Document:

Exhibit 10.5

 

RELIANT ENERGY, INC.,

as guarantor

PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING
AUTHORITY

EXEMPT FACILITIES REVENUE BONDS

(Reliant Energy Seward, LLC Project)

SERIES 2004A

 

THIRD SUPPLEMENTAL GUARANTEE AGREEMENT

Dated as of December 1, 2006

to

GUARANTEE AGREEMENT

Dated as of December 22, 2004

The Bank of New York Trust Company, N.A.,

as Trustee

 

 

GUARANTEE AGREEMENT

THIRD SUPPLEMENTAL
GUARANTEE AGREEMENT dated as of December 1, 2006 (this “Supplemental
Guarantee Agreement”) to the Guarantee Agreement dated as of December 22,
2004 (the “Guarantee Agreement”) by and among Reliant Energy, Inc., a
Delaware corporation (the “Company”), the Subsidiary Guarantors (as
defined therein), and The Bank of New York Trust Company, N.A., as trustee (the
“Trustee”) (as successor to J.P. Morgan Trust Company, National
Association), relating to the Pennsylvania Economic Development Financing
Authority Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project)
Series 2004A, as supplemented by the Supplemental Guarantee Agreement dated as
of September 21, 2006 among the Company, Reliant Energy Power Supply, LLC and
the Trustee.  Capitalized terms used in
this Supplemental Guarantee Agreement, but not defined herein, shall have the
respective meanings given to such terms in the Guarantee Agreement.

WITNESSETH:

WHEREAS, Section 9.02 of
the Guarantee Agreement provides, among other things, that the Company and the
Trustee may amend or supplement the Guarantee Agreement with the consent of the
Holders of at least a majority in aggregate principal amount of the Series
2004A Bonds then Outstanding; and

WHEREAS, the Company has
solicited the consent of the Holders to certain amendments to the Guarantee
Agreement described in the Second Amended and Restated Consent Solicitation
Statement dated November 8, 2006 (the “Consent Solicitation Statement”)
and which have been reflected herein (the “Amendments”); and

WHEREAS, the Company has
received and filed with the Trustee, in the manner contemplated by the
Guarantee Agreement, evidence of the consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Series 2004A Bonds,
consenting to the Amendments to be effected in the form of this Supplemental
Guarantee Agreement; and

NOW, THEREFORE, in
consideration of the mutual agreements herein set forth, the parties hereto
agree as follows:

1.             Amendments to the
Guarantee Agreement.

The following amendments
are made to the Guarantee Agreement effective as of the date specified in
Section 2 below:

(a)           In Section 1.01:

(1)           The definition of “Excluded
Securities” is amended in its entirety to read as follows:

Excluded Securities” means debt or equity securities issued by
any Subsidiary of the Company other than RERH Holdings, LLC, IP Trust, IT
Trust, Orion Power Holdings, Inc. and REMA (or their successors); provided,
however, that “Excluded Securities” shall include beneficial interests in the
IP Trust or the IT Trust that are held by RERH Holdings, LLC or its
Subsidiaries.

 1
 

 

(2)           The definition of “Excluded
Subsidiaries” is amended to delete the reference to “RE Retail Receivables,
LLC.”

(3)           The following definition is added:

“IP Trust” means
Reliant Energy Trademark Trust, a Delaware statutory trust.

(4)           The following definition is added:

“IT Trust” means
Reliant Energy IT Trust, a Delaware statutory trust.

(5)           The definition of “Permitted
Liens” is amended:

(i)            to
amend clause (24) in its entirety to read as follows:

(24)         [Reserved];

(ii)           to
delete “and” at the end of clause (33);

(iii)          to add the following new clause (34) after
clause (33):

(34)                         Liens on
assets of RERH Holdings, LLC and its Subsidiaries securing obligations of RERH
Holdings, LLC or any of its Subsidiaries under (a) Credit Facilities in an
aggregate principal amount not to exceed $300,000,000 plus all other
obligations due under such Credit Facilities and (b) any agreement for or in
support of the supply or sales of energy or products or services related or
incidental to the supply or sales of energy or any activities related to the
supply or sales of energy or products or services related or incidental to the
supply or sales of energy of RERH Holdings, LLC or any of its Subsidiaries,
including any agreement providing for the reimbursement of guarantees or
collateral postings made on behalf of RERH Holdings, LLC or any of its
Subsidiaries; and

; and

(iv)          to
renumber existing clause “(34)” as clause “(35).”

(6)           The definition of “Permitted
Prior Liens” is amended to substitute “and (33)” with “, (33) and (34).”

(b)           Section 4.08(b) is
amended:

(1)           to delete “and” at the
end of clause (18);

 2
 

 

(2)           to substitute “; and”
for the period at the end of clause (19); and

(3)           to add the following
new clause (20) after clause (19):

(20)         restrictions on RERH
Holdings, LLC or any of its Subsidiaries contained in (a) the Working Capital
Facility dated as of September 24, 2006 among Reliant Energy Power Supply, LLC
(“REPS”), the guarantors party thereto, and Merrill Lynch Capital Corporation,
(b) the Credit Sleeve and Reimbursement Agreement dated as of September 24,
2006 among REPS, the guarantors party thereto, Merrill Lynch Commodities, Inc.,
and Merrill Lynch & Co., Inc., and (c) any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of the agreements referred to in the preceding clauses (a) and
(b), provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacement or refinancings are not
materially more restrictive, taken as a whole, with respect to such dividend
and other payment restrictions than those contained in those agreements as
reasonably determined by the Company.

(c)           The following
Subsection (c) is added to Section 4.08:

(c)           Promptly following the last day of each month
and so long as such payment is permitted under the terms of the agreements
referred to in Section 4.08(b)(20), the Company shall cause RERH Holdings, LLC
to pay cash dividends or distributions to the Company in an amount equal to (i)
the amount which is permitted under the terms of the agreements referred to in
Section 4.08(b)(20) on such day minus (ii)(A) amounts reasonably estimated by
the Company to be due and payable by RERH Holdings, LLC and its Subsidiaries on
or before the 20th day of the month next occurring plus (B) the lesser of (1)
$100,000,000 and (2) the amount permitted under the Credit Agreement on the
date the agreements referred to in Section 4.08(b)(20) become effective.

(d)           In Section 4.09(b):

(1)           Subsection (b)(1) of
Section 4.09 is amended in its entirety to read as follows:

(1)           the
incurrence (A) by the Company and the guarantee by the Guarantors of additional
Indebtedness and letters of credit under Credit Facilities, (B) by
Securitization Entities of Indebtedness in Qualified Securitization
Transactions, and (C) by RERH Holdings, LLC and its Subsidiaries of additional
Indebtedness and letters of credit under Credit Facilities (including

 3
 

 

guarantees of such Indebtedness) (provided, however,
that (I) the aggregate principal amount of Indebtedness incurred under this
clause (C) at any one time outstanding shall not exceed $310,000,000, and (II) the
proceeds of Indebtedness incurred under this clause (C) shall be used only for
the repayment of Indebtedness and other Obligations of RERH Holdings, LLC and
its Subsidiaries or to finance working capital needs of RERH Holdings, LLC and
its Subsidiaries, including the payment of sales, general and administrative,
and operations and maintenance expenses (including capital expenditures) and
all other expenses in the ordinary course of business of RERH Holdings, LLC and
its Subsidiaries) in an aggregate principal amount at any one time outstanding
under this clause (1) (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and its
Restricted Subsidiaries thereunder), including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (1), not to exceed $2.5 billion;

(2)           The following paragraph
is added to the end of the section:

Notwithstanding anything in this Section 4.09(b) to
the contrary, the aggregate principal amount of Indebtedness of RERH Holdings,
LLC and its Subsidiaries at any one time outstanding, other than Indebtedness
incurred pursuant to clause (14) of this Section 4.09(b), may not exceed
$310,000,000.

(e)           Section 4.10 is amended
in its entirety to read as follows:

Section 4.10  Asset Sale Offers.

(a)           Within
five Business Days after the receipt of any Net Proceeds from an Asset Sale of
the Equity Interests of RERH Holdings, LLC (and its successors), of all or substantially
all of the assets of RERH Holdings, LLC and its Subsidiaries (and their
successors), or of all or substantially all of the assets of the Company and
its Subsidiaries (other than RERH Holdings, LLC and its Subsidiaries (and their
successors)), the Company shall make an Asset Sale Offer to all Holders of each
Series of Bonds and all holders of other Indebtedness (including the 2014
Notes, the Existing 2010 Notes, and the Existing 2013 Notes) that is pari passu
with the Seward Guarantees (other than Credit Agreement Debt) (and so long as
this Guarantee Agreement is Equally and Ratably secured with such other pari
passu Indebtedness) containing provisions similar to those set forth in this
Guarantee Agreement with respect to offers to purchase or redeem with the
proceeds of sales of assets, to purchase (or repay, prepay or redeem, as
applicable) an aggregate principal amount of each Series of Bonds and such
other pari passu Indebtedness that may be purchased (or repaid, prepaid or
redeemed) equal to the aggregate of such Net Proceeds multiplied by a fraction,
the numerator of which consists of (A) the aggregate principal amount then
outstanding on each Series of

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Bonds and all such
other pari passu Indebtedness containing such provisions (not including Credit
Agreement Debt) and the denominator of which is (B) the sum of (i) such
aggregate amount in the preceding clause (A) and (ii) the Credit Agreement Debt
then outstanding (an “Asset Sale Offer”). The offer price in any Asset Sale
Offer will be equal to 100% of principal amount plus accrued and unpaid
interest to the date of purchase, and shall be payable in cash.  If any such Net Proceeds remain after
consummation of an Asset Sale Offer, the Company may use such Net Proceeds for
any purpose not otherwise prohibited by this Guarantee Agreement.  If the aggregate principal amount of each
Series of Bonds and such other pari passu Indebtedness tendered into such Asset
Sale Offer exceeds the amount of such Net Proceeds, the Company shall select
the Series of Bonds and such other pari passu Indebtedness to be purchased on a
pro rata basis based on the principal amount of Series of Bonds and such other
pari passu Indebtedness tendered.

(b)           In
the event that, pursuant to Section 4.10 hereof, the Company is required to
commence an Asset Sale Offer, it shall follow the procedures specified below.

(c)           The
Asset Sale Offer shall be made to all holders of each Series of Bonds and all
holders of other Parity Secured Debt (other than Credit Agreement Debt)
containing provisions similar to those set forth in this Guarantee Agreement
with respect to offers to purchase or redeem with the proceeds of sales of
assets.  The Asset Sale Offer shall
remain open for a period of at least 20 Business Days following its commencement
and not more than 30 Business Days, except to the extent that a longer period
is required by applicable law (the “Offer Period”).  No later than three Business Days after the
termination of the Offer Period (the “Purchase Date”), the Company shall apply
a portion of the Net Proceeds as calculated pursuant to the first sentence of
Section 4.10(a) hereof (the “Offer
Amount”) to the purchase of Notes and such other Parity Secured Debt (on a pro rata basis, if applicable) or, if
less than the Offer Amount has been tendered, all Series of Bonds and other
Indebtedness tendered in response to the Asset Sale Offer.  Payment for any bond in a Series of Bonds
(each a “Bond”) so purchased shall be made in the same manner as interest
payments are made.

(d)           If
the Purchase Date is on or after an interest record date and on or before the
related interest payment date, any accrued and unpaid interest shall be paid to
the Person in whose name a Bond is registered at the close of business on such
record date, and no additional interest will be payable to Holders who tender
Bonds pursuant to the Asset Sale Offer.

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(e)           Upon
the commencement of an Asset Sale Offer, the Company shall send, by first class
mail, a notice to the Trustee and each of the Holders.  The notice will contain all instructions and
materials necessary to enable such Holders to tender Bonds pursuant to the
Asset Sale Offer.  The notice, which will
govern the terms of the Asset Sale Offer, will state:

(i)            that the Asset Sale Offer is being made
pursuant to Section 4.10 hereof and the length of time the Asset Sale Offer
will remain open;

(ii)           the Offer Amount, the purchase price and the Purchase Date;

(iii)          that any Bond not tendered or accepted for payment will continue to
accrue interest;

(iv)          that, unless the Company defaults in making such payment, any Bond
accepted for payment pursuant to the Asset Sale Offer shall cease to accrue
interest;

(v)           that Holders electing to have a Bond purchased pursuant to an Asset
Sale Offer may elect to have Bond purchased in integral multiples of $1,000
only;

(vi)          that Holders electing to have a Bond purchased pursuant to any Asset
Sale Offer shall be required to surrender the Bond endorsed or assigned as the
Trustee may require or transfer by book-entry transfer, to the Company or a
Paying Agent at the address specified in the notice at least three days before
the Purchase Date;

(vii)         that Holders shall be entitled to withdraw their election if the
Company or the Paying Agent, as the case may be, receives, not later than the expiration
of the Offer Period, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Bond the
Holder delivered for purchase and a statement that such Holder is withdrawing
his election to have such Bond purchased;

(viii)        that, if the aggregate principal amount of Bonds and other Parity Secured Debt surrendered in
connection with the Asset Sale Offer exceeds the Offer Amount, the Company
shall select the Bonds and other Parity
Secured Debt to be purchased on a pro rata basis based on the principal
amount of Bonds and such other Parity
Secured Debt surrendered (with such adjustments as may be deemed
appropriate by the Company so that only Bonds in denominations of $1,000, or
integral multiples thereof, will be purchased); and

(ix)           that Holders whose Bonds were purchased only in part will be issued new
Bonds equal in principal amount to the

 6
 

 

unpurchased portion of the
Bonds surrendered (or transferred by book-entry transfer).

On or before the
Purchase Date, the Company shall, to the extent lawful, accept for payment, on
a pro rata basis to the extent necessary, the Offer Amount of Bonds or portions
thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer
Amount has been tendered, all Bonds tendered, and shall deliver to the Trustee
an Officer’s Certificate stating that such Bonds or portions thereof were
accepted for payment by the Company in accordance with the terms of this
Section 4.10.  The Company or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an
amount equal to the purchase price of the Bonds tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly cause the
issuance of a new Bond, and the Trustee, upon written request from the Company
shall authenticate and mail or deliver such new Bond to such Holder, in a
principal amount equal to any unpurchased portion of the Bond surrendered.  Any Bond not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof.  The Company shall publicly announce the
results of the Asset Sale Offer on or as soon as practicable after the Purchase
Date.

(f)            The
foregoing shall be made in accordance with the terms of the Indenture and, to
the extent inconsistent with any terms of the Indenture, the terms of the
Indenture shall control.

(g)           If
a Holder of a bond in Series of Bonds’ acceptance of any Asset Sale Offer
results in the inclusion of the interest on such Holder’s bonds in the gross
income of such Holder for federal income tax purposes, the Company shall pay
such Holder on the date each interest payment is due for such Holder’s Series
of Bonds an amount equal to the interest then due and payable divided by (1
minus the highest effective federal tax rate at such time) less the amount of
interest otherwise paid to the Holder.

(f)            Section 4.24 is added
to read in its entirety as follows:

Section 4.24  Early Redemption.

The Company and
the Subsidiary Guarantors agree that, notwithstanding the terms of the Series
2004A Bonds, (1) the Company and the Subsidiary Guarantors will cause the
Series 2004A Bonds not to be redeemed before June 1, 2011 and (2) upon any
optional redemption of the Series 2001A Bonds during the period beginning June
1, 2011 and ending May 31, 2014, the Company and the Subsidiary Guarantors will
cause an additional amount to be paid to the Holders of the Series 2004A Bonds
being redeemed such that the aggregate amount received by such Holders upon
redemption is equal to the amounts expressed as a percentage of principal
amount set forth below (plus accrued interest, if

 7
 

 

any, to the redemption date) for a redemption of the
Series 2004A Bonds during the periods set forth below:

	
  Optional Redemption Dates

  	
   

  	
  Redemption Prices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 1, 2011
  through May 31, 2012

  	
   

  	
  103

  	
  %

  
	
  June 1, 2012
  through May 31, 2013

  	
   

  	
  102

  	
  %

  
	
  June 1, 2013 through
  May 31, 2014

  	
   

  	
  101

  	
  %

  

 

(g)           The following
Subsection (h) is added to Section 10.06:

(h)           Notwithstanding
anything herein to the contrary, the Company agrees that, without the prior
consent of the holders of at least a majority in aggregate principal amount of
the Guarantee Obligations with respect to each Series of Bonds, the Collateral
Trustee’s Liens in the Equity Interests of RERH Holdings, LLC (or its
successor) or, if any, in all or substantially all of the assets of RERH
Holdings, LLC and its Subsidiaries (or their successors) (the “Retail Assets”)
or in all or substantially all of the Company and its Subsidiaries’ (other than
RERH Holdings, LLC and its Subsidiaries’ (or their successors)) assets,
including Equity Interests (the “Wholesale Assets”) may not be released, except
no such consent shall be required (i) in the case of an Asset Sale of the
Equity Interests of RERH Holdings, LLC (or its successor), the Retail Assets or
the Wholesale Assets or (ii) on and after the date on which, as of the last day
of two consecutive Fiscal Quarters, both (A) the Consolidated Leverage Ratio
for the applicable immediately preceding four Fiscal Quarters was 2.75:1 or
less and (B) the Consolidated Interest Coverage Ratio for the applicable
immediately preceding four Fiscal Quarters was 3.25:1 or more (the “Ratio Test”).  The Company agrees to file a current report
on Form 8-K with the SEC showing the calculation of the Ratio Test within 60
days (or 90 days if end of the period is also the end of a fiscal year) (i)
after the end of first four-quarter period in which it meets the Ratio Test and
for which it proposes to use the Ratio Test to implement the foregoing Lien
release and (ii) after the end of the second consecutive four-quarter period in
which it meets the Ratio Test and for which it proposes to use the Ratio Test to
implement the foregoing Lien release. 
The Company also agrees to promptly notify the Trustee of the filing of
the Form 8-K and to deliver to the Trustee the calculations of the Ratio Test
certified by the Company’s chief financial officer and that the Company may not
implement a Lien release without consent on account of the Ratio Test without
first complying with this sentence and the immediately preceding sentence.

The following terms shall
have the following meanings when used in this paragraph (h):

“Acquisition”
means any transaction or any series of related transactions by which a Person
(a) acquires any going business (including a power generation facility) or all
or substantially all of the assets of any

 8
 

 

other Person, or
division thereof, whether through purchase of assets, merger, or otherwise or
(b) directly or indirectly acquires greater than 50% of the Voting Stock of any
other Person.

“Consolidated
EBITDAR” means, for any period for the Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP, an amount equal to,
without any duplication, (a) net income (before giving effect to the
cumulative effect of changes in accounting principles and discontinued
operations and before income taxes and franchise taxes to the extent based on
the income of such Person and its Subsidiaries) for such period, plus (b)
Consolidated Interest Charges for such period, plus (c) depreciation,
depletion, impairment, abandonment and amortization expense for such period,
plus (d) the book accounting lease expense under the REMA Lease for such
period, plus (e) interest and fees expensed under any receivables
monetization or securitization during such period, plus (f) net unrealized
losses related to trading or non-trading energy derivatives, plus (g) cash
dividends or distributions actually received during such period from an entity
which is not a consolidated Subsidiary of such Person, minus (h) net
unrealized gains related to trading or non-trading energy derivatives;
provided, however, for purposes of this definition, (i) gains and losses
on the disposition of assets not in the ordinary course of business, (ii) any
other noncash charge or gain, and (iii) any extraordinary or other
non-recurring item or expense, including severance costs, shall be excluded to
the extent incurred or realized during such period in accordance with GAAP from
the calculation of Consolidated EBITDAR. If during any period for which
Consolidated EBITDAR is being determined, the Company or any Subsidiary shall
have (a) made or consummated any Acquisition for gross consideration of
$3,000,000 or more (including Indebtedness assumed), then Consolidated EBITDAR
shall be determined on a pro forma basis for such period as if such Acquisition
had been made or consummated as of the beginning of the first day of such
period or (b) made or consummated any Asset Sale that is not fully included in
discontinued operations, then Consolidated EBITDAR shall, to the extent such
Asset Sale is not excluded from Consolidated EBITDAR pursuant to the foregoing
proviso, be determined on a pro forma basis for such period as if such Asset
Sale had been made or consummated as of the beginning of the first day of such
period.

“Consolidated
Interest Charges” means, without duplication, for any period for the
Company and its Subsidiaries on a consolidated basis in accordance with GAAP,
(a) the total interest expense for such period, plus (b) the interest expense
during such period attributable to (i) the REMA Lease, (ii) the fees
and yield paid in connection with, or interest expense attributable to, any
account receivables securitization or monetization permitted hereunder, and
(iii) any capitalized interest during such period, plus (c) all cash
dividends and distributions paid on preferred or preference stock, plus
(d) to the extent deducted in determining total interest expense, net
unrealized gains under any agreement described in the definition of “Hedging
Obligations” permitted hereunder and existing

 9
 

 

on or prior to
December 22, 2004 (excluding any ongoing settlement payments in connection with
permitted interest rate swap agreements), minus (e)(i) the total interest
income of such Person and its Subsidiaries, including interest income from any
escrow or trust account, (ii) in all cases whether expensed or amortized,
any interest expense attributable to (A) any makewhole or premium paid in
connection with the repayment of any Debt, (B) any upfront direct or indirect
costs, expenses, or fees incurred in connection with, including those arising
out of the preparation for the maturity of, (1) any Debt, (2) the incurrence of
any Debt after December 22, 2004, or (3) the amendment of any Debt, (C) to
the extent added in determining total interest expense, the upfront cost and
net unrealized losses under any agreement described in the definition of “Hedging
Obligations” permitted hereunder and existing on or prior to December 22, 2004
(excluding ongoing settlement payments in connection with permitted interest
rate swap agreements), and (D) any of the RRI Warrants;
(iii)  all non-recurring interest expense with respect to items not
constituting Indebtedness, and (iv) interest expense attributable to
Indebtedness repaid or required to be repaid under any Indebtedness for which
the Company has notified the Credit Agreement Agent in writing that it agrees
it will not designate the Net Proceeds as Excluded Proceeds, in each case in
connection with an Asset Sale.

“Consolidated
Interest Coverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated EBITDAR for the period of the four prior Fiscal Quarters
ending on such date to (b) Consolidated Interest Charges for such period.

“Consolidated
Leverage Ratio” means, as of any date of determination, the ratio of (a)
Consolidated Total Debt as of such date to (b) Consolidated EBITDAR for the
period of the four Fiscal Quarters most recently ended.

“Consolidated
Total Debt” means, as of any date of determination, for the Company and its
Subsidiaries on a consolidated basis in accordance with GAAP, (i) all
outstanding Debt of the Company and its Subsidiaries on such date, minus (ii)
without duplication, all (a) cash and short-term investments, in an aggregate
amount not to exceed $300,000,000 at any time, (b) restricted cash, in an
amount not to exceed the aggregate amount of Indebtedness of the Company or any
of its Subsidiaries, the terms of which Indebtedness cause such cash to appear
as restricted cash on the consolidated balance sheet of the Company and its
Subsidiaries, and (c) broker, counterparty, and customer margin/collateral
assets and deposits advanced to or held on behalf of such broker, counterparty
or customer, as each of the foregoing appears on the consolidated balance sheet
of the Company and its Subsidiaries.

“Debt”
means, as of any date of determination with respect to the Company and its
Subsidiaries, without duplication, in accordance with GAAP the following:
(a) the total amount of indebtedness, including any

 10
 

 

fair value
adjustments, and other obligations of the Company and its Subsidiaries for
borrowed money (whether by loan or the issuance of debt securities), including
the unreimbursed amount of any drawings under letters of credit issued for the
account of the Company or any of its Subsidiaries, but excluding the amount of
indebtedness for borrowed money that is either (i) required to be repaid or
(ii) for which the Company has notified the Credit Agreement Agent in writing
that it agrees it will not designate the Net Proceeds as Excluded Proceeds, in
each case in connection with an Asset Sale, (b) all Capital Lease
Obligations and, except for the REMA Lease, Attributable Debt in respect of
sale and leaseback transactions or financing leases, (c) the unpaid balance
owed to the certificate holders under the REMA Lease, (d) obligations under
any accounts securitization or monetization arrangement permitted hereunder and
not recorded on the Company balance sheet for that period, and (e) all
guaranties of payment or collection of any obligations described in clauses (a)
through (d) of this definition of any other Person; provided, however, that
Debt shall not include:  (i) any
guaranties that may be incurred by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business or similar
transactions, (ii) any Obligations or guaranties of performance of Obligations
under performance bonds, (iii) trade accounts payable in the ordinary course of
business, (iv) customer advance payments and customer deposits arising in the
ordinary course of business, (v) the liability of any Person as a general
partner of a partnership for Debt of such partnership, if the partnership is
not a Subsidiary of such Person, and (vi) any completion or performance
guarantees (or similar guarantees that a project or a Subsidiary perform as
planned).  In determining the outstanding
amount of any Debt:  (a) the amount of
money borrowed shall be the outstanding principal amount thereof, (b) the
amount of all unreimbursed letters of credit shall be the unreimbursed amount
thereof, (c) the amount of any accounts monetization or securitization shall be
the amount invested by the investor therein, and (d) the amount of guaranties
shall be the amount of the guaranteed obligations determined as provided above
in this sentence.

“RRI
Warrants” means the warrants issued by the Company and outstanding on
December 22, 2004.

(h)           Subsection (a)(2) of
Section 13.01 is amended in its entirety to read as follows:

(2)           the
Seward Subsidiary and the Seward Collateral Trustee shall file a mortgage on
the Seward Collateral substantially in the form of Exhibit B hereto for the
benefit of the present and future holders of the Series 2004A Bonds and any
other Permitted Secured PEDFA Bond Indebtedness on an Equal and Ratable Basis
on or before the date on which the Seward Security Event occurs, and the Series
2004A Bonds will thereafter be secured by Liens upon the Seward Subsidiary’s
rights in the Seward Collateral;

 11
 

 

2.             Effectiveness of
Amendments.

The Amendments shall
become effective on the date of this Supplemental Guarantee Agreement.

3.             Ratification of
Guarantee Agreement.

The Guarantee Agreement,
as supplemented and amended by this Supplemental Guarantee Agreement, is in all
respects ratified and confirmed, and this Supplemental Guarantee Agreement
shall be deemed part of the Guarantee Agreement in the manner and to the extent
herein and therein provided.

4.             Trustee Not
Responsible for Recitals.

The recitals herein
contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof.  The Trustee makes no representation as to the
validity or sufficiency of this Supplemental Guarantee Agreement.

5.             Governing Law.

THE INTERNAL LAW OF THE
STATE OF NEW YORK SHALL GOVERN THIS SUPPLEMENTAL GUARANTEE AGREEMENT.

6.             Separability.

In case any one or more
of the provisions contained in this Supplemental Guarantee Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any respect,
then, to the extent permitted by law, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Supplemental
Guarantee Agreement, but this Supplemental Guarantee Agreement shall be
construed as if such invalid or illegal or unenforceable provision had never
been contained herein.

7.             Counterparts.

This Supplemental
Guarantee Agreement may be executed in any number of counterparts each of which
shall be an original, but such counterparts shall together constitute but one
and the same instrument.

 12
 

 

IN WITNESS WHEREOF, the
parties hereto have caused this Supplemental Guarantee Agreement to be duly
executed by their respective officers thereunto duly authorized, as of the day
and year first above written.

RELIANT ENERGY, INC.,

as Guarantor

	
  

  	
  By:

  	
  /s/ Andrew Johannesen

  	
   

  
	
   

  	
  Name:

  	
  Andrew Johannesen

  	
   

  
	
   

  	
  Title:

  	
  Vice President and Assistant Treasurer

  	
   

  
						

 

 13
 

 

RELIANT ENERGY ASSET
MANAGEMENT, LLC

RELIANT ENERGY
BROADBAND, INC.

RELIANT ENERGY
CALIFORNIA HOLDINGS, LLC

RELIANT ENERGY
COMMUNICATIONS, INC.

RELIANT ENERGY
COOLWATER, INC.

RELIANT ENERGY CORPORATE
SERVICES, LLC

RELIANT ENERGY ELLWOOD,
INC.

RELIANT ENERGY ETIWANDA,
INC.

RELIANT ENERGY FLORIDA,
LLC

RELIANT ENERGY KEY/CON
FUELS, LLC

RELIANT ENERGY MANDALAY,
INC.

RELIANT ENERGY NORTHEAST
GENERATION, INC.

RELIANT ENERGY NORTHEAST
HOLDINGS, INC.

RELIANT ENERGY ORMOND
BEACH, INC.

RELIANT ENERGY POWER
GENERATION, INC.

RELIANT ENERGY SABINE
(TEXAS), INC.

RELIANT ENERGY SERVICES
DESERT BASIN, LLC

RELIANT ENERGY SERVICES
MID-STREAM, LLC

RELIANT ENERGY SEWARD,
LLC

RELIANT ENERGY TRADING
EXCHANGE, INC.

RELIANT ENERGY VENTURES,
INC.

RELIANT
ENERGY WHOLESALE GENERATION, LLC

	
  

  	
  By:

  	
  /s/ Andrew Johannesen

  
	
   

  	
  Name:

  	
  Andrew Johannesen

  
	
   

  	
  Title:

  	
  Assistant Treasurer of the corporations and limited

  liability companies listed above

  
				

 

 14
 

 

RELIANT
ENERGY SERVICES, INC.

 

	
  

  	
  By:

  	
  /s/ Andrew C.
  Johannesen

  
	
   

  	
  Name:  Andrew C. Johannesen

  
	
   

  	
  Title:  Vice President and Treasurer

  

 

RELIANT ENERGY ELECTRIC
SOLUTIONS, LLC

RELIANT ENERGY POWER
SUPPLY, LLC

RELIANT ENERGY RETAIL
SERVICES, LLC

RELIANT
ENERGY SOLUTIONS EAST, LLC

 

	
  

  	
  By:

  	
  /s/ Lloyd A.
  Whittington

  
	
   

  	
  Name:

  	
  Lloyd A.
  Whittington

  
	
   

  	
  Title:

  	
  Vice President
  and Treasurer of the limited

  
	
   

  	
  liability
  companies listed above

  
				

 

RELIANT
ENERGY RETAIL HOLDINGS, LLC

 

	
  

  	
  By:

  	
  /s/ Lloyd A.
  Whittington

  
	
   

  	
  Name:  Lloyd A. Whittington

  
	
   

  	
  Title:    Assistant Treasurer

  

 

 15
 

 

RELIANT ENERGY CAPTRADES
HOLDING CORP.

RELIANT
ENERGY SABINE (DELAWARE), INC.

 

	
  

  	
  By:

  	
  /s/ Patricia F.
  Genzel

  	
   

  
	
   

  	
  Name:  Patricia F. Genzel

  
	
   

  	
  Title:  President and Secretary

  

 

 16
 

 

THE BANK OF NEW YORK
TRUST COMPANY,

N.A., as
Trustee

 

	
  

  	
  By:

  	
  /s/ Michael J.
  Judge

  	
   

  
	
   

  	
  Authorized Signatory

  

 

 17Exhibit 10.6

THIRD
AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT

Dated as of December 1,
2006

(amending and restating the Second Amended and Restated Credit and

Guaranty Agreement, dated as of December 22, 2004),

among

RELIANT ENERGY, INC., as the Borrower,

The Other Loan Parties Referred To Herein, as Guarantors,

The Other Lenders Party Hereto,

BANK OF AMERICA, N.A.,

as Administrative Agent,

Revolving Credit Facility Agent, Term Facility Agent,

Collateral Agent and Revolving Credit Syndication Agent,

DEUTSCHE BANK AG, NEW YORK BRANCH,

as Pre-Funded L/C Facility Agent, Term Facility Syndication Agent

and Pre-Funded L/C Facility Syndication Agent,

and

GOLDMAN SACHS CREDIT PARTNERS L.P.

and MERRILL LYNCH CAPITAL
CORPORATION,

as Documentation Agents and Joint Book Runners for the Revolving
Credit Facility,

THE BANK OF NOVA SCOTIA and UBS
LOAN FINANCE LLC,

as Documentation Agents and Joint Book Runners for the Term
Facility, and

ABN AMRO N.V.,

as Documentation Agent and Joint Book Runner for the Pre-Funded
L/C Facility

BANC OF AMERICA SECURITIES LLC

and

DEUTSCHE BANK SECURITIES INC.,

as Joint Lead
Arrangers and Joint Book Runners for the Revolving Credit Facility

DEUTSCHE BANK SECURITIES INC.,

BANC OF
AMERICA SECURITIES LLC, and

J.P.
MORGAN SECURITIES INC.,

as Joint Lead Arrangers and Joint Bookrunners for the Term
Facility

DEUTSCHE
BANK SECURITIES INC.,

J.P.
MORGAN SECURITIES INC., and

BANC OF
AMERICA SECURITIES LLC,

as Joint Lead Arrangers and Joint Bookrunners for the
Pre-Funded L/C Facility

 

TABLE OF
CONTENTS

	
  

  	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I                DEFINITIONS AND
  ACCOUNTING TERMS

  	
  2

  
	
  1.1

  	
  Defined Terms

  	
  2

  
	
  1.2

  	
  Other Interpretive Provisions

  	
  64

  
	
  1.3

  	
  Accounting Terms

  	
  65

  
	
  1.4

  	
  Rounding

  	
  65

  
	
  1.5

  	
  Times of Day

  	
  65

  
	
  1.6

  	
  Letter of Credit Amounts

  	
  66

  
	
  ARTICLE II               THE COMMITMENTS
  AND CREDIT EXTENSIONS

  	
  66

  
	
  2.1

  	
  The Loans; The Pre-Funded L/C Deposit Account

  	
  66

  
	
  2.2

  	
  Borrowings, Conversions and Continuations of Loans

  	
  69

  
	
  2.3

  	
  Letters of Credit

  	
  71

  
	
  2.4

  	
  Optional and Mandatory Prepayments

  	
  84

  
	
  2.5

  	
  Termination or Reduction of Commitments; Reduction
  of Pre-Funded L/C Facility

  	
  90

  
	
  2.6

  	
  Repayment of Loans

  	
  91

  
	
  2.7

  	
  Interest

  	
  92

  
	
  2.8

  	
  Fees

  	
  92

  
	
  2.9

  	
  Computation of Interest and Fees

  	
  94

  
	
  2.10

  	
  Evidence of Debt

  	
  94

  
	
  2.11

  	
  Payments Generally; Administrative Agent’s Clawback

  	
  95

  
	
  2.12

  	
  Sharing of Payments by Lenders

  	
  97

  
	
  ARTICLE III             TAXES, YIELD
  PROTECTION AND ILLEGALITY

  	
  97

  
	
  3.1

  	
  Taxes

  	
  97

  
	
  3.2

  	
  Illegality

  	
  99

  
	
  3.3

  	
  Inability to Determine Rates

  	
  100

  
	
  3.4

  	
  Increased Costs; Capital Adequacy; Reserves on
  Eurodollar Rate Loans

  	
  100

  
	
  3.5

  	
  Compensation for Losses

  	
  102

  
	
  3.6

  	
  Mitigation Obligations; Replacement of Lenders

  	
  102

  
	
  3.7

  	
  Survival

  	
  103

  
	
  3.8

  	
  Application to Pre-Funded L/C Participation Fees

  	
  103

  

 

 i
 

 

 

	
  

  	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE IV             CONDITIONS
  PRECEDENT TO EFFECTIVENESS AND CREDIT EXTENSIONS

  	
  103

  
	
  4.1

  	
  Conditions of Effectiveness and Initial Credit
  Extension

  	
  103

  
	
  4.2

  	
  Conditions to All Credit Extensions

  	
  106

  
	
  ARTICLE V               REPRESENTATIONS
  AND WARRANTIES

  	
  107

  
	
  5.1

  	
  Existence, Qualification and Power; Compliance with
  Laws

  	
  107

  
	
  5.2

  	
  Authorization; No Contravention

  	
  107

  
	
  5.3

  	
  Governmental Authorization; Other Consents

  	
  108

  
	
  5.4

  	
  Binding Effect

  	
  108

  
	
  5.5

  	
  Financial Statements; No Material Adverse Effect

  	
  108

  
	
  5.6

  	
  Litigation

  	
  109

  
	
  5.7

  	
  No Default

  	
  109

  
	
  5.8

  	
  Ownership of Property; Liens

  	
  109

  
	
  5.9

  	
  Environmental Matters

  	
  109

  
	
  5.10

  	
  Insurance

  	
  110

  
	
  5.11

  	
  Taxes

  	
  111

  
	
  5.12

  	
  ERISA Compliance

  	
  111

  
	
  5.13

  	
  Subsidiaries; Equity Interests

  	
  112

  
	
  5.14

  	
  Margin Regulations; Investment Company Act

  	
  112

  
	
  5.15

  	
  Disclosure

  	
  112

  
	
  5.16

  	
  Compliance with Laws

  	
  113

  
	
  5.17

  	
  Intellectual Property; Licenses, Etc

  	
  113

  
	
  5.18

  	
  Solvency

  	
  113

  
	
  5.19

  	
  Perfection, Etc.

  	
  113

  
	
  5.20

  	
  Information Technology Systems

  	
  114

  
	
  5.21

  	
  Marks

  	
  114

  
	
  5.22

  	
  IP/IT Agreements

  	
  114

  
	
  ARTICLE VI             AFFIRMATIVE
  COVENANTS

  	
  114

  
	
  6.1

  	
  Financial Statements

  	
  115

  
	
  6.2

  	
  Certificates; Other Information

  	
  116

  

 

 ii
 

 

 

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  Notices

  	
  117

  
	
  6.4

  	
  Payment of Obligations

  	
  118

  
	
  6.5

  	
  Preservation of Existence, Etc

  	
  118

  
	
  6.6

  	
  Maintenance of Properties

  	
  118

  
	
  6.7

  	
  Maintenance of Insurance

  	
  119

  
	
  6.8

  	
  Compliance with Laws

  	
  119

  
	
  6.9

  	
  Books and Records

  	
  119

  
	
  6.10

  	
  Inspection Rights

  	
  119

  
	
  6.11

  	
  Use of Proceeds

  	
  119

  
	
  6.12

  	
  Additional Loan Parties; Security Interests

  	
  120

  
	
  6.13

  	
  Further Assurances

  	
  121

  
	
  6.14

  	
  Florida Mortgaged Properties

  	
  122

  
	
  6.15

  	
  Sale Note, etc

  	
  122

  
	
  6.16

  	
  Retail Group Distributions

  	
  123

  
	
  ARTICLE VII            NEGATIVE COVENANTS

  	
  124

  
	
  7.1

  	
  Liens

  	
  124

  
	
  7.2

  	
  Investments

  	
  124

  
	
  7.3

  	
  Indebtedness

  	
  124

  
	
  7.4

  	
  Consolidation and Mergers

  	
  127

  
	
  7.5

  	
  Asset Sales

  	
  128

  
	
  7.6

  	
  Restricted Payments

  	
  129

  
	
  7.7

  	
  Line of Business

  	
  130

  
	
  7.8

  	
  Transactions with Affiliates

  	
  131

  
	
  7.9

  	
  Restrictive Agreements

  	
  132

  
	
  7.10

  	
  Use of Proceeds

  	
  132

  
	
  7.11

  	
  Financial Covenants

  	
  133

  
	
  7.12

  	
  Capital Expenditures

  	
  133

  
	
  7.13

  	
  Modification of Certain Agreements

  	
  134

  
	
  7.14

  	
  Fiscal Year

  	
  135

  
	
  7.15

  	
  Commodity Hedging

  	
  135

  

 

 iii
 

 

 

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  7.16

  	
  Suspension of Certain Covenants upon Release Date

  	
  135

  
	
  7.17

  	
  Orion Subsidiaries

  	
  136

  
	
  7.18

  	
  Designated Entities

  	
  136

  
	
  7.19

  	
  Foreign Investments

  	
  138

  
	
  7.20

  	
  Payment, Commitment Reduction Upon Retail Sale or
  Wholesale Sale

  	
  138

  
	
  ARTICLE VIII           GUARANTY

  	
  138

  
	
  8.1

  	
  Guaranty; Limitation of Liability

  	
  138

  
	
  8.2

  	
  Guaranty Absolute

  	
  139

  
	
  8.3

  	
  Waivers and Acknowledgments

  	
  140

  
	
  8.4

  	
  Subrogation

  	
  141

  
	
  8.5

  	
  Assumption and Joinder

  	
  142

  
	
  8.6

  	
  Subordination

  	
  142

  
	
  8.7

  	
  Continuing Guaranty; Assignments

  	
  142

  
	
  ARTICLE IX             EVENTS OF DEFAULT
  AND REMEDIES

  	
  143

  
	
  9.1

  	
  Events of Default

  	
  143

  
	
  9.2

  	
  Remedies upon Event of Default

  	
  146

  
	
  9.3

  	
  Application of Funds

  	
  146

  
	
  ARTICLE X              THE AGENTS AND THE
  ISSUING BANKS

  	
  147

  
	
  10.1

  	
  Appointment and Authority

  	
  147

  
	
  10.2

  	
  Rights As a Lender

  	
  148

  
	
  10.3

  	
  Exculpatory Provisions

  	
  148

  
	
  10.4

  	
  Reliance by the Agents

  	
  149

  
	
  10.5

  	
  Delegation of Duties

  	
  149

  
	
  10.6

  	
  Resignation of Administrative Agents

  	
  150

  
	
  10.7

  	
  Non-Reliance on Administrative Agent, the Pre-Funded
  L/C Facility Agent and Other Lenders

  	
  152

  
	
  10.8

  	
  No Other Duties, Etc

  	
  152

  
	
  10.9

  	
  Administrative Agent May File Proofs of Claim

  	
  152

  
	
  10.10

  	
  Collateral and Guaranty Matters

  	
  153

  
	
  ARTICLE XI         MISCELLANEOUS

  	
  156

  

 

 iv
 

 

.

	
  

  	
   

  	
  Page

  
	
   

  	
   

  
	
  11.1

  	
  Amendments, Etc

  	
  156

  
	
  11.2

  	
  Notices; Effectiveness; Electronic Communication

  	
  157

  
	
  11.3

  	
  No Waiver; Cumulative Remedies

  	
  159

  
	
  11.4

  	
  Expenses; Indemnity; Damage Waiver

  	
  159

  
	
  11.5

  	
  Payments Set Aside

  	
  162

  
	
  11.6

  	
  Successors and Assigns

  	
  162

  
	
  11.7

  	
  Confidentiality

  	
  167

  
	
  11.8

  	
  Right of Setoff

  	
  167

  
	
  11.9

  	
  Interest Rate Limitation

  	
  168

  
	
  11.10

  	
  Counterparts; Integration; Effectiveness

  	
  168

  
	
  11.11

  	
  Survival of Representations and Warranties

  	
  168

  
	
  11.12

  	
  Severability

  	
  169

  
	
  11.13

  	
  Replacement of Lenders

  	
  169

  
	
  11.14

  	
  Governing Law; Jurisdiction; Etc

  	
  170

  
	
  11.15

  	
  Waiver of Jury Trial

  	
  171

  
	
  11.16

  	
  USA PATRIOT Act Notice

  	
  171

  
	
  11.17

  	
  No Oral Agreements

  	
  171

  
	
  11.18

  	
  Citibank Intercreditor Agreement

  	
  171

  
	
  11.19

  	
  Orion Bank Guarantors

  	
  171

  
	
  11.20

  	
  Effect of Amendment and Restatement of the Existing
  Credit Agreement

  	
  171

  
	
  11.21

  	
  Release of Guarantors, Collateral

  	
  172

  
	
  11.22

  	
  No Advisory or Fiduciary Responsibility

  	
  172

  
	
  SIGNATURE PAGE

  	
  S-1

  

 

 v
 

 

 

	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  1.1(a)

  	
  Existing Letters of Credit

  	
   

  
	
  1.1(b)

  	
  Guarantors

  	
   

  
	
  1.1(c)

  	
  [Reserved]

  	
   

  
	
  1.1(d)

  	
  Subordination Terms

  	
   

  
	
  1.1(e)

  	
  Mortgages and Title Policies

  	
   

  
	
  1.1(f)

  	
  Secured Hedge Agreements

  	
   

  
	
  1.1(g)

  	
  Existing Indebtedness

  	
   

  
	
  2.1

  	
  Commitments and Pro Rata Shares

  	
   

  
	
  5.8(c)

  	
  Closing Date Mortgaged Properties

  	
   

  
	
  5.9(c)

  	
  Environmental Matters

  	
   

  
	
  5.13

  	
  Subsidiaries and Other Equity Investments

  	
   

  
	
  5.17

  	
  Intellectual Property Matters

  	
   

  
	
  7.3(k)

  	
  List of Agreements Prohibiting Subordination of
  Intercompany Indebtedness

  	
   

  
	
  10.10(e)

  	
  Certain Closing Actions

  	
   

  
	
  11.2

  	
  Administrative Agent’s Office; Facility Agents’
  Offices; Certain Addresses for Notices

  	
   

  
	
  11.21

  	
  Guarantors and Collateral to be released on the
  Closing Date

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Form of

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  Borrowing Notice

  	
   

  
	
  B

  	
  L/C Certificate

  	
   

  
	
  C

  	
  Continuation/Conversion Notice

  	
   

  
	
  D-1

  	
  Revolving Credit Note

  	
   

  
	
  D-2

  	
  Term Note

  	
   

  
	
  E

  	
  Compliance Certificate

  	
   

  
	
  F

  	
  Assignment and Assumption

  	
   

  
	
  G

  	
  Assumption and Joinder

  	
   

  
	
  H

  	
  Sale Note

  	
   

  

 

 vi

 

THIRD AMENDED AND RESTATED CREDIT AND GUARANTY
AGREEMENT

This THIRD AMENDED AND RESTATED CREDIT AND GUARANTY
AGREEMENT (as further amended, restated, supplemented or otherwise modified
from time to time, this “Agreement”) dated as of December 1, 2006, is among
RELIANT ENERGY, INC., a Delaware corporation (the “Borrower”), the other
LOAN PARTIES referred to herein, as Guarantors, each lender from time to time
party hereto (collectively, the “Lenders” and individually, a “Lender”),
BANK OF AMERICA, N.A., as Administrative Agent, Revolving Credit Facility
Agent, Term Facility Agent, Collateral Agent and Revolving Credit Syndication
Agent, DEUTSCHE BANK AG, NEW YORK BRANCH, as Pre-Funded L/C Facility Agent,
Term Facility Syndication Agent and Pre-Funded L/C Facility Syndication Agent,
GOLDMAN SACHS CREDIT PARTNERS L.P. and MERRILL LYNCH CAPITAL CORPORATION, as
Documentation Agents and Joint Book Runners for the Revolving Credit Facility,
THE BANK OF NOVA SCOTIA AND UBS LOAN FINANCE LLC, as Documentation Agents and
Joint Book Runners for the Term Facility, and ABN AMRO N.V., as Documentation
Agent and Joint Book Runner for the Pre-Funded L/C Facility.

PRELIMINARY STATEMENTS:

The Borrower and certain of its Subsidiaries (such
terms and each other capitalized term used but not defined in the recitals
having the meaning provided in Section 1.1) have entered into the Second
Amended and Restated Credit and Guaranty Agreement, dated as of December 22,
2004 (such agreement, as further amended, restated, supplemented or otherwise
modified prior to the date hereof, the “Existing Credit Agreement”) with
Bank of America, N.A., as administrative agent, Barclays Bank PLC and Deutsche
Bank Securities Inc., as syndication agents, Goldman Sachs Credit Partners L.P.
and Merrill Lynch Capital Corporation, as documentation agents, and the other
lenders party thereto.

The Borrower has requested that Section 11.13 of the
Existing Credit Agreement (including such amended Section 11.13) be amended by
the vote of the Required Lenders under (and as defined in) the Existing Credit
Agreement to read in its entirety as Section 11.13 of this Agreement, and
immediately following the effectiveness of such amendment, that the Existing
Credit Agreement (including such amended Section 11.13) be amended and
restated in its entirety to become effective and binding on the Borrower
pursuant to the terms of this Agreement, and the Required Lenders (under and as
defined in the Existing Credit Agreement) have agreed to amend Section 11.13 of
the Existing Credit Agreement to read in its entirety as set forth in this
Agreement, and immediately following the effectiveness of the amendment to
Section 11.13, the Lenders (including those Persons who become Lenders
hereunder pursuant to Section 11.13) have agreed to amend and restate the
Existing Credit Agreement in its entirety to read as set forth in this
Agreement.  It has also been agreed by
the parties to the Existing Credit Agreement that the Existing Letters of
Credit shall be governed by and deemed to be outstanding under the amended and
restated terms and conditions contained in this Agreement, with the intent that
the terms of this Agreement shall supersede the terms of the Existing Credit
Agreement (each of which shall hereafter have no further effect upon the
parties thereto, other than as referenced herein and other than for accrued
fees and expenses, and indemnification provisions, accrued and owing under the
terms of the Existing Credit Agreement on or prior to

 

the date hereof or
arising (in the case of an indemnification) under the terms of the Existing
Credit Agreement, in each case to the extent provided for in the Existing
Credit Agreement).

The parties hereto agree that from and after the
effectiveness of this Agreement, the obligations under the Existing Credit
Agreement, including the terms of the extensions of credit outstanding
thereunder, shall be continued as, and evidenced by, the Loans, Letters of
Credit, Pre-Funded L/C Deposits and other Credit Agreement Obligations and Loan
Documents.

The Lenders and the L/C Issuers have indicated their
willingness to continue extensions of credit under the Existing Credit
Agreement as Loans and Letters of Credit hereunder, and make additional Loans,
fund Pre-Funded L/C Deposits and continue existing or issue additional Letters
of Credit on the terms and subject to the conditions set forth herein.

In consideration of the mutual covenants and
agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.1          Defined Terms.  As used in this Agreement, the following
terms shall have the meanings set forth below:

“Acquired Debt” means with respect to any
specified Person:

(a)           Indebtedness of any
other Person existing at the time such other Person is merged with or into or
became a Subsidiary of such specified Person, whether or not such Indebtedness
is incurred in connection with, or in contemplation of, such other Person
merging with or into, or becoming a Subsidiary of, such specified Person; and

(b)           Indebtedness secured
by a Lien encumbering any asset acquired by such specified Person.

“Acquisition” means any transaction or any
series of related transactions by which a Person (1) acquires any going
business (including a power generation facility) or all or substantially all of
the assets of any other Person, or division thereof, whether through purchase
of assets, merger, or otherwise or (2) directly or indirectly acquires greater
than 50% of the Voting Stock of any other Person.

“Acquisition Consideration” means the gross
consideration (other than Equity Interests in the Borrower) paid (including
Indebtedness assumed) in connection with any Acquisition.

“Actionable Default” means (1) the failure to
pay any payment of principal of or interest on any Series of Secured Debt
outstanding in the amount of $50,000,000 or more resulting in an event of
default under the applicable Series of Secured Debt after payment is due,
including payments that are due (or if any required offer had been timely made
would be due) in respect of any mandatory offer to purchase Parity Secured Debt
resulting in an event of default under the applicable Series of Secured Debt,
(2) the failure to pay in full, when due and payable in full (whether at
maturity, upon acceleration or otherwise), either the Secured Notes or the
Loans or

 2
 

 

any other Series of
Secured Debt outstanding in the amount of $50,000,000 or more, (3) the
exercise by the Collateral Trustee or any of its co-trustees or agents
(including the Administrative Agent) of any right or power that is exercisable
by it only upon default to take sole and exclusive dominion or control over any
deposits in a deposit account, commodity contract in a commodity account or
financial asset in a securities account constituting any Shared Collateral or
the delivery of any instructions to the Collateral Trustee directing it to
foreclose or otherwise enforce, or to disburse the proceeds of enforcement of,
any Lien upon any Collateral, or (4) the occurrence of any Event of Default
under this Agreement or the Secured Note Agreements arising from the
commencement of any bankruptcy case, receivership or other insolvency or
liquidation proceeding by or against the Borrower or any of its Subsidiaries or
any similar default provision at any time in effect under any indenture or
agreement governing any Series of Secured Debt.

“Additional Guarantor” means each Person (other
than the Guarantors party hereto on the Closing Date) that shall be required to
execute and deliver an Instrument of Assumption and Joinder pursuant to Section 6.12.

“Administrative Agent” means Bank of America in
its capacity as administrative agent under any of the Loan Documents, or any
successor administrative agent.

“Administrative Agent’s Office” means the
Administrative Agent’s address and, as appropriate, account as set forth on Schedule
11.2, or such other address or account as the Administrative Agent may from
time to time notify to the Borrower and the Lenders.

“Administrative Questionnaire” means an
Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” of any specified Person means any
other Person directly or indirectly Controlling or Controlled by or under
direct or indirect common Control with such specified Person; provided,
that a Person will be deemed to be an Affiliate of the Borrower if the Borrower
has knowledge that such Person beneficially owns 10% or more of the Voting
Stock of the Borrower; provided, further, that the Borrower shall
only be deemed to have knowledge of any Person beneficially owning 10% or more
of the Borrower’s Voting Stock if such Person has filed a statement of
beneficial ownership pursuant to Sections 13(d) or 13(g) of the Exchange Act or
has provided written notice thereof to the Borrower.  Notwithstanding the foregoing, no Person
(other than the Borrower or any Restricted Subsidiary of the Borrower) in whom
a Securitization Entity makes an Investment in connection with a Qualified
Securitization Transaction shall be deemed to be an Affiliate of the Borrower
solely by reason of such Investment.

“Agent-Related Person” means each of the
Administrative Agent, the Collateral Agent, the Pre-Funded L/C Facility Agent,
each Joint Lead Arranger and each Joint Bookrunner named on the cover page of
this Agreement, together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.

“Agents” means, collectively, the Syndication
Agents and the Documentation Agent (as of the Closing Date), the Facility Agents,
the Administrative Agent and the Collateral Agent.

“Aggregate Commitments” means the Commitments
of all the Lenders.

 3
 

 

“Aggregate Revolving Credit Commitments” means
the Revolving Credit Commitments of all the Lenders.

“Agreement” has the meaning specified in the preamble.

“Applicable Amount” means the Non-PEDFA Amount minus
the PEDFA Amount.

“Applicable Fronting Commitment” means
(a) in respect of Bank of America and Deutsche Bank, $105,000,000, in each
case, in its capacity as a Revolving L/C Issuer; and (b) in respect of
each other Revolving L/C Issuers, $70,000,000.

“Applicable Margin” means a per annum rate
equal to, with respect to Revolving Credit Loans, Term Loans and Pre-Funded L/C
Deposits and commitment fee payable under Section 2.8(a), the appropriate
applicable percentage set forth below corresponding to the Consolidated
Leverage Ratio as of the most recent Calculation Date with respect to Revolving
Credit Loans, Term Loans and Pre-Funded L/C Deposits and the commitment fee; provided
that on and after the 180th day following the
consummation by the Borrower or any of its Subsidiaries of any acquisition of
Permitted ERCOT Assets, each of the rates with respect to Revolving Credit
Loans set forth below shall increase by 2.00% on the amount of outstanding
Revolving Credit Loans which is equal to the lesser of (a) the aggregate amount
of all Revolving Credit Loans outstanding as of such date and (b) the amount by
which the Acquisition Consideration paid for all acquisitions of Permitted
ERCOT Assets on or after the Closing Date through such date exceeds the Funded
ERCOT Amount as of such date:

(i)            at any time the ratings in respect of the Borrower’s
Corporate Credit/Family Corporate ratings are determined by S&P to be lower
than B+ (Stable) or by Moody’s to be lower than B1 (Stable), the Applicable
Margin will be the following:

Revolving
Credit Loans, Term Loans, Pre-Funded L/C Deposits and Commitment Fees

	
  Pricing Level

  	
   

  	
  Consolidated

  Leverage

  Ratio

  	
   

  	
  Applicable

  Percentage

  For Eurodollar

  Loans

  	
   

  	
  Applicable

  Percentage

  For Base

  Rate Loans

  	
   

  	
  Applicable

  Percentage

  For

  Commitment

  Fees

  	
   

  
	
  I

  	
   

  	
  >
  4.0:1

  	
   

  	
  2.375

  	
  %

  	
  1.375

  	
  %

  	
  0.50

  	
  %

  
	
  II

  	
   

  	
  < 4.0:1

  	
   

  	
  2.125

  	
  %

  	
  1.125

  	
  %

  	
  0.50

  	
  %

  

 

(ii)           at any time the ratings in respect of the Borrower’s
Corporate Credit/Family Corporate ratings are determined by S&P to be B+
(Stable) or better and by Moody’s to be B1 (Stable) or better, the Applicable
Margin will be the following:

Revolving
Credit Loans, Term Loans, Pre-Funded L/C Deposits and Commitment Fees

	
  Pricing Level

  	
   

  	
  Consolidated

  Leverage

  Ratio

  	
   

  	
  Applicable

  Percentage

  For Eurodollar

  Loans

  	
   

  	
  Applicable

  Percentage

  For Base

  Rate Loans

  	
   

  	
  Applicable

  Percentage

  For

  Commitment

  Fees

  	
   

  
	
  I

  	
   

  	
  >
  4.0:1

  	
   

  	
  2.125

  	
  %

  	
  1.125

  	
  %

  	
  0.50

  	
  %

  
	
  II

  	
   

  	
  < 4.0:1

  	
   

  	
  2.125

  	
  %

  	
  1.125

  	
  %

  	
  0.50

  	
  %

  

 

 4
 

 

Each Applicable Margin with respect to Revolving Credit Loans, Term
Loans and Pre-Funded L/C Deposits and the commitment fee shall be determined
and adjusted quarterly on the date (each a “Calculation Date”) one
Business Day after the date by which the Borrower is required to provide the
consolidated financial information required by Section 6.1(a) or (b)
and the Compliance Certificate required by Section 6.2(a) for the fiscal
quarter or year of the Borrower most recently ended prior to the Calculation
Date; provided that (i) each such initial Applicable Margin shall
be based on Pricing Level I (as shown above) and shall remain at Pricing Level
I until the Calculation Date in respect of the fiscal quarter ending June 30,
2007 and, thereafter, each such Applicable Margin shall be based on the Pricing
Level (as shown above) corresponding to the Consolidated Leverage Ratio as of
the last day of the most recently ended fiscal quarter or year of the Borrower
preceding the applicable Calculation Date; (ii) if the Borrower fails to
provide the consolidated financial information required by Section 6.1(a)
or (b) or the Compliance Certificate required by Section 6.2(a)
for the most recently ended fiscal quarter or year of the Borrower preceding
any applicable Calculation Date, each such Applicable Margin from such
Calculation Date shall be based on Pricing Level I (as shown above) until such
time as such consolidated financial information and an appropriate officer’s
certificate is provided, whereupon such Applicable Margin shall be based on the
Pricing Level (as shown above) corresponding to the Consolidated Leverage Ratio
as of the last day of the most recently ended fiscal quarter or year of the
Borrower preceding such Calculation Date; and (iii) if and for so long as
any Event of Default shall have occurred and be continuing, each such
Applicable Margin shall be based on Pricing Level I (as shown above).  Each Applicable Margin shall be effective
from one Calculation Date until the next Calculation Date.  Any adjustment in such Applicable Margins
shall be applicable to all Revolving Credit Loans, Term Loans and Pre-Funded
L/C Deposits then existing or subsequently made.

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

“Asset Sale” means:

(a)           the sale, lease,
conveyance or other disposition of any assets; and

(b)           the issuance of
Equity Interests in any of the Borrower’s Restricted Subsidiaries.

Notwithstanding the foregoing, none of the following
items will be deemed to be an Asset Sale:

 5
 

 

(1)           any single
transaction or series of related transactions that involves assets with gross
cash proceeds of $3,000,000 or less;

(2)           a transfer of assets
between or among the Borrower and Restricted Subsidiaries;

(3)           an issuance of
Equity Interests by a Restricted Subsidiary to the Borrower or to a Restricted
Subsidiary of the Borrower;

(4)           the sale or lease of
products, services or accounts receivable in the ordinary course of business
and any sale or other disposition of damaged, worn out or obsolete assets or
assets no longer used or useful in the Borrower’s or any of its Restricted
Subsidiaries’ business;

(5)           the sale or other
disposition of cash or Cash Equivalents;

(6)           sales of accounts
receivable, equipment and related assets (including contract rights) of the
type specified in the definition of Qualified Securitization Transaction to a
Securitization Entity;

(7)           a Restricted Payment
that is permitted by the provisions of Section 7.6 hereof or a Permitted
Investment;

(8)           a disposition
resulting from any Condemnation; provided, that if such disposition
involves assets with gross cash proceeds in excess of $3,000,000, that any cash
proceeds received in connection therewith are treated as Net Asset Sale
Proceeds;

(9)           the disposition by
Reliant Energy Wholesale Generation, LLC of the substation at the Bighorn
generating facility (and the related real property assets) to be conveyed to
Nevada Power Company pursuant to the terms and provisions of that certain EPC
Agreement dated December 18, 2002 between Reliant Energy Bighorn, LLC and
Nevada Power Company; and

(10)         a disposition of
assets (other than any assets securing Parity Secured Debt) in connection with
a foreclosure, transfer or deed in lieu of foreclosure or other exercise of
remedial action.

“Assignee Group” means two or more Eligible
Assignees that are Affiliates of one another or two or more Approved Funds
managed by the same investment advisor.

“Assignment and Assumption” means an assignment
and assumption entered into by a Lender and an Eligible Assignee (with the
consent of any party whose consent is required by Section 11.6(b)),
and accepted by the Administrative Agent, in substantially the form of Exhibit F
or any other form approved by the Administrative Agent.

“Assignment of Leases and Rents” means any
assignment of leases and rents or equivalent document now existing or hereafter
entered into, that is executed and delivered by one or more of the Loan Parties
to the Collateral Trustee (for the benefit of the Secured Parties), and

 6
 

 

in each case, as such
document may be amended, restated, supplemented or otherwise modified from time
to time.

“Attributable Debt” means, on any date, (a) in
respect of a sale and leaseback transaction, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended (such present value to be calculated using a discount rate equal to
the rate of interest implicit in such transaction, determined in accordance
with GAAP; provided, that if such sale and leaseback transaction results
in a Capital Lease Obligation, the amount of Indebtedness represented thereby
will be determined in accordance with the definition of “Capital Lease
Obligation”) and (b) in respect of any Synthetic Lease Obligation or financing
lease, the amount of the remaining lease payments under the relevant lease that
would as of such date be required to be capitalized on a balance sheet in
accordance with GAAP if such lease were accounted for as a Capital Lease
Obligation.

“Audited Financial Statements” means the
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries for the Fiscal Year ended December 31, 2005, and the related
consolidated statements of income or operations, shareholders’ equity and
comprehensive income (loss) and cash flows for such Fiscal Year of the Borrower
and its consolidated Subsidiaries, including the notes thereto.

“Auto-Renewal Letter of Credit” means a Letter
of Credit with an initial expiry date of one year or less after the date of its
issuance that has automatic renewal provisions.

“Availability Period” means the period from and
including the Effective Date to but not including the Revolving Credit
Termination Date.

“Bank of America” means Bank of America, N.A.
and its successors.

“Bank Security Agreement” means the Amended and
Restated Security Agreement, dated as of July 1, 2003, among the Borrower, the
other Loan Parties and Bank of America, as Collateral Agent, as such agreement
may be amended, restated, supplemented or otherwise modified from time to time.

“Bankruptcy Code” means the Bankruptcy Reform
Act of 1978, as heretofore and hereafter amended, as codified at 11 U.S.C. §
101 et seq.

“Base Rate” means for any day a fluctuating
rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1%
and (b) the rate of interest in effect for such day as publicly announced from
time to time by Bank of America as its “prime rate.”  The “prime rate” is a rate set by Bank of
America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.  Any change in such
rate announced by Bank of America shall take effect at the opening of business
on the day specified in the public announcement of such change.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 7
 

 

“Base Return” means, with
respect to a Pre-Funded L/C Deposit for any Investment Period, an amount equal
to the Eurodollar Rate for the applicable Investment Period.

“Beneficial Owner” has the meaning specified
for such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act.  The terms “Beneficially Owns” and “Beneficially
Owned” have a corresponding meaning.

“Board of Directors” means:

(1)           with respect to a
corporation, the board of directors of the corporation or any committee thereof
duly authorized to act on behalf of such board;

(2)           with respect to a
partnership, the Board of Directors of the general partner of the partnership;

(3)           with respect to a
limited liability company, the managing member or members or any controlling
committee of managing members or board of directors thereof; and

(4)           with respect to any
other Person, the board or committee of such Person serving a similar function.

“Board Resolution” means a resolution passed by
the Board of Directors of the Borrower.

“Borrower” has the meaning specified in the
introductory paragraph hereto, and its successors.

“Borrowing” means a Revolving Credit Borrowing,
a Term Borrowing or a Pre-Funded L/C Borrowing, as the context may require.

“Borrowing Notice” means a notice of (a) a Term
Borrowing in substantially the form of Exhibit A, (b) a Revolving Credit
Borrowing in substantially the form of Exhibit A, (c) a conversion
(which shall not constitute a new Borrowing) of Loans from one Type to the
other in substantially the form of Exhibit C, or (d) a continuation
(which shall not constitute a new Borrowing) of Eurodollar Rate Loans, pursuant
to Section 2.2(a), substantially in the form of Exhibit C.

“Business Day” means any day other than a
Saturday, Sunday or other day on which commercial banks are authorized to close
under the Laws of, or are in fact closed in, Houston, Texas or the state where
the Administrative Agent’s Office is located and, if such day relates to any
Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits
are conducted by and between banks in the London interbank eurodollar market.

“Capital Expenditure” means, with respect to
any Person for any period, the aggregate amount of all expenditures by such
Person during that period which, in accordance with GAAP, are or should be
included in “additions to property, plant and equipment”, “capital expenditures”
or similar items reflected in the statement of cash flows of such Person for
such period.  For purposes of this
definition, the purchase price of equipment that is purchased simultaneously

 8
 

 

with the trade-in of
existing equipment or with insurance or proceeds of any Condemnation shall be
included in Capital Expenditures only to the extent of the gross amount of such
purchase price, less the credit granted by the seller of such equipment for the
equipment being traded in at such time or the amount of such insurance or
proceeds of any Condemnation, as the case may be.

“Capital Lease Obligation” means, as applied to
any Person, at the time any determination is to be made, the amount of the
liability in respect of a capital lease that would at that time be required to
be capitalized on a balance sheet of such Person in accordance with GAAP in the
reasonable judgment of such Person, and the Stated Maturity thereof shall be
the date of the last payment of rent or any other amount due under such lease
prior to the first date upon which such lease may be prepaid by the lessee
without payment of a penalty.

“Capital Stock” means:

(a)           in the case of a
corporation, corporate stock;

(b)           in the case of an
association or business entity, any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock;

(c)           in the case of a
partnership or limited liability company, partnership interests (whether
general or limited) or membership interests; and

(d)           any other interest
or participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person, but
excluding from all of the foregoing any debt securities convertible into
Capital Stock, whether or not such debt securities include any right of
participation with Capital Stock.

“Cash Collateralize” means to pledge and
deposit with or deliver to the Collateral Agent, for the benefit of any L/C
Issuer and (a) the Revolving Credit Lenders, as collateral for the Revolving
L/C Obligations and/or the Revolving Credit Commitments; and (b) the Pre-Funded
L/C Lenders, as collateral for the Pre-Funded L/C Obligations and/or the
Pre-Funded L/C Commitments, cash or deposit account balances pursuant to
documentation in form and substance reasonably satisfactory to the
Administrative Agent, the Pre-Funded L/C Facility Agent, the Borrower, the
Collateral Agent and such L/C Issuer; provided, that such cash or
deposit account balances shall not be subject to any Lien other than the Lien
of the Lenders to secure the Obligations. 
Derivatives of such term (including the term “Cash Collateral”)
have corresponding meanings.

“Cash Equivalents” means:

(1)           United States
dollars;

(2)           securities issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality of the United States government (provided,
that the full faith and credit of the United States is pledged in support of
those securities) having maturities of not more than one year from the date of
acquisition;

 9
 

 

(3)           deposit accounts
with any lender party to this Agreement, Mellon Bank N.A., Wells Fargo Bank,
N.A., Wachovia Bank, National Association, or any other bank that has a
long-term debt rating at the time of investment of A+ or better by S&P and
A1 or better by Moody’s (an “Approved Bank”);

(4)           time deposits,
certificates of deposit, acceptances or prime commercial paper issued by an
Approved Bank at the time acquired or issued (as applicable and whichever is
latest), in each case, having a maturity of not more than one year from the
date of acquisition;

(5)           repurchase
obligations for underlying securities of the types described in clause (2)
entered into with an Approved Bank at the time acquired, issued or entered into
(as applicable and whichever is latest), in each case, having a maturity of not
more than one year from the date of acquisition and secured by securities of
the type described in clause (2), the market value of which
(including accrued interest) is not less than the amount of the applicable repurchase
agreement;

(6)           commercial paper
with a rating at the time of investment of A-1 by S&P and P-1 by Moody’s
and, in each case, maturing within one year after the date of acquisition; and

(7)           money market funds
which invest primarily in Cash Equivalents of the kinds described in clauses
 (1) through (6) of this definition.

“Cash Payment Amount” has the meaning specified
in the definition of “Consolidated EBITDAR”.

“Casualty Event” means the damage or
destruction, as the case may be, of property of any Person; provided,
that Casualty Event shall not include any disposition to which clause (8)
of the definition of Asset Sale applies.

“Change in Law” means the occurrence, after the
date of this Agreement, of any of the following: (a) the adoption or taking effect
of any law, rule, regulation or treaty, (b) any change in any law, rule,
regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any
request, guideline or directive (whether or not having the force of law) by any
Governmental Authority.

“Change of Control” means the occurrence of any
of the following:

(a)           the direct or
indirect sale, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the properties or assets of the Borrower and its
Subsidiaries taken as a whole to any “person” (as that term is used in Section
13(d) of the Exchange Act, but excluding any employee benefit plan of the
Borrower or any of its Restricted Subsidiaries, and any person or entity acting
in its capacity as trustee, agent or other fiduciary or administrator of any
such plan);

 10
 

 

(b)           the adoption of a
plan relating to the liquidation or dissolution of the Borrower other than (i)
the consolidation with, merger into or transfer of all or part of the
properties and assets of any Restricted Subsidiary of the Borrower to the
Borrower or any other Restricted Subsidiary of the Borrower and (ii) the merger
of the Borrower with an Affiliate solely for the purpose of reincorporating the
Borrower or reforming the Borrower in another jurisdiction;

(c)           the consummation of
any transaction (including any merger or consolidation) the result of which is
that any “person” (as defined above) becomes the Beneficial Owner, directly or
indirectly, of more than 50% of the Voting Stock of the Borrower, measured by
voting power rather than number of shares;

(d)           the first day on
which a majority of the members of the Board of Directors of the Borrower are
not Continuing Directors; or

(e)           the Borrower
consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Borrower, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of the
Borrower or such other Person is converted into or exchanged for cash,
securities or other property, other than any such transaction where the Voting
Stock of the Borrower outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified Stock) of
the surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance).

“Channelview” means Reliant Energy Channelview,
L.P., a Delaware limited partnership, and its successors.

“Closing Date” means December 22, 2004.

“Closing Date Mortgaged Properties” means
collectively the properties indicated on Schedule 5.8(c).

“Code” means the Internal Revenue Code of 1986
as amended from time to time.

“Collateral” means, collectively, (i) the “Collateral”
as defined in the Collateral Trust Agreement, and (ii) the “Collateral” as
defined in the Separate Security Agreement.

“Collateral Agent” means Bank of America in its
capacity as collateral agent for the Credit Agreement Secured Parties, or such
successor Collateral Agent as may be appointed pursuant to Article XI.

“Collateral Trust Agreement” means that certain
collateral trust agreement, dated as of July 1, 2003, entered into among the
Borrower, certain of its Subsidiaries and Wachovia Bank, National Association,
as initial Collateral Trustee, and acknowledged and agreed to by the Administrative
Agent (in its capacity as a collateral trustee agent) and Wilmington Trust
Company, as trustee for the holders of the Secured Notes, as such agreement may
be amended, restated, supplemented or otherwise modified from time to time.

 11
 

 

“Collateral Trustee” means any collateral
trustee for the Secured Parties under the Collateral Trust Agreement.

“Commitment” means, as the context may require,
a Term Commitment, a Revolving Credit Commitment or Pre-Funded L/C Commitment.

“Commodity Hedging Obligations” means, with
respect to any specified Person, the net obligations of such Person under
agreements or arrangements designed to protect such Person against fluctuations
in commodity prices.

“Compliance Certificate” means a certificate
substantially in the form of Exhibit E.

“Condemnation” means any condemnation or other
taking, or temporary or permanent requisition of, any property, any interest
therein or right appurtenant thereto, or any change of grade affecting any
property, in each case as the result of the exercise of any right of
condemnation or eminent domain.  A sale
or other transfer to a Governmental Authority in lieu of, or in anticipation
of, condemnation shall be deemed to be a Condemnation.

“Consolidated EBITDAR” means, for any period
for the Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP, an amount equal to, without any duplication, (a) net
income (before giving effect to the cumulative effect of changes in accounting
principles and discontinued operations and before income taxes and franchise
taxes to the extent based on the income of such Person and its Subsidiaries)
for such period, plus (b) Consolidated Interest Charges for such period,
plus (c) depreciation, depletion, impairment, abandonment and amortization
expense for such period, plus (d) the book accounting lease expense
under the REMA Lease for such period, plus (e) interest and fees
expensed under any receivables monetization or securitization during such
period, plus (f) net unrealized losses related to trading or non-trading energy
derivatives, plus, (g) cash dividends or distributions actually
received during such period from an entity which is not a consolidated
Subsidiary of such Person, and minus (h) net unrealized gains
related to trading or non-trading
energy derivatives; provided, however, for purposes of this
definition, (i) gains and losses on the disposition of assets not in the
ordinary course of business, (ii) any other noncash charge or gain, and (iii)
any extraordinary or other non-recurring item or expense, including severance
costs, shall be excluded to the extent incurred or realized during such period
in accordance with GAAP from the calculation of Consolidated EBITDAR.

If during any period for which Consolidated EBITDAR is
being determined, the Borrower or any Subsidiary shall have (a) made or
consummated any Acquisition for gross consideration of $3,000,000 or more
(including Indebtedness assumed), then Consolidated EBITDAR shall be determined
on a pro  forma basis for such period as if such Acquisition had
been made or consummated as of the beginning of the first day of such period or
(b) made or consummated any Asset Sale that is not fully included in
discontinued operations, then Consolidated EBITDAR shall, to the extent such
Asset Sale is not excluded from Consolidated EBITDAR pursuant to the foregoing
proviso, be determined on a pro  forma basis for such period as if
such Asset Sale had been made or consummated as of the beginning of the first
day of such period.  Furthermore, there
shall be added back to Consolidated EBITDAR the amount of any cash charges
incurred as a result of, or a condition to, the termination of a contract with
non-Affiliates

 12
 

 

under which the Borrower
or a Subsidiary is obligated, but only to the extent that the Borrower has
Excluded Proceeds arising from Asset Sales after the Effective Date at least
equal to the amount (the “Cash Payment Amount”) of any cash payment made
in connection with such termination.

“Consolidated Interest Charges” means, without
duplication, for any period for the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP, (a) the total interest expense for
such period (including the Monthly Sleeve Fee, as defined in the Reimbursement
Agreement, or similar fee payable in connection with the Sleeve Transaction,
however defined, whether or not included as interest expense in accordance with
GAAP), plus (b) the interest expense during such period
attributable to (i) the REMA Lease, (ii) the fees and yield paid in connection
with, or interest expense attributable to, any account receivables
securitization or monetization permitted hereunder, and (iii) any capitalized
interest during such period, plus (c) all cash dividends and
distributions paid on preferred or preference stock, plus (d) to the
extent deducted in determining total interest expense, net unrealized gains
under any agreement described in the definition of “Hedging Obligations”
permitted hereunder and existing on or prior to the Closing Date (excluding any
ongoing settlement payments in connection with permitted interest rate swap
agreements), minus (e)(i) the total interest income of such Person and
its Subsidiaries, including interest income from any escrow or trust account,
(ii) in all cases whether expensed or amortized, any interest expense
attributable to (A) any makewhole or premium paid in connection with the
repayment of any Debt, (B) any upfront direct or indirect costs, expenses, or
fees incurred in connection with, including those arising out of the
preparation for the maturity of, (1) any Debt, (2) the incurrence of any Debt
after the Closing Date, or (3) the amendment of any Debt, (C) to the extent
added in determining total interest expense, the upfront cost and net
unrealized losses under any agreement described in the definition of “Hedging
Obligations” permitted hereunder and existing on or prior to the Closing Date
(excluding ongoing settlement payments in connection with permitted interest
rate swap agreements), and (D) any of the RRI Warrants; (iii) all non-recurring
interest expense with respect to items not constituting Indebtedness, and (iv)
interest expense attributable to Indebtedness repaid or required to be repaid
under any Indebtedness for which the Borrower has notified the Administrative
Agent in writing that it agrees it will not designate the Net Asset Sale
Proceeds as Excluded Proceeds, in each case in connection with an Asset Sale.

“Consolidated Interest Coverage Ratio” means,
as of any date of determination, the ratio of (a) Consolidated EBITDAR for the
period of the four prior Fiscal Quarters ending on such date to (b)
Consolidated Interest Charges for such period.

“Consolidated Leverage Ratio” means, as of any
date of determination, the ratio of (a) Consolidated Total Debt as of such
date to (b) Consolidated EBITDAR for the period of the four Fiscal
Quarters most recently ended.

“Consolidated Total Debt” means, as of any date
of determination, for the Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP, (i) all outstanding Debt of the Borrower and its
Subsidiaries on such date, minus (ii) without duplication, all (a) cash
and short-term investments, in an aggregate amount not to exceed $300,000,000
at any time, (b) restricted cash, in an amount not to exceed the aggregate
amount of Indebtedness of the Borrower or any of its Subsidiaries, the terms of
which Indebtedness cause such cash to appear as restricted cash on

 13
 

 

the consolidated balance
sheet of the Borrower and its Subsidiaries, and (c) broker, counterparty, and
customer margin/collateral assets and deposits advanced to or held on behalf of
such broker, counterparty or customer, as each of the foregoing appears on the
consolidated balance sheet of the Borrower and its Subsidiaries.

“Continuing Directors” means, as of any date of
determination, any member of the Board of Directors of the Borrower who (a) was
a member of such Board of Directors on the Effective Date; or (b) was nominated
for election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board at the time
of such nomination or election.

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

“Contribution Agreement” means that certain
Third Amended and Restated Contribution Agreement dated as of the Effective
Date and executed by each of the Loan Parties, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time.

“Contribution Date” has the meaning specified
in Section 7.18(b).

“Control” means, with respect to any Person,
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; and the terms “controlling,”
“controlled by” and “under common control with” have correlative meanings.

“Control Agreement” means a Deposit Account
Control Agreement or a Securities Account Control Agreement.

“Convertible Notes” means the Borrower’s 5.00%
Convertible Senior Subordinated Notes due 2010 in an aggregate principal amount
of $275,000,000, issued pursuant to that certain Indenture, dated as of June
24, 2003, by and between the Borrower and Wilmington Trust Company, as trustee.

“Core Asset Consent” means, as of any date of
determination, the consent of both (a) Lenders having more than 50% of the
Revolving Credit Exposure; and (b) Lenders holding in the aggregate more
than 50% of the sum of the aggregate Outstanding Amount of all Term Loans and
all Pre-Funded L/C Deposits; provided, that the Commitment of, and the
portion of the applicable Outstandings held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination as to whether
the required consent has been obtained under either clause (a) or (b)
above.

“Credit Agreement Obligations” means all
advances to, and debts, liabilities, Obligations, covenants and duties of, any
Loan Party arising under or in connection with any Loan Document or otherwise
with respect to any Loan, Pre-Funded L/C Deposit or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including Post-Petition Interest.

 14
 

 

“Credit Agreement Secured Parties” means,
collectively, the Lenders, each L/C Issuer, the Administrative Agent, the
Pre-Funded L/C Facility Agent, each counterparty to a Secured Hedge Agreement
that is (or at the time such Secured Hedge Agreement was entered into, was) a
Lender or an Affiliate thereof (a “Hedge Bank”) and (in each case) each
of their respective successors, transferees and assigns.

“Credit Extension” means each of the following:
(a) a Borrowing; (b) an L/C Credit Extension; and (c) the making of a
Pre-Funded L/C Deposit.

“DB Credit Agreement” means the Credit and
Guaranty Agreement, dated as of October 7, 2005, among the Borrower, certain of
its Subsidiaries party thereto (as guarantors), certain banks, financial
institutions and other Persons from time to time party thereto (as lenders) and
Deutsche Bank AG, New York Branch, as administrative agent, as in effect on the
Effective Date.

“Debt” means, as of any date of determination
with respect to the Borrower and its Subsidiaries, without duplication, in
accordance with GAAP the following: (a) the total amount of indebtedness,
including any fair value adjustments, and other obligations of the Borrower and
its Subsidiaries for borrowed money (whether by loan or the issuance of debt
securities), including the unreimbursed amount of any drawings under letters of
credit issued for the account of the Borrower or any of its Subsidiaries, but excluding the amount of indebtedness for
borrowed money that is either (i) required to be repaid under this Agreement or
otherwise or (ii) for which the Borrower has notified the Administrative
Agent in writing that it agrees it will not designate the Net Asset Sale
Proceeds as Excluded Proceeds, in each case in connection with an Asset Sale,
(b) all Capital Lease Obligations and, except for the REMA Lease,
Attributable Debt in respect of sale and leaseback transactions, Synthetic
Lease Obligations or financing leases, (c) the unpaid balance owed to the
certificate holders under the REMA Lease, (d) obligations under any
accounts securitization or monetization arrangement permitted hereunder and not
recorded on the Borrower balance sheet for that period and (e) all guaranties
of payment or collection of any obligations described in clauses (a)
through (d) of this definition of any other Person; provided, however,
that Debt shall not include:  (i) any
guaranties that may be incurred by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business or similar
transactions, (ii) any Obligations or guaranties of performance of Obligations
under performance bonds, (iii) trade accounts payable in the ordinary course of
business, (iv) customer advance payments and customer deposits arising in the
ordinary course of business, (v) the liability of any Person as a general
partner of a partnership for Debt of such partnership, if the partnership is
not a Subsidiary of such Person, and (vi) any completion or performance
guarantees (or similar guarantees that a project or a Subsidiary perform as
planned).

In determining the outstanding amount of any
Debt:  (a) the amount of money borrowed
shall be the outstanding principal amount thereof, (b) the amount of all
unreimbursed letters of credit shall be the unreimbursed amount thereof, (c)
the amount of any accounts monetization or securitization shall be the amount
invested by the investor therein, and (d) the amount of guaranties shall be the
amount of the guaranteed obligations determined as provided above in this
sentence.

 15
 

 

“Debtor Relief Laws” means the Bankruptcy Code
of the United States, and all other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.

“Default” means any event or condition that
constitutes an Event of Default or that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.

“Default Rate” means (a) when used with respect
to Credit Agreement Obligations other than Loans, Pre-Funded L/C Deposits and
L/C Obligations, an interest rate equal to (i) the Base Rate plus (ii)
the Applicable Margin, if any, applicable to Revolving Credit Loans maintained
as Base Rate Loans plus (iii) 2% per annum, and (b) when used with
respect to Loans, Pre-Funded L/C Deposits and L/C Obligations, a rate equal to
(i) the rate of interest applicable thereto hereunder plus (ii) the
Applicable Margin, if any, applicable thereto plus (iii) 2% per
annum.

“Defaulting Lender” means any Lender that (a)
has failed to fund any portion of the Term Loans, Revolving Credit Loans or
participations in L/C Obligations required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to the Administrative Agent, the Pre-Funded L/C
Facility Agent or any other Lender any other amount required to be paid by it
hereunder within one Business Day of the date when due, unless the subject of a
good faith dispute, or (c) has been deemed insolvent or become the subject of a
bankruptcy or insolvency proceeding.

“Deposit Account” shall have the meaning given
to such term in the Security Agreement.

“Deposit Account Control Agreement” means, with
respect to any Deposit Account, a written agreement or other authenticated
record, in form and substance reasonably satisfactory to the Administrative
Agent, pursuant to which the depositary bank in which such Deposit Account is
maintained shall agree, among other things, to comply at any time with
instructions from the Collateral Trustee (or its co-trustees, agents or
sub-agents) to such depositary bank directing the disposition of funds from
time to time credited to such Deposit Account, without further consent of any
Loan Party or its nominee, as any such agreement or record may be amended,
restated, supplemented or otherwise modified from time to time.

“Deposit Bank” means Deutsche Bank or any of
its Affiliates.

“Designated Credit Facilities” has the meaning
specified in the Collateral Trust Agreement; provided, that in no event
will the Working Capital Agreement be a Designated Credit Facility.

“Designated Entities” means, collectively, OPH,
REMA, Channelview, Retail Holdco, IP Trust, IT Trust and (in each case) their
respective Subsidiaries.

“Deutsche Bank” means Deutsche Bank AG, New
York Branch, and its successors.

“Disqualified Stock” means any Capital Stock
that, by its terms (or by the terms of any security into which it is
convertible, or for which it is exchangeable, in each case, at the option of

 16
 

 

the holder of the Capital
Stock), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder of the Capital Stock, in whole or in part, on or
prior to the date that is 91 days after the Term Loan Maturity Date.  Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders of the Capital Stock have the right to require the Borrower to
repurchase such Capital Stock upon the occurrence of a change of control or an
asset sale shall not constitute Disqualified Stock if the terms of such Capital
Stock provide that the Borrower may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or redemption complies
with the provisions of Section 7.6. 
The amount of Disqualified Stock deemed to be outstanding at any time
for purposes of this Agreement shall be equal to the maximum amount that the
Borrower and its Restricted Subsidiaries may become obligated to pay upon the
maturity of, or pursuant to any mandatory redemption provisions of, such
Disqualified Stock, exclusive of accrued dividends.

“Documentation Agents” means, collectively,
Goldman Sachs Credit Partners L.P. and Merrill Lynch Capital Corporation, as
Revolving Credit Facility Documentation Agents, The Bank of Nova Scotia and UBS
AG, as Term Facility Documentation Agents and ABN AMRO N.V., as Pre-Funded L/C
Facility Documentation Agent.

“Dollar” and “$” mean lawful money of
the United States.

“Domestic Subsidiary” means a Subsidiary that
is organized or incorporated under the laws of the United States or a State
thereof.

“Draw Amount” means, with respect to any Letter
of Credit, the amount necessary to settle the obligations of any L/C Issuer
under any draft or demand made under such Letter of Credit.

“Effective Date” means the first date all the
conditions precedent in Section 4.1 are satisfied or waived in
accordance with Section 11.1.

“Eligible Assignee” means (a) a Lender; (b) an
Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other
than a natural person) approved by (i) the Administrative Agent and, if
applicable, the Pre-Funded L/C Facility Agent and (solely in the case of any
assignment of a Revolving Credit Commitment) each L/C Issuer and
(ii) unless an Event of Default has occurred and is continuing, the
Borrower (each such approval not to be unreasonably withheld or delayed); provided,
that notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrower or any of the Borrower’s Affiliates or Subsidiaries or any Person who
in the ordinary course of its business owns and/or operates power generating
facilities.

“Environmental Laws” means any and all Federal,
state, local, regional and foreign statutes, laws, rules of common law,
constitutional provisions, regulations, ordinances, rules judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or Hazardous Materials, including, without limitation, those
relating to the use analysis, generation, manufacture, storage, discharge,
emission, release, disposal, transportation treatment, investigation, removal,
or remediation of Hazardous Materials. 
Environmental Laws include,

 17
 

 

without limitation, those
acts commonly referred to as the Comprehensive Environmental Response,
Compensation and Liability Act of 1980; the Superfund Amendments and
Reauthorization Act; the National Environmental Policy Act; the Hazardous
Materials Transportation Act; the Resource Conservation and Recovery Act, the
Solid Waste Disposal Act, the Clean Water Act, the Clean Air Act, the Toxic
Substances Control Act, and the Occupational Safety and Health Act, and their
state counterparts.

“Environmental Liability” means any liability,
contingent or otherwise (including any liability for damages, costs of
environmental remediation, fines, penalties or indemnities), of the Borrower,
any other Loan Party or any of their respective Subsidiaries directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

“Equally and Ratably” means, in reference to
sharing of any Liens on Shared Collateral or proceeds thereof as among the
holders of Parity Secured Obligations, after allowing for the payment
priorities in the Order of Application, that such Liens or proceeds:

(1)           shall be allocated
and distributed to the applicable Secured Debt Representative for account of
the holders of Secured Notes, to the Administrative Agent for account of the
Lenders and to the Secured Debt Representative for each other Series of Secured
Debt for account of the holders of such Series of Secured Debt, ratably in
proportion to the principal, interest, fees and premium (if any) outstanding,
when the allocation or distribution is made, on (i) the Secured Notes, (ii)
Credit Agreement Obligations, (iii) Hedging Obligations and amounts payable to
a Lender in connection with a bank account or any other banking services, in
each case, that are required by this Agreement to be secured on an equal and
ratable basis with the Credit Agreement Obligations and (iv) all other Series
of Secured Debt (allocated proportionately to the Secured Debt Representative
for each other Series of Secured Debt if there is more than one), respectively;
and thereafter

(2)           shall be allocated
and distributed (if any remain after payment in full of all of the principal,
interest, fees and premium (if any) outstanding on the Secured Notes, Credit
Agreement Obligations, the Hedging Obligations and other amounts payable to a
lender referred to in clause (1), and each other Series of Secured
Debt) to the applicable Secured Debt Representative for account of the holders
of any remaining Secured Note Obligations, to the Administrative Agent for
account of the Lenders holding any remaining Credit Agreement Obligations,
Hedging Obligations or such other amounts and to the Secured Debt
Representative for each other Series of Secured Debt for account of the holders
of any remaining Parity Secured Obligations in respect of such Series of
Secured Debt, ratably in proportion to the aggregate unpaid amount of such
remaining Secured Note Obligations, Credit Agreement Obligations, Hedging
Obligations or such other amounts and other remaining Parity Secured Obligations,
respectively, that are due and demanded prior to the date such distribution is
made.

 18
 

 

For this purpose:

(1)           unfunded commitments
to extend credit shall not be counted as outstanding debt;

(2)           obligations of the
Borrower or any Guarantor in respect of outstanding letters of credit, bank
guarantees, bankers’ acceptances or other similar instruments shall be counted
as outstanding debt (whether or not contingent), except that if any such
instrument thereafter expires without being funded, an equitable adjustment
shall be made in any future distribution so that the aggregate amount
distributed is distributed Equally and Ratably as if such instrument had never
been outstanding (but all distributions shall be final and non-refundable when
made);

(3)           during the pendency
of any Actionable Default, and subject to the Order of Application, if any
payment or distribution is made in cash to the Lenders or any other holders of
Parity Secured Obligations from or on account of Separate Collateral by reason
of enforcement of Liens or realization in a bankruptcy case, receivership or
other insolvency or liquidation proceeding, then any concurrent or subsequent
payment or distribution that is to be made in cash to such holders from or on
account of Shared Collateral by reason of any such enforcement or realization
shall be reduced, and any concurrent or subsequent payment or distribution that
is to be made in cash to the remaining holders of Parity Secured Obligations
from or on account of Shared Collateral by reason of any such enforcement or
realization shall be increased, to the extent necessary to cause the aggregate
amount of all payments and distributions made in cash to all holders of Parity
Secured Obligations (whether made from or on account of Separate Collateral or
from or on account of Shared Collateral) by reason of any such enforcement or
realization to be distributed Equally and Ratably as fully as if the Separate
Collateral had been Shared Collateral; and

(4)           all amounts
apportioned and distributed to the Administrative Agent or the Secured Debt
Representative for any other Series of Secured Debt may be allocated,
apportioned and distributed by it in accordance with the applicable provisions
of the Credit Agreement or the indenture or agreement governing such other
Series of Secured Debt, including to give effect to any payment priorities
provided for therein as among the holders of obligations outstanding
thereunder.

“Equity Interests” means Capital Stock and all
warrants, options or other rights to acquire Capital Stock (but excluding any
debt security that is convertible into, or exchangeable for, Capital Stock).

“ERISA” means the Employee Retirement Income
Security Act of 1974.

“ERISA Affiliate” means any trade or business
(whether or not incorporated) which is a member of the controlled group of the
Borrower or under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
for purposes of provisions relating to Section 412 of the Code).

 19
 

 

“ERISA Event” means (a) a Reportable Event with
respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations that is treated
as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer,
any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

“Eurodollar Rate” means, for any Interest
Period with respect to a Eurodollar Rate Loan or for any Investment Period with
respect to a Pre-Funded L/C Deposit, the rate per annum equal to the British
Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters
(or other commercially available source providing quotations of BBA LIBOR as
designated by the Administrative Agent from time to time) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period or Investment Period, as the case may be, for Dollar deposits
(for delivery on the first day of such Interest Period or Investment Period, as
the case may be) with a term equivalent to such Interest Period or Investment
Period, as the case may be.  If such rate
is not available at such time for any reason, then the “Eurodollar Rate” for
such Interest Period or Investment Period, as the case may be, shall be the
rate per annum determined by the Administrative Agent or the Pre-Funded L/C
Facility Agent, as the case may be, to be the rate at which deposits in Dollars
for delivery on the first day of such Interest Period or Investment Period, as
the case may be, in same day funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by Bank of America or Deutsche
Bank and with a term equivalent to such Interest Period or Investment Period,
as the case may be, would be offered by Bank of America’s or Deutsche Bank’s
London Branch to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) two Business Days prior to
the commencement of such Interest Period or Investment Period, as the case may
be.

“Eurodollar Rate Loan” means a Loan that bears
interest at a rate based on the Eurodollar Rate.

“Event of Default” has the meaning specified in
Section 9.1.

“Excepted Debt” means Indebtedness expressly
permitted to be incurred or issued pursuant to Section 7.3(a) (solely
with respect to the Credit Agreement Obligations in respect of the Revolving
Credit Loans and Revolving L/C Obligations), (b), (c), (d),
(e), (f), (h), (j), (k), (s) and (t).

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

 20

 

“Exchange Traded Contract” means each exchange
traded contract between Retail Holdco or any of its Subsidiaries and an
exchange requiring daily mark-to-market settlement relating to the sale,
purchase, delivery or receipt of any power product or natural gas, or any
financial derivative in respect thereof.

“Excluded Entities” means: (a) Retail
Holdco, Channelview, OPH, IP Trust and IT Trust; and (b) each of
their respective Subsidiaries; provided, that Retail Holdco,
Channelview, OPH, IP Trust, IT Trust, together with their respective
Subsidiaries, shall no longer be an “Excluded Entity” in the event that
(x) such entity is not prohibited under any agreement for borrowed money
or any Sleeve Document from taking the actions set forth in Section 6.12,
and (y) such entity is no longer restricted or prohibited from paying
dividends or other distributions to a Loan Party, repaying loans or advances
owed to a Loan Party or transferring any of its properties or assets to a Loan
Party, other than restrictions imposed by Law.

“Excluded Proceeds” means any Net Asset Sale
Proceeds that are designated by the Borrower as Excluded Proceeds; provided,
that (a) not more than $300,000,000 of such Net Asset Sale Proceeds may be
designated as Excluded Proceeds during any single calendar year; (b) not
more than $750,000,000 of such Net Asset Sale Proceeds may be designated as
Excluded Proceeds on or after the Closing Date; (c) Net Asset Sale
Proceeds from Asset Sales of generation assets or other businesses, in each case
acquired by the Borrower or any Restricted Subsidiary after the Closing Date
pursuant to an Acquisition, may not be designated as Excluded Proceeds; and (d) Retail Sale Proceeds or
Wholesale Sale Proceeds may not be designated as Excluded Proceeds.

“Excluded Taxes” means, with respect to the
Administrative Agent, the Pre-Funded L/C Facility Agent, any Lender, any L/C
Issuer or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) taxes imposed on or measured by its
overall net income (however denominated), and franchise taxes imposed on it (in
lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable Lending Office is located, (b) any branch profits taxes imposed by
the United States or any similar tax imposed by any other jurisdiction in which
the Borrower is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 11.13),
any withholding tax that is imposed on amounts payable to such Foreign Lender
at the time such Foreign Lender becomes a party hereto (or designates a new
Lending Office) or is attributable to such Foreign Lender’s failure or
inability (other than as a result of a Change in Law) to comply with Section 3.1(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new Lending Office (or assignment),
to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 3.1(a).

“Existing Credit Agreement” has the meaning
specified in the first recital.

“Existing Florida Mortgages” means the
mortgages listed in Item 1 of Schedule 1.1(e).

 21
 

 

“Existing Indebtedness” means Indebtedness
(other than intercompany Indebtedness) of the Borrower and its Restricted
Subsidiaries in existence on the Closing Date and set forth on Schedule
1.1(g).

“Existing Letters of Credit” means the letters
of credit described on Schedule 1.1(a) hereto.

“Existing Mortgages” means the mortgages listed
in Item 2 of Schedule 1.1(e).

“Existing Title Policies” means the title
policies listed in Item 3 of Schedule 1.1(e).

“Extraordinary Receipt” means any cash received
by or paid to or for the account of any Person from proceeds of insurance
(other than proceeds of business interruption insurance to the extent such
proceeds constitute compensation for lost earnings).

“Facility” means the Term Facility, the
Revolving Credit Facility or the Pre-Funded L/C Facility, as the context may
require.

“Facility Agent’s Office” means, with respect
to each Facility Agent, such Facility Agent’s address and, as appropriate,
account as set forth on Schedule 11.2 or such other address or account
as such Facility Agent may from time to time notify to the Borrower and the
Lenders.

“Facility Agents” means, collectively, the
Pre-Funded L/C Facility Agent, the Term Facility Agent and the Revolving Credit
Facility Agent.

“Fair Market Value” means the value that would
be paid by a willing buyer to a willing seller in a transaction not involving
distress or necessity of either party, determined in good faith by the chief
financial officer of the Borrower or Board of Directors of the Borrower or the
selling entity (unless otherwise provided in this Agreement).

“Fair Value Certificate” has the meaning
specified in the definition of Permitted Sale.

“Federal Funds Rate” means, for any day, the
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided, that
(a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate (rounded upward, if necessary, to a whole
multiple of 1/100 of 1%) charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.

“Fee Letter” means any of (a) the letter
agreement, dated as of November 28, 2006, among the Borrower and each Arranger,
and (b) the letter agreement, dated as of November 28, 2006, between the Borrower
and the Administrative Agent, as each may be amended, restated, supplemented or
otherwise modified from time to time.

 22
 

 

“Fiscal Quarter” means a quarter ending on the
last day of March, June, September or December.

“Fiscal Year” means any period of twelve
consecutive calendar months ending on December 31; references to a Fiscal Year
with a number corresponding to any calendar year (e.g., the “2006
Fiscal Year”) refer to the Fiscal Year ending on December 31 of such
calendar year.

“Florida Mortgaged Properties” means the
Closing Date Mortgaged Properties described in the Existing Florida Mortgages.

“Florida Mortgage Supplement” means a
Supplement to the Existing Florida Mortgages, in a form reasonably acceptable
to the Agents and the Borrower, and completed to include the Credit Agreement
Obligations as Secured Debt under each such Existing Florida Mortgage.

“Foreign Lender” means any Lender that is
organized under the laws of a jurisdiction other than that in which the
Borrower is resident for tax purposes. 
For purposes of this definition, the United States, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.

“Foreign Person” means any Person that is not
organized or existing under the United States or a state thereof.

“Foreign Subsidiary” means any Subsidiary that
is not a Domestic Subsidiary.

“FRB” means the Board of Governors of the
Federal Reserve System of the United States.

“Free Cash Flow” means, for any period from
January 1, 2005 through the date of its determination:

(a)           the Borrower’s
aggregate operating cash flow from continuing operations;

plus

(b)           to the extent
deducted in determining operating cash flow from continuing operations, any
extraordinary or other non-recurring item or expense, including severance
payments;

plus (if a reduction) or minus
(if an increase)

(c)           the aggregate
changes in margin deposits on energy trading and hedging activities, net;

plus (if a reduction) or minus
(if an increase)

(d)           the aggregate
changes in restricted cash, all during such period;

minus

 23
 

 

(e)           capital expenditures
during such period;

all, except for clause (b), as indicated on the
Borrower’s consolidated statements of cash flows.

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

“Funded ERCOT Amount” means, as of any date,
the sum of the amount of Free Cash Flow, Net Financing Proceeds and Net Asset
Sales Proceeds actually generated or received, as applicable, under clauses
(a), (b), (c), (d) or (f) of the definition of
Permitted Acquisition Limit, on and after the Closing Date through such date.

“GAAP” means generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect from time
to time.

“Governmental Authority” means the government
of the United States of America, any other nation or any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of, or pertaining to, government.

“Granting Lender” has the meaning specified in Section 11.6(h).

“Guarantee” means a guarantee other than by
endorsement of negotiable instruments for collection in the ordinary course of
business, direct or indirect, in any manner including by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take or pay or to maintain financial
statement conditions or otherwise).  The
term “Guarantee” as a verb has a corresponding meaning.

“Guaranteed Obligations” has the meaning
specified in Section 8.1(a).

“Guarantors” means each of:

(a)           the
entities listed on Schedule 1.1(b) hereto; and

(b)           any
other Subsidiary of the Borrower that executes this Agreement in accordance
with the provisions of this Agreement,

and their respective successors and assigns.

“Guaranty” means the guaranty of the Credit
Agreement Obligations provided by each Guarantor pursuant to the terms of Article
VIII of this Agreement.

 24
 

 

“Hazardous Materials” means all explosive,
flammable, corrosive or radioactive substances or wastes and all hazardous,
carcinogenic, mutagenic or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes,
toxic mold and all other substances or wastes of any nature regulated pursuant
to any Environmental Law.

“Hedge Bank” has the meaning specified in the
definition of “Secured Parties”.

“Hedge Termination Value” means, in respect of
any one or more Hedging Agreements, after taking into account the effect of any
legally enforceable netting agreement relating to such Hedging Agreements, (a)
for any date on or after the date such Hedging Agreements have been closed out
and termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a),
the amount(s) determined as the mark-to-market value(s) for such Hedging
Agreements, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Hedging
Agreements (which may include a Lender or any Affiliate of a Lender).

“Hedging Agreement” has the meaning specified
in the definition of “Hedging Obligation”.

“Hedging Obligations” means, with respect to
any specified Person, the net obligations of such Person under:

(a)           interest rate swap
agreements (whether from fixed to floating or from floating to fixed), interest
rate cap agreements and interest rate collar agreements;

(b)           other agreements or
arrangements designed to manage interest rate risk; and

(c)           other agreements or
arrangements designed to protect such Person against fluctuations in currency
exchange rates (any agreement or arrangement referred to in this clause or any
of the foregoing clauses (a) and (b), a “Hedging Agreement”).

The amount of any net obligation under any Hedging
Agreement on any date shall be deemed to be the Hedge Termination Value thereof
as of such date.

“Honor Date” means the date of any payment by
any L/C Issuer under a Letter of Credit.

“Indebtedness” means, with respect to any
specified Person, any indebtedness of such Person (excluding accrued expenses
or trade payables), whether or not contingent (without duplication):

(a)           in respect of
borrowed money;

(b)           evidenced by bonds,
notes, debentures or similar instruments or letters of credit or reimbursement
agreements in respect thereof;

(c)           in respect of banker’s
acceptances;

 25
 

 

(d)           representing Capital
Lease Obligations or Attributable Debt in respect of sale and leaseback
transactions (including the REMA Lease), Synthetic Lease Obligations or
financing leases;

(e)           representing the
balance deferred and unpaid of the purchase price of any property or services
due more than six months after such property is acquired or such services are completed;

(f)            representing any
Hedging Obligations; or

(g)           consisting of
Disqualified Stock.

whether or not any of the preceding items appear as a
liability upon a balance sheet of the specified Person prepared in accordance
with GAAP.  In addition, the term “Indebtedness”
includes all Indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such Indebtedness is assumed by the specified
Person) and, to the extent not otherwise included, the Guarantee by the
specified Person of any Indebtedness of any other Person.  If obligations of a Securitization Entity are
Indebtedness, for the purposes of calculating the amount of Indebtedness of a
Securitization Entity outstanding as of any date, the face or notional amount
of any interest in receivables or equipment that is outstanding as of such date
shall be deemed to be Indebtedness but any such interests held by Affiliates of
such Securitization Entity shall be excluded for purposes of such calculation.  The amount of any Indebtedness outstanding as
of any date will be:

(i)            the accreted value
of the Indebtedness, in the case of any Indebtedness issued with original issue
discount;

(ii)           the principal
amount of and premium (if any) on the Indebtedness, in the case of any other
Indebtedness;

(iii)          in respect of
Indebtedness of other Persons secured by a Lien on the assets of the specified
Person, the lesser of:

(A)          the
Fair Market Value of such asset at such date of determination, and

(B)           the
amount of such Indebtedness of such other Persons; and

(iv)          in respect of any
Guarantee, an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith.

“Indemnified Taxes” means Taxes other than
Excluded Taxes.

“Indemnitee” has the meaning specified in Section 11.4(b).

 26
 

 

“Information
Technology Systems” means all information technology systems used in the
operation and support of the Wholesale Business including hardware, software,
middleware, tools, databases, technical and business information, know-how or
other data or information, related documents, registrations and franchises,
licenses or leases for any of the foregoing and all license rights and all
additions, improvements, enhancements and accessions thereto, and books and
records describing or used in connection with any of the foregoing.

“Initial Term Loans” means a loan made by a
Term Lender to the Borrower under Section 2.1(a).

“Instrument of Assumption and Joinder” means an
Assumption and Joinder Agreement substantially in the form of Exhibit G.

“Intercreditor Confirmation” means the
agreement of any holder of Parity Secured Debt or other Parity Secured
Obligations to the provisions described in the Order of Application and
definition of the term “Equally and Ratably,” as set forth in any Secured Debt
Document for the benefit of, and enforceable as a third party beneficiary by,
each present and future holder of Parity Secured Obligations and each present
and future Secured Debt Representative.

“Interest Payment Date” means, (a) as to any
Loan other than a Base Rate Loan, the last day of each Interest Period
applicable to such Loan and the applicable Maturity Date; provided, that
if any Interest Period for a Eurodollar Rate Loan exceeds three months, the
respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and (b) as to any Base
Rate Loan, each Quarterly Payment Date and the applicable Maturity Date.

“Interest Period” means as to each Eurodollar
Rate Loan, the period commencing on the date such Eurodollar Rate Loan is
disbursed or converted to or continued as a Eurodollar Rate Loan and ending on
the date one, two, three, six, nine, or, if available, twelve months
thereafter, as selected by the Borrower in its Borrowing Notice, as the case
may be; provided, that:

(i)            any Interest Period
that would otherwise end on a day that is not a Business Day shall be extended
to the next succeeding Business Day unless, in the case of a Eurodollar Rate
Loan, such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;

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

(iii)          no Interest Period
shall extend beyond the applicable Maturity Date.

“Investment” means, with respect to any Person,
all direct or indirect investments by such Person in other Persons (including
Affiliates) in the forms of loans (including Guarantees or similar
obligations), advances or capital contributions (excluding payroll, commission,
travel and similar advances to officers and employees made in the ordinary course
of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities,

 27
 

 

together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.  “Investment” shall
exclude extensions of trade credit by the Borrower and its Restricted
Subsidiaries in the ordinary course of business and Permitted PEDFA Bond
Indebtedness.  The acquisition by the
Borrower or any Subsidiary of the Borrower of a Person that holds an Investment
in a third Person will be deemed to be an Investment by the Borrower or such
Subsidiary in such third Person in an amount equal to the Fair Market Value of
the Investments held by the acquired Person in such third Person.  Except as otherwise provided in this
Agreement, the amount of an Investment shall be its Fair Market Value at the
time the Investment is made and without giving effect to subsequent changes in
value.

“Investment Grade Rating” means a rating equal
to or higher than Baa3 (or the equivalent) by Moody’s or BBB- (or the
equivalent) by S&P.

“Investment Grade Rating Date” means the date
on which (i) the rating assigned to the Secured Notes by each of S&P and
Moody’s or, if no Secured Notes are outstanding, the corporate rating assigned
to the Borrower, is an Investment Grade Rating and (ii) no Default shall have
occurred and be continuing.

“Investment Period” means, relative to any
Pre-Funded L/C Deposits earning a Pre-Funded L/C Participation Fee, the period
beginning on (and including) the date on which such Pre-Funded L/C Deposit is
deposited or the last day of the preceding Investment Period and ending on (but
excluding) the day which numerically corresponds to such date one month
thereafter; provided, however, that (a) if any such Investment
Period would otherwise end on a day that is not a Business Day, such Investment
Period shall end on the next following Business Day (unless such next following
Business Day is the first Business Day of a calendar month, in which case such
Investment Period shall end on the Business Day next preceding such numerically
corresponding day); and (b) the first Investment Period after the Effective
Date shall be comprised of the period beginning on (and including) the
Effective Date and ending on January 1, 2007.

“IP/IT Agreements” means the IP License
Agreement, the IP Servicing Agreement, the IP Trust Agreement, the IT Services
Agreement, the IT Servicing Agreement, and the IT Trust Agreement.

“IP License Agreement” means the Trademark
License Agreement, dated as of the Effective Date, between the Borrower and the
IP Trust.

“IP Rights” has the meaning specified in Section 5.17.

“IP Servicing Agreement” means the Trademark
Administrative Servicing Agreement, dated as of the Effective Date, between the
Borrower and the IP Trust.

“IP/IT Trust Assets” means the “Trust Assets”,
as collectively defined in the IP Trust Agreement and the IT Trust Agreement.

“IP Trust” means Reliant Energy Trademark
Trust, a Delaware statutory trust.

 28
 

 

“IP Trust Agreement” means the Amended and
Restated Trademark Trust Agreement, dated as of the Effective Date, among the
Borrower, Reliant Energy Retail Holdings, LLC, and Wilmington Trust Company, as
Delaware Trustee.

“IRS” means the United States Internal Revenue
Service.

“ISP” means, with respect to any Letter of
Credit, the “International Standby Practices 1998” published by the Institute
of International Banking Law & Practice (or such later version thereof as
may be in effect at the time of issuance).

“IT Services Agreement” means the Information
Technology Services Agreement, dated as of the Effective Date, between the
Borrower and the IT Trust.

“IT Servicing Agreement” means the IT
Administrative Servicing Agreement, dated as of the Effective Date, among the
IT Trust, the Borrower, and Reliant Energy Corporate Services, LLC.

“IT Trust” means Reliant Energy IT Trust, a
Delaware statutory trust.

“IT Trust Agreement” means the Amended and
Restated IT Trust Agreement, dated as of the Effective Date, among the
Borrower, Reliant Energy Corporate Services, LLC, Reliant Retail Holdings, LLC,
and Wilmington Trust Company, as Delaware Trustee.

“Junior Securities” mean the issuance by the
Borrower, solely for cash proceeds (except for the conversion of any
convertible security into ordinary common stock of the Borrower), of senior
subordinated notes (where either (i) the subordination provisions of such notes
shall be at least as favorable to the Lenders as the subordination provisions
set forth in Schedule 1.1(d) or the Convertible Notes; or (ii) the
subordination provisions shall be in all respects satisfactory to the Agents),
or preferred or preference stock of any kind, common equity securities, or any
warrants, options or similar instruments for the purchase of any equity interest,
whether common or preferred; provided, that any convertible security
constituting a “Junior Security” pursuant to the foregoing shall be convertible
only into ordinary common stock of the Borrower.

“Laws” means, collectively, all international,
foreign, federal, state and local statutes, treaties, rules, guidelines,
regulations, ordinances, codes and administrative or judicial precedents or
authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders, directed
duties, requests, licenses, authorizations and permits of, and agreements with,
any Governmental Authority.

“L/C Certificate” means a certificate, substantially
in the form of Exhibit B, to be delivered by the Borrower to the
Administrative Agent, the Pre-Funded L/C Facility Agent and the applicable L/C
Issuer in connection with the issuance of each Letter of Credit or the
amendment of any outstanding Letter of Credit to increase the face amount
thereof (as applicable).

“L/C Credit Extension” means, with respect to
any Letter of Credit, the issuance thereof or extension of the expiry date
thereof, or the increase of the amount thereof.

 29
 

 

“L/C Exposure” means, at any time, the amount
expressed in Dollars of the aggregate or stated face amount of all drafts which
may then or thereafter be presented by beneficiaries under all Letters of
Credit then outstanding plus (without duplication), the face amount of all
drafts which have been presented or accepted under all Letters of Credit but
have not yet been paid or have been paid, but not reimbursed, whether directly
or from the proceeds of a Revolving Credit Loan or a Pre-Funded L/C Deposit, as
the case may be, hereunder.

“L/C Final Expiration Date” means the Revolving
Credit L/C Final Expiration Date or the Pre-Funded L/C Commitment Termination
Date, as the case may be.

“L/C Issuer” means each Revolving L/C Issuer
and each Pre-Funded L/C Issuer.

“L/C Obligations” means the Revolving L/C
Obligations and/or the Pre-Funded L/C Obligations, as the case may be.

“Lender” has the meaning specified in the
introductory paragraph hereto and, as the context requires, includes any L/C
Issuer and, any Pre-Funded L/C Lender.

“Lending Office” means, as to any Lender, the
office or offices of such Lender described as such in such Lender’s
Administrative Questionnaire, or such other office or offices as a Lender may
from time to time notify the Borrower and the Administrative Agent.

“Letter of Credit” means each Revolving Letter
of Credit and each Pre-Funded Letter of Credit.

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

“Lien” means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset, whether or not filed, recorded or otherwise perfected
under applicable law, including any conditional sale or other title retention
agreement and any lease that constitutes a security interest.

“Loan” means an extension of credit by a Lender
to the Borrower under Article II in the form of a Term Loan or a
Revolving Credit Loan.

“Loan Documents” means (i) this Agreement,
(ii) each Note, (iii) each L/C Certificate, (iv) each Security
Document, (v) each Secured Hedge Agreement, (vi) the Contribution
Agreement, (vii) each UCC financing statement, (viii) each of the Fee
Letters, (ix) each Instrument of Assumption and Joinder, (x) each
other document, agreement, certificate or instrument required to be or
otherwise executed by any Loan Party in connection with this Agreement or any
or any of the other documents listed above and (xi) solely for purposes of
Section 6.13, the Orion Note Documents.

“Loan Party” means the Borrower and each Guarantor.

“Material Adverse Effect” means a material
adverse effect upon (a) the business, operations, property, financial
condition or prospects of the Borrower and its Subsidiaries taken

 30
 

 

as a whole; or
(b) the validity or enforceability against any Loan Party of any Loan
Document to which it is a party or the material rights and remedies of the
Administrative Agent and the Lenders thereunder.

“Material Subsidiary” means, as of any date,
any Subsidiary of the Borrower where either (i) $25,000,000 or more of
Consolidated EBITDAR during the four-Fiscal Quarter period most recently ended
was attributable to such Subsidiary or (ii) as of such date, had assets with a
book value of $50,000,000 or more.

“Maturity Date” means, as the context may
require, the Revolving Credit Termination Date, the Term Loan Maturity Date or
the Pre-Funded L/C Commitment Termination Date.

“Merrill Lynch” means Merrill Lynch Capital
Corporation and its successors.

“ML&Co.” means Merrill Lynch & Co.
Inc., a Delaware corporation.

“MLCI” means Merrill Lynch Commodities, Inc., a
Delaware corporation.

“Moody’s” means Moody’s Investors Service, Inc.
or if such company shall cease to issue ratings, another nationally recognized
rating company selected in good faith by mutual agreement of the Administrative
Agent and the Borrower.

“Mortgage” means any mortgage, deed of trust,
deed to secure debt or such equivalent document now existing or hereafter
entered into covering the Mortgaged Real Property Assets, that is executed and
delivered by one or more of the Loan Parties to the Collateral Trustee (for the
benefit of the Secured Parties), including the Existing Mortgages, as any such
document may be amended, restated, supplemented or otherwise modified from time
to time.

“Mortgage Supplement” means Supplements to the
Existing Mortgages (except for the Existing Florida Mortgages), substantially
in the form of the form of Supplement attached to each Existing Mortgage, and
completed to include the Sharing Eligible Debt in existence on the Effective Date
as an “Additional Series of Secured Debt” under each such Existing Mortgage.

“Mortgaged Real Property Assets” means those
real property assets of the Loan Parties on which a Lien has been granted by
the applicable Loan Party to the Collateral Trustee (for the benefit of the
Secured Parties).

“Multiemployer Plan” means any employee benefit
plan of the type described in Section 4001(a)(3) of ERISA, to which the
Borrower or any ERISA Affiliate makes or is obligated to make contributions, or
during the preceding five plan years, has made or been obligated to make
contributions.

“Net Asset Sale Proceeds” means the aggregate
cash proceeds received by the Borrower or any of its Restricted Subsidiaries in
respect of any Asset Sale (including any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale and payments made to retire
Indebtedness (other than the Loans) required to be repaid in connection
therewith, including legal, accounting and investment banking fees, and sales
commissions, and any relocation expenses incurred as a result

 31
 

 

of the Asset Sale, taxes
paid or payable as a result of the Asset Sale, in each case, after taking into
account any available tax credits or deductions and any tax sharing
arrangements, and amounts reserved for adjustment in respect of the sale price
of such asset or assets established in accordance with GAAP.

“Net Casualty Proceeds” means, with respect to
any Casualty Event, the amount of any insurance proceeds or condemnation awards
received by the Borrower, any Loan Party or OPH or any of its Subsidiaries in
connection with such Casualty Event in excess of $10,000,000, individually or
in the aggregate over the course of a Fiscal Year (net of all reasonable and
customary collection expenses thereof), but excluding any proceeds or awards
required to be paid to a creditor (other than the Lenders) which holds a first
priority Lien permitted by Section 7.1 on the property which is the subject
of such Casualty Event.

“Net Financing Proceeds” means with respect to
the incurrence or issuance after the Closing Date by the Borrower to any Person
of any Senior Debt or Junior Securities permitted under this Agreement, the excess
of:

(a)           the gross cash
proceeds received by the Borrower from such incurrence or issuance, over

(b)           all reasonable and
customary underwriting commissions and legal, investment banking, brokerage and
accounting and other professional fees, sales commissions and disbursements
actually incurred in connection with such sale or issuance which have not been
paid to Affiliates of the Borrower in connection therewith.

“New Secured Notes” means the Borrower’s 6.75%
Secured Notes due 2014.

“Non-PEDFA Amount” means the amount of Net
Asset Sale Proceeds resulting from a Retail Sale or from a Wholesale Sale that
would be required under Section 2.4(b), (a) if no Event of Default is
continuing at the time of such sale, to Cash Collateralize L/C Obligations; or
(b) if an Event of Default is continuing at the time of such sale, to
prepay Loans and Cash Collateralize L/C Obligations, in each case, calculated
as if PEDFA Debt was not included in Parity Secured Debt.

“Non-Recourse” means, with respect to any
specified Person and the Indebtedness of such Person:

(1)           neither the Borrower
nor any of its Restricted Subsidiaries (A) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness) for the Indebtedness of such Person other than a pledge of the
Equity Interests of such Person or of the Subsidiaries of such Person, (B) is
directly or indirectly liable as a guarantor or otherwise of the Indebtedness
of such Person, or (C) constitutes the lender with respect to the Indebtedness
of such Person; and

(2)           in the case of an
Unrestricted Subsidiary, no default on the Indebtedness of such Unrestricted
Subsidiary (including any rights that the holders of the Indebtedness may have
to take enforcement action against an Unrestricted Subsidiary) would permit
upon notice, lapse of time or both any holder of Indebtedness of the Borrower
or any of

 32
 

 

its Restricted Subsidiaries to declare a default on
such Indebtedness of the Borrower or any of its Restricted Subsidiaries or
cause the payment of such Indebtedness of the Borrower or any of its Restricted
Subsidiaries to be accelerated or payable prior to its stated maturity.

“Nonrenewal Notice Date” means, for any Letter
of Credit, a day (to be agreed upon at the time such Letter of Credit is
issued) before which the relevant L/C Issuer may prevent the renewal of such
Letter of Credit.

“Note” means a promissory note made by the
Borrower in favor of a Lender evidencing Loans made by such Lender,
substantially in the form of Exhibit D-1 or Exhibit D-2, as
applicable.

“Obligations” means any principal, interest,
premium, fees, indemnifications, reimbursements, expenses, damages and other
liabilities payable under the documentation governing any Indebtedness.

“OPC” means Orion Power Capital, LLC, a
Delaware limited liability company, and its successors.

“OPH” means Orion Power Holdings, Inc., a
Delaware corporation, and its successors.

“OPH Asset Sale Proceeds” means any Net Asset
Sale Proceeds received by the Borrower or any of its Subsidiaries from any Asset
Sale by OPH or any of its Subsidiaries.

“OPH Note Indenture” means the Indenture, dated
as of April 27, 2000, among OPH and Wilmington Trust Company, as trustee,
pursuant to which the OPH Notes were issued, as amended, restated, supplemented
or otherwise modified from time to time.

“OPH Notes” means OPH’s 12% Senior Notes due
2010.

“OPMW” means Orion Power MidWest, L.P., a
Delaware limited partnership, and its successors.

“OPMW Revolving Note” means the revolving note,
dated as of the date hereof, issued by OPMW to the Borrower in the maximum
principal amount of $75,000,000 as amended, restated, supplemented or otherwise
modified from time to time.

“Order of Application” has the meaning assigned
to it in the Collateral Trust Agreement.

“Organization Documents” means, (a) with
respect to any corporation, the certificate or articles of incorporation and
the bylaws (or equivalent or comparable constitutive documents with respect to
any non-U.S. jurisdiction); (b) with respect to any limited liability
company, the certificate or articles of formation or organization and operating
agreement; and (c) with respect to any partnership, joint venture, trust
or other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement,
instrument, filing or notice with respect thereto filed in connection with its
formation or organization with the applicable Governmental Authority in the
jurisdiction of its formation or 

 33
 

 

organization and, if
applicable, any certificate or articles of formation or organization of such
entity.

“Orion Guarantors” means, collectively, OPC,
OPMW, Orion Power Midwest GP, Inc. and Orion Power Midwest LP, LLC.

“Orion Guaranty” means the Amended and Restated
Guaranty Agreement executed by the Orion Guarantors in favor of Reliant Energy,
Inc., as secured party, as amended, restated, supplemented or otherwise
modified from time to time.

“Orion Note Document” means each OPMW Revolving
Note and each agreement or other document executed in connection therewith.

“Orion Security Agreement” means  the Amended and Restated Security Agreement
executed by OPH and the Orion Guarantors in favor of Reliant Energy, Inc., as
secured party, as amended, restated, supplemented or otherwise modified from
time to time.

“Other Taxes” means all present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or under any other Loan Document
or from the execution, delivery or enforcement of, or otherwise with respect
to, this Agreement or any other Loan Document.

“Outstanding Amount” means (a) with
respect to Term Loans, Revolving Credit Loans and Pre-Funded L/C Deposits on
any date, the aggregate outstanding principal amount thereof after giving
effect to any borrowings and prepayments, repayments or refundings of Term
Loans, Revolving Credit Loans and Pre-Funded L/C Deposits, as the case may be,
occurring on such date; (b) with respect to any Revolving L/C Obligations on
any date, the amount of such Revolving L/C Obligations on such date after
giving effect to any L/C Credit Extension occurring on such date and any other
changes in the aggregate amount of the Revolving L/C Obligations as of such
date, including as a result of any reimbursements by the Borrower of applicable
Unreimbursed Amounts; and (c) with respect to any Pre-Funded L/C
Obligations on any date, the aggregate amount of such Pre-Funded L/C
Obligations on such date after giving effect to any Pre-Funded L/C Credit
Extension occurring on such date and any other changes in the aggregate amount
of the Pre-Funded L/C Obligations as of such date, including as a result of the
aggregate amount of any reimbursements by the Borrower of applicable
Unreimbursed Amounts.

“Parent Services Agreement” means the Master
Services Agreement among the Borrower or other Loan Parties and Retail Holdco
and its Subsidiaries entered into as a condition to the closing of the
Reimbursement Agreement, as amended, supplemented, amended and restated or
otherwise modified, renewed or replaced from time to time.

“Parity Secured Debt” means, collectively:

(1)           the Secured Notes;

(2)           the PEDFA
Guaranties;

 34
 

 

(3)           the Credit Agreement
Obligations; and

(4)           Sharing Eligible
Debt that is designated by the Borrower, in a certificate of a Responsible
Officer of the Borrower delivered to the Collateral Trustee on or before the
date of incurrence of such Indebtedness, as entitled to share Equally and
Ratably in the benefits and proceeds of all Liens held by the Collateral
Trustee in Shared Collateral.

“Parity Secured Obligations” means,
collectively, the Secured Note Obligations, the PEDFA Guaranty Obligations, the
Credit Agreement Obligations and all Obligations in respect of each other
Series of Secured Debt.

“Participant” has the meaning specified in Section 11.6(d).

“PBGC” means the Pension Benefit Guaranty
Corporation.

“PEDFA Amount” means the amount of Net Asset
Sale Proceeds resulting from a Retail Sale or from a Wholesale Sale that would
be required under Section 2.4(b), (a) if no Event of Default is
continuing at the time of such sale, to Cash Collateralize L/C Obligations; or
(b) if an Event of Default is continuing at the time of such sale, to
prepay Loans and Cash Collateralize L/C Obligations, in each case, calculated
as if PEDFA Debt was included in Parity Secured Debt.

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

“PEDFA Guaranties” means collectively, the
Borrower’s (i) five Guarantee Agreements, each dated as of December 22, 2004,
among the Borrower, the Guarantors and J.P.Morgan Trust Company, as trustee,
and (ii) other guaranties constituting Permitted PEDFA Bond Indebtedness made
by the Borrower from time to time in accordance with Section 7.3.

“PEDFA Guaranty Obligations” means:

(1)           the Obligations of
the Borrower under the PEDFA Guaranties issued on the Closing Date; or

(2)           the Obligations of
the Borrower under the PEDFA Guaranties issued after the Closing Date that
constitute another Series of Secured Debt.

“Pension Plan” means any “employee pension
benefit plan” (as such term has the meaning specified in Section 3(2) of
ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA
and is sponsored or maintained by the Borrower or any ERISA Affiliate or to
which the Borrower or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.

“Permitted Acquisition” means any Acquisition
by the Borrower or any of its Restricted Subsidiaries that satisfies all of the
following conditions:  (1) the aggregate
Acquisition Consideration paid or incurred by the Borrower and its Restricted
Subsidiaries in connection with such Acquisition, together with the aggregate
Acquisition Consideration paid by Borrower

 35
 

 

and its Restricted
Subsidiaries in connection with all other Acquisitions since the Closing Date,
does not exceed the Permitted Acquisition Limit, (2) no Default shall have
occurred and be continuing or would result therefrom on the date of the closing
of such Acquisition, (3) the Borrower shall have delivered to the
Administrative Agent a certificate of an Authorized Officer certifying
compliance with Section 7.11 on a pro  forma basis after
giving effect to the Acquisition (without supporting calculations), (4) the
acquired Person is in (or the acquired assets are useful in) a Permitted
Business, and (5) the assets, including any Capital Stock, acquired pursuant to
such Acquisition shall be pledged as additional collateral for the Facilities,
and any acquired entity shall become a Guarantor, in each case in accordance
with Section 6.12.

“Permitted Acquisition Limit” means, as of any
date, an amount equal to the sum of (a) the lesser of (i) 50% of Free
Cash Flow for the period from the Closing Date through such date and
(ii) $1,000,000,000; (b) in the case of the acquisition of a
Permitted ERCOT Asset, the amount of additional senior secured Indebtedness
issued for such Acquisition, not to exceed $500,000,000; (c) the amount of
additional senior secured Indebtedness issued since the Closing Date, not to
exceed $300,000,000; (d) the amount of unsecured Indebtedness and Specified
Junior Securities issued since the Closing Date, but only to the extent not
required hereunder to be applied to the prepayment of Loans; (e) with respect
to acquisitions of Permitted ERCOT Assets through December 22, 2006, an amount,
not less than zero, equal to $500,000,000 less the amounts under clauses (a),
(b), (c), (d), and (f) of this definition used for
Acquisition Consideration of Permitted ERCOT Assets; and (f) the amount of
Excluded Proceeds since the Closing Date (less the aggregate Cash Payment
Amounts actually added back to Consolidated EBITDAR after the Effective Date),
in each case to the extent such amounts are actually received by the Borrower
and permitted to be retained by it under this Agreement.

“Permitted Business” means the business of
providing services and products in the energy market and any businesses
incidental or reasonably related thereto.

“Permitted Debt” has the meaning specified in Section
7.3.

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

“Permitted ERCOT Assets” means (1) electric
generating assets together with assets related thereto (including any assets
related to the operation and fuel supply of such electric generating assets)
which assets support the Borrower’s and/or its Restricted Subsidiaries’ retail
business in the State of Texas and (2) all (but not less than all) of the
Capital Stock of any Person that owns solely Permitted ERCOT Assets (whether
directly or through one or more wholly owned Subsidiaries) described in clause (1)
above.

“Permitted Exceptions” means secured
Indebtedness of the Borrower or any of its Restricted Subsidiaries incurred
pursuant to Section 7.3(b), (c), (d), (h) (other
than Secured Note Obligations), (s) (solely with respect to Indebtedness
to which clause (6) or (7) of the definition of Permitted Liens
applies), and (t), and in each case Permitted Refinancing Indebtedness
with respect to the foregoing.

“Permitted Investments” means:

 36
 

 

(1)           any Investment by
the Borrower or any Restricted Subsidiary in the Borrower or in a Restricted
Subsidiary and Investments existing on the Closing Date and on Schedule 5.13;

(2)           any Investment in
Cash Equivalents and, in the case of any Person, cash equivalents or other
liquid investments permitted under any credit facility constituting Permitted
Debt to which such Person is a party;

(3)           any Investment by
the Borrower or any Restricted Subsidiary constituting a Permitted Acquisition;

(4)           any Investments in
any Person having an aggregate Fair Market Value (measured on the date each
such Investment was made and without giving effect to subsequent changes in
value), when taken together with (i) all other Investments made pursuant to
this clause that are at the time outstanding and (ii) the aggregate amount of
Restricted Payments made pursuant to Section 7.6, not to exceed
$75,000,000 since the Closing Date;

(5)           any Investment made
as a result of the receipt of non-cash consideration from an Asset Sale that
was made pursuant to and in compliance with the provisions of Section 7.5;

(6)           any acquisition of
assets or Capital Stock solely in exchange for the issuance of Equity Interests
(other than Disqualified Stock) of the Borrower;

(7)           any Investments
received in compromise or resolution of (A) Obligations of trade creditors or
customers that were incurred in the ordinary course of business of the Borrower
or any of its Restricted Subsidiaries, including pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of any
trade creditor or customer; or (B) litigation, arbitration or other disputes
with Persons who are not Affiliates;

(8)           Investments
represented by Hedging Obligations;

(9)           loans or advances to
employees made in the ordinary course of business up to an aggregate principal
amount not to exceed $10,000,000 at any one time;

(10)         any Investment
acquired by the Borrower or any of its Restricted Subsidiaries on account of
any claim against, or interest in, any other Person (A) acquired in good faith
in connection with or as a result of a bankruptcy, workout, reorganization or
recapitalization of such other Person or (B) as a result of a bona fide
foreclosure by the Borrower or any of its Restricted Subsidiaries with respect
to any claim against any other Person;

(11)         repurchases of the Secured
Notes or other Parity Secured Debt (not using proceeds of Revolving Credit
Loans except as expressly permitted hereunder);

 37
 

 

(12)         any Investment by the
Borrower or a Restricted Subsidiary of the Borrower in a Securitization Entity
or any Investment by a Securitization Entity in any other Person in connection
with a Qualified Securitization Transaction;

(13)         payment of
consolidated taxes pursuant to the Tax Sharing Agreement, dated as of October
1, 2002, among the Borrower and its Subsidiaries named therein, as amended,
supplemented or modified from time to time, the Parent Services Agreement or
any other tax allocation agreements among the Borrower and its Subsidiaries;

(14)         receivables owing to
the Borrower or a Restricted Subsidiary, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; provided, that such trade terms may include such
concessionary trade terms as the Borrower or such Restricted Subsidiary deems
reasonable under the circumstances; and

(15)         other Investments in
any Person having an aggregate Fair Market Value (measured on the date each
such Investment was made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to this
clause that are at the time outstanding not to exceed $125,000,000.

“Permitted Liens” means:

(1)           Liens held by the
Collateral Trustee Equally and Ratably securing all Indebtedness that is Parity
Secured Debt and Equally and Ratably securing all other Parity Secured
Obligations;

(2)           Liens that are
granted or maintained by the Borrower and the Restricted Subsidiaries as
security for Credit Agreement Obligations;

(3)           Liens on assets of
REMA and its Subsidiaries securing Indebtedness of REMA and its Subsidiaries
permitted to be incurred pursuant to clause (c) of Section 7.3,
including cash collateral for letters of credit issued thereunder and Liens
encumbering assets of REMA and/or any of its Subsidiaries securing obligations
under, or in connection with, or which constitute, Qualifying Credit Support
(as defined in the participation agreements to which REMA is a party);

(4)           Liens on assets of
the Seward Subsidiary securing Permitted PEDFA Bond Indebtedness incurred by
the Seward Subsidiary and that is Non-Recourse to the Borrower and all of its
other Restricted Subsidiaries (other than an unsecured Guarantee, if any,
provided by the Borrower or any Guarantor);

(5)           Liens on assets of a
Restricted Subsidiary in existence on the date on which such Person becomes a
Restricted Subsidiary (provided, that (i) such Liens existed at the
time such Person became a Restricted Subsidiary and were not created in
anticipation thereof, (ii) no such Lien shall attach to any asset acquired
by such Person, after such Person became a Restricted Subsidiary, pursuant to
an Investment in such Person by the Borrower or any Restricted Subsidiary, or
in an Affiliate Transaction that

 38
 

 

does not satisfy the requirements of Section 7.8(a)
and (iii) the amount of Indebtedness secured thereby is not increased);

(6)           Liens securing
Capital Lease Obligations and purchase money obligations, in each case
permitted to be incurred pursuant to clause (s) or (t) of Section
7.3, covering only the assets acquired with or financed by such
Indebtedness;

(7)           Liens securing
obligations under sale leaseback transactions and Synthetic Lease Obligations,
in each case permitted to be incurred pursuant to clause (s) or (t)
of Section 7.3, covering only the assets acquired with or financed by such
Indebtedness;

(8)           Liens in favor of
the Borrower or the Guarantors;

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

(10)         Liens imposed by law,
such as carriers’, warehousemen’s, landlord’s and mechanics’ Liens, in each
case, incurred in the ordinary course of business;

(11)         survey exceptions,
encumbrances, easements or reservations, including those for licenses,
rights-of-way, sewers, electric lines, telegraph and telephone lines, other
utilities, mineral reservations and rights and leases, zoning restrictions and
other restrictions as to the use of real property or other exceptions to title
that were not incurred in connection with Indebtedness and that (A) exist on
the Closing Date and are recorded on such date, (B) are permitted under the
terms of the Security Documents or (C) do not in the aggregate materially
adversely affect the value of said properties or materially impair their use in
the operation of the business of such Person;

(12)         Liens to secure any
Permitted Refinancing Indebtedness permitted to be incurred under this
Agreement if such Permitted Refinancing Indebtedness is incurred by the same
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded (except as provided in clause (4) of the
definition of Permitted Refinancing Indebtedness); provided, that:

(a)           the
new Lien shall be limited to all or part of the same categories of property and
assets that secured or, under the written agreements pursuant to which the
original Lien arose, could secure the original Lien (plus improvements and
accessions to, such property or proceeds or distributions thereof), except, if
Permitted PEDFA Bond Indebtedness is Sharing Eligible Debt, it may be secured
by Liens held by the Collateral Trustee on the Shared Collateral;

(b)           the
Indebtedness secured by the new Lien is not increased to any amount greater
than the sum of (i) the outstanding principal amount or, if greater, committed
amount of the Permitted Refinancing Indebtedness and (ii) an amount necessary
to pay any fees and expenses, including premiums, related to such refinancings,
refunding, extension, renewal or replacement and (iii) any protective

 39
 

 

advances with respect to the property and assets that
secure such Permitted Refinancing Indebtedness;

(13)         Liens on assets
transferred to a Securitization Entity or on assets of a Securitization Entity,
in either case incurred in connection with a Qualified Securitization
Transaction;

(14)         financing statements
(including precautionary statements) filed in connection with a Capital Lease
Obligation, financing lease, Synthetic Lease Obligation or an operating lease,
in each case, not prohibited hereunder; provided, that no such financing
statement extends to, covers or refers to as collateral, any property or assets
of the Borrower or a Restricted Subsidiary, other than the property or assets
which are subject to such Capital Lease Obligation, financing lease, Synthetic
Lease Obligation, or operating lease;

(15)         Liens arising out of
or in connection with any judgment that does not constitute an Event of Default
or in connection with any litigation or other legal proceeding as to which an
appeal to contest or review is timely commenced in good faith by appropriate
proceedings and as to which adequate reserves have been established in
accordance with GAAP; provided, that any right to levy, seizure,
attachment, sequestration, foreclosure or garnishment of any property and
assets of the Borrower or a Restricted Subsidiary thereof arising out of or in
connection with any such Lien has been and continues to be enjoined or
effectively stayed;

(16)         inchoate statutory
Liens arising under ERISA;

(17)         Liens (A) on cash and
short-term investments (i) deposited by the Borrower or any of its Subsidiaries
in margin accounts with or on behalf of futures contract brokers or paid over
to other counterparties or (ii) pledged or deposited as collateral to a
contract counterparty or issuer of surety bonds by the Borrower or any of its
Subsidiaries, in the case of clause (i) or (ii), to secure
obligations with respect to (a) contracts for commercial and trading activities
in the ordinary course of business and contracts (including physical delivery,
option (whether cash or financial), exchange, swap and futures contracts) for the
purchase, transmission, distribution, sale, lease or hedge of any
energy-related commodity or service or (b) interest rate, commodity price, or
currency rate management contracts or derivatives and (B) encumbering assets
other than accounts or receivables arising out of contracts or agreements
relating to the generation, distribution or transmission of energy; provided,
that all such agreements or contracts are entered into in the ordinary course
of business;

(18)         Liens arising by
virtue of any statutory or common law provision relating to banker’s liens,
rights of set off or similar rights, contractual rights of setoff or netting
arrangements entered into in the ordinary course of business and similar rights
with respect to deposit accounts, commodity accounts and/or securities
accounts;

(19)         Liens arising under
Section 9.343 of the Texas Uniform Commercial Code or similar statutes of
states other than Texas;

 40

 

(20)         [RESERVED];

(21)         pledges and
deposits to secure the payment of worker’s compensation, unemployment
insurance, social security benefits or obligations under similar laws, or to
secure the payment or performance of statutory or public obligations (including
environmental, municipal and public utility commission obligations and
requirements), reimbursement or indemnity obligations arising out of surety,
performance, or other similar bonds, and other obligations of a like nature, in
each case incurred in the ordinary course of business;

(22)         Liens
granted by a Person in favor of a commercial trading counterparty pursuant to a
netting agreement, which Liens encumber rights under agreements that are
subject to such netting agreement and which Liens secure such Person’s
obligations to such counterparty under such netting agreement; provided,
that any such agreements and netting agreements are entered into in the
ordinary course of business; and provided, further, that the
Liens are incurred in the ordinary course of business and when granted, do not
secure obligations which are past due;

(23)         Liens on
proceeds from the issuance of Seward Tax-Exempt Bonds or Permitted PEDFA Bond
Indebtedness and Liens on Indebtedness of the Borrower held by the Seward
Subsidiary securing the Seward Tax-Exempt Bonds or Permitted PEDFA Bond
Indebtedness;

(24)         Liens on
assets of Reliant Energy Channelview L.P. and Liens on the Equity Interests in
Reliant Energy Channelview (Delaware) LLC and Reliant Energy Channelview
(Texas) LLC, to the extent such Liens are existing on the Closing Date;

(25)         Liens on
assets of REMA and its Subsidiaries created in connection with the
sale-leaseback of REMA’s interests in the Keystone, Conemaugh and Shawville
generating facilities consummated in August, 2000;

(26)         Liens
created in connection with the indemnity and contribution obligations in favor
of underwriters or note purchasers in connection with the Seward Tax-Exempt
Bonds;

(27)         Liens on
assets of Reliant Energy Solutions, LLC created in connection with Delivery
Order No. DABT39-97-C-4046 dated September 1997 and issued by the Directorate
of Contracting, Contract Support Division, Ft. Sill, Oklahoma;

(28)         Liens
incurred in the ordinary course of business of the Borrower or any Restricted
Subsidiary of the Borrower securing obligations that do not exceed $25,000,000
in the aggregate at any one time outstanding;

(29)         Liens on
certain of Reliant Energy Wholesale Generation LLC’s switchyard equipment at
the Choctaw generating facility granted to Entergy in connection with an
Operating and Maintenance Agreement;

 41
 

 

(30)         Separate
Collateral (as defined in the Collateral Trust Agreement) which secures on a
pari passu basis the Credit Agreement Obligations and any other Designated
Credit Facilities; and

(31)         Liens on
assets of the Retail Group securing obligations of the Retail Group under (a)
the Working Capital Agreement in an aggregate principal amount not to exceed
$300,000,000 plus all other obligations due under such Working Capital
Agreement; and (b) any agreement for or in support of, the supply or sales of
energy or products or services related or incidental to the supply or sales of
energy or any activities related to the supply or sales of energy or products
or services related or incidental to the supply or sales of energy of the
Retail Group, including any agreement providing for the reimbursement of
guarantees or collateral postings made on behalf of any member of the Retail
Group.

“Permitted Payment” means, on any given date,
any voluntary or mandatory repayment, prepayment, repurchase, retirement,
redemption or defeasance of the principal of any Term Loans or other Parity
Secured Debt (but specifically excluding (i) Revolving Credit Loans,
(ii) PEDFA Debt and (iii) loans outstanding under other revolving-type
credit facilities except, in the case of each of clauses (i) and (iii),
as a result of a Dollar-for-Dollar permanent reduction in the commitments
thereunder); provided that no such repayment, prepayment, repurchase,
retirement, redemption or defeasance of Indebtedness incurred at any time after
the Closing Date under clause (s) of Section 7.3 shall be a
Permitted Payment unless all of the Term Loans shall have previously been
repaid in full.

“Permitted PEDFA Bond Indebtedness” means
Indebtedness incurred or guaranteed by the Borrower and/or the Guarantors in
tax-exempt Pennsylvania industrial development act financings that are not
supported by Letters of Credit outstanding under this Agreement, the proceeds
of which are used:

(a)           to build
the Seward Facility;

(b)           to
reimburse the Borrower, its Restricted Subsidiaries or the Seward Subsidiary
for amounts advanced or incurred, or for Indebtedness incurred to fund such
construction costs, prior to the date of incurrence of such Indebtedness; or

(c)           to refund
or defease the Seward-Tax Exempt Bonds or refinance Indebtedness evidenced by
or in support of the Seward-Tax Exempt Bonds.

“Permitted Prior Liens” means (1) Liens
described in clauses (5), (6), (7), (9), (10),
(11), (14), (17), (18), (19), (21), (22),
(26), (27), (29) and (31) of the definition of “Permitted
Liens,” (2) Liens refinancing or replacing any of the Liens contemplated in clause (1)
of this definition, and (3) Liens that arise by operation of law and are not
voluntarily granted, to the extent entitled by law to priority over the
security interests created by the Security Documents.

“Permitted Refinancing Indebtedness” means any
Indebtedness of the Borrower or any of its Restricted Subsidiaries issued in
exchange for, or the net proceeds of which are used to extend, refinance,
renew, replace, defease or refund other Indebtedness of the Borrower or any of
its Restricted Subsidiaries (other than intercompany Indebtedness); provided,
that:

 42
 

 

(1)           the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness extended, refinanced, renewed,
replaced, defeased or refunded (plus all accrued interest on the Indebtedness and
the amount of all expenses, costs and fees and premiums incurred in connection
therewith);

(2)           except
for Permitted PEDFA Bond Indebtedness, such Permitted Refinancing Indebtedness
has a final maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;

(3)           if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Credit Agreement
Obligations, such Permitted Refinancing Indebtedness is subordinated in right
of payment to the Credit Agreement Obligations on terms at least as favorable
to the Lenders as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded, as reasonably determined by the Borrower or such Restricted
Subsidiary;

(4)           such
Indebtedness is incurred either by the Borrower or by the Restricted Subsidiary
who is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded, except that Permitted PEDFA Bond Indebtedness
may be (A) incurred by the Borrower and/or guaranteed by the Borrower and/or
the Guarantors if the assets of the Seward Subsidiary (other than Investments
in the Borrower pledged to secure such Permitted PEDFA Bond Indebtedness and
proceeds from the issuance of Permitted PEDFA Bond Indebtedness that secures
Permitted PEDFA Bond Indebtedness) remain free of all Liens securing
Indebtedness, except Liens held by the Collateral Trustee as security for
Parity Secured Obligations or (B) guaranteed by the Borrower on an unsecured
basis if such Indebtedness is otherwise Non-Recourse to the Borrower and its
other Restricted Subsidiaries (other than the Seward Subsidiary) and is secured
solely by Liens on the assets of the Seward Subsidiary and/or the Equity
Interests of the Seward Subsidiary;

(5)           if
incurred by the Borrower, such Indebtedness may be guaranteed by the
Guarantors; and

(6)           such
Indebtedness (other than (i) Indebtedness permitted pursuant to clause (d)
or (e) of Section 7.3, (ii) letter of credit facilities
refinancing the Revolving Credit Facility and permanently reducing the
Revolving Credit Commitments, Dollar for Dollar and (iii) Indebtedness incurred
by Channelview and its equity holders and Subsidiaries, but only if such
Indebtedness incurred by Channelview and its equity holders and Subsidiaries is
Non-Recourse to the Borrower and the Guarantors) has a final maturity date that
is at least six months after the Term Loan Maturity Date and provides for the
amortization of not more than 10% of its original outstanding principal amount
prior to the Term Loan Maturity Date.

 43
 

 

“Permitted Sale”
means one or more sales of any Transferred Asset by the Borrower or any
Restricted Subsidiary to the Purchaser Subsidiary, pursuant to which all of the
following conditions shall be satisfied on or prior to the consummation of such
sale (or, if a later date is specified with respect to any of the following
conditions, such later date with respect to such condition):

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

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

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

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

(5)  the Administrative Agent
shall have received a certificate, dated as of the date of consummation of such
Permitted Sale and duly executed by a Responsible Officer of the Borrower, in
which certificate the Borrower shall certify as to good standing, due
authorization, corporate power and authority, due execution and delivery, valid
and

 44
 

 

binding obligation, absence of conflicts with
organizational documents, contracts, laws and governmental orders, and validity
and perfection of security interests, in each case with respect to the
applicable Sale Note(s) and the other documents contemplated by clause (3),
and, at the time such certificate is delivered, such certifications shall in
fact be true and correct; and

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

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

“PJM” means PJM Interconnection, L.L.C. or any
successor thereto.

“PJM Retail Business” means the Retail Energy
Business conducted by the Retail Group in the ordinary course of business in
the PJM market area.

“Plan” means any “employee benefit plan” (as
such term is defined in Section 3(3) of ERISA) established by the Borrower
or, with respect to any such plan that is subject to Section 412 of the
Code or Title IV of ERISA, any ERISA Affiliate.

“Post-Petition Interest” means interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any case, proceeding or action relating to the bankruptcy, reorganization or
insolvency of the Borrower or any other Loan Party (or interest that would
accrue but for the operation of applicable bankruptcy, reorganization or insolvency
laws), whether or not a claim for post-filing or post-petition interest is
allowed or allowable as a claim in any such case, proceeding or action.

“Power and Hedging Contracts” means Retail
Holdco’s and its Subsidiaries’ over-the-counter power purchase and related
hedging contracts, providing for the sale, purchase, delivery or receipt of any
power product or natural gas or financial derivative in respect thereof.

“Pre-Funded L/C Commitment” means, as to each
Pre-Funded L/C Lender, its obligation to make Pre-Funded L/C Deposits to the
Pre-Funded L/C Facility Agent for the benefit of the Pre-Funded L/C Issuer
pursuant to Section 2.1(c)(ii) in an aggregate amount at any one time
outstanding not to exceed the amount set forth opposite such Pre-Funded L/C Lender’s
name on Schedule 2.1 under the caption “Pre-Funded L/C Commitment” or in
an Assignment and Assumption pursuant to which such Pre-Funded L/C Lender
becomes a party hereto, as applicable (in an aggregate amount for all
Pre-Funded L/C Lenders on the Effective Date not to exceed $300,000,000).

“Pre-Funded L/C Commitment Termination Date”
means the earliest to occur of (a) December 1, 2010; (b) the date on
which the Pre-Funded L/C Commitments have been reduced to zero pursuant to Section
2.5(d) and all Pre-Funded L/C Deposits have been returned

 45
 

 

to the Pre-Funded L/C
Lenders; and (c) the date of the termination of the Pre-Funded L/C Commitments
pursuant to Section 9.2.

“Pre-Funded L/C Deposit” means, with respect to
each Lender, the cash deposit, if any, made by such Lender pursuant to clause
(c)(ii) of Section 2.1, as the same may be (a) reduced from time to
time pursuant to Section 2.1 or Section 2.5(d); or
(b) reduced or increased from time to time pursuant to assignments by or
to such Lender pursuant to Section 11.6.

“Pre-Funded L/C Deposit Account” means one or
more accounts established by the Pre-Funded L/C Facility Agent or an Affiliate
thereof at Deutsche Bank with the title “Pre-Funded L/C Lenders (Reliant
Energy, Inc.) Pre-Funded L/C Deposit Account” pursuant to clause (c)(i)
of Section 2.1.

“Pre-Funded L/C Deposit Cost Amount” means, at
any time, the amount agreed to by the Borrower and the Deposit Bank.  The Pre-Funded L/C Deposit Cost Amount shall
initially be equal to 0.1333%.

“Pre-Funded L/C Deposit Return” has the meaning
specified in clause (c)(iv) of Section 2.1.

“Pre-Funded L/C Facility” means, at any time,
the aggregate amount of Pre-Funded L/C Deposits of all the Pre-Funded L/C
Lenders at any time.

“Pre-Funded L/C Facility Agent” means Deutsche
Bank AG, New York Branch, in its capacity as agent for the Pre-Funded L/C
Facility under the Loan Documents, or any successor agent.

“Pre-Funded L/C Final Expiration Date” means
the Pre-Funded L/C Commitment Termination Date.

“Pre-Funded L/C Issuer” means Deutsche Bank, in
its capacity as issuer of the Pre-Funded Letters of Credit, together with its
permitted successors and assigns in such capacity.

“Pre-Funded L/C Lender” means, as of any time,
any Lender that has a Pre-Funded L/C Commitment, a Pre-Funded L/C Deposit or a
Pre-Funded L/C Participation Obligation at such time.

“Pre-Funded L/C Obligations” means, as at any
date of determination, the aggregate amount available to be drawn under all
outstanding Pre-Funded Letters of Credit plus the aggregate of all
Unreimbursed Amounts in connection with Pre-Funded Letters of Credit.  For purposes of computing the amount
available to be drawn under any Pre-Funded Letter of Credit, the amount of such
Pre-Funded Letter of Credit shall be determined in accordance with Section
1.6.  For all purposes of this
Agreement, if on any date of determination a Pre-Funded Letter of Credit has
expired by its terms but any amount may still be drawn thereunder by reason of
the operation of Rule 3.14 of the ISP, such Pre-Funded Letter of Credit shall
be deemed to be “outstanding” in the amount so remaining available to be drawn.

 46
 

 

“Pre-Funded L/C Participation Fees” has the
meaning specified in clause (c) of Section 2.8.

“Pre-Funded L/C Participation Obligations” has
the meaning set forth in Section 2.3(b)(ii).

“Pre-Funded L/C Reimbursement Obligation” has
the meaning specified in clause (e) of Section 2.3.

“Pre-Funded L/C Term Loans” has the meaning
specified in clause (c)(i)(B) of Section 2.3.

“Pre-Funded Letter of Credit” means any standby
letter of credit issued under clause (a)(ii)(A) of Section 2.3
and shall include those of the Existing Letters of Credit identified on Schedule
1.1(a) as “Pre-Funded Letters of Credit”.

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

“Pro Rata Percentage” means, on any date of
determination and with respect to Net Asset Sale Proceeds to be applied in
accordance with Section 2.4(b)(i), a percentage equal to (i) the
Total Outstandings on such date, divided by (ii) the sum of (A) the Total
Outstandings on such date, plus (B) the amount of the unused
Aggregate Revolving Credit Commitments then in effect, plus (C) the
aggregate outstanding principal amount of Parity Secured Debt described in clause (Y)
of Section 2.4(b)(i)(A), clause (Y) of Section 2.4(b)(i)(B)
or Section 2.4(b)(i)(C), as applicable, in each case with respect to
which an offer to repurchase or prepay is required to be made, or which must be
otherwise repurchased or prepaid (in part), with the Net Asset Sale Proceeds
described in such clause (Y) of Section 2.4(b)(i)(A), clause
(Y) of Section 2.4(b)(i)(B) or Section 2.4(b)(i)(C).

“Pro Rata Share” means, with respect to each
Lender and with respect to any Facility at any time, a fraction (expressed as a
percentage, carried out to the ninth decimal place),

(a)           with
respect to the Revolving Credit Facility, the numerator of which is the amount
of the Revolving Credit Commitment of the relevant Revolving Credit Lender at
such time and the denominator of which is the aggregate Revolving Credit
Commitments at such time; provided, that if the commitment of each
Revolving Credit Lender to make Revolving Credit Loans and the obligation of
any L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 9.2,
then the Pro Rata Share of each Revolving Credit Lender shall be determined
based on the Pro Rata Share of such Revolving Credit Lender immediately prior
to such termination and after giving effect to any subsequent assignments made
pursuant to the terms hereof;

(b)           with
respect to the Term Facility, the numerator of which is the outstanding
principal amount of the Term Loans of the relevant Term Lender at such time and
the denominator of which is the aggregate outstanding principal amount of all
of the Term Loans at such time; and

 47
 

 

(c)           with
respect to the Pre-Funded L/C Facility, the numerator of which is the
Outstanding Amount of the Pre-Funded L/C Deposit of the relevant Pre-Funded L/C
Lender at such time and the denominator of which is the Outstanding Amount of
all Pre-Funded L/C Deposits at such time; provided that if the
Pre-Funded L/C Deposit shall have been reduced to zero, than the Pro Rata share
of each Pre-Funded L/C Lender shall be determined based on the Pro Rata Share
of such Pre-Funded L/C Lender immediately prior to such reduction to zero.

“Purchase Money Note” means a promissory note
of a Securitization Entity evidencing amounts owed to the Borrower or any
Restricted Subsidiary of the Borrower in connection with a Qualified
Securitization Transaction to a Securitization Entity, which note shall be
repaid from cash available to the Securitization Entity other than amounts
required to be established as reserves pursuant to agreements, amounts paid to
investors in respect of interest and principal and amounts paid in connection
with the purchase of newly generated receivables or newly acquired equipment.

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

“Qualified Securitization Transaction” means
any transaction or series of transactions that may be entered into by the
Borrower or any of its Restricted Subsidiaries pursuant to which the Borrower
or any of its Restricted Subsidiaries may sell, convey or otherwise transfer
to: (a) a Securitization Entity (in the case of a transfer by the Borrower
or any of its Restricted Subsidiaries); and (b) any other Person (in the case
of a transfer by a Securitization Entity), or may grant a security interest in any
accounts receivable or equipment (whether now existing or arising or acquired
in the future) of the Borrower or any of its Restricted Subsidiaries, and any
assets related thereto, including all collateral securing such accounts
receivable and equipment, all contracts and contract rights and all guarantees
or other obligations in respect of such accounts receivable and equipment,
proceeds of such accounts receivable and equipment and other assets (including
contract rights) which are customarily transferred or in respect of which
security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable and equipment.

“Quarterly Payment Date” means the first day of
each April, July, October and January, or, if any such date is not a Business
Day, the next succeeding Business Day.

“Reduction Amount” has the meaning specified in
Section 2.4(b)(viii).

“Register” has the meaning specified in Section 11.6(c).

“Reimbursement Agreement” means the Credit
Sleeve and Reimbursement Agreement, dated as of September 24, 2006, among the
Retail Group, MLCI and ML&Co., as amended and restated in connection with
the occurrence of the Effective Date and as the same may be further amended,
amended and restated, supplemented or otherwise modified, renewed or replaced
in whole or in part from time to time.

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“Related Parties” means, with respect to any
Person, such Person’s Affiliates and the partners, directors, trustees,
officers, employees, agents and advisors of such Person and of such Person’s
Affiliates.

“Release Date” 
means the date on which both (a) as of the last day of two consecutive
Fiscal Quarters, both (i) the Consolidated Leverage Ratio for the applicable
immediately preceding four Fiscal Quarters was 2:75:1 or less and (ii) the
Consolidated Interest Coverage Ratio for the applicable immediately preceding
four Fiscal Quarters was 3.25:1 or more; (b)  all Term Loans, including,
for the avoidance of doubt, all Pre-Funded L/C Term Loans, and any “syndicated
bank” style financings incurred pursuant to clause (s) of Section 7.3,
and all refinancings, replacements or renewals thereof, in each case which do
not provide for a suspension of all of the covenants that are described in Section
7.16, shall have been repaid in full and commitments in connection
therewith shall have been terminated; and (c) all Pre-Funded L/C
Obligations have been repaid in full, all Pre-Funded Letters of Credit have
been terminated or expired and all Pre-Funded L/C Commitments have expired.

“REMA” means Reliant Energy Mid-Atlantic Power
Holdings, LLC, a Delaware limited liability company, and its successors.

“REMA Lease” means, collectively, the
obligations of REMA as facility lessee under the Facility Lease Agreements,
each dated as of August 24, 2000 and each between REMA and, respectively,
Conemaugh Lessor Genco, LLC, Keystone Lessor Genco, LLC, and Shawville Lessor
Genco, LLC, and under the related participation agreements and other documents
executed in connection therewith.

“Remedial Action” shall have the meaning
ascribed to it in Section 101(24) of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et. seq. or any other
Environmental Law.

“Reportable Event” means any of the events set
forth in Section 4043(c) of ERISA, other than events for which the 30 day
notice period has been waived.

“Request for Credit Extension” means (a) with
respect to a Borrowing, conversion or continuation of Term Loans or Revolving
Credit Loans, a Borrowing Notice; and (b) with respect to an L/C Credit
Extension, an L/C Certificate.

“Required Lenders” means, as of any date of
determination, Lenders having more than 50% of the sum of (a) the Total
Outstandings (with the aggregate amount of each Lender’s risk participation and
funded participation in L/C Obligations being deemed “held” by such Lender for
purposes of this definition) and (b) the aggregate unused Revolving Credit
Commitments; provided, that the unused Revolving Credit Commitment of,
and the portion of the Total Outstandings held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Lenders.

“RERH” means Reliant Energy Retail Holdings,
LLC, a Delaware limited liability company, and its successors.

 49
 

 

“RESE” means Reliant Energy Solutions East,
LLC, a Delaware limited liability, and its successors.

“Residual Amount” means the aggregate amount of
cash received pursuant to clauses (b) and (c) of Section 6.15
which remains after (i) the Borrower has prepaid or redeemed in full the
outstanding principal amount of (and permanently cancelled Dollar-for-Dollar
all commitments with respect to) all Term Loans and other Parity Secured Debt
that the Borrower has the right to voluntarily prepay or redeem without premium
and (ii) the earlier of (x) the date on which the Borrower has prepaid or
redeemed in full, or has made offer(s) to prepay or redeem which have not been
accepted with respect to, other Parity Secured Debt and (y) the expiration of
the time periods set forth in such clauses (b) and (c), as
applicable.

“Responsible Officer” means the chief executive
officer, president, chief financial officer, treasurer or assistant treasurer
of a Loan Party.  Any document delivered
hereunder that is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Loan Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
such Loan Party.

“Restricted Payment” means any of the
following:

(1)           any
declaration or payment of any dividend or the making of any other payment or
distribution on account of the Borrower’s or any of its Restricted Subsidiaries’
Equity Interests (including any payment in connection with any merger or
consolidation involving the Borrower or any of its Restricted Subsidiaries) or
to the direct or indirect holders of the Borrower’s or any of its Restricted
Subsidiaries’ Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
the Borrower or to the Borrower or a Restricted Subsidiary of the Borrower);

(2)           any
purchase, redemption or other acquisition or retirement for value (including in
connection with any merger or consolidation involving the Borrower) of any
Equity Interests of the Borrower;

(3)           any
payment on or with respect to, or purchase, redemption, defeasance or other
acquisition or retirement for value of any Indebtedness of the Borrower or of
any Guarantor that is contractually subordinated to the Credit Agreement
Obligations (excluding any intercompany Indebtedness, intercompany receivables
or intercompany advances between or among any of the Borrower and its
Restricted Subsidiaries and Permitted PEDFA Bond Indebtedness), except a
payment of interest or principal at the Stated Maturity thereof.

“Restricted Subsidiary” means a Subsidiary
organized or incorporated under the laws of the United States or a State
thereof that is not an Unrestricted Subsidiary.

“Retail Energy Business” means the Borrower’s
and its Subsidiaries’ business of providing services and products in the retail
energy market and any businesses incidental or

 50
 

 

reasonably related
thereto operated by the Retail Group and performing under the Sleeve Documents
and any activities incidental or related thereto, including:

(a)           all
related retail customer contracts;

(b)           all
related commercial and industrial customer contracts;

(c)           all
related Exchange Traded Contracts and Power and Hedging Contracts; 

and

(d)           all
related assets and employees necessary or appropriate to manage such business.

“Retail Group” means, collectively, Retail
Holdco and all of its Subsidiaries.

“Retail Holdco” means RERH Holdings, LLC, a
Delaware limited liability company.

“Retail Sale” means the sale of either (a) all
or substantially all of the assets of the Retail Group; or (b) the Equity
Interests of Retail Holdco.

“Retail Sale Proceeds” means any Net Asset Sale
Proceeds received by the Borrower or any of its Subsidiaries from any Retail
Sale.

“Revolving Credit Borrowing” means a borrowing
consisting of simultaneous Revolving Credit Loans of the same Type and, in the
case of Eurodollar Rate Loans, having the same Interest Period made by each of
the Revolving Credit Lenders pursuant to Section 2.1(b).

“Revolving Credit Commitment” means, as to each
Revolving Credit Lender, its obligation to (a) make Revolving Credit Loans
to the Borrower pursuant to Section 2.1(b) (in an aggregate amount
for all Revolving Credit Lenders not to exceed $700,000,000 (as reduced, if
necessary, by the Applicable Amount in accordance with Section 7.20),
and (b) purchase participations in Revolving L/C Obligations, in an
aggregate principal amount at any one time outstanding not to exceed,
initially, the amount set forth opposite such Revolving Credit Lender’s name on
Schedule 2.1 under the caption “Revolving Credit Commitment” or in
the Assignment and Assumption pursuant to which such Revolving Credit Lender
becomes a party hereto, as applicable, as such amount may be adjusted from time
to time in accordance with this Agreement.

“Revolving Credit Exposure” means, as of any
date of determination, (a) the aggregate Revolving Credit Commitments or (b) if
the commitment of each Revolving Credit Lender to make Revolving Credit Loans
and the obligation of the Revolving L/C Issuers to make Revolving L/C Credit
Extensions have been terminated pursuant to Section 9.2, the Total
Revolving Credit Outstandings (with the aggregate amount of each Revolving
Credit Lender’s risk participation and funded participation in Revolving L/C
Obligations being deemed “held” by such Lender for purposes of this
definition).

“Revolving Credit Facility” means, at any time,
the Outstanding Amount of Revolving Credit Exposures of all Revolving Credit
Lenders at such time.

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“Revolving Credit Facility Agent” means Bank of
America in its capacity as administrative agent under the Revolving Credit
Facility, or any successor administrative agent.

“Revolving Credit L/C Final Expiration Date”
means the day that is five Business Days prior to the Revolving Credit
Termination Date.

“Revolving Credit Lender” means, at any time,
any Lender that has a Revolving Credit Commitment at such time.

“Revolving Credit Loan” means a loan by a
Revolving Credit Lender to the Borrower under Section 2.1(b).

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

“Revolving Credit Termination Date” means the earlier of (a) December
22, 2009; or (b) the date of termination in whole of the Revolving Credit
Commitments pursuant to Section 2.5 or 9.2.

“Revolving L/C Advance” means, with respect to
each Revolving Credit Lender, such Revolving Credit Lender’s funding of its
participation in any Revolving L/C Borrowing in accordance with its Pro Rata
Share.

“Revolving L/C Borrowing” means an extension of
credit resulting from a drawing under any Revolving Letter of Credit which has
not been reimbursed on the date when made or refinanced as a Revolving Credit
Borrowing.

“Revolving L/C Exposure” means, at any time,
the amount expressed in Dollars of the aggregate outstanding face amount of all
drafts which may then or thereafter be presented by beneficiaries under all
Revolving Letters of Credit then outstanding plus (without duplication),
the face amount of all drafts which have been presented or accepted under all
Revolving Letters of Credit but have not yet been paid or have been paid, but
not reimbursed, whether directly or from the proceeds of a Revolving Credit
Loan or Revolving L/C Borrowing hereunder.

“Revolving L/C Issuer” means each of ABN AMRO
Bank N.V., Bank of America, Deutsche Bank, JPMorgan Chase Bank, N.A., The Bank
of Nova Scotia, UBS AG, Stamford Branch and any other Lender with a Revolving
Credit Commitment in excess of $70,000,000 which agrees (pursuant to a joinder
in form and substance satisfactory to the Administrative Agent) to be a
Revolving L/C Issuer after the Closing Date, each in its capacity as an issuer
of Revolving Letters of Credit hereunder, and in each case, its successors in
such capacity as provided in Section 11.6(b) hereof; provided,
that each of such Revolving L/C Issuers shall be required to issue Revolving
Letters of Credit only in accordance with the terms and subject to the
conditions set forth herein, up to an aggregate amount, at any one time, not in
excess of the amount opposite such entity’s name under the column entitled “Revolving
L/C Issuer Amount for Revolving Letters of Credit” in Schedule 2.1
hereto (as such Schedule may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms

 52
 

 

hereof).  Each Revolving L/C Issuer may, in its
discretion, arrange for any Revolving Letter of Credit to be issued by an
Affiliate of such Revolving L/C Issuer as long as such Affiliate is reasonably
acceptable to the beneficiary under such Letter of Credit, in which case, the
term “Revolving L/C Issuer” shall include, with respect to Revolving
Letters of Credit issued by such Affiliate, such Affiliate.

“Revolving L/C Issuer Amount for Revolving Letters
of Credit” has the meaning specified in the definition of Revolving L/C
Issuer.

“Revolving L/C Obligations” means, as at any
date of determination, the aggregate amount available to be drawn under all
outstanding Revolving Letters of Credit plus the aggregate of all
Unreimbursed Amounts in connection with Revolving Letters of Credit, including
all Revolving L/C Borrowings.  For
purposes of computing the amount available to be drawn under any Revolving
Letter of Credit, the amount of such Revolving Letter of Credit shall be
determined in accordance with Section 1.6.  For all purposes of this Agreement, if on any
date of determination a Revolving Letter of Credit has expired by its terms but
any amount may still be drawn thereunder by reason of the operation of Rule
3.14 of the ISP, such Revolving Letter of Credit shall be deemed to be “outstanding”
in the amount so remaining available to be drawn.

“Revolving L/C Participation Obligations” has
the meaning specified in clause (b)(ii) of Section 2.3.

“Revolving Letter of Credit” means any standby
letter of credit issued under clause (a)(i)(A) of Section 2.3 and
shall include those of the Existing Letters of Credit identified on Schedule
1.1(a) as “Revolving Letters of Credit”.

“Revolving Letter of Credit Fee” has the
meaning specified in Section 2.3(i).

“Revolving Loan Payment Amount” means, on any
particular date, without duplication, the aggregate principal amount of
repayments or prepayments of Revolving Credit Loans made with either
(a) cash consideration received by the Borrower or the applicable
Restricted Subsidiary pursuant to clause (i) of the definition of
Permitted Sale or (b) the proceeds of any repayments or prepayments (that
are not attributable to Transferred Asset Sale Proceeds) of principal on any
Sale Note, in the case of each of clauses (a) and (b), that have
not been used for Permitted Payments.

“RRI Warrants” means the warrants issued by the
Borrower pursuant to the Warrant Agreement.

“S&P” means Standard & Poor’s Ratings
Group (presently a division of The McGraw-Hill Companies, Inc.), together with
its successors, or, if such company shall cease to issue ratings, another
nationally recognized rating company selected in good faith by mutual agreement
of the Administrative Agent and the Borrower.

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

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“Scheduled Investment Termination Date” means,
when referring to the Pre-Funded L/C Deposits on deposit in the Pre-Funded L/C
Deposit Account, the date agreed to by the Borrower and the Pre-Funded L/C
Facility Agent and the Deposit Bank from time to time.

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

“Secured Debt Documents” means,
collectively, the Loan Documents, the Secured Note Agreements, the PEDFA
Guaranties and the indenture, agreement and other documents governing each
other Series of Secured Debt and all agreements binding on any obligor related
thereto.

“Secured Debt Representative” means:

(1)           in the
case of the Secured Notes, Wilmington Trust Company, as Trustee;

(2)           the
Seward Bond Trustee;

(3)           in the
case of Indebtedness under this Agreement, the Administrative Agent; or

(4)           in the
case of any other Series of Secured Debt, the trustee, agent or representative
of the holders of such Series of Secured Debt who maintains, or on whose behalf
is maintained, the transfer register for or who acts as administrative agent
for such Series of Secured Debt and is appointed as Secured Debt Representative
(for purposes related to the administration of the Security Documents) pursuant
to the indenture or agreement governing such Series of Secured Debt.

“Secured Hedge Agreement” means any Hedging
Agreement permitted under Article VI or VII that is entered
into by and between the Borrower and any Hedge Bank, including each of the
Hedging Agreements listed on Schedule 1.1(f).

“Secured Note Agreements” means, collectively
(a) the Indenture, dated as of July 1, 2003, among the Borrower, the guarantors
referred to therein, and Wilmington Trust Company, as trustee, pursuant to
which the Borrower’s 9.25% Secured Notes due 2010 were issued, (b) the
Indenture, dated as of July 1, 2003, among the Borrower, the guarantors
referred to therein, and Wilmington Trust Company, as trustee, pursuant to
which the Borrower’s 9.50% Secured Notes due 2013 were issued, (c) the
Indenture, dated as of December 22, 2004 among the Borrower, the guarantors
referred to therein, and Wilmington Trust Company, as trustee, pursuant to
which the New Secured Notes were issued, and (d) each other indenture among the
Borrower, the guarantors referred to therein (if applicable) and the indenture
trustee thereunder, and each other loan or note purchase agreement among the
Borrower, the guarantors referred to therein (if applicable), the Lenders or
note purchasers thereunder and the administrative agent (if any) thereunder, in
each case pursuant to which a series of Secured Notes was issued or a loan was
made constituting a series of Secured Notes, as each such agreement or
indenture may be amended, restated, supplemented or otherwise modified from
time to time.

“Secured Note Obligations” means:

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(1)           the
Secured Notes issued on the dates of the respective Secured Note Agreements; or

(2)           the
Secured Notes issued by the Borrower after the dates of the respective Secured
Note Agreements that constitute another Series of Secured Debt; or

(3)           all
related exchange notes;

together with the Guarantees of the foregoing and all
other Obligations (including all Obligations owing to the applicable Secured
Debt Representatives) of any obligor under the Secured Note Agreements.

“Secured Notes” means, collectively, the
Borrower’s (i) 9.25% Secured Notes due 2010, (ii) 9.50% Secured Notes due 2013,
(iii) New Secured Notes and (iv) other senior secured notes issued from time to
time in a private placement, registered offering, exchange offering, or loan
transaction, in which notes have been issued in accordance with Section 7.3.

“Secured Parties” means, collectively, the
Lenders, each L/C Issuer, the Administrative Agent, the Pre-Funded L/C Facility
Agent, each counterparty to a Secured Hedge Agreement that is (or at the time
such Secured Hedge Agreement was entered into, was) a Lender or an Affiliate
thereof (a “Hedge Bank”) and (in each case) each of their respective
successors, transferees and assigns and each of the other “Secured Parties” as
defined in the Collateral Trust Agreement.

“Securities Account” means any securities account
as such term has the meaning specified in the UCC, now or hereafter held in the
name of any Loan Party.

“Securities Account Control Agreement” means,
with respect to any Pledged Securities or other Investment Property (as such
terms are defined in the Security Agreement), a written agreement or other
authenticated record, in form and substance reasonably satisfactory to the
Administrative Agent, pursuant to which the securities intermediary which holds
such Pledged Securities or such other Investment Property shall agree, among
other things, to comply with entitlement orders or other instructions from the
Collateral Trustee (or its co-trustees, agents or sub-agents) to such
securities intermediary as to Pledged Securities or other Investment Property,
without further consent of any Loan Party or its nominee, as any such agreement
or record may be amended, amended, restated, supplemented or otherwise modified
from time to time.

“Securitization Entity” means any Person in
which the Borrower or any Restricted Subsidiary of the Borrower makes an
Investment and to which the Borrower or any Restricted Subsidiary of the
Borrower transfers accounts receivable or equipment (and related assets,
including contract rights) which engages in no activities other than in connection
with the financing, sale, or purchase of accounts receivable or equipment or
related assets (including contract rights) and which is designated by the
Borrower (as provided below) as a Securitization Entity:

(a)           no
portion of the Indebtedness or any other Obligations (contingent or otherwise)
of which:

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(i)            is
guaranteed by the Borrower or any Restricted Subsidiary of the Borrower
(excluding guarantees of Obligations (other than the principal of, and interest
on, Indebtedness)) pursuant to Standard Securitization Undertakings;

(ii)           is
recourse to or obligates the Borrower or any Restricted Subsidiary of the
Borrower in any way other than pursuant to Standard Securitization
Undertakings; or

(iii)          subjects any property or asset of the
Borrower or any Restricted Subsidiary of the Borrower, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings;

(b)           with
which neither the Borrower nor any Restricted Subsidiary of the Borrower has
any material contract, agreement, arrangement or understanding (except in
connection with a Purchase Money Note or Qualified Securitization Transaction)
other than on terms no less favorable to the Borrower or such Restricted
Subsidiary than those that might be obtained at the time from Persons that are
not Affiliates of the Borrower, as determined by the Borrower, other than
amounts payable in the ordinary course of business in connection with servicing
receivables and other assets of such entity; and

(c)           which
neither the Borrower nor any Restricted Subsidiary of the Borrower has any
obligation to maintain or preserve such Person’s financial condition or cause
such Person to achieve certain levels of operating results.

The Borrower shall notify the Administrative Agent of
any such designation, which notice shall include delivery to the Administrative
Agent of a certificate of a Responsible Officer certifying that such
designation complied with the foregoing conditions.

“Security Agreement” means the Amended and
Restated Security Agreement, dated as of July 1, 2003, among the Borrower,
the other Loan Parties and the Collateral Trustee (for the benefit of the
Secured Parties), as such agreement may be amended, restated, supplemented or
otherwise modified from time to time.

“Security Documents” means (i) the Collateral
Trust Agreement, the Security Agreement and the Separate Security Agreement,
(ii) each Control Agreement, (iii) each Mortgage, (iv) each
Assignment of Leases and Rents, and (v) each other security agreement,
pledge agreement, mortgage, deed of trust, assignment agreement and other
instrument being executed concurrently herewith or from time to time hereafter
pursuant to which a Lien has been granted by any of the Loan Parties in favor of
the Collateral Agent (for the benefit of the Secured Parties) or the Collateral
Trustee (for the benefit of the Secured Parties under the Collateral Trust
Agreement) on any of its assets to secure any of the Obligations.

“Senior Debt” means Indebtedness that is not
subordinated in right of payment to the Credit Agreement Obligations.

“Separate Collateral” has the meaning specified
in the Collateral Trust Agreement.

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“Separate Security Agreement” means that
certain Amended and Restated Security Agreement dated as of July 1, 2003, among
the Borrower, the other Loan Parties and the Collateral Agent (for the benefit
of the Secured Parties), as such agreement may be amended, restated,
supplemented or otherwise modified from time to time.

“Series of Secured Debt” means, severally, the
Secured Notes, the PEDFA Guaranties, the Indebtedness under this Agreement and
each other issue or series of Parity Secured Debt.

“Seward Bond Issuer” has the meaning specified
in the definition of “Seward Bond Trust Indentures” set forth in this Article.

“Seward Bond Trust Indentures” means
(a) the Trust Indenture, dated as of December 1, 2001, between
Pennsylvania Economic Development Financing Authority (the “Seward Bond
Issuer”) and the Seward Bond Trustee pursuant to which the Seward Series
2001A Bonds were issued by the Seward Bond Issuer; (b) the Trust
Indenture, dated as of April 1, 2002, between the Seward Bond Issuer and the
Seward Bond Trustee pursuant to which the Seward Series 2002A Bonds were issued
by the Seward Bond Issuer; (c) the Trust Indenture, dated as of April 1,
2002, between the Seward Bond Issuer and the Seward Bond Trustee pursuant to
which the Seward Series 2002B Bonds were issued by the Seward Bond Issuer, as
such Trust Indentures may be amended, restated, supplemented or otherwise
modified from time to time; (d) the Trust Indenture, dated as of September
1, 2003, between the Seward Bond Issuer and the Seward Bond Trustee pursuant to
which the Seward Series 2003A Bonds were issued by the Seward Bond Issuer; (e) the
Trust Indenture, dated as of December 22, 2004, between the Seward Bond Issuer
and the Seward Bond Trustee pursuant to which the Seward Series 2004A Bonds
were issued by the Seward Bond Issuer; and (f) trust indentures entered
into by the Seward Bond Issuer after the Closing Date as permitted hereunder in
connection with any Seward Tax-Exempt Bonds issued after the Closing Date.

“Seward Bond Trustee” means J.P. Morgan Trust
Company, National Association, as Trustee, and any successor or other trustee,
under the Seward Bond Trust Indentures.

“Seward Facility” means the 521 MW coal
facility and related assets owned by Reliant Energy Seward, LLC, or its
successors, and located in New Florence, Indiana County, Pennsylvania.

“Seward Series 2001A Bonds” has the meaning
specified in the definition of “Seward Tax-Exempt Bonds”.

“Seward Series 2002A Bonds” has the meaning
specified in the definition of “Seward Tax-Exempt Bonds”.

“Seward Series 2002B Bonds” has the meaning
specified in the definition of “Seward Tax-Exempt Bonds”.

“Seward Series 2003A Bonds” has the meaning
specified in the definition of “Seward Tax Exempt Bonds.”

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“Seward Series 2004A Bonds” has the
meaning specified in the definition of “Seward Tax Exempt Bonds.”

“Seward Subsidiary” means
Reliant Energy Seward, LLC, a Delaware limited liability company, and its
successors.

“Seward Tax-Exempt Bonds” means (1) the
Pennsylvania Economic Financing Authority Exempt Facilities Revenue Bonds
(Reliant Energy Seward, LLC Project), Series 2001A, in the original aggregate
principal amount of $150,000,000 (the “Seward Series 2001A Bonds”), (2)
the Pennsylvania Economic Financing Authority Exempt Facilities Revenue Bonds
(Reliant Energy Seward, LLC Project), Series 2002A, in the original aggregate
principal amount of $75,000,000 (the “Seward Series 2002A Bonds”), (3)
the Pennsylvania Economic Financing Authority Exempt Facilities Revenue Bonds
(Reliant Energy Seward, LLC Project), Series 2002B, in the original aggregate
principal amount of $75,000,000 (the “Seward Series 2002B Bonds”), (4)
the Pennsylvania Economic Financing Authority Exempt Facilities Revenue Bonds
(Reliant Energy Seward, LLC Project), Series 2003A, in the original aggregate
principal amount of $100,000,000 (the “Seward Series 2003A Bonds”), and
(5) any bonds issued by PEDFA on or after the Closing Date as permitted
hereunder and supported by letters of credit outstanding hereunder.

“Shared Collateral” has the meaning specified
in the Collateral Trust Agreement.

“Sharing Eligible Debt” means:

(1)           Indebtedness
under clauses (a), (e) and (f) of the definition of
Permitted Debt;

(2)           Indebtedness
under clause (s) of the definition of Permitted Debt;

(3)           the
Secured Notes;

(4)           the PEDFA
Guaranties;

(5)           Permitted
Refinancing Indebtedness of the Borrower or, if it constitutes Permitted PEDFA
Bond Indebtedness, Indebtedness of the Borrower and/or the Seward Subsidiary
and/or guaranteed by the Borrower and/or the Guarantors, the net proceeds of
which are used to refinance Indebtedness evidenced by or in support of the
Seward Tax-Exempt Bonds; provided, that in the case of Permitted PEDFA
Bond Indebtedness, the assets of the Seward Subsidiary (other than Investments
in the Borrower pledged to secure such Permitted PEDFA Bond Indebtedness and
proceeds from the issuance of Permitted PEDFA Bond Indebtedness that secures
Permitted PEDFA Bond Indebtedness) shall remain free of all Liens securing
Indebtedness, except Permitted Prior Liens and Liens held by the Collateral
Trustee as security for the Parity Secured Debt; and

(6)           Permitted
Refinancing Indebtedness, the net proceeds of which are used to refinance
Parity Secured Debt;

provided, that
each category of Indebtedness described above:

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(1)           must be
guaranteed by any of the Restricted Subsidiaries that, on the date of
incurrence of such Indebtedness, is obligated as a Guarantor under a Guarantee
of the Credit Agreement Obligations;

(2)           must not
be subordinated in right of payment or in respect of the application of the
proceeds of the Collateral Trustee’s Liens on the Collateral to any other
Indebtedness of the Borrower or any Guarantor (whether or not such other
Indebtedness is part of the same series of Indebtedness), except in accordance
with the Order of Application; and

(3)           is
governed by an indenture or agreement that appoints a Secured Debt
Representative and includes an Intercreditor Confirmation.

“Sleeve Documents” means, collectively, the
Working Capital Agreement, the Reimbursement Agreement, the Parent Services
Agreement and all other agreements (including the agreements entered into in
respect of the PJM Retail Business) delivered in connection with the
Reimbursement Agreement.

“Sleeve Transaction” means the provision of
certain guarantees of ML&Co and the posting of required collateral, in each
case, in connection with the supply and hedging and related activities of the
Retail Group in the Retail Energy Business.

“Solvent” and “Solvency” mean, with
respect to any Person on any date of determination, that on such date
(a) the fair value of the property of such Person is greater than the
total amount of liabilities, including contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay such debts and liabilities as
they mature and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s property would constitute an unreasonably small capital.  The amount of contingent liabilities at any
time shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability; provided, that if
the context in which “Solvent” or “Solvency” is used refers to a Person
together with its Subsidiaries, Person as used above shall be deemed to be a
reference to such Person together with its Subsidiaries.

“SPC” has the meaning specified in Section 11.6(h).

“Specified Junior Securities” means
subordinated debt securities issued by the Borrower that:

(1)           are
subordinated to the Loans pursuant to subordination provisions (A) at least as
favorable to the Lenders as either the subordination provisions set forth in Schedule
1.1(d) hereto or the subordination provisions applicable to the Borrower’s
5.00% Convertible Senior Subordinated Notes due 2010 issued pursuant to that
certain indenture, dated as of June 24, 2003, by and between the Borrower and
Wilmington Trust Company, as trustee, or (B) otherwise acceptable to the
Agents;

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(2)           have a
final maturity date occurring at least 91 days after the Term Loan Maturity
Date and have a Weighted Average Life to Maturity at least 91 days longer than
the Weighted Average Life to Maturity of the Term Loans;

(3)           are not
guaranteed by any Subsidiary of the Borrower except for any guarantee by a
Guarantor that is contractually subordinated in right of payment to the prior
payment in full in cash to the Guaranty; and

(4)           are not
convertible into any other securities except Equity Interests of the Borrower
(other than Disqualified Stock).

“Standard Securitization Undertakings” means
representations, warranties, covenants and indemnities entered into by the
Borrower or any Subsidiary of the Borrower, which are substantially similar to
those in existence on the Closing Date or are otherwise reasonably customary in
an accounts receivable or equipment securitization transaction, in each case,
as determined by the Borrower.

“Stated Maturity” means, with respect to any
installment of interest or principal on any series of Indebtedness, the date on
which the payment of interest or principal was scheduled to be paid in the
documentation governing such Indebtedness as of the Closing Date, and shall not
include any contingent obligations to repay, redeem or repurchase any such
interest or principal prior to the date originally scheduled for the payment
thereof.

“Subordinated Indebtedness” means any
Indebtedness of a Person that is contractually subordinated to the Credit
Agreement Obligations.

“Subordinated Obligations” has the meaning
specified in Section 8.6.

“Subsidiary” of a Person means a corporation,
partnership, joint venture, limited liability company or other business entity
of which a majority of the shares of securities or other interests having
ordinary voting power for the election of directors or other governing body
(other than securities or interests having such power only by reason of the
happening of a contingency) are at the time beneficially owned, or the
management of which is otherwise controlled, directly, or indirectly through
one or more intermediaries, or both, by such Person.  Unless otherwise specified, all references
herein to a “Subsidiary”, “Restricted Subsidiary”, “Restricted Subsidiaries” or
“Subsidiaries” shall refer to a Subsidiary, Restricted Subsidiary, Restricted
Subsidiaries or Subsidiaries of the Borrower.

“Syndication Agents” means, collectively,
(a) Bank of America, N.A. as Revolving Credit Syndication Agent, and
(b) Deutsche Bank AG, New York Branch, as Term Facility Syndication Agent
and Pre-Funded L/C Facility Syndication Agent.

“Synthetic Lease Obligation” means the monetary
obligation of a Person under a so-called synthetic, off-balance sheet or tax
retention lease.

“Taxes” means all present or future taxes,
levies, imposts, duties, deductions, withholdings, assessments, fees or other
charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

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“Term Borrowing” means a borrowing consisting
of simultaneous Term Loans of the same Type and, in the case of Eurodollar Rate
Loans, having the same Interest Period made by each of the Term Lenders
pursuant to Section 2.1(a).

“Term Commitment” means, as to each Term
Lender, its obligation to make Term Loans to the Borrower pursuant to Section 2.1(a)
in an aggregate amount at any one time outstanding not to exceed the amount set
forth opposite such Lender’s name on Schedule 2.1 under the caption
“Term Commitment” or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable (in an aggregate amount for all
Term Lenders as of the date hereof not to exceed $400,000,000).

“Term Facility” means, at any time, the
outstanding amount of Term Loans of all Term Lenders at such time.

“Term Facility Agent” means Bank of America,
N.A. in its capacity as administrative agent under the Term Facility, or any
successor administrative agent thereunder.

“Term Lender” means, at any time, any Lender
that has a Term Commitment or holds a Term Loan at such time.

“Term Loan” means, collectively, each Initial
Term Loan and each Pre-Funded L/C Term Loan.

“Term Loan Maturity Date” means
December 1, 2010.

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

“Termination Date” means the date on which (i)
all of the Credit Agreement Obligations have been indefeasibly paid in full in
cash, (ii) the Commitments have been permanently terminated in their entirety,
(iii) all Letters of Credit shall have expired or been terminated or canceled
or the Borrower shall have provided Cash Collateral for such unexpired or
non-terminated Letters of Credit in accordance with the terms of this
Agreement, (iv) each Pre-Funded L/C Lender shall have received the full amount
of its Pre-Funded L/C Deposit, and (v) (A) each Secured Hedge
Agreement shall have (1) expired, (2) been terminated or canceled or
(3) been transferred by the applicable Hedge Bank in a manner
(satisfactory in all respects to such Hedge Bank) so that such Hedge Bank no longer
has any obligations whatsoever with respect to such Secured Hedge Agreement, or
(B) the Credit Agreement Obligations under such Secured Hedge Agreement shall
have been collateralized in a manner reasonably satisfactory to the applicable
Hedge Bank(s).

“Threshold Amount” means, on any date of
determination, except as otherwise set forth in Section 6.12 as to any
Domestic Subsidiary or group of Domestic Subsidiaries which are not Loan
Parties, that such Subsidiary or Subsidiaries had either (i) $25,000,000 or
more of Consolidated EBITDAR during the four-Fiscal Quarter period most
recently ended or (ii) had assets the aggregate book value of which was
$50,000,000 or more.

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“Title Company” means a title insurance company
of recognized national standing which is acceptable to the Administrative Agent
in its sole discretion.

“Title Policy” means, with respect to any
Mortgage, a mortgagee policy of title insurance (ALTA or the equivalent) or
marked “commitment” of title insurance insuring the applicable Mortgage as a
first priority Lien on such real property asset in favor of the Collateral
Trustee (for the benefit of the holders of the Parity Secured Obligations,
including the Secured Parties) to secure the Parity Secured Obligations, free
of all Liens other than the Permitted Encumbrances, which policy of title
insurance shall be issued by a Title Company in such policy amounts, with such
endorsements and affirmative insurance, and in form and substance reasonably
satisfactory to the Administrative Agent, and shall contain no exceptions to
coverage other than matters satisfactory to the Administrative Agent in its
judgment reasonably exercised and which policy of title insurance shall have
been fully paid for by the Borrower.

“Total Outstandings” means (without
duplication) the aggregate Outstanding Amount of all Loans, Pre-Funded L/C
Deposits and all L/C Obligations.

“Total Revolving Credit Outstandings” means the
aggregate Outstanding Amount of all Revolving Credit Loans and all Revolving
L/C Obligations.

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

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

“Trigger Amount” has the meaning specified in clause
(b) of Section 6.15.

“Type” means with respect to a Loan, its
character as a Base Rate Loan or a Eurodollar Rate Loan.

“Unfunded Pension Liability” means the excess
of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of
ERISA, over the current value of that Pension Plan’s assets, determined in
accordance with the assumptions used for funding the Pension Plan pursuant to
Section 412 of the Code for the applicable plan year.

“United States” and “U.S.” mean the
United States of America.

“Unreimbursed Amount” has the meaning specified
in Section 2.3(c)(i).

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“Unrestricted Subsidiary” means any Subsidiary
of the Borrower that is designated by the Board of Directors of the Borrower as
an Unrestricted Subsidiary pursuant to a Board Resolution, but only to the
extent that:

(a)           such Subsidiary has
no Indebtedness other than Indebtedness that is Non-Recourse to the Borrower
and its Restricted Subsidiaries;

(b)           except as permitted
pursuant to Section 7.8, such Subsidiary is not party to any
agreement, contract, arrangement or understanding with the Borrower or any
Restricted Subsidiary unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Borrower or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Borrower;

(c)           such Subsidiary is a
Person with respect to which neither the Borrower nor any of its Restricted
Subsidiaries has any direct or indirect obligation (i) to subscribe for
additional Equity Interests or (ii) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results; and

(d)           the aggregate Fair
Market Value of all outstanding Investments owned by the Borrower and its
Restricted Subsidiaries in the Subsidiary properly designated and of all
outstanding Investments owned by such Subsidiary properly designated would be
Permitted Investments under Section 7.2 as of the time of the
designation.

Any designation of a Subsidiary of the Borrower as an
Unrestricted Subsidiary will be evidenced to the Administrative Agent by filing
with the Administrative Agent a certified copy of the Board Resolution giving
effect to such designation and a certificate of a Responsible Officer of the
Borrower certifying that such designation complied with the preceding
conditions and was permitted by Section 7.2.  If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted Subsidiary, it
will thereafter cease to be an Unrestricted Subsidiary for purposes of this
Agreement and the other Loan Documents and any Indebtedness of such Subsidiary
will be deemed to be incurred by a Restricted Subsidiary of the Borrower as of
such date and, if such Indebtedness is not permitted to be incurred as of such
date pursuant to Section 7.3, the Borrower will be in default of
such covenant. The Board of Directors of the Borrower may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
that such designation will be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Borrower of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation will only be permitted if (i) such
Indebtedness is permitted pursuant to Section 7.3; and (ii) no
Default would be in existence following such designation. Upon any such
designation of an Unrestricted Subsidiary as a Restricted Subsidiary, the
redesignated Subsidiary will become a Guarantor pursuant to and if required by Section 6.12;
provided, that any redesignated Restricted Subsidiary that is not a
Material Subsidiary need not become a Subsidiary Guarantor until such time as
it becomes a Material Subsidiary.

“Voting Stock” of any Person as of any date
means the Capital Stock of such Person that is at the time entitled to vote in
the election of the Board of Directors of such Person.

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“Warrant Agreement” means the Common Stock
Warrant Agreement dated as of March 28, 2003 made by the Borrower for the
benefit of the holders from time to time of the stock warrants issued pursuant
thereto.

“Weighted Average Life to Maturity” means, when
applied to any Indebtedness at any date, the number of years obtained by
dividing:

(1)           the sum of the
products obtained by multiplying (A) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness,
by (B) the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment; by

(2)           the then outstanding
principal amount of such Indebtedness.

“Wholesale Business” has the meaning specified
in Section 5.20.

“Wholesale Sale” means the sale of all or
substantially all of the assets of the Borrower and its Subsidiaries, other
than a Retail Sale.

“Wholesale Sale Proceeds” means any Net Asset
Sale Proceeds received by the Borrower or any of its Subsidiaries from any
Wholesale Sale.

“Working Capital Agreement” means the Working
Capital Facility, dated as of September 24, 2006, among Retail Holdco and its
Subsidiaries and ML&Co., entered into as a condition to the closing of the
Reimbursement Agreement, as amended and restated in connection with the
occurrence of the Effective Date and as the same may be further amended,
amended and restated, supplemented or otherwise modified, renewed or replaced
in whole or in part from time to time.

1.2          Other Interpretive Provisions.  With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

(a)           The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will”
shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i)
any definition of or reference to any agreement, instrument or other document
(including any Organization Document) shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (iii) the words “herein,” “hereof”
and “hereunder,” and words of similar import when used in any Loan
Document, shall be construed to refer to such Loan Document in its entirety and
not to any particular provision thereof, (iv) all references in a Loan Document
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and

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Schedules to, the Loan Document in which such
references appear, (v) any reference to any law shall include all statutory and
regulatory provisions consolidating, amending, replacing or interpreting such
law and any reference to any law or regulation shall, unless otherwise
specified, refer to such law or regulation as amended, modified or supplemented
from time to time, and (vi) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

(b)           In the computation of periods of time
from a specified date to a later specified date, the word “from” means “from
and including;” the words “to” and “until” each mean “to
but excluding;” and the word “through” means “to and including.”

(c)           Section headings herein and in
the other Loan Documents are included for convenience of reference only and
shall not affect the interpretation of this Agreement or any other Loan
Document.

1.3          Accounting Terms.

(a)           Generally.  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, except as otherwise
specifically prescribed herein.

(b)           Changes in GAAP.  If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrower or the Required Lenders shall so
request, the Administrative Agent, the Lenders and the Borrower shall negotiate
in good faith to amend such ratio or requirement to preserve the original
intent thereof in light of such change in GAAP (subject to the approval of the
Required Lenders and the Borrower); provided, that until so amended, (i)
such ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (ii) the Borrower shall provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting
forth a reconciliation between calculations of such ratio or requirement made
before and after giving effect to such change in GAAP.  Unless otherwise noted, computation of
financial covenants and financial requirements under the Loan Documents shall
be made on a consolidated basis for the Borrower and its Subsidiaries, without
duplication.

1.4          Rounding.  Any financial ratios required to be
maintained by the Borrower pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).

1.5          Times of Day.  Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).

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1.6          Letter of Credit Amounts.  Unless otherwise specified
herein, the amount of a Letter of Credit at any time shall be deemed to be the
stated amount of such Letter of Credit in effect at such time; provided
that with respect to any Letter of Credit that, by its terms or the terms of
the L/C Certificate or any other agreement or document delivered in connection
with such Letter of Credit, provides for one or more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all
such increases, whether or not such maximum stated amount is in effect at such
time.

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.1          The Loans; The Pre-Funded L/C Deposit
Account.

(a)           The Term Borrowings.  Subject to the terms and conditions set forth
herein, each Term Lender severally agrees to make a term loan to the Borrower
on the Effective Date in an amount equal to the Term Commitment of such Term
Lender.  Amounts borrowed under this
clause and repaid or prepaid may not be reborrowed.  Term Loans may be Base Rate Loans or
Eurodollar Rate Loans, as further provided herein.

(b)           The Revolving Credit Borrowings.
Subject to the terms and conditions set forth herein, each Revolving Credit
Lender severally agrees to make loans to the Borrower from time to time, on any
Business Day during the Availability Period, in an aggregate amount not to
exceed at any time outstanding the amount of such Lender’s Revolving Credit
Commitment; provided, that after giving effect to any Revolving Credit
Borrowing, the sum of the aggregate Outstanding Amount of the Revolving Credit
Loans of any Lender plus such Lender’s Pro Rata Share of the Outstanding Amount
of all Revolving L/C Obligations shall not exceed such Lender’s Revolving
Credit Commitment. Within the limits of each Lender’s Revolving Credit
Commitment, and subject to the other terms and conditions hereof, the Borrower
may borrow under this clause, prepay under Section 2.4, and reborrow under
this clause. Revolving Credit Loans may be Base Rate Loans or Eurodollar Rate
Loans, as further provided herein.

(c)           The Pre-Funded L/C Deposit Account.  (i)  On or prior to the
Effective Date, the Pre-Funded L/C Facility Agent shall establish the Pre-Funded
L/C Deposit Account.  The Pre-Funded L/C
Facility Agent shall maintain records enabling it to determine at any time the
amount of the interest of each Pre-Funded L/C Lender in the Pre-Funded L/C
Deposit Account.  No Person (other than
the Pre-Funded L/C Facility Agent or any of their sub-agents) shall have the
right to make any withdrawals from the Pre-Funded L/C Deposit Account or
exercise any other right or power with respect thereto, except as expressly
provided herein.  Without limiting the
generality of the foregoing, each party hereto acknowledges and agrees that no
amount on deposit at any time in the Pre-Funded L/C Deposit Account (A) shall
be the property of any Secured Party (other than the Pre-Funded L/C Facility
Agent for the benefit of the Pre-Funded L/C Issuer) or any of the Borrower, its
Subsidiaries or Affiliates, and (B) shall constitute “collateral” under the
Loan Documents (other than in favor of the Pre-Funded L/C Issuer in respect of
the Pre-Funded L/C Participation Obligations) for any Obligation of the
Borrower or any other Loan Party. 
Furthermore, none of the Borrower, its Subsidiaries or its Affiliates
shall have any right or title to, or interest in any amount on deposit at any
time in the Pre-Funded L/C

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Deposit Account. 
In addition, each Pre-Funded L/C Lender hereby grants to the Pre-Funded
L/C Facility Agent for the benefit of the Pre-Funded L/C Issuer a security
interest in, and rights of offset against, its rights and interests in such
Pre-Funded L/C Lender’s Pre-Funded L/C Deposit, and investments thereof and
proceeds of any of the foregoing, to secure the obligations of such Pre-Funded
L/C Lender hereunder.  Each Pre-Funded
L/C Lender agrees that its right, title and interest with respect to the
Pre-Funded L/C Deposit Account shall be limited to the right to require its
Pre-Funded L/C Deposit to be used as expressly set forth herein and that it
will have no right to require the return of its Pre-Funded L/C Deposit other
than as expressly provided herein (each Pre-Funded L/C Lender hereby
acknowledging that its Pre-Funded L/C Deposit constitutes payment for its
Pre-Funded L/C Participation Obligations and that the Pre-Funded L/C Issuer
will be issuing, amending, renewing and extending Pre-Funded Letters of Credit
in reliance on the availability of such Pre-Funded L/C Lender’s Pre-Funded L/C
Deposit to discharge such Pre-Funded L/C Lender’s obligations in accordance
with clause (c)(iii) of this Section, clause (c) of Section
2.3 and clause (d) of Section 2.5).  The funding of the Pre-Funded L/C Deposits
and the agreements with respect thereto set forth in this Agreement constitute
arrangements solely among the Pre-Funded L/C Facility Agent, the Pre-Funded L/C
Issuer and the Pre-Funded L/C Lenders with respect to the funding and
reimbursement obligations of the Pre-Funded L/C Lenders under this Agreement,
and do not constitute loans, extensions of credit or other financial
accommodations to any Loan Party.

(ii)           Subject
to the terms and conditions set forth herein, each Pre-Funded L/C Lender
severally agrees to make a payment to the Pre-Funded L/C Facility Agent on or
prior to the Effective Date in an amount equal to such Pre-Funded L/C Lender’s
Pre-Funded L/C Commitment and the Pre-Funded L/C Facility Agent agrees to
deposit such payments in the Pre-Funded L/C Deposit Account for the benefit of
such Pre-Funded L/C Issuer. 
Notwithstanding any provision in this Agreement to the contrary, the
sole funding obligation of each Pre-Funded L/C Lender in respect of its
Pre-Funded L/C Commitment and Pre-Funded L/C Participation Obligation shall be
satisfied in full upon the payment of an amount equal to its Pre-Funded L/C
Commitment on the Effective Date.

(iii)          Each
Pre-Funded L/C Lender irrevocably and unconditionally agrees that its Pre-Funded
L/C Deposit in the Pre-Funded L/C Deposit Account shall be withdrawn and
distributed as follows:

(A)          In the event the
Pre-Funded L/C Issuer is not reimbursed pursuant to clause (c) of Section
2.3 for a drawing in respect of a Pre-Funded Letter of Credit, the
Pre-Funded L/C Facility Agent shall withdraw from the Pre-Funded L/C Deposit
Account the amount of such Unreimbursed Amount (and reduce each Pre-Funded L/C
Lender’s Pre-Funded L/C Deposit and Pre-Funded L/C Commitment in the amount of
such Pre-Funded L/C Lender’s Pro Rata Share of such Unreimbursed Amount) and
make such Pre-Funded L/C Deposits available to the Pre-Funded L/C Issuer.  In connection with the foregoing, the
Pre-Funded L/C Facility shall concurrently and without further action or notice
be reduced by such withdrawn Unreimbursed Amount.  It is understood and agreed that such
application shall not reduce or satisfy the Borrower’s obligations to reimburse
the Pre-Funded L/C Issuer or the Pre-Funded L/C Lenders for the related
drawing.

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(B)           Subject to Section
2.5(d), in the event the Borrower voluntarily decides to permanently reduce
the Pre-Funded L/C Facility, the Pre-Funded L/C Facility Agent will withdraw
from the Pre-Funded L/C Deposit Account an amount equal to such reduction, and
pay to each Pre-Funded L/C Lender an amount equal to the product of (1) such
Pre-Funded L/C Lender’s Pro Rata Share of the Pre-Funded L/C Facility
multiplied by (2) the aggregate amount of such reduction.  In connection with the foregoing, each
Pre-Funded L/C Lender’s Pre-Funded L/C Commitment and Pre-Funded L/C Deposit
shall concurrently and without further action or notice be reduced by its Pro
Rata Share of such withdrawn amount.  In
no event shall the Pre-Funded L/C Commitments and Pre-Funded L/C Deposits be
reduced to an amount that is less than the aggregate amount of the Pre-Funded
L/C Obligations.

(C)           Upon the occurrence
of the Pre-Funded L/C Commitment Termination Date, in the event that all
Pre-Funded Letters of Credit have been returned, replaced or cancelled, all
amounts remaining in the Pre-Funded L/C Deposit Account shall be returned to
the Pre-Funded L/C Lenders based on such Pre-Funded L/C Lender’s Pro Rata
Share.

(iv)          The
Pre-Funded L/C Facility Agent, each Pre-Funded L/C Issuer and each Pre-Funded
L/C Lender hereby agrees that the Deposit Bank (or a designated affiliate
thereof) may invest the Pre-Funded L/C Deposits in such investments as may be
determined from time to time by the Pre-Funded L/C Facility Agent (or a
designated affiliate thereof).  On each
day on which Pre-Funded L/C Participation Fees are required to be paid with
respect to all or any portion of the Pre-Funded L/C Deposits pursuant to clause
(c) of Section 2.8, the Deposit Bank shall pay to each Pre-Funded
L/C Lender an amount equal to (A) the Base Return for the relevant
Investment Period less the Pre-Funded L/C Deposit Cost Amount multiplied
by (B) such Pre-Funded L/C Lender’s Pro Rata Share of the aggregate amount
on deposit in the Pre-Funded L/C Deposit Account (a “Pre-Funded L/C Deposit
Return”); provided  that, the Pre-Funded L/C Facility Agent
shall not be required to pay Pre-Funded L/C Deposit Returns to
any Pre-Funded L/C Lender during quarterly periods when Pre-Funded L/C Deposits
are used to reimburse any Pre-Funded L/C Issuer with respect to payments and
disbursements on Pre-Funded Letters of Credit. 
Any amounts earned and received with respect to Pre-Funded L/C Deposits
during any applicable Investment Period in excess of the Base Return shall be
for the account of the Deposit Bank.  No
Person other than the Pre-Funded L/C Facility Agent shall have any obligation
under or in respect of this clause.

(v)           Notwithstanding
anything to the contrary in this Agreement, the Borrower shall not be liable
for any losses due to (A) the misappropriation of any Pre-Funded L/C Deposit or
(B) the failure of the Deposit Bank to pay the Pre-Funded L/C Deposit
Return to any Pre-Funded L/C Lender or to apply amounts in the Pre-Funded L/C
Deposits in accordance with this clause (c) (it being understood and
agreed for greater certainty that this clause shall not limit any obligation of
the Borrower hereunder to pay any Pre-Funded L/C Participation Fee).  None of the Pre-Funded L/C Facility Agent,
the Pre-Funded L/C Issuer or any other Person guarantees any rate of return on
the investment of any Pre-Funded L/C Deposit held in the Pre-Funded L/C Deposit
Account.

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(vi)          If
the Pre-Funded L/C Issuer and/or the Pre-Funded L/C Facility Agent is enjoined
from taking any action referred to in this clause (c), or if the
Pre-Funded L/C Issuer and/or the Pre-Funded Facility Agent reasonably
determines that, by operation of law, it may reasonably be precluded from
taking any such action, or if any Loan Party or Pre-Funded L/C Lender
challenges in any legal proceeding any of the acknowledgements, agreements or
characterizations set forth in any of this clause (c), then, in any such
case (and so long as such event or condition shall be continuing), and
notwithstanding anything contained herein to the contrary, the Pre-Funded L/C
Issuer shall not be required to issue, renew or extend any Pre-Funded Letter of
Credit.

(vii)         If
the Pre-Funded L/C Issuer or Pre-Funded L/C Facility Agent is enjoined from
withdrawing amounts from the Pre-Funded Deposit Account of a Pre-Funded L/C
Lender in accordance with clause (c)(iii)(A) of this Section 2.1,
or reasonably determines that it is precluded from taking such actions, (A)
from and after the date such withdrawal would have been made but for such
circumstance the Pre-Funded L/C Deposit Return and the Pre-Funded L/C
Participation Fees that would have otherwise been required to be withdrawn and
paid to such Pre-Funded L/C Lender shall instead be added to the Pre-Funded
Deposit Account of such Pre-Funded L/C Lender and (B) such Pre-Funded L/C
Lender shall pay to the Pre-Funded L/C Issuer interest on the amount that
should have been withdrawn at the rate equal to the Default Rate for Term Loans
until such time as such withdrawal is made.

(viii)        In
the event any payment of a Pre-Funded L/C Reimbursement Obligation shall be
required to be refunded by the Pre-Funded L/C Issuer to the Borrower after the
return of the Pre-Funded L/C Deposits to the Pre-Funded L/C Lenders as
permitted hereunder, each Pre-Funded L/C Lender agrees to acquire and fund a
participation in such refunded amount equal to the lesser of its Pro Rata Share
thereof and the amount of its Pre-Funded L/C Deposit that shall have been so
returned.  The obligations of the
Pre-Funded L/C Lenders under this clause shall survive the payment in full of
the Pre-Funded L/C Deposits and the termination of this Agreement.

2.2          Borrowings, Conversions and
Continuations of Loans.

(a)           Each Borrowing, each conversion of
Loans from one Type to the other, and each continuation of Eurodollar Rate
Loans shall be made upon the Borrower’s irrevocable notice to the
Administrative Agent, which may be given by telephone.  Each such notice must be received by the
Administrative Agent not later than 11:00 a.m. (New York time) (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate
Loans to Base Rate Loans and (ii) on the requested date of any Borrowing of
Base Rate Loans.  Each telephonic notice
by the Borrower pursuant to this clause must be confirmed promptly by delivery
to the Administrative Agent of a written Borrowing Notice, appropriately
completed and signed by a Responsible Officer of the Borrower.  Each Borrowing of, conversion to or
continuation of Eurodollar Rate Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof.  Except as provided in Section 2.3(c),
each Borrowing of or conversion to Base Rate Loans shall be in a principal amount
of $5,000,000 or a whole multiple of $1,000,000 in excess thereof.  Each Borrowing Notice (whether telephonic or
written) shall specify (i) whether the Borrower is

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requesting a Term Borrowing or a Revolving Credit
Borrowing, a conversion of Term Loans or Revolving Credit Loans from one Type
to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested
date of the Borrowing, conversion or continuation, as the case may be (which
shall be a Business Day), (iii) the principal amount of Loans to be
borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to
which existing Loans are to be converted, and (v) if applicable, the
duration of the Interest Period with respect thereto.  If the Borrower fails to specify a Type of
Loan in a Borrowing Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be
made as, or converted to, Base Rate Loans. 
Any such automatic conversion to Base Rate Loans shall be effective as
of the last day of the Interest Period then in effect with respect to the
applicable Eurodollar Rate Loans.  If the
Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar
Rate Loans in any such Borrowing Notice, but fails to specify an Interest
Period, it will be deemed to have specified an Interest Period of one month.

(b)           Following receipt of a Borrowing
Notice, the Administrative Agent shall promptly notify each Lender under the
applicable Facility of the amount of its Pro Rata Share of the applicable
Loans, and if no timely notice of a conversion or continuation is provided by
the Borrower, the Administrative Agent shall notify each Lender of the details
of any automatic conversion to Base Rate Loans described in Section 2.2(a).  In the case of a Borrowing, each Lender under
the applicable Facility shall make the amount of its Loan available to the
Administrative Agent in immediately available funds at the Administrative Agent’s
Office not later than 1:00 p.m. (New York time) on the Business Day specified
in the applicable Borrowing Notice.  Upon
satisfaction of the applicable conditions set forth in Section 4.2 (and,
if such Borrowing is the initial Credit Extension, Section 4.1), the
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent by 3:00pm (New York time)
on the Business Day specified in the applicable Borrowing Notice, either by
(i) crediting the account of the Borrower on the books of Bank of America
with the amount of such funds or (ii) wire transfer of such funds, in each
case in accordance with instructions provided to (and reasonably acceptable to)
the Administrative Agent by the Borrower; provided, that if, on the date
the Borrowing Notice with respect to such Borrowing is given by the Borrower,
there are Revolving L/C Borrowings outstanding, then the proceeds of such
Borrowing, first, shall be applied to the payment in full of any such
Revolving L/C Borrowings, and second, shall be made available to the
Borrower as provided above.

(c)           The Borrower may irrevocably request
that Pre-Funded L/C Deposits be made on the Effective Date by the applicable
Lenders by delivering a Borrowing Notice to the Pre-Funded L/C Facility Agent
on or prior to the Effective Date.

(d)           Except as otherwise provided herein,
a Eurodollar Rate Loan may be continued or converted only on the last day of an
Interest Period for such Eurodollar Rate Loan. 
During the existence of an Event of Default, no Loans may be requested
as, converted to or continued as Eurodollar Rate Loans without the consent of
the Required Lenders.

(e)           The Administrative Agent shall
promptly notify the Borrower and the Lenders of the interest rate applicable to
any Interest Period for Eurodollar Rate Loans upon determination of such
interest rate.  The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error.  At any time that Base
Rate Loans are

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outstanding, the Administrative Agent shall notify the
Borrower and the Lenders of any change in the Administrative Agent’s prime rate
used in determining the Base Rate promptly following the public announcement of
such change.

(f)            After giving effect to all
Borrowings, all conversions of Loans from one Type to the other, and all
continuations of Loans as the same Type, there shall not be more than ten
Interest Periods in effect.

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

2.3          Letters of Credit.

(a)           (i)            The
Revolving Letters of Credit.  Subject
to the terms and conditions set forth herein, (A) the Revolving L/C
Issuers agree, in reliance upon the agreements of the other Revolving Credit
Lenders set forth in this Section, (1) from time to time on any Business
Day during the period from the Effective Date until the Revolving Credit L/C
Final Expiration Date, to issue Revolving Letters of Credit for the account of
the Borrower or its Subsidiaries (other than Retail Holdco or any of its Subsidiaries
when the Sleeve Documents are in effect), and to amend, renew or extend the
expiry dates of Revolving Letters of Credit previously issued by it, in
accordance with Section 2.3(b), and (2) to honor drawings if
presented in accordance with the terms and conditions of such Revolving Letters
of Credit; and (B) the Revolving Credit Lenders severally agree to
participate in Revolving Letters of Credit issued for the account of the
Borrower or its Subsidiaries; provided, that no Revolving L/C Issuer
shall be obligated to make any Revolving L/C Credit Extension with respect to
any Revolving Letter of Credit, if as of the date of such Revolving L/C Credit
Extension, (1) the amounts outstanding under the Revolving Credit Facility
would exceed the aggregate Revolving Credit Commitments, (2) the Revolving L/C
Exposure would exceed the aggregate Revolving Credit Commitments; provided,
further, that no Revolving L/C Issuer shall be required to issue, amend
or renew any Revolving Letter of Credit if, after giving effect thereto, all
Revolving L/C Obligations held by such Revolving L/C Issuer with respect to all
Revolving Letters of Credit issued by such Revolving L/C Issuer (or its
Affiliates) would exceed the amount set forth on Schedule 2.1, opposite
the name of such Revolving L/C Issuer, under the column entitled “Revolving L/C
Issuer Amount for Revolving Letters of Credit”, or (3) the sum of the
aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving
Credit Lender plus such Lender’s Pro Rata Share of the Revolving L/C Exposure
would exceed such Lender’s Revolving Credit Commitment.  Each request by the Borrower for the issuance
or amendment of a Revolving Letter of Credit shall be deemed to be a
representation by the Borrower that the Revolving L/C Credit Extension so
requested complies with the conditions set forth in the preceding
sentence.  Within the foregoing limits,
and subject to the terms and conditions hereof, the Borrower’s ability to
obtain Revolving Letters of Credit shall be fully revolving, and accordingly
the Borrower may, during the foregoing period, obtain Revolving Letters of
Credit to replace Revolving Letters of Credit that have expired or that have
been drawn upon and paid.  The Existing
Letters of Credit identified on Schedule 1.1(a) as “Revolving Letters of
Credit” shall be deemed to have been issued pursuant hereto, and from and

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after the Effective Date shall be Revolving Letters of
Credit and shall be subject to and governed by the terms and conditions hereof.

(ii)           The
Pre-Funded Letters of Credit. 
Subject to the terms and conditions set forth herein, the Pre-Funded L/C
Issuer agrees, in reliance upon the agreements of the other Pre-Funded L/C
Lenders set forth in this Section, from time to time on any Business Day during
the period from the Effective Date until the Pre-Funded L/C Final Expiration
Date, for the account of the Borrower or its Subsidiaries (other than Retail
Holdco or any of its Subsidiaries when the Sleeve Documents are in effect),
(A) to issue one or more standby letters of credit for the account of the
Borrower or its Subsidiaries (other than Retail Holdco or any of its
Subsidiaries when the Sleeve Documents are in effect), and to amend, renew or
extend the expiry date of Pre-Funded Letters of Credit previously issued by it,
in accordance with Section 2.3(b); and (B) to honor drawings if
presented in accordance with the terms and conditions of such Pre-Funded
Letters of Credit.  The Pre-Funded L/C
Issuer shall not be permitted or required to issue or increase the stated
amount of any Pre-Funded Letter of Credit if, after giving effect thereto, the
aggregate amount of all Pre-Funded L/C Obligations would exceed the Pre-Funded
L/C Facility or if the aggregate amounts available to draw under all
outstanding Pre-Funded Letters of Credit would exceed the aggregate amount of
the Pre-Funded L/C Deposit Account.  Each
request by the Borrower for the issuance or amendment of a Pre-Funded Letter of
Credit shall be deemed to be a representation by the Borrower that the Pre-Funded
Letter of Credit so requested complies with the condition set forth in the
preceding sentence.  Within the foregoing
limits, and subject to the terms and conditions hereof, the Borrower’s ability
to obtain Pre-Funded Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain Pre-Funded
Letters of Credit to replace Pre-Funded Letters of Credit that have expired or
that have been drawn upon and paid.  The Existing
Letters of Credit identified on Schedule 1.1(a) as “Pre-Funded Letters
of Credit” shall be deemed to have been issued pursuant hereto, and from and
after the Effective Date shall be Pre-Funded Letters of Credit and shall be
subject to and governed by the terms and conditions hereof.

(iii)          No
L/C Issuer shall be under any obligation to issue any Letter of Credit if:

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

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(B)           the expiry date of
such requested Letter of Credit would occur after the earlier of (1) the first
anniversary of its date of issuance or (2) the 10 Business Day prior to
the applicable L/C Final Expiration Date;

(C)           the issuance of such
Letter of Credit would violate one or more generally applicable policies of
such L/C Issuer;

(D)          such Letter of Credit
is to be denominated in a currency other than Dollars, or such Letter of Credit
allows for payments more than three Business days after the expiry date of such
Letter of Credit; or

(E)           a default on any
Lender’s obligations to fund under Section 2.3(c) exists or any Lender
is at such time a Defaulting Lender hereunder, unless such L/C Issuer had
entered into satisfactory arrangements with the Borrower or such Lender to
eliminate such L/C Issuer’s risk with respect to such Lender.

(iv)          No
L/C Issuer shall be under any obligation to amend any Letter of Credit in any
way (whether or not such amendment increases the amount of the applicable
Letter of Credit) (A) at any time on or after the Revolving Credit Termination
Date or Pre-Funded L/C Commitment Termination Date, as the case may be, (B) if
the beneficiary of such Letter of Credit does not accept the proposed amendment
to such Letter of Credit on the basis that the stated amount of the Letter of
Credit has been reduced, the expiry date thereof has been accelerated or any
term relating to the procedure for drawing thereunder has changed or
(C) if any of the conditions set forth in clauses (iii)(A), (C),
(D) or (E) of this Section 2.3 exist.  In addition, and without limiting the terms
of the first sentence of this clause, no L/C Issuer shall be under any
obligation to amend any Letter of Credit to increase the amount thereof if such
L/C Issuer would have no obligation at such time to issue such Letter of Credit
in its amended form under the terms hereof by reason of the provisions of Section
2.3(a)(i), Section 2.3(a)(ii), Section 2.3(a)(iii), Section
4.2 or otherwise.

(v)           Each
Revolving L/C Issuer shall act on behalf of the Revolving Credit Lenders and
the Pre-Funded L/C Issuer shall act on behalf of the Pre-Funded L/C Lenders,
with respect to any Letters of Credit issued by it and the documents associated
therewith, and such L/C Issuer shall have all of the benefits and immunities (A) provided
to the Administrative Agent or the Pre-Funded L/C Facility Agent, as
applicable, in Article X with respect to any acts taken or omissions
suffered by an L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit as fully as if the term “Administrative Agent” or “Pre-Funded L/C
Facility Agent”, as the case may be, as used in Article X included such
L/C Issuer with respect to such acts or omissions, and (B) as additionally
provided herein with respect to such L/C Issuer.

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(b)           Procedures for Issuance and
Amendment of Letters of Credit; Auto-Renewal Letters of Credit.

(i)            Each
Letter of Credit shall be issued on a sight basis upon the request of the
Borrower delivered to the relevant L/C Issuer (with a copy to the
Administrative Agent and, if applicable, the Pre-Funded L/C Facility Agent) in
the form of an L/C Certificate, appropriately completed and signed by a
Responsible Officer of the Borrower. 
Such L/C Certificate must be received by such L/C Issuer, the
Administrative Agent, and, if applicable, the Pre-Funded L/C Facility Agent not
later than 3:00 p.m. (New York time) at least two Business Days (or such later
date and time as the Pre-Funded L/C Facility Agent, in the case of any
Pre-Funded Letter of Credit, or the Administrative Agent, in the case of
Revolving Letters of Credit, and such L/C Issuer may agree in a particular
instance in their sole discretion) prior to the proposed issuance date.  In the case of a request for an initial
issuance of a Letter of Credit, such L/C Certificate shall specify in form and
detail reasonably satisfactory to such L/C Issuer: (A) the proposed
issuance date of the requested Letter of Credit (which shall be a Business Day);
(B) the amount thereof which shall be in Dollars; (C) the expiry date
thereof; (D) the name and address of the beneficiary thereof; (E) the account
party or parties thereof; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and
(G) the transactions or obligations to be supported thereby.  In the case of a request for an amendment of
any outstanding Letter of Credit, such L/C Certificate shall specify in form
and detail reasonably satisfactory to the relevant L/C Issuer (1) the Letter of
Credit to be amended; (2) the proposed date of amendment thereof (which shall
be a Business Day); (3) the nature of the proposed amendment; and (4) such
other matters consistent with the items set forth in clauses (A)-(G)
in the preceding sentence as such L/C Issuer may reasonably require.

(ii)           Promptly
after receipt of any L/C Certificate, subject to the terms and conditions
hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit
for the account of the Borrower (or the applicable Subsidiary) or enter into
the applicable amendment, as the case may be, in each case in accordance with
such L/C Issuer’s usual and customary business practices.  Immediately upon the issuance or increase in
the stated amount of (A) each Revolving Letter of Credit, each Revolving Credit
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase, without recourse or warranty, from the relevant Revolving L/C
Issuer a risk participation in such Revolving Letter of Credit (the “Revolving
L/C Participation Obligation”) in an amount equal to the product of such
Lender’s Pro Rata Share of the Revolving Credit Facility times the amount of
such Revolving Letter of Credit and (B) each Pre-Funded Letter of Credit or
each Pre-Funded L/C Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase without recourse or warranty, to the extent
of its Pro Rata Share of the Pre-Funded L/C Facility, a participation interest
in such Pre-Funded Letter of Credit, including any contingent liability or
Pre-Funded L/C Reimbursement Obligation created as a result of any issuance
thereof or disbursement with respect thereto (each, a “Pre-Funded L/C
Participation Obligation”).  Each
Pre-Funded L/C Lender’s Pre-Funded L/C Participation Obligation shall be
pre-funded (as provided in clause (c) of Section 2.1), in favor
of the Pre-Funded L/C Issuer, by such Pre-Funded L/C Lender’s Pre-Funded L/C
Deposit.  Such Pre-Funded L/C Lender’s
Pre-Funded L/C Deposit shall

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be available for
withdrawal by the Pre-Funded L/C Facility Agent, in the amounts contemplated by
and otherwise in accordance with clause (c)(iii) of Section 2.1,
to reimburse the Pre-Funded L/C Issuer for Pre-Funded L/C Reimbursement
Obligations.  No L/C Issuer shall be
obligated to make any independent determination as to whether the requested
issuance or amendment is permitted in accordance with the terms hereof, and,
unless and until such L/C Issuer receives such confirmation from, in respect of
the Revolving Letters of Credit, the Administrative Agent or, in respect of
Pre-Funded Letters of Credit, the Pre-Funded L/C Facility Agent, such L/C
Issuer shall have no obligation to issue the requested Letter of Credit.

(iii)          If
the Borrower so requests in any applicable L/C Certificate, any L/C Issuer
shall issue an Auto-Renewal Letter of Credit. 
Unless otherwise directed by such L/C Issuer, the Borrower shall not be
required to make a specific request to such L/C Issuer for any such
renewal.  Once an Auto-Renewal Letter of
Credit has been issued, the Borrower and the Revolving Credit Lenders or the
Pre-Funded L/C Lenders, as applicable, shall be deemed to have authorized (but
may not require) such L/C Issuer to permit the renewal of such Letter of Credit
at any time to an expiry date not later than 10 Business Days prior to the
applicable L/C Final Expiration Date; provided, that (A) such L/C Issuer
may give a notice of non-renewal and thereby prevent the renewal of an
Auto-Renewal Letter of Credit if such L/C Issuer has determined at any time
prior to the Nonrenewal Notice Date of such Auto-Renewal Letter of Credit, in
accordance with the terms of the Letter of Credit, that it would have no
obligation at such time to extend such Letter of Credit in its renewed form
under the terms hereof (by reason of the provisions of Sections 2.3(a)(i),(ii),
(iii) or (iv) or otherwise), and (B) such L/C Issuer shall not
permit any such renewal if it has received notice (which may be by telephone,
if immediately confirmed in writing, or in writing) on or before the day that
is ten days before the Nonrenewal Notice Date from the Administrative Agent or
the Pre-Funded L/C Facility Agent, as applicable, or the Borrower that one or
more of the applicable conditions specified in Section 2.3(a)(i) is not
then satisfied.

(iv)          Promptly
after its issuance of any Letter of Credit or any amendment to a Letter of
Credit, the relevant L/C Issuer will deliver to the Borrower and the
Administrative Agent and, in the case of a Pre-Funded Letter of Credit, the
Pre-Funded L/C Facility Agent, a true and complete copy of such Letter of
Credit or amendment.

(c)           Drawings and Reimbursements;
Funding of Participations.

(i)            Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the relevant L/C Issuer shall promptly notify the
Borrower and the Administrative Agent and, in the case of a Pre-Funded Letter
of Credit, the Pre-Funded L/C Facility Agent, thereof (which may be telephonic,
promptly confirmed by telecopy).  Not
later than 12:00 p.m. (New York time) on an Honor Date, the Borrower may
reimburse such L/C Issuer through the Administrative Agent and, in the case of
a Pre-Funded Letter of Credit, the Pre-Funded L/C Facility Agent, in an amount
equal to the amount of such drawing; provided that the Borrower shall
not be entitled to reimburse the relevant Pre-Funded L/C Issuer for any
drawings which occur within the period commencing on the 91st day prior to the
Pre-Funded L/C Commitment

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Termination Date
until after the Pre-Funded L/C Deposit shall have been applied as set forth in clause
(c)(i)(B)(x) of this Section 2.3. 
If the Borrower does not so reimburse such L/C Issuer on the date
necessary to settle the obligations of the L/C Issuer under any draft drawn or
demand made under a Letter of Credit, the Administrative Agent or the
Pre-Funded L/C Facility Agent, as applicable, shall promptly notify each
Revolving Credit Lender or Pre-Funded L/C Lender, as applicable, of the Honor
Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”),
and the amount of such Lender’s Pro Rata Share thereof.  In such event,

(A)          in respect of
Revolving Letters of Credit, the Unreimbursed Amount shall automatically be
converted (unless the Borrower is in Default under Section 9.1(f) or (g))
to a Revolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor
Date in an amount equal to the Unreimbursed Amount, and

(B)           in respect of the
Pre-Funded Letters of Credit, (x) an amount equal to such Unreimbursed Amount
shall be withdrawn from the Pre-Funded Deposit Account and paid to the
Pre-Funded L/C Issuer in accordance with clause (c)(iii) of Section
2.1 to fund the Pre-Funded L/C Lenders’ Pre-Funded L/C Participation
Obligations in respect thereof, and (y) the Borrower shall be obligated to
reimburse the Pre-Funded L/C Issuers in an amount equal to such drawing on
demand, provided that so long as (1) no Default or Event of Default
has occurred and is continuing, (2) the Borrower is in pro forma
compliance with the financial covenants set forth in Section 7.11 before
and after giving effect to such conversion, and (3) the representations
and warranties set forth in the Loan Documents shall be true and correct in all
material respects, the Borrower may elect to convert an amount equal to the
Unreimbursed Amount into Term Loans to be disbursed on the Honor Date in an
amount equal to the Unreimbursed Amount,

and, in each case without regard to the minimum and multiples specified in Section
2.2(a) for the principal amount of Loans and without regard to whether the
conditions in Section 4.2 are then satisfied, but subject to the amount
of the unutilized portion of the Aggregate Commitments.  Any Pre-Funded L/C Term Loan made pursuant to
this paragraph or Section 2.5(d) shall, on and after the funding date
thereof, be deemed to be a Term Loan for all purposes hereunder and have the
same terms as the other Term Loans hereunder and shall be treated as a single
tranche of Term Loans.  Any notice given
by any L/C Issuer, the Administrative Agent or, if applicable, the Pre-Funded
L/C Facility Agent pursuant to this clause may be given by telephone if
immediately confirmed in writing; provided, that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.  Any additional Unreimbursed
Amounts in respect of any Pre-Funded Letter of Credit shall be made available
to the Pre-Funded L/C Issuer pursuant to the terms of clause (c)(iii)(A)
of Section 2.1.

(ii)           Each
Revolving Credit Lender (including the Revolving Credit Lender acting as
Revolving L/C Issuer) shall upon any notice pursuant to Section 2.3(c)(i)
make

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funds available to
the Administrative Agent for the account of the relevant Revolving L/C Issuer
at the Administrative Agent’s Office in an amount equal to its Pro Rata Share
of the Unreimbursed Amount not later than 1:00 p.m. (New York time) on the
Business Day specified in such notice by the Administrative Agent, whereupon,
subject to the provisions of Section 2.3(c)(iii), each Revolving Credit
Lender that so makes funds available shall be deemed to have made a Base Rate
Loan to the Borrower in such amount.  The
Administrative Agent shall remit the funds so received to such Revolving L/C
Issuer.

(iii)          (A)          Base Rate Loans made in respect of a
Revolving Letter of Credit shall be made as of the date of such settlement of
such Revolving Letter of Credit.  The
proceeds of such Base Rate Loan shall be paid by the Revolving Credit Lenders
to the Administrative Agent for payment to the relevant Revolving L/C Issuer of
such Revolving Letter of Credit (and the Administrative Agent shall promptly
pay such proceeds to such L/C Issuer) to reimburse such L/C Issuer of such
Revolving Letter of Credit for each Revolving Credit Lender’s Pro Rata Share of
the amount actually disbursed by such L/C Issuer of such Revolving Letter of
Credit pursuant to such draft or demand. 
With respect to any Unreimbursed Amount in respect of a Revolving Letter
of Credit that is not fully refinanced by a Revolving Credit Borrowing of Base
Rate Loans because the Borrower is in Default under Section 9.1(f) or (g)
or for any other reason, the Borrower shall be deemed to have incurred from the
relevant Revolving L/C Issuer an Revolving L/C Borrowing in the amount of the
Unreimbursed Amount that is not so refinanced, which Revolving L/C Borrowing
shall be due and payable on demand (together with interest) and shall bear
interest at the Default Rate.  In such
event, each Revolving Credit Lender’s payment to the Administrative Agent for
the account of such Revolving L/C Issuer pursuant to Section 2.3(c)(iii)
shall be deemed payment in respect of its participation in such Revolving L/C
Borrowing and shall constitute an Revolving L/C Advance from such Revolving
Credit Lender in satisfaction of its participation obligation under this
Section.

(B)           Pre-Funded L/C Term
Loans made upon conversion of the related Unreimbursed Amount pursuant to Section
2.3(c)(i)(B) shall permanently reduce each Pre-Funded L/C Lender’s
Pre-Funded L/C Commitment and Pre-Funded L/C Deposit, concurrently and without
further action or notice, by its Pro Rata Share of such withdrawn amount.  With respect to any Unreimbursed Amount in
respect of a Pre-Funded Letter of Credit that is not reimbursed by the Borrower
or not deemed to be converted into Pre-Funded L/C Term Loans pursuant to the
terms of this paragraph because the Borrower is unable to satisfy the
conditions set forth in clause (c)(i)(B) above, such Unreimbursed Amount
shall bear interest at the Default Rate, and such interest shall be due and
payable on demand.

(iv)          Until
each Revolving Credit Lender funds its Revolving Credit Loan or Revolving L/C
Advance pursuant to this clause (c) to reimburse any Revolving L/C
Issuer for any amount drawn under any Revolving Letter of Credit, interest in
respect of such Revolving Credit Lender’s Pro Rata Share of such amount shall
be solely for the account of such L/C Issuer. 
Until the Pre-Funded L/C Deposit is applied to fund the Pre-Funded L/C
Lender’s Pre-Funded L/C Participation Obligation under clause (c)(iii)
of

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Section 2.01,
interest in respect of such Pre-Funded L/C Lender’s Pro Rata share of such
amount shall be solely for the account of the relevant Pre-Funded L/C Issuer.

(v)           Each
Revolving Credit Lender’s obligation to make Revolving Credit Loans or
Revolving L/C Advances to reimburse any Revolving L/C Issuer for amounts drawn
under Revolving Letters of Credit, as contemplated by this clause (c),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense
or other right which such Revolving Credit Lender may have against such
Revolving L/C Issuer, the Borrower or any other Person for any reason
whatsoever, (B) the occurrence or continuance of a Default, or
(C) any other occurrence, event or condition, whether or not similar to
any of the foregoing; provided, that each Revolving Credit Lender’s
obligation to make Revolving Credit Loans (but not its obligation to make
Revolving L/C Advances) pursuant to this clause (c) is subject to
the Borrower not being in Default under Section 9.1(f) or (g).  No such making of a Revolving L/C Advance
shall relieve or otherwise impair the obligation of the Borrower to reimburse
such Revolving L/C Issuer for the amount of any payment made by such Revolving
L/C Issuer under any Revolving Letter of Credit, together with interest as
provided herein.

(vi)          If
any Revolving Credit Lender fails to make available to the Administrative Agent
for the account of any Revolving L/C Issuer any amount required to be paid by
such Revolving Credit Lender pursuant to the foregoing provisions of this clause (c)
by the time specified in this clause (c)(ii), such Revolving L/C
Issuer shall be entitled to recover from such Revolving Credit Lender (acting
through the Administrative Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on which such
payment is immediately available to such Revolving L/C Issuer at a rate per
annum equal to the Federal Funds Rate from time to time in effect for the first
three days and, thereafter, at a rate of interest equal to the Base Rate.  A certificate of the relevant Revolving L/C
Issuer submitted to any Revolving Credit Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (c)(vi)
shall be conclusive absent manifest error.

(vii)         If
at any time a distribution is to be made by the Administrative Agent to any
Revolving Credit Lender and such Revolving Credit Lender has failed to make
available to the Administrative Agent for the account of the relevant L/C
Issuer any amount required to be paid by such Revolving Credit Lender pursuant
to the foregoing provisions of this clause (c), the Administrative
Agent shall pay such distribution to such L/C Issuer, to the extent of such
unpaid amount together with any interest thereon accrued pursuant to clause (c)(vi).

(viii)        On
the Maturity Date or upon the occurrence of an Event of Default pursuant to
Section 9.1(f) of this Agreement, each Pre-Funded L/C Issuer may assign its
rights to reimbursement to the Pre-Funded L/C Lenders in accordance with their
respective pro rata shares and Section 11.6.

(ix)           Following
the reimbursement by the Borrower for any drawing under the Pre-Funded L/C
Facility, in no event shall the Deposit Bank be required to return to any

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Pre-Funded L/C
Lender any proceeds of such Pre-Funded L/C Lender’s Pre-Funded L/C Deposit
prior to the 90th day following such reimbursement unless the
respective Pre-Funded L/C Lender shall have sufficiently indemnified the
Deposit Bank (in the sole discretion of the Deposit Bank) for any losses the
Deposit Bank may incur as a result of preference claims brought by any creditor
of the Borrower with respect to the proceeds of such reimbursement.

(d)           Repayment of Participations.

(i)            At
any time after any Revolving L/C Issuer has made a payment under any Revolving
Letter of Credit and has received from any Revolving Credit Lender such
Revolving Credit Lender’s Revolving L/C Advance in respect of such payment in
accordance with Section 2.3(c), if the Administrative Agent receives for
the account of such Revolving L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from the Borrower or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such
Revolving Credit Lender its Pro Rata Share thereof (appropriately adjusted, in
the case of interest payments, to reflect the period of time during which such
Revolving Credit Lender’s Revolving L/C Advance was outstanding) in the same
funds as those received by the Administrative Agent.

(ii)           At
any time after any Pre-Funded L/C Issuer has made a payment under any
Pre-Funded Letter of Credit and has applied the Pre-Funded L/C Deposit of a
Pre-Funded L/C Lender in accordance with Section 2.3(c), if the
Pre-Funded L/C Facility Agent receives for the account of such Pre-Funded L/C
Issuer any payment in respect of the related Unreimbursed Amount or interest
thereon (whether directly from the Borrower or otherwise, including proceeds of
Cash Collateral applied thereto by the Pre-Funded L/C Facility Agent), the
Pre-Funded L/C Facility Agent will distribute to such Pre-Funded L/C Lender its
Pro Rata share thereof (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Pre-Funded L/C Lender’s
Pre-Funded L/C deposit was applied) in the same funds as those received by the
Pre-Funded L/C Facility Agent.

(iii)          If
any payment pursuant to Section 2.3(c)(i) received by the Administrative
Agent for the account of any Revolving L/C Issuer or by the Pre-Funded L/C Facility
Agent for the account of any the Pre-Funded L/C Issuer, is required to be
returned under any of the circumstances described in Section 11.5
(including pursuant to any settlement entered into by such L/C Issuer in its
discretion), each Revolving Credit Lender or Pre-Funded L/C Lender, as the case
may be, shall pay to the Administrative Agent or the Pre-Funded L/C Facility
Agent, as the case may be, for the account of such L/C Issuer its Pro Rata
Share thereof on demand of the such Agent, plus interest thereon from
the date of such demand to the date such amount is returned by such Lender, at
a rate per annum equal to the Federal Funds Rate from time to time in effect
for the first three days and, thereafter, at a rate of interest equal to the
Base Rate.  The obligations of the
Lenders under this shall survive the payment in full of the Credit Agreement
Obligations and the termination of this Agreement.

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(e)           Obligations Absolute.  The obligation of the Borrower under clause
(c) of Section 2.3 to reimburse, without duplication, the
Revolving L/C Issuers and the Revolving Credit Lenders and the Pre-Funded L/C
Issuer and Pre-Funded L/C Lenders (such obligation of the Borrower in respect
of a drawing under a Pre-Funded Letter of Credit being referred to herein as
the “Pre-Funded L/C Reimbursement Obligation”) with respect to each
disbursement (including interest thereon), each Revolving Credit Lender’s
obligation under Section 2.3(c) to pay to such Revolving L/C Issuer its
applicable Pro Rata Share of any drawing under a Letter of Credit, and the
right of the Pre-Funded L/C Issuer to be paid with amounts on deposit in the
Pre-Funded L/C Deposit Account pursuant to clause (c)(iii)(A) of Section
2.1, shall be absolute and unconditional (and shall be paid strictly in
accordance with the terms of this Agreement) under any and all circumstances,
including the following:

(i)            any
lack of validity or enforceability of such Letter of Credit, this Agreement, or
any other agreement or instrument relating thereto;

(ii)           the
existence of any claim, counterclaim, setoff, defense or other right that the
Borrower or any Subsidiary may have at any time against any beneficiary or any
transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), such L/C Issuer or any other
Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;

(iii)          any
draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; or any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under such Letter of Credit;

(iv)          any
payment by such L/C Issuer under such Letter of Credit against presentation of
a draft or certificate that does not strictly comply with the terms of such
Letter of Credit; or any payment made by such L/C Issuer under such Letter of
Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law;

(v)           any
exchange, release or nonperfection of any Collateral, or any release or
amendment or waiver of or consent to departure from the Guaranty or any other
guarantee, for all or any of the Credit Agreement Obligations of the Borrower
in respect of such Letter of Credit;

(vi)          the
occurrence of any Default or Event of Default; or

(vii)         any
other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, including any other circumstance that might otherwise constitute
a defense available to, or a discharge of, the Borrower, except as otherwise
provided in clause (f) of this Section.

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The Borrower shall promptly examine a copy of each
Letter of Credit and each amendment thereto that is delivered to it and, in the
event of any claim of noncompliance with the Borrower’s instructions or other
irregularity, the Borrower will immediately notify the relevant L/C
Issuer.  The Borrower shall be
conclusively deemed to have waived any such claim against such L/C Issuer and
its correspondents unless such notice is given as aforesaid.

(f)            Role of L/C Issuer.  Each Revolving Credit Lender, each Pre-Funded
L/C Lender and the Borrower agree that, in paying any drawing under a Letter of
Credit, no L/C Issuer shall have any responsibility to obtain any document
(other than any sight draft, certificates and documents expressly required by
the Letter of Credit) or to ascertain or inquire as to the validity or accuracy
of any such document or the authority of the Person executing or delivering any
such document.  None of any L/C Issuer,
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of any L/C Issuer shall be liable to any Lender for (i) any
action taken or omitted in connection herewith at the request or with the
approval of the Lenders or the Required Lenders, as applicable; (ii) any action
taken or omitted in the absence of gross negligence or willful misconduct as
determined by a court of competent jurisdiction; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or L/C Certificate.  The Borrower hereby assumes all risks of the
acts or omissions of any beneficiary or transferee with respect to its use of
any Letter of Credit; provided, that this assumption is not intended to,
and shall not, preclude the Borrower’s pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement.  None of any L/C Issuer, any
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of any L/C Issuer, shall be liable or responsible for any of the
matters described in clauses (i) through (vii) of Section
2.3(e); provided, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against an L/C Issuer,
and such L/C Issuer may be liable to the Borrower, to the extent, but only to
the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves were caused by such L/C
Issuer’s willful misconduct or gross negligence as determined by a court of
competent jurisdiction or such L/C Issuer’s willful failure to pay under any
Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit AND THE BORROWER FOR ITSELF AND ITS
SUBSIDIARIES, HEREBY WAIVES AND RELINQUISHES ANY AND ALL CLAIMS IT MAY HAVE FOR
INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES AND FOR DIRECT DAMAGES RESULTING
FROM NEGLIGENCE BY ANY L/C ISSUER WHICH DOES NOT RISE TO THE LEVEL OF GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. 
In furtherance and not in limitation of the foregoing, any L/C Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and such L/C Issuer shall not be responsible for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

(g)           Cash Collateral.  Upon the request of the Administrative Agent,
the Pre-Funded L/C Facility Agent or any L/C Issuer to the Borrower, if,
(i) as of the Revolving Credit L/C Final Expiration Date, any Revolving
Letter of Credit may for any reason remain outstanding and partially or wholly
undrawn or (ii) as of the Pre-Funded L/C Final Expiration Date, any
Pre-Funded

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Letter of Credit may for any reason remain outstanding
and partially or wholly undrawn, in each case, the Borrower shall immediately
Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an
amount equal to such Outstanding Amount determined as of the applicable L/C Final
Expiration Date).  As required pursuant
to Section 2.3(a)(iii) or 2.3(b)(iii), the Borrower shall
immediately Cash Collateralize the relevant Letter(s) of Credit in the amount
specified therein.  The Borrower hereby
grants to the Collateral Agent, for the benefit of (A) in respect of the
Revolving Letters of Credit, the Revolving L/C Issuers and the Revolving Credit
Lenders, and (B) in respect of the Pre-Funded Letters of Credit, the
Pre-Funded L/C Issuer and the Pre-Funded L/C Lenders, a security interest in
all such cash, deposit accounts and all balances therein and all proceeds of
the foregoing.  Cash Collateral shall be
maintained in a Letter of Credit Collateral Account.  If at any time the Collateral Agent
determines that any funds held as Cash Collateral are subject to any right or
claim of any Person other than the Collateral Agent or that the total amount of
such funds is less than the aggregate Outstanding Amount of all L/C Obligations
that are required to be Cash Collateralized at such time, the Borrower will,
forthwith upon demand by the Collateral Agent, pay to the Collateral Agent, as
additional funds to be deposited and held in such Letter of Credit Collateral
Account, an amount equal to the excess of (1) such aggregate Outstanding
Amount over (2) the total amount of funds, if any, then held as Cash
Collateral that the Collateral Agent determines to be free and clear of any
such right and claim.  Upon the drawing
of any Letter of Credit for which funds are on deposit as Cash Collateral, such
funds shall be applied, to the extent permitted under applicable law, to
reimburse the relevant L/C Issuers.  So
long as no Event of Default shall have occurred and be continuing, upon
payment, expiration or termination of a Letter of Credit that was Cash Collateralized,
applicable amounts on deposit in such Letter of Credit Collateral Accounts
shall be promptly returned to the Borrower.

(h)           Applicability of
ISP98 and UCP.  Unless otherwise
expressly agreed by the relevant L/C Issuer and the Borrower when a Letter of
Credit is issued (including any such agreement applicable to an Existing Letter
of Credit), (i) the rules of the “International Standby Practices 1998”
published by the Institute of International Banking Law & Practice (or such
later version thereof as may be in effect at the time of issuance) shall apply
to each standby Letter of Credit, or (ii) the rules of the Uniform Customs and
Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce (the “ICC”) at the time of issuance
(including the ICC decision published by the Commission on Banking Technique
and Practice on April 6, 1998 regarding the European single currency (euro))
shall apply to each Letter of Credit, and in each case to the extent not inconsistent
with the above referred rules, the laws of the State of New York shall apply to
each Letter of Credit.

(i)            Revolving Letter of
Credit Fees.  The Borrower shall pay
to the Administrative Agent for the account of each Revolving Credit Lender in
accordance with its Pro Rata Share a Revolving Letter of Credit fee (the “Revolving
Letter of Credit Fee”) for each Revolving Letter of Credit equal to (x) for
so long as such Revolving Letter of Credit shall be Cash Collateralized, 1.00%
per annum times the daily amount available to be drawn under such
Revolving Letter of Credit and (y) otherwise, the Applicable Margin for
Eurodollar Rate Loans times the daily amount available to be drawn under
such Revolving Letter of Credit.  For
purposes of computing the daily amount available to be drawn under any
Revolving Letter of Credit, the amount of such Revolving Letter of Credit shall
be determined in accordance with Section 1.6.  Revolving Letter of Credit Fees shall be
(i) computed on a quarterly basis in arrears and (ii) due and payable on

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each Quarterly Payment Date, commencing with the first
such date to occur after the issuance of such Revolving Letter of Credit, on
the Revolving L/C Final Expiration Date with respect to such Revolving Letter
of Credit and thereafter on demand.  If
there is any change in the Applicable Margin for Eurodollar Rate Loans during
any quarter, for purposes of clause (y) above the remaining daily
amount available to be drawn under each Revolving Letter of Credit shall be
computed and multiplied by the Applicable Margin for Eurodollar Rate Loans
separately for each period during such quarter that such Applicable Margin was
in effect.  Notwithstanding anything to
the contrary contained herein, upon the request of the Required Revolving Credit
Lenders, while any Event of Default exists under Section 9.1(a), all
Revolving Letter of Credit Fees shall accrue at the Default Rate.

(j)            Fronting Fee and
Documentary and Processing Charges Payable to L/C Issuer.  The Borrower shall pay directly to each L/C
Issuer for its own account a fronting fee on the outstanding face amount of
each Letter of Credit issued by such L/C Issuer, at a rate per annum equal to
(i)(A) in respect of the Revolving Letters of Credit, to the extent the
aggregate stated amount of all outstanding Revolving Letters of Credit issued
by such Revolving L/C Issuer is less than or equal to Applicable Fronting
Commitment (including after giving effect to any increase in the face amount of
Letters of Credit issued by any L/C Issuer occurring on the Effective Date as a
result of any issuers under the Existing Agreement ceasing to be an L/C Issuer
under this Agreement), 0.15% and (B) to the extent the aggregate stated amount
of all outstanding Letters of Credit issued by such Revolving L/C Issuer is in
excess of such Applicable Fronting Commitment, 0.25% (but only on such excess)
and (ii) in respect of the Pre-Funded Letters of Credit, 0.10%multiplied by the
aggregate stated amount of all outstanding Pre-Funded Letters of Credit,
computed on the daily amount available to be drawn under such Letters of Credit
on a quarterly basis in arrears, and due and payable on each Quarterly Payment
Date, commencing with the first such date to occur after the issuance of such
Letter of Credit, on the L/C Final Expiration Date with respect to such Letter
of Credit and thereafter on demand.  For
purposes of computing the daily amount available to be drawn under any Letter
of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.6. 
In addition, the Borrower shall pay directly to each L/C Issuer for its
own account the customary issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of such L/C Issuer
relating to letters of credit as from time to time in effect.  Such customary fees and standard costs and
charges are due and payable on demand and are nonrefundable.

(k)           Conflict with Issuer
Documents.  In the event of any
conflict between the terms hereof and the terms of any L/C Certificate, the
terms hereof shall control.

(l)            Letters of Credit
Issued for Subsidiaries. 
Notwithstanding that a Letter of Credit issued or outstanding hereunder
is in support of any obligations of, or is for the account of, a Subsidiary,
the Borrower shall be obligated to reimburse each L/C Issuer hereunder for any
and all drawings under such Letter of Credit. 
The Borrower hereby acknowledges that the issuance of Letters of Credit
for the account of Subsidiaries inures to the benefit of the Borrower, and that
the Borrower’s business derives substantial benefits from the businesses of
such Subsidiaries.

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2.4          Optional and Mandatory
Prepayments.

(a)           Optional.  The Borrower may, upon notice to the
Administrative Agent at any time or from time to time voluntarily prepay Loans
in whole or in part without premium or penalty; provided, that
(1) such notice must be received by the Administrative Agent not later
than 11:00 a.m. (A) three Business Days prior to any date of prepayment of
Eurodollar Rate Loans, and (B) on the date of prepayment of Base Rate Loans;
(2) any prepayment of Eurodollar Rate Loans and Base Rate Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof, in each case, if less, the entire principal amount thereof then
outstanding; and (3) any prepayments of Term Loans shall be applied ratably to
the principal repayment installments thereof on a pro  rata
basis.  Each such notice shall specify
the date and amount of such prepayment or refund and the Type(s) of Loans to be
prepaid.  The Administrative Agent will
promptly notify each applicable Lender of its receipt of each such notice, and
of the amount of such Lender’s Pro Rata Share of such prepayment or
refund.  If such notice is given by the
Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein.  Any prepayment of a Eurodollar
Rate Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section 3.5.  Each such prepayment shall be applied to the
Loans in accordance with their respective Pro Rata Shares.

(b)           Mandatory.  (i)  If the Borrower or any of its Restricted
Subsidiaries consummates any Asset Sale which in the aggregate results in the
realization by the Borrower or such Restricted Subsidiary of Net Asset Sale
Proceeds (determined as of the date of such Asset Sale, whether or not such Net
Asset Sale Proceeds are then received by the Borrower or such Restricted
Subsidiary), the Borrower shall apply all Net Asset Sale Proceeds received
pursuant to Section 7.5 and all other Net Asset Sale Proceeds other than
Excluded Proceeds, in each case, to the extent not previously applied in such
Fiscal Year to make mandatory prepayments of Term Loans under this clause (b)(i)
(it being understood that Net Asset Sale Proceeds subject to this clause (b)(i)
applied in such Fiscal Year to make prepayments of Term Loans, prior to receipt
of such Net Asset Sale Proceeds other than Excluded Proceeds shall be deemed to
have been made as a mandatory prepayment under this clause (b)(i)),
within three Business Days after the date of receipt thereof by the Borrower or
such Restricted Subsidiary subject to the provisions of Section 2.4(b)(ix),
as follows:

(A)          to the
extent such Net Asset Sale Proceeds are not OPH Asset Sale Proceeds, Retail
Sale Proceeds or Wholesale Sale Proceeds, (X) if none of such Net Asset Sale
Proceeds is required by the terms of any Parity Secured Debt to be offered to
any holder of any Parity Secured Debt or otherwise used to repurchase or prepay
any Parity Secured Debt, to prepay Loans and, subject to Section 9.3, if
an Event of Default has then occurred and is continuing, to refund the Pre-Funded
L/C Deposits and reduce the Pre-Funded L/C Commitments (in each case,
determined as provided in Section 2.4(b)(vii) and (viii)
below), in an amount equal to 100% of such Net Asset Sale Proceeds received and
(Y) if any of such Net Asset Sale Proceeds is required by the terms of any
Parity Secured Debt to be offered to any holder of any Parity Secured Debt or
otherwise used to repurchase or prepay any Parity Secured Debt, to prepay Loans
and, subject to Section 9.3, if an Event of Default has then occurred
and is continuing, to refund the Pre-Funded

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L/C Deposits and
reduce the Pre-Funded L/C Commitments (in each case, determined as provided in Section 2.4(b)(vii)
and (viii) below), in an amount equal to 100% of such Net Asset Sale
Proceeds received multiplied by the Pro Rata Percentage;

(B)           to the extent such Net
Asset Sale Proceeds are OPH Asset Sale Proceeds, (X) if none of such Net Asset
Sale Proceeds is required by the terms of any Parity Secured Debt or the OPH
Note Indenture to be offered to any holder of any Parity Secured Debt or any
holder of an OPH Note or otherwise used to repurchase or prepay any Parity
Secured Debt or OPH Notes, to prepay Loans and, subject to Section 9.3,
if an Event of Default has occurred and is continuing, to refund the Pre-Funded
L/C Deposits and reduce the Pre-Funded L/C Commitments (in each case,
determined as provided in Section 2.4(b)(vii) and (viii)
below), in an amount equal to 100% of such Net Asset Sale Proceeds received, to
the extent the OPH Note Indenture does not prohibit the distribution of such
Net Asset Sale Proceeds to the Borrower and (Y) to the extent such OPH Asset
Sale Proceeds (I) are not otherwise required, in accordance with the OPH
Note Indenture, to be offered to prepay any OPH Notes, and (II) are required by
the terms of any Parity Secured Debt to be offered to any holder of Parity
Secured Debt or otherwise used to repurchase or prepay any Parity Secured Debt,
to pay a dividend in the amount of such proceeds to the Borrower and, in turn,
to prepay Loans and, subject to Section 9.3, if an Event of Default has
occurred and is continuing, to refund the Pre-Funded L/C Deposits and reduce
the Pre-Funded L/C Commitments (in each case, determined as provided in Section 2.4(b)(vii)
and (viii) below), in an amount equal to 100% of such Net Asset Sale
Proceeds received multiplied by the Pro Rata Percentage, but only (so long as
and to the extent such Net Asset Sale Proceeds are not accepted by any such
holder of Parity Secured Debt) to the extent the OPH Note Indenture does not
prohibit the distribution of such Net Asset Sale Proceeds to the Borrower; and

(C)           to the
extent such Net Asset Sale Proceeds are Retail Sale Proceeds or Wholesale Sale
Proceeds, (X) if none of such Net Asset Sale Proceeds is required by the terms
of any Parity Secured Debt to be offered to any holder of any Parity Secured
Debt, to prepay Loans and, subject to Section
9.3, if an Event of Default has occurred and is continuing, to refund the
Pre-Funded L/C Deposits and reduce the Pre-Funded L/C Commitments (in each
case, determined as provided in Section 2.4(b)(vii) and (viii)
below), in an amount equal to 100% of such Net Asset Sale Proceeds and (Y) if
such Net Asset Sale Proceeds are required by the terms of any Parity Secured
Debt to be offered to any holder of any Parity Secured Debt, to prepay Loans
and, subject to Section 9.3, if an Event of Default has occurred and is
continuing, to refund the Pre-Funded L/C Deposits and reduce the Pre-Funded L/C
Commitments (in each case, determined as provided in Section 2.4(b)(vii)
and (viii) below), in an amount equal to 100% of such Net Asset Sale
Proceeds multiplied by the Pro Rata Percentage.

In addition, in the event any such Net Asset Sale Proceeds described in
the foregoing clauses (b)(i)(A), (B) and (C) are required by the
terms of (x) any Parity Secured Debt to be and are offered to any holder
of Parity Secured Debt but are not accepted by such holder, or (y) the OPH
Note Agreement to be and are offered to any holder of an OPH Note but are
accepted neither by such holder nor subsequently by any holder of any Parity
Secured Debt to whom they are required by the terms of any Parity

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Secured Debt Agreement to be and are offered, and are
permitted in accordance with the OPH Note Indenture to be distributed to the
Borrower (such Net Asset Sale Proceeds being referred to herein as “Available
Proceeds”), then promptly, but in any event no later than three (3)
Business Days after the last day for, in each case, such holder of any Parity
Secured Debt to accept the repurchase or prepayment offer, the Borrower shall
prepay Loans and, subject to Section 9.3, if an Event of Default has
occurred and is continuing, to refund the Pre-Funded L/C Deposits and reduce
the Pre-Funded L/C Commitments (in each case, determined as provided in Section 2.4(b)(vii)
and (viii) below), in an amount equal to 100% of such Available
Proceeds.

(ii)           Upon the incurrence or issuance by the
Borrower or any of its Subsidiaries of any secured Senior Debt (other than
Excepted Debt) and any Permitted Refinancing Indebtedness of any of the
foregoing, the Borrower shall prepay an aggregate principal amount of Loans
and, subject to Section 9.3, if an Event of Default has occurred and is
continuing, to refund the Pre-Funded L/C Deposits and reduce the Pre-Funded L/C
Commitments (in each case, determined as provided in Section 2.4(b)(vii)
and (viii) below), equal to 100% of all Net Financing Proceeds received
therefrom within three Business Days after the date of receipt thereof by the Borrower
or such Subsidiary subject to the provisions of Section 2.4(b)(ix).

(iii)          Upon the incurrence or issuance by the
Borrower or any of its Subsidiaries of any unsecured Senior Debt (other than
Excepted Debt), the Borrower shall prepay an aggregate principal amount of
Loans and, if an Event of Default has occurred and is continuing, to refund the
Pre-Funded L/C Deposits and reduce the Pre-Funded L/C Commitments (in each
case, determined as provided in Section 2.4(b)(vii) and (viii)
below), in an aggregate amount equal to (x) if the Consolidated Leverage Ratio
determined on a pro forma basis after giving effect to such incurrence or
issuance as of the last day of the Fiscal Quarter most recently ended equals or
exceeds to 4.0:1, 75% of all Net Financing Proceeds received therefrom and (y)
if the Consolidated Leverage Ratio so determined is less than 4.0:1, 50% of all
Net Financing Proceeds received therefrom, within three Business Days after the
date of receipt thereof by the Borrower or such Subsidiary subject to the
provisions of Section 2.4(b)(x); provided, that so long as no
Event of Default shall have occurred and be continuing,

(A)          if the
Borrower intends to reinvest any Net Financing Proceeds in accordance with this
proviso, it shall deliver written notice of such intention to the
Administrative Agent on or prior to the third Business Day immediately
following the date on which Borrower receives such Net Financing Proceeds,

(B)           if the
Borrower shall have delivered such notice, it may reinvest all or any portion
of such Net Financing Proceeds in an aggregate amount, together with the
aggregate amount of Net Financing Proceeds reinvested pursuant to Section
2.4(b)(iv), not to exceed $500,000,000 in Permitted ERCOT Assets so long
as, pending such reinvestment, the Net Financing Proceeds are applied to repay
Revolving Credit Loans or maintained as Collateral for the Credit Agreement
Obligations, and

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(C)           on the
date the Borrower consummates such purchase of Permitted ERCOT Assets, it shall
deliver a certificate of a Responsible Officer to the Administrative Agent
certifying that all, or, subject to the immediately succeeding proviso, part
of, such Net Financing Proceeds have been reinvested in accordance with the
proviso of this clause (b)(iii) and, as a result, no mandatory
prepayments are required under this clause (b)(iii);

provided, further, that any
Net Financing Proceeds not so reinvested shall be immediately applied to the
prepayment of the Loans as set forth in this Section.

(iv)          Upon the incurrence or issuance by the
Borrower of any Junior Securities (other than Excepted Debt and other than in
connection with the exercise of employee options or the RRI Warrants), the
Borrower shall prepay an aggregate principal amount of Loans and, subject to Section
9.3, if such repayment is required pursuant to an Event of Default, to
refund the Pre-Funded L/C Deposits and reduce the Pre-Funded L/C Commitments
(in each case, determined as provided in Section 2.4(b)(vii) and (viii)
below), in an aggregate amount equal to 50% of all Net Financing Proceeds
received therefrom, within three Business Days after the date of receipt
thereof by the Borrower subject to the provisions of Section 2.4(b)(x); provided,
that so long as no Event of Default shall have occurred and be continuing,

(A)          if the
Borrower intends to reinvest any Net Financing Proceeds in accordance with this
proviso, it shall deliver written notice of such intention to the
Administrative Agent on or prior to the Business Day immediately following the
date on which Borrower receives such Net Financing Proceeds,

(B)           if the
Borrower shall have delivered such notice, it may reinvest all or any portion
of such Net Financing Proceeds in an aggregate amount, together with the
aggregate amount of Net Financing Proceeds reinvested pursuant to Section 2.4(b)(iii),
not to exceed $500,000,000 in Permitted ERCOT Assets so long as, pending such
reinvestment, the Net Financing Proceeds are applied to repay Revolving Credit
Loans or maintained as Collateral for the Credit Agreement Obligations, and

(C)           on the
date the Borrower consummates such purchase of Permitted ERCOT Assets, it shall
deliver a certificate of a Responsible Officer to the Administrative Agent
certifying that all, or, subject to the immediately succeeding proviso, part
of, such Net Financing Proceeds have been reinvested in accordance with the
proviso of this clause (b)(iv) and, as a result, no mandatory
prepayments are required under this clause (b)(iv);

provided, further, that any
Net Financing Proceeds not so reinvested shall be immediately applied to the
prepayment of the Loans as set forth in this Section.

(v)           Upon any Extraordinary Receipt received by
or paid to or for the account of the Borrower, any of the Loan Parties or OPH
or any of its Subsidiaries in respect of its property or assets, and not
otherwise included in clause (i), (ii), (iii) or (iv)
of this

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clause (b),
the Borrower shall prepay an aggregate principal amount of Loans and, subject
to Section 9.3, if an Event of Default has occurred and is continuing,
to refund the Pre-Funded L/C Deposits and reduce the Pre-Funded L/C Commitments
(in each case, determined as provided in Section 2.4(b)(vii) and (viii)
below), in an aggregate amount equal to 100% of all Net Casualty Proceeds
received therefrom within three Business Days after the date of receipt thereof
by the Borrower or such Subsidiary subject to the provisions of Section
2.4(b)(x); provided, that with respect to proceeds of insurance and
Condemnation awards (or payments in lieu thereof),

(A)          if the
Borrower intends to reinvest the Net Casualty Proceeds thereof in accordance
with this proviso, it shall deliver written notice of such intention to the
Administrative Agent on or prior to the Business Day immediately following the
date on which Borrower receives such Net Casualty Proceeds,

(B)           if the
Borrower shall have delivered such notice, the Net Casualty Proceeds thereof
may be reinvested, so long as such reinvestment is to restore, repair or
replace the assets or property or purchase other assets with substantially the
same utility and in the same line of business in respect of which such Net
Casualty Proceeds were received, and so long as such reinvestment is
consummated or irrevocably committed to be consummated within 365 days after
the receipt of such Net Casualty Proceeds so long as, pending such
reinvestment, the Net Casualty Proceeds are applied to repay Revolving Credit
Loans or maintained as Collateral for the Credit Agreement Obligations, and

(C)           on the
date the Borrower consummates or commits to consummate such restoration, repair
or replacement or purchase, it shall deliver a certificate of a Responsible
Officer to the Administrative Agent certifying that all, or, subject to the
immediately succeeding proviso, part of, such Net Casualty Proceeds have been
reinvested in accordance with the first proviso of this clause (b)(v)
and, as a result, no mandatory prepayments are required under this clause (b)(v);

provided, further, that any
Net Casualty Proceeds not so reinvested (or such lesser percentage which
represents the remaining portion of such proceeds not expended or committed
pursuant to the foregoing and less any amounts required to pay for necessary
remediation expenses with respect to a condition affecting the applicable
property, to pay reasonable expenses incurred in connection with the closure of
the applicable property and to pay any costs reasonably incurred in connection
with such casualty event) shall be immediately applied to the prepayment of the
Loans, and, if applicable, to the Pre-Funded L/C Deposits, in accordance with
the foregoing or, to the extent the Collateral Trustee is loss payee under any
insurance policy (if applicable), the Borrower shall irrevocably direct the
Collateral Trustee to transfer to the Administrative Agent to be applied (in
each case, promptly, but in no event later than three (3) Business Days
following receipt of such proceeds) as a prepayment of Loans, and, if
applicable, the Pre-Funded L/C Deposits, in accordance with the foregoing.

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Notwithstanding the foregoing, that if an Event of
Default shall have occurred and be continuing, all Net Casualty Proceeds which
would otherwise be payable to the Borrower pursuant to this clause (b)(v)
shall be paid to the Collateral Trustee and applied pursuant to the Collateral
Trust Agreement; provided, that with respect to tangible property
subject to any Permitted Encumbrance, no such prepayment shall be required to
the extent that this clause (b)(v) would require an application of Net
Casualty Proceeds that would violate or breach any of the provisions of the
instruments or documents under which such Permitted Encumbrance arises or which
governs the application of proceeds.

(vi)          If, as a result of the Borrower reducing the
Aggregate Revolving Credit Commitments, the Total Revolving Outstandings at any
time exceed the Aggregate Revolving Credit Commitments then in effect, the
Borrower shall immediately prepay Revolving Credit Loans and/or Cash
Collateralize the Revolving L/C Obligations in an aggregate amount equal to
such excess; provided, that the Borrower shall not be required to Cash
Collateralize the Revolving L/C Obligations pursuant to this clause (b)(vi)
unless after the prepayment in full of the Revolving Credit Loans the Total
Revolving Credit Outstandings exceed the Aggregate Revolving Credit Commitments
then in effect.

(vii)         Each prepayment of Loans and reduction of
Pre-Funded L/C Deposits pursuant to clauses (i), (ii), (iii),
(iv) or (v) of this clause (b) shall be applied, first,
ratably to the Term Loans to the principal repayment installments thereof on a pro
rata basis, and, subject to Section 9.3, if an Event of Default
has occurred and is continuing, to refund the Pre-Funded L/C Deposits and
reduce the Pre-Funded L/C Commitments; second, to reduce the Revolving
Credit Loans in the manner set forth in clause (b)(viii), and, thereafter,
in respect of prepayments or refunds pursuant to clause (i) only, at any
time the aggregate amount of Net Asset Sale Proceeds generated after the
Effective Date (other than Excluded Proceeds) exceeds $750,000,000, to refund
the Pre-Funded L/C Deposits and reduce the Pre-Funded L/C Commitments or to the
Cash Collateralization of the Pre-Funded L/C Obligations.

(viii)        Prepayments of the Revolving Credit Loans and
reduction of Pre-Funded L/C Deposits pursuant to clause (i), (ii),
(iii), (iv) or (v) of this clause (b) shall be
applied, first, to prepay Revolving L/C Borrowings outstanding at such
time until all such Revolving L/C Borrowings are paid in full, second,
to prepay Revolving Credit Loans outstanding at such time until all such
Revolving Credit Loans are paid in full and third, to Cash Collateralize
the Revolving L/C Obligations, and fourth, in respect of prepayments
pursuant to clause (i) only, at any time the aggregate amount of Net
Asset Sale Proceeds generated after the Effective Date (other than Excluded
Proceeds) exceeds $750,000,000, to refund the Pre-Funded L/C Deposits and
reduce the Pre-Funded L/C Commitments or to the Cash Collateralization of the
Pre-Funded L/C Obligations; and, in the case of prepayments of the Revolving
Credit Loans required pursuant to clause (i), (ii), (iii),
(iv) or (v) of this clause (b), the amount remaining,
if any, after the prepayment in full of all Loans and Revolving L/C Borrowings
outstanding at such time and the Revolving L/C Obligations have been Cash
Collateralized (the sum of such prepayment amounts, cash collateralization
amounts and remaining amount being, collectively, the “Reduction Amount”)
may be retained by the Borrower for use in the ordinary course of

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its business.  Upon the drawing of any Revolving Letter of
Credit or Pre-Funded Letter of Credit, which has been Cash Collateralized, such
funds shall be applied (without any further action by or notice to or from the
Borrower or any other Person) to reimburse the applicable L/C Issuer, the
Revolving Credit Lenders or the Pre-Funded L/C Lenders, as applicable.

(ix)           Notwithstanding the provisions of Sections
2.4(b)(i), (ii), (iii), (iv) and (v), if any
mandatory prepayments under any such clause of this clause (b)
would result in the Borrower incurring any obligation (as determined in the
reasonable judgment of the Borrower) under Section 3.5 as a result of
any such mandatory prepayment of Eurodollar Loans or refund of Pre-Funded L/C
Deposits prior to the last day of an Interest Period, so long as no Default has
occurred and is continuing, the Borrower may defer the making of such mandatory
prepayment until the earlier of (A) the last day of such Interest Period and (B)
the date thirty days after the date on which such mandatory prepayment would
otherwise have been required to be made; provided that, pending such
mandatory prepayment, the related amounts shall be applied to repay Revolving
Credit Loans or maintained as Collateral for the Credit Agreement Obligations.

(x)            Notwithstanding anything to the contrary
contained herein, all of the foregoing provisions of Section 2.4(b)
shall be suspended following the Release Date; provided, that (i) no
Default or Event of Default shall have occurred and been existing as of the
Release Date and (ii) if, after the Investment Grade Rating Date, the ratings
assigned to the Secured Notes by both Moody’s and S&P should decline to
below an Investment Grade Rating, all of the foregoing provisions of Section
2.4(b) shall be reinstituted as of and from the date of such rating
decline.

(xi)           Any refunding of the Pre-Funded L/C Facility
pursuant to this Section 2.4 shall be applied as follows: first, to the
extent that the aggregate amount of the Pre-Funded L/C Deposit exceeds the
Pre-Funded L/C Obligations at such time, to reduce the Pre-Funded L/C Facility
in accordance with Section 2.5(d) but on a mandatory basis and, second,
to Cash Collateralize the Pre-Funded L/C Obligations.

2.5          Termination or Reduction
of Commitments; Reduction of Pre-Funded L/C Facility.

(a)           Optional.  The Borrower may, upon notice to the
Administrative Agent, terminate the unused portion of the Revolving Credit
Commitments, or from time to time permanently reduce the unused portion of the
Revolving Credit Commitments; provided, that (A) any such notice
shall be received by the Administrative Agent not later than 11:00 a.m. five
Business Days prior to the date of termination or reduction, (B) any such
partial reduction shall be in an aggregate amount of $5,000,000 or any whole
multiple of $1,000,000 in excess thereof, (C) the Borrower shall not terminate
or reduce the unused portions of the Revolving Credit Commitments if, after
giving effect thereto and to any concurrent prepayments hereunder, the
Outstanding Amount of Revolving Credit Loans and Revolving L/C Obligations
would exceed the Aggregate Revolving Credit Commitments.

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(b)           Mandatory.  The Term Commitment shall be automatically
and permanently reduced to zero on the Effective Date (after giving effect to
the Borrowing of Term Loans).  The
Pre-Funded L/C Commitment shall be automatically and permanently reduced to
zero on the Effective Date (after giving effect to the making of the Pre-Funded
L/C Deposits).

(c)           Application of
Commitment Reductions; Payment of Fees. 
The Administrative Agent will promptly notify the Revolving Credit
Lenders of any termination or reduction of unused portions of the Revolving
Credit Commitment under this Section. 
Upon any reduction of the unused Revolving Credit Commitment, the
Commitment of each Revolving Credit Lender shall be reduced by such Lender’s
Pro Rata Share of the amount by which the Revolving Credit Commitment is
reduced.  All fees accrued until the
effective date of any termination of the Aggregate Commitments shall be paid on
the effective date of such termination.

(d)           Reduction of
Pre-Funded L/C Facility.  The
Borrower may upon notice to the Administrative Agent and the Pre-Funded L/C
Facility Agent, from time to time permanently reduce the Pre-Funded L/C
Deposit; provided that (A) any such notice shall be received by the
Administrative Agent not later than 11:00 a.m. five Business Days prior to the
date of termination or reduction; (B) any such partial reduction shall be in an
aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess
thereof; (C) such reduction shall not result in the Pre-Funded L/C
Deposits (exclusive of earnings thereon) being less than Pre-Funded L/C
Obligations at such time; and (D)  such reduction shall not occur prior to
the 90th day after the Deposit Bank has received
reimbursement for any drawing under the Pre-Funded L/C Facility.  Upon any such reduction of the Pre-Funded L/C
Deposits, the portion of the Pre-Funded L/C Deposits being so reduced (together
with any applicable Pre-Funded L/C Participation Fees) shall be refunded to
each Pre-Funded L/C Lender in an amount equal to its Pro Rata Share in
accordance with Section 2.1(c)(iii)(B); provided that the
Borrower may elect to incur Pre-Funded L/C Term Loans with the proceeds of such
reduction, so long as (1) no Default or Event of Default has occurred and
is continuing, (2) the Borrower is in pro forma compliance with the
financial covenants set forth in Section 7.11 before and after giving
effect to such conversion and (3) the representations and warranties set
forth in the Loan Documents shall be true and correct in all material respects.

2.6          Repayment of Loans.

(a)           Term Loans.  The Borrower shall repay to the
Administrative Agent for the ratable account of the Term Lenders on each
Quarterly Payment Date the aggregate principal amount of Term Loans set forth
opposite such Quarterly Payment Date (which amounts shall be reduced as a
result of the application of prepayments in accordance with the order of
priority set forth in Section 2.4 or increased as a result of the
incurrence of Pre-Funded L/C Term Loans pursuant to Section 2.3 or Section
2.5(d)); provided, that the final principal repayment installment of
the Term Loans shall be repaid on the Term Loan Maturity Date in an amount
equal to the aggregate principal amount of all Term Loans outstanding on such
date:

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  Quarterly Payment Date

  	
   

  	
  Amount of Term Loan Repayment per

  Payment Date

  
	
  April 1, 2007 through (and
  including) September 30, 2010

  	
   

  	
  $1,000,000 plus
  0.25% of the original principal amount of any outstanding Pre-Funded L/C Term
  Loans

  
	
  December 1, 2010

  	
   

  	
  The remaining
  amount of Term Loans

  

 

(b)           Revolving Credit
Loans.  The Borrower shall repay to
the Administrative Agent for the ratable account of the Revolving Credit
Lenders on the Revolving Credit Termination Date the aggregate principal amount
of all Revolving Credit Loans outstanding on such date.

(c)           Pre-Funded L/C
Deposits.  Subject to clause (d)
of Section 2.5, the Pre-Funded L/C Facility Agent shall refund for the
ratable account of each Pre-Funded L/C Lender on the Pre-Funded L/C Commitment
Termination Date the aggregate principal amount of all Pre-Funded L/C Deposits
outstanding on such date.

2.7          Interest.

(a)           Subject to the
provisions of clause (b) below, (i) each Eurodollar Rate Loan shall
bear interest on the outstanding principal amount thereof for each Interest
Period at a rate per annum equal to the Eurodollar Rate for such Interest
Period plus the Applicable Margin; and (ii) each Base Rate Loan
shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus
the Applicable Margin.

(b)           (i)             During
all times that an Event of Default under Section 9.1(a) shall have
occurred and be continuing, the Borrower shall pay interest on the principal
amount of all outstanding Loans and Unreimbursed Amounts and all overdue
interest, fees and other amounts, at a fluctuating interest rate per annum at
all times equal to the Default Rate and the Pre-Funded L/C Participation Fee
shall be increased by 2.00%, in each case to the fullest extent permitted by
applicable Laws.

(ii)           Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.

(c)           Interest on each Loan
shall be due and payable in arrears on each Interest Payment Date applicable
thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable
in accordance with the terms hereof before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law.

2.8          Fees.  In addition to certain fees described in clauses
(i) and (j) of Section 2.3:

(a)           Commitment Fee.  The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Pro Rata Share, a
commitment fee equal to the Applicable Margin times the actual daily
amount by which the Aggregate Commitments for

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Revolving Credit Loans exceed the sum of (i) the
Outstanding Amount of Revolving Credit Loans and (ii) the Outstanding Amount of
Revolving L/C Obligations; provided, that any commitment fee accrued
with respect to any of the Commitments of a Defaulting Lender during the period
prior to the time such Lender became a Defaulting Lender and unpaid at such
time shall not be payable by the Borrower so long as such Lender shall be a
Defaulting Lender except to the extent that such commitment fee shall otherwise
have been due and payable by the Borrower prior to such time; provided, further,
that no commitment fee shall accrue on any of the Commitments of a Defaulting
Lender so long as such Lender shall be a Defaulting Lender.  The commitment fee shall accrue at all times
during the Availability Period, including at any time during which one or more
of the conditions in Article IV is not met, and shall be due and
payable quarterly in arrears on each Quarterly Payment Date, commencing with
the first such date to occur after the Effective Date, and on the Revolving
Commitment Termination Date.  The
commitment fee shall be calculated quarterly in arrears, and if there is any
change in the Applicable Margin during any quarter, the actual daily amount
shall be computed and multiplied by the Applicable Margin separately for each
period during such quarter that such Applicable Margin was in effect.

(b)           Draw-Down Fee.  The Borrower shall pay draw-down fees to the
Administrative Agent for the account of each Revolving Credit Lender in
accordance with its Pro Rata Share, as follows:

(i)            within five Business Days following the
date of consummation by the Borrower or any of its Subsidiaries of any
acquisition of Permitted ERCOT Assets, a draw-down fee equal to 0.50% of the
amount by which the Acquisition Consideration paid for all acquisitions of
Permitted ERCOT Assets on or after the Closing Date through such date exceeds
the Funded ERCOT Amount as of such date; and

(ii)           on the 180th day following the date of consummation by the
Borrower or any of its Subsidiaries of any acquisition of Permitted ERCOT
Assets, a draw-down fee equal to 1.50% of the amount by which the Acquisition
Consideration paid for all acquisitions of Permitted ERCOT Assets on or after
the Closing Date through such date exceeds the Funded ERCOT Amount as of such
date.

(c)           Pre-Funded L/C
Participation Fees.  Upon the deposit
of the Pre-Funded L/C Deposits in the Pre-Funded L/C Deposit Account, the fees
(“Pre-Funded L/C Participation Fees”) relative to the Pre-Funded L/C
Deposits shall accrue at a rate per annum equal to the sum of (x) the
Eurodollar Rate for the relevant Investment Period plus the Applicable
Margin for Term Loans and (y) the Pre-Funded L/C Deposit Cost Amount minus
the Pre-Funded L/C Deposit Return payable by the Pre-Funded L/C Facility Agent
to the Pre-Funded L/C Lenders pursuant to clause (c)(iv) of Section
2.1 for the applicable period.  All
Pre-Funded L/C Deposits shall accrue fees at all times that they are on deposit
in the Pre-Funded L/C Deposit Account. 
Pre-Funded L/C Participation Fees accrued on each Pre-Funded L/C Deposit
shall be payable, without duplication, (i) on the Pre-Funded L/C Commitment
Termination Date, (ii) on the date of any refund of a Pre-Funded L/C Deposit
pursuant to clause (a) of Section 2.4, on the amount of such
deemed Pre-Funded L/C Deposits so refunded, and (iii) the last day of each
Investment Period.

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(d)           Other Fees.   (i)
The Borrower shall pay to the Agents and the Administrative Agent for their own
respective accounts fees in the amounts and at the times specified in the Fee
Letter.  Such fees shall be fully earned
when paid and shall not be refundable for any reason whatsoever.

(ii)           The Borrower shall pay to the Administrative
Agent and the Pre-Funded L/C Facility Agent such fees as shall have been
separately agreed upon in writing in the amounts and at the times so
specified.  Such fees shall be fully
earned when paid and shall not be refundable for any reason whatsoever.

2.9          Computation of Interest
and Fees.  All computations of
interest for Base Rate Loans when the Base Rate is determined by Bank of
America’s “prime rate” shall be made on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed. 
All other computations of fees and interest (including, without
limitation the Base Return and the Pre-Funded L/C Deposit Cash Amounts) shall
be made on the basis of a 360-day year and actual days elapsed (which results
in more fees or interest, as applicable, being paid than if computed on the
basis of a 365-day year).  Interest shall
accrue on each Loan for the day on which the Loan is made, and shall not accrue
on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid, provided, that any Loan that is repaid on the same day
on which it is made shall, subject to Section 2.11(a), bear
interest for one day.  Each determination
by the Administrative Agent of an interest rate or fee hereunder shall be
conclusive and binding for all purposes, absent manifest error.

2.10        Evidence of Debt.

(a)           The Credit Extensions
made by each Lender shall be evidenced by one or more accounts or records
maintained by such Lender, the Pre-Funded L/C Facility Agent and the
Administrative Agent in the ordinary course of business.  The accounts or records maintained by the
Administrative Agent, the Pre-Funded L/C Facility Agent and each Lender shall
be conclusive absent manifest error of the amount of the Credit Extensions made
by the Lenders to the Borrower and the interest and payments thereon.  Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Credit Agreement
Obligations.  In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error.  In the event
of any conflict between the accounts and records maintained by any Pre-Funded
L/C Lender or the Pre-Funded L/C Issuer and the accounts and records of the
Pre-Funded L/C Facility Agent in respect of such matters, the accounts and
records of the Pre-Funded L/C Facility Agent shall control in the absence of
manifest error.  Upon the request of any
Lender made through the Administrative Agent, the Borrower shall promptly
execute and deliver to such Lender (through the Administrative Agent) a Note,
which shall evidence such Lender’s Loans in addition to such accounts or
records.  Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable),
amount and maturity of its Loans and payments with respect thereto.

(b)           In addition to the
accounts and records referred to in clause (a), each Lender, the
Pre-Funded L/C Facility Agent and the Administrative Agent shall maintain in
accordance with

 94
 

 

their usual practice accounts or records evidencing
the purchases and sales by each Lender of participations in Letters of
Credit.  In the event of any conflict
between the accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error.  In the event of any conflict
between the accounts and records maintained by the Pre-Funded L/C Facility
Agent and the accounts and records of any Pre-Funded L/C Lender in respect of
such matters, the accounts and records of the Pre-Funded L/C Facility Agent
shall control in the absence of manifest error.

(c)           Entries made in good
faith by the Administrative Agent in the Register pursuant to Section
2.10(a), and by the Pre-Funded L/C Facility Agent and each Lender in its
account or accounts pursuant to Section 2.10(a), shall be prima  facie
evidence of the amount of principal and interest due and payable or to become
due and payable from the Borrower to, in the case of the Register, each Lender
and, in the case of such account or accounts, such Lender, under this Agreement
and the other Loan Documents, absent manifest error; provided, that the
failure of the Administrative Agent, the Pre-Funded L/C Facility Agent or such
Lender to make an entry, or any finding that an entry is incorrect, in the
Register or such account or accounts shall not limit or otherwise affect the
obligations of the Borrower under this Agreement and the other Loan Documents.

2.11        Payments Generally;
Administrative Agent’s Clawback.

(a)           General.  All payments to be made by the Borrower shall
be made without condition or deduction for any counterclaim, defense,
recoupment or setoff.  Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent’s Office in
Dollars and in immediately available funds not later than 2:00 p.m. on the date
specified herein.  The Administrative
Agent will promptly distribute to each Lender its Pro Rata Share (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrower
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.

(b)           (i)            Funding by Lenders; Presumption by
Administrative Agent.  Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with Section 2.2 and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the case
of a payment

 95
 

 

to be made by such Lender, the greater of the Federal
Funds Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation and (B) in the case of a
payment to be made by the Borrower, the interest rate applicable to Base Rate
Loans.  If the Borrower and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the
applicable Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Loan included in such Borrowing.  Any payment by the Borrower shall be without
prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent.

(ii)           Payments by Borrower; Presumptions by
Administrative Agent.  Unless the
Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or an L/C Issuer hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or such L/C Issuer, as the case may be,
the amount due.  In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or such
L/C Issuer, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or such L/C
Issuer, in immediately available funds with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal
Funds Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.

A notice of the Administrative Agent to any Lender or
the Borrower with respect to any amount owing under this clause shall be
conclusive, absent manifest error.

(c)           Failure to Satisfy
Conditions Precedent.  If any Lender
makes available to the Administrative Agent funds for any Loan to be made by
such Lender as provided in the foregoing provisions of this Article, and such
funds are not made available to the Borrower by the Administrative Agent
because the conditions to the applicable Credit Extension set forth in Article IV
are not satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

(d)           Obligations of
Lenders Several.  The obligations of
the Lenders hereunder to make Loans, to fund participations in Letters of
Credit and to make payments pursuant to Section 11.4(c) are several and
not joint.  The failure of any Lender to
make any Loan, to fund any such participation or to make any payment under
Section 11.4(c) on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its Loan,
to purchase its participation or to make its payment under Section 11.4(c).

 96
 

 

(e)           Funding Source.  Nothing herein shall be deemed to obligate
any Lender to obtain the funds for any Loan in any particular place or manner
or to constitute a representation by any Lender that it has obtained or will
obtain the funds for any Loan in any particular place or manner.

2.12        Sharing of Payments
by Lenders.  If any Lender (with
Pre-Funded L/C Lenders being included in this Section) shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Loans made by it or the participations
in L/C Obligations held by it resulting in such Lender’s receiving payment of a
proportion of the aggregate amount of such Loans or participations and accrued
interest thereon greater than its pro rata share thereof as provided herein,
then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Loans and subparticipations in L/C Obligations of the
other Lenders, or make such other adjustments as shall be equitable, so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them; provided, that:

(i)            if any such participations or
subparticipations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations or subparticipations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and

(ii)           the provisions of this Section shall
not be construed to apply to (x) any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or (y) any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or subparticipations in L/C Obligations to
any assignee or participant, other than to the Borrower or any Subsidiary
thereof (as to which the provisions of this Section shall apply).

Each Loan Party consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Loan Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Loan
Party in the amount of such participation.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.1          Taxes.

(a)           Payments Free of
Taxes.  Any and all payments by or on
account of any obligation of the Borrower hereunder or under any other Loan
Document shall be made free and clear of and without reduction or withholding
for any Indemnified Taxes or Other Taxes; provided, that if the Borrower shall
be required by applicable law to deduct any Indemnified Taxes (including any
Other Taxes) from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions

 97
 

 

applicable to additional sums payable under this
Section) the Administrative Agent, each Lender or each L/C Issuer, as the case
may be, receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii)
the Borrower shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

(b)           Payment of Other
Taxes by the Borrower.  Without
limiting the provisions of clause (a) above, the Borrower shall
timely pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.

(c)           Indemnification by
the Borrower.  The Borrower shall
indemnify the Administrative Agent, each Lender and each L/C Issuer, within 10
days after demand therefor, for the full amount of any Indemnified Taxes,
Pre-Funded L/C Deposit Return or Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) paid by the Administrative Agent, such Lender or such L/C Issuer,
as the case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes,
Pre-Funded L/C Deposit Return or Other Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or an L/C Issuer
(with a copy to the Administrative Agent), or by the Administrative Agent on
its own behalf or on behalf of a Lender or an L/C Issuer, shall be conclusive
absent manifest error.

(d)           Evidence of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

(e)           Status of Lenders.  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrower is resident for tax purposes, or any treaty
to which such jurisdiction is a party, with respect to payments hereunder or
under any other Loan Document shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation prescribed by applicable law as will
permit such payments to be made without withholding or at a reduced rate of
withholding.  In addition, any Lender, if
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements.

Without limiting the generality of the foregoing, in
the event that the Borrower is resident for tax purposes in the United States,
any Foreign Lender shall deliver to the Borrower and the Administrative Agent
(in such number of copies as shall be requested by the recipient) on or prior
to the date on which such Foreign Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the request of the Borrower or the
Administrative Agent, but only if such Foreign Lender is legally entitled to do
so), whichever of the following is applicable:

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(i)            duly completed copies of Internal Revenue
Service Form W-8BEN claiming eligibility for benefits of an income tax treaty
to which the United States is a party,

(ii)           duly completed copies of Internal Revenue
Service Form W-8ECI,

(iii)          in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under section 881(c) of the
Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank”
within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent
shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the
Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue
Service Form W-8BEN, or

(iv)          any other form prescribed by applicable law
as a basis for claiming exemption from or a reduction in United States Federal
withholding tax duly completed together with such supplementary documentation
as may be prescribed by applicable law to permit the Borrower to determine the
withholding or deduction required to be made.

(f)            Treatment of Certain
Refunds.  If the Administrative
Agent, any Lender or any L/C Issuer determines, in its sole discretion, that it
has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section, it shall pay to the Borrower an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this Section with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent, such Lender or such L/C
Issuer, as the case may be, and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund); provided,
that the Borrower, upon the request of the Administrative Agent, such Lender or
such L/C Issuer, agrees to repay the amount paid over to the Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent, such Lender or such L/C Issuer in the
event the Administrative Agent, such Lender or such L/C Issuer is required to
repay such refund to such Governmental Authority.  This clause shall not be construed to require
the Administrative Agent, any Lender or any L/C Issuer to make available its
tax returns (or any other information relating to its taxes that it deems
confidential) to the Borrower or any other Person.

3.2          Illegality.  If any Lender determines that any Law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund Eurodollar Rate Loans, or to determine or charge interest rates based upon
the Eurodollar Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, then, on notice thereof by
such Lender to the Borrower through the Administrative Agent, any obligation of
such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate
Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies
the Administrative Agent and the Borrower that the circumstances giving rise to
such determination no longer exist.  Upon
receipt of such notice, the Borrower shall, upon

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demand from such Lender (with a copy to the
Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate
Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Rate Loans.  Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted.

3.3          Inability to Determine
Rates.  If the Required Lenders
determine that for any reason in connection with any request for a Eurodollar
Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits
are not being offered to banks in the London interbank eurodollar market for
the applicable amount and Interest Period of such Eurodollar Rate Loan, (b)
adequate and reasonable means do not exist for determining the Eurodollar Rate
for any requested Interest Period with respect to a proposed Eurodollar Rate
Loan, or (c) the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the
cost to such Lenders of funding such Loan, the Administrative Agent will
promptly so notify the Borrower and each Lender.  Thereafter, the obligation of the Lenders to
make or maintain Eurodollar Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice.  Upon receipt of such
notice, the Borrower may revoke any pending request for a Borrowing of, conversion
to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to
have converted such request into a request for a Borrowing of Base Rate Loans
in the amount specified therein.

3.4          Increased Costs; Capital
Adequacy; Reserves on Eurodollar Rate Loans.

(a)           Increased Costs
Generally.  If any Change in Law
shall:

(i)            impose, modify or deem applicable any
reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any reserve requirement
contemplated by Section 3.4(e)) or any L/C Issuer;

(ii)           subject any Lender or any L/C Issuer to any
tax of any kind whatsoever with respect to this Agreement, any Letter of
Credit, any participation in a Letter of Credit, any Eurodollar Rate Loan or
Pre-Funded L/C Deposit made by it, or change the basis of taxation of payments
to such Lender or such L/C Issuer in respect thereof (except for Indemnified
Taxes or Other Taxes covered by Section 3.1 and the imposition of,
or any change in the rate of, any Excluded Tax payable by such Lender or such
L/C Issuer); or

(iii)          impose on any Lender or any L/C Issuer or the
London interbank market any other condition, cost or expense affecting this
Agreement, Eurodollar Rate Loans or Pre-Funded L/C Deposit made by such Lender
or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Rate
Loan or Pre-Funded L/C Deposit (or of maintaining its

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obligation to make any such Loan or Pre-Funded L/C
Deposit), or to increase the cost to such Lender or such L/C Issuer of
participating in, issuing or maintaining any Letter of Credit (or of
maintaining its obligation to participate in or to issue any Letter of Credit),
or to reduce the amount of any sum received or receivable by such Lender or
such L/C Issuer hereunder (whether of principal, interest or any other amount)
then, upon request of such Lender or such L/C Issuer, the Borrower will pay to
such Lender or such L/C Issuer, as the case may be, such additional amount or
amounts as will compensate such Lender or such L/C Issuer, as the case may be,
for such additional costs incurred or reduction suffered.

(b)           Capital Requirements.  If any Lender or any L/C Issuer determines
that any Change in Law affecting such Lender or such L/C Issuer or any Lending
Office of such Lender or such Lender’s or such L/C Issuer’s holding company, if
any, regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender’s or such L/C Issuer’s capital or on the
capital of such Lender’s or such L/C Issuer’s holding company, if any, as a
consequence of this Agreement, the Commitments of such Lender or the Loans made
by, or participations in Letters of Credit held by, such Lender, or the Letters
of Credit issued by such L/C Issuer, to a level below that which such Lender or
such L/C Issuer or such Lender’s or such L/C Issuer’s holding company could
have achieved but for such Change in Law (taking into consideration such Lender’s
or such L/C Issuer’s policies and the policies of such Lender’s or such L/C
Issuer’s holding company with respect to capital adequacy), then from time to
time the Borrower will pay to such Lender or such L/C Issuer, as the case may
be, such additional amount or amounts as will compensate such Lender or such
L/C Issuer or such Lender’s or such L/C Issuer’s holding company for any such
reduction suffered.

(c)           Certificates for Reimbursement.  A certificate of a Lender or an L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or such
L/C Issuer or its holding company, as the case may be, as specified in clause (a)
or (b) of this Section and delivered to the Borrower shall be
conclusive absent manifest error.  The
Borrower shall pay such Lender or such L/C Issuer, as the case may be, the
amount shown as due on any such certificate within 10 days after receipt
thereof.

(d)           Delay in Requests.  Failure or delay on the part of any Lender or
any L/C Issuer to demand compensation pursuant to the foregoing provisions of
this Section shall not constitute a waiver of such Lender’s or such L/C
Issuer’s right to demand such compensation; provided, that the Borrower
shall not be required to compensate a Lender or such L/C Issuer pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than six months prior to the date that such Lender or
such L/C Issuer, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or such
L/C Issuer’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the six-month period referred to above shall be extended to include the
period of retroactive effect thereof).

(e)           Reserves on Eurodollar Rate Loans.  The Borrower shall pay to each Lender, as
long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the
unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs
of such reserves allocated to such Loan or the Pre-Funded L/C Deposit

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by such Lender (as determined by such Lender in good
faith, which determination shall be conclusive), which shall be due and payable
on each date on which interest is payable on such Loan or the Base Return is
payable with respect to the Pre-Funded L/C Deposit; provided, that the
Borrower shall have received at least 10 days’ prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender.  If a Lender fails to give notice 10 days
prior to the relevant Interest Payment Date or payment date for such Base
Return, as the case may be, such additional interest shall be due and payable
10 days from receipt of such notice.

3.5          Compensation for Losses.  Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender and the Deposit Bank and the Pre-Funded
L/C Facility Agent harmless from any loss, cost or expense incurred by it as a
result of:

(a)           any continuation, conversion, payment
or prepayment of any Loan other than a Base Rate Loan on a day other than the
last day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);

(b)           any failure by the Borrower (for a
reason other than the failure of such Lender to make a Loan) to prepay, borrow,
continue or convert any Loan other than a Base Rate Loan on the date or in the
amount notified by the Borrower;

(c)           any assignment of a Eurodollar Rate
Loan on a day other than the last day of the Interest Period therefor as a
result of a request by the Borrower pursuant to Section 11.13; or

(d)           any withdrawals from the Pre-Funded
L/C Deposit Account pursuant to the terms of this Agreement prior to the end of
the applicable Investment Period or Scheduled Investment Termination Date for
the Pre-Funded L/C Deposits; and (ii) the termination of all Pre-Funded L/C
Deposit Commitments (and the related termination of the investment of the funds
held in the Pre-Funded L/C Deposit Account) prior to the end of any applicable
Investment Period or Scheduled Investment Termination Date for the Pre-Funded
L/C Deposits,

excluding any loss of anticipated profits, but
including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate
the deposits from which such funds were obtained.  The Borrower shall also pay any customary
administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the
Borrower to the Lenders under this Section, each Lender shall be deemed to have
funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such
Loan by a matching deposit or other borrowing in the London interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such Eurodollar Rate Loan was in fact so funded.

3.6          Mitigation Obligations; Replacement of
Lenders.

(a)           Designation of a Different Lending
Office.  If any Lender requests
compensation under Section 3.4, or the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 3.1, or if any Lender
gives a notice pursuant to Section 3.2, then such Lender shall use
reasonable efforts to designate

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a different Lending Office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder to another of
its offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 3.1 or 3.4, as the case may be, in the
future, or eliminate the need for the notice pursuant to Section 3.2,
as applicable, and (ii) in each case, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender.  The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.

(b)           Replacement of Lenders.  If any Lender requests compensation under Section 3.4,
or if the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 3.1,
the Borrower may replace such Lender in accordance with Section 11.13.

3.7          Survival.  All of the Borrower’s obligations under this
Article shall survive termination of the Aggregate Commitments and repayment of
all other Credit Agreement Obligations hereunder.

3.8          Application to Pre-Funded L/C
Participation Fees. 
The foregoing provisions of this Article III shall apply, mutatis
mutandis, to Pre-Funded L/C Participation Fees and the Pre-Funded L/C
Deposit Return as if Pre-Funded L/C Participation Fees were interest on Loans
and to Pre-Funded L/C Deposits as if Pre-Funded L/C Deposits and the Pre-Funded
L/C Deposit Return were Eurodollar Rate Loans.

ARTICLE IV

CONDITIONS PRECEDENT TO EFFECTIVENESS AND CREDIT EXTENSIONS

4.1          Conditions of Effectiveness and
Initial Credit Extension. 
Section 11.13 of the Existing Credit Agreement shall be amended to read
in its entirety as set forth in Section 11.13 of this Agreement
upon the execution and delivery to the Administrative Agent of this Agreement
by the Borrower and the Required Lenders under (and as defined in) the Existing
Credit Agreement.  The remainder of this
Agreement shall become (and be deemed to have become) effective to amend and
restate the Existing Credit Agreement in its entirety, immediately after the
amendment to Section 11.13 on the terms set forth in the preceding
sentence, and the obligation of each L/C Issuer and each Lender to make its
initial Credit Extension hereunder shall in each case be subject to
satisfaction of the following conditions precedent:

(a)           The Administrative Agent’s receipt of
the following, each of which shall be originals or telecopies (followed
promptly by originals) unless otherwise specified, each properly executed by a
Responsible Officer of the signing Loan Party, each dated the Effective Date
(or, in the case of certificates of governmental officials, a recent date
before the Effective Date) and each in form and substance satisfactory to the
Administrative Agent and each of the Lenders:

(i)            executed
counterparts of this Agreement, sufficient in number for distribution to the
Administrative Agent, each Lender and the Borrower;

(ii)           a
Note executed by the Borrower in favor of each Lender requesting a Note;

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(iii)          such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and
capacity of each Responsible Officer thereof authorized to act as a Responsible
Officer in connection with this Agreement and the other Loan Documents to which
such Loan Party is a party;

(iv)          such
documents and certifications as the Administrative Agent may reasonably require
to evidence that (A) each Loan Party is duly organized or formed, and is
validly existing, in good standing in Delaware; and (B) the Borrower is
qualified to engage in business in the State of Texas;

(v)           a
favorable opinion of Bracewell & Giuliani LLP, counsel to the Loan Parties,
addressed to the Administrative Agent and each Lender, in form and substance
reasonably satisfactory to the Administrative Agent;

(vi)          [RESERVED]

(vii)         a
favorable opinion of in-house counsel to the Loan Parties, in form and
substance reasonably satisfactory to the Administrative Agent;

(viii)        a
certificate signed by a Responsible Officer of the Borrower certifying (A) that
the conditions specified in Sections 4.2(a) and (b) have been
satisfied, and (B) that there has been no event or circumstance since
December 31, 2005 that, except as disclosed in any Exchange Act filings made on
or before five Business Days before the Effective Date, has had or could be
reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect;

(ix)           a
certificate addressed to the Administrative Agent and the Lenders, duly
executed and delivered by a Responsible Officer of the Borrower, representing
that all Indebtedness of Securitization Entities under all Qualified
Securitization Transactions shall have been repaid in full and all Qualified
Securitization Transactions shall have been terminated;

(x)            a
certificate addressed to the Administrative Agent and the Lenders, duly
executed and delivered by a Responsible Officer of the Borrower, representing
that attached thereto are true and complete copies of the Reimbursement
Agreement, the Parent Services Agreement, the Collateral Trust Agreement (as
defined in the Working Capital Agreement) and the Working Capital Agreement,
without any amendments to such agreements adverse to the Lenders that are not
reasonably satisfactory to the Lenders, and that such Sleeve Documents are in
full force and effect and that the Sleeve Transaction has been (or,
contemporaneously with the occurrence of the Effective Date, will be)
consummated;

(xi)           evidence
reasonably satisfactory to it that membership interests of Retail Holdco owned
by the Borrower are Collateral;

(xii)          a
certificate addressed to the Administrative Agent and the Lenders, duly
executed and delivered by a Responsible Officer of the Borrower,
(A) representing that

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each of the
Secured Note Agreements and the PEDFA Guaranties shall have been amended to
permit the transactions contemplated under this Agreement, (B) attaching
true and complete copies of such amendments, and (C) further representing
that such amendments are in full force; and

(xiii)         a
certificate addressed to the Administrative Agent and the Lenders, duly
executed and delivered by a Responsible Officer of the Borrower, representing
that attached thereto are true and complete copies of the IP/IT Agreements, and
that the IP/IT Agreements are in full force and effect.

(b)           The Collateral Agent’s receipt of the
following, each of which shall be originals or telecopies (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Loan Party:

(i)            evidence
satisfactory to the Administrative Agent and the Term Facility Syndication
Agent that the Existing Mortgages, upon the Effective Date, will continue to
create valid and subsisting Liens on the Closing Date Mortgaged Properties in
favor of the Collateral Trustee for the benefit of the Secured Parties,
together with evidence that (i) counterparts of
the Mortgage Supplements have been duly executed, acknowledged and
delivered for filing in the filing or recording offices in which each Existing
Mortgage being supplemented by an associated Mortgage Supplement was filed and
(ii) all filing and recording taxes, if any, and fees have been paid or will be
paid upon recordation or filing of the Mortgage Supplements;

(ii)           a
duly executed and acknowledged Florida Mortgage Supplement with respect to each
Existing Florida Mortgage, delivered into escrow on terms and conditions
reasonably satisfactory to the Agents and the Borrower (which terms and
conditions shall include provision for the release from escrow and appropriate
recording of each such Florida Mortgage Supplement in accordance with and in
the circumstances contemplated by Section 6.14);

(iii)          such
tax and Uniform Commercial Code lien searches as the Administrative Agent may
reasonably request and demonstrating that no other filings, encumbrances or
transfers (other than in connection with Permitted Liens and Permitted
Encumbrances) with regard to any Collateral are of record in any jurisdiction
in which it shall be reasonably necessary or desirable for the Collateral Agent
or Collateral Trustee, as applicable, to make a Uniform Commercial Code filing
in order to provide the Collateral Agent or Collateral Trustee, as applicable,
(for the benefit of the Secured Parties) with a perfected security interest in
the Collateral and if applicable, evidence reasonably satisfactory to the
Administrative Agent that any Liens indicated by such financing statements (or
similar documents) that are not permitted under this Agreement, have been or
will be released on or prior to the Effective Date; and

(iv)          such
other assurances, certificates, documents, consents or opinions as the
Administrative Agent reasonably may require.

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(c)           Concurrently with the making of the
Loans hereunder on the Effective Date, all principal amounts of Term Loans
outstanding under (and as defined in) the Existing Credit Agreement, together
with all interest, fees and other amounts due and payable with respect thereto,
shall have been paid in full.

(d)           The Administrative Agent’s receipt of
all unpaid interest and fees accrued under the Existing Credit Agreement
through the Effective Date and all other fees, expenses and other charges
outstanding thereunder (including all amounts due under clause (c) of
Section 3.5 thereof arising as a result of the termination of all interest
periods thereunder on the Effective Date).

(e)           Any fees required to be paid on or
before the Effective Date shall have been paid.

(f)            Unless waived by the Administrative
Agent, the Borrower shall have paid all fees, charges and disbursements of
counsel to the Administrative Agent to the extent invoiced prior to or on the
Effective Date.

(g)           All governmental authorizations and all
third party consents and approvals necessary in connection with the Loan
Documents shall have been obtained (without the imposition of any conditions
that are not acceptable to the Lenders) and shall remain in effect.

(h)           Since December 31, 2005, there shall
not have occurred any event, development, condition or circumstance not
disclosed in the Borrower’s 2005 report filed on SEC Form 10-K, first-, second-
or third quarter 2006 reports filed on SEC Form 10-Q, or any report filed on
SEC form 8-K at least five Business Days before the Effective Date, that shall
have had a Material Adverse Effect.

(i)            Concurrently with the making of the
Loans hereunder on the Effective Date, the DB Credit Agreement, together with
all interest, fees and other amounts due and payable with respect thereto,
shall be paid in full and the commitments in respect of such Indebtedness shall
be terminated and (i) all Liens securing payment of any such Indebtedness shall
be released and (ii) the Administrative Agent shall have received all
Uniform Commercial Code Form UCC 3 termination statements or other instruments
as may be necessary, in the reasonable judgment of the Administrative Agent, in
connection therewith.

(j)            Without limiting the generality of
the provisions of Section 11.4, for purposes of determining
compliance with the conditions specified in this Section, each Lender that has
signed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter required thereunder
to be consented to or approved by or acceptable or satisfactory to a Lender
unless the Administrative Agent shall have received notice from such Lender
prior to the proposed Effective Date specifying its objection thereto.

4.2          Conditions to All Credit Extensions.  The obligation of each Lender to honor any
Request for a Credit Extension (including the initial Credit Extensions
hereunder, but excluding (i) any Borrowing Notice requesting only a conversion
of Loans to the other Type, (ii) a continuation of Eurodollar Rate Loan
and (iii) a Revolving Credit Loan to reimburse a drawing under a Letter of
Credit as provided herein) is subject to the following conditions precedent:

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

(b)           no Default shall exist, or would
result from such proposed Credit Extension or from the application of the
proceeds thereof; and

(c)           the Administrative Agent and, if
applicable, each L/C Issuer shall have received a Request for Credit Extension
in accordance with the requirements hereof.

Each Request for Credit Extension (other than a
(i) Borrowing Notice requesting only a conversion of Loans to the other
Type, (ii) a continuation of Eurodollar Rate Loans and (iii) other than a
Revolving Credit Loan to reimburse a drawing under a Letter of Credit as
provided herein) submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.2(a)
and (b) have been satisfied on and as of the date of the applicable
Credit Extension.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the
Administrative Agent and the Lenders that:

5.1          Existence, Qualification and Power;
Compliance with Laws. 
Each Loan Party and each Subsidiary thereof (a) is duly organized or
formed, validly existing and in good standing under the Laws of the jurisdiction
of its incorporation or organization, (b) has all requisite power and authority
and all requisite governmental licenses, authorizations, consents and approvals
to (i) own its assets and carry on its business and (ii) execute, deliver and
perform its obligations under the Loan Documents to which it is a party, (c) is
duly qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is in
compliance with all Laws; except in each case referred to in clause (b)(i),
(c) or (d), to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect.

5.2          Authorization; No Contravention.  The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any

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payment to be made under (i) any Contractual
Obligation to which such Person is a party or affecting such Person or the
properties of such Person or any of its Subsidiaries, where such Contractual
Obligation (x) evidences Indebtedness of the Borrower or any of its
Subsidiaries or (y) is identified in the exhibit list from time to time in
filings made by the Borrower with the SEC as material to the Borrower, or (ii)
any order, injunction, writ or decree of any Governmental Authority or any
arbitral award to which such Person or its property is subject that could
reasonably be expected to have a Material Adverse Effect; (c) violate any Law
that could reasonably be expected to have a Material Adverse Effect; or (d)
result in the creation of any Lien other than a Permitted Lien.  Each Loan Party and each Subsidiary thereof
is in compliance with all Contractual Obligations referred to in clause (b)(i),
except to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.

5.3          Governmental Authorization; Other
Consents.  No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required
in connection with (i) the execution, delivery or performance by any Loan Party
of this Agreement or any other Loan Document, (ii) the grant by any Loan
Party of the Liens granted by it pursuant to the Loan Documents, or
(iii) the perfection or maintenance of the Liens created under the Loan
Documents (including the first priority nature thereof) (other than the filing
of UCC-1 Financing Statements, the Mortgages, and the Assignments of Leases and
Rents), all of which have been duly obtained, taken, given or made and are in
full force and effect.

5.4          Binding Effect.  This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. 
This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against each Loan Party that is party thereto in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally and by general principles of equity, whether such
enforceability is considered in a proceeding at law or in equity.

5.5          Financial Statements; No Material
Adverse Effect.

(a)           The Audited Financial Statements (i)
were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein and (ii)
fairly present in all material respects the consolidated financial condition of
the Borrower and its consolidated Subsidiaries as of the date thereof and their
results of operations and cash flows for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein.

(b)           The unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries dated September 30,
2006, and the related consolidated statements of income and cash flows and the
related notes and supplemental information for the Fiscal Quarter ended on that
date (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, and (ii) fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations and cash flows for the period covered thereby, subject,
in

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the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments.

(c)           Since the date of the Audited
Financial Statements, there has been no event or circumstance, either
individually or in the aggregate, except as disclosed in the Borrower’s
Exchange Act filings made on or before the five Business Days before the
Effective Date, that has had or could reasonably be expected to have a Material
Adverse Effect.

5.6          Litigation.  There are no actions, suits, proceedings,
claims or disputes pending or, to the knowledge of the Borrower, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Borrower or any of its Subsidiaries or against any
of their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) except as disclosed in the Borrower’s Exchange Act filings made
on or before the five Business Days before the Effective Date, either
individually or in the aggregate, if determined adversely, could reasonably be
expected to have a Material Adverse Effect.

5.7          No Default.  No Default has occurred and is continuing or
would result from the consummation of the transactions contemplated by this
Agreement or any other Loan Document.

5.8          Ownership of Property; Liens.

(a)           Each of the Borrower and each
Subsidiary has good and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of
its business, except for Permitted Liens and Permitted Encumbrances and such
defects in title as could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

(b)           The property of the Borrower and its
Restricted Subsidiaries is subject to no Liens, other than Permitted Liens and
Permitted Encumbrances.

(c)           Set forth on Schedule 5.8(c)
hereto is a complete and accurate list of all real property interests owned as
of the Effective Date by the Borrower and the other Loan Parties which are
material to their business and are reflected on the financial statements
referred to in Section 5.5 (other than such properties or assets
disposed of since the date of such financial statements), showing as of the
date hereof the street address, county or other relevant jurisdiction, state,
and record owner thereof.  Except as set
forth on Schedule 5.8(c), the Borrower and each other Loan Party has
good, marketable and insurable fee simple title to such real property, free and
clear of all Liens, other than Permitted Liens and Permitted Encumbrances.

5.9          Environmental Matters.

(a)           Borrower and its Subsidiaries have
been and are in compliance with all Environmental Laws, including obtaining and
complying with all required environmental permits, other than non-compliances
that could not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.

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(b)           Neither the Borrower nor any of its
Subsidiaries nor any property currently or, to the knowledge of Borrower or any
of its Subsidiaries, previously owned, operated or leased by or for Borrower or
any of its Subsidiaries is subject to any pending or, to the knowledge of
Borrower or any of its Subsidiaries, threatened, claim, order, agreement,
notice of violation, notice of potential liability or is the subject of any
pending or threatened proceeding or governmental investigation under or
pursuant to Environmental Laws other than those that could not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse
Effect.

(c)           Except as set forth on Schedule
5.9(c), as of the Effective Date neither the Borrower nor any of its
Subsidiaries has a treatment, storage or disposal facility requiring a permit
under the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the
regulations thereunder or any state analog.

(d)           There are no facts, circumstances or
conditions known to Borrower or any of its Subsidiaries arising out of or
relating to the operations or ownership of Borrower or any of its Subsidiaries
or of the property owned, operated or leased by Borrower or any of its
Subsidiaries that are not specifically included in the financial information
furnished to the Lenders that could be reasonably expected to result in any
Environmental Liabilities that could reasonably be expected to have a Material
Adverse Effect, unless such liabilities are (i) covered by environmental
liability insurance, (ii) subject to an indemnity from any Governmental
Authority, or (iii) subject to an indemnity satisfactory to the Borrower from a
Person that is not an Affiliate of the Borrower that the Borrower has
determined in good faith is appropriately credit worthy in relation to the
potential amount of such liabilities.

(e)           As of the Effective Date, no
environmental Lien has attached to any property of Borrower or its Subsidiaries
and, to the knowledge of Borrower or its Subsidiaries, no facts, circumstance
or conditions exist that could, individually or in the aggregate, reasonably be
expected to result in an environmental Lien that would have a Material Adverse
Effect.

(f)            Neither Borrower nor any of its
Subsidiaries is undertaking, and has not completed, either individually or
together with other potentially responsible parties, any investigation or
assessment or Remedial Action relating to any actual or threatened release of
Hazardous Materials at any site, location or operation, either voluntarily or pursuant
to the order of any Governmental Authority or the requirements of any
Environmental Law that could reasonably be expected to have a Material Adverse
Effect; and all Hazardous Materials generated, used, treated, handled or stored
at, or transported to or from, any property currently or formerly owned or
operated by Borrower or any of its Subsidiaries have been disposed of in a
manner that could not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.

5.10        Insurance.  The properties of the Borrower and its
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Borrower, in such amounts (after giving effect
to any self-insurance compatible with the following standards), with such
deductibles and covering such risks as are customarily carried by companies of
same or similar size engaged in similar businesses and owning similar
properties in localities where the Borrower or the applicable Subsidiary
operates.

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5.11        Taxes.  The Borrower and its Subsidiaries have filed
all Federal, state and other material tax returns and reports required to be
filed after giving effect to applicable extensions, except for tax returns or
reports the failure of which to timely file could not reasonably be expected to
have a Material Adverse Effect, and have paid all Federal, state and other
material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP.  There
is no proposed tax assessment against the Borrower or any Subsidiary that
would, if made, have a Material Adverse Effect. 
Except for (x) the Parent Services Agreement, (y) the Tax Sharing
Agreement referred to in clause (13) of Permitted Investments and
(z) the Tax Allocation Agreement dated as of December 31, 2000, by and
among Reliant Energy, Inc. (now known as Centerpoint Energy, Inc.) and its
affiliates parties thereto and Reliant Resources, Inc. and its affiliates
parties thereto, on the Effective Date, neither any Loan Party nor any
Subsidiary thereof is party to any tax sharing agreement.

5.12        ERISA Compliance.

(a)           Each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
Federal or state Laws.  Each Plan that is
intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification.  The
Borrower and each ERISA Affiliate have made all required contributions (both
quarterly and annually) to each Plan subject to Section 412 of the Code,
and no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to
any Plan.

(b)           There are no pending or, to the best
knowledge of the Borrower, threatened claims, actions or lawsuits, or action by
any Governmental Authority, with respect to any Plan that could reasonably be
expected to have a Material Adverse Effect. 
There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could
reasonably be expected to result in a Material Adverse Effect.

(c)           (i) 
No ERISA Event has occurred or is reasonably expected to occur that
could reasonably be expected to have a Material Adverse Effect; (ii) no Pension
Plan has any Unfunded Pension Liability, whether or not waived, that could
reasonably be expected to have a Material Adverse Effect, and no application
for a waiver of the minimum funding standard has been filed with respect to any
Pension Plan; (iii) neither any Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA) that could reasonably be expected to have a
Material Adverse Effect; (iv) neither the Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Sections 4201 or 4243 of ERISA with respect
to a Multiemployer Plan that could reasonably be expected to have a Material
Adverse Effect; and (v) neither the Borrower nor any ERISA Affiliate has
engaged in a transaction that could be subject to Sections 4069 or 4212(c) of
ERISA.

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5.13        Subsidiaries; Equity Interests.  On the Effective Date, the Borrower has no
Subsidiaries other than those specifically disclosed in Part (a) of Schedule
5.13, and all of the outstanding Equity Interests in such Subsidiaries have
been validly issued, are fully paid and nonassessable and are owned in the
amounts specified on Part (a) of Schedule 5.13 free and clear of
all Liens except those created under the Loan Documents and the Permitted
Liens.  On the Effective Date, the
Borrower and its Subsidiaries have no equity investments in any other Person
other than those specifically disclosed in Part (b) of Schedule 5.13.  All of the outstanding Equity Interests in
the Borrower have been validly issued and are fully paid and
nonassessable.  Set forth on Part (c)
of Schedule 5.13 is a complete and accurate list of all Loan Parties,
showing as of the Effective Date (as to each Loan Party) the jurisdiction of
its incorporation, the address of its principal place of business and its U.S.
taxpayer identification number.

5.14        Margin Regulations; Investment Company
Act.

(a)           The Borrower is not engaged and will
not engage, principally or as one of its important activities, in the business
of purchasing or carrying margin stock (within the meaning of Regulation U
issued by the FRB), or extending credit for the purpose of purchasing or
carrying margin stock and no proceeds of any Borrowings or drawings under any
Letter of Credit will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying margin stock.

(b)           None of the Borrower, any Person
Controlling the Borrower, or any Subsidiary (i) is in violation of any
regulation under the Federal Power Act or any foreign, federal or local statute
or any other Law of the United States of America or any other jurisdiction, in
each case limiting its ability to incur indebtedness for money borrowed as
contemplated hereby or by any other Loan Document or (ii) is or is
required to be registered as an “investment company” under the Investment Company
Act of 1940.  Neither the making of any
Loan, nor the issuance of any Letters of Credit, nor the application of the
proceeds or repayment thereof by the Borrower, nor the consummation of the
other transactions contemplated by the Loan Documents, will violate any
provision of any such Act referenced in clauses (i) and (ii), any
other Laws referenced therein, or any rule, regulation or order of the SEC
under the Investment Company Act of 1940.

5.15        Disclosure.  The Borrower has disclosed to the Administrative
Agent and the Lenders all agreements, instruments and corporate or other
restrictions to which it or any of its Subsidiaries is subject, and all other
matters known to it (other than general industry, political, and economic
conditions), that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.  No report, financial statement, certificate
or other information furnished (whether in writing or orally) by or on behalf
of any Loan Party to the Administrative Agent or any Lender in connection with
the transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other information so furnished), at the time furnished or
delivered, contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, taken as a whole, in
the light of the circumstances under which they were made, not misleading; provided,
that with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time made.

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5.16        Compliance with Laws.  Each Loan Party and each Subsidiary is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ, injunction
or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

5.17        Intellectual Property; Licenses, Etc.  The Borrower, the IP Trust, the IT Trust and
their respective Subsidiaries own, or possess the right to use, all of the
trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that are necessary for the operation of their respective
businesses, without conflict with the rights of any other Person, unless the
failure to so own or possess the right to use could not reasonably be expected
to have a Material Adverse Effect.  To
the best knowledge of the Borrower, except as set forth on Schedule 5.17,
no slogan or other advertising device, product, process, method, substance,
part or other material now employed, or now contemplated to be employed, by the
IT Trust, the IP Trust, the Borrower or any of their respective Subsidiaries
infringes upon or misappropriates any rights held by any other Person in a
manner that could reasonably be expected to have a Material Adverse Effect.  To the best knowledge of the Borrower, no
other Person is infringing upon or misappropriating any IP Rights of the IT
Trust, the IP Trust, the Borrower or any of their respective Subsidiaries in a
manner that could reasonably be expected to have a Material Adverse
Effect.  Except as set forth on Schedule
5.17, no claim or litigation regarding any of the foregoing is pending or,
to the best knowledge of the Borrower, threatened, which, either individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.

5.18        Solvency.  The Borrower is, together with its
Subsidiaries on a consolidated basis, Solvent.

5.19        Perfection, Etc.

(a)           The Security Documents (other than
the Mortgages and the Assignments of Leases and Rents), create and grant to the
Collateral Trustee for the benefit of the applicable Secured Parties or the
Collateral Agent (for the benefit of the Credit Agreement Secured Parties),
together with (i) the filing of appropriate UCC-1 and, if applicable, UCC-3,
financing statements with the filing offices required under the Security
Agreement, and (ii) the possession of certificated Pledged Securities
(together with blank executed stock powers with respect thereto), a valid,
first priority, perfected security interest in the Collateral, subject (other
than in the case of investment property) only to Permitted Encumbrances and, as
to perfection, subject to the terms and provisions of the Security Agreement.

(b)           The Mortgages and the Assignments of
Leases and Rents, when the Mortgage Supplements are executed and delivered,
will create in favor of the Collateral Trustee, for the benefit of the
applicable Secured Parties, a legal, valid and enforceable Lien on all of the
Loan Parties’ respective right, title and interest in and to the real property
assets (except personalty that does not constitute fixtures) covered thereby
and the proceeds thereof.  When each of
the Mortgage Supplements are filed in the appropriate offices specified by a
Loan Party and the

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proper amount of mortgage recording or similar taxes
(if any) are paid, each of the Mortgages and the Assignments of Leases and
Rents together with the UCC-1 financing statements relating to fixtures
previously filed in connection with the Mortgages, shall constitute fully
perfected Liens on, and fully perfected security interest in, all right, title
and interest of the applicable Loan Parties in the real property assets (except
personalty that does not constitute fixtures) covered thereby and the proceeds
thereof, subject only to Permitted Encumbrances and, as to perfection, subject
to the terms and provisions of the Mortgages and the Assignments of Leases and
Rents.

5.20        Information Technology Systems.  The Borrower, the other Loan Parties, the IT
Trust and their respective Subsidiaries own or have the right to access and use
(through arm’s length service contracts including the IT Services Agreement and
the IT Servicing Agreement) all Information Technology Systems necessary to
operate and support its business other than the Retail Energy Business (the “Wholesale
Business”), including Information Technology Systems providing capabilities
consistent with the arrangements in place for the Wholesale Business as of the
Effective Date.  After giving effect to
the transactions contemplated to occur on the Effective Date, the assets and
properties of the Borrower and its Subsidiaries that have been transferred,
conveyed, assigned or otherwise delivered to the IP Trust and the IT Trust, as
applicable, are reasonably necessary to support both the Wholesale Business and
the Retail Energy Business.

5.21        Marks.  The Borrower, the IP Trust and their
respective Subsidiaries own or have the right to use (through arm’s length
licenses and other arrangements including the IP License Agreement and the
Parent Services Agreement if then in effect) all trademarks necessary to
operate and support the Wholesale Business using the “Reliant” name and any
similar names consistent with the arrangements in place for the Wholesale
Business as of the Effective Date.

5.22        IP/IT Agreements.  All consents, notices and filings necessary
in connection with (a) the execution, delivery and performance of the
IP/IT Agreements by the Borrower, the IP Trust, the IT Trust, Reliant Energy
Retail Holdings, LLC, and Reliant Energy Corporate Services, LLC, as
applicable, and (b) the transfer, conveyance, assignment and delivery of
the IP/IT Trust Assets to the IP Trust and the IT Trust under the IP Trust
Agreement and the IT Trust Agreement, respectively, have been obtained, except,
in either case, to the extent the failure to so obtain or otherwise make such
consents, notices or filings could not reasonably be expected to have a
Material Adverse Effect.  The IP/IT
Agreements have been duly executed and delivered by each party thereto.  The IP/IT Agreements constitute a legal,
valid and binding obligation of each party thereto, enforceable against each
party thereto in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally and by general principles of equity,
whether such enforceability is considered in a proceeding at law or in equity.

ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment
hereunder, any Loan, any Pre-Funded L/C Deposit or other Credit Agreement
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding (if neither (x) Cash Collateralized in
accordance with the terms of this Agreement nor (y) supported with a
back-to-back letter of credit 

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reasonably acceptable to the L/C Issuers), the
Borrower shall, and shall (except in the case of the covenants set forth in Sections
6.1, 6.2, and 6.3) cause each Subsidiary to:

6.1          Financial Statements.  Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent:

(a)           as soon as available, but in any
event within 90 days after the end of each Fiscal Year of the Borrower, an
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such Fiscal Year, and the related consolidated
statements of income or operations, stockholders’ equity, comprehensive income
(loss) and cash flows for such Fiscal Year, setting forth in each case in
comparative form the figures as of the end of, and for, the previous Fiscal
Year, all in reasonable detail and prepared in accordance with GAAP, such
consolidated statements to be audited and accompanied by a report and opinion
of an independent registered public accounting firm of nationally recognized
standing, which report and opinion shall be prepared in accordance with the
standards of the Public Company Accounting Oversight Board or its successor and
shall not be subject to any “going concern” or like qualification or exception;

(b)           as soon as available, but in any
event within 45 days after the end of each of the first three Fiscal Quarters
of each Fiscal Year of the Borrower, an unaudited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such Fiscal
Quarter, and the related unaudited consolidated statements of income or
operations for such Fiscal Quarter and for the portion of the Borrower’s Fiscal
Year then ended and cash flows for the portion of the Borrower’s Fiscal Year
then ended, setting forth in each case in comparative form the figures for the
corresponding Fiscal Quarter of the previous Fiscal Year and the corresponding
portion of the previous Fiscal Year, all in reasonable detail, certified by a
Responsible Officer of the Borrower as fairly presenting in all material
respects the financial condition, results of operations and cash flows of the
Borrower and its consolidated Subsidiaries in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of footnotes;

(c)           as soon as available, but in any
event within thirty (30) days after the end of the first and second calendar
months of each Fiscal Quarter, a copy of the Borrower’s (i) internal monthly
consolidated corporate reporting package (i.e., flash reports) and (ii)
monthly historical collateral postings (liquidity) reports; and

(d)           within 15 days after approval thereof
by the Borrower’s Board of Directors for each Fiscal Year, a consolidated plan
and financial forecast for such Fiscal Year and the two immediately succeeding
Fiscal Years (or portion thereof) through the Term Loan Maturity Date (a “Financial
Plan”), including (i) a forecasted consolidated balance sheet and
forecasted consolidated statements of income or operations and cash flows of
the Borrower and its Subsidiaries for each such Fiscal Year, (ii) forecasted
consolidated statements of income or operations and cash flows of the Borrower
and its Subsidiaries for each month of such Fiscal Year (but not subsequent
Fiscal Years) and (iii) forecasts of calculations under Section 7.11 for
each Fiscal Quarter of such Fiscal Year, and for each Fiscal Year in the case
of subsequent Fiscal Years.

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As to any information contained in materials furnished
pursuant to Section 6.2(c), the Borrower shall not be separately
required to furnish such information under clause (a) or (b)
above, but the foregoing shall not be in derogation of the obligation of the
Borrower to furnish the information and materials described in clauses (a)
and (b) above at the times specified therein.

6.2          Certificates; Other Information.  Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent:

(a)           concurrently with the delivery of the
financial statements referred to in Sections 6.1(a) and (b),
a duly completed Compliance Certificate signed by a Responsible Officer of the
Borrower;

(b)           promptly after any request by the
Administrative Agent or any Lender, copies of any detailed audit reports,
management letters or recommendations submitted to the board of directors (or
the audit committee of the board of directors) of the Borrower by independent
accountants in connection with the accounts or books of the Borrower or any
Subsidiary, or any audit of any of them;

(c)           promptly after the same are
available, copies of all quarterly and annual reports filed by the Borrower
with the SEC on Forms 10-Q and 10-K, and all current reports filed by the
Borrower with the SEC on Form 8-K;

(d)           promptly after the furnishing
thereof, copies of any notice of default furnished to any holder of debt
securities of any Loan Party or any Subsidiary thereof pursuant to the terms of
any indenture, loan or credit or similar agreement and not otherwise required
to be furnished to the Lenders pursuant to Section 6.1 or any other
clause of this Section;

(e)           promptly, and in any event within
five Business Days after receipt thereof by any Loan Party or any Subsidiary
thereof, copies of each material, non-routine, written notice or other
material, non-routine, written correspondence received from the SEC concerning
any investigation or possible investigation or other inquiry by such agency
regarding financial or other operational results of any Loan Party or any
Subsidiary thereof;

(f)            promptly, and in any event within
five Business Days after receipt thereof by any Loan Party or any Subsidiary
thereof, copies of (i) each notice of default or event of default received or
delivered by Retail Holdco or its Subsidiaries under or in connection with any
Sleeve Document, (ii) each amendment to the Reimbursement Agreement and
the Working Capital Agreement to the extent not available pursuant to clause
(c) above and (iii) any notice received or delivered by any such Person
under (A) Section 10.1 of the IP Trust Agreement or (B) Section 9.1 of the IT
Trust Agreement; and

(g)           promptly, such additional information
regarding the business, financial or corporate affairs of the Borrower or any
Subsidiary, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender may from time to time reasonably request.

Documents required to be delivered pursuant to Section 6.1(a)
or (b) or Sections 6.2(c) or (f) (to the extent any
such documents are included in materials otherwise filed with the SEC)

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may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date (i) on which the Borrower posts such documents, or provides a
link thereto on the Borrower’s website on the Internet at the website address
listed on Schedule 11.2; or (ii) on which such documents are posted
on the Borrower’s behalf on an Internet or intranet website, if any, to which
each Lender and the Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent); provided,
that (A) the Borrower shall deliver paper copies of such documents to the
Administrative Agent or any Lender that requests the Borrower to deliver such
paper copies and (B) the Borrower shall notify the Administrative Agent and
each Lender (by telecopier or electronic mail) of the posting of any such
documents and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents.  Notwithstanding anything contained herein, in
every instance the Borrower shall be required to provide paper copies of the
Compliance Certificates required by Section 6.2(a) to the
Administrative Agent.  Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by the
Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

The Borrower hereby acknowledges that (a) the
Administrative Agent will make available to the Lenders and each L/C Issuer
materials and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials
on IntraLinks or another similar electronic system (the “Platform”) and
(b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders
that do not wish to receive material non-public information with respect to the
Borrower or its securities) (each, a “Public Lender”).  The Borrower hereby agrees that (w) all
Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that
the word “PUBLIC” shall appear prominently on the first page thereof; (x) by
marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have
authorized the Administrative Agent and each L/C Issuer and the Lenders to
treat such Borrower Materials as either publicly available information or not
material information (although it may be sensitive and proprietary) with
respect to the Borrower or its securities for purposes of United States Federal
and state securities laws; (y) all Borrower Materials marked “PUBLIC” are
permitted to be made available through a portion of the Platform designated “Public
Investor;” and (z) the Administrative Agent shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Investor.”

6.3          Notices.  Promptly notify the Administrative Agent and
each Lender:

(a)           after any Responsible Officer’s
obtaining knowledge of the occurrence of any Default;

(b)           of any matter that has resulted or
could reasonably be expected to result in a Material Adverse Effect (including
as a result of (i) breach or non-performance of, or any default under, a
Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute,
litigation, investigation, proceeding or suspension between the Borrower or any
Subsidiary and any Governmental Authority; or (iii) the commencement of, or any
material development in, any

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litigation or proceeding affecting the Borrower or any
Subsidiary, including pursuant to any applicable Environmental Laws);

(c)           after any Responsible Officer’s
obtaining knowledge of the occurrence of any ERISA Event or of any contribution
failure under Code Section 412, or ERISA Section 302 with respect to any
Pension Plan;

(d)           of the (i) occurrence of any Asset
Sale for which the Borrower is required to make a mandatory repayment pursuant
to Section 2.4(b)(i), and (ii) incurrence or issuance of any
Indebtedness for which the Borrower is required to make a mandatory repayment
pursuant to Section 2.4(b)(ii), (iii) or (iv); and

(e)           (x) of the occurrence of (i) any
Permitted Sale, (ii) any repayment or prepayment of principal of any Sale Note
and (iii) any repayment or prepayment of Revolving Credit Loans using either
(A) cash consideration received by the Borrower or the applicable Restricted
Subsidiary with respect to a Permitted Sale pursuant to clause (i) of
the definition of Permitted Sale or (B) the proceeds of any repayment or
prepayment set forth in clause (ii), (y) following the occurrence of any
event set forth in clause (e)(x), of the outstanding principal amount of
all Sale Notes and calculations to demonstrate the extent to which a Trigger
Amount has accrued, in each case, both immediately before and after giving
effect to such event and (z) following any Permitted Payment pursuant to Section
6.15(b) or (c), the date and amount of such Permitted Payment and
the Parity Secured Debt to which such Permitted Payment was applied.

Each notice pursuant to this Section (other than subsection
(d)) shall be accompanied by a statement of a Responsible Officer of the
Borrower setting forth details of the occurrence referred to therein and
stating what action the Borrower has taken and proposes to take with respect
thereto.  Each notice pursuant to Section 6.3(a)
shall describe with particularity any and all provisions of this Agreement and
any other Loan Document that have been breached.

6.4          Payment of Obligations.  Pay and discharge as the same shall become
due and payable (a) all tax liabilities, assessments and governmental charges
or levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings diligently conducted and
adequate reserves in accordance with GAAP are being maintained by the Borrower
or such Subsidiary; and (b) all lawful claims which, if unpaid, would by law
become a Lien upon its property that is not a Permitted Lien.

6.5          Preservation of Existence, Etc.  (a) 
Preserve, renew and maintain in full force and effect its legal
existence and good standing under the Laws of the jurisdiction of its
organization except in a transaction permitted by Section 7.4 or 7.5;
(b) take all reasonable action to maintain all rights, privileges, permits,
licenses and franchises necessary or desirable in the normal conduct of its
business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (c) preserve or renew all of
its registered patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect.

6.6          Maintenance of Properties.  (a) 
Maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and

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condition, ordinary wear and tear excepted; (b) make
all necessary repairs thereto and renewals and replacements thereof; and (c)
use the standard of care typical in the industry in the operation and
maintenance of its facilities, in each of cases (a), (b) and (c), except where
the failure to do so could not reasonably be expected to have a Material
Adverse Effect.

6.7          Maintenance of Insurance.  Maintain with financially sound and reputable
insurance companies, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons of
same or similar size engaged in the same or similar business, of such types and
in such amounts (after giving effect to any self-insurance compatible with the
following standards) as are customarily carried under similar circumstances by
such other Persons and providing for not less than 30 days’ (or such other
period as required by law) prior notice to the Collateral Trustee of
termination, lapse or cancellation of such insurance.

6.8          Compliance with Laws.  Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b) the
failure to comply therewith could not reasonably be expected to have a Material
Adverse Effect.

6.9          Books and Records.  (a) 
Maintain proper books of record and account, in which entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Borrower or
such Subsidiary, as the case may be; and (b) maintain such books of record and
account in material conformity with all applicable requirements of any
Governmental Authority having regulatory jurisdiction over the Borrower or such
Subsidiary, as the case may be.

6.10        Inspection Rights.  Permit representatives and independent
contractors of the Administrative Agent to visit and inspect any of its
properties (subject in the case of access to its properties and assets, to any
applicable restrictions contained in the leases for the Mortgaged Real Property
Assets and the applicable Loan Party’s site safety and security requirements),
to examine its corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its officers, and independent public accountants, all at the
expense of the Borrower and at such reasonable times during normal business hours
and as often as may be reasonably desired, upon reasonable advance notice to
the Borrower; provided, that when an Event of Default exists the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.

6.11        Use of Proceeds.  Use the proceeds of (a) the Revolving Credit
Facility for general corporate purposes, including (i) permitted investments,
(ii) replacing loans and letters of credit under the Existing Credit Agreement
and the DB Credit Agreement and refinancing Indebtedness of Securitization
Entities under Qualified Securitization Transactions existing on the Effective
Date, (iii) funding scheduled payments of principal of and interest on (but
excluding the voluntary repayment or prepayment, or voluntary repurchase,
retirement,

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redemption or defeasance of the principal of or
interest on) any Term Loans or other Parity Secured Debt, (iv) funding
Permitted Payments in an amount not to exceed the then applicable Revolving
Loan Payment Amount and (v) acquisitions of Permitted ERCOT Assets to the
extent permitted hereunder; (b) the Term Facility to replace term loans
outstanding under the Existing Credit Agreement and refinance Indebtedness of
Securitization Entities under Qualified Securitization Programs; and (c) the
Pre-Funded Letters of Credit for general corporate purposes; provided,
that in no event shall proceeds of any Credit Extension be used to repay or
prepay any loans under the Working Capital Agreement.

6.12        Additional Loan Parties; Security
Interests.

(a)           Subject to the provisions of clause (b)
below, promptly and in any event within thirty (30) Business Days
(i) after the formation or acquisition after the Closing Date of any new
Subsidiary (other than a Subsidiary that is prohibited from becoming a Loan
Party pursuant to the Sleeve Documents or an agreement for Indebtedness in
existence on the Closing Date which is permitted under Section 7.3, or
an agreement for any refinancing or renewal of any such Indebtedness pursuant
to, and in accordance with, Section 7.3) that has satisfied the
Threshold Amount, (ii) with respect to any Subsidiary (other than a Subsidiary
that is prohibited from becoming a Loan Party pursuant to the Sleeve Documents
or an agreement for Indebtedness in existence on the Closing Date which is
permitted under Section 7.3, or an agreement for any refinancing or
renewal of any such Indebtedness pursuant to, and in accordance with, Section
7.3) which was formed or acquired after the Closing Date and which did not
initially satisfy the Threshold Amount, after such Subsidiary does satisfy the
Threshold Amount, (iii) after any Subsidiary ceases to be an Excluded Entity or
(iv) after any Subsidiary Guarantees any Indebtedness of the Borrower other
than the Obligations (as the case may be), deliver to the Collateral Trustee
(with copies to the Administrative Agent) the following: (x) in the case of the
Domestic Subsidiaries, (A) an Instrument of Assumption and Joinder executed by
such Subsidiary pursuant to which, among other things, such Subsidiary shall
become a Loan Party hereunder; and a Joinder Agreement (in substantially the
form of Exhibit A to the Collateral Trust Agreement) pursuant to which, among
other things, such Subsidiary shall become a party to the Collateral Trust
Agreement and the Security Agreement, (B) appropriate UCC-1 financing
statements with respect to the collateral under the Security Agreement and
under the Separate Security Agreement, (C) all applicable Lien searches with
respect to such Subsidiary, (D) Organizational Documents described in Section
4.1(a)(iii) and (iv) with respect to such Subsidiary, (E) a
written opinion of counsel covering those matters addressed in the opinion
delivered on the Closing Date but limited to such Subsidiary, (F) Mortgages for
any of such Subsidiary’s real property assets having a book value in excess of
$20,0000,000, (G) such other security documents as may be reasonably
requested by the Administrative Agent or its counsel and all of the foregoing
in form and substance reasonably satisfactory to the Administrative Agent and
its counsel, and (H) if applicable, certificates or other instruments (if any)
representing 100% of the Equity Interests in such Subsidiary owned by a Loan
Party together with an undated stock power (or other appropriate document)
executed in blank for each such certificate or other instrument; and (y) in the
case of Foreign Subsidiaries, such security documents as may be reasonably
requested by, and in form and substance reasonably satisfactory to, the
Administrative Agent or its counsel, in order to cause the pledge by the
applicable Loan Parties of the Equity Interests of such Subsidiary owned by
such Loan Parties if such Foreign Subsidiary is a direct Subsidiary of a Loan
Party; provided, that no more than 65% of the total

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outstanding Equity Interests of such Foreign
Subsidiary shall be required to be pledged by the Loan Parties pursuant to this
Section.  Neither the Collateral Agent
nor the Collateral Trustee nor any other Person shall be required to release
any Subsidiary from the Guaranty nor release any Lien on the Equity Interests
or assets of any Subsidiary solely for the reason that such Subsidiary ceases
to satisfy the Threshold Amount at any time.

(b)           If at any time after
the Closing Date, any one or more Domestic Subsidiaries (other than Domestic
Subsidiaries that are prohibited from becoming a Loan Party pursuant to the
Sleeve Documents or an agreement for Indebtedness in existence on the Closing
Date which is permitted under Section 7.3, or an agreement for any
refinancing or renewal of any such Indebtedness pursuant to, and in accordance
with, Section 7.3) have been formed or acquired which Subsidiaries are
not Loan Parties hereunder and have individually or in the aggregate satisfied
the Threshold Amount, promptly following its determination that the Threshold
Amount has been satisfied, cause one or more of such Subsidiaries to become
Loan Parties hereunder and to provide the documents required by Section
6.12(a) above, so that (i) the aggregate book value of the assets of all
Domestic Subsidiaries that have been formed or acquired after the Closing Date
and are not Loan Parties hereunder is, at all times, less than $50,000,000 and
(ii) the aggregate Consolidated EBITDAR during the four-Fiscal Quarter period
most recently ended attributable to all such Subsidiaries formed or acquired
after the Closing Date that are not Loan Parties does not exceed $25,000,000.

(c)           At any time and from
time to time, promptly execute and deliver any and all further instruments and
documents and take all such other action as the Administrative Agent and the
Collateral Agent may reasonably deem necessary or desirable in obtaining the
full benefits of, or in perfecting and preserving the Liens of, such
Guaranties, Instruments of Assumption and Joinder, and Security Documents.

Notwithstanding anything to the contrary contained
herein, none of the foregoing actions shall be required to be taken by, or with
respect to, REMA or any of its Subsidiaries or, so long as the Reimbursement
Agreement prohibits the Retail Group from becoming a Loan Party, any member of
the Retail Group.

6.13        Further Assurances.  Promptly upon request by the Administrative
Agent, or any Lender through the Administrative Agent, (a) correct any material
defect or error that may be discovered in any Loan Document or in the
execution, acknowledgment, filing or recordation thereof, and (b) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, certificates, assurances and
other instruments as the Administrative Agent, or any Lender through the
Administrative Agent, may reasonably require from time to time in order to (i)
carry out more effectively the purposes of the Loan Documents, (ii) to the
fullest extent permitted by applicable law, subject any Loan Party’s or any of
its Subsidiaries’ properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Loan Documents, (iii) perfect
and maintain the validity, effectiveness and priority of any of the Loan
Documents and any of the Liens intended to be created thereunder and (iv)
assure, convey, grant, assign, transfer, preserve, protect and confirm more
effectively unto the Secured Parties the rights granted or now or hereafter
intended to be granted to the Secured Parties under any Loan Document or under
any other instrument executed in connection

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with any Loan Document to which any Loan Party or any
of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries
to do so.

6.14        Florida Mortgaged
Properties.  Upon the occurrence and
during the continuation of any Event of Default, at the request of the Required
Lenders, the Borrower shall cause each of the Florida Mortgage Supplements to
be filed in the appropriate offices and the proper amount of mortgage recording
or similar taxes (if any) to be paid in connection therewith, in order to grant
a fully perfected Lien on, and fully perfected security interest in, all right,
title and interest of the applicable Loan Parties in the real property assets
(except personalty that does not constitute fixtures) covered thereby and the
proceeds thereof, subject only to Permitted Encumbrances and, as to perfection,
subject to the terms and provisions of the Existing Florida Mortgages and the
Assignments of Leases and Rents.

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

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

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

(d)           Ensure that, at all
times prior to the making of any Permitted Payment required to be made pursuant
to clauses (b) and (c), and with respect to which there is a Revolving
Loan Payment Amount, the Aggregate Commitments for Revolving Credit Loans shall
equal or exceed the sum of (i) the Outstanding Amount of Revolving Credit Loans
plus (ii) the

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Outstanding Amount of Revolving L/C Obligations plus
(iii) such Revolving Loan Payment Amount.

(e)           The Borrower shall
apply the Residual Amount to reduce the Revolving Credit Exposure as follows: first,
to prepay outstanding Revolving L/C Borrowings until all such Revolving L/C
Borrowings are paid in full, second, to prepay outstanding Revolving
Credit Loans until all such Revolving Credit Loans are paid in full and, third,
to Cash Collateralize the Revolving L/C Obligations.

(f)            Any Residual Amount
remaining after the application set forth in clause (e) may be retained
by the Borrower for use in the ordinary course of its business.

6.16        Retail Group
Distributions.  Promptly following
the last day of each month, beginning with the first full month occurring after
the initial Contribution Date,

(a)           cause Retail Holdco to
pay cash dividends or distributions to the Borrower in an amount equal to (i)
that which is permitted under the terms of Section 6.11(c) of the Reimbursement
Agreement (or similar clause in any replacement agreement) on such day minus
(ii) the sum of (A) amounts reasonably estimated by the Borrower to be due and
payable by the Retail Group on or before the 20th day of the month next occurring plus
(B) $100,000,000; and

(b)           provide to the
Administrative Agent within 45 days following the last day of each of the first
three Fiscal Quarters and 90 days (in the case of the fourth Fiscal Quarter) a
statement as to the amount of dividends paid to the Borrower by Retail Holdco
and the amount of cash Investments made in the Retail Group by the Borrower and
Subsidiaries (other than the Retail Group) in the previous Fiscal Quarter and
also on a cumulative basis since the Effective Date.

6.17        Title Companies, Local
Counsel Opinions.  Promptly, but in
any event within 30 days following the Effective Date, deliver to the Administrative
Agent (i) modification endorsements issued by the Title Companies to the
Collateral Trustee that provide the Collateral Trustee (for benefit of the
Secured Parties in accordance with the Collateral Trust Agreement) with
mortgagee’s title insurance through the Closing Date under the Existing Title
Policies insuring that the Existing Mortgages (not including the Existing
Florida Mortgages), as supplemented by the Mortgage Supplements referenced in Section
4.1(b), create a first priority Lien (subject to Permitted Encumbrances) on
the Closing Date Mortgaged Properties (not including the Florida Mortgaged
Properties) securing the Parity Secured Obligations; provided, that the
coverage effectuated by the Title Companies’ issuance of the modification endorsements
shall be the substantially the same as or better than the coverage under the
Existing Title Policies prior to the date of issuance of the modification
endorsements, except for the addition of Liens (as defined in and permitted
under the Existing Credit Agreement) arising between the date the Existing
Title Policies were last modified by the Title Companies and the Effective
Date; and (ii) favorable opinions of local counsel for the Loan Parties in
jurisdictions in which the Closing Date Mortgaged Properties are located,
including, among other things, opinions with respect to the enforceability and
perfection of the Mortgages covering the Closing Date Mortgaged Properties and
any related fixture filings, in form and substance reasonably satisfactory to
the Administrative Agent.

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ARTICLE VII

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment
hereunder, any Loan or other Credit Agreement Obligation hereunder shall remain
unpaid or unsatisfied, or any Letter of Credit shall remain outstanding (if
neither (x) Cash Collateralized in accordance with the terms of this
Agreement nor (y) supported with a back-to-back letter of credit
reasonably acceptable to the L/C Issuers), the Borrower shall not, nor shall it
permit any Restricted Subsidiary to, directly or indirectly:

7.1          Liens.  Create, incur, assume or otherwise cause or
suffer to exist or become effective any Lien of any kind on any asset now owned
or hereafter acquired, except Permitted Liens.

7.2          Investments.  Subject to Sections 7.18 and 7.19,
make or hold any Investments, except for Permitted Investments.

7.3          Indebtedness.  Create, incur, issue, assume, suffer to
exist, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to any Indebtedness (including Acquired
Debt and Disqualified Stock), and the Borrower shall not permit any of its
Restricted Subsidiaries to issue any shares of preferred stock, in each case,
other than the following (collectively, “Permitted Debt”):

(a)           the Credit Agreement
Obligations;

(b)           Indebtedness of
Securitization Entities under Qualified Securitization Transactions in an
aggregate principal amount at any one time outstanding under this clause not to
exceed (i) $450,000,000, which is incurred and outstanding only at a time
when (A) the Sleeve Documents are no longer binding on the Borrower or any of
is Subsidiaries and (B) no amounts are owing by the Borrower or any of its
Subsidiaries under the Sleeve Documents; or (ii) $300,000,000 (less the
amount by which Indebtedness permitted under Section 7.3(t) exceeds
$10,000,000) which is incurred and outstanding only at a time when (A) the
Working Capital Agreement has been terminated and (B) securitization
facilities of the type permitted under this clause are permitted under the
Sleeve Documents;

(c)           Indebtedness of REMA
and its Subsidiaries in an aggregate principal amount at any one time
outstanding under this clause (with letters of credit being deemed to have
a principal amount equal to the maximum potential liability of REMA and its
Subsidiaries thereunder) not to exceed $60,000,000;

(d)           the following
Indebtedness of the Borrower and the Guarantors: (i) Permitted PEDFA Bond
Indebtedness and/or the guarantee thereof by the Borrower or the Guarantors or
(ii) Indebtedness evidenced by or in support of the Seward Tax-Exempt
Bonds, in an aggregate principal amount at any one time outstanding under this
clause, not to exceed $500,000,000 less the aggregate amount of all
repayments, optional or mandatory, of the principal of any Indebtedness
incurred pursuant to this clause that have been made by the Borrower and/or the
Guarantors since the Closing Date;

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(e)           Indebtedness of the
Borrower, including Parity Secured Debt, pursuant to a letter of credit or
synthetic letter of credit facility not to exceed the sum of (i) the difference
of (x) $500,000,000 minus (y) the aggregate principal amount of the
Seward Tax-Exempt Bonds refinanced as fixed-rate Permitted PEDFA Bond
Indebtedness on or after the Closing Date in accordance with clause (d)
above plus (ii) the aggregate amount by which the Revolving Credit
Commitments have been permanently reduced since the Effective Date;

(f)            Indebtedness of the
Borrower, including Parity Secured Debt, in an aggregate principal amount at
any one time outstanding under this clause, not to exceed $500,000,000, the
proceeds of which are used to purchase (or which Indebtedness is assumed in
connection with the purchase of) Permitted ERCOT Assets (provided, that
such Permitted ERCOT Assets become Collateral securing the Credit Agreement
Obligations on (or promptly following) such purchase);

(g)           Specified Junior
Securities issued by the Borrower; provided, that if there is any change
in the terms of such Specified Junior Securities that results in such securities
no longer meeting all of the requirements of the definition of “Specified
Junior Securities,” then such change will be deemed to constitute an incurrence
of Indebtedness by the Borrower that was not permitted by this clause;

(h)           Existing Indebtedness
of the Borrower and its Restricted Subsidiaries;

(i)            Senior Debt of the
Borrower that is not secured by any Lien;

(j)            Permitted Refinancing
Indebtedness of the Borrower or any of its Restricted Subsidiaries in exchange
for, or the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted to be
incurred under clauses (a), (b), (c), (d), (f),
(g), (h), (i), (j), (s) or (t) of
this Section;

(k)           intercompany
Indebtedness between or among the Borrower and any of its Restricted
Subsidiaries; provided, that:

(i)            such Indebtedness (except Permitted PEDFA
Bond Indebtedness, Indebtedness restricted from being subordinated pursuant to
agreements identified on Schedule 7.3(k) and the OPMW Revolving Note)
must be subordinated to the prior payment in full in cash of the Credit
Agreement Obligations; and

(ii)           any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a Person
other than the Borrower or any Restricted Subsidiary, and any sale or other
transfer of any such Indebtedness to a Person that is not the Borrower or any
Restricted Subsidiary (except transfers to the Collateral Trustee to secure
Parity Secured Obligations) shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Borrower or such Restricted Subsidiary,
as the case may be, that was not permitted by this clause;

(l)            shares of preferred
stock issued by any Restricted Subsidiary to the Borrower or to any Restricted
Subsidiary; provided, that:

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(i)            any subsequent issuance or transfer of
Equity Interests that results in any such preferred stock being held by a
Person other than the Borrower or any Restricted Subsidiary; and

(ii)           any sale or other transfer of any such
preferred stock to a Person that is not either the Borrower or any Restricted
Subsidiary,

shall be deemed, in each case, to constitute an
issuance of such preferred stock by the Borrower or such Restricted Subsidiary,
as the case may be, that was not permitted by this clause;

(m)          Hedging Obligations
incurred by the Borrower or any of its Restricted Subsidiaries in the ordinary
course of business and not for speculative purposes;

(n)           Indebtedness of the
Borrower or any of its Restricted Subsidiaries in respect of workers’
compensation claims, self-insurance obligations, bankers’ acceptances,
performance and surety bonds provided by the Borrower or a Restricted
Subsidiary in the ordinary course of business;

(o)           Indebtedness of the
Borrower or any of its Restricted Subsidiaries arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds, so long as such Indebtedness is
covered within five business days;

(p)           Indebtedness arising
from agreements of the Borrower or a Restricted Subsidiary providing for
indemnification, adjustment of purchase price or similar obligations, in each
case, incurred or assumed in connection with the disposition of any business,
assets or Equity Interests of a Subsidiary; provided, that the maximum
aggregate liability in respect of all such Indebtedness shall at no time exceed
the gross proceeds (including non-cash proceeds) actually received by the
Borrower and/or such Restricted Subsidiary in connection with such disposition;

(q)           the Guarantee by the
Borrower or any Guarantor of Indebtedness of the Borrower or any Guarantor that
is permitted by clause (d)  (e), (f), (g), (i),
(j) or (s) of this Section;

(r)            the Guarantee by OPC
and its Subsidiaries of the OPMW Revolving Note;

(s)           additional Indebtedness
of the Borrower or any of its Restricted Subsidiaries (other than the Retail
Group, for so long as any Sleeve Documents are in effect or any amounts are
owing thereunder), the proceeds of which are used for, or assumed in connection
with, general corporate purposes, including:

(i)            Indebtedness of the Borrower or any of its
Restricted Subsidiaries. including Parity Secured Debt, Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, and Disqualified Stock of the Borrower, and

(ii)           Indebtedness of Securitization Entities
under Qualified Securitization Transactions which is incurred and outstanding
only at a time when (A) the Sleeve Documents are no longer binding on the
Borrower or any of is Subsidiaries and (B) no

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amounts are owing
by the Borrower or any of its Subsidiaries under the Sleeve Documents,

in an aggregate principal amount (or accreted value,
as applicable) at any time outstanding under this clause (s), not to
exceed $680,000,000 minus (if required pursuant to Section 7.20)
the Applicable Amount; and

(t)            incurrence by the
Retail Group of additional Indebtedness and letters of credit (including
guarantees delivered by other than the Borrower or any Subsidiary that is not a
Subsidiary of Retail Holdco of such Indebtedness) provided, that (i) the
aggregate principal amount of Indebtedness incurred under this clause at any
one time outstanding shall not exceed $310,000,000, and (ii) the proceeds of
Indebtedness incurred under this clause shall be used only for the repayment of
Indebtedness and other obligations of the Retail Group or to finance working
capital needs of the Retail Group, including the payment of sales, general and
administrative, and operations and maintenance expenses (including Capital
Expenditures) and all other expenses in the ordinary course of business of the
Retail Group).

Notwithstanding any of the foregoing, neither OPH nor
any of its Subsidiaries shall create, incur, issue, assume, suffer to exist,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to any Indebtedness (including Acquired Debt and
Disqualified Stock), or issue any shares of preferred stock, in each case,
except to the extent permitted (i) under clauses (h) (but not any
Permitted Refinancing Indebtedness thereunder), (k), (l), (m),
(n), (o), (p) and (r) of
this Section and (ii) under clause (s) of this Section, to the extent
described in clause (d)(v) of Section 7.18.

7.4          Consolidation and
Mergers.

(a)           Consolidate or merge
with or into another Person, or sell, assign, transfer, convey or otherwise
dispose of all or substantially all of the properties or assets of the Borrower
and its Restricted Subsidiaries taken as a whole, in one or more related
transactions, to another Person, except that:

(i)            so long as no Default exists or would
result therefrom, (A) any Subsidiary (other than Retail Holdco or any of
its Subsidiaries when the Sleeve Documents are in effect) may merge with or
dissolve into (i) the Borrower; provided, that the Borrower shall be the
continuing or surviving Person or (ii) any one or more other Subsidiaries;
provided, that when any Guarantor is merging with or dissolving into another
Subsidiary, the Guarantor shall be the continuing or surviving person or such
other Subsidiary shall become a Guarantor upon the consummation of such merger
or dissolution in compliance with Section 6.12, (B) any Subsidiary
of Retail Holdco may merge with or dissolve into Retail Holdco or any other
Subsidiary of Retail Holdco;

(ii)           in connection with any Asset Sale permitted
under Section 7.5, any Subsidiary of the Borrower may dissolve,
liquidate, consolidate or merge with any other Person or permit any other Person
to consolidate or merge with or into it; and

(iii)          so long as no Default exists or would result
therefrom, in connection with any Investment permitted under Section 7.2,
any Subsidiary of the Borrower may

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dissolve,
liquidate, consolidate or merge with or into any other Person or permit any
other Person to merge or consolidate with it; provided, that, in a
merger, dissolution or consolidation of other than Retail Holdco or any of its
Subsidiaries when the Sleeve Documents are in effect, the Person surviving such
merger, dissolution or consolidation shall be a Guarantor in compliance with Section
6.12.

(b)           In addition, the
Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to,
directly or indirectly, lease all or substantially all of the properties or
assets of the Borrower and its Restricted Subsidiaries, in one or more related
transactions, to any other Person.

(c)           This Section shall not
apply to (i) any sale, transfer, assignment, conveyance, lease or other
disposition of assets between or among the Borrower and the Restricted
Subsidiaries, or (ii) the merger of the Borrower with an Affiliate solely
for the purpose of reincorporating or re-forming the Borrower in another
jurisdiction.

7.5          Asset Sales.

(a)           Consummate an Asset Sale
unless:

(i)            the Borrower (or the Restricted Subsidiary,
as the case may be) receives consideration at the time of such Asset Sale at
least equal to the Fair Market Value of the assets or Equity Interests issued
or sold or otherwise disposed of (as reasonably determined by the Borrower or
such Restricted Subsidiary); and

(ii)           at least 90% of the consideration therefor
received in the Asset Sale by the Borrower or such Restricted Subsidiary is in
the form of cash or Cash Equivalents. 
For purposes of this provision, each of the following shall be deemed to
be cash:

(A)          any
liabilities, as shown on the Borrower’s most recent consolidated balance sheet,
of the Borrower or any Restricted Subsidiary (other than contingent liabilities
and liabilities that are by their terms subordinated to the Loans or any
Guaranty thereof) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Borrower or such
Restricted Subsidiary from further liability;

(B)           any
securities, notes or other Obligations received by the Borrower or any such
Restricted Subsidiary from such transferee that are converted (by sale or other
disposition) by the Borrower or such Restricted Subsidiary into cash, to the
extent of the cash received in that conversion within 60 days; and

(C)           reasonable
reserves for indemnity obligations and purchase price adjustments funded in
cash or held back by the purchaser.

(b)           In addition, without
having obtained the Core Asset Consent in writing, the Borrower shall not, and
shall not permit any of its Restricted Subsidiaries to, consummate (i) an
Asset Sale of (x) any Equity Interest in RERH or (y) any “price-to-beat” small
commercial or residential retail customers of RERH or any of its Subsidiaries
that are located in the “greater

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Houston area” or (ii) an Asset Sale of any Equity
Interest in REMA or OPH, or any assets of RERH (other than any asset to which clause (b)(i)(y)
applies), REMA or OPH (and, in each case, their respective Subsidiaries), where
the gross proceeds of the portion of the Equity Interest or asset being sold,
together with the gross proceeds of any other such Equity Interest or assets
sold in an Asset Sale on or after the Closing Date, would exceed
$2,500,000,000.  For purposes of
calculating the amount under the foregoing clause (b)(ii), upon the
first closing of any in a series of transactions, all of the Equity Interests
or assets whose sale is contemplated by such series shall be deemed to have
then been sold for their gross proceeds as at the time of such first closing.

(c)           If any Net Asset Sale
Proceeds from any sale of Shared Collateral or from any issuance of Equity
Securities that constitute an Asset Sale are required pursuant to the terms of
any of the Secured Debt Documents to be deposited into a cash collateral or
similar account, then such Net Proceeds shall be deposited into a Prepayment
Collateral Account as part of the Shared Collateral.  As to any other Net Asset Sale Proceeds,
pending final application of such Net Asset Sale Proceeds in accordance with Section
2.4, the Borrower shall apply such Net Asset Sale Proceeds in accordance
with Section 2.4.

7.6          Restricted Payments.  Make any Restricted Payment by way of the
payment of any dividend or distribution in cash or Cash Equivalents on any
Equity Interests of the Borrower prior to the Release Date; otherwise, make any
Restricted Payment except for the following:

(a)           the payment of any
dividend within 60 days after the date of declaration of the dividend, if at
the date of declaration the dividend would have complied with the provisions of
this Agreement (and, in the case of any dividends to be paid by the Borrower,
no Default had occurred and was continuing on the date of such declaration);

(b)           so long as no Default
has occurred and is continuing or would be caused thereby, the making of any
Restricted Payment in exchange for, or (subject to Section 2.4(b)(v))
out of the net cash proceeds of, the substantially concurrent sale (other than
to a Restricted Subsidiary of the Borrower) of, Equity Interests of the
Borrower (other than Disqualified Stock) or of the substantially concurrent
contribution of common equity capital or surplus to the Borrower;

(c)           the defeasance,
redemption, repurchase or other acquisition of Subordinated Indebtedness of the
Borrower or any Guarantor with the net cash proceeds from a substantially
concurrent incurrence of Permitted Refinancing Indebtedness;

(d)           the payment of any
dividend (or, in the case of any partnership, limited liability company or
trust, any similar distribution) by a Restricted Subsidiary of the Borrower to
the holders of its Equity Interests on a pro  rata basis;

(e)           so long as no Default
has occurred and is continuing or would be caused thereby, (i) the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
of the Borrower or any Restricted Subsidiary of the Borrower in connection with
any management equity subscription agreement, stock option agreement,
shareholders’ agreement, severance agreement, employee benefit plan or
agreement or similar agreement, in each case, as in existence and as in effect
on the Closing Date, (ii) the repurchase, redemption or other

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acquisition or retirement for value of any Equity
Interests of the Borrower or any Restricted Subsidiary of the Borrower in
connection with any management equity subscription agreement, stock option
agreement, shareholders’ agreement, severance agreement, employee benefit plan
or agreement or similar agreement other than any such agreement or plan described
in clause (i) above, or (ii) the repurchase for value of any Equity
Interests of the Borrower in the open market to satisfy stock options issued by
the Borrower that are outstanding; provided, that with respect to clauses
(ii) and (iii) above, the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests after the Closing
Date may not exceed $25,000,000 in any calendar year;

(f)            the repurchase of
Equity Interests deemed to occur upon the exercise of stock options to the
extent such Equity Interests represent a portion of the exercise price of those
stock options;

(g)           the purchase by the
Borrower of fractional shares upon conversion of any securities of the Borrower
into Equity Interests of the Borrower;

(h)           so long as no Default
has occurred and is continuing or would be caused thereby, the declaration and
payment of dividends to holders of any class or series of Disqualified Stock of
the Borrower or any Restricted Subsidiary of the Borrower issued on or after the
Closing Date in accordance with Section 7.3(s) hereof;

(i)            the transactions with
any Person (including any Affiliate of the Borrower) set forth in clauses
(b)(i) and (b)(iv) of Section 7.8(b) hereof and the funding
of any obligations in connection therewith;

(j)            the issuance of Equity
Interests of the Borrower (other than Disqualified Stock) for other Equity
Interests of the Borrower in connection with any rights offering and payments
for the redemption of fractional shares in connection with any rights offering;
and

(k)           so long as no Default
has occurred and is continuing or would be caused thereby, additional
Restricted Payments, other than the payment by the Borrower of any cash
dividends or other cash distributions in respect of the Borrower’s Equity Interests,
in an aggregate amount not to exceed, together with the aggregate amount of
Investments made pursuant to clause (4) of the definition of “Permitted
Investments,” $75,000,000 since the Closing Date.

Notwithstanding the foregoing terms of this Section,
the aggregate amount of Restricted Payments made pursuant to clauses (a)
and (h), from the Release Date but prior to the Investment Grade Rating
Date shall not exceed $50,000,000 in any twelve-month period.  The amount of all Restricted Payments (other
than cash) shall be the Fair Market Value on the date of the Restricted Payment
of the asset(s) or securities proposed to be transferred or issued by the
Borrower or such Restricted Subsidiary, as the case may be, pursuant to the
Restricted Payment.

7.7          Line of Business.  Not, nor permit any of its Restricted
Subsidiaries to, engage in any business other than the Permitted Business,
except to such extent as would not be material to the Borrower and its
Subsidiaries taken as a whole.

 130
 

 

7.8          Transactions with Affiliates.

(a)           Not, and not permit any
of its Restricted Subsidiaries to, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate of the Borrower (each, an “Affiliate
Transaction”), unless such Affiliate Transaction is on terms that are no
less favorable (as reasonably determined by the Borrower) to the Borrower or
the relevant Restricted Subsidiary than those that would have been obtained in
a comparable transaction by the Borrower or such Restricted Subsidiary with an
unrelated Person.

(b)           The following items
shall not be deemed to be Affiliate Transactions and, therefore, shall not be
subject to the provisions of Section 7.8(a) hereof:

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

(ii)           transactions between or among the Borrower
and/or its Restricted Subsidiaries (other than (A) the Retail Group and
(B) Foreign Subsidiaries), transactions between or among any member of the
Retail Group, transactions under the Parent Services Agreement, transactions
between or among the IT Trust and the IP Trust and the Retail Group and
transactions between or among REI, and its Subsidiaries, the IT Trust, the IP
Trust, and the Retail Group that are evidenced or contemplated by the IP/IT
Agreements;

(iii)          transactions with a Person that is an
Affiliate of the Borrower solely because the Borrower owns, directly or through
a Restricted Subsidiary, an Equity Interest in, or controls, such Person;

(iv)          payment of reasonable directors’ fees to
Persons who are not otherwise Affiliates of the Borrower;

(v)           any issuance of Equity Interests (other than
Disqualified Stock) of the Borrower to Affiliates of the Borrower;

(vi)          Restricted Payments that do not violate the
provisions of Section 7.6 hereof;

(vii)         transactions effected as part of a Qualified
Securitization Transaction;

(viii)        loans or advances to employees in the ordinary
course of business not to exceed $10,000,000 in the aggregate outstanding at
any one time;

(ix)           any agreement, instrument or arrangement as
in effect as of the Closing Date, or any amendment thereto or any transaction
contemplated thereby (including pursuant to any amendment thereto) in any
replacement agreement thereto so long as any

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such amendment or
replacement agreement is not more disadvantageous to the Lenders in any
material respect than the original agreement as in effect on the Closing Date
as determined by the Borrower; and

(x)            any pro  rata distribution
(including a rights offering) to all holders of a class of Equity Interests or
Indebtedness of the Borrower or any of its Restricted Subsidiaries, including
Persons who are Affiliates of the Borrower or any of its Restricted
Subsidiaries.

7.9          Restrictive Agreements.  Enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of the Borrower or any Restricted Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets,
or (b) the ability of any Restricted Subsidiary to pay dividends or make any
other distributions with respect to any shares of its capital stock or any
other Equity Interest or participation in its profits owned by a Restricted
Subsidiary, or (c) the ability of any Restricted Subsidiary (including any
Purchaser Subsidiary) to make or repay loans or advances to the Borrower or any
other Restricted Subsidiary or to Guarantee Indebtedness of the Borrower or any
other Restricted Subsidiary or to transfer any of its properties or assets to
the Borrower or any other Restricted Subsidiary; provided, that the
foregoing shall not apply to (i) restrictions and conditions imposed by Laws,
or by any Loan Document, (ii) restrictions and conditions in any agreement or
contract existing on the Closing Date and any amendments, modifications,
restatements, renewals or replacements thereof that are not more restrictive,
taken as a whole, than the restrictions existing on the Closing Date, (iii)
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary or asset pending such sale; provided, that such
restrictions and conditions apply only to the Subsidiary or asset that is to be
sold and such sale is permitted hereunder, (iv) restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, (v) customary non-assignment provisions in
any contract, easement or lease, and other customary
encumbrances and restrictions entered into in the ordinary course of business
that are not more restrictive, taken as a whole, than the encumbrances existing
on the Closing Date, (vi) restrictions or conditions contained in any trading,
netting, operating, construction, service, supply, purchase, sale or similar
agreement to which any Restricted Subsidiary is a party and which is entered
into in the ordinary course of business; provided, that such agreement
prohibits the encumbrance of solely the property or assets of such Restricted
Subsidiary that are the subject of such agreement, the payment rights arising
thereunder and/or the proceeds thereof and not to any other asset or property
of such Restricted Subsidiary or the assets or property of any other Restricted
Subsidiary, (vii) restrictions contained in documents evidencing Indebtedness
existing at the time at which any such Person first becomes a Restricted
Subsidiary, so long as such restriction was not agreed to or entered into
solely in contemplation of such change in status, and any amendments,
modifications, restatements, renewals or replacements thereof that are not more
restrictive, taken as a whole, than the restrictions existing at the time such
Person first becomes a Restricted Subsidiary and (viii) restrictions and
conditions contained in the Sleeve Documents.

7.10        Use of Proceeds.  Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulation
U of the FRB) or to extend credit to others for the

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purpose of purchasing or carrying margin stock or to
refund indebtedness originally incurred for such purpose.

7.11        Financial Covenants.

(a)           Consolidated
Interest Coverage Ratio.  Permit the
Consolidated Interest Coverage Ratio (i) as of the end of any Fiscal Quarter of
the Borrower ending after the Release Date to be less than 2:75:1 and (ii) as
of the end of any Fiscal Quarter of the Borrower ending prior to the Release
Date to be less than the ratio set forth below opposite such Fiscal Quarter:

	
  Four Fiscal Quarters Ending

  	
   

  	
  Minimum

  Consolidated Interest

  Coverage Ratio

  	
   

  
	
  Closing Date
  through June 30, 2007

  	
   

  	
  1.5:1.0

  	
   

  
	
  September 30,
  2007

  	
   

  	
  1.8:1.0

  	
   

  
	
  December 31, 2007 and
  each Fiscal Quarter thereafter

  	
   

  	
  2.0:1.0

  	
   

  

 

(b)           Consolidated
Leverage Ratio.  Permit the
Consolidated Leverage Ratio (i) as of the end of any Fiscal Quarter of the
Borrower ending after the Release Date to be greater than 3:25:1 and (ii) as of
the end of any Fiscal Quarter of the Borrower ending prior to the Release Date
set forth below to be greater than the ratio set forth below opposite such
period:

	
  Four Fiscal Quarters Ending

  	
   

  	
  Maximum

  Consolidated

  Leverage Ratio

  	
   

  
	
  Closing Date
  through June 30, 2007

  	
   

  	
  6.0:1.0

  	
   

  
	
  September 30,
  2007

  	
   

  	
  5.5:1.0

  	
   

  
	
  December 31, 2007 and
  each Fiscal Quarter thereafter

  	
   

  	
  5.0:1.0

  	
   

  

 

7.12        Capital Expenditures.  Make or become legally obligated to make any
Capital Expenditure, except

(a)           for Capital
Expenditures other than in connection with an Acquisition, in an amount not
exceeding $250,000,000 in the aggregate for the Borrower and its Restricted
Subsidiaries during each Fiscal Year; provided, that (i) any
portion of the $250,000,000 amount permitted in any Fiscal Year that is not
used during such Fiscal Year (the “Carry Amount”) may be carried forward
for a period of one Fiscal Year and added to the amount of permitted Capital
Expenditures in the immediately succeeding Fiscal Year (but no portion of any
Carry Amount shall be used (or deemed to be used) in the applicable Fiscal Year
until the entire amount of the Capital Expenditures permitted to be made in
such Fiscal Year (i.e., without giving effect to any Carry Amount) as provided
in this Section shall first have been used in full) and (ii) any portion

 133
 

 

of the $250,000,000 amount permitted in any Fiscal
Year may be subtracted from the total amount permitted in such Fiscal Year and
added to the permitted amount in the immediately preceding Fiscal Year; and

(b)           in the case of Capital
Expenditures in connection with an Acquisition, an amount that, together with
the aggregate amount of Acquisition Consideration paid by the Borrower or its
Subsidiaries on or after the Closing Date but prior to the Release Date, in the
aggregate does not exceed the Permitted Acquisition Limit;

provided, that in the case of both clauses
(a) and (b), regulatory and environmental capital expenditures
necessary to operate assets or to comply with law or permits and emergency
capital expenditures, shall not be limited and shall not be included in
calculating compliance with such limitations.

7.13        Modification of Certain
Agreements.  Consent to any
amendment, supplement, waiver or other modification of, or enter into any
forbearance from exercising any rights with respect to the terms or provisions
contained in,

(a)           documents relating to
Subordinated Indebtedness (other than intercompany Indebtedness) of the
Borrower or any Restricted Subsidiary in any way that:

(i)            increases the rate of or shortens the time
for payment of interest on any Subordinated Indebtedness;

(ii)           increases the principal of, shortens the
final maturity date of or shortens the Weighted Average Life to Maturity of any
Subordinated Indebtedness;

(iii)          alters in a manner adverse to the Borrower
the redemption provisions or the price or terms at which the Borrower or such
Restricted Subsidiary is required to offer to purchase any Subordinated
Indebtedness; or

(iv)          amends the subordination provisions of the
agreements governing any Subordinated Indebtedness;

(b)           the Organization
Documents of the Borrower or any of its Subsidiaries, if the result could
reasonably expected to have a Material Adverse Effect;

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

(d)           any Sale Note in any
way that (i) reduces the rate of interest or extends the date scheduled for
payment of principal of or interest on, or reduces the principal amount (other
than

 134
 

 

as a result of a Dollar for Dollar repayment) of, such
Sale Note, (ii) modifies, waives or deletes the terms of any Sale Note which
provide for a cross-default to Indebtedness of OPH under the OPH Note Indenture
or the OPH Notes, or (iii) releases collateral securing such Sale Note,
except in connection with any asset disposition that is not prohibited
hereunder and the Net Asset Sale Proceeds of which are applied in accordance
herewith;

(e)           any Sleeve Document (or
replacement of any Sleeve Document) in a way that (i) adversely affects any
member of the Retail Group’s ability to make dividends or distributions to, or
pay obligations owed to, the Borrower or Subsidiaries that are not members of
the Retail Group or (ii) adversely affects the Lenders’ and the Administrative
Agent’s rights to acquire the Sleeve Provider’s position under the Sleeve
Documents; or

(f)            otherwise, (i) amend,
modify or supplement the IP/IT Agreements as in effect on the Effective Date in
a manner that could (A) be materially adverse to the rights of the Loan Parties
to use the property covered thereby, or (B) reasonably be expected to have a
material adverse effect on the material rights and remedies of the Secured
Parties, or (ii) agree to dissolve or liquidate either the IP Trust or the IT
Trust if such dissolution or liquidation could reasonably be expected to (A) be
materially adverse to the right of the Loan Parties to use the property covered
thereby that is reasonably necessary to operate the Borrower’s business or (B)
have a material adverse effect on the material rights and remedies of the
Secured Parties.

7.14        Fiscal Year.  Not, nor permit any of its Restricted
Subsidiaries to, directly or indirectly, change its Fiscal Year from a Fiscal
Year ending December 31.

7.15        Commodity Hedging.  Not, nor permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or assume any Commodity
Hedging Obligations except in the ordinary course of business and not for
speculative purposes.

7.16        Suspension of Certain
Covenants upon Release Date. 
Following the Release Date (provided, that there shall not have
occurred or been continuing any Default as of the Release Date), (i) the
provisions of clause (ii) of the proviso to clause (5) of the
definition of Permitted Liens and the provisions of Sections 7.2, 7.5,
7.12, 7.18 and 7.19 hereof shall be suspended; provided,
that the Core Asset Consent shall continue to be required for the entire term
of this Agreement in connection with any Asset Sale contemplated by Section
7.5(b), (ii) the provisions of Section 7.6 shall be suspended; provided,
that following the Release Date but prior to the Investment Grade Rating Date,
dividends or distributions of cash or Cash Equivalents on any Equity Interests
of the Borrower shall not exceed $50,000,000 in any twelve-month period, and other
Restricted Payments (as defined in the Secured Note Agreements, but excluding
Investments) shall be permitted only (x) to the extent permitted under the
Secured Note Agreements and (y) so long as no Default shall have occurred and
be continuing, and (iii) the Administrative Agent shall (and each Lender
hereby authorizes and directs the Administrative Agent to) promptly cause the
release of all Liens securing the Credit Agreement Obligations; provided,
that immediately following such release, the Borrower and its Subsidiaries
shall not have any other secured Indebtedness (other than the Permitted
Exceptions).  Notwithstanding the
foregoing, if the ratings assigned by both Moody’s and S&P to the Secured
Notes should subsequently decline to below an Investment Grade Rating, the
provisions of clause (ii) of the proviso to clause (5) of the
definition of Permitted Liens and the provisions of

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Sections 7.2,
7.5, 7.6, 7.12, 7.18 and 7.19 hereof shall
be reinstituted as of and from the date of such rating decline, and the
provisions of Section 7.6 hereof shall be interpreted as if they had
been in effect since the Release Date, except that no Default will be deemed to
have occurred solely by reason of a Restricted Payment made or declared (and
later made) in accordance with the provisions of Section 7.6, a breach
of Section 7.2, 7.5, 7.12, 7.18 or 7.19
while the provisions of such Sections were suspended, or a breach of Section
7.1 while the provisions of clause (ii) of the proviso to clause
(5) of the definition of Permitted Liens were suspended.

7.17        Orion Subsidiaries.

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

(b)           The Borrower shall not
take or permit any action that would cause a “Change of Control” (as defined in
the OPH Note Indenture) to occur, without the consent of the Required Lenders.

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

7.18        Designated Entities.  Notwithstanding anything to the contrary
contained herein (including this Article):

(a)           other than with respect
to the Retail Group, the IP Trust and the IT Trust, which are governed by clause
(b), neither the Borrower nor any Restricted Subsidiary shall make any
Investment in or otherwise transfer any asset to any Designated Entity, other
than pursuant to cash loans evidenced by promissory notes that are pledged as
Collateral under the Security Documents (but released upon the Release Date); provided,
that to the extent any such Designated Entity has Contractual Obligations
existing on the Closing Date which prohibit the incurrence by such Designated
Entity of Indebtedness (including pursuant to such promissory notes), the
Borrower and the Restricted Subsidiaries may, to the extent of such
prohibitions, make cash equity contributions to such Designated Entity, (iii)
credit support provided in the ordinary course of business to support
obligations other than Debt of such Designated Entity (such as and including
posting of cash and/or letters of credit, delivery of performance guarantees or
similar agreements and arrangements to guaranty the timely and complete
performance of such Designated Entity), (iv) Investments and transfers of
assets (other than cash,

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Cash Equivalents, or any power generation facility)
and payments for goods and services in the ordinary course of business; provided,
that the Borrower or a Restricted Subsidiary may sell the Transferred Assets to
the Purchaser Subsidiary pursuant to the terms of any Permitted Sale, and
(v) Investments by a Designated Entity in the direct or indirect parents
or Subsidiaries of such Designated Entity;

(b)           neither the Borrower
nor any Restricted Subsidiary (other than a Subsidiary in the Retail Group or
IT Trust or IP Trust) shall make any Investment in or otherwise transfer any
asset to Retail Holdco, any of its Subsidiaries, the IP Trust or the IT Trust,
other than (i) pursuant to cash loans evidenced by promissory notes that
are pledged as Collateral under the Security Documents (but released upon the
Release Date); provided, that to the extent Retail Holdco or any of its
Subsidiaries has Contractual Obligations existing on the Effective Date,
including under the Sleeve Documents, which prohibit the incurrence of
Indebtedness (including pursuant to such promissory notes), the Borrower and
the Restricted Subsidiaries may, to the extent of such prohibitions, make cash
equity contributions in an aggregate amount not in excess of $100,000,000
during the term of this Agreement to Retail Holdco or any of its Subsidiaries
on any date (referred to as a “Contribution Date”), but then only if
(A) no Default has occurred and is continuing or would result therefrom,
(B) no “Default” under (and as defined in) either the Working Capital
Agreement or the Reimbursement Agreement has occurred and is continuing or
would result therefrom and (C) the proceeds of such equity contributions
are used only for the ordinary course of business working capital obligations
of the Retail Group (and not to repay any principal amount outstanding under
the Working Capital Agreement) or to fund Acquisitions by any of the Retail
Group to the extent permitted hereunder, (ii) pursuant to the Parent
Services Agreement, any of the IP/IT Agreements or any documents entered into
in respect of the PJM Retail Business, (iii) the transfer of the Retail
Energy Business to Retail Holdco in accordance with the terms of the Sleeve
Documents, (iv) Investments and transfers of the assets used in the PJM
Retail Business on the date on which RESE becomes party to the Reimbursement
Agreement, (v) transfers of assets (other than cash, Cash Equivalents, or
any power generation facility) and payments for, and sales of, goods and
services in the ordinary course of business, and transfers of cash to the IT
Trust or the IP Trust for the acquisition of goods and services for the use by
the IT Trust or the IP Trust in the ordinary course of business to provide the
services under the IP/IT Trust Agreements, (vi) credit support (whether in
the form of guarantees, cash or letters of credit), for REPS, RERS or the IT
Trust that are outstanding on the Effective Date; provided, that, other
than with respect to the guarantee by the Borrower of the obligations owing by
certain of its Affiliates under the Accenture Agreement, the Borrower agrees to
use commercially reasonable efforts to cause counterparties thereto to release
the Borrower and such Restricted Subsidiaries from the obligations thereunder,
and (vii) the Investments in and transfer of assets to the IP Trust and
the IT Trust by the Borrower and its Subsidiaries pursuant to the IP/IT
Agreements;

(c)           neither Retail Holdco
nor any of its Subsidiaries shall consummate any Acquisitions for
consideration, singly or in the aggregate after the Effective Date, in excess
of $100,000,000; and

(d)           no Designated Entity
shall incur or permit to exist any Indebtedness other than (i) pursuant to
clause (a)(i) or (b)(i) above, (ii) Existing Indebtedness in
respect of which it is obligated, (iii) Permitted Refinancing Indebtedness
with respect to any such Existing

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Indebtedness, (iv) in the case of the Retail Group,
Indebtedness permitted by clause (t) of Section 7.3 or (v)
Indebtedness incurred by REMA, OPH or their respective Subsidiaries pursuant to
clause (s) of Section 7.3 in an amount not to exceed $200,000,000
at any time outstanding, but only if the proceeds of such Indebtedness are
applied to environmental remediation and upgrade of fixed or capital assets to
comply with applicable law.

7.19        Foreign Investments.  Notwithstanding anything to the contrary
contained herein (including this Article), neither the Borrower nor any
Restricted Subsidiary (other than a Foreign Subsidiary) shall make any
Investment in any Foreign Subsidiary unless the Borrower shall have taken all
actions required by Section 6.12 with respect thereto; provided,
that the aggregate amount of Investments made by the Borrower and/or Restricted
Subsidiaries (other than a Foreign Subsidiary) in Foreign Subsidiaries after the
Closing Date shall not exceed $50,000,000.

7.20        Payment, Commitment
Reduction Upon Retail Sale or Wholesale Sale.  Upon the occurrence of a Retail Sale or a
Wholesale Sale, the Borrower shall elect, by a written notice to the
Administrative Agent, to apply the entire Applicable Amount to either
(i) permanently reduce the amount of Indebtedness permitted under Section
7.3(s); (ii) cause a mandatory reduction in the amount of the
Revolving Credit Commitments; or (iii) cash collateralize, on terms
satisfactory to the Administrative Agent, Revolving Letters of Credit, in each
case within 3 Business Days following the consummation of the consummation of
the Retail Sale or the Wholesale Sale.

ARTICLE VIII

GUARANTY

8.1          Guaranty; Limitation of
Liability.

(a)           Each Guarantor, jointly
and severally, hereby absolutely, unconditionally and irrevocably guarantees
the punctual payment when due, whether at scheduled maturity or on any date of
a required prepayment or by acceleration, demand or otherwise, of all Credit Agreement
Obligations of the Borrower now or hereafter existing (including any
extensions, modifications, substitutions, amendments or renewals of any or all
of the foregoing Credit Agreement Obligations), whether direct or indirect,
absolute or contingent, and whether for principal, interest, premiums, fees,
indemnities, contract causes of action, costs, expenses or otherwise (such
Credit Agreement Obligations being the “Guaranteed Obligations”), and
agrees to pay any and all expenses (including reasonable fees and expenses of
counsel) incurred by any Agent or any other Secured Party in enforcing any
rights under this Guaranty or any other Loan Document.  Without limiting the generality of the
foregoing, each Guarantor’s liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any other
Loan Party to any Secured Party under or in respect of the Loan Documents but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving such other Loan
Party.

(b)           Each Guarantor, and by
its acceptance of this Guaranty, the Administrative Agent and each other
Secured Party, hereby confirms that it is the intention of all such Persons
that this Guaranty and the Obligations of each Guarantor hereunder not
constitute a fraudulent transfer or conveyance for purposes of Debtor Relief
Laws, the Uniform Fraudulent Conveyance Act, the

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Uniform Fraudulent Transfer Act or any similar
foreign, federal or state law to the extent applicable to this Guaranty and the
Obligations of each Guarantor hereunder. 
To effectuate the foregoing intention, the Administrative Agent, the
other Secured Parties and the Guarantors hereby irrevocably agree that the
Obligations of each Guarantor under this Guaranty at any time shall be limited
to the maximum amount as will result in the Credit Agreement Obligations of
such Guarantor under this Guaranty not constituting a fraudulent transfer or
conveyance.

(c)           Each Guarantor hereby
unconditionally and irrevocably agrees that in the event any payment shall be
required to be made to any Secured Party under this Guaranty or any Instrument
of Assumption and Joinder, such Guarantor will contribute, to the maximum
extent permitted by law, such amounts to each other Guarantor and each other
Guarantor so as to maximize the aggregate amount paid to the Secured Parties
under or in respect of the Loan Documents.

8.2          Guaranty Absolute.  Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Secured Party with respect thereto.  The
Credit Agreement Obligations of each Guarantor under or in respect of this
Guaranty are independent of the Guaranteed Obligations or any other Credit
Agreement Obligations of any other Loan Party under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against the Borrower or any other Loan Party or whether the
Borrower or any other Loan Party is joined in any such action or actions.  The liability of each Guarantor under this
Guaranty shall be irrevocable, absolute and unconditional irrespective of, and
each Guarantor hereby irrevocably waives any defenses it may now have or hereafter
acquire in any way relating to, any or all of the following:

(a)           any lack of validity or
enforceability of any Loan Document or any agreement or instrument relating
thereto;

(b)           any change in the time,
manner or place of payment of, or in any other term of, all or any of the
Guaranteed Obligations or any other Credit Agreement Obligations of any other
Loan Party under or in respect of the Loan Documents, or any other amendment or
waiver of or any consent to departure from any Loan Document, including any
increase in the Guaranteed Obligations resulting from the extension of
additional credit to any Loan Party or any of its Subsidiaries or otherwise;

(c)           any taking, exchange,
release or non-perfection of any Collateral or any other collateral, or any
taking, release or amendment or waiver of, or consent to departure from, any
other guaranty, for all or any of the Guaranteed Obligations;

(d)           any manner of
application of Collateral or any other collateral, or proceeds thereof, to all
or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any Collateral or any other collateral for all or any of the
Guaranteed Obligations or any other Credit Agreement Obligations of any Loan
Party under the Loan Documents or any other assets of any Loan Party or any of
its Subsidiaries;

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(e)           any change,
restructuring or termination of the corporate structure or existence of any
Loan Party or any of its Subsidiaries;

(f)            any failure of any
Secured Party to disclose to any Loan Party any information relating to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any other Loan Party now or hereafter known to such
Secured Party (each Guarantor waiving any duty on the part of the Secured
Parties to disclose such information);

(g)           the failure of any
other Person to execute or deliver this Guaranty, any Instrument of Assumption
and Joinder or any other guaranty or agreement or the release or reduction of
liability of any Guarantor or other guarantor or surety with respect to the
Guaranteed Obligations; or

(h)           any other circumstance
(including any statute of limitations) or any existence of or reliance on any
representation by any Secured Party that might otherwise constitute a defense
available to, or a discharge of, any Loan Party or any other guarantor or
surety.

This Guaranty shall survive termination of this
Agreement and shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by any Secured Party or any other
Person upon the insolvency, bankruptcy or reorganization of the Borrower or any
other Loan Party or otherwise, all as though such payment had not been made.

8.3          Waivers and
Acknowledgments.

(a)           Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that
any Secured Party protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral.

(b)           Each Guarantor hereby
unconditionally and irrevocably waives any right to revoke this Guaranty and
acknowledges that this Guaranty is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.

(c)           Each Guarantor hereby
unconditionally and irrevocably waives (i) any defense arising by reason of any
claim or defense based upon an election of remedies by any Secured Party that
in any manner impairs, reduces, releases or otherwise adversely affects the
subrogation, reimbursement, exoneration, contribution or indemnification rights
of such Guarantor or other rights of such Guarantor to proceed against any of
the other Loan Parties, any other guarantor or any other Person or any
Collateral and (ii) any defense based on any right of set-off or counterclaim
against or in respect of the Credit Agreement Obligations of such Guarantor
hereunder.

(d)           Each Guarantor
acknowledges that the Collateral Trustee may, without notice to or demand upon
such Guarantor and without affecting the liability of such Guarantor under this
Guaranty, foreclose under any mortgage by nonjudicial sale, and each Guarantor
hereby waives

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any defense to the recovery by the Collateral Trustee
and the other Secured Parties against such Guarantor of any deficiency after
such nonjudicial sale and any defense or benefits that may be afforded by
applicable law.

(e)           Each Guarantor hereby
unconditionally and irrevocably waives any duty on the part of any Secured
Party to disclose to such Guarantor any matter, fact or thing relating to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any other Loan Party or any of its Subsidiaries now
or hereafter known by such Secured Party.

(f)            Each Guarantor
acknowledges that it will receive substantial direct and indirect benefits from
the financing arrangements contemplated by the Loan Documents and that the waivers
set forth in Section 8.2 and this Section are knowingly made in
contemplation of such benefits.

8.4          Subrogation.  Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against the Borrower, any other Loan Party or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
such Guarantor’s Guaranteed Obligations under or in respect of this Guaranty or
any other Loan Document, including any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in
any claim or remedy of any Secured Party against the Borrower, any other Loan
Party or any other insider guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including the right to take or receive from the Borrower, any other Loan
Party or any other insider guarantor, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account
of such claim, remedy or right, unless and until all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash, all Letters of Credit shall have expired or been
terminated and the Commitments shall have expired or been terminated.  If any amount shall be paid to any Guarantor
in violation of the immediately preceding sentence at any time prior to the
latest of (a) the payment in full in cash of the Guaranteed Obligations and all
other amounts payable under this Guaranty, (b) the latest maturity date in
respect of the Facilities outstanding from time to time and (c) the latest date
of expiration or termination of all Letters of Credit, such amount shall be
received and held in trust for the benefit of the Secured Parties, shall be
segregated from other property and funds of such Guarantor and shall forthwith
be paid or delivered to the Administrative Agent in the same form as so received
(with any necessary endorsement or assignment) to be credited and applied to
the Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising.  If (i) any Guarantor shall make payment to
any Secured Party of all or any part of the Guaranteed Obligations, (ii) all of
the Guaranteed Obligations and all other amounts payable under this Guaranty
shall have been paid in full in cash, (iii) the latest maturity date in respect
of the Facilities outstanding from time to time shall have occurred and (iv)
all Letters of Credit shall have expired or been terminated, the Secured
Parties will, at such Guarantor’s request and expense, execute and deliver to
such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation
to such Guarantor of an interest in the Guaranteed Obligations resulting from
such payment made by such Guarantor pursuant to this Guaranty.

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8.5          Assumption and Joinder.  Upon the execution and delivery by any
Additional Guarantor of an Instrument of Assumption and Joinder as required
under Section 6.12(a), (a) such Person shall become and be a
Guarantor hereunder, and each reference in this Guaranty to a “Guarantor” shall
also mean and be a reference to such Additional Guarantor, and each reference
in any other Loan Document to a “Guarantor” shall also mean and be a reference
to such Additional Guarantor, and (b) each reference herein to “this Guaranty,”
“hereunder,” “hereof” or words of like import referring to this Guaranty, and
each reference in any other Loan Document to the “Guaranty,” “thereunder,” “thereof”
or words of like import referring to this Guaranty, shall mean and be a
reference to this Guaranty as supplemented by such Instrument of Assumption and
Joinder.

8.6          Subordination.  Each Guarantor hereby subordinates any and
all debts, liabilities and other Obligations owed to such Guarantor by each
other Loan Party (the “Subordinated Obligations”) to the Guaranteed
Obligations to the extent and in the manner hereinafter set forth in this
Section:

(a)           Prohibited Payments,
Etc.  Except during the continuance
of a Default (including the commencement and continuation of any proceeding
under any Debtor Relief Law relating to any other Loan Party), each Guarantor
may receive regularly scheduled payments from any other Loan Party on account
of the Subordinated Obligations.  After
the occurrence and during the continuance of any Default (including the
commencement and continuation of any proceeding under any Debtor Relief Law
relating to any other Loan Party), however, unless the Required Lenders
otherwise agree, no Guarantor shall demand, accept or take any action to
collect any payment on account of the Subordinated Obligations.

(b)           Prior Payment of
Guaranteed Obligations.  In any
proceeding under any Debtor Relief Law relating to any other Loan Party, each
Guarantor agrees that the Secured Parties shall be entitled to receive payment
in full in cash of all Guaranteed Obligations (including all Post-Petition
Interest) before such Guarantor receives payment of any Subordinated
Obligations.

(c)           Turn-Over.  After the occurrence and during the
continuance of any Default (including the commencement and continuation of any
proceeding under any Debtor Relief Law relating to any other Loan Party), each
Guarantor shall, if the Administrative Agent so request, collect, enforce and
receive payments on account of the Subordinated Obligations as trustee for the
Secured Parties and deliver such payments to the Administrative Agent on
account of the Guaranteed Obligations (including all Post-Petition Interest),
together with any necessary endorsements or other instruments of transfer, but
without reducing or affecting in any manner the liability of such Guarantor
under the other provisions of this Guaranty.

8.7          Continuing Guaranty;
Assignments.  This Guaranty is a
continuing guaranty and shall (a) remain in full force and effect until
the latest of (i) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, (ii) the
latest maturity date in respect of the Facilities outstanding from time to
time, (iii) the latest date of expiration or termination of all Letters of
Credit, or Cash Collateralization thereof or issuance of a back-to-back letter
of credit reasonably satisfactory to the applicable L/C Issuer with respect
thereto, and (iv) the release thereof in accordance with Section 10.10,
(b) be binding upon the Guarantor, its successors and assigns and
(c) inure to the benefit of and be enforceable by the

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Secured Parties and their successors, transferees and
assigns.  Upon the occurrence of the
latest date specified in clause (a) above, the Guarantors shall be
released from other Credit Agreement Obligations under the Loan Documents.  Without limiting the generality of clause (c)
of the immediately preceding sentence, any Secured Party may assign or
otherwise transfer all or any portion of its rights and Obligations under this
Agreement (including all or any portion of its Commitments, the Advances owing
to it and the Note or Notes held by it) to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to such Secured Party herein or otherwise, in each case as and to the
extent provided in this Section.  No
Guarantor shall have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Secured Parties.

ARTICLE IX

EVENTS OF DEFAULT AND REMEDIES

9.1          Events of Default.  Any of the following shall constitute an
Event of Default:

(a)           Non-Payment.  The Borrower or any other Loan Party fails to
pay (i) when and as required to be paid herein, any amount of principal of any
Loan or any L/C Obligation, or (ii) within three Business Days after the
same becomes due, any interest on any Loan or on any L/C Obligation, or any fee
or other amount payable hereunder or under any other Loan Document; or

(b)           Specific Covenants.  The Borrower fails to perform or observe any
term, covenant or agreement contained in any of Section 6.3, 6.5
(only with respect to the existence of the Borrower), 6.11 or 6.12
or Article VII; or

(c)           Other Defaults.  Any Loan Party fails to perform or observe
any other covenant or agreement (not specified in clause (a) or (b)
above) contained in any Loan Document on its part to be performed or observed
and such failure continues for 30 days after the earlier to occur of (i) a
Loan Party receiving notice thereof from the Administrative Agent (which notice
shall be given at the request of any Lender) or any other Person, or (ii) a Responsible
Officer or other executive officer of a Loan Party obtains knowledge of such
occurrence; or

(d)           Representations and
Warranties.  Any representation,
warranty, certification or statement of fact made or deemed made by or on
behalf of the Borrower or any other Loan Party herein, in any other Loan
Document, or in any document delivered in connection herewith or therewith
shall be incorrect or misleading in any material respect when made or deemed
made; or

(e)           Cross-Default.  (i) Any Loan Party, any Person required to
become a Loan Party pursuant to Section 6.12, REMA, Retail Holdco, OPH
or any Subsidiary of REMA, Retail Holdco or OPH (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness under or
Guarantee in respect of the REMA Lease or any other Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Hedging Agreements)
having an aggregate principal amount (including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $50,000,000,
or (B) fails to observe or perform any other

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agreement or condition relating to any such
Indebtedness or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect
of which default or other event is (x) in the case of all such
Indebtedness or Guarantees (including under or in respect of the REMA Lease),
to cause, or (y) in the case of all such Indebtedness or Guarantees (other
than under or in respect of the REMA Lease), to permit the holder or holders of
such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its Stated
Maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Hedging Agreement
an Early Termination Date (as defined in such Hedging Agreement) resulting from
(A) any event of default under such Hedging Agreement as to which the Borrower
or any Subsidiary is the Defaulting Party (as defined in such Hedging
Agreement) or (B) any Termination Event (as so defined) under such Hedging
Agreement as to which the Borrower or any Subsidiary is an Affected Party (as
so defined) and, in either event, the Hedge Termination Value owed by the
Borrower or such Subsidiary as a result thereof is greater than $50,000,000 and
not paid when due; or

(f)            Insolvency
Proceedings, Etc.  The Borrower or
any Loan Party (or Person that is required to become a Loan Party pursuant to Section
6.12) that is a Material Subsidiary or REMA, Retail Holdco, OPH or any
Subsidiary of REMA, Retail Holdco or OPH institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator
or similar officer for it or for all or any material part of their respective
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or
consent of such Person and the appointment continues undischarged or unstayed
for 60 calendar days; or any proceeding under any Debtor Relief Law relating to
any such Person or to all or any material part of their respective property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or

(g)           Inability to Pay
Debts; Attachment.  The Borrower or
any Loan Party (or Person that is required to become a Loan Party pursuant to Section
6.12) that is a Material Subsidiary or REMA, Retail Holdco, OPH or any
Subsidiary of REMA, Retail Holdco or OPH becomes unable or admits in writing
its inability or fails generally to pay its debts as they become due; or

(h)           Judgments.  There is entered against the Borrower, any
Loan Party, any Person that is required to become a Loan Party pursuant to Section
6.12, REMA, Retail Holdco, OPH or any Subsidiary of REMA, Retail Holdco or
OPH a final judgment or order for the payment of money in an aggregate amount
exceeding $50,000,000 (to the extent not covered by independent third-party
insurance or that has not been paid), and (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) within thirty
(30) days from the later of (X) the entry of any such judgment or the date of
any such order (as applicable) and (Y) the date any payment is required to be
made on or with respect to any such judgment or order pursuant to the terms
thereof, the same shall not have been paid, discharged or vacated or, in the

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case of a judgment, stayed pending appeal, or shall
not have been discharged or vacated within thirty (30) days from the entry of a
final order of affirmance on appeal; or

(i)            ERISA.  (i) An ERISA Event occurs with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Borrower under Title IV of ERISA to
the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in
excess of $50,000,000, or (ii) the Borrower or any ERISA Affiliate fails to pay
when due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of
ERISA under a Multiemployer Plan in an aggregate amount in excess of
$50,000,000; or the Borrower fails to make a contribution under Code Section
412 or ERISA Section 302 with respect to a Pension Plan, within 30 days after
the date on which the Borrower obtains knowledge that such contribution is due,
in an aggregate amount in excess of $50,000,000; or

(j)            Change of Control.  There occurs any Change of Control; or

(k)           Invalidity of
Documents.  (i) Any Security
Agreement, Mortgage or other Security Document after delivery thereof pursuant
to Section 4.1 or 6.12 shall for any reason (other than pursuant
to the terms thereof or as expressly permitted thereby) cease to create a valid
and perfected first priority Lien (subject to Permitted Encumbrances and
Permitted Liens) on and security interest in the Collateral purported to be
covered thereby; provided, that no such defects pursuant to this clause
with respect to a Lien granted or purported to be granted by any of the Loan
Documents shall give rise to an Event of Default under this clause unless such
defects shall adversely affect the aggregate value of the Collateral by an
aggregate amount of $50,000,000 or more; or (ii) any Loan Party shall so assert
such invalidity or lack of perfection or priority; or (iii) any other Loan
Document, at any time after its execution and delivery and for any reason other
than as expressly permitted hereunder or thereunder or satisfaction in full of
all the Credit Agreement Obligations thereunder, ceases to be in full force and
effect; or any Loan Party or any other Person contests in any manner the
validity or enforceability of any provision of any other Loan Document; or any
Loan Party denies that it has any or further liability or obligation under any
other Loan Document, or purports to revoke, terminate or rescind any provision
of any other Loan Document;

(l)            Failure of
Subordination.  Unless otherwise
waived or consented to by the Administrative Agent and the Required Lenders in
writing, the subordination provisions relating to any Subordinated Indebtedness
(the “Subordination Provisions”) shall fail to be enforceable by the
Administrative Agent, the Lenders and the L/C Issuers in accordance with the
terms thereof, or the monetary Credit Agreement Obligations shall fail to
constitute “Senior Indebtedness” or “Senior Debt” (or similar term) referring
to the Credit Agreement Obligations; or the Borrower or any of its Restricted
Subsidiaries shall, directly or indirectly, disavow or contest in any manner
(i) the effectiveness, validity or enforceability of any of the Subordination
Provisions, (ii) that the Subordination Provisions exist for the benefit of the
Secured Parties or (iii) that all payments of principal of or premium and
interest on the Subordinated Debt, or realized from the liquidation of any
property of any Loan Party, shall be subject to any of such Subordination
Provisions; or

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(m)          Retail Group.  Any event of default (however defined) with
respect to Retail Holdco or any of its Subsidiaries occurs and is continuing
under the Reimbursement Agreement or the Working Capital Agreement that permits
either the termination of the Reimbursement Agreement or the Working Capital
Agreement or the acceleration of Retail Holdco’s or any such Subsidiary’s
obligations thereunder.

9.2          Remedies upon Event of
Default.  If any Event of Default
occurs and is continuing, the Administrative Agent shall, at the request of, or
may, with the consent of, the Required Lenders, take any or all of the
following actions:

(a)           declare by written
notice to the Borrower the Commitment of each Lender to make Loans and any
obligation of an L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such Commitments and obligation shall be terminated;

(b)           declare by written
notice to the Borrower the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;

(c)           require by written
notice to the Borrower that the Borrower Cash Collateralize the Revolving L/C
Obligations (in an amount equal to the then Outstanding Amount thereof) and the
Pre-Funded L/C Obligations (in an amount equal to the then Outstanding Amount
thereof); and

(d)           exercise on behalf of
itself and the Lenders all rights and remedies available to it and the Lenders
under the Loan Documents;

provided, that upon the occurrence
of an actual or deemed entry of an order for relief with respect to the
Borrower under the Bankruptcy Code of the United States, the obligation of each
Lender to make Loans and any obligation of an L/C Issuer to make L/C Credit
Extensions shall automatically terminate, the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, and the obligation of the Borrower to
Cash Collateralize the L/C Obligations as aforesaid shall automatically become
effective, in each case without further act of the Administrative Agent or any
Lender.

9.3          Application of Funds.  After the exercise of remedies provided for
in Section 9.2 (or after the Loans have automatically become
immediately due and payable and the L/C Obligations have automatically been
required to be Cash Collateralized as set forth in the proviso to Section 9.2),
any amounts received on account of the Credit Agreement Obligations shall be
applied by the Administrative Agent in the following order:

(a)           to payment of that
portion of the Credit Agreement Obligations constituting fees, indemnities,
expenses and other amounts (including fees, charges and disbursements of
counsel to the Administrative Agent and the Pre-Funded L/C Facility Agent and
amounts payable under Article III) payable to the Administrative
Agent and the Pre-Funded L/C Facility Agent in its capacity as such;

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(b)           to payment of that
portion of the Credit Agreement Obligations constituting fees, indemnities and
other amounts (other than principal and interest) payable to the Lenders and
each L/C Issuer (including reasonable fees, charges and disbursements of
counsel to the respective Lenders and the respective L/C Issuer (including fees
and time charges for attorneys who may be employees of any Lender or any L/C
Issuer) and amounts payable under Article III), ratably among them
in proportion to the amounts described in this clause payable to them;

(c)           to payment of Hedging
Obligations and that portion of the Credit Agreement Obligations constituting
accrued and unpaid interest on the Loans, Revolving L/C Borrowings and other
Credit Agreement Obligations, ratably among the Lenders and each applicable L/C
Issuer in proportion to the respective amounts described in this clause payable
to them;

(d)           to payment of that
portion of the Credit Agreement Obligations constituting unpaid principal of
the Revolving Credit Loans, Unreimbursed Amounts, the Term Loans, the Revolving
L/C Borrowings, and to the Administrative Agent for the account of each L/C
Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the
aggregate undrawn amount of Letters of Credit ratably among the Revolving
Credit Lenders, the Term Lenders and Pre-Funded L/C Lenders in proportion to
the respective amounts described in this clause held by them;

(e)           to the payment of all
other Credit Agreement Obligations of the Loan Parties owing under or in
respect of the Loan Documents that are due and payable to the Secured Parties
on such date, ratably based upon the respective aggregate amounts of all such
Credit Agreement Obligations owing to the Secured Parties on such date; and

(f)            the balance, if any,
after all of the Credit Agreement Obligations have been indefeasibly paid in
full, to the Borrower or as otherwise required by Law.

Subject to Section 2.3(c), amounts used to Cash
Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause (d)
above shall be applied to satisfy drawings under such Letters of Credit as they
occur.  If any amount remains on deposit
as Cash Collateral after all Letters of Credit have either been fully drawn or
expired, such remaining amount shall be applied to the other Credit Agreement
Obligations, if any, in the order set forth above.

ARTICLE X

THE AGENTS AND THE ISSUING BANKS

10.1        Appointment and
Authority.  Each of the Lenders and
each L/C Issuer hereby irrevocably appoints Bank of America to act on its
behalf as the Administrative Agent hereunder and under the other Loan Documents
and authorizes the Administrative Agent and the Collateral Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent and the Collateral Agent by the terms hereof or thereof,
together with such actions and powers as are reasonably incidental thereto.  Each Pre-Funded L/C Lender and the Pre-Funded
L/C Issuer hereby irrevocably appoints Deutsche Bank AG, New York Branch to act
on its behalf as the Pre-Funded L/C Facility Agent hereunder and under the
other Loan Documents and authorizes the Pre-Funded L/C Facility Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Pre-Funded L/C Facility Agent by the terms

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hereof or thereof, together with such actions and
powers as are reasonably incidental hereto. 
The provisions of this Article are solely for the benefit of the
Administrative Agent, the Collateral Agent, the Pre-Funded L/C Facility Agent,
the Lenders and each L/C Issuer, and neither the Borrower nor any other Loan
Party shall have rights as a third party beneficiary of any of such provisions.

10.2        Rights As a Lender.  The Person serving as the Administrative
Agent, the Collateral Agent or the Pre-Funded L/C Facility Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not the Administrative
Agent, the Collateral Agent or the Pre-Funded L/C Facility Agent and the term “Lender”
or “Lenders” shall, unless otherwise expressly indicated or unless the context
otherwise requires, include the Person serving as the Administrative Agent, the
Collateral Agent or the Pre-Funded L/C Facility Agent hereunder in its
individual capacity.  Such Person and its
Affiliates may accept deposits from, lend money to, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with the Borrower or any Subsidiary or other Affiliate thereof as
if such Person were not the Administrative Agent, the Collateral Agent or the
Pre-Funded L/C Facility Agent hereunder and without any duty to account
therefor to the Lenders.

10.3        Exculpatory Provisions.  The Administrative Agent, the Collateral
Agent and the Pre-Funded L/C Facility Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan
Documents.  Without limiting the
generality of the foregoing, the Administrative Agent, the Collateral Agent and
the Pre-Funded L/C Facility Agent:

(a)           shall not be subject to
any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing;

(b)           shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby or by the other
Loan Documents that the Administrative Agent, the Collateral Agent and the
Pre-Funded L/C Facility Agent are required to exercise as directed in writing
by the Required Lenders (or such other number or percentage of the Lenders as
shall be expressly provided for herein or in the other Loan Documents); provided,
that the Administrative Agent, the Collateral Agent and the Pre-Funded L/C
Facility Agent shall not be required to take any action that, in their opinion
or the opinion of their counsel, may expose the Administrative Agent, the
Collateral Agent or the Pre-Funded L/C Facility Agent, as applicable, to
liability or that is contrary to any Loan Document or applicable law; and

(c)           shall not, except as
expressly set forth herein and in the other Loan Documents, have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Affiliates that is communicated to or
obtained by the Person serving as the Administrative Agent, the Collateral
Agent or the Pre-Funded L/C Facility Agent or any of their respective
Affiliates in any capacity.

The Administrative Agent, the Collateral Agent and the
Pre-Funded L/C Facility Agent shall not be liable for any action taken or not
taken by it, WHETHER OR NOT RELATED TO ANY SINGULAR, JOINT
OR CONCURRENT NEGLIGENCE OF SUCH AGENTS,

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(i) with the consent or
at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary, or as the Administrative Agent, the
Collateral Agent or the Pre-Funded L/C Facility Agent, as applicable, shall
believe in good faith shall be necessary, under the circumstances as provided
in Sections 11.1 and 9.2) or (ii) in the absence of its own gross
negligence or willful misconduct.  The
Administrative Agent, the Collateral Agent and the Pre-Funded L/C Facility
Agent shall be deemed not to have knowledge of any Default unless and until
notice describing such Default is given to the Administrative Agent, the
Collateral Agent or the Pre-Funded L/C Facility Agent, as applicable, by the
Borrower, a Lender or an L/C Issuer.

The Administrative Agent, the Collateral Agent and the
Pre-Funded L/C Facility Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein or therein or the occurrence of any Default, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent, the Collateral Agent or the Pre-Funded
L/C Facility Agent, as applicable.

10.4        Reliance by the
Agents.  The Agents shall be entitled
to rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or
other distribution) believed by them to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person.  The Administrative Agent and the Pre-Funded
L/C Facility Agent also may rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon. 
In determining compliance with any condition hereunder to the making of
a Loan, or the issuance of a Letter of Credit, that by its terms must be
fulfilled to the satisfaction of a Lender or an L/C Issuer, the Administrative
Agent or the Pre-Funded L/C Facility Agent, as the case may be, may presume
that such condition is satisfactory to such Lender or such L/C Issuer unless
the Administrative Agent or the Pre-Funded L/C Facility Agent, as the case may
be, shall have received notice to the contrary from such Lender or such L/C
Issuer prior to the making of such Loan or the issuance of such Letter of
Credit.  The Agents may consult with
legal counsel (who may be counsel for the Borrower), independent accountants
and other experts selected by them, and shall not be liable for any action
taken or not taken by them in accordance with the advice of any such counsel,
accountants or experts.

10.5        Delegation of Duties.  The Agents may perform any and all of their
respective duties and exercise their respective rights and powers hereunder or
under any other Loan Document by or through any one or more sub-agents
appointed by the Agents, respectively. 
The Agents and any such sub-agent may perform any and all of their
respective duties and exercise their respective rights and powers by or through
their respective Related Parties.  The
exculpatory provisions of this Article shall apply to any such sub-agent
and to the Related Parties

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of the Agents and any such sub-agent, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Agents.

10.6        Resignation of
Administrative Agents.

(a)           Administrative Agent.  The Administrative Agent may at any time give
notice of its resignation to the Pre-Funded L/C Facility Agent, the Lenders,
each L/C Issuer and the Borrower.  Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor, which shall
be a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States.  If
no such successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders and each L/C Issuer, appoint
a successor Administrative Agent meeting the qualifications set forth above; provided,
that if the Administrative Agent shall notify the Borrower and the Lenders that
no qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the Administrative Agent on behalf of
the Lenders or each L/C Issuer under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed) and (2) all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender and
each L/C Issuer directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this Section).  The fees payable
by the Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and
such successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 11.4
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any
actions taken or omitted to be taken by any of them while the retiring
Administrative Agent was acting as Administrative Agent.

Any resignation by Bank of America as Administrative
Agent pursuant to this Section shall also constitute its resignation as a
Revolving L/C Issuer.  Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, (a)
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring Revolving L/C Issuer, (b) the
retiring Revolving L/C Issuer shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents, and (c) the successor
Revolving L/C Issuer shall issue letters of credit in substitution for the
Revolving Letters of Credit issued by the retiring Revolving L/C Issuer, if
any, outstanding at the time of such succession or make other

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arrangement satisfactory
to the retiring Revolving L/C Issuer to effectively assume the obligations of
the retiring Revolving L/C Issuer with respect to such Revolving Letters of
Credit.

(b)           Resignation of
Pre-Funded L/C Facility Agent.  The Pre-Funded L/C Facility Agent
may at any time give notice of its resignation to the Administrative Agent, the
Pre-Funded L/C Lenders, each Pre-Funded L/C Issuer and the Borrower.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with
the Borrower, to appoint a successor, which shall be a bank with an office in
the United States, or an Affiliate of any such bank with an office in the
United States.  If no such successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Pre-Funded L/C Facility
Agent gives notice of its resignation, then the retiring Pre-Funded L/C
Facility Agent may on behalf of the Pre-Funded L/C Lenders and each Pre-Funded
L/C Issuer, appoint a successor Pre-Funded L/C Facility Agent meeting the
qualifications set forth above; provided, that if the Pre-Funded L/C
Facility Agent shall notify the Borrower and the Pre-Funded L/C Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the
retiring Pre-Funded L/C Facility Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the Pre-Funded L/C Facility Agent on
behalf of the Pre-Funded L/C Lenders or each Pre-Funded L/C Issuer under any of
the Loan Documents, the retiring Pre-Funded L/C Facility Agent shall continue
to hold such collateral security until such time as a successor Pre-Funded L/C
Facility Agent is appointed) and (2) all payments, communications and
determinations provided to be made by, to or through the Pre-Funded L/C
Facility Agent shall instead be made by or to each Pre-Funded L/C Lender and
each Pre-Funded L/C Issuer directly, until such time as the Required Lenders
appoint a successor Pre-Funded L/C Facility Agent as provided for above in this
Section.  Upon the acceptance of a
successor’s appointment as Pre-Funded L/C Facility Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Pre-Funded L/C Facility
Agent, and the retiring Pre-Funded L/C Facility Agent shall be discharged from
all of its duties and obligations hereunder or under the other Loan Documents
(if not already discharged therefrom as provided above in this Section).  The fees payable by the Borrower to a
successor Pre-Funded L/C Facility Agent shall be the same as those payable to
its predecessor unless otherwise agreed between the Borrower and such successor.  After the retiring Pre-Funded L/C Facility
Agent’s resignation hereunder and under the other Loan Documents, the
provisions of this Article and Section 11.4 shall continue in
effect for the benefit of such retiring Pre-Funded L/C Facility Agent, its sub-agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while the retiring Pre-Funded L/C Facility Agent was
acting as Pre-Funded L/C Facility Agent.

Any resignation by Deutsche Bank AG, New York Branch,
as Pre-Funded L/C Facility Agent pursuant to this Section shall also
constitute its resignation as a Pre-Funded L/C Issuer.  Upon the acceptance of a successor’s
appointment as Pre-Funded L/C Facility Agent hereunder, (a) such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring Pre-Funded L/C Issuer, (b) the retiring Pre-Funded
L/C Issuer shall be discharged from all of its duties and obligations hereunder
or under the other Loan Documents, and (c) the successor Pre-Funded L/C Issuer
shall issue letters of credit in substitution for the Pre-Funded Letters of
Credit issued by the retiring Pre-Funded L/C Issuer, if any, outstanding at

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the time of such
succession or make other arrangement satisfactory to the retiring Pre-Funded
L/C Issuer to effectively assume the obligations of the retiring Pre-Funded L/C
Issuer with respect to such Pre-Funded Letters of Credit.

10.7        Non-Reliance on
Administrative Agent, the Pre-Funded L/C Facility Agent and Other Lenders.  Each Lender and each L/C Issuer acknowledges
that it has, independently and without reliance upon the Administrative Agent,
the Pre-Funded L/C Facility Agent or any other Lender or any of their Related
Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.  Each Lender and each L/C
Issuer also acknowledges that it will, independently and without reliance upon
the Administrative Agent, the Pre-Funded L/C Facility Agent or any other Lender
or any of their Related Parties and based on such documents and information as
it shall from time to time deem appropriate, continue to make its own decisions
in taking or not taking action under or based upon this Agreement, any other
Loan Document or any related agreement or any document furnished hereunder or
thereunder.

10.8        No Other Duties, Etc.  Anything herein to the contrary
notwithstanding, none of the Arrangers or other Agents listed on the cover page
hereof shall have any powers, duties or responsibilities under this Agreement
or any of the other Loan Documents, except in its capacity, as applicable, as
the Administrative Agent, the Pre-Funded L/C Facility Agent, a Lender or an L/C
Issuer hereunder.

10.9        Administrative Agent May
File Proofs of Claim.  In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective
of whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise

(a)           to file and prove a
claim for the whole amount of the principal and interest owing and unpaid in
respect of the Loans, L/C Obligations and all other Credit Agreement
Obligations that are owing and unpaid and to file such other documents as may
be necessary or advisable in order to have the claims of the Lenders, each
applicable L/C Issuer, the Pre-Funded L/C Facility Agent and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders, such L/C Issuer, the Pre-Funded L/C
Facility Agent and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders, each applicable L/C Issuer, the
Pre-Funded L/C Facility Agent and the Administrative Agent under Sections
2.3(i) and (j), 2.8 and 11.4) allowed in such judicial
proceeding; and

(b)           to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same;

and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Lender and each applicable L/C Issuer
and the Pre-Funded L/C Facility Agent to make such payments to the
Administrative Agent and,

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in the event that the Administrative Agent shall
consent to the making of such payments directly to the Lenders and each
applicable L/C Issuer and the Pre-Funded L/C Facility Agent, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections
2.8 and 11.4.

Nothing contained herein shall be deemed to authorize
the Administrative Agent to authorize or consent to or accept or adopt on
behalf of any Lender or any L/C Issuer any plan of reorganization, arrangement,
adjustment or composition affecting the Credit Agreement Obligations or the
rights of any Lender or to authorize the Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding.

10.10      Collateral and Guaranty
Matters.

(a)           The Administrative
Agent and the Collateral Agent are irrevocably authorized, at the discretion of
the Administrative Agent or the Collateral Agent from time to time, to take any
of the following actions or to direct the Collateral Trustee or other
applicable Persons to take any of the following actions, in each case as the
Administrative Agent or the Collateral Agent shall determine to be in the
interest of the Lenders:

(i)            accept, release, subordinate or otherwise
modify any Lien on any real or personal property, including any security issued
by or other ownership interest in any Person, (A) with respect to acceptances,
at any time, (B) with respect to releases, upon the Release Date or upon
termination of the Aggregate Commitments and payment in full of all Credit
Agreement Obligations (other than contingent indemnification obligations) and
the expiration or termination of all Letters of Credit, (C) with respect to
releases, to the extent of property that is or will be sold, monetized,
securitized, leased or otherwise transferred or disposed of as part of or in
connection with any transaction required or permitted under any Loan Document
or otherwise to the extent contemplated by any transaction required or
permitted under any Loan Document (and without limiting any other applicable
releases, to the extent any Subsidiary ceases to be a Subsidiary of the
Borrower, or all or substantially all of its assets is sold or otherwise
transferred or disposed of, then regardless of the form of such transaction
such release may extend to all of the ownership interests in such Subsidiary
and the assets of such Subsidiary), (D) with respect to subordinations, to the
extent the Lien which benefits from the subordination is permitted by Section 7.1,
or (E) under other circumstances, to the extent such actions under such other
circumstances are approved, authorized or ratified in writing by the Required
Lenders or such greater percentage of Lenders required under Section 11.1(i)
or (j); provided that in any circumstances when any release is
authorized, any lesser modification such as a partial release or subordination
is also authorized;

(ii)           accept, release, subordinate or otherwise
modify the Guaranty, any other Guarantee of any Credit Agreement Obligations or
as applicable any Person obligated under the Guaranty or any such Guarantee,
(A) with respect to acceptances, at any time, (B) with respect to releases, if
the applicable guarantor ceases to be a Subsidiary as a result of a transaction
permitted hereunder or otherwise to the extent contemplated by any transaction required
or permitted under any Loan Document (and without limiting any

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other applicable
releases, to the extent any Subsidiary that is an issuer of “Excluded
Securities” as defined in the Collateral Trust Agreement is released from the
Guaranty or any such Guarantee, then such release may extend to a release of
Liens in the Excluded Securities issued by such Subsidiary) or (C) under other
circumstances, to the extent such other actions under such circumstances are
approved, authorized or ratified in writing by the Required Lenders or such
greater percentage of Lenders required under Section 11.1(i) or (j);
provided that in any circumstances when any release is authorized, any
lesser modification such as a partial release or subordination is also
authorized;

(iii)          take or direct the taking of any action to
which clause (i) above applies (other than the release of, or the
subordination of the Secured Parties’ Lien on, all or substantially all of the
Collateral in any transaction or series of related transactions) if and to the
extent determined by the Administrative Agent or the Collateral Agent that the
cost to the Credit Parties of not taking such action, including administrative
costs, is disproportionate to the benefit to be maintained by the Secured Parties
by not taking such action;

(iv)          enter into any intercreditor agreements,
subordination agreements and other agreements related to the Security Documents
or the Guaranty or any other Guarantee of any Credit Agreement Obligations
determined by the Administrative Agent or the Collateral Trustee to be in the
interest of the Lenders, (A) with Persons who have been granted Liens permitted
by Section 7.1, (B) to the extent contemplated by any transaction
required or permitted under any Loan Document or (C) under other circumstances
to the extent such other circumstances are approved, authorized or ratified in
writing by the Required Lenders or such greater percentage of Lenders required
under Section 11.1(i) or (j); and

(v)           exercise rights (other than enforcement rights
unless authorized by the Required Lenders) and perform obligations under the
Collateral Trust Agreement and the other Security Documents, the Guaranty and
any other Guarantee of any Credit Agreement Obligations, the documents and
agreements referred to in clause (iv) above and related documents and
agreements, in each case as required or as deemed appropriate in the discretion
of the Administrative Agent or the Collateral Trustee, including amending,
supplementing, waiving, providing consent under or otherwise modifying any of
the foregoing documents or agreements, directing or providing notices or other
communications to the Collateral Trustee and becoming or appointing any agent,
co-agent, sub-agent, trustee, co-trustee, sub-trustee or the like for the
Collateral Trustee or for other Persons.

(b)           The Administrative
Agent and the Collateral Agent hereby agree to take or direct the Collateral
Trustee or other applicable Person to take, to the extent not otherwise
prohibited by this Agreement, (1) any of the actions authorized under clause
(a)(i)(A)-(D), (a)(ii)(A) or (B), or (iv)(A) or (B)
above upon the occurrence of any of the applicable circumstances set forth in
such clauses and the receipt of the Borrower’s written request that such
action be taken.  The manner of taking
such actions shall be determined by the Administrative Agent and the Collateral
Agent in their reasonable discretion after consultation with the Borrower
following the occurrence of any of such applicable circumstances.  In connection therewith, the Administrative

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Agent and the Collateral Agent shall timely execute
and deliver, provide, return or otherwise make available or direct the
execution and delivery, provision, return or otherwise making available of all
filings, recordings, notices, and other documents and agreements, including
financing statements, recordable real property documents and general releases
and notices, directions and other communications to the Collateral Trustee,
required by the terms of this Agreement or reasonably requested by the
Borrower.

(c)           Upon request by the
Administrative Agent or the Collateral Agent at any time, the Required Lenders
will confirm in writing any authority to take or direct the taking of any of
the actions in accordance with this Section.

(d)           Any actions taken or
directed to be taken by the Administrative Agent or the Collateral Agent under
the authority granted under this Section shall be deemed for all purposes to be
authorized by and shall be binding on and may be made on behalf of the Lenders
and the other Secured Parties under this Agreement.  In addition, whether or not so authorized,
the Collateral Trustee, any agent, co-agent, sub-agent, trustee, co-trustee,
sub-trustee or the like for the Collateral Trustee and any other Person to whom
these provisions may relate are directed to follow, and shall be entitled to
rely upon as so authorized by the Lenders and the other Secured Parties under
this Agreement, any document or agreement, notice, direction or other
communication signed by or received from the Administrative Agent or the
Collateral Agent purporting to be authorized by or to be on behalf of the
Lenders or any other Secured Parties under this Agreement or any subset thereof
under this Section or otherwise.

(e)           Contemporaneously with
the execution hereof, in addition to all other authorizations provided in this
Section, the Administrative Agent and the Collateral Agent are irrevocably
authorized to, and direct the Collateral Trustee and any agent, co-agent,
sub-agent, trustee, co-trustee, sub-trustee or the like to, and hereby so
direct all of them to, execute and deliver, provide, return or otherwise make
available all filings, recordings, notices and documents and agreements (i)
necessary or desirable to satisfy the conditions set forth in Section 4.1,
(ii) necessary or desirable to complete the releases and other actions set
forth on Schedule 10.10(e), and (iii) otherwise deemed necessary or
desirable by the Administrative Agent or the Collateral Agent to effect the
transactions contemplated in connection with the execution and delivery of this
Agreement.

(f)            Upon the receipt of
any proceeds from the disposition of Separate Collateral in connection with the
exercise of remedies, the Administrative Agent shall distribute to the administrative
agent under each Designated Credit Facility a percentage of such proceeds equal
to (i) the outstanding principal amount and all other amounts owing under such
Designated Credit Facility on the date of such receipt divided by (ii) the sum
of (A) the outstanding principal amount and all other amounts owing under all
Designated Credit Facilities on the date of such receipt and (B) the Credit
Agreement Obligations on the date of such receipt.  The balance of such proceeds shall be
distributed in accordance with Section 9.3.

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ARTICLE XI

MISCELLANEOUS

11.1        Amendments, Etc.  No amendment or waiver of any provision of
this Agreement or any other Loan Document (other than Fee Letters), and no
consent to any departure by the Borrower or any other Loan Party therefrom,
shall be effective unless in writing signed by the Required Lenders (or the
Administrative Agent, the Pre-Funded L/C Facility Agent or Collateral Agent,
with the authorization of the Required Lenders) and the Borrower or the
applicable Loan Party, as the case may be, and, if not signed by the
Administrative Agent, acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, that no such amendment,
waiver or consent shall:

(a)           waive any condition set
forth in Section 4.1(a), or, in the case of the initial Credit
Extension, Section 4.2, without the written consent of each Lender;

(b)           extend or increase the
Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 9.2)
without the written consent of such Lender;

(c)           postpone any date fixed
by this Agreement or any other Loan Document for any payment or mandatory
prepayment of principal, interest, fees or other amounts due to the Lenders (or
any of them) or any scheduled or mandatory reduction of the Aggregate
Commitments hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;

(d)           reduce the principal
of, or the rate of interest specified herein on, any Loan or Revolving L/C
Borrowing, or (subject to clause (iv) of the second proviso to this
Section) any fees or other amounts payable hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby; provided,
that only the consent of the Required Lenders shall be necessary to amend the
definition of “Default Rate” or to waive any Obligation of the Borrower to pay
interest or Letter of Credit Fees at the Default Rate;

(e)           change Section 2.12
or Section 9.3 in a manner that would alter the pro  rata
sharing of payments required thereby without the written consent of each
Lender;

(f)            change any provision
of this Section, the definition of “Required Lenders” or the definition of “Core
Asset Consent” or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender;

(g)           change any provision of
Section 11.6 the effect of which would impose additional restrictions on
assignments and participations by Lenders without the written consent of each
Lender;

(h)           change any provision of
Sections 2.4(b)(vii), (viii), (ix) and (x) without
the written consent of each Lender;

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(i)            except as otherwise
permitted, authorized or required by any Loan Document, release any Guarantor
from the Guaranty without the written consent of each Lender; provided
that no consent of any Lender or any Agent shall be required for the release of
a Guarantor whose Equity Interests are sold in accordance with Section 7.5
or that consolidates or merges out of existence in accordance with Section
7.4;

(j)            except as otherwise
permitted, authorized or required by any Loan Document, release all or
substantially all of the Collateral in any transaction or series of related
transactions, without the written consent of each Lender;

(k)           only for purposes of
determining whether or not the Release Date has occurred, and not for purposes
of determining compliance with, or otherwise allowing amendments to, financial
covenants, change any provision of Section 7.11(a)(i) or 7.11(b)(i)
or Section 7.5(b) or (in each case) any defined term referred to or
applicable therein, without the written consent of Lenders having more than 66-2¤3%
of the Revolving Credit Exposure; or

(l)            except to add any
additional, or increase, any Revolving L/C Issuer Amount for Revolving Letters
of Credit with the consent of the Borrower and the affected Revolving L/C
Issuer, change any provision of Schedule 2.1 insofar as it relates to
any Revolving L/C Issuer Amount for Revolving Letters of Credit, without the
written consent of each Revolving L/C Issuer affected thereby and (unless an
Event of Default has occurred and is continuing) the Borrower;

and, provided, further, that (i) no
amendment, waiver or consent shall, unless in writing and signed by each L/C
Issuer affected thereby in addition to the Lenders required above, affect the
rights or duties of any L/C Issuer under this Agreement or any Issuer Document
relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by
(A) the Administrative Agent in addition to the Lenders required above,
affect the rights or duties of the Administrative Agent under this Agreement or
any other Loan Document or (B) the Pre-Funded L/C Facility Agent or the
Deposit Bank in addition to the Lenders required above, affect the rights or
duties of the Pre-Funded L/C Facility Agent or the Deposit Bank under this
Agreement or any other Loan Document; and (iii) Section 11.6(h)
may not be amended, waived or otherwise modified without the consent of each
Granting Lender all or any part of whose Loans are being funded by an SPC at
the time of such amendment, waiver or other modification; and (iv) the Fee
Letters may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto. 
Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender.

11.2        Notices; Effectiveness;
Electronic Communication.

(a)           Notices Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in clause (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopier

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as follows, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:

(i)            if to the Borrower, the Administrative
Agent, the Pre-Funded L/C Facility Agent or an L/C Issuer, to the address,
telecopier number, electronic mail address or telephone number specified for
such Person on Schedule 11.2; and

(ii)           if to any other Lender, to the address,
telecopier number, electronic mail address or telephone number specified in its
Administrative Questionnaire.

Notices sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices sent by telecopier shall be deemed to have been given when
sent (except that, if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
business day for the recipient).  Notices
delivered through electronic communications to the extent provided in clause (b)
below, shall be effective as provided in such clause (b).

(b)           Electronic
Communications.  Notices and other
communications to the Lenders and each L/C Issuer hereunder may be delivered or
furnished by electronic communication (including e-mail and Internet or
intranet websites) pursuant to procedures approved by the Administrative Agent;
provided, that the foregoing shall not apply to notices to any Lender or any
L/C Issuer pursuant to Article II if such Lender or such L/C Issuer, as
applicable, has notified the Administrative Agent and the Pre-Funded L/C Facility
Agent that it is incapable of receiving notices under such Article by
electronic communication.  The
Administrative Agent, the Pre-Funded L/C Facility Agent or the Borrower may, in
its discretion, agree to accept notices and other communications to it hereunder
by electronic communications pursuant to procedures approved by it; provided,
that approval of such procedures may be limited to particular notices or
communications.

Unless the Administrative Agent otherwise prescribes,
(i) notices and other communications sent to an e-mail address shall be
deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement); provided,
that if such notice or other communication is not sent during the normal
business hours of the recipient, such notice or communication shall be deemed
to have been sent at the opening of business on the next business day for the
recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause (i)
of notification that such notice or communication is available and identifying
the website address therefor.

(c)           Change of Address,
Etc.  Each of the Borrower, the
Administrative Agent, the Pre-Funded L/C Facility Agent and each L/C Issuer may
change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto.  Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder
by notice to the Borrower, the Administrative Agent, the Pre-Funded L/C
Facility Agent and each L/C Issuer.

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(d)           Reliance by
Administrative Agent, the Pre-Funded L/C Facility Agent, each L/C Issuer and
Lenders.  The Administrative Agent,
the Pre-Funded L/C Facility Agent, each L/C Issuer and the Lenders shall be
entitled to rely and act upon any notices (including telephonic Borrowing
Notices) purportedly given by or on behalf of the Borrower even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof received after any action was taken in accordance with such terms.  The Borrower shall indemnify the
Administrative Agent, the Pre-Funded L/C Facility Agent, each L/C Issuer, each
Lender and the Related Parties of each of them from all losses, costs, expenses
and liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower.  All telephonic notices to and other
telephonic communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

(e)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE.”  THE AGENT PARTIES (AS
DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER
MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR
ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR
OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER
MATERIALS OR THE PLATFORM.  In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to the Borrower, any Lender, any L/C
Issuer or any other Person for losses, claims, damages, liabilities or expenses
of any kind (whether in tort, contract or otherwise) arising out of the
Borrower’s or the Administrative Agent’s transmission of Borrower Materials
through the Internet, except to the extent that such losses, claims, damages,
liabilities or expenses are determined by a court of competent jurisdiction by
a final and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of such Agent Party; provided that in no event
shall any Agent Party have any liability to the Borrower, any Lender, any L/C
Issuer or any other Person for indirect, special, incidental, consequential or
punitive damages (as opposed to direct or actual damages).

11.3        No Waiver; Cumulative
Remedies.  No failure by any Lender,
any L/C Issuer, the Pre-Funded L/C Facility Agent or the Administrative Agent
to exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.  The
rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

11.4        Expenses; Indemnity;
Damage Waiver.

(a)           Costs and Expenses.  The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative
Agent, the Pre-Funded L/C Facility Agent and their

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Affiliates (including the reasonable fees, charges and
disbursements of one principal counsel and reasonably required local counsel
for the Administrative Agent and the Pre-Funded L/C Facility Agent), in
connection with the syndication of each of the credit facilities provided for
herein, the preparation, negotiation, execution, delivery and administration of
this Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by an L/C Issuer in connection with
the issuance, amendment, renewal or extension of any Letter of Credit or any
demand for payment thereunder and (iii) all reasonable out-of-pocket
expenses incurred by the Administrative Agent, the Pre-Funded L/C Facility
Agent, any Lender or any L/C Issuer (including the reasonable fees, charges and
disbursements of any counsel for the Administrative Agent, the Pre-Funded L/C
Facility Agent, any Lender or any L/C Issuer), and shall pay all fees and time
charges for attorneys who may be employees of the Administrative Agent, the
Pre-Funded L/C Facility Agent, any Lender or any L/C Issuer, in connection with
the enforcement or protection of its rights (A) in connection with this
Agreement and the other Loan Documents, including its rights under this
Section, or (B) in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.

(b)           Indemnification by
the Borrower.  The Borrower shall
indemnify the Administrative Agent (and any sub-agent thereof), the Pre-Funded
L/C Facility Agent (and any sub-agent thereof), each other Agent, each Lender
and each L/C Issuer, and each Related Party of any of the foregoing Persons
(each such Person being called an “Indemnitee”) against, WHETHER OR NOT RELATED TO ANY NEGLIGENCE OF THE INDEMNIFIED PARTIES,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee), and shall indemnify and hold
harmless each Indemnitee from all fees and time charges and disbursements for
attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by the Borrower or any
other Loan Party arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement, any other Loan Document
or any agreement or instrument contemplated hereby or thereby, the performance
by the parties hereto of their respective obligations hereunder or thereunder
or the consummation of the transactions contemplated hereby or thereby,
(ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by an L/C Issuer to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought
by a third party or by the Borrower or any other Loan Party, and regardless of
whether any Indemnitee is a party thereto, in all cases, whether or not caused
by or arising, in whole or in part, out of the comparative, contributory or
sole negligence of the Indemnitee; provided, that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful

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misconduct of such Indemnitee, (y) result from a
claim brought by the Borrower or any other Loan Party against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Loan Document, if the Borrower or such Loan Party has obtained a final
and nonappealable judgment in its favor on such claim as determined by a court
of competent jurisdiction or (z) result from any dispute arising solely
between or among any Lenders, Agents or L/C Issuers, which dispute is not a result
of any act or omission of any Loan Party.

(c)           Reimbursement by
Lenders.  To the extent that the
Borrower for any reason fails to indefeasibly pay any amount required under clause (a)
or (b) of this Section to be paid by it to the Administrative
Agent (or any sub-agent thereof), the Pre-Funded L/C Facility Agent (or any
sub-agent thereof), an L/C Issuer or any Related Party of any of the foregoing,
each Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the Pre-Funded L/C Facility Agent (or any such sub-agent thereof),
such L/C Issuer or such Related Party, as the case may be, such Lender’s Pro
Rata Share (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided, that
the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent), the Pre-Funded L/C Facility Agent
(or any such sub-agent thereof) or such L/C Issuer in its capacity as such, or
against any Related Party of any of the foregoing acting for the Administrative
Agent (or any such sub-agent), the Pre-Funded L/C Facility Agent (or any such
sub-agent thereof) or such L/C Issuer in connection with such capacity.  The obligations of the Lenders under this clause (c)
are subject to the provisions of Section 2.11(d).  If any Lender fails to pay its Pro Rata Share
of such unpaid amount within 10 Business Days following the date of such Lender’s
receipt of notice thereof (the “Notice Period”) from the Administrative
Agent, the Pre-Funded L/C Facility Agent, an L/C Issuer or any Related Party of
the foregoing, such Person shall be entitled to recover from such Lender, on
demand, then interest on the amount due for the period from the day immediately
following the end of the Notice Period to the date payment in full is made at a
rate per annum equal to the Federal Funds Rate from time to time in effect.

(d)           Waiver of Consequential
Damages, Etc.  To the fullest extent
permitted by applicable law, the Borrower shall not assert, and hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof.  No
Indemnitee referred to in clause (b) above shall be liable for any
damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other
Loan Documents or the transactions contemplated hereby or thereby.

(e)           Payments.  All amounts due under this Section shall
be payable not later than ten Business Days after the Borrower’s or any Lender’s
receipt of a written demand therefor.

(f)            Survival.  The agreements in this Section shall
survive the resignation of the Administrative Agent, the Pre-Funded L/C
Facility Agent and any L/C Issuer, the replacement of

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any Lender, the termination of the Aggregate
Commitments and the repayment, satisfaction or discharge of all the other
Credit Agreement Obligations.

11.5        Payments Set Aside.  To the extent that any payment by or on
behalf of the Borrower is made to the Administrative Agent, the Pre-Funded L/C
Facility Agent, any L/C Issuer or any Lender, or the Administrative Agent, the
Pre-Funded L/C Facility Agent, any L/C Issuer or any Lender exercises its right
of setoff, and such payment or the proceeds of such setoff or any part thereof
is subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Administrative Agent, the Pre-Funded L/C Facility Agent, such L/C Issuer or
such Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the Credit Agreement
Obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (b) each Lender, each L/C Issuer and the
Pre-Funded L/C Facility Agent severally agrees to pay to the Administrative
Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest
thereon from the date of such demand to the date such payment is made at a rate
per annum equal to the Federal Funds Rate from time to time in effect.  The Obligations of the Lenders, each L/C
Issuer and the Pre-Funded L/C Facility Agent under clause (b) of
the preceding sentence shall survive the payment in full of the Credit
Agreement Obligations and the termination of this Agreement.

11.6        Successors and Assigns.

(a)           Successors and
Assigns Generally.  The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except
that neither the Borrower nor any other Loan Party may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of the Administrative Agent and each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of clause (b)
of this Section, (ii) by way of participation in accordance with the provisions
of clause (d) of this Section, or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of clause (f)
of this Section, or (iv) to an SPC in accordance with the provisions of clause (h)
of this Section (and any other attempted assignment or transfer by any party hereto
shall be null and void).  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in clause (d)
of this Section and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent, each L/C Issuer and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

(b)           Assignments by
Lenders.  Any Lender may at any time
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment,
the Loans and Pre-Funded L/C Deposits (including for purposes of this clause (b),
participations in Revolving L/C Obligations and Pre-Funded L/C Obligations) at
the time owing to it); provided, that:

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(i)            except in the case of an assignment of the
entire remaining amount of the assigning Lender’s Commitment, the Loans and
Pre-Funded L/C Deposits at the time owing to it or in the case of an assignment
to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a
Lender, the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans and Pre-Funded L/C Deposits of the
assigning Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $1,000,000 with
respect to Term Loans and the Pre-Funded L/C Commitments, and $10,000,000 with
respect to Revolving Credit Commitments, unless each of the Administrative
Agent and, so long as no Event of Default has occurred and is continuing, the
Borrower otherwise consents (each such consent not to be unreasonably withheld
or delayed); provided that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to
a single Eligible Assignee (or to an Eligible Assignee and members of its
Assignee Group) will be treated as a single assignment for purposes of
determining whether such minimum amount has been met;

(ii)           each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned (including, with respect to any portion of any Revolving Loan
Commitment assigned, the corresponding obligation to purchase participations in
Revolving L/C Obligations pursuant to Section 2.3(b));

(iii)          (w) any assignment of a Revolving Credit
Commitment must be approved by the Administrative Agent and each Revolving L/C
Issuer, (x) any assignment of Pre-Funded L/C Commitments or Pre-Funded L/C
Deposits must be approved by the Pre-Funded L/C Facility Agent and each
Pre-Funded L/C Issuer, (y) any reduction in any Revolving L/C Issuer Amount for
Revolving Letters of Credit must be approved by each Revolving L/C Issuer and
(unless an Event of Default has occurred and is continuing) the Borrower, in
each case, such approval not to be unreasonably withheld or delayed and (z) any
assignment of a Revolving Credit Commitment or obligations to make Revolving
Loans (even if to another Lender or an Affiliate of a Lender), so long as no
Event of Default has occurred and is continuing, shall require the consent of
the Borrower, not to be unreasonably withheld or delayed unless such assignment
is merely increasing the Revolving Credit Commitment of a Revolving Credit
Lender; and

(iv)          the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee of $3,500, and the Eligible Assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire; provided that (A) only one such fee
shall be required in connection with a concurrent assignment by a Lender to one
or more Approved Funds, and (B) the Administrative Agent may, in its sole
discretion, elect to waive such processing and recordation fee in the case of
any assignment.

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Subject to acceptance and recording thereof by the
Administrative Agent pursuant to clause (c) of this Section, from
and after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 3.1, 3.4, 3.5, and 11.4 with
respect to facts and circumstances occurring prior to the effective date of
such assignment.  Any term or provision
hereof to the contrary notwithstanding, no portion of any Pre-Funded L/C
Deposit of any assigning Pre-Funded L/C Lender shall be refunded in connection
with any assignment by such Pre-Funded L/C Lender, but instead (A) the
applicable Eligible Assignee shall purchase from such assigning Pre-Funded L/C
Lender that portion of the Pre-Funded L/C Deposit identified in the applicable
Lender Assignment Agreement for such consideration as mutually agreed upon by
such parties; and (B) such assigned portion of such Pre-Funded L/C Deposit shall
remain on deposit in the Pre-Funded L/C Deposit Account and, upon the
effectiveness of such assignment, shall become the Pre-Funded L/C Deposit of
such Eligible Assignee.  Upon request,
the Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this clause shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with clause (d)
of this Section.

(c)           Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and L/C Obligations owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).  In connection with each assignment of
Pre-Funded L/C Deposits, the Pre-Funded L/C Deposit of the assignor Lender
shall not be released, but shall instead be purchased by the relevant assignee
and continue to be held for application (to the extent not already applied) in
accordance with Article II to satisfy such assignee’s obligations in
respect of Pre-Funded L/C Deposit Account Loans and Pre-Funded Letters of
Credit.

The entries in the Register shall be conclusive, and
the Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be
available for inspection by each of the Borrower and each L/C Issuer at any
reasonable time and from time to time upon reasonable prior notice.  In addition, at any time that a request for a
consent for a material or substantive change to the Loan Documents is pending,
any Lender wishing to consult with other Lenders in connection therewith may
request and receive from the Administrative Agent a copy of the Register.

(d)           Participations.  Any Lender may at any time, without the
consent of, or notice to, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrower or
any of the Borrower’s Affiliates or Subsidiaries) (each, a

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“Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment, the Loans and/or Pre-Funded L/C Deposits (including such Lender’s
participations in Revolving L/C Obligations and Pre-Funded L/C Obligations)
owing to it); provided, that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent, the Lenders and each L/C
Issuer shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided, that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in
the first proviso to Section 11.1 (other than Section 11.1(k))
that affects such Participant.  Subject
to clause (e) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.1, 3.4
and 3.5 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to clause (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 11.8
as though it were a Lender, provided, that such Participant agrees to be
subject to Section 2.11 as though it were a Lender.

(e)           Limitations upon
Participant Rights.  A Participant
shall not be entitled to receive any greater payment under Section 3.1
or 3.4 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower’s prior written
consent.  A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.1
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.1(e)
as though it were a Lender.

(f)            Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided, that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

(g)           Electronic Execution
of Assignments.  The words “execution,”
“signed,” “signature,” and words of like import in any Assignment and
Assumption shall be deemed to include electronic signatures or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

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(h)           Special Purpose
Funding Vehicles.  Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”)
may grant to a special purpose funding vehicle identified as such in writing
from time to time by the Granting Lender to the Administrative Agent and the
Borrower (an “SPC”) the option to provide all or any part of any Loan or
Pre-Funded L/C Deposit that such Granting Lender would otherwise be obligated
to make pursuant to this Agreement; provided, that (i) nothing herein
shall constitute a commitment by any SPC to fund any Loan or Pre-Funded L/C
Deposit, and (ii) if an SPC elects not to exercise such option or otherwise
fails to make all or any part of such Loan or such Pre-Funded L/C Deposit, the
Granting Lender shall be obligated to make such Loan pursuant to the terms hereof
or, if it fails to do so, to make such payment to the Administrative Agent as
is required under Section 2.11(b)(ii).  Each party hereto hereby agrees that (i)
neither the grant to any SPC nor the exercise by any SPC of such option shall
increase the costs or expenses or otherwise increase or change the obligations
of the Borrower under this Agreement (including its obligations under Section 3.4),
(ii) no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement for which a Lender would be liable, and (iii) the Granting
Lender shall for all purposes, including the approval of any amendment, waiver
or other modification of any provision of any Loan Document, remain the lender
of record hereunder.  The making of a
Loan or Pre-Funded L/C Deposit by an SPC hereunder shall utilize the Commitment
of the Granting Lender to the same extent, and as if, such Loan or such
Pre-Funded L/C Deposit were made by such Granting Lender.  In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior debt of any
SPC, it will not institute against, or join any other Person in instituting
against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceeding under the laws of the United States or any State
thereof.  Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without prior
consent of the Borrower and the Administrative Agent and without paying any
processing fee therefor, assign all or any portion of its right to receive
payment with respect to any Loan or Pre-Funded L/C Deposit to the Granting
Lender and (ii) disclose on a confidential basis any non-public information
relating to its funding of Loans to any rating agency, commercial paper dealer
or provider of any surety or Guarantee or credit or liquidity enhancement to
such SPC.

(i)            Resignation as an
L/C Issuer after Assignment. 
Notwithstanding anything to the contrary contained herein, if at any
time an L/C Issuer assigns all of its Commitment and Loans pursuant to clause (b)
above, such L/C Issuer may, upon 30 days’ notice to the Borrower and the
Lenders, resign as an L/C Issuer.  In the
event of any such resignation as an L/C Issuer, the Borrower shall be entitled
to appoint from among the Lenders a successor L/C Issuer hereunder; provided,
that (i) each outstanding Letter of Credit issued by such L/C Issuer shall
remain in full force and effect until such Letter of Credit has terminated or
expired (without giving effect to any renewals thereof) and (ii) no failure by
the Borrower to appoint any such successor shall affect the resignation of such
L/C Issuer as an L/C Issuer.  Each
resigning L/C Issuer shall retain all the rights and obligations of an L/C
Issuer hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as an L/C Issuer and all Revolving L/C
Obligations and Pre-Funded L/C Obligations with respect thereto.

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11.7        Confidentiality.  Each of the Agents, the Collateral Agent,
each L/C Issuer and the Lenders understands that some of the information
furnished to it pursuant to this Agreement and the other Loan Documents may be
received by it prior to the time that such information shall have been made
public, and each of the Administrative Agent, the other Agents the Collateral
Agent, each L/C Issuer and the Lenders hereby agrees that it will keep all the
Information (as defined below) received by it confidential except that such
Person shall be permitted to disclose Information (i) only to such of its
officers, directors, employees, agents, representatives, auditors, consultants,
advisors, trustees, investment advisors, lawyers and affiliates as need to know
such Information in connection with this Agreement or any other Loan Document
and who will be advised of the confidential nature of such Information; (ii) to
any other party to this Agreement; (iii) to a proposed assignee or
participant in accordance with Section 11.6 hereof (or any pledgee
referred to in clause (f) thereof); provided that prior to any
such disclosure each such proposed assignee, participant or pledgee shall agree
in writing to be bound by provisions of this Section 11.7 (or
provisions no less restrictive than this Section 11.7); (iv) to the
extent required by Law and regulations or by any subpoena or other legal
process; (v) to the extent requested by any bank regulatory authority or other
regulatory authority; (vi) to the extent such information (A) is or
becomes publicly available other than as a result of a breach of this Agreement
or (B) becomes available to such Lender on a nonconfidential basis from a source
other than a Loan Party or any of its Affiliates; (vii) to the extent the
Borrower shall have consented to such disclosure; (viii) in connection with the
servicing of the Loans hereunder, in protecting, exercising or enforcing any
rights and/or remedies in connection with any Loan Document or in any
proceeding in connection with any Loan Document or any of the transactions
contemplated thereby or (ix) to the Collateral Trustee.  For the purposes of this Section, “Information”
means all information received from the Borrower, any other Loan Party or their
respective officers, directors, employees, agents, representatives, auditors,
consultants, advisors, trustees, investment advisors, lawyers and affiliates
(collectively, “Credit Party Agents”) relating to the Borrower, any Loan
Party, any Subsidiary of a Loan Party or any of their respective businesses,
other than any such information that is available to the Administrative Agent,
any other Agent, the Collateral Agent, any L/C Issuer or any Lender on a
nonconfidential basis prior to disclosure by the Borrower, any Loan Party or
any Subsidiary of a Loan Party.  Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.  In the event
of any required disclosure of Information, any Person required to maintain the
confidentiality of such Information as provided in this Section agrees to use
reasonable efforts to inform the Borrower as promptly as practicable of the
circumstances and the Information required to be disclosed to the extent not prohibited
by Law.

11.8        Right of Setoff.  If an Event of Default shall have
occurred and be continuing, each Lender, each L/C Issuer and each of their
respective Affiliates is hereby authorized at any time and from time to time,
to the fullest extent permitted by applicable law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final, in
whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by such Lender, such L/C Issuer or any such
Affiliate to or for the credit or the account of the Borrower or any other Loan
Party against any and all of the Credit Agreement Obligations of the Borrower
or such Loan Party now or hereafter existing under this Agreement or any other
Loan Document to such Lender or such L/C Issuer, irrespective of whether or not
such Lender or such

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L/C Issuer shall have made any demand under this
Agreement or any other Loan Document and although such Credit Agreement
Obligations of the Borrower or such Loan Party may be contingent or unmatured
or are owed to a branch or office of such Lender or such L/C Issuer different
from the branch or office holding such deposit or obligated on such
indebtedness.  The rights of each Lender,
each L/C Issuer and their respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that
such Lender, such L/C Issuer or their respective Affiliates may have.  Each Lender and each L/C Issuer agrees to
notify the Borrower and the Administrative Agent promptly after any such setoff
and application; provided, that the failure to give such notice shall
not affect the validity of such setoff and application.

11.9        Interest Rate Limitation.  Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under
the Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent, the Pre-Funded
L/C Facility Agent or any Lender shall receive interest in an amount that
exceeds the Maximum Rate, the excess interest shall be applied to the principal
of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower.  In determining whether the interest
contracted for, charged, or received by the Administrative Agent, the
Pre-Funded L/C Facility Agent or a Lender exceeds the Maximum Rate, such Person
may, to the extent permitted by applicable Law, (a) characterize any payment
that is not principal as an expense, fee, or premium rather than interest, (b)
exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Credit Agreement Obligations
hereunder.

11.10      Counterparts; Integration;
Effectiveness.  This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract.  This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof.  Except as provided in Section 4.1,
this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto.  Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.

11.11      Survival of Representations
and Warranties.  All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been
or will be relied upon by the Administrative Agent, the Pre-Funded L/C Facility
Agent and each Lender, regardless of any investigation made by the
Administrative Agent, the Pre-Funded L/C Facility Agent or any Lender or on
their behalf and notwithstanding that the Administrative Agent, the Pre-Funded
L/C Facility Agent or any Lender may have had notice or knowledge of any
Default at the time of any Credit Extension, and shall continue in full force
and effect as long as any

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Loan or any other Credit Agreement Obligation
hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall
remain outstanding.

11.12      Severability.  If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired
thereby and (b) the parties shall endeavor in good faith negotiations to
replace the illegal, invalid or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

11.13      Replacement of Lenders.  If (a) any Lender requests compensation
under Section 3.4; (b) the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 3.1; (c) any Lender is a
Defaulting Lender; (d) any Lender does not consent to a proposed
amendment, waiver, consent or release with respect to any Loan Document that
requires the consent of each Lender by a date specified by the Borrower (or
gives the Borrower written notice prior to such date of its intention not to do
so), and such amendment, waiver, consent or release has otherwise been approved
by the Required Lenders; or (e) any other circumstance exists hereunder that
gives the Borrower the right to replace a Lender as a party hereto, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 11.6), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided, that

(a)           the Borrower shall have
paid to the Administrative Agent the assignment fee specified in Section 11.6(b);

(b)           such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans,
Pre-Funded L/C Deposit and L/C Advances, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder and under the other Loan
Documents (including any amounts under Section 3.5) from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts);

(c)           in the case of any such
assignment resulting from a claim for compensation under Section 3.4
or payments required to be made pursuant to Section 3.1, such
assignment will result in a reduction in such compensation or payments
thereafter;

(d)           such assignment does
not conflict with applicable Laws; and

(e)           with respect to any
proposed amendment, waiver, consent or release contemplated by clause (d),
such amendment, waiver, consent or release will be effected as a result of the
assignment contemplated by this Section (together with all other such
assignments required by the Borrower to be made pursuant hereto).

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A Lender shall not be required to make any such
assignment or delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.

11.14      Governing Law;
Jurisdiction; Etc.

(a)           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b)           SUBMISSION TO
JURISDICTION.  THE BORROWER AND EACH
OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK SITTING IN NEW YORK CITY AND OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
COURT OF THE STATE OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, IN SUCH FEDERAL COURT.  EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER
LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER
OR ANY L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c)           WAIVER OF VENUE.  THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN CLAUSE (b)
OF THIS SECTION.  EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

(d)           SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.2.  NOTHING IN THIS AGREEMENT WILL AFFECT THE
RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.

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11.15      Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

11.16      USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as
hereinafter defined), the Pre-Funded L/C Facility Agent and the Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower
that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender, the Pre-Funded L/C Facility Agent or the
Administrative Agent, as applicable, to identify the Borrower in accordance
with the Act.

11.17      No Oral Agreements.  THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

11.18      Citibank Intercreditor
Agreement.  Those Lenders parties to
this Credit Agreement that were “Tranche A Lenders” (as defined in the Existing
Credit Agreement) under the Existing Credit Agreement hereby acknowledge and
agree that the Intercreditor Agreement dated as of March 28, 2003 between Bank
of America, N.A., as Administrative Agent and Collateral Agent and Citicorp
USA, Inc., as Tranche A Agent and Citibank, N.A., as Tranche A Collateral
Agent, as assigned to the Collateral Trustee, shall no longer be in effect.

11.19      Orion Bank Guarantors.  Pursuant to the Existing Credit Agreement,
the Orion Bank Guarantors (as defined in the Existing Credit Agreement)
provided a limited guaranty of the obligations thereunder.  The Lenders hereby acknowledge and agree that
such Orion Bank Guarantors are released from all obligations with respect to
such limited guaranty, and that such limited guaranty is no longer in effect.

11.20      Effect of Amendment and
Restatement of the Existing Credit Agreement.  On the Effective Date, the Existing Credit
Agreement shall be amended and restated in its entirety.  The parties hereto acknowledge and agree that
(a) this Agreement and the other Loan

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Documents, whether executed and delivered in
connection herewith or otherwise, do not constitute a novation or termination
of, but instead is an amendment of, the “Obligations” (as defined in the
Existing Credit Agreement) under the Existing Credit Agreement as in effect
immediately prior to the Effective Date and which remain outstanding;
(b) the “Obligations” (as amended and restated hereby and which are
hereinafter subject to the terms herein) are in all respects continuing; and
(c) the Liens and security interests as granted under the applicable Loan
Documents securing payment of such “Obligations” are in all respects continuing
and in full force and effect, except as set forth in Section 11.21.

11.21      Release of Guarantors,
Collateral.  (a)  Each Secured Party agrees to, and authorizes
and directs the Administrative Agent, the Collateral Trustee and the Collateral
Agent to do all things necessary or reasonably requested by the Borrower (i) on
and subsequent to the Effective Date to (A) release from the Guaranty each of
the Subsidiaries set forth on Schedule 11.21 (the “Released
Guarantors”) except RESE; (B) release from the Liens securing all Parity
Secured Debt and the Liens encumbering any Separate Collateral the property and
assets (including the Equity Interests in the Released Guarantors except RESE)
constituting the Retail Energy Business and the property and assets being
contributed to the IP Trust and the IT Trust pursuant to the IP/IT Agreements;
and (C) enter into amendments to the Collateral Trust Agreement and the
Security Agreement with respect to the inclusion of Retail Holdco and the
beneficial interests in the IT Trust and the IP Trust in the definition of “Excluded
Securities”; and (ii) on and subsequent to the date that RESE becomes a member
of the Retail Group and an “Other Reliant Retail Obligor” under the
Reimbursement Agreement, to (A) release RESE from the Guaranty and (B) release
from the Liens securing all Parity Secured Debt and the Liens encumbering any
Separate Collateral the property and assets (including the Equity Interests in
RESE) constituting the PJM Retail Business.

(b)           Each Lender
acknowledges and agrees that (i) on the Effective Date, each Released Guarantor
other than RESE is released from all obligations with respect to the Guaranty,
and that such Guaranty is no longer in effect with respect to any Released
Guarantor other than RESE, and (ii) on date that RESE becomes a member of the
Retail Group and an “Other Reliant Retail Obligor” under the Reimbursement
Agreement, RESE is released from all obligations with respect to the Guaranty,
and that such Guaranty is no longer in effect with respect to RESE.

11.22      No Advisory or Fiduciary
Responsibility.  In connection with
all aspects of each transaction contemplated hereby, the Borrower acknowledges
and agrees, and acknowledges its Affiliates’ understanding, that: (i) the
credit facilities provided for hereunder and any related arranging or other
services in connection therewith (including in connection with any amendment,
waiver or other modification hereof or of any other Loan Document) are an arm’s-length
commercial transaction between the Borrower and its Affiliates, on the one
hand, and the Facility Agents and the Arrangers, on the other hand, and the
Borrower is capable of evaluating and understanding and understands and accepts
the terms, risks and conditions of the transactions contemplated hereby and by the
other Loan Documents (including any amendment, waiver or other modification
hereof or thereof); (ii) in connection with the process leading to such
transaction, each of the Facility Agents and the Arrangers is and has been
acting solely as a principal and is not the financial advisor, agent or
fiduciary, for the Borrower or any of its Affiliates, stockholders, creditors
or employees or any other Person; (iii) none of the Facility

 172
 

 

Agents or the Arrangers has assumed or will assume an
advisory, agency or fiduciary responsibility in favor of the Borrower with
respect to any of the transactions contemplated hereby or the process leading
thereto, including with respect to any amendment, waiver or other modification
hereof or of any other Loan Document (irrespective of whether any of the
Facility Agents or the Arrangers has advised or is currently advising the
Borrower or any of its Affiliates on other matters) and none of the Facility
Agents or the Arrangers has any obligation to the Borrower or any of its Affiliates
with respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Loan Documents; (iv) the Facility
Agents and the Arrangers and their respective Affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of
the Borrower and its Affiliates, and none of the Facility Agents or the
Arrangers has any obligation to disclose any of such interests by virtue of any
advisory, agency or fiduciary relationship; and (v) the Facility Agents and the
Arrangers have not provided and will not provide any legal, accounting,
regulatory or tax advice with respect to any of the transactions contemplated
hereby (including any amendment, waiver or other modification hereof or of any
other Loan Document) and the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate.  The Borrower hereby waives and releases, to
the fullest extent permitted by law, any claims that it may have against the
Facility Agents and the Arrangers with respect to any breach or alleged breach
of agency or fiduciary duty.

 173

 

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the date first
above written.

	
  

  	
  RELIANT ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew C. Johannesen

  
	
   

  	
  Name:

  	
  Andrew C. Johannesen

  
	
   

  	
  Title:

  	
  Vice President and Assistant Treasurer

  
	
   

  	
   

  
	
   

  	
  RELIANT ENERGY ASSET MANAGEMENT, LLC

  
	
   

  	
  RELIANT ENERGY BROADBAND, INC.

  
	
   

  	
  RELIANT ENERGY CALIFORNIA HOLDINGS, LLC

  
	
   

  	
  RELIANT ENERGY COMMUNICATIONS, INC.

  
	
   

  	
  RELIANT ENERGY COOLWATER, INC.

  
	
   

  	
  RELIANT ENERGY CORPORATE SERVICES, LLC

  
	
   

  	
  RELIANT ENERGY ELLWOOD, INC.

  
	
   

  	
  RELIANT ENERGY ETIWANDA, INC.

  
	
   

  	
  RELIANT ENERGY FLORIDA, LLC

  
	
   

  	
  RELIANT ENERGY KEY/CON FUELS, LLC

  
	
   

  	
  RELIANT ENERGY MANDALAY, INC.

  
	
   

  	
  RELIANT ENERGY NORTHEAST GENERATION, INC.

  
	
   

  	
  RELIANT ENERGY NORTHEAST HOLDINGS, INC.

  
	
   

  	
  RELIANT ENERGY ORMOND BEACH, INC.

  
	
   

  	
  RELIANT ENERGY POWER GENERATION, INC.

  
	
   

  	
  RELIANT ENERGY SABINE (TEXAS), INC.

  
	
   

  	
  RELIANT ENERGY SERVICES DESERT BASIN, LLC

  
	
   

  	
  RELIANT ENERGY SERVICES MID-STREAM, LLC

  
	
   

  	
  RELIANT ENERGY SEWARD, LLC

  
	
   

  	
  RELIANT ENERGY TRADING EXCHANGE, INC.

  
	
   

  	
  RELIANT ENERGY VENTURES, INC.

  
	
   

  	
  RELIANT ENERGY WHOLESALE GENERATION,

  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew C. Johannesen

  
	
   

  	
  Name: Andrew C. Johannesen

  
	
   

  	
  Title: Assistant Treasurer of the corporations and
  limited

  
	
   

  	
  liability companies listed above

  
	
   

  	
   

  
	
   

  	
  RELIANT ENERGY SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew C. Johannesen

  
	
   

  	
  Name:

  	
  Andrew C. Johannesen

  
	
   

  	
  Title:

  	
  Vice President and Treasurer

  
				

 

Third Amended and
Restated Credit and Guaranty Agreement

 

 

	
  

  	
  RELIANT ENERGY ELECTRIC SOLUTIONS, LLC

  
	
   

  	
  RELIANT ENERGY SOLUTIONS EAST, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lloyd A. Whittington

  
	
   

  	
  Name:

  	
  Lloyd A. Whittington

  
	
   

  	
  Title:

  	
  Vice President and Treasurer of the limited
  liability

  
	
   

  	
  companies

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RELIANT ENERGY CAPTRADES HOLDING CORP.

  
	
   

  	
  RELIANT ENERGY SABINE (DELAWARE), INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patricia F. Genzel

  
	
   

  	
  Name:

  	
  Patricia F. Genzel

  
	
   

  	
  Title:

  	
  President and Secretary

  
				

 

 

 

	
  

  	
  BANK OF AMERICA, N.A., as Administrative

  
	
   

  	
  Agent, an L/C Issuer and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jay T. Wampler

  
	
   

  	
   

  	
  Name:

  	
  Jay T. Wampler

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
					

 

 

 

	
  

  	
  DEUTSCHE BANK AG, NEW YORK

  
	
   

  	
  BRANCH, as an L/C Issuer, a Lender and Deposit Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marcus M. Tarkington

  
	
   

  	
   

  	
  Name:

  	
  Marcus M. Tarkington

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Silvia L. Spear

  
	
   

  	
   

  	
  Name:

  	
  Silvia L. Spear

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
					

 

 

 

	
  

  	
  DEUTSCHE BANK SECURITIES INC., as a Syndication

  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin M. Sherlock

  
	
   

  	
   

  	
  Name:

  	
  Kevin M. Sherlock

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nadeem Nisar

  
	
   

  	
   

  	
  Name:

  	
  Nadeem Nisar

  
	
   

  	
   

  	
  Title:

  	
  Director

  
					

 

 

 

	
  

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  GOLDMAN SACHS CREDIT PARTNERS L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Walton

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark Walton

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
						

 

 

 

	
  

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  MERRILL LYNCH CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Don Burkitt

  
	
   

  	
   

  	
  Name:

  	
  Don Burkitt

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					

 

 

 

	
  

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  JPMorgan Chase Bank, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Traband

  
	
   

  	
   

  	
  Name:

  	
  Robert Traband

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					

 

 

 

	
  

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NOVA SCOTIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thame Rattew

  
	
   

  	
   

  	
  Name:

  	
  Thame Rattew

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
					

 

 

 

	
  

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  ABM Amro Bank N.V.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Reed

  
	
   

  	
   

  	
  Name:

  	
  John Reed

  
	
   

  	
   

  	
  Title:

  	
  Director

  
					

 

	
  

  	
  By:

  	
  /s/ Scott Donaldson

  
	
   

  	
   

  	
  Name:

  	
  Scott Donaldson

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					

 

 

 

	
  

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  UBS AG, Stamford Branch

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas Gorvolino

  
	
   

  	
   

  	
  Name:

  	
  Douglas Gorvolino

  
	
   

  	
   

  	
  Title:

  	
  Associate Director Banking Products Services, US

  
					

 

	
  

  	
  By:

  	
  /s/ Steven J. Nibur

  
	
   

  	
   

  	
  Name:

  	
  Steven J. Nibur

  
	
   

  	
   

  	
  Title:

  	
  Associate Director Banking Products Services, US

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]