be made pursuant to the Plan of Reorganization) plus (b) 100%of Free Cash Flow since the Closing Date (less any amounts of Free Cash Flowapplied to prepay the Term Loans as required under Section 2.11) and (II)in an amount equal to the amount of interest payable by MAG with respect to theMAG Senior Notes within five (5) Business Days of such distribution ordividend.

 

8.3.                              Liens.  TheBorrower shall not, and shall not permit any Restricted Subsidiary to, create, incur,assume or suffer to exist any Lien upon any of its property, whether now ownedor hereafter acquired, except:

 

#### (a)                                  Liens arising solely by operation of lawor by order of a court or tribunal or other Governmental Authority (or by anagreement of similar effect);

####  

#### (b)                                 Liens arising in the ordinary course ofbusiness or operations, in respect of overdue amounts which either (A) havenot been overdue for more than thirty (30) days or (B) are being contestedin good faith;

####  

#### (c)                                  Liens securing Permitted Debt ascontemplated by the definition thereof;

####  

#### (d)                                 Liens arising out of title retention orlike provisions in relation to the acquisition of goods or equipment acquiredin the ordinary course of business or operations and relating only to suchgoods or equipment;

####  

#### (e)                                  Liens on deposits to secure, or any Lienotherwise securing, the performance of bids, trade contracts (other than forborrowed money), leases, statutory obligations, surety bonds, appeal bonds,performance bonds and other obligations of a like nature incurred in theordinary course of business;

####  

#### (f)                                    Liens created or arising over any Assetwhich is acquired, constructed or created by the Borrower or a RestrictedSubsidiary, but only if (x) such Lien secures only principal amounts (notexceeding the cost of such acquisition, construction or creation) of Debtincurred for the purposes of such acquisition, construction or creation,together with any costs, expenses, interest and fees incurred in relationthereto or a guarantee given in respect thereof, (y) such Lien is created orarises on or before ninety (90) days after the

 

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#### completion of suchacquisition, construction or creation and (z) such Lien is confined solely tothe property so acquired, constructed or created;

####  

#### (g)                                 Liens (x) outstanding on or over anyAsset acquired after the date hereof, (y) in existence at the date of suchacquisition and (z) where the Borrower does not take any step to increase theprincipal amount secured thereby from that so secured and outstanding at thetime of such acquisition (other than in the case of Liens for a fluctuatingbalance facility, by way of utilization of that facility within the limitsapplicable thereto at the time of acquisition);

####  

#### (h)                                 Liens constituted by a right of set offor rights over a margin call account or any form of cash collateral and lettersof credit or any similar arrangement for obligations incurred in respect of anyagreement for the sale of, or the hedging or management of risks with respectto, electric energy or capacity, commodities, currency or interest rates, whicharrangement was entered into on arm’s-length, commercial terms;

####  

#### (i)                                     (x) Liens in favor of counterparties toany PPA or FSA (other than Affiliates of the Borrower) that are junior to theLiens created by the Security Documents pursuant to an agreement in the form ofExhibit I or otherwise on terms reasonably satisfactory to theAdministrative Agent; (y) Step-In Rights; and (z) Liens in favor ofcounterparties to any PPA or FSA (other than Affiliates of the Borrower) thatare paripassu with the Liens securing the Obligations and aregranted solely to secure the obligations of the Borrower or any RestrictedSubsidiary under such PPA or FSA, which in the aggregate for the Borrower andits Restricted Subsidiaries do not exceed at any time outstanding $100,000,000,provided that (1) the Lien is limited to the Assets of the Borroweror Restricted Subsidiary specific to its performance under the PPA or FSA, asthe case may be, secured by such Assets and (2) the obligations secured byeach such Lien are structured so that the counterparty’s credit exposure andactual or projected mark-to market exposure to the Borrower or RestrictedSubsidiary, as the case may be, is positively correlated with power prices;

####  

#### (j)                                     Liens in favor of a plaintiff ordefendant in any action before a court or tribunal as security for costs orexpenses where such action is being prosecuted or defended in the bona fideinterest of the Borrower;

####  

#### (k)                                  Liens described in any of clauses (d) through(g) above or clauses (l) and (m) below which are renewed or extended uponthe renewal or extension or refinancing or replacement of the Debt securedthereby, provided that there is no increase in the principal amount ofthe Debt secured thereby over the principal, capital or nominal amount thereof(plus any accrued interest and prepayment premium) outstanding immediatelyprior to such refinancing;

####  

#### (l)                                     Liens existing on the date hereof andlisted on Schedule 8.3(l),  providedthat no such Lien is spread to cover any additional property after the ClosingDate and that the amount of the obligations secured thereby is not increased;

 

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#### (m)                               Liens on the property of a Personexisting at the time such Person is merged into or consolidated with, oracquired by, the Borrower or a Restricted Subsidiary thereof and not incurredin contemplation with such merger, consolidation or acquisition;

####  

#### (n)                                 Liens created pursuant to the SecurityDocuments; 

####  

#### (o)                                 pledges or deposits in connection withworkers’ compensation, unemployment insurance and other social securitylegislation;

####  

#### (p)                                 Liens for taxes not yet due or that arebeing contested in good faith by appropriate proceedings, provided thatadequate reserves with respect thereto are maintained on the books and recordsof the Borrower or its Restricted Subsidiaries, as the case may be, inconformity with GAAP; 

####  

#### (q)                                 Liens securing Debt or other obligationsnot exceeding $50,000,000 at any one time outstanding;

####  

#### (r)                                    any interest or title of a lessor underany lease entered into by the Borrower or any other Subsidiary in the ordinarycourse of its business and covering only the assets so leased; and

####  

#### (s)                                  any interest or title of a lessor whetherby statute, common-law or by virtue of a lease entered into by the Borrower orany Subsidiary in the ordinary course of its business and covering the propertyof the Borrower or any such Subsidiary located in, at or on the leasedpremises.

####  

8.4.                              Mergers.  TheBorrower will not, and will not permit any Restricted Subsidiary to, enter intoany merger, consolidation or amalgamation, or liquidate, wind up or dissolveitself (or suffer any liquidation or dissolution), or Dispose of all orsubstantially all of its property or business, except that:

 

#### (a)                                  any Loan Party may merge, consolidate oramalgamate with, or dispose of all or substantially all of its property orbusiness to, another Loan Party or any Person which, immediately following suchtransaction, shall be a Loan Party;

####  

#### (b)                                 any Restricted Subsidiary (other than aSubsidiary Guarantor) may merge, consolidate or amalgamate with, or dispose ofall or substantially all of its property or business to, the Borrower or anyother Restricted Subsidiary;

####  

#### (c)                                  any Loan Party may dispose of all orsubstantially all of its property or business in a transaction which does notviolate Section 8.5; and

####  

#### (d)                                 any Restricted Subsidiary may liquidate,wind-up or dissolve itself into another Restricted Subsidiary or the Borrower.

####  

8.5.                              Asset Sales.  TheBorrower will not, and will not permit any Restricted Subsidiary to, conductany Asset Sale other than the sale or disposition of Assets for which 75% ofthe consideration received (excluding any Debt of any such RestrictedSubsidiary assumed in

 

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connectionwith any such sale or Disposition) is in cash (which, for purposes of this Section 8.5,shall include liabilities, securities, notes or other obligations received bythe Borrower or any Restricted Subsidiary that are convertible into cash (andare so converted within 180 days after the completion of the Asset Sale) andcertain replacement and other capital assets and operating assets received bythe Borrower or any Restricted Subsidiary); provided that prior to theexecution of a legally binding agreement to consummate (A) any Asset Salewhich shall relate to Assets with a fair market value in excess of $150,000,000or (B) if the fair market value of all Assets sold, transferred, leased ordisposed of pursuant to this paragraph shall exceed $150,000,000 in any fiscalyear, each Asset Sale thereafter during such fiscal year, the Borrower shallhave received written confirmation from each of S&P and Moody’s that thecredit ratings assigned by such entities to the Loans shall be no lower thansuch ratings assigned by S&P and Moody’s, as the case may be, to the Loansimmediately prior to the time that S&P and Moody’s, as the case may be,shall have become aware of such proposed Asset Sale, the use of the proceedsthereof and all transactions related thereto, in each case after giving effectto such Asset Sale, the use of the proceeds thereof and all transactionsrelated thereto.

 

8.6.                              Investments.  TheBorrower will not, and will not permit any Restricted Subsidiary to, make anyadvance, loan, extension of credit (by way of guaranty or otherwise) or capitalcontribution to, or purchase any Capital Stock, bonds, notes, debentures orother debt securities of, any Person (all of the foregoing, “Investments”),except:

 

#### (a)                                  extensions of trade credit in theordinary course of business;

####  

#### (b)                                 Investments in cash and Cash Equivalents;

####  

#### (c)                                  Guarantee Obligations of Permitted Debt; 

####  

#### (d)                                 loans and advances to employees of theBorrower or any Subsidiary in the ordinary course of business (including fortravel, entertainment and relocation expenses); 

####  

#### (e)                                  Investments in Assets useful in thebusiness of the Borrower and its Restricted Subsidiaries made by the Borroweror any of its Restricted Subsidiaries with the Net Cash Proceeds of anyRecovery Event or Asset Sale;

####  

#### (f)                                    Investments which constitute proceeds ofany permitted Disposition;

####  

#### (g)                                 Investments by the Borrower or anyRestricted Subsidiary in the Borrower, any Subsidiary Guarantor, MET or MIRMA; provided,that such Investment made in MET or MIRMA pursuant to this clause (g) shallnot take the form of a contribution of Assets, other than cash or Capital Stockof any Person;

####  

#### (h)                                 any acquisition of Assets or CapitalStock solely in exchange for the issuance of equity interests (other thanDisqualified Stock) of the Borrower;

####  

#### (i)                                     Investments represented by obligationsunder Hedging Arrangements;

####  

#### (j)                                     any Investment in a Person, if as aresult of such Investment, such Person is merged, consolidated or amalgamatedwith or into, or transfers or conveys substantially

 

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#### all of its assetsto, or is liquidated into, the Borrower or a Restricted Subsidiary of theBorrower or will immediately following such Investment be a RestrictedSubsidiary; provided that the Borrower and its Restricted Subsidiariesshall maintain minimum liquidity (defined as availability under this Agreementplus cash and Cash Equivalents of the Loan Parties on hand not subject to anyLien (other than the Lien created under the Security Documents) and cash andCash Equivalents of the Borrower’s Restricted Subsidiaries which are not LoanParties that are then distributable to a Loan Party) of at least $250,000,000on a proforma basis after giving effect to the consummation ofsuch Investment and any permitted financing thereof;

####  

#### (k)                                  any Investments received (i) incompromise or resolution of obligations of trade creditors or customers thatwere incurred in the ordinary course of business of the Borrower or any of itsRestricted Subsidiaries, including (A) obligations of financially troubledaccount debtors to the extent reasonably necessary in order to prevent or limitloss and (B) pursuant to any plan of reorganization or similar arrangementupon the bankruptcy or insolvency of any trade creditor or customer, (ii) incompromise or resolution of litigation, arbitration or other disputes, or (iii) onaccount of any claim against, or an interest in, any other Person (A) acquiredin good faith in connection with or as a result of a bankruptcy, workout,reorganization or recapitalization of such other Person or (B) as a resultof a bona fide foreclosure by the Borrower or any of its RestrictedSubsidiaries with respect to any claim against any other Person;

####  

#### (l)                                     any Investment existing or committed toon the date hereof and listed on Schedule 8.6(l);

####  

#### (m)                               Investments in the form of, or pursuantto, working interests, royalty interests, mineral leases, processingagreements, farm-out agreements, contracts for the sale, transportationor exchange of oil and natural gas, unitization agreements, pooling agreements,area of mutual interest agreements, production sharing agreements or othersimilar or customary agreements, transactions, properties, interests orarrangements, and Investments and expenditures in connection therewith orpursuant thereto, in each case, made or entered into in the ordinary course ofbusiness; and

####  

#### (n)                                 in addition to Investments otherwiseexpressly permitted by this Section, Investments by the Borrower or any of itsRestricted Subsidiaries in an aggregate amount (valued at cost) not to exceed$75,000,000 at any time outstanding.

####  

8.7.                              Transactions withAffiliates.  The Borrower shall not, and shall not permitany Restricted Subsidiary to, enter into any transaction, including anypurchase, sale, lease or exchange of property, the rendering of any service orthe payment of any management, advisory or similar fees, with any Affiliate(other than the Borrower or any Restricted Subsidiary) unless such transactionis (a) otherwise permitted under this Agreement, and (b) is either(w) pursuant to agreements set forth in Schedule 8.7, as such agreementsmay be amended, modified, supplemented, extended or renewed, providedthat any future amendment, modification, supplement, extension or renewal ofany such agreement entered into after the Closing Date will be permitted to theextent that its terms are not more disadvantageous in any material respect tothe Lenders than the terms of such agreement in effect on the Closing Date, (x)upon fair and

 

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reasonableterms no less favorable to the Borrower or such Restricted Subsidiary, as thecase may be, than it would obtain in a comparable arm’s length transaction witha Person that is not an Affiliate, (y) structured as a commercially reasonableand fair allocation of costs, including corporate overhead costs, or (z) isdisclosed in the Plan of Reorganization. 

 

8.8.                              Sales and Leasebacks.  TheBorrower shall not, and shall not permit any Restricted Subsidiary to, enterinto any arrangement with any Person providing for the leasing by the Borroweror any Restricted Subsidiary of real or personal property that has been or isto be sold or transferred by the Borrower or such Restricted Subsidiary to suchPerson or to any other Person to whom funds have been or are to be advanced bysuch Person on the security of such property or rental obligations of theBorrower or such Restricted Subsidiary except to the extent that the sale ofthe relevant property is permitted under Section 8.5 and such lease, iftreated as a Lien and Debt, does not violate Sections 8.1 or 8.3.

 

8.9.                              Changes in FiscalPeriods.  The Borrower shall not change its fiscal yearto end on a day other than December 31 or change its method of determiningfiscal quarters.

 

SECTION 9.  EVENTSOF DEFAULT

 

If any of the following events shall occur and becontinuing:

 

#### (a)                                  the Borrower shall fail to pay anyprincipal of any Loan or Reimbursement Obligation when due in accordance withthe terms hereof; or the Borrower shall fail to pay any interest on any Loan orReimbursement Obligation, or any other amount payable hereunder or under anyother Loan Document, within five (5) Business Days after any such interestor other amount becomes due in accordance with the terms hereof; or

####  

#### (b)                                 (i)  any Loan Party shall default inthe observance or performance of any agreement contained in Section 6.4(a),7 or 8 of this Agreement (other than Section 8.3) or (ii) any LoanParty shall default in the observance or performance of any agreement containedin Section 8.3, and such default shall continue unremedied for a period of15 days after written notice to the Borrower from the Administrative Agent orthe Majority Lenders; or 

####  

#### (c)                                  any representation or warranty made ordeemed made by any Loan Party herein or in any other Loan Document or in anycertificate, document or financial or other statement delivered or required tobe delivered pursuant hereto or thereto shall prove to have been inaccurate inany material respect on or as of the date made or deemed made and in the caseof any representation or warranty made in any such certificate, document orfinancial or other statement that does not refer to or incorporate by referenceany of the representations or warranties otherwise made or deemed made in anyLoan Document, such inaccuracy could reasonably be expected to have a MaterialAdverse Effect; or

####  

#### (d)                                 any Loan Party shall default in theobservance or performance in any material respect of any other agreementcontained in this Agreement or any other Loan Document (other than as providedin paragraphs (a) through (c) of this Section), and such

 

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#### default shallcontinue unremedied for a period of 30 days after written notice to theBorrower from the Administrative Agent or the Majority Lenders; or

####  

#### (e)                                  The Borrower, any of its RestrictedSubsidiaries or New Mirant (subject in the case of New Mirant to there beingoutstanding more than $100,000,000 of unfunded MAI Series A PreferredShares and MAI Series B Preferred Shares in the aggregate) shall fail topay any principal of or premium or interest on any Debt of such entity that isoutstanding in a principal or notional amount equal to or in excess of$50,000,000, when the same becomes due and payable (whether by scheduled maturity,required prepayment, acceleration, demand or otherwise), and such failure shallcontinue after the applicable grace period, if any, specified in the agreementor instrument relating to such Debt; or any other event shall occur orcondition shall exist under the agreement or instrument relating to any suchDebt and shall continue after the applicable grace period, if any, specified insuch agreement or instrument, if the effect of such event or condition is toaccelerate the maturity of such Debt by reason of default; or

####  

#### (f)                                    Any judgment or order for the payment ofmoney in excess of $50,000,000 shall be rendered against the Borrower or any ofits material Restricted Subsidiaries and there shall be any period of sixty(60) consecutive days during which a stay of enforcement of such judgment ororder, by reason of a pending appeal or otherwise, shall not be in effect; or

####  

#### (g)                                 The Borrower, any of its materialRestricted Subsidiaries or New Mirant (subject in the case of New Mirant tothere being outstanding more than $100,000,000 of unfunded MAI Series APreferred Shares and MAI Series B Preferred Shares in the aggregate) (eacha “Designated Party”) shall (i) apply for or consent to theappointment of, or the taking of possession by, a receiver, custodian, trusteeor liquidator of itself or of all or a substantial part of its property, (ii) makea general assignment for the benefit of its creditors, (iii) commence avoluntary case under the Bankruptcy Code (as now or hereafter in effect) or anysimilar law of any applicable jurisdiction, (iv) file a petition seekingto take advantage of any other law relating to bankruptcy, insolvency,reorganization, winding-up, or composition or readjustment of debts, or (v) failto controvert in a timely and appropriate manner, or acquiesce in writing to,any petition filed against it in an involuntary case under the Bankruptcy Codeor any similar law of any applicable jurisdiction; or a proceeding or caseshall be commenced, without the application or consent of such DesignatedParty, in any court of competent jurisdiction, seeking (x) its liquidation,reorganization, dissolution or winding up, or the composition or readjustmentof its debts, (y) the appointment of a trustee, receiver, custodian, liquidatoror the like of such Designated Party or of all or any substantial part of itsassets, or (z) similar relief in respect of such Designated Party under any lawrelating to bankruptcy, insolvency, reorganization, winding-up, or compositionor adjustment of debts, and such proceeding or case shall continue unstayed andin effect for a period of sixty (60) or more days; or

####  

#### (h)                                 Except with the prior written consent ofthe Majority Lenders, the MAI Series A Preferred Shares or the MAI Series BPreferred Shares cease to be enforceable or rights of the holders thereof areamended or waived; or

 

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#### (i)                                     The Borrower ceases to be Controlled,directly or indirectly, by New Mirant; or

####  

#### (j)                                     (i) Any Security Document shall forany reason be asserted in writing by the Borrower or any material SubsidiaryGuarantor not to be a legal, valid and binding obligation of any party thereto,(ii) any security interest purported to be created by any SecurityDocument and to extend to assets that are material to the Borrower and itsSubsidiaries on a consolidated basis shall cease to be, or shall be asserted inwriting by the Borrower or any other Loan Party not to be, a valid andperfected security interest (having the priority required by this Agreement orthe relevant Security Document) in the securities, assets or properties coveredthereby, except to the extent that any such loss of perfection or priorityresults from the failure of the Administrative Agent to maintain possession ofcertificates actually delivered to it representing securities pledged under theSecurity Documents and except to the extent that such loss is covered by alender’s title insurance policy and the Administrative Agent shall bereasonably satisfied with the credit of such insurer; or (iii) anyintercreditor agreement in respect of second-lien or subordinated indebtednessshall for any reason be asserted in writing by the Borrower or any materialSubsidiary Guarantor not to be a legal, valid and binding obligation of anyparty thereto or shall otherwise cease to be enforceable; or

####  

#### (k)                                  the guarantee contained in Section 2of the Guarantee and Collateral Agreement of any Subsidiary Guarantor thatholds material Assets shall cease, for any reason, to be in full force andeffect or any Loan Party shall so assert in writing; or

####  

#### (l)                                     An ERISA Event shall occur and becontinuing that, when taken together with all other such ERISA Events, wouldresult in a Material Adverse Effect; or

####  

#### (m)                               The Facility Leases shall have beenterminated pursuant to Section 18.1(b) of the Facility Lease (asdefined in the Facility Lease Documents).

####  

then, and in any such event, (A) if such eventis an Event of Default specified in clause (i), (ii), (iii) or (iv) ofparagraph (g) above with respect to the Borrower, automatically theCommitments shall immediately terminate and the Loans (with accrued interestthereon) and all other amounts owing under this Agreement and the other LoanDocuments (including all amounts of Revolving L/C Obligations, whether or notthe beneficiaries of the then outstanding Revolving Letters of Credit shallhave presented the documents required thereunder) shall immediately become dueand payable, and (B) if such event is any other Event of Default, eitheror both of the following actions may be taken: (i) with the consent of the Majority Lenders, the AdministrativeAgent may, or upon the request of the Majority Lenders, the AdministrativeAgent shall, by notice to the Borrower declare the Revolving Commitments to beterminated forthwith, whereupon the Revolving Commitments shall immediatelyterminate; and (ii) with the consent of the Majority Lenders, theAdministrative Agent may, or upon the request of the Majority Lenders, theAdministrative Agent shall, by notice to the Borrower, declare the Loans (withaccrued interest thereon) and all other amounts owing under this Agreement andthe other Loan Documents (including all amounts of Revolving L/C Obligations,whether or not the beneficiaries of the then outstanding Revolving Letters ofCredit shall have presented the documents required thereunder) to be due andpayable forthwith, whereupon the same shall

 

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immediatelybecome due and payable.  With respect toall Letters of Credit with respect to which presentment for honor shall nothave occurred at the time of an acceleration pursuant to this paragraph, theBorrower shall at such time deposit in a cash collateral account opened by theAdministrative Agent an amount equal to the aggregate then undrawn andunexpired amount of such Letters of Credit. Amounts held in such cash collateral account shall be applied by theAdministrative Agent to the payment of drafts drawn under such Letters ofCredit, and the unused portion thereof after all such Letters of Credit shallhave expired or been fully drawn upon, if any, shall be applied to repay otherobligations of the Borrower hereunder and under the other Loan Documents.  After all such Letters of Credit shall haveexpired or been fully drawn upon, all Reimbursement Obligations shall have beensatisfied and all other obligations of the Borrower hereunder and under theother Loan Documents shall have been paid in full, the balance, if any, in suchcash collateral account shall be returned to the Borrower (or such other Personas may be lawfully entitled thereto).  Exceptas expressly provided above in this Section, presentment, demand, protest andall other notices of any kind are hereby expressly waived by the Borrower.

 

SECTION 10.  THEAGENTS

 

10.1.                        Appointment.  EachLender hereby irrevocably designates and appoints the Administrative Agent asthe agent of such Lender under this Agreement and the other Loan Documents, andeach such Lender irrevocably authorizes the Administrative Agent, in suchcapacity, to take such action on its behalf under the provisions of thisAgreement and the other Loan Documents and to exercise such powers and performsuch duties as are expressly delegated to the Administrative Agent by the termsof this Agreement and the other Loan Documents, together with such other powersas are reasonably incidental thereto.  Notwithstanding any provision to the contrary elsewhere in thisAgreement, the Administrative Agent shall not have any duties orresponsibilities, except those expressly set forth herein, or any fiduciaryrelationship with any Lender, and no implied covenants, functions,responsibilities, duties, obligations or liabilities shall be read into thisAgreement or any other Loan Document or otherwise exist against theAdministrative Agent.

 

10.2.                        Delegation of Duties.  TheAdministrative Agent may execute any of its duties under this Agreement and theother Loan Documents by or through agents or attorneys-in-fact and shall beentitled to advice of counsel concerning all matters pertaining to suchduties.  The Administrative Agent shall notbe responsible for the negligence or misconduct of any agents or attorneysin-fact selected by it with reasonable care.

 

10.3.                        Exculpatory Provisions. Neither any Agent nor any of their respective officers, directors,employees, agents, attorneys-in-fact or affiliates shall be (i) liable forany action lawfully taken or omitted to be taken by it or such Person under orin connection with this Agreement or any other Loan Document (except to theextent that any of the foregoing are found by a final and nonappealabledecision of a court of competent jurisdiction to have resulted from its or suchPerson’s own gross negligence or willful misconduct) or (ii) responsiblein any manner to any of the Lenders for any recitals, statements,representations or warranties made by any Loan Party or any officer thereofcontained in this Agreement or any other Loan Document or in any certificate,report, statement or other document referred to or provided for in, or receivedby the Agents under or in connection with, this Agreement or any other LoanDocument

 

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orfor the value, validity, effectiveness, genuineness, enforceability orsufficiency of this Agreement or any other Loan Document or for any failure ofany Loan Party a party thereto to perform its obligations hereunder orthereunder.  The Agents shall not beunder any obligation to any Lender to ascertain or to inquire as to theobservance or performance of any of the agreements contained in, or conditionsof, this Agreement or any other Loan Document, or to inspect the properties,books or records of any Loan Party.

 

10.4.                        Reliance by AdministrativeAgent.  The Administrative Agent shall be entitled torely, and shall be fully protected in relying, upon any instrument, writing,resolution, notice, consent, certificate, affidavit, letter, telecopy, telex orteletype message, statement, order or other document or conversation believedby it to be genuine and correct and to have been signed, sent or made by theproper Person or Persons and upon advice and statements of legal counsel(including counsel to the Borrower), independent accountants and other expertsselected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any Note as theowner thereof for all purposes unless a written notice of assignment,negotiation or transfer thereof shall have been filed with the AdministrativeAgent.  The Administrative Agent shall befully justified in failing or refusing to take any action under this Agreementor any other Loan Document unless it shall first receive such advice orconcurrence of the Majority Lenders (or, if so specified by this Agreement, allLenders) as it deems appropriate or it shall first be indemnified to itssatisfaction by the Lenders against any and all liability and expense that maybe incurred by it by reason of taking or continuing to take any suchaction.  The Administrative Agent shallin all cases be fully protected in acting, or in refraining from acting, underthis Agreement and the other Loan Documents in accordance with a request of theMajority Lenders (or, if so specified by this Agreement, all Lenders), and suchrequest and any action taken or failure to act pursuant thereto shall bebinding upon all the Lenders and all future holders of the Loans.

 

10.5.                        Notice of Default.  TheAdministrative Agent shall not be deemed to have knowledge or notice of theoccurrence of any Default or Event of Default unless the Administrative Agenthas received notice from a Lender or the Borrower referring to this Agreement,describing such Default or Event of Default and stating that such notice is a “noticeof default”.  In the event that theAdministrative Agent receives such a notice, the Administrative Agent shallgive notice thereof to the Lenders.  TheAdministrative Agent shall take such action with respect to such Default orEvent of Default as shall be reasonably directed by the Majority Lenders (or,if so specified by this Agreement, all Lenders); provided that unlessand until the Administrative Agent shall have received such directions, theAdministrative Agent may (but shall not be obligated to) take such action, orrefrain from taking such action, with respect to such Default or Event ofDefault as it shall deem advisable in the best interests of the Lenders.

 

10.6.                        Non-Reliance on Agents andOther Lenders.  Each Lender expressly acknowledges thatneither the Agents nor any of their respective officers, directors, employees,agents, attorneys-in-fact or affiliates have made any representations orwarranties to it and that no act by any Agent hereafter taken, including anyreview of the affairs of a Loan Party or any affiliate of a Loan Party, shallbe deemed to constitute any representation or warranty by any Agent to anyLender.  Each Lender represents to the Agentsthat it has, independently and without reliance upon any Agent or any otherLender, and based on such documents and information as it has deemedappropriate, made its own appraisal of and investigation into the

 

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business,operations, property, financial and other condition and creditworthiness of theLoan Parties and their affiliates and made its own decision to make its Loanshereunder and enter into this Agreement. Each Lender also represents that it will, independently and withoutreliance upon any Agent or any other Lender, and based on such documents andinformation as it shall deem appropriate at the time, continue to make its owncredit analysis, appraisals and decisions in taking or not taking action underthis Agreement and the other Loan Documents, and to make such investigation asit deems necessary to inform itself as to the business, operations, property,financial and other condition and creditworthiness of the Loan Parties andtheir affiliates.  Except for notices,reports and other documents expressly required to be furnished to the Lendersby the Administrative Agent hereunder, the Administrative Agent shall not haveany duty or responsibility to provide any Lender with any credit or otherinformation concerning the business, operations, property, condition (financialor otherwise), prospects or creditworthiness of any Loan Party or any affiliateof a Loan Party that may come into the possession of the Administrative Agentor any of its officers, directors, employees, agents, attorneys-in-fact oraffiliates.

 

10.7.                        Indemnification.  TheLenders agree to indemnify each Agent in its capacity as such (to the extentnot reimbursed by the Borrower and without limiting the obligation of the Borrowerto do so), ratably according to their respective Aggregate Exposure Percentagesin effect on the date on which indemnification is sought under this Section (or,if indemnification is sought after the date upon which the Commitments shallhave terminated and the Loans shall have been paid in full, ratably inaccordance with such Aggregate Exposure Percentages immediately prior to suchdate), from and against any and all liabilities, obligations, losses, damages,penalties, actions, judgments, suits, costs, expenses or disbursements of anykind whatsoever that may at any time (whether before or after the payment ofthe Loans) be imposed on, incurred by or asserted against such Agent in any wayrelating to or arising out of, the Commitments, this Agreement, any of theother Loan Documents or any documents contemplated by or referred to herein ortherein or the transactions contemplated hereby or thereby or any action takenor omitted by such Agent under or in connection with any of the foregoing; providedthat no Lender shall be liable for the payment of any portion of suchliabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses or disbursements that are found by a final andnonappealable decision of a court of competent jurisdiction to have resultedfrom such Agent’s gross negligence or willful misconduct.  The agreements in this Section shallsurvive the payment of the Loans and all other amounts payable hereunder.

 

10.8.                        Agent in Its IndividualCapacity.  Each Agent and its affiliates may make loansto, accept deposits from and generally engage in any kind of business with anyLoan Party as though such Agent were not an Agent.  With respect to its Loans made or renewed byit and with respect to any Letter of Credit issued or participated in by it,each Agent shall have the same rights and powers under this Agreement and theother Loan Documents as any Lender and may exercise the same as though it werenot an Agent, and the terms “Lender” and “Lenders” shall include each Agent inits individual capacity.

 

10.9.                        Successor AdministrativeAgent.  The Administrative Agent may resign asAdministrative Agent upon 10 days’ notice to the Lenders and the Borrower.  If the Administrative Agent shall resign asAdministrative Agent under this Agreement and the other

 

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LoanDocuments, then the Majority Lenders shall appoint from among the Lenders asuccessor agent for the Lenders, which successor agent shall (unless an Eventof Default under Section 9(a) or Section 9(g) with respectto the Borrower shall have occurred and be continuing) be subject to approvalby the Borrower (which approval shall not be unreasonably withheld or delayed),whereupon such successor agent shall succeed to the rights, powers and dutiesof the Administrative Agent, and the term “Administrative Agent” shall meansuch successor agent effective upon such appointment and approval, and theformer Administrative Agent’s rights, powers and duties as Administrative Agentshall be terminated, without any other or further act or deed on the part ofsuch former Administrative Agent or any of the parties to this Agreement or anyholders of the Loans.  If no successoragent has accepted appointment as Administrative Agent by the date that is ten (10) daysfollowing a retiring Administrative Agent’s notice of resignation, the retiringAdministrative Agent’s resignation shall nevertheless thereupon becomeeffective, and the Lenders shall assume and perform all of the duties of theAdministrative Agent hereunder until such time, if any, as the Majority Lendersappoint a successor agent as provided for above.  After any retiring Administrative Agent’sresignation as Administrative Agent, the provisions of this Section 10shall inure to its benefit as to any actions taken or omitted to be taken by itwhile it was Administrative Agent under this Agreement and the other LoanDocuments.

 

10.10.                  Co- Syndication Agents.  Noneof the Co-Syndication Agents shall have any duties or responsibilitieshereunder in its capacity as such.

 

10.11.                  Intercreditor Agreements.  EachLender hereby agrees that the Administrative Agent may enter into anyIntercreditor Agreement pursuant to the terms hereof on its behalf and agreesto be bound by the terms thereof and, in the case of any IntercreditorAgreement relating to Permitted Pari Passu Debt, consents and agrees to theappoint of JPMCB on its behalf as collateral agent thereunder.  In addition, the Lenders hereby agree thatpursuant to any Intercreditor Agreement entered into substantially in the formsattached as Exhibits I or K, the Administrative Agent may designate anyaddition Security Document hereunder as an “Addition Existing FacilitiesSecurity Document” and/or a “First Priority Security Document” or similar term,as the case may be, thereunder.  

 

SECTION 11.  MISCELLANEOUS

 

11.1.                        Amendments and Waivers. Neither this Agreement, any other Loan Document, nor any terms hereof orthereof may be amended, supplemented or modified except in accordance with theprovisions of this Section 11.1. The Majority Lenders and each Loan Party party to the relevant LoanDocument may, or, with the written consent of the Majority Lenders, theAdministrative Agent and each Loan Party party to the relevant Loan Documentmay, from time to time, (a) enter into written amendments, supplements ormodifications hereto and to the other Loan Documents for the purpose of addingany provisions to this Agreement or the other Loan Documents or changing in anymanner the rights of the Lenders or of the Loan Parties hereunder or thereunderor (b) waive, on such terms and conditions as the Majority Lenders or theAdministrative Agent, as the case may be, may specify in such instrument, anyof the requirements of this Agreement or the other Loan Documents or anyDefault or Event of Default and its consequences; provided, however,that no such waiver and no such amendment, supplement or modification shall (i) forgivethe principal amount or extend the final scheduled

 

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dateof maturity of any Loan, extend the scheduled date of any amortization paymentin respect of any Term Loan, reduce the stated rate of any interest or feepayable hereunder (except (x) in connection with any reduction in thepost-default rate of interest set forth in Section 2.14(c); (y) inconnection with the waiver of applicability of any post-default increase ininterest rates (which waiver shall be effective with the consent of theMajority Facility Lenders of each adversely affected Facility); and (z) thatany amendment or modification of defined terms used in the financial covenantsin this Agreement shall not constitute a reduction in the rate of interest orfees for purposes of this clause (i)) or extend the scheduled date of anypayment thereof, or increase the amount or extend the expiration date of anyLender’s Revolving Commitment, or otherwise change the time, place or thecurrency of payments to be made on the Loans, in each case without the writtenconsent of each Lender directly affected thereby; (ii) eliminate or reducethe voting rights of any Lender under this Section 11.1 without thewritten consent of such Lender; (iii) reduce any percentage specified inthe definition of Majority Lenders, consent to the assignment or transfer bythe Borrower of any of its rights and obligations under this Agreement and theother Loan Documents, release all or substantially all of the Collateral orrelease all or substantially all of the Subsidiary Guarantors from theirobligations under the Guarantee and Collateral Agreement, in each case withoutthe written consent of all Lenders; (iv) reduce the percentage specifiedin the definition of Majority Facility Lenders with respect to any Facilitywithout the written consent of all Lenders under such Facility; (v) amend,modify or waive any provision of Section 2.17 without the written consentof each Lender adversely affected thereby; (vi) amend, modify or waive anyprovision of Section 10 without the written consent of the AdministrativeAgent; (vii) amend, modify or waive any provision of Section 2.6 or2.7 without the written consent of the Swingline Lender; or (viii) amend,modify or waive any provision of Section 3 without the written consent ofeach Issuing Lender.  Any such waiver andany such amendment, supplement or modification shall apply equally to each ofthe Lenders and shall be binding upon the Loan Parties, the Lenders, theAdministrative Agent and all future holders of the Loans.  In the case of any waiver, the Loan Parties,the Lenders and the Administrative Agent shall be restored to their formerposition and rights hereunder and under the other Loan Documents, and anyDefault 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 ofDefault, or impair any right consequent thereon.

 

Notwithstanding the foregoing, this Agreement may beamended (or amended and restated) with the written consent of the MajorityLenders, the Administrative Agent and the Borrower (a) to add one or moreadditional credit facilities to this Agreement (each, an “IncrementalFacility”) and to permit the extensions of credit from time to timeoutstanding thereunder and the accrued interest and fees in respect thereof toshare ratably in the benefits of this Agreement and the other Loan Documentswith the Term Loans and Revolving Extensions of Credit and the accrued interestand fees in respect thereof and (b) to include appropriately the Lendersholding such credit facilities in any determination of the Majority Lenders andMajority Facility Lenders, provided that no consent of the MajorityLenders or Administrative Agent (except as provided in clause (iv) below)shall be required if (i) such Incremental Facility constitutes PermittedPari Passu Debt hereunder, (ii) no Default or Event of Default hasoccurred and is continuing or would result after giving effect to the making ofLoans under such Incremental Facility, (iii) the Applicable Margin forsuch Loans shall not be greater than the Applicable Margin then in effect forthe comparable Loans hereunder by more than 0.25% and, other than with respectto such pricing term, such Loans shall otherwise be on the same terms

 

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andconditions as those applicable to the Loans and (iv) any bank, financialinstitution or other entity that becomes a Lender under such IncrementalFacility shall be subject to the consent of the Administrative Agent.

 

In addition, notwithstanding the foregoing, thisAgreement may be amended with the written consent of the Administrative Agent,the Borrower and the Lenders providing the relevant Replacement Term Loans (asdefined below) to permit the refinancing, replacement or modification of alloutstanding Term Loans (“Refinanced Term Loans”) with a replacement “B”term loan tranche hereunder (“Replacement Term Loans”), providedthat (a) the aggregate principal amount of such Replacement Term Loansshall not exceed the aggregate principal amount of such Refinanced Term Loans, (b) theApplicable Margin for such Replacement Term Loans shall not be higher than theApplicable Margin for such Refinanced Term Loans and (c) the weightedaverage life to maturity of such Replacement Term Loans shall not be shorterthan the weighted average life to maturity of such Refinanced Term Loans at thetime of such refinancing.

 

If, in connection with any proposed amendment,waiver or consent pursuant to Section 11.1 hereof requiring the consent of all Lenders, the consent of MajorityLenders is obtained but the consent of all Lenders whose consent if required isnot obtained (any Lender withholding consent being referred to as a “Non-ConsentingLender”), then, upon written notice to any Non-Consenting Lender andthe Administrative Agent, the Borrower shall be permitted, at its sole expense,to replace such Non-Consenting Lender by requiring such Non-Consenting Lenderto assign and delegate, without recourse, all of its rights and obligationsunder this Agreement and the other Loan Documents to a replacement financialinstitution that shall assume such obligations (which replacement financialinstitution may be another Lender, if such Lender accepts such assignment); provided,that (i) the Administrative Agent and, in the case of any assignment of aLender’s Revolving Commitment, each Revolving Issuing Lender shall haveconsented to such replacement financial institution (such consent not to beunreasonably withheld), (ii) the Non-Consenting Lender shall be obligatedto make such replacement in accordance with the provisions of Section 11.6(provided that the Borrower shall be obligated to pay the registration andprocessing fee referred to therein), (iii) the replacement financialinstitution shall purchase, at par, all Loans and other amounts owing to suchreplaced Lender on or prior to the date of replacement in accordance with Section 11.6,and (iv) the Borrower shall be liable to such Non-Consenting Lender under Section 2.20if any Eurodollar Loan owing to such Non-Consenting Lender shall be purchasedother than on the last day of the Interest Period relating thereto.

 

11.2.                        Notices.  Allnotices, requests and demands to or upon the respective parties hereto to beeffective shall be in writing (including by telecopy), and, unless otherwiseexpressly provided herein, shall be deemed to have been duly given or made whendelivered, or three Business Days after being deposited in the mail, postageprepaid, or, in the case of telecopy notice, when received, addressed asfollows in the case of the Borrower, the Administrative Agent and the IssuingLenders identified below, and as set forth in an administrative questionnairedelivered to the Administrative Agent in the case of the Lenders, or to suchother address as may be hereafter notified by the respective parties hereto:

 

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| Borrower:                    |   | Mirant North America, LLC  1155 Perimeter Center West,  Suite 100  Atlanta, GA 30338 |
|------------------------------|--------|-------------------------------------------------------------------------------------------|
|                         |   | Attention: William Holden                                                                 |
|                         |   | Telecopy: (678) 579-7634                                                                  |
|                         |   | Telephone: (678) 579-7728                                                                 |
|                         |   |                                                                                      |
|                         |   | With a copy to: Steve  Nickerson                                                          |
|                         |   | Telecopy: (678) 579-5951                                                                  |
|                         |   | Telephone: (678) 579-6440                                                                 |
|                         |   |                                                                                      |
| Administrative Agent:        |   | JP Morgan Chase Bank, N.A.                                                                |
|                         |   | 1111 Fannin Street, Floor  10                                                             |
|                         |   | Houston, Texas 77002                                                                      |
|                         |   | Attention: Loan and Agency  Services                                                      |
|                         |   | Telecopy: (713) 427-6307                                                                  |
|                         |   | Telephone: (713) 750-2377                                                                 |
|                         |   |                                                                                      |
| JPMCB, as an Issuing  Lender |   | JPMorgan Chase Bank, N.A.                                                                 |
|                         |   | 10420 Highland Manner  Drive                                                              |
|                         |   | BL 2, Floor 4                                                                             |
|                         |   | Tampa, Florida 33610                                                                      |
|                         |   | Attention: Standby Letter  of Credit                                                      |
|                         |   | Telecopy: (813) 432-5161                                                                  |
|                         |   | Telephone: (813) 432-6339                                                                 |
|                         |   |                                                                                      |
| DBTCA, as an Issuing  Lender |   | Deutsche Bank Trust  Company                                                              |
|                         |   | Americas                                                                                  |
|                         |   | 60 Wall Street                                                                            |
|                         |   | 38th Floor                                                                                |
|                         |   | New York, NY 10005                                                                        |
|                         |   | Attention: Standby Letter  of Credit                                                      |
|                         |   | Unit                                                                                      |
|                         |   | Telecopy: (212) 250-1014                                                                  |
|                         |   | Telephone: (212) 797-0403                                                                 |

 

provided thatany notice, request or demand to or upon the Administrative Agent, any IssuingLender or the Lenders shall not be effective until received.

 

Notices and other communications to the Lendershereunder may be delivered or furnished by electronic communications pursuantto procedures approved by the Administrative Agent; provided that theforegoing shall not apply to notices pursuant to Section 2 unlessotherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or the Borrower may,in its discretion, agree to accept notices and other communications to ithereunder by electronic communications pursuant to procedures approved by it; providedthat approval of such procedures may be limited to particular notices orcommunications.

 

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11.3.                        No Waiver; CumulativeRemedies.  No failure to exercise and no delay inexercising, on the part of the Administrative Agent or any Lender, any right,remedy, power or privilege hereunder or under the other Loan Documents shalloperate as a waiver thereof; nor shall any single or partial exercise of anyright, remedy, power or privilege hereunder preclude any other or further exercisethereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privilegesherein provided are cumulative and not exclusive of any rights, remedies,powers and privileges provided by law.

 

11.4.                        Survival of Representationsand Warranties.  All representations and warranties madehereunder, in the other Loan Documents and in any document, certificate orstatement delivered pursuant hereto or in connection herewith shall survive theexecution and delivery of this Agreement and the making of the Loans and otherextensions of credit hereunder.

 

11.5.                        Payment of Expenses andTaxes.  The Borrower agrees (a) to pay orreimburse the Administrative Agent (i) for all its out-of-pocket costs andexpenses incurred in connection with the development, preparation and executionof, and any amendment, supplement or modification to, this Agreement and theother Loan Documents and any other documents prepared in connection herewith ortherewith, and the consummation and administration of the transactionscontemplated hereby and thereby, including the reasonable fees anddisbursements of counsel to the Administrative Agent and filing and recordingfees and expenses, with statements with respect to the foregoing to besubmitted to the Borrower prior to the Closing Date (in the case of amounts tobe paid on the Closing Date) and from time to time thereafter on a quarterlybasis or such other periodic basis as the Administrative Agent shall deemappropriate and (ii) for all of its costs and expenses incurred inconnection with the enforcement or preservation of any rights under thisAgreement, the other Loan Documents and any such other documents, including thefees and disbursements of counsel to the Administrative Agent, (b) to payor reimburse each Lender for all its costs and expenses incurred in connectionwith the enforcement or preservation of any rights under this Agreement, theother Loan Documents and any such other documents, in each case, during thecontinuance of an Event of Default, including the fees and disbursements ofcounsel (including the allocated fees and expenses of in-house counsel) to eachLender, (c) to pay, indemnify, and hold each Lender and the AdministrativeAgent harmless from, any and all recording and filing fees and any and allliabilities 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 payablein connection with the execution and delivery of, or consummation or administrationof any of the transactions contemplated by, or any amendment, supplement ormodification of, or any waiver or consent under or in respect of, thisAgreement, the other Loan Documents and any such other documents, and (d) topay, indemnify, and hold each Lender and the Administrative Agent and theirrespective officers, directors, trustees, employees, affiliates, agents andcontrolling persons (each, an “Indemnitee”) harmless from and againstany and all other liabilities, obligations, losses, damages, penalties,actions, judgments, suits, costs, expenses or disbursements of any kind ornature whatsoever with respect to the execution, delivery, enforcement,performance and administration of this Agreement, the other Loan Documents andany such other documents, including any of the foregoing relating to the use ofproceeds of the Loans or the violation of, noncompliance with or liabilityunder, any Environmental Law applicable to the operations of the Borrower orany of its Subsidiaries or any real property currently or formerly owned,leased, operated or otherwise used (including properties to which wastes orother materials were sent for treatment, storage or disposal) by the 

 

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Borroweror any of its Subsidiaries or any of their predecessors and the reasonable feesand expenses of legal counsel in connection with claims, actions or proceedingsby any Indemnitee against any Loan Party under any Loan Document (all theforegoing in this clause (d), collectively, the “Indemnified Liabilities”),provided, that the Borrower shall have no obligation hereunder to anyIndemnitee with respect to Indemnified Liabilities to the extent suchIndemnified Liabilities are found by a final and nonappealable decision of a courtof competent jurisdiction to have resulted from the gross negligence or willfulmisconduct of such Indemnitee.  Withoutlimiting the foregoing, and to the extent permitted by applicable law, theBorrower agrees not to assert and to cause its Subsidiaries not to assert, andhereby waives and agrees to cause its Subsidiaries to waive, all rights forcontribution or any other rights of recovery with respect to all claims,demands, penalties, fines, liabilities, settlements, damages, costs andexpenses of whatever kind or nature, under or related to Environmental Laws,that any of them might have by statute or otherwise against anyIndemnitee.  

 

Promptly after receipt by an Indemnitee of notice ofthe commencement of any claim, litigation, investigation, responding to orproceedings against it relating to any Indemnified Liability (“Proceedings”),such Indemnitee will, if a claim is to be made hereunder against the Borrowerin respect thereof, notify the Borrower in writing of the commencement thereof;provided, however, that (i) the omission so to notify theBorrower will not relieve it from any liability that it may have hereunderexcept to the extent it has been materially prejudiced by such failure and (ii) theomission so to notify the Borrower will not relieve the Borrower from anyliability that it may have to an Indemnitee otherwise than on accounthereof.  Thereafter, the Indemnitee andthe Borrower shall consult, to the extent appropriate, with a view to minimizingthe cost to the Borrower of the obligations under this Section 11.5.  In case any such Proceedings are broughtagainst any Indemnitee and it notifies the Borrower of the commencementthereof, the Borrower will be entitled to participate therein, and, to theextent that it may elect by written notice delivered to such Indemnitee, toassume the defense thereof, with counsel reasonably satisfactory to suchIndemnitee, provided that if the defendants in any such Proceedingsinclude both such Indemnitee and the Borrower and such Indemnitee shall haveconcluded that there may be legal defenses available to it that are differentfrom or additional to those available to the Borrower, such Indemnitee shallhave the right to select separate counsel to assert such legal defenses and tootherwise participate in the defense of such Proceedings on behalf of suchIndemnitee.  Upon receipt of notice fromthe Borrower to such Indemnitee of its election so to assume the defense ofsuch Proceedings and approval by such Indemnitee of counsel, the Borrower shallnot be liable to such Indemnitee for expenses incurred by such Indemnitee inconnection with the defense thereof (other than reasonable costs ofinvestigation) unless (i) such Indemnitee shall have employed separatecounsel in connection with the assertion of legal defenses in accordance withthe proviso to the immediately preceding sentence (it being understood,however, that the Borrower shall not be liable for the expenses of more thanone separate counsel representing the Indemnitees who are parties to suchProceedings), (ii) the Borrower shall not have employed counsel reasonablysatisfactory to such Indemnitee to represent such Indemnitee within areasonable time after notice of commencement of the Proceedings or (iii) theBorrower shall have authorized in writing the employment of counsel for suchIndemnitee.

 

The Borrower shall not be liable for any settlementof any Proceedings effected without its written consent (which consent shallnot be unreasonably withheld).  If anysettlement of

 

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anyProceeding is consummated with the written consent of the Borrower or if thereis a final judgment for the plaintiff in any such Proceedings, the Borroweragrees to indemnify and hold harmless each Indemnitee from and against any andall losses, claims, damages, liabilities and expenses by reason of suchsettlement or judgment in accordance with the provisions of this Section 11.5(d).  Notwithstanding anything in this Section 11.5(d) tothe contrary, if at any time an Indemnitee shall have requested the Borrower toreimburse such Indemnitee for legal or other expenses in connection withinvestigating, responding to or defending any Proceedings as contemplated bythis Section 11.5(d), the Borrower shall be liable for any settlement ofany Proceedings effected without its written consent if (i) suchsettlement is entered into more than 30 days after receipt by the Borrower ofsuch request for reimbursement and (ii) the Borrower shall not havereimbursed such Indemnitee in accordance with such request prior to the date ofsuch settlement.  The Borrower shall not,without the prior written consent of an Indemnitee (which consent shall not beunreasonably withheld), effect any settlement of any pending or threatened Proceedingsin respect of which indemnity could have been sought hereunder by suchIndemnitee unless such settlement (i) includes an unconditional release ofsuch Indemnitee in form and substance satisfactory to such Indemnitee from allliability on claims that are the subject matter of such Proceedings and (ii) doesnot include any statement as to or any admission of fault, culpability or afailure to act by or on behalf of any Indemnitee.  

 

All amounts due under this Section 11.5 shallbe payable not later than 10 days after written demand therefor.  Statements payable by the Borrower pursuantto this Section 11.5 shall be submitted to the Treasurer (Telephone No. (678)579-7728) (Telecopy No. (678) 579-7634), at the address of the Borrowerset forth in Section 11.2, or to such other Person or address as may behereafter designated by the Borrower in a written notice to the AdministrativeAgent.  The agreements in this Section 11.5shall survive repayment of the Loans and all other amounts payable hereunder.

 

11.6.                        Successors and Assigns;Participations and Assignments.  (a)  The provisions of this Agreementshall be binding upon and inure to the benefit of the parties hereto and theirrespective successors and assigns permitted hereby (including any affiliate ofthe Issuing Lender that issues any Letter of Credit), except that (i) theBorrower may not assign or otherwise transfer any of its rights or obligationshereunder without the prior written consent of each Lender (and any attemptedassignment or transfer by the Borrower without such consent shall be null andvoid) and (ii) no Lender may assign or otherwise transfer its rights orobligations hereunder except in accordance with this Section.

 

### (b)                                 (i)  Subject to the conditions setforth in paragraph (b)(ii) below, any Lender may assign to one or moreassignees (each, an “Assignee”) all or a portion of its rights andobligations under this Agreement (including all or a portion of its Commitmentsand the Loans at the time owing to it) with the prior written consent of:

###  

(A)                              the Borrower (such consent not to beunreasonably withheld or delayed), provided that no consent of theBorrower shall be required for an assignment to a Lender, an affiliate of aLender, an Approved Fund (as defined below) or, if an Event of Default hasoccurred and is continuing, any other Person; and

 

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(B)                                the Administrative Agent and eachIssuing Lender (such consent not to be unreasonably withheld or delayed), providedthat no consent of the Administrative Agent shall be required for assignmentsof Commitments and/or Loans among Lenders, affiliates of Lenders or ApprovedFunds within the same Facility, and provided, further, that noconsent of any Issuing Lender shall be required for an assignment of Term Loansonly.

 

##### (ii)                                  Assignments shall be subject to thefollowing additional conditions: 

#####  

(A)                              except in the case of an assignment to aLender, an affiliate of a Lender or an Approved Fund or an assignment of theentire remaining amount of the assigning Lender’s Commitments or Loansunder any Facility, the amount of the Commitments or Loans of the assigningLender subject to each such assignment (determined as of the date theAssignment and Assumption with respect to such assignment is delivered to theAdministrative Agent) shall not be less than $5,000,000 unless each of theBorrower and the Administrative Agent otherwise consent (which assignment maybe on a non-pro rata basis), provided that such amounts shall beaggregated in respect of each Lender and its affiliates or Approved Funds, ifany; 

 

(B)                                the parties to each assignment shallexecute and deliver to the Administrative Agent an Assignment and Assumption,together with a processing and recordation fee of $3,500, provided thatonly one such fee shall be payable to the Administrative Agent in connectionwith simultaneous assignments by a Lender to two or more related ApprovedFunds; and 

 

(C)                                the Assignee, if it shall not be aLender, shall deliver to the Administrative Agent an administrativequestionnaire.

 

For the purposes of this Section 11.6, “ApprovedFund” means any Person (other than a natural person) that is engaged inmaking, purchasing, holding or investing in bank loans and similar extensionsof credit in the ordinary course and that is administered or managed by (a) aLender, (b) an affiliate of a Lender or (c) an entity or an affiliateof an entity that administers or manages a Lender.

 

##### (iii)                               Subject to acceptance and recordingthereof pursuant to paragraph (b)(iv) below, from and after theeffective date specified in each Assignment and Assumption the Assigneethereunder shall be a party hereto and, to the extent of the interest assignedby such Assignment and Assumption, have the rights and obligations of a Lenderunder this Agreement, and the assigning Lender thereunder shall, to the extentof the interest assigned by such Assignment and Assumption, be released fromits obligations under this Agreement (and, in the case of an Assignment andAssumption covering all of the assigning Lender’s rights and obligations underthis Agreement, such Lender shall cease to be a party hereto but shall continueto be entitled to the benefits of Sections 2.18, 2.19, 2.20 and 11.5 withrespect to facts and circumstances occurring prior to the effective date ofsuch assignment).  To the extent that anassignment of all or any portion of a Lender’s outstanding obligations pursuantto this Section 11.6 would, at the time of such assignment, result inincreased costs under Sections 2.18, 2.19, or

 

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##### 2.20 from those beingcharged by the respective assigning Lender prior to such assignment, then theBorrower shall not be obligated to pay such increased costs.  Any assignment or transfer by a Lender ofrights or obligations under this Agreement that does not comply with this Section 11.6shall be treated for purposes of this Agreement as a sale by such Lender of aparticipation in such rights and obligations in accordance with paragraph (c) ofthis Section.

#####  

##### (iv)                              The Administrative Agent, acting for thispurpose as an agent of the Borrower, shall maintain at one of its offices acopy of each Assignment and Assumption delivered to it and a register for therecordation of the names and addresses of the Lenders, and the Commitments of,and principal amount of the Loans and Revolving L/C Obligations owing to, eachLender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall beconclusive, and the Borrower, the Administrative Agent, the Issuing Lenders andthe Lenders may treat each Person whose name is recorded in the Registerpursuant to the terms hereof as a Lender hereunder for all purposes of thisAgreement, notwithstanding notice to the contrary.  With respect to any Lender, the transfer ofthe Commitments of such Lender and the rights to the principal of, and theinterest on, any Loan made pursuant to such Commitments shall not be effectiveuntil such transfer is recorded on the Register maintained by the AdministrativeAgent with respect to ownership of such Commitments and Loans.  The Register shall be available forinspection by the Borrower, the Issuing Lenders and any Lender, at anyreasonable time and from time to time upon reasonable prior notice.

#####  

##### (v)                                 Upon its receipt of a duly completedAssignment and Assumption executed by an assigning Lender and an Assignee, theAssignee’s completed administrative questionnaire (unless the Assignee shallalready be a Lender hereunder), the processing and recordation fee referred toin paragraph (b) of this Section and any written consent to suchassignment required by paragraph (b) of this Section, the AdministrativeAgent shall accept such Assignment and Assumption and record the informationcontained therein in the Register.  Noassignment shall be effective for purposes of this Agreement unless it has beenrecorded in the Register as provided in this paragraph.

#####  

### (c)                                  (i)  Any Lender may, without theconsent of the Borrower or the Administrative Agent, sell participations to oneor more banks or other entities (a “Participant”) in all or a portion ofsuch Lender’s rights and obligations under this Agreement (including all or aportion of its Commitments and the Loans owing to it); provided that (A) suchLender’s obligations under this Agreement shall remain unchanged, (B) suchLender shall remain solely responsible to the other parties hereto for theperformance of such obligations and (C) the Borrower, the AdministrativeAgent, the Issuing Lenders and the other Lenders shall continue to deal solelyand directly with such Lender in connection with such Lender’s rights andobligations under this Agreement.  Anyagreement pursuant to which a Lender sells such a participation shall providethat such Lender shall retain the sole right to enforce this Agreement and toapprove any amendment, modification or waiver of any provision of thisAgreement; provided that such agreement may provide that such Lenderwill not, without the consent of the Participant, agree to any amendment,modification or waiver that (1) requires the consent of each Lenderdirectly affected thereby pursuant to the proviso to the second sentence of Section 11.1and (2) directly affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agreesthat each Participant shall be entitled to the benefits of Sections 2.18, 2.19and 2.20 to the same extent as if it were a Lender and had acquired itsinterest by assignment pursuant to paragraph

 

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### (b) of thisSection.  To the extent permitted by law,each Participant also shall be entitled to the benefits of Section 11.7(b) asthough it were a Lender, provided such Participant shall be subject to Section 11.7(a) asthough it were a Lender.

###  

##### (ii)                                  A Participant shall not be entitled toreceive any greater payment under Section 2.18 or 2.19 than the applicableLender would have been entitled to receive with respect to the participationsold to such Participant, unless the sale of the participation to suchParticipant is made with the Borrower’s prior written consent.  Any Participant that is a Non-U.S. Lendershall not be entitled to the benefits of Section 2.19 unless suchParticipant complies with Sections 2.19(d) and (e).

#####  

### (d)                                 Any Lender may at any time pledge orassign a security interest in all or any portion of its rights under thisAgreement to secure obligations of such Lender, including any pledge orassignment to secure obligations to a Federal Reserve Bank, and this Section shallnot apply to any such pledge or assignment of a security interest; providedthat no such pledge or assignment of a security interest shall release a Lenderfrom any of its obligations hereunder or substitute any such pledgee orAssignee for such Lender as a party hereto.

###  

### (e)                                  The Borrower, upon receipt of writtennotice from the relevant Lender, agrees to issue Notes to any Lender requiringNotes to facilitate transactions of the type described in paragraph (d) above.

###  

### (f)                                    Notwithstanding the foregoing, any ConduitLender may assign any or all of the Loans it may have funded hereunder to itsdesignating Lender without the consent of the Borrower or the AdministrativeAgent and without regard to the limitations set forth in Section 11.6(b).  Each of the Borrower, each Lender and theAdministrative Agent hereby confirms that it will not institute against aConduit Lender or join any other Person in instituting against a Conduit Lenderany bankruptcy, reorganization, arrangement, insolvency or liquidationproceeding under any state bankruptcy or similar law, for one year and one dayafter the payment in full of the latest maturing commercial paper note issuedby such Conduit Lender; provided, however, that each Lender designatingany Conduit Lender hereby agrees to indemnify, save and hold harmless eachother party hereto for any loss, cost, damage or expense arising out of itsinability to institute such a proceeding against such Conduit Lender duringsuch period of forbearance.

###  

11.7.                        Adjustments; Set-off.  (a) Except to the extent that this Agreement expressly provides for payments to beallocated to a particular Lender or to the Lenders under a particular Facility,if any Lender (a “Benefitted Lender”) shall receive any payment of allor part of the Obligations owing to it, or receive any collateral in respectthereof (whether voluntarily or involuntarily, by set-off, pursuant to eventsor proceedings of the nature referred to in Section 9(g), or otherwise),in a greater proportion than any such payment to or collateral received by anyother Lender, if any, in respect of the Obligations owing to such other Lender,such Benefitted Lender shall purchase for cash from the other Lenders aparticipating interest in such portion of the Obligations owing to each suchother Lender, or shall provide such other Lenders with the benefits of any suchcollateral, as shall be necessary to cause such Benefitted Lender to share theexcess payment or benefits of such collateral ratably with each of the Lenders;provided, however, that if all or any portion of such excesspayment or benefits is thereafter

 

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recoveredfrom such Benefitted Lender, such purchase shall be rescinded, and the purchaseprice and benefits returned, to the extent of such recovery, but withoutinterest.

 

### (b)                                 In addition to any rights and remedies ofthe Lenders provided by law, each Lender shall have the right, without priornotice to the Borrower, any such notice being expressly waived by the Borrowerto the extent permitted by applicable law, upon any amount becoming due andpayable by the Borrower hereunder (whether at the stated maturity, byacceleration or otherwise), to set off and appropriate and apply against suchamount any and all deposits (general or special, time or demand, provisional orfinal), in any currency, and any other credits, indebtedness or claims, in anycurrency, in each case whether direct or indirect, absolute or contingent,matured or unmatured, at any time held or owing by such Lender or any branch oragency thereof to or for the credit or the account of the Borrower, as the casemay be.  Each Lender agrees promptly tonotify the Borrower and the Administrative Agent after any such setoff andapplication made by such Lender, provided that the failure to give suchnotice shall not affect the validity of such setoff and application.

###  

11.8.                        Counterparts.  ThisAgreement may be executed by one or more of the parties to this Agreement onany number of separate counterparts, and all of said counterparts takentogether shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page ofthis Agreement by facsimile transmission shall be effective as delivery of amanually executed counterpart hereof.  Aset of the copies of this Agreement signed by all the parties shall be lodgedwith the Borrower and the Administrative Agent.

 

11.9.                        Severability.  Anyprovision of this Agreement that is prohibited or unenforceable in anyjurisdiction shall, as to such jurisdiction, be ineffective to the extent ofsuch prohibition or unenforceability without invalidating the remainingprovisions hereof, and any such prohibition or unenforceability in anyjurisdiction shall not invalidate or render unenforceable such provision in anyother jurisdiction.

 

11.10.                  Integration.  ThisAgreement and the other Loan Documents represent the entire agreement of theBorrower, the Administrative Agent and the Lenders with respect to the subjectmatter hereof and thereof, and there are no promises, undertakings,representations or warranties by the Administrative Agent or any Lenderrelative to the subject matter hereof not expressly set forth or referred toherein or in the other Loan Documents.

 

11.11.                  **GOVERNING LAW****.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONSOF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED ANDINTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.**

 

11.12.                  Submission To Jurisdiction; Waivers.  The Borrower herebyirrevocably and unconditionally:

 

#### (a)                                  submits for itself and its property inany legal action or proceeding relating to this Agreement and the other LoanDocuments to which it is a party, or for recognition and enforcement of anyjudgment in respect thereof, to the non-exclusive general

 

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#### jurisdiction ofthe courts of the State of New York, the courts of the United States for theSouthern District of New York, and appellate courts from any thereof;

####  

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

####  

#### (c)                                  agrees that service of process in anysuch action or proceeding may be effected by mailing a copy thereof byregistered or certified mail (or any substantially similar form of mail),postage prepaid, to the Borrower at its address set forth in Section 11.2or at such other address of which the Administrative Agent shall have beennotified pursuant thereto;

####  

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

####  

#### (e)                                  waives, to the maximum extent notprohibited by law, any right it may have to claim or recover in any legalaction or proceeding referred to in this Section any special, exemplary,punitive or consequential damages.

####  

11.13.                  Acknowledgements.  The Borrower hereby acknowledges that:

 

#### (a)                                  it has been advised by counsel in thenegotiation, execution and delivery of this Agreement and the other LoanDocuments;

####  

#### (b)                                 neither the Administrative Agent nor anyLender has any fiduciary relationship with or duty to the Borrower arising outof or in connection with this Agreement or any of the other Loan Documents, andthe relationship between Administrative Agent and Lenders, on one hand, and theBorrower, on the other hand, in connection herewith or therewith is solely thatof debtor and creditor; and

####  

#### (c)                                  no joint venture is created hereby or bythe other Loan Documents or otherwise exists by virtue of the transactionscontemplated hereby among the Lenders or among the Borrower and the Lenders.

####  

11.14.                  Releases of Guarantees and Liens.  (a)  Notwithstandinganything to the contrary contained herein or in any other Loan Document, theAdministrative Agent is hereby irrevocably authorized by each Lender (withoutrequirement of notice to or consent of any Lender except as expressly requiredby Section 11.1) to take any action requested by the Borrower having theeffect of releasing any Collateral or guarantee obligations (i) to theextent necessary to permit consummation of any transaction not prohibited byany Loan Document or that has been consented to in accordance with Section 11.1or (ii) under the circumstances described in paragraph (b) below.

 

### (b)                                 At such time as the Loans, theReimbursement Obligations and the other obligations under the Loan Documents(other than obligations under or in respect of Swap

 

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### Agreements) shall havebeen paid in full, the Commitments have been terminated and no Letters ofCredit shall be outstanding, the Collateral shall be released from the Lienscreated by the Security Documents, and the Security Documents and allobligations (other than those expressly stated to survive such termination) ofthe Administrative Agent and each Loan Party under the Security Documents shallterminate, all without delivery of any instrument or performance of any act byany Person.

###  

11.15.                  Confidentiality.  Each of the Administrative Agent and eachLender agrees to keep confidential all non-public information provided to it byany Loan Party, the Administrative Agent or any Lender pursuant to or inconnection with this Agreement that is designated by the provider thereof asconfidential; provided that nothing herein shall prevent theAdministrative Agent or any Lender from disclosing any such information (a) tothe Administrative Agent, any other Lender or any affiliate thereof, (b) subjectto an agreement to comply with the provisions of this Section, to any actual orprospective Transferee or any direct or indirect counterparty to any SwapAgreement (or any professional advisor to such counterparty), (c) to itsemployees, directors, trustees, agents, attorneys, accountants and otherprofessional advisors or those of any of its affiliates, (d) upon the requestor demand of any Governmental Authority, (e) in response to any order ofany court or other Governmental Authority or as may otherwise be requiredpursuant to any Requirement of Law, (f) if requested or required to do soin connection with any litigation or similar proceeding, (g) that has beenpublicly disclosed, (h) to the National Association of InsuranceCommissioners or any similar organization or any nationally recognized ratingagency that requires access to information about a Lender’s investmentportfolio in connection with ratings issued with respect to such Lender, or (i) inconnection with the exercise of any remedy hereunder or under any other LoanDocument.

 

11.16.                  **WAIVERS OF JURY TRIAL****.  THE BORROWER, THE ADMINISTRATIVE AGENT ANDTHE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANYLEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOANDOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.**

 

11.17.                  Delivery of Addenda.  Each initial Lender shall become a party tothis Agreement by delivering to the Administrative Agent an Addendum dulyexecuted by such Lender.

 

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IN WITNESS WHEREOF, the parties hereto have causedthis Agreement to be duly executed and delivered by their proper and dulyauthorized officers as of the day and year first above written.

 
|   |   | MIRANT NORTH AMERICA, LLC                                           |
|--------|--------|---------------------------------------------------------------------|
|   |   |                                                                |
|   |   | By:                                                                 |   |   |
|   |   | Name:                                                               |
|   |   | Title:                                                              |
|   |   |                                                                |
|   |   |                                                                |
|   |   | JPMORGAN CHASE BANK, N.A., as  Administrative Agent and as a Lender |
|   |   |                                                                |
|   |   | By:                                                                 |   |   |
|   |   | Name:                                                               |
|   |   | Title:                                                              |
|   |   |                                                                |
|   |   | GOLDMAN SACHS CREDIT PARTNERS L.P.,  as Co-Syndication Agent        |
|   |   |                                                                |
|   |   | By:                                                                 |   |   |
|   |   | Name:                                                               |
|   |   | Title:                                                              |
|   |   |                                                                |
|   |   |                                                                |
|   |   | DEUTSCHE BANK SECURITIES, INC., as  Co-Syndication Agent            |
|   |   |                                                                |
|   |   | By:                                                                 |   |   |
|   |   | Name:                                                               |
|   |   | Title:                                                              |
|   |   |                                                                |
|   |   |                                                                |
|   |   | By:                                                                 |   |   |
|   |   | Name:                                                               |
|   |   | Title:                                                              |

 

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