Document:

exv10w2

EXHIBIT 10.2

 

STP 3 & 4 OWNERS AGREEMENT

by and among

CITY OF SAN ANTONIO,

NUCLEAR INNOVATION NORTH AMERICA LLC,

NINA TEXAS 3 LLC

and

NINA TEXAS 4 LLC

 

			
	*	 	The confidential content of this Exhibit 10.2 has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS
	 	 	2	 
	Section 1.1 Definitions and Usage
	 	 	2	 
	Section 1.2 Rules as to Usage
	 	 	5	 
	ARTICLE II OWNERS
	 	 	5	 
	Section 2.1 Ownership Interests
	 	 	5	 
	Section 2.2 Additional Owners
	 	 	7	 
	Section 2.3 Term
	 	 	7	 
	Section 2.4 Related Agreements
	 	 	7	 
	ARTICLE III VOTING
	 	 	8	 
	Section 3.1 Decisions Relating to STP 3 and STP4
	 	 	8	 
	Section 3.2 San Antonio Cooperation
	 	 	11	 
	Section 3.3 Access to Information
	 	 	12	 
	Section 3.4 Allocation of Costs and Obligations to Pay Costs
	 	 	12	 
	Section 3.5 Power Production Prior to Final Completion Date
	 	 	12	 
	Section 3.6 Cooperation Among Owners
	 	 	13	 
	Section 3.7 Indemnification
	 	 	13	 
	ARTICLE IV TRANSFERS
	 	 	13	 
	Section 4.1 Transfers
	 	 	13	 
	ARTICLE V GENERAL PROVISIONS
	 	 	14	 
	Section 5.1 Notices
	 	 	14	 
	Section 5.2 Governing Law; Forum Selection
	 	 	14	 
	Section 5.3 Relationship Of Owners
	 	 	14	 
	Section 5.4 Third Party Beneficiaries
	 	 	15	 
	Section 5.5 Further Assurances
	 	 	15	 
	Section 5.6 Binding Effect
	 	 	15	 
	Section 5.7 Amendment
	 	 	15	 
	Section 5.8 Headings; Table Of Contents
	 	 	15	 
	Section 5.9 Interpretation And Reliance
	 	 	15	 
	Section 5.10 Severability
	 	 	15	 
	Section 5.11 Complete Agreement
	 	 	15	 
	Section 5.12 Counterparts
	 	 	16	 
	Section 5.13 Waiver of Sovereign Immunity
	 	 	16	 

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APPENDICES

	 	 	 
	APPENDIX A —

	 	Addresses for Notices
	 
	 	 
	Schedule 2.1(b)(ii)

	 	Abandonment Calculation Example
	 
	 	 
	Schedule 3.4(a)

	 	Project Costs Accrued Through January 31, 2010

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OWNERS AGREEMENT

     THIS STP 3 & 4 OWNERS AGREEMENT is made and entered into effective as of the 1st day of March,
2010 (the “Effective Date”), by and among THE CITY OF SAN ANTONIO, acting by and through
the City Public Service Board of San Antonio, a Texas municipal utility (“San Antonio”),
NUCLEAR INNOVATION NORTH AMERICA LLC, a limited liability company formed under the laws of the
State of Delaware (“NINA”), NINA TEXAS 3 LLC, a limited liability company formed under the
laws of the State of Delaware, indirectly wholly owned by NINA (“NINA 3”), and NINA TEXAS 4
LLC, a limited liability company formed under the laws of the State of Delaware, indirectly wholly
owned by NINA (“NINA 4” and together with NINA and NINA 3, the “NINA Parties”).
San Antonio, NINA 3 and NINA 4, and any permitted transferee are also each referred to herein as an
“Initial Owner” and collectively as the “Initial Owners.”

RECITALS

     A. San Antonio and NRG South Texas LP (“NRG South Texas”) are parties to the Amended
and Restated South Texas Project Participation Agreement dated effective as of November 17, 1997,
by and among The City of Austin, San Antonio and NRG South Texas (as successor in interest to
Houston Lighting & Power Company and Central Power and Light Company) (the “Participation
Agreement”);

     B. Each Participant in the electric generating units operating at the South Texas Project site
as of the Effective Date (“STP 1” and “STP 2” or collectively, the “Existing
STP Units”) and the Owners under this Agreement have the rights and obligations due each of
them under the Participation Agreement;

     C. San Antonio and NRG South Texas are parties to the South Texas Project Supplemental
Agreement, dated effective as of October 29, 2007, and one or more Addenda or Amendments thereto
(the “Supplemental Agreement”), which set forth mutual understandings for the development
of two additional Generating Units at the South Texas Project, STP 3 and STP 4 (as defined below);

     D. Each of San Antonio and NRG South Texas exercised their respective rights pursuant to
Article 6 of the Participation Agreement to pursue development of STP 3 and STP 4;

     E. NRG South Texas subsequently assigned to NINA 3 and NINA 4 its right under the
Participation Agreement to develop STP 3 and STP 4, respectively, without assigning rights and
obligations retained by the owners of STP 1 and STP 2;

     F. By its letter dated February 20, 2009, Austin Energy has acknowledged that it has elected
not to participate in the Project in response to valid notice from the participating owners;

     G. On the date hereof, San Antonio entered into a Project Agreement, Settlement Agreement and
Mutual Release (the “Project Agreement”), by and among San Antonio, NINA, NINA 3 and NINA
4, (with joinders therein by NRG South Texas and NRG Energy Inc. (“NRG”) for limited
purposes), in order to, among other things, more fully set forth certain rights and obligations of
each of the Initial Owners with respect to the licensing, development, construction, ownership and
operation of STP 3 and STP 4 and to address and settle a pending legal action among the Parties;
and

     H. The Parties desire to enter into this Agreement in order to more fully set forth certain
rights and obligations of each of the Owners (as defined below) with respect to the licensing,
development, construction, ownership and operation of STP 3 and STP 4 and to evidence their
agreement

 

 

with regard to the Parties’ respective Unit Ownership Interests in the Project pursuant to
Section 6.5.1 of the Participation Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements of the Initial Owners
herein set forth, which are hereby incorporated as terms of this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the
Parties, the Parties, intending to be legally bound, do hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions and Usage. Unless the context shall otherwise require, capitalized terms
used in this Agreement shall have the meanings assigned to them in this Section 1.1. In
addition, unless expressly provided otherwise by the terms of this Agreement, each capitalized term
used and not defined herein, shall have the meaning given to it in the following agreement (and, if
there is a conflict among such agreements, in the following order of preference): the (i)
Participation Agreement, (ii) Operating Agreement, and (iii) EPC Contract, each as may be amended
from time to time.

     “Abandon” or “Abandonment” means, with respect to a Unit, (i) the announcement by any NINA
Party (or by any successor to the NINA Parties’ role under this Agreement) that it is no longer
pursuing development of such Unit; (ii) any NINA Party (or any successor to the NINA Parties’ role
under this Agreement) ceasing to be actively engaged in pursuing the development of the Project for
a period of one year in the absence of the exercise of a suspension right under the EPC Contract or
for a period of one year after the expiration of any suspension period under the EPC Contract; or
(iii) the termination of the EPC Contract other than due to a default by TANE.

     “Additional Owner” means each Owner that is not an Initial Owner.

     “Affiliate” means with respect to an entity, any other entity controlling, controlled by or
under common control with such entity. As used in this definition, the term “control,” including
the correlative terms “controlling,” “controlled by” and “under common control with,” shall mean
the possession, directly or indirectly, of the power to direct or cause the direction of the
management or policies of an entity, whether through ownership of voting securities, by contract or
otherwise.

     “Agency Agreement” means the Agency Agreement dated as of October 30, 2007 among San Antonio,
NRG South Texas and OPCO, as assigned pursuant to the Project Agreement.

     “Agreement” means this Owners Agreement, including all Appendices, Exhibits and Schedules
hereto.

     “COL Application” means the Combined Operating License Application (Docket no. PROJO749) for
the Project filed with the U.S. Nuclear Regulatory Commission by OPCO dated September 20, 2007, as
amended or supplemented.

     “Distribution” has the meaning given to it in Section 2.4(c)(i).

     “DOE” means the U.S. Department of Energy.

     “Effective Date” has the meaning given to it in the first paragraph of this Agreement.

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     “EPC Contract” means the agreement dated February 24, 2009, by and among OPCO as agent for the
Owners and TANE, pursuant to which TANE shall perform the engineering, procurement and construction
services necessary to develop and construct, employing ABWR technology, STP 3 and/or STP 4 (and any
successor agreements).

     “Existing STP Units” has the meaning given to it in the Recitals.

     “Final Completion Date” has the meaning set forth in the EPC Contract.

     “FNTP” means the full notice to proceed issued by the Owners to TANE pursuant to the EPC
Contract with respect to STP 3 and STP 4, as applicable.

     “Funding Recommencement Date” means, with respect to each Unit, the date the Unit reaches the
Substantial Completion Date under the EPC Contract.

     “Governmental Authority” means any federal, state or local governmental entity, authority or
agency, court, tribunal, regulatory commission or other body, whether legislative, judicial or
executive (or a combination or permutation thereof), including the Nuclear Regulatory Commission.

     “Initial Owner” has the meaning given to it in the first paragraph of this Agreement.

     “Law” means any statute, law, treaty, rule, code, ordinance, requirement, regulation, permit
or certificate of any Governmental Authority, any interpretation of any of the foregoing by any
Governmental Authority, or any binding judgment, decision, decree, injunction, writ, order or like
action of any court, arbitrator or other Governmental Authority.

     “Lien” means any mortgage, deed of trust, pledge, security interest, assignment as collateral,
deposit arrangement, charge or encumbrance, lien (statutory or other), right of first refusal,
right to acquire, restrictions or other preferential arrangement in the nature of a security
interest (including any conditional sale or other title retention agreement or any financing lease
having substantially the same economic effect as any of the foregoing).

     “NINA” has the meaning given to it in the first paragraph of this Agreement.

     “NINA 3” has the meaning given to it in the first paragraph of this Agreement.

     “NINA 4” has the meaning given to it in the first paragraph of this Agreement.

     “NINA Parties” has the meaning given to it in the first paragraph of this Agreement.

     “NRG” has the meaning given to it in the Recitals to this Agreement.

     “NRG South Texas” has the meaning given to it in the Recitals to this Agreement.

     “OPCO” means STP Nuclear Operating Company and its successors and assigns under the Operating
Agreement.

     “Operating Agreement” means the South Texas Project Operating Agreement originally by and
among The City of Austin, Texas, Houston Lighting & Power Company (predecessor to NRG South Texas),
San Antonio and Central Power and Light Company, and OPCO, dated as of November 17, 1997.

     “Owner” means each Initial Owner and each Additional Owner.

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     “Party” and “Parties” means the parties to this Agreement.

     “Participation Agreement” has the meaning given to it in the Recitals to this Agreement.

     “Person” means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, limited liability company, unincorporated organization, Governmental
Authority or any other form of entity.

     “Project” means the development, licensing and construction of two additional electric
Generating Units, STP 3 and STP 4, which are currently contemplated to be constructed by TANE,
employing ABWR technology, at the Site, pursuant to the COL Application.

     “Project Costs” means “Project Costs” as such term is defined in the Participation Agreement,
as they relate to the Project.

     “Repurchase Notice” has the meaning given to it in Section 2.1(b)(ii).

     “San Antonio” has the meaning given to it in the first paragraph of this Agreement.

     “San Antonio Restoration Costs Share” has the meaning given to it in Section 2.1(b).

     “Site” means the land on which STP 3 and STP 4 are to be located, as described in the COL
Application.

     “STP 3” means the electric generating unit, described as the third unit to be constructed at
the South Texas Project in the COL Application, and, prior to its construction, the right to
develop such electric generating unit.

     “STP 3 & 4 Common Facilities” means facilities intended for common use by both STP 3 and STP 4
from and after the STP 4 Commercial Operation Date, but excludes any undivided interest in the
Common Station Facilities that the Owners of STP 3 and STP 4 may acquire pursuant to the provisions
of the Participation Agreement.

     “STP 4” means the electric generating unit, described as the fourth unit to be constructed at
the South Texas Project in the COL Application, and, prior to its construction, the right to
develop such electric generating unit.

     “STP 4 Commercial Operation Date” means the date that STP 4 achieves commercial operation.

     “Supplemental Agreement” has the meaning given to it in the Recitals of this Agreement.

     “TANE” means Toshiba America Nuclear Energy Corporation.

     “Total Project Costs” means all costs, obligations and liabilities to develop, license,
design, construct, finance, repair, replace, reconstruct, and start-up STP 3, STP 4, and the STP 3
& 4 Common Facilities (including a proportionate share of any Project Costs relating to the Common
Station Facilities, including costs relating to the acquisition thereof, which are for the common
use of the Units and the Existing STP Units), including, the cost of all related environmental
studies, safety analyses, site evaluation, licensing, engineering, design, contract preparation,
purchasing, supervision, expediting, erection, financing (including interest during construction
and other related costs for any financing), common facility upgrades (including the costs of
Capital Additions and Capital Betterments to the

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previously existing Common Station Facilities as provided in Section 6.5.2 of the
Participation Agreement), inspection, accounting, testing, management and security, and any
liability of any Party for any losses, liabilities, deficiencies, penalties, fines, costs, damages
and expenses (including legal fees and costs) incurred by anyone other than a Party which arises
out of developing, licensing, designing, financing or construction of STP 3 and STP 4 and is not
solely and separately attributable to the Existing STP Units.

     “Ultimate Parent” has the meaning given to it in Section 4.1(a).

     “Unit” means, as applicable, STP 3 or STP 4.

     “Unit Ownership Interest” has the meaning given to it in Section 2.1(a).

     Section 1.2 Rules as to Usage.

          (a) The terms defined above have the meanings set forth above for all purposes, and such
meanings are equally applicable to both the singular and plural forms of the terms defined.

          (b) “Include,” “includes” and “including” shall be deemed to be followed by “without
limitation” whether or not they are in fact followed by such words or words of like import.

          (c) Any agreement, instrument or Law defined or referred to above means such agreement or
instrument or Law as from time to time amended, modified or supplemented, including (in the case of
agreements or instruments) by waiver or consent and (in the case of Laws) by succession of
comparable successor Laws and includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein.

          (d) References to a Person include its successors and permitted assigns.

          (e) Any term defined above by reference to any agreement, instrument or Law has such meaning
whether or not such agreement, instrument or Law is in effect.

          (f) “Hereof,” “herein,” “hereunder” and comparable terms refer, unless otherwise expressly
indicated, to the entire agreement or instrument in which such terms are used and not to any
particular article, Section or other subdivision thereof or attachment thereto.

          (g) References to any gender include, unless the context otherwise requires, references to all
genders.

          (h) “Shall” and “will” have equal force and effect.

          (i) References to “$” or to “dollars” shall mean the lawful currency of the United States of
America.

ARTICLE II

OWNERS

Section 2.1 Ownership Interests.

          (a) As of the Effective Date, subject to adjustments as provided herein, the Owners own all
rights relating to STP 3, STP 4 and the STP 3 & 4 Common Facilities, in undivided interests as

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tenants in common as follows (such interests being, with respect to each of STP 3 and STP 4,
an Owner’s “Unit Ownership Interest”):

	 	 	 	 	 
	STP 3 and STP 3 & 4 Common Facilities
	 
	 	 	 	 
	San Antonio
	 	 	7.625	%
	NINA 3
	 	 	92.375	%
	 
	 	 	 	 
	STP 4
	 
	 	 	 	 
	San Antonio
	 	 	7.625	%
	NINA 4
	 	 	92.375	%

          (b) The Parties recognize and acknowledge that at any time prior to the Funding Recommencement
Date for each Unit, NINA 3 and/or NINA 4 may choose to abandon the development of the Project
without liability to any Owner, other than pursuant to any written agreements among the Parties;
provided, however, that the NINA Parties hereby agree that they will not pursue a
“downsized Project” (i.e., Unit 3 alone). In the case of Abandonment, in no event will San
Antonio’s Unit Ownership Interest ever fall below 7.625%.

          (i) If STP 3 or the Project is Abandoned at any time prior to conditional approval from
the DOE with respect to the loan guaranty term sheet, then, at San Antonio’s option in its
sole and absolute discretion exercised upon delivery of written notice to NINA within 90
days after the date San Antonio becomes aware of such Abandonment, the Owner’s Unit
Ownership Interest will automatically revert to 50% without any further action of the
Parties.

          (ii) If STP 3 or the Project is Abandoned at any time after conditional approval from
the DOE with respect to the loan guaranty term sheet, but prior to FNTP, then, at San
Antonio’s option in its sole and absolute discretion exercised upon delivery of written
notice (the “Repurchase Notice”) to NINA within 90 days after the date San Antonio
becomes aware of such Abandonment, (A) each Owner’s respective Unit Ownership Interest will
automatically revert to the proportion that the Total Project Costs actually paid by such
Owner prior to the Abandonment date bears to the Total Project Costs paid by all Owners
through such date, without any further action of the Parties, and (B) San Antonio shall have
the right to increase its Unit Ownership Interest to any percentage between the percentage
in clause (A) and 50% upon payment to the NINA Parties of an amount equal to the difference
between (1)(x) Total Project Costs actually paid by all Parties prior to the Abandonment
date, times (y) the percentage that San Antonio wants to own, minus (2) the Total Project
Costs actually paid by San Antonio prior to such date. The closing of the repurchase
described in clause (B) shall occur no later than 12 months after the date of receipt by the
NINA Parties of the Repurchase Notice. For purposes of the formulas contained in paragraph
(ii), the Owners hereby agree that (I) they shall count only the out-of-pocket Total Project
Costs relating to the development, licensing, design, construction and starting-up of the
Project, and not any Total Project Costs relating to the financing of the Project or
relating to an Owner’s internal matters, such as financing costs, interest, commitment fees,
investment banking fees, over-head costs or personnel costs, (II) San Antonio, on the one
hand, and the NINA Parties, on the other hand, have paid an equal amount of Total Project
Costs through the date of this Agreement, and (III) any payments made to San Antonio by NRG
(by and for the benefit of the NINA Parties) under Sections 3.1.1 and 3.1.2
of the Project Agreement (i.e., the Initial Cash Payment and Remaining Cash Payment
thereunder), as and when paid, shall increase or decrease, as applicable, an Owner’s share
of the Total Project Costs. For the

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avoidance of doubt, with respect to the “City Initiative Contribution” under the
Project Agreement, no portion of such contribution shall be included in the calculation of
Total Project Costs under this Section 2.1(b)(ii). An example of the foregoing
formula is set forth on Schedule 2.1(b)(ii).

          (iii) If STP 3 or the Project is Abandoned at any time after FNTP and San Antonio has
not acquired any additional Ownership Interest or exercised its rights pursuant to this
Section 2.1, then the Unit Ownership Interests shall remain as provided in
Section 2.1(a).

Promptly after San Antonio’s exercise of its right to increase its Unit Ownership Interest, NINA,
NINA 3 and NINA 4, as applicable, shall execute, acknowledge and deliver all documents and shall
take all other actions reasonably necessary to convey the applicable Unit Ownership Interest to San
Antonio, free and clear of all Liens (other than those to which the conveyances under Section
2.1.2 of the Project Agreement are subject, those arising under applicable Law or the
Participation Agreement, those which are customary title encumbrances of a non-lien nature that
arise during the ordinary course of development of a nuclear facility and that are granted pursuant
to the NINA Parties’ authority under Section 3.1 hereof or granted by San Antonio, or those
of the type described in clause (y) of Section 3.1(b)(vi) hereof) including such
documentation reasonably satisfactory to San Antonio, its creditors and lenders (including the DOE,
if applicable), to effect the transfer of the relevant portion of the NINA Parties’ undivided
tenant-in-common percentage interest in: (a) the land on which the Project (comprising only STP 3
and STP 4) is located and in all improvements located thereon, and (b) the Common Station
Facilities. San Antonio, on behalf of itself and its creditors and lenders, agrees that the deeds
and conveyance instruments that shall be used by the Parties pursuant to Section 2.1.2 of
the Project Agreement are acceptable forms to effect the conveyances contemplated by this
Section 2.1(b).

Following Abandonment, the NINA Parties and San Antonio shall be responsible, in proportion to
their Abandonment Restoration Costs Share, for all costs of Abandonment, including restoring the
Site (to the extent not occupied by the Existing STP Units) to the condition (including completing
all landscaping and other restoration work to the extent) set forth in the ETS and in accordance
with all Applicable Laws and Applicable Permits. “Abandonment Restoration Costs Share”
shall mean (a) as to the NINA Parties, 100% minus the amount of percentage increase in Unit
Ownership Interest acquired by San Antonio pursuant to San Antonio’s exercise of its right pursuant
to Section 2.1(b)(ii)(B) (the “San Antonio Restoration Costs Share”), and (b) as to
San Antonio, the San Antonio Restoration Costs Share. San Antonio shall reimburse the NINA Parties
for the San Antonio Restoration Costs Share of any costs of Abandonment paid by the NINA Parties
between the Abandonment date and the date when San Antonio exercises its right pursuant to
Section 2.1(b)(ii)(B).

     Section 2.2 Additional Owners. Any Person to which a Unit Ownership Interest in STP 3 and/or STP 4
is transferred in accordance with this Agreement or the Participation Agreement must assume the
obligations of the transferring Owner and become an Owner under this Agreement and must execute an
assignment and assumption agreement as evidence thereof.

     Section 2.3 Term. The term of this Agreement shall commence as of the Effective Date and shall
remain in force and effect until the expiration of the Participation Agreement.

     Section 2.4 Related Agreements.

          (a) The terms of the Participation Agreement shall govern the rights and obligations of the
Owners except to the extent of the agreements among the Owners set out in this Agreement relating
to STP 3 and/or STP 4, which agreements shall, as among the Owners, control in the event of a
conflict between this Agreement and the Participation Agreement. For the avoidance of doubt, any
failure to

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make reference in this Agreement to any specific provision of the Participation Agreement
shall not be interpreted to mean that such provision is inapplicable to the Owners.

          (b) The Owners acknowledge and agree that OPCO shall, pursuant to the terms of the Operating
Agreement, license, operate, construct, maintain and decommission STP 3 and STP 4. Upon assignment
of its rights, obligations and liabilities under the Agency Agreement from San Antonio to NINA 3
and NINA 4, the relationship between OPCO and the Owners regarding oversight of the Project
construction, including during the development, licensing and construction phases of STP 3 and/or
STP 4, as applicable, shall be governed by this Agreement.

          (c) As to the EPC Contract and other Project documents entered into by OPCO under the Agency
Agreement or by the Owners directly (whether before or after the date hereof, including documents
entered into after the date hereof by the NINA Parties), even though all or a portion of the
beneficial interest in such agreements have been assigned to the NINA Parties, each Owner shall
continue to own its Unit Ownership Interest share of the following rights: (i) any work product,
intellectual property rights or tangible property as it relates to the Project to which the owner
under the EPC Contract obtains title pursuant to the terms thereof and (ii) cash proceeds paid to
the owners under the EPC Contract by or on behalf of TANE pursuant to the EPC Contract (including
liquidated damages, warranty or casualty proceeds) to the extent not used to repair or reconstruct
the Project (such cash proceeds, a “Distribution”).

          (d) In furtherance of the foregoing, the NINA Parties agree as follows:

          (i) If the NINA Parties receive a Distribution, the NINA Parties shall (A) accept and
hold San Antonio’s Unit Ownership Interest share of such Distribution for the account and
sole benefit of San Antonio, (B) have no equitable or beneficial interest in San Antonio’s
Unit Ownership Interest share of such Distribution, and (C) deliver San Antonio’s Unit
Ownership Interest share of such Distribution (free of any withholding, setoff, recoupment,
or deduction of any kind) promptly to San Antonio. In addition, the NINA Parties shall do
all acts and shall execute and deliver such further written instruments as may be reasonably
required to vest in San Antonio the rights described in Section 2.4(c)(i) above.

          (ii) The NINA Parties (A) shall maintain records of all payments made to the NINA
Parties with respect to the EPC Contract or such other Project documents, and (B) shall
cause OPCO, in the ordinary course of its business and consistent with its past practices,
to maintain records relating to the work product, intellectual property rights and tangible
property as it relates to the Project to which the owner under the EPC Contract obtains
title pursuant to the terms thereof. Such records shall be available for inspection by San
Antonio from time to time upon reasonable prior notice to the NINA Parties during regular
business hours.

ARTICLE III

VOTING

Section 3.1 Decisions Relating to STP 3 and STP 4.

          (a) As to decisions of the Owners Committee affecting only one or more of the Units, then each
of NINA 3 and NINA 4, with respect to the Project and from and after the San Antonio Cease Funding
Date (as defined in the Project Agreement), shall have full discretion and control for the
operation, maintenance, planning, development, construction (including being the party to the EPC
Contract), construction and development scheduling, financing and other aspects of management of
such Unit, including decisions with respect to (i) management of the EPC Contract and development
or

8

 

cancellation of the Project; (ii) day-to-day operations, including relationship with OPCO and
direction as to interface between OPCO, as licensee, and the NRC; (iii) government relations,
including interface with the NRC; (iv) insurance as to the Project (as long as such insurance (A)
meets the requirements in the Participation Agreement and the EPC Contract, and (B) names San
Antonio as an additional insured), but nothing shall prevent San Antonio from maintaining at its
own cost, additional insurance it deems necessary; (v) decommissioning and the timing thereof; (vi)
budgets; (vii) maintenance, repairs and casualty restoration; (viii) Project litigation (unless San
Antonio is a party to such suit or there exists an actual or potential conflict of interest between
the NINA Parties or their counsel and San Antonio, in which case San Antonio may participate in
such litigation at its own cost and expense); provided, however, that in making its
decisions relating to Project litigation, NINA 3 and NINA 4 may not agree, without San Antonio’s
prior written consent, to any settlement or compromise of such litigation (A) that involves any
non-ministerial non-monetary obligations to be performed by San Antonio, or (B) that involves
monetary obligations on San Antonio that are in excess of its proportionate Unit Ownership
Interest; (ix) NRC license extensions; (x) the right to sell, lease, make a sale-leaseback,
exchange, convey or dispose of assets of the Project the ownership of which are not necessary for
the operation of the Project; (xi) the right to license intellectual property rights of the type
described in Section 2.4(c)(i), but each Owner shall have the right to its Unit Ownership
Interest in the net proceeds thereof; and (xii) upratings and improvements, in each case, whether
such decision is made prior to or after the Funding Recommencement Date for each Unit. To effect
the foregoing, the NINA Parties shall be permitted to enter into any agreement or arrangement for
the Project on behalf of the Owners as long as such agreements or arrangements (x) are entered into
by OPCO as agent on behalf of Owners and (y) do not impose (i) any non-ministerial non-monetary
obligations to be performed by San Antonio, (ii) any monetary obligations on San Antonio during the
period prior to the Funding Recommencement Date, or (iii) any monetary obligations on San Antonio
during the period after to the Funding Recommencement Date that are disproportionate to San
Antonio’s Unit Ownership Interests. Nothing herein shall prevent the NINA Parties from entering
into agreements or arrangements on their own behalf and for their own account for the Project.

          (b) Notwithstanding anything to the contrary in this Agreement, the Participation Agreement,
the Operating Agreement, the organizational documents of OPCO, the EPC Contract, or the Agency
Agreement (and any amendments and successor agreements thereto), the NINA Parties each hereby agree
that they will not, directly or indirectly, take or approve any of the following actions without
the prior written consent of San Antonio:

               (i) Any change to use a nuclear reactor technology for the Project other than ABWR nuclear
reactor technology for the Units;

               (ii) Any action which would affect or limit San Antonio’s right to its proportionate
allocation of power output from the Project after the Funding Recommencement Date;

               (iii) Any material change in the location of a Unit;

               (iv) To the extent relating to the Project, any agreement or amendment to an agreement
requiring material payments or transfer of rights to, or for the benefit of, NRG or the NINA
Parties or any Person which beneficially owns or holds 10% or more of the equity of NRG or the NINA
Parties or any Affiliate thereof, except for (i) those entered into in the ordinary course of
development or operation of the Project that are upon fair and reasonable terms not less favorable
to the Project than would be obtained in a comparable arm’s length transaction with an unrelated
third party or (ii) those where all material payments or transfer of rights, as applicable, under
such agreement or amendment are to be paid or made by the NINA Parties, including as part of Total
Project Costs in connection with the development and construction of the Project;

9

 

               (v) Any material agreement or amendment to an agreement requiring payments or transfer of
rights to, or for the benefit of, any party that is providing goods or services to NRG or the NINA
Parties or any Person which beneficially owns or holds 10% or more of the equity of NRG or the NINA
Parties or any director, officer, employee or Affiliate thereof in connection with other projects
that would impose material Project Costs on the Project after the Funding Recommencement Date for
which San Antonio would be liable in exchange for lower costs or other benefits on such other
project;

               (vi) The granting, creation or incurrence of a Lien on any assets of or relating to the
Project or the Site, other than (x) Liens imposed solely on the NINA Parties’ Unit Ownership
Interest, and (y) Liens imposed by Law, such as carriers’, warehousemen’s, landlords’ and
mechanics’ liens, in each case, incurred in the ordinary course of development and operation of the
Project;

               (vii) Causing or allowing the Site or Project to carry on, or to be used for, any business
other than the business relating to the licensing, development, ownership, construction and
operation of STP 3, STP 4 and/or the STP 3 & 4 Common Facilities, except in the case of
Abandonment; or

               (viii) Committing to do any of the foregoing or authorizing any representative or agent to do
any of the foregoing.

          (c) San Antonio and the NINA Parties shall vote their respective Unit Ownership Interests in
the manner consistent with this Section 3.1 and shall cause their Ultimate Parents and
Affiliates and their agents and representatives not to take or approve any actions inconsistent
with this Section 3.1. The Owners acknowledge and agree that the NINA Parties shall have
the right to direct OPCO on behalf of all Owners pursuant to the terms of this Agreement and the
Agency Agreement (as assigned) with respect to the operation, maintenance, planning, development,
construction, construction and development scheduling and financing of the Project as set forth
more fully in and subject to the terms and conditions of this Section 3.1.

          (d) Indemnity.

               (i) If San Antonio becomes a party to any third-party or governmental proceeding, lawsuit,
arbitration or investigation (in any case brought by a Person not affiliated with San Antonio)
arising from or relating to events, occurrences or circumstances that occur, arise or exist prior
to the Funding Recommencement Date of a Unit and are related to the development or construction
activities under the EPC Contract (or any replacement thereof), any agreement entered into or
action taken or omitted to be taken in connection therewith or under any other agreement entered
into by the NINA Parties or, at the NINA Parties’ direction, OPCO relating to the development or
construction of the Project, then, in accordance with the right to manage such proceeding, lawsuit,
arbitration or investigation pursuant to Section 3.1(a)(viii) (but without the ability to
impose monetary obligations on San Antonio pursuant to subsection (B) of the proviso
thereof), the NINA Parties shall defend, protect and hold harmless San Antonio and its Affiliates
and their successors and assigns from and against such third-party or governmental proceedings,
lawsuits, arbitrations or investigations and shall indemnify San Antonio and its Affiliates and
their successors and assigns against any damages, penalties, fines, liabilities, costs, expenses
and monetary obligations arising out of, relating to or resulting from such third-party or
governmental proceedings, lawsuits, arbitrations, or investigations; provided, that
the NINA Parties’ liability under this Section 3.1(d) shall not apply to the extent caused
by the Willful Action (as defined in the Participation Agreement) by San Antonio, its Affiliates
and successors and assigns.

10

 

               (ii) The NINA Parties’ obligations in this Section 3.1(d) shall terminate upon the
expiration of the relevant statute of limitations, except that such obligations shall survive as to
any proceeding, lawsuit, arbitration or investigation covered by this paragraph that is not barred
by the relevant statute of limitations.

               (iii) Each Party, on behalf of itself and its Affiliates, successors and assigns, will use
commercially reasonable efforts (which shall not include any requirement to threaten or initiate
litigation) to look to available insurance for the Project, if any, to cover the matters that are
the subject of this indemnity and, to the extent such insurance coverage is obtained, each Party
hereby waives on behalf of its insurers all right to subrogation. Notwithstanding the previous
sentence, the NINA Parties shall perform their obligations under Section 3.1(d)(i) (A)
until the applicable insurance carrier for the Project affirmatively agrees to assume the defense
(at its costs) of the matters that are the subject of this indemnity, and (B) to the extent that
such insurance does not fully cover the matters that are the subject of this indemnity. If San
Antonio (or its Affiliates and their successors and assigns) receives any insurance proceeds with
respect to a matter for which such Person has previously been indemnified hereunder, then such
Person shall promptly refund to the NINA Parties a portion of such proceeds (net of direct
collection expenses and less any adjustments to past, present and future insurance premiums) equal
to the amount paid by the NINA Parties hereunder.

               (iv) Except as provided in this Section 3.1(d), this Section 3.1 is not
intended to grant an Owner any additional rights to make any direct claims against another Owner,
or to increase the liabilities of an Owner towards another Owner, beyond the limitations set forth
in the Participation Agreement. The provisions of Section 20.3 of the Participation
Agreement shall apply to this Agreement

          (e) Nothing in this Agreement will modify or limit San Antonio’s rights with respect to
decisions involving the Existing STP Units or involving both the Units and the Existing STP Units
or involving the Common Station Facilities which are for the common use of the Units and the
Existing STP Units.

     Section 3.2 San Antonio Cooperation. San Antonio shall cooperate with and assist the NINA Parties
promptly, as and when reasonably requested by the NINA Parties and at the NINA Parties’ expense, to
the extent necessary for the NINA Parties to perform their duties, responsibilities and obligations
under this Agreement, the EPC Contract and other agreements related to the financing, construction
and operation of the Project, including:

          (a) executing and delivering documents, certificates or instruments requested by the NINA
Parties that are necessary in connection with the financing of the Project and the NINA Parties’
performance of such duties, responsibilities and obligations; and

          (b) supporting the NINA Parties’ efforts to receive a United States Department of Energy loan
guaranty for the Project (including by providing clarity to the DOE on San Antonio’s ownership
position in the Project); provided, that unless requested by the NINA Parties or
the DOE, or unless required in order to comply with applicable Law, San Antonio shall not attend
any meetings with the DOE or request additional data from the DOE regarding such loan guaranty.

San Antonio will be deemed to comply with this Section 3.2 if it acts in good faith in
response to a request from the NINA Parties that is consistent with the terms on this Section
3.2. The NINA Parties’ sole remedy for a breach of this Section 3.2 by San Antonio
will be an action for specific performance, and in no event will San Antonio be liable for monetary
damages to the NINA Parties or to any other Person for a breach or alleged breach of this
Section 3.2.

11

 

     Section 3.3 Access to Information. With respect to STP 3, STP 4 and/or the STP 3 & 4 Common
Facilities, San Antonio shall have such rights of access and audit as are described in the
Participation Agreement and Operating Agreement. If requested by San Antonio, the NINA Parties
shall provide reasonable assistance to San Antonio in gaining access to all of OPCO’s books and
records and to all of its material correspondence with Government Authorities relating to STP 3,
STP 4 and/or the STP 3 & 4 Common Facilities. In addition, the NINA Parties will provide San
Antonio with reasonable access to, and the right to inspect and audit, the books and records of the
Owners Committee. The foregoing rights in this Section 3.3 represent all of San Antonio’s
rights to access information or participate in meetings relating to the development and
construction of the Project.

     Section 3.4 Allocation of Costs and Obligations to Pay Costs.

          (a) From and after February 1, 2010 and except as set forth in Section 3.4(b) below,
NINA 3 and NINA 4 (and their permitted transferees) will be solely responsible for and shall pay
the Project Costs and Total Project Costs (including all liabilities and obligations of the Owners
under the EPC Contract), and San Antonio will have no liability or obligation for any Total Project
Costs; provided, however, that San Antonio agrees to pay when due, in the ordinary
course of business consistent with OPCO’s customary historical practices, its 50% of the costs set
forth on Schedule 3.4(a) attached hereto relating to the portion of services rendered and
materials delivered on or prior to January 31, 2010. For the avoidance of doubt, (i) San Antonio
shall not be responsible for any Total Project Costs other than those expressly set forth on
Schedule 3.4(a), regardless of whether such amounts were approved by San Antonio on or
before January 31, 2010, (ii) the costs set forth on Schedule 3.4(a) are estimated amounts,
and San Antonio shall not be obligated to pay such costs until the actual amounts are determined
and invoiced by OPCO, and (iii) for the line item on Schedule 3.4(a) titled “TANE Long Lead
Material”, San Antonio shall pay 50% of $[*], or $ [*], with payments up to these amounts made when
due after invoices are received. If San Antonio has paid or in the future pays any amounts
relating to services rendered or to be rendered or materials delivered or to be delivered after
January 31, 2010 (as reasonably determined by OPCO), then such payments shall reduce the amounts
payable by San Antonio under this Section 3.4(a). San Antonio shall have the right to
review the invoices, work papers, worksheets and other documents relating to the costs on
Schedule 3.4(a) in order to independently verify the estimated and actual amounts to be
paid by San Antonio under this Section 3.4(a). If San Antonio disputes the determination
by OPCO, then San Antonio will notify NINA and OPCO. If San Antonio, NINA and OPCO are unable to
resolve the dispute within 30 days after San Antonio’s notice, then San Antonio and NINA shall
submit the dispute for determination to a nationally recognized accounting firm mutually acceptable
to San Antonio and NINA (which firm may not be a firm that has been engaged by the Parties during
the prior two years). The determination of the accounting firm shall be final and binding on the
Parties. NINA and San Antonio shall each pay half of the fees and costs of such accounting firm’s
review and determination.

          (b) From and after the Funding Recommencement Date of each Unit, each Owner shall be obligated
to fund its Unit Ownership Interest share of the Project Costs incurred after such date with
respect to such Unit as provided under the Participation Agreement and the Operating Agreement (and
any successor agreements thereto); provided, however, that NINA 3 and NINA 4 (and
their permitted transferees) will continue to be solely responsible for and shall pay all
liabilities and obligations under the EPC Contract and all other Project Costs relating to
development and construction of the Project (whether incurred before or after the Funding
Recommencement Date) that are necessary to achieve Final Completion of the Project.

     Section 3.5 Power Production Prior to Final Completion Date.

          (a) Prior to the Funding Recommencement Date, the NINA Parties shall designate a Qualified
Scheduling Entity pursuant to the ERCOT regulations who will be responsible for scheduling

12

 

power for such Unit. Any revenues generated by a Unit during such period shall be paid to and
for the benefit of the NINA Parties in proportion to their ownership of such Unit.

          (b) Following the Funding Recommencement Date, each Owner with a Unit Ownership Interest in
such Unit shall designate a Qualified Scheduling Entity pursuant to the ERCOT regulations, who will
be responsible for scheduling power allocable to such Owner until the Unit reaches its Final
Completion Date.

          (c) From and after the Final Completion Date, each Owner of such Unit have the obligation to
take its Generation Entitlement Share (as defined in the Participation Agreement) of power and
energy produced from such Unit during such period, which shall be equal to its Unit Ownership
Interest in such Unit.

     Section 3.6 Cooperation Among Owners. Upon the reasonable request of any Party, and at the
requesting Party’s expense, the other Parties shall furnish such information and documentation
regarding such Party as reasonably requested by the requesting Party and necessary for the
requesting Party’s performance of its duties, responsibilities and obligations under this
Agreement, the EPC Contract and other agreements related to the financing, construction and
operation of the Project.

     Section 3.7 Indemnification. The Owners’ rights and obligations with respect to indemnification
shall be as provided in the Participation Agreement and nothing set forth herein shall be construed
as a waiver of any such rights of the parties under the Participation Agreement.

ARTICLE IV

TRANSFERS

     Section 4.1 Transfers.

          (a) Restriction. NINA, NINA 3 and NINA 4 will not, and will not permit its Ultimate Parent or
a subsidiary of its Ultimate Parent to, sell, assign, transfer or otherwise dispose of, except
pursuant to (b) below, an equity interest in (or issue equity interests in) any direct or
indirect subsidiary of the Ultimate Parent owning directly or indirectly a Unit Ownership Interest
in STP 3 and/or 4, where all or substantially all of such subsidiary’s assets are directly (or
indirectly through one or more subsidiaries) the Unit Ownership Interest in STP 3 and/or 4.

     “Ultimate Parent” means, as applicable with respect to NINA 3 and NINA 4, NRG as well
as any Person that is a transferee or purchaser of an equity interest in a transaction after the
date hereof as to which the restriction in (a) above would apply, but for the application
of (b)(i) or (b)(iii) below. For the avoidance of doubt, as to the Person that is
the transferee or purchaser in the preceding sentence, such Person shall be an Ultimate Parent, but
not any parent entity of such Person.

          (b) Permitted Transfers. The foregoing restriction shall not apply to any of the following:

               (i) a sale, disposition or issuance to an Affiliate;

               (ii) a transfer or disposition as collateral security or pursuant to hypothecation, pledge, or
mortgage or similar lien granted in good faith pursuant to a bona fide financing transaction, or
with respect to the foreclosure, transfer or disposition thereof by a collateral agent;

               (iii) a bona fide sale, disposition or issuance made prior to the Funding Recommencement Date
of both Units 3 and 4; or

13

 

               (iv) an issuance of equity in an entity (A) to the existing holders of equity in such entity
pro rata in accordance with their ownership interests, (B) in connection with an initial or
subsequent public offering, or (C) in connection with a private placement or similar transaction
where the existing holders of equity in such entity are diluted pro-rata as to their ownership in
such entity and where such issuance is not part of an arrangement that specifically includes
distributions to the existing equity holders of the issuing entity or any purchases or redemptions
of equity interests of the existing equity holders in the issuing entity and therefore would have
the effect of transferring an existing equity holder’s direct or indirect interest in STP 3 and/or
4 to the new equity holder(s) beyond such pro-rata dilution arising from such issuance.

          (c) The NINA Parties agree that if within ten years after the Funding Recommencement Date of
both Units 3 and 4 they become aware that a holder of an equity interest in any of the NINA Parties
desires to sell some or all of that interest, the NINA Parties will use commercially reasonable
efforts to request such holder of an equity interest to enter in discussions with San Antonio about
a possible sale of a portion of that interest to San Antonio.

ARTICLE V

GENERAL PROVISIONS

     Section 5.1 Notices. All notices, consents, approvals, requests, invoices or statements provided
for or permitted to be given under this Agreement must be in writing. Notices to an Owner must be
delivered to such Owner at the address for such Owner set forth in Appendix A to this Agreement or
at such other address as such Owner shall designate by written notice to the other Owner delivered
in accordance with this Section 5.1. Notices may be (i) sent by registered or certified
mail with return receipt requested, (ii) delivered personally (including delivery by private
courier services and with a signed confirmation of receipt) or (iii) sent by facsimile (with
confirmation of such notice) to the Owner entitled thereto. Each Owner hereto shall have the right
at any time and from time to time to specify additional Persons to whom notice thereunder must be
given, by delivering to the other Owner five (5) days notice thereof.

     Section 5.2 Governing Law; Forum Selection. THIS AGREEMENT AND ALL OF THE RIGHTS AND DUTIES OF THE
PARTIES HEREUNDER ARISING FROM OR RELATING IN ANY WAY TO THE SUBJECT MATTER OF THIS AGREEMENT, OR
THE TRANSACTIONS CONTEMPLATED HEREBY, SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE CHOICE OF LAWS RULES THEREOF THAT WOULD
RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

     THE PARTIES IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE STATE DISTRICT COURTS OF
TRAVIS COUNTY, TEXAS WITH RESPECT TO ANY MATTER ARISING FROM OR RELATING IN ANY WAY TO THE SUBJECT
MATTER OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, TO VENUE IN THE STATE DISTRICT COURTS OF
TRAVIS COUNTY, TEXAS, OR BASED ON FORUM NON CONVENIENS, WHICH A PARTY MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION. SERVICE OF PROCESS MAY BE MADE IN
ANY MANNER RECOGNIZED BY SUCH COURTS.

     Section 5.3 Relationship Of Owners. Neither the execution nor delivery of this Agreement, nor the
consummation of the transactions contemplated hereunder, shall create or constitute a partnership
(including for federal income tax purposes), joint venture, or any other form of business
organization or

14

 

arrangement between the Owners, except for the contractual arrangements specifically set forth in
this Agreement and the other documents referred to herein if and when executed. No Owner (or any
of its agents, officers or employees) shall be an agent, fiduciary or employee of any other Owner
or any of its Affiliates, nor, except as is expressly agreed to in writing in this Agreement, shall
an Owner (or any of its agents, officers or employees) have any power to assume or create any
obligation on behalf of any other Owners or any of its Affiliates.

     Section 5.4 Third Party Beneficiaries. There are no third party beneficiaries to this Agreement,
and the provisions of this Agreement shall not impart any legal or equitable right, remedy or claim
enforceable by any Person, firm or organization other than the Owners (and their permitted
successors and permitted assigns).

     Section 5.5 Further Assurances. Each Owner agrees to do all acts and things and to execute and
deliver such further written instruments, as may be from time to time reasonably required to carry
out the terms and provisions of this Agreement.

     Section 5.6 Binding Effect. The terms of this Agreement shall be binding upon, and inure to the
benefit of, the Owners and their successors and permitted assigns.

     Section 5.7 Amendment. This Agreement may not be modified or amended except by an instrument in
writing signed by authorized representatives of each of the Owners. An Owner’s waiver of any
provision under this Agreement shall not be deemed to be an amendment or modification to this
Agreement.

     Section 5.8 Headings; Table Of Contents. The headings of the Articles and Sections of this
Agreement are included for convenience only and shall not be deemed to constitute a part of this
Agreement.

     Section 5.9 Interpretation And Reliance. No presumption will apply in favor of any Owner in the
interpretation of this Agreement in the resolution of any ambiguity of any provisions thereof.

     Section 5.10 Severability. In the event that any provision of this Agreement is held to be
unenforceable or invalid by any court of competent jurisdiction, the Owners shall negotiate an
equitable adjustment to the provisions of this Agreement with the view to effecting, to the extent
possible, the original purpose and intent of this Agreement, and the validity and enforceability of
the remaining provisions shall not be affected thereby.

     Section 5.11 Complete Agreement. Except for the Project Agreement, the Participation Agreement,
the Operating Agreement, the Agency Agreement, the EPC Contract and the portion of the Supplemental
Agreement described below, this Agreement, in conjunction with all Exhibits, Schedules and
Appendices attached hereto and thereto, constitutes the entire agreement of the Owners relating to
the subject matter of this Agreement and supersede all prior contracts, agreements or
understandings with respect to the subject matter hereof and thereof, both oral or written. Each
Party agrees that: (i) as among the Parties hereto, the Supplemental Agreement be and hereby is
terminated and of no further force and effect (and all parties thereunder are fully and
unconditionally released of all obligations thereunder), except that the rights and obligations of
San Antonio and NRG South Texas as to the rights of first refusal applicable to the Existing STP
Units as described in Section 9 thereof shall survive; (ii) the other Parties and their
Affiliates (and their respective agents and representatives) have not made any representation,
warranty, covenant or agreement to or with such Party relating to the subject matter hereof and
thereof other than as reduced to writing in this Agreement, the Project Agreement or any of the
agreements

15

 

contemplated thereby; and (iii) such Party has not relied upon any representation, warranty,
covenant or agreement to or with the other Party or its Affiliates relating to the subject matter
hereof and thereof, other than those reduced to writing in this Agreement. The Parties acknowledge
and agree that, except as set forth in clause (i) above, this Agreement supersedes the Supplemental
Agreement in its entirety.

     Section 5.12 Counterparts. This Agreement may be executed by the Owners in any number of separate
counterparts, each of which when so executed and delivered shall be deemed an original, but all
such counterparts shall together constitute one and the same agreement. All signatures need not be
on the same counterpart.

     Section 5.13 Waiver of Sovereign Immunity. To the extent that any Party hereto (including
assignees of any Party’s rights or obligations under this Agreement) may be entitled, in any
jurisdiction, to claim sovereign immunity from any liability or from service of process, from suit,
from the jurisdiction of any court, from attachment prior to judgment, from attachment in aid of
execution of an arbitral award or judgment (interlocutory or final), or from any other legal
process, and to the extent that, in any such jurisdiction there may be attributed such a sovereign
immunity (whether claimed or not), each Party hereto hereby irrevocably agrees not to claim, and
hereby irrevocably waives, such sovereign immunity with respect to any claim or suit by a Party
against any other Party or other exercise of remedies by a Party against any other Party arising
pursuant to this Agreement or the agreements contemplated hereby.

[Remainder of page intentionally left blank; signature page follows]

16

 

     IN WITNESS WHEREOF, this Agreement has been executed by the Owners as of the Effective Date.

	 	 	 	 	 
	 	CITY OF SAN ANTONIO, acting through the City 

Public Service Board of San Antonio

 	 
	 
	 	By:  	/s/ Jelynne LeBlanc Burley
 	 
	 	 	Name:  	Jelynne LeBlanc Burley 	 
	 	 	Title:  	Acting General Manager 	 

Appendix A-1

 

	 	 	 	 	 

	 	 	 	 	 
	 	NUCLEAR INNOVATION NORTH AMERICA LLC

 	 
	 	By:  	/s/ Steve Winn
 	 
	 	 	Name:  	Steve Winn 	 
	 	 	Title:  	Chief Executive Officer & President 	 
	 
	 	NINA TEXAS 3 LLC

 	 
	 	By:  	/s/ Steve Winn
 	 
	 	 	Name:  	Steve Winn 	 
	 	 	Title:  	Chief Executive Officer & President 	 
	 
	 	NINA TEXAS 4 LLC

 	 
	 	By:  	/s/ Steve Winn
 	 
	 	 	Name:  	Steve Winn 	 
	 	 	Title:  	Chief Executive Officer & President 	 
	 

Appendix A-2

 

APPENDIX A

ADDRESSES FOR NOTICES

	 	 	 
	San Antonio

	 	NINA Texas 3 LLC
	 
	 	 
	City Public Service Board

	 	NINA Texas 3 LLC
	145 Navarro

	 	c/o Nuclear Innovation North America LLC
	Mail Drop 101007

	 	521 Fifth Ave., 30th Floor
	P.O. Box 1771

	 	New York, New York
	San Antonio, Texas 78296

	 	Attn: President & CEO
	Attn: Acting General Manager

	 	Telephone: 212.210.6578
	 

	 	Facsimile: 212.867.4941
	with a copy (which shall not constitute notice) to:

	 	  
	 

	 	with a copy (which shall not constitute notice) to:
	CPS Energy Legal Dept
	 	 
	Mail Drop 101010

	 	Nuclear Innovation North America LLC
	P.O. Box 1771

	 	521 Fifth Ave., 30th Floor
	San Antonio, Texas 78296

	 	New York, New York
	Attn: General Counsel

	 	Attn: General Counsel
	 

	 	Telephone: 212.210.6572
	 

	 	Facsimile: 212.867.4941
	 
	 	 
	NINA Texas 4 LLC

	 	Nuclear Innovation North America LLC 
	 
	 	 
	NINA Texas 4 LLC

	 	Nuclear Innovation North America LLC
	c/o Nuclear Innovation North America LLC

	 	521 Fifth Ave., 30th Floor
	521 Fifth Ave., 30th Floor

	 	New York, New York
	New York, New York

	 	Attn: President & CEO
	Attn: President & CEO

	 	Telephone: 212.210.6578
	Telephone: 212.210.6578

	 	Facsimile: 212.867.4941
	Facsimile: 212.867.4941
	 	 
	 

	 	with a copy (which shall not constitute notice) to:
	with a copy (which shall not constitute
notice) to:

	 	  
	 

	 	Nuclear Innovation North America LLC
	Nuclear Innovation North America LLC

	 	521 Fifth Ave., 30th Floor
	521 Fifth Ave., 30th Floor

	 	New York, New York
	New York, New York

	 	Attn: General Counsel
	Attn: General Counsel

	 	Telephone: 212.210.6572
	Telephone: 212.210.6572

	 	Facsimile: 212.867.4941
	Facsimile: 212.867.4941
	 	 

Appendix A-3

 

 

SCHEDULE 2.1(b)(ii)

Abandonment Calculation Example

Data Points:

	 	(a)	 	Abandonment occurs after payment of Initial Cash Payment and Remaining Cash Payment:
$80 million total
	 
	 	(b)	 	Total Project Costs expended by NINA Parties and San Antonio through date of Agreement:
$300 million each ($600 million total)
	 
	 	(c)	 	Out-of-pocket Total Project Costs (including Initial Cash Payment and Remaining Cash
Payment) expended by NINA Parties at time of Abandonment: $580 million
	 
	 	(d)	 	Costs of Abandonment expended by NINA Parties between Abandonment date and closing of
repurchase by San Antonio: $200 million

Calculation:

	 	(a)	 	Automatic reversion pursuant to Section 2.1(b)(ii)(A):

     NINA Parties: 72.5% Unit Ownership Interest

                              (i.e., $580 million / $800 million)

     San Antonio: 27.5% Unit Ownership Interest

                              (i.e., $220 million / $800 million)

	 
	 	(b)	 	San Antonio Unit Ownership Interest increase pursuant to Section 2.1(b)(ii)(B):

     
San Antonio decides to repurchase up to 50% Unit Ownership Interest (i.e., 22.5% San
Antonio Restoration Costs Share).

      Payment for Unit Ownership Interest:

                              $180 million (i.e., ($800 million * 50%) — $220 million)

     Reimbursement payment for Abandonment costs:

                              $45 million (i.e., 22.5% * $200 million)

 

 

SCHEDULE 3.4(a)

Project Costs Accrued Through January 31, 2010

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Original Liability	 	 
	 	 	 	 	Updated with Actual	 	 
	 	 	 	 	Invoice Amount, if	 	Invoiced or
	Line #	 	Description	 	received	 	Estimate @ 1/31
	1

	 	00473370_TOSHIBA AM-002
	 	[*]
	 	Invoice
	2

	 	00473370_TOSHIBA AM-002
	 	[*]
	 	Invoice
	3

	 	TANE JAN STP.3.EN
	 	[*]
	 	Estimate
	4

	 	TANE JAN STP.5.EN
	 	[*]
	 	Estimate
	5

	 	TANE JAN STP.6.EN
	 	[*]
	 	Estimate
	6

	 	TANE JAN STP HO QUALITY ASSUR
	 	[*]
	 	Estimate
	7

	 	TANE JAN STP HO LIC/REG AFFAI
	 	[*]
	 	Estimate
	8

	 	TANE JAN STP HO PROJ MGT
	 	[*]
	 	Estimate
	9

	 	TANE JAN STP HO RM/DOC CONTRL
	 	[*]
	 	Estimate
	10

	 	TANE JAN STP HO COST/SCHED/FI
	 	[*]
	 	Estimate
	11

	 	TANE JAN STP HO INFORMATION T
	 	[*]
	 	Estimate
	12

	 	TANE JAN STP HO PROCURE SUPT
	 	[*]
	 	Estimate
	13

	 	TANE JAN STP HO TRAINING
	 	[*]
	 	Estimate
	14

	 	TANE JAN STP HO ENG MGT
	 	[*]
	 	Estimate
	15

	 	TANE JAN STP HO CONST PLANNIN
	 	[*]
	 	Estimate
	16

	 	TANE JAN STP HO SU/TEST SUPT
	 	[*]
	 	Estimate
	17

	 	TANE JAN STP HO TRAVEL
	 	[*]
	 	Estimate
	18

	 	TANE JAN STP HO ADMINISTRATIV
	 	[*]
	 	Estimate
	19

	 	TANE JAN STP FI CONST PLANNIN
	 	[*]
	 	Estimate
	20

	 	TANE JAN STP FI PROCUREMENT S
	 	[*]
	 	Estimate
	21

	 	TANE JAN STP.6.CN
	 	[*]
	 	Estimate
	22

	 	TANE JAN FI COST/SCHED/FIN
	 	[*]
	 	Estimate
	23

	 	TANE Long Lead Material Accrual
	 	[*]
	 	Estimate
	24

	 	Altran Audit Fee
	 	[*]
	 	Estimate
	25

	 	Bechtel-Owner’s Engineer (January) Est Review
	 	[*]
	 	Estimate
	26

	 	00475972_BO-MAC CON-001
	 	[*]
	 	Invoice
	27

	 	Coats Rose (January)
	 	[*]
	 	Estimate
	28

	 	Cox, Smith, Matthews (January)
	 	[*]
	 	Estimate
	29

	 	Credit Card Accruals @ EOM
	 	[*]
	 	Estimate
	30

	 	EPRI (January)
	 	[*]
	 	Estimate
	31

	 	Enercon Services January (James Cook)
	 	[*]
	 	Estimate
	32

	 	Erin Engineering (January)
	 	[*]
	 	Estimate
	33

	 	Erin Engineering (December)
	 	[*]
	 	Estimate
	34

	 	Exponent (January)
	 	[*]
	 	Estimate
	35

	 	Hitachi (Short Pay GE Nov Inv)
	 	[*]
	 	Estimate
	36

	 	Hurst Technologies (J. Marek) January
	 	[*]
	 	Estimate
	37

	 	Hurst Technologies (January 17-31)
	 	[*]
	 	Estimate
	38

	 	00475684_HURST TECHNOLO
	 	[*]
	 	Invoice
	39

	 	Hurst Technologies (January 17-31) I&C Staff Support
	 	[*]
	 	Estimate
	40

	 	00475571_INOTEK SAF-001
	 	[*]
	 	Invoice
	41

	 	00475873_INOTEK SAF-001
	 	[*]
	 	Invoice
	42

	 	MPR January (B.Coward)
	 	[*]
	 	Estimate
	43

	 	McKinsey (December)
	 	[*]
	 	Estimate
	44

	 	Morgan Lewis (COLA) January
	 	[*]
	 	Estimate
	45

	 	Morgan Lewis (EPC) January
	 	[*]
	 	Estimate
	46

	 	NRC (January)
	 	[*]
	 	Estimate
	47

	 	Sequoia (January)
	 	[*]
	 	Estimate

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Original Liability	 	 
	 	 	 	 	Updated with Actual	 	 
	 	 	 	 	Invoice Amount, if	 	Invoiced or
	Line #	 	Description	 	received	 	Estimate @ 1/31
	48

	 	Sun Tech period January EXPENSES
	 	[*]
	 	Estimate
	49

	 	Sun Tech period January EXPENSES
	 	[*]
	 	Estimate
	50

	 	Sun Tech period January EXPENSES
	 	[*]
	 	Estimate
	51

	 	Sun Tech period January EXPENSES
	 	[*]
	 	Estimate
	52

	 	Sun Tech period January EXPENSES
	 	[*]
	 	Estimate
	53

	 	Sun Tech period January EXPENSES
	 	[*]
	 	Estimate
	54

	 	Sun Tech Per Diem January
	 	[*]
	 	Estimate
	55

	 	Sun Tech Per Diem January
	 	[*]
	 	Estimate
	56

	 	Sun Tech Per Diem January
	 	[*]
	 	Estimate
	57

	 	Sun Tech Per Diem January
	 	[*]
	 	Estimate
	58

	 	Sun Tech Per Diem January
	 	[*]
	 	Estimate
	59

	 	Sun Tech Per Diem January
	 	[*]
	 	Estimate
	60

	 	Sun Tech Per Diem January
	 	[*]
	 	Estimate
	61

	 	Sun Tech Per Diem January
	 	[*]
	 	Estimate
	62

	 	Sun Tech period January
	 	[*]
	 	Estimate
	63

	 	Sun Tech period January
	 	[*]
	 	Estimate
	64

	 	Sun Tech period January
	 	[*]
	 	Estimate
	65

	 	Sun Tech period January
	 	[*]
	 	Estimate
	66

	 	Sun Tech period January
	 	[*]
	 	Estimate
	67

	 	Sun Tech period January
	 	[*]
	 	Estimate
	68

	 	Sun Tech period January
	 	[*]
	 	Estimate
	69

	 	Sun Tech period January
	 	[*]
	 	Estimate
	70

	 	Sun Tech period 01/24-01/31
	 	[*]
	 	Estimate
	71

	 	Sun Tech period 01/24-01/31
	 	[*]
	 	Estimate
	72

	 	Sun Tech period 01/24-01/31
	 	[*]
	 	Estimate
	73

	 	Sun Tech period 01/24-01/31
	 	[*]
	 	Estimate
	74

	 	Sun Tech period 01/24-01/31
	 	[*]
	 	Estimate
	75

	 	Sun Tech period 01/24-01/31
	 	[*]
	 	Estimate
	76

	 	Sun Tech period 01/24-01/31
	 	[*]
	 	Estimate
	77

	 	Sun Tech period 01/24-01/31
	 	[*]
	 	Estimate
	78

	 	Sun Tech Reconciliation January
	 	[*]
	 	Estimate
	79

	 	Sun Tech Reconciliation January
	 	[*]
	 	Estimate
	80

	 	Sun Tech Reconciliation January
	 	[*]
	 	Estimate
	81

	 	00475974_SUN TECHNICAL
	 	[*]
	 	Invoice
	82

	 	Sun Tech Reconciliation December
	 	[*]
	 	Estimate
	83

	 	Sun Tech Reconciliation December
	 	[*]
	 	Estimate
	84

	 	Sun Tech Reconciliation December
	 	[*]
	 	Estimate
	85

	 	Sun Tech Reconciliation December
	 	[*]
	 	Estimate
	86

	 	Sun Tech various invoice adjustments
	 	[*]
	 	Estimate
	87

	 	Sun Tech period December EXPENSES
	 	[*]
	 	Estimate
	88

	 	Sun Tech period December (R.Gibson)
	 	[*]
	 	Estimate
	89

	 	Sun Tech period December (L. Arnold)
	 	[*]
	 	Estimate
	90

	 	TEPCO Accrual January
	 	[*]
	 	Estimate
	91

	 	TEPCO Accrual December
	 	[*]
	 	Estimate
	92

	 	Tetra Tech (January)
	 	[*]
	 	Estimate
	 

	 	Accrual & AP Liabiliaties	 	 	 	 
	 
	 	 	 	 	 	 
	1

	 	U34 Outstanding Checks @ EOM
	 	[*]
	 	Checks
	2

	 	U34 AP @ EOM
	 	[*]
	 	Actual
	 
	 	 	 	 	 	 
	3

	 	U34 Paid time off @ EOM
	 	[*]
	 	Actual

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Original Liability	 	 
	 	 	 	 	Updated with Actual	 	 
	 	 	 	 	Invoice Amount, if	 	Invoiced or
	Line #	 	Description	 	received	 	Estimate @ 1/31
	4

	 	Costs Incurred but Not Accrued as of Jan. 31, 2010,
and Funded after Jan. 31, 2010:	 	 	 	 
	 

	 	2/5 EFT funding s/b in 1/31 liab — Empl exp.
	 	[*]	 	 
	 

	 	2/10 wire funding to Willis of TX s/b in liab @ 1/31
	 	[*]	 	 
	 

	 	Empl ot exp in Jan. s/b in 1/31 liab, funded 2/12
	 	[*]	 	 
	 

	 	Verizon Conf services 2/19 s/b in liab @ 1/31
	 	[*]	 	 
	 

	 	ACH 2/19 for Jan exp (mileage) s/b in liab @ 1/31
	 	[*]	 	 
	 

	 	Jan invoice adjustment Bechtel, decr 1/31 liab
	 	[*]	 	 
	 

	 	Jan Sun invoice, not accrued @ 1/31
	 	[*]	 	 
	 

	 	2/4 ACH paymt of $263 for Jan UPS services, s/b in
liab @ 1/31
	 	[*]	 	 
	 

	 	TANE 2/26 pymt Equipment Purchase Approval

Software, s/b in 1/31 liab
	 	[*]	 	 
	 

	 	2/26 ACH pymts for 1/31 liab, Not in 1/31 GL
	 	[*]
	 	[*]
	 
	 	 	 	 	 	 
	 

	 	Other Amounts Due @ EOM
	 	 	 	[*]
	 
	 	 	 	 	 	 
	 

	 	Total AP & Accruals @ February 26, 2010
	 	 	 	[*]
	 
	 	 	 	 	 	 
	1

	 	Less Funding since Jan. 31, 2010 For Costs Incurred
Since Jan. 31, 2010
	 	 	 	          [*]
	 
	 	 	 	 	 	 
	2

	 	Less Funding after Jan. 31, 2010 For Costs Incurred
But Not Accrued as of Jan. 31, 2010
	 	 	 	          [*]
	 
	 	 	 	 	 	 
	 

	 	Total AP & Accruals @ February 26, 2010
	 	 	 	          [*]Exhibit 10.10

EXHIBIT 10.10

AMENDMENT NO. 3 TO CREDIT AGREEMENT

This AMENDMENT NO. 3 to CREDIT AGREEMENT, dated as of                      , 2009, (this
“Amendment”) among GREATBATCH LTD., a New York corporation (the “Borrower”); the
LENDERS referred to in the Credit Agreement referred to below (collectively, the
“Lenders”); and MANUFACTURERS AND TRADERS TRUST COMPANY (“M&T”), individually, as
the Issuing Bank, a Lender, the Swing Lender and the Administrative Agent. M&T, when acting in its
capacity as administrative agent for the Lenders and the Issuing Bank and other Secured Parties, or
any successor or assign that assumes that position pursuant to the terms of the Credit Agreement,
is hereinafter referred to as the “Administrative Agent”).

Background

A. The Borrower, the Lenders and the Administrative Agent have entered into that certain
Credit Agreement, dated as of May 22, 2007, as amended by Amendment No. 1 to Credit Agreement,
dated as of December 20, 2007 and Amendment No. 2 to Credit Agreement, dated as of November 4,
2008, among the Borrower, the Lenders and the Administrative Agent (the “Existing Credit
Agreement” and the same, as it may be amended, restated, modified and/or supplemented from time
to time, the “Credit Agreement”), which provides for certain extensions of credit to the
Borrower, subject to certain conditions.

B. The Borrower and Parent have advised the Lenders that they would like to form two new
wholly-owned Subsidiaries which will, in turn, invest in Persons in which they may, from time to
time, hold majority or controlling interests.

C. The Administrative Agent and the Lenders are willing to enter into this Amendment to make
certain amendments to the Credit Agreement requested by the Borrower, pursuant to the terms, and
subject to the conditions, specified below.

NOW THEREFORE, in consideration of the promises and conditions set forth in this Amendment,
and intending to be legally bound, the parties hereto hereby agree as follows:

SECTION 1. Defined Terms. Terms defined in this Amendment which are capitalized but
not defined herein shall have the meanings given to such terms in the Existing Credit Agreement.
This Amendment amends the Existing Credit Agreement, as in effect on the date hereof.

 

 

 

SECTION 2. Amendments. The Existing Credit Agreement is hereby amended as follows:

2.1 Defined Terms. The following new definitions are inserted in the appropriate alphabetical
order in Section 1.1 (Defined Terms):

GB Ventures: GBV, LLC, a Delaware limited liability company and a
wholly-owned Subsidiary of the Parent.

QIG: QIG Group, LLC, a Delaware limited liability company and a
wholly-owned Subsidiary of the Borrower.

Non-Guarantor Ventures: Ventures that do not, pursuant to Section
8.28, become Loan Parties.

Subsidiary Guarantor: each U.S. Subsidiary of the Borrower, and such
other Foreign Subsidiaries of the Borrower and Ventures as designated by the
Borrower from time to time or as are required to guarantee the Obligations
pursuant to Section 8.28 (Certain Obligations Respecting Subsidiaries).

Venture: a Person in which GB Ventures and QIG, individually or
collectively, own a majority or controlling interest of its Capital Stock.

2.2 Defined Terms. The following defined terms in Section 1.1 (Defined Terms) of the Existing
Credit Agreement are hereby amended as follows:

U.S. Subsidiary. The definition of “ U.S. Subsidiary” is amended by deleting
the “.” at the end, replacing it with “;” and by adding the following proviso
to the end thereof:

provided, however, no Non-Guarantor Venture shall be
considered a U.S. Subsidiary.

2.3 Mandatory Prepayments and Reductions in the Facility. Section 2.1.4(b) (Issuance of
Equity) is amended by adding the following proviso at the end of the first sentence:

; provided, however, that so long as (i) no Default or Event
of Default exists at the time of the issuance of Capital Stock of a Venture
or would exist immediately after giving effect thereto; and (ii) the proceeds
from any such issuance of Capital Stock of a Venture are held in a deposit
account maintained with a Lender or the Agent, the Borrower shall not be
obligated to make any prepayment of the Loans in connection with the issuance
of Capital Stock of a Venture by either GB Ventures or QIG.

2.4 Lines of Business. Section 5.5 (Lines of Business) of the Existing Credit Agreement is
amended and restated in its entirety to read as follows:

5.5 Lines of Business. The Borrower and its Subsidiaries are engaged
only in Permitted Businesses. Parent is not engaged in any business
activities other than (i) owning 100% of the outstanding Capital Stock of the
Borrower; (ii) owning 100% of the outstanding Capital Stock of GB Ventures;
(iii)
owning 1.0% of the outstanding Capital Stock of Greatbatch Mexico; and (iii)
engaging in activities directly related to the foregoing.

 

2

 

2.5 Security Interest in Collateral. The last sentence of Section 5.6 (Security Interest in
Collateral) of the Existing Credit Agreement is amended and restated in its entirety to read as
follows:

Upon the filing of such UCC-1 financing statements in the offices specified
thereon and the recordation of the Intellectual Property Collateral Agreements
in the United States Copyright Office, no further action, including, without
limitation, any filing or recording of any document or the obtaining of any
consent, is necessary in order to establish, perfect and maintain the
Administrative Agent’s first priority security interests (subject to Permitted
Perfection Limitations) in the equity of the Borrower, the U.S. Subsidiaries
of the Borrower, the Ventures owned by GB Ventures or QIG and sixty six
percent (66%) of the First-Tier Foreign Subsidiaries of the Borrower, and in
the personal property (including fixtures and Intellectual Property) of each
Loan Party other than Excluded Assets (for the benefit of the Secured
Parties), except for the periodic filing of continuation statements with
respect to such UCC-1 financing statements. Upon the sale or other
disposition by GB Ventures or QIG of any Capital Stock in any Venture to any
Person, the Administrative Agent’s security interest in such Capital Stock
will be deemed to be automatically released so long as any proceeds or such
sale or other disposition are applied in accordance with the terms of this
Agreement.

2.6 Adequacy of Capital; Solvency. The last two sentences of Section 5.21 (Adequacy of
Capital; Solvency) of the Existing Credit Agreement are deleted in their entirety and replaced by
the following:

Parent has no assets or liabilities other than 100% of the outstanding
Capital Stock of the Borrower, 1.0% of the outstanding Capital Stock of
Greatbatch Mexico and 100% of the outstanding Capital Stock of GB Ventures,
and assets and liabilities directly related thereto. Parent has no
liabilities except for (a) usual and customary obligations related to its
existence, (b) usual and customary obligations related to compliance with
requirements for public companies and the ownership of the Capital Stock of
the Borrower, Greatbatch Mexico and GB Ventures and (c) the 2003 Debentures,
the 2007 Debentures and any Permitted Debenture Refinancing.

2.7 Delivery of Quarterly Financial Statements. Section 6.1.1 (Delivery of Quarterly
Financial Statements) of the Existing Credit Agreement is amended by adding the following to the
end thereof:

Beginning with the quarter ending March 31, 2009, at the time of the delivery
of the quarterly financial statements referred to above, the Borrower shall
also deliver (as to all periods commencing on or after January 1, 2009), a
management-prepared Consolidating balance sheet, statement of income and
changes in retained earnings and statement of cash flows, showing separately
the results of operations and financial condition of the Non-Guarantor
Ventures, if any, as a separate group.

 

3

 

2.8 Delivery of Annual Financial Statements; Accountants’ Certification. Section 6.1.2
(Delivery of Annual Financial Statements; Accountants’ Certification) of the Existing Credit
Agreement is amended by adding the following new subclause (e) to such Section 6.1.2:

(e) Beginning with the fiscal year ending December 31, 2009, at the time of
the delivery of the annual financial statements referred to above, the
Borrower shall also deliver (as to all periods commencing on or after January
1, 2009), a management-prepared Consolidating balance sheet, statement of
income and changes in retained earnings and statement of cash flows, showing
separately the results of operations and financial condition of the
Non-Guarantor Ventures, if any, as a separate group.

2.9 Indebtedness. Section 8.1.1 (Indebtedness) of the Existing Credit Agreement is amended by
(i) deleting the “and” at the end of subclause (k), (ii) deleting the “.” at the end of subclause
(l) and replacing it with “;”, and (iii) by adding the following new subclauses (m) and (n) to such
Section 8.1.1:

(m) Indebtedness arising from the deferral of payment of a Restricted Payment
allowed under Section 8.4.6 (whether or not such Indebtedness is
subordinated); and

(n) Indebtedness permitted by clause (i) of Section 8.3.

2.10 Restricted Payments. Section 8.4 (Restricted Payments) of the Existing Credit Agreement
is amended by adding the following new Section 8.4.6 (Ventures):

Ventures. A Venture may make one or more Restricted Payments for tax
distributions and for the redemption of Capital Stock in a Venture (including
subsequent payments on Indebtedness arising from the deferral of a payment
created in connection with the redemption of Capital Stock in a Venture so
long as the deferred payment is not guaranteed by a Loan Party) may be made
by the Borrower to a Venture to be distributed to any Person holding a
minority interest in the Capital Stock of such Venture so long as no Default
or Event of Default exists at the time of the Restricted Payment or would
exist immediately after giving effect thereto.

2.11 Investments, Loans, Acquisitions, Etc.. Section 8.3 (Investments, Loans, Acquisitions,
Etc.) clause (i) of the Existing Credit Agreement is amended and restated in its entirety to read
as follows:

(i) other Investments in an aggregate amount not to exceed Fifteen Million
Dollars ($15,000,000) in any fiscal year, which other Investments shall
include, but not be limited to, Investments in Non-Guarantor Ventures;

 

4

 

2.12 Certain Obligations Respecting Subsidiaries. Section 8.28 (Certain Obligations
Respecting Subsidiaries) of the Existing Credit Agreement is amended and restated in its entirety
to read as follows:

(a) The Borrower will take such action, and will cause each of its Subsidiaries to take such
action, from time to time as shall be necessary to ensure that Parent, and all U. S. Subsidiaries
of the Borrower are guarantors of the Secured Obligations and that all of the equity and material
assets (other than Excluded Assets) of the Borrower and all Guarantors are subject to a first
priority Lien securing the Secured Obligations, subject to no other Lien except Permitted Liens and
subject to Permitted Perfection Limitations. Without limiting the generality of the foregoing, in
the event that the Borrower or any of its Subsidiaries shall form or acquire any new Subsidiary
(which it shall only do in conformity with the provisions of this Agreement), the Borrower,
contemporaneously with the formation or acquisition of such new Subsidiary: (i) will execute and
deliver, such documents as shall be necessary to cause (without duplication) all of the Capital
Stock of any new Venture owned by GB Ventures or QIG, any new U.S. Subsidiary and up to a maximum
of sixty-six percent (66%) of the Capital Stock of any new First-Tier Foreign Subsidiary of the
Borrower, of a U.S. Subsidiary or of a Venture to be duly pledged (on a first-priority perfected
basis) to secure the Secured Obligations; (ii) will cause each new U.S. Subsidiary to execute and
deliver a Subsidiary Suretyship Agreement (or a joinder thereto), joinders to the Security
Agreements and Pledge Agreements, UCC-1 financing statements, and such other documents as may be
necessary to cause such new U.S. Subsidiary to be a guarantor of the Secured Obligations and its
material assets (other than Excluded Assets) to be pledged to secure such guaranty; and (iii) will
cause such new U.S. Subsidiary to deliver such proof of corporate action, incumbency of officers,
opinions of counsel and other documents as is consistent with those delivered by the Borrower
pursuant to Section 4.1 (Conditions to Initial Funding) upon the Closing Date or as the
Administrative Agent shall have requested, and to take such other action as the Administrative
Agent shall request to perfect the security interest in the Capital Stock and material assets
(other than Excluded Assets) of such new U.S. Subsidiary created pursuant to the Loan Documents.

(b) If at any time

(1) the aggregate amount of the Adjusted EBITDA of the (X) Foreign Subsidiaries
of the Borrower or of the U.S. Subsidiaries and (Y) the Non-Guarantor Ventures shall
exceed fifteen percent (15%) of the Adjusted EBITDA of Parent and its Subsidiaries,
on a Consolidated basis, or

(2) the aggregate amount of the assets of the (X) Foreign Subsidiaries of the
Borrower or of the U.S. Subsidiaries and (Y) the Non-Guarantor Ventures shall exceed
fifteen percent (15%) of the aggregate amount of the assets of Parent and its
Subsidiaries, on a Consolidated basis,

 

5

 

then notwithstanding any provision of this Agreement or any Loan Document to the contrary, the
Borrower shall either:

(i) cause one or more Foreign Subsidiaries and/or Ventures to guaranty the Secured
Obligations and pledge their material personal property
assets to secure such guaranty and shall pledge (or cause the relevant Subsidiaries to
pledge) 100% of the equity of such Foreign Subsidiaries or Ventures, as applicable to the
extent necessary to cause (i) the aggregate amount of the Adjusted EBITDA of the Loan
Parties to exceed eighty-five percent (85%) of the Adjusted EBITDA of Parent and its
Subsidiaries, on a Consolidated basis, and (ii) the aggregate amount of the assets of the
Loan Parties to exceed eighty-five percent (85%) of the aggregate amount of the assets of
Parent and its Subsidiaries, on a Consolidated basis; or

(ii) exclude the results of operations and financial condition of the Foreign
Subsidiaries and Non-Guarantors Ventures from the Financial Covenants in Article 7
(Financial Covenants) and provide separate financial statements pursuant to Subsection 6.1.1
(Delivery of Quarterly Financial Statements ) and Subsection 6.1.2 (Delivery of Annual
Financial Statements; Accountants’ Certification) and a reconciliation of the financial
statements showing the effects of excluding the Foreign Subsidiaries and Non-Guarantor
Ventures.

SECTION 3. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders and the
Administrative Agent to agree to the amendments set forth in this Amendment, the Borrower makes the
following representations and warranties, which shall survive the execution and delivery of this
Amendment:

(a) As of the date hereof, no Default or Event of Default has occurred and is continuing or
would exist immediately after giving effect to the amendments contained herein.

(b) Each of the representations and warranties of the Loan Parties set forth in the Existing
Credit Agreement and other Loan Documents is true and correct in all material respects both before
and after giving effect to the amendments contemplated hereby as though each such representation
and warranty were made at and as of the date hereof.

(c) No consent or approval of any third party, or any governmental agency or authority, is
necessary in connection with the execution, delivery and/or performance of this Amendment or any
other instrument, agreement or other document executed and/or delivered in connection herewith
and/or the enforceability hereof or thereof.

(d) Upon satisfaction of the conditions set forth in Section 4 (Conditions Precedent) below,
the Existing Credit Agreement, as amended by this Amendment, and each other instrument, agreement
or other document executed and/or delivered in connection herewith to which the Borrower is a party
will constitute the legal, valid and binding obligation of the Borrower, enforceable against it in
accordance with the terms thereof.

 

6

 

SECTION 4. CONDITIONS PRECEDENT.

4.1 The amendments to the Existing Credit Agreement set forth in Section 2 above shall become
effective, as of the date first above written, upon satisfaction of the following:

(a) the execution and delivery of this Amendment by the Borrower, the Administrative Agent and
the Majority Lenders;

(b) receipt by the Administrative Agent of all invoiced costs and expenses; and

(c) receipt by the Administrative Agent of such other documents and information as the
Administrative Agent shall reasonably request on or prior to the date that the condition in clause
(a) above is satisfied.

SECTION 5. MISCELLANEOUS.

5.1 Counterparts. This Amendment may be executed in counterparts and by different parties
hereto in separate counterparts, each of which, when executed and delivered, shall be deemed to be
an original and all of which, when taken together, shall constitute one and the same instrument. A
photocopied or facsimile signature shall be deemed to be the functional equivalent of a manually
executed original for all purposes.

5.2 Ratification. Except as specifically modified hereby, all of the terms, covenants and
conditions of the Existing Credit Agreement and each of the other Loan Documents are ratified,
reaffirmed and confirmed and shall continue in full force and effect as therein written.

5.3 Payment of Expenses. Without limiting other payment obligations of the Borrower set forth
in the Loan Documents, the Borrower agrees to pay all reasonable, out-of-pocket costs and expenses
incurred by the Administrative Agent in connection with the preparation, execution and delivery of
this Amendment and any other documents or instruments which may be delivered in connection
herewith, including, without limitation, the reasonable fees and expenses of its counsel, Drinker
Biddle & Reath LLP, whether or not this Amendment shall become effective.

5.4 Authorization to Administrative Agent. Each Lender hereby authorizes the Administrative
Agent to take such action as shall be consistent with the purposes hereof and as it shall deem
necessary or appropriate to carry out the purposes of this Amendment.

5.5 Governing Law. This Amendment shall be governed by, and construed in accordance with, the
Law of the State of New York (excluding the Laws applicable to conflicts or choice of law).

5.6 Binding Effect. This Amendment shall be binding upon and inure to the benefit of
Borrower, the Administrative Agent, the Lenders and their respective successors and assigns;
provided, however, that Borrower may not assign this Amendment, the Existing Credit Agreement or
any of the other Loan Documents or any of its rights hereunder or thereunder, and any such
prohibited assignment shall be null and void.

 

7

 

5.7 Severability. If any provision of this Amendment or the application thereof to any Person
or circumstance shall be invalid or unenforceable to any extent, the remainder of this Amendment
and the application of such provision to any other Person or circumstance shall not be affected
thereby and shall be enforced to the greatest extent permitted by law

5.8 References. From and after the effective date of this Amendment, each reference in the
Credit Agreement to “this Agreement”, “hereof”, “hereunder” or words of like import, and all
references to the Credit Agreement in any and all Loan Documents, other agreements, instruments,
documents, certificates and writings of every kind and nature, shall be deemed to mean the Existing
Credit Agreement as modified and amended by this Amendment and as the same may be further amended,
modified or supplemented in accordance with the terms thereof.

[signature page follows]

 

8

 

IN WITNESS WHEREOF, the undersigned have caused this Amendment No. 3 to Credit Agreement to be
duly executed by their respective, duly authorized officers as of the date first above written.

BORROWER:

	 	 	 	 	 
	 	GREATBATCH LTD.

 	 
	 	By:  	
 	 
	 	 	Name:  	Thomas J. Mazza 	 
	 	 	Title:  	Senior Vice President and Chief Financial Officer 	 
	 

 

9

 

ADMINISTRATIVE AGENT:

	 	 	 	 	 
	 	MANUFACTURERS AND TRADERS TRUST COMPANY, in its capacity as
the Administrative Agent, the Issuing Bank, the Swing Lender
and a Lender

 	 
	 	By:  	
 	 
	 	 	Name:  	Michael J. Prendergast 	 
	 	 	Title:  	Vice President 	 

 

10

 

	 	 	 	 	 

LENDERS:

	 	 	 	 	 
	 

	 	[                                                            ]
	 	 
	 

	 	Name of Lender
	 	 

 

11

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