Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.1

EXECUTION COPY

 

 

EQUITY COMMITMENT AGREEMENT

among

SANDY CREEK ENERGY ASSOCIATES, L.P.,

a Delaware limited partnership,

as Borrower

and

DYNEGY SANDY CREEK HOLDINGS, LLC,

a Delaware limited liability company,

as Equity Investor

and

CREDIT SUISSE,

as Collateral Agent

Dated as of August 29, 2007

 

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE 1. DEFINITIONS 
	 	 	3	 
	1.1 Defined Terms 
	 	 	3	 
	1.2 Rules of Interpretation 
	 	 	6	 
	1.3 UCC Definitions 
	 	 	6	 
	ARTICLE 2. OBLIGATIONS OF EQUITY INVESTOR AND THE BORROWER 
	 	 	6	 
	2.1 Equity Contributions
	 	 	6	 
	2.2 Payments 
	 	 	10	 
	2.3 Waiver of Defenses; Obligations Unconditional 
	 	 	11	 
	2.4 Subrogation 
	 	 	12	 
	ARTICLE 3. SPECIFIC PROVISIONS 
	 	 	13	 
	3.1 Reinstatement 
	 	 	13	 
	3.2 Specific Performance 
	 	 	13	 
	3.3 Bankruptcy Code Waiver by Equity Investor 
	 	 	14	 
	3.4 Commencement of Bankruptcy Proceedings 
	 	 	14	 
	3.5 Grant of Security Interest; Actions by Collateral Agent 
	 	 	14	 
	3.6 Set-Off 
	 	 	15	 
	ARTICLE 4. PURCHASE OF PARTICIPATING INTEREST 
	 	 	15	 
	4.1 Required Purchase of Participating Interest 
	 	 	15	 
	4.2 Effect of Purchase of Participating Interest 
	 	 	16	 
	4.3 Subordinate Nature of Participating Interest 
	 	 	16	 
	4.4 Rights of Agents and the Secured Parties 
	 	 	16	 
	4.5 No Voting Rights 
	 	 	17	 
	4.6 Outright Purchase; Obligations Unconditional 
	 	 	17	 
	ARTICLE 5. REPRESENTATIONS AND WARRANTIES 
	 	 	17	 
	5.1 Corporate Existence and Business 
	 	 	17	 
	5.2 Power and Authorization; Enforceable Obligations 
	 	 	17	 
	5.3 No Legal Bar 
	 	 	18	 
	5.4 Ownership Interests 
	 	 	18	 
	5.5 EPC Contract and Credit Documents 
	 	 	18	 
	5.6 Solvency Matters 
	 	 	18	 
	5.7 Compliance with Laws 
	 	 	18	 
	5.8 No Litigation or Proceeding 
	 	 	18	 
	5.9 Investment Company Act 
	 	 	19	 
	ARTICLE 6. COVENANTS 
	 	 	19	 
	6.1 Existence 
	 	 	19	 
	6.2 Compliance with Laws 
	 	 	19	 
	6.3 Credit Support 
	 	 	19	 
	ARTICLE 7. MISCELLANEOUS 
	 	 	19	 
	7.1 Successions or Assignments
	 	 	19	 
	7.2 Waivers
	 	 	20	 
	7.3 Interpretation 
	 	 	20	 
	7.4 Remedies Cumulative 
	 	 	20	 
	7.5 Severability 
	 	 	20	 
	7.6 Amendments 
	 	 	20	 
	7.7 Jurisdiction 
	 	 	21	 
	7.8 Governing Law 
	 	 	21	 
	7.9 Integration of Terms 
	 	 	21	 
	7.10 Notices 
	 	 	21	 
	7.11 Counterparts 
	 	 	22	 
	7.12 Further Assurances 
	 	 	22	 
	7.13 Termination of Agreement 
	 	 	22	 
	7.14 No Third Party Beneficiaries 
	 	 	22	 
	7.15 Consequential Damages 
	 	 	22	 
	7.16 Scope of Liability 
	 	 	22	 

 

i

EQUITY COMMITMENT AGREEMENT

This EQUITY COMMITMENT AGREEMENT, dated as of August 29, 2007 (this “Agreement”), by
and among SANDY CREEK ENERGY ASSOCIATES, L.P., a limited partnership organized and existing under
the laws of the State of Delaware (the “Borrower”), DYNEGY SANDY CREEK HOLDINGS, LLC, a
limited liability company organized and existing under the laws of the State of Delaware (the
“Equity Investor) and CREDIT SUISSE, in its capacity as collateral agent for the Secured
Parties under the Intercreditor Agreement (in such capacity, together with its successors and
permitted assigns, the “Collateral Agent”).

RECITALS 

WHEREAS, the Borrower desires to develop, construct, finance and operate, together with one or
more Co-Participants (with such term and each other capitalized term used but not defined in this
preamble having the meaning assigned thereto in Article I of the Credit Agreement referred to
below), an approximately 900 net megawatt coal-fired power generation facility, to be located in
Riesel, Texas, known as the “Sandy Creek Energy Station” (as more fully defined in the Credit
Agreement referred to below, the “Project”).

WHEREAS, in order to finance the development, construction, operation and maintenance of its
interests in the Project, (a) the Borrower has entered into that certain Credit Agreement, dated as
of the date hereof (as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among the Borrower, the lenders from time to time party
thereto, Credit Suisse, as administrative agent for the Lenders under the Credit Agreement, the
Collateral Agent, and, among others, Credit Suisse Securities (USA) LLC and RBS Securities
Corporation as joint lead arrangers and as joint book managers, and (b) the Sponsors and Holdco
have agreed to contribute (or cause to be contributed) cash in the form of common equity to the
Borrower to fund a portion of the Project Costs, in the case of the Equity Investor, pursuant to
this Agreement, and, in the case of the other Sponsor and Holdco, pursuant to the other Equity
Commitment Agreements.

WHEREAS, as of the Closing Date, the Equity Investor is the indirect owner of 50% of the
outstanding economic and beneficial ownership interests in the Borrower.

WHEREAS, the Equity Investor has agreed to make Equity Contributions (as defined below) in
accordance with this Agreement in order to finance a portion of the cost of developing and
constructing the Project and to satisfy certain other conditions under and in accordance with the
Loan Documents.

WHEREAS, the Equity Investor has agreed to provide credit support for its Equity Commitment
obligations in the form of one or more irrevocable letters of credit, in form and substance
reasonably acceptable to the Collateral Agent, issued by one or more Acceptable Credit Providers
(each such letter of credit, “Acceptable Credit Support”).

WHEREAS, the execution and delivery of this Agreement, and the provision of Acceptable Credit
Support, is a condition precedent to the Lenders’ obligation to make Loans and other extensions of
credit to the Borrower under the Credit Agreement.

 

2

 

AGREEMENT

NOW, THEREFORE, in consideration of the promises contained herein, and in order to induce the
Lenders to enter into the Credit Agreement and the other Loan Documents and to make the advances of
credit contemplated thereby, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1.

DEFINITIONS

1.1 Defined Terms. Each capitalized term used and not otherwise defined herein (including
the preamble and recitals) shall have the meaning assigned to such term (whether directly or by
reference to another agreement or document) in the Credit Agreement. In addition to the terms
defined in the Credit Agreement, the following terms shall have the following respective meanings:

“Acceptable Credit Support” has the meaning given in the recitals.

“Act of Required Secured Parties” has the meaning given in the Intercreditor
Agreement.

“Agreement” has the meaning given in the preamble.

“Borrower” has the meaning given in the preamble.

“Borrower Interests” has the meaning give in the Pledge Agreement.

“Collateral Agent” has the meaning given in the preamble.

“Contribution Amount” has the meaning given in Section 2.1(e).

“Contribution Date” has the meaning given in Section 2.1(e).

“Contribution Request” has the meaning given in Section 2.1(e).

“Credit Agreement” has the meaning given in the recitals.

“Date Certain Funding Contribution” has the meaning given in Section
2.1(a)(iii).

“Debt Equity Ratio” has the meaning given in the Depositary Agreement.

“Default Funding Contribution” has the meaning given in Section 2.1(a)(ii).

“Defaulted Payment” has the meaning given in Section 4.1.

“Discharge Date” has the meaning given in the Intercreditor Agreement.

 

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“Discharge of Secured Obligations” has the meaning given in the Intercreditor
Agreement.

“Drawing Amount” has the meaning given in Section 2.1(d).

“Drawstop Equity Contributions” has the meaning given in the Depositary
Agreement.

“Equity Commitment” means, at any time, the Equity Contribution to be made by
the Equity Investor at such time (and in such amounts) as specified in Section 2.1(a), as
may be reduced from time to time in accordance with (i) Section 2.1(c) in connection with a
Permitted Project Interest Transfer and (ii) Section 2.1(g) in connection with a transfer by
the Equity Investor of all or a portion of its ownership interest in the Equity Interests of
the Borrower. The initial Equity Commitment of the Equity Investor, which may be reduced as
specified in the preceding sentence, as of the Closing Date is $223,000,000 (the
“Initial Equity Commitment”). Notwithstanding any contrary provision contained in
any Transaction Document, the aggregate Equity Commitment shall not exceed the Initial
Equity Commitment.

“Equity Contribution” means any Equity Funds provided by the Equity Investor in
accordance with the terms of this Agreement.

“Equity Contribution Date” means each Contribution Date and each other date on
which any Equity Contribution is required to be made hereunder.

“Equity Funds” means any cash capital contribution in exchange for or in
respect of common equity interests provided by the Equity Investor to the Borrower either
directly or indirectly through one or more companies in which the Equity Investor has
ownership interest, in each case pursuant to the terms of this Agreement.

“Equity Investor” has the meaning given in the preamble.

“Equity Letter of Credit” means each letter of credit provided in accordance
with this Agreement that constitutes Acceptable Credit Support.

“Final Equity Contribution” means an amount equal to the equity contributions
required to be made hereunder and under the other Equity Commitment Agreements necessary for
the Borrower to achieve a Debt Equity Ratio (as defined in the Depositary Agreement) of 56.8
: 43.2 on the Term Conversion Date, after giving effect to the application of such proceeds
to the prepayment of the Loans in accordance with Section 3.11(c) of the Depositary
Agreement and Sections 2.10(c) and 2.11(b) of the Credit Agreement and the reduction of
Commitments in accordance with Section 2.08 of the Credit Agreement; provided, that
in no event shall the Investor Percentage of such amount, together with all other Equity
Contributions made by the Equity Investor in accordance with the terms of this Agreement,
exceed the Equity Commitment.

 

4

 

“Funding Contribution” means each Project Cost Funding Contribution, each
Default Funding Contribution, each Date Certain Funding Contribution and each Term
Conversion Date Funding Contribution.

“Holdco Equity Contributions” means any Holdco Equity Funds provided by Holdco
in accordance with the terms of the Holdco Equity Commitment Agreement.

“Holdco Equity Funds” means any cash capital contribution in exchange for or in
respect of common equity interests provided by Holdco to the Borrower either directly or
indirectly through the Pledgors pursuant to the terms of the Holdco Equity Commitment
Agreement.

“Investor Percentage” means 50%, as may be adjusted in accordance with Section
2.1(g).

“Limited Partnership Agreement” means the Amended and Restated Agreement of
Limited Partnership of Sandy Creek Energy Associates, L.P., dated as of August 29, 2007.

“Pro Rata Basis” means, with respect to any Equity Letter of Credit drawn to
fund a Funding Contribution, a percentage equal to the undrawn amount of such Equity Letter
of Credit divided by the total undrawn amount of the Equity Letters of Credit being drawn to
fund such Funding Contribution.

“Project Cost Funding Contribution” has the meaning given in Section 2.1(a)(i).

“Retained Interest” has the meaning given in Section 4.3.

“Secured Obligations” has the meaning given such term in the Intercreditor
Agreement.

“Secured Parties” has the meaning given such term in the Intercreditor
Agreement.

“Term Conversion Date Funding Contribution” has the meaning given in Section
2.1(a)(iv).

“Transferee” has the meaning given in Section 2.1(g).

“Trigger Event” shall have the meaning given such term in the Intercreditor
Agreement.

“UCC” shall mean the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the perfection or priority of
the security interest in any Pledged Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean
the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or priority and for purposes of definitions
related to such provisions.

 

5

 

1.2 Rules of Interpretation. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, the rules of interpretation set forth
in Section 1.02 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis, as
if fully set forth herein.

1.3 UCC Definitions. All terms defined in the UCC shall have the respective meanings
given to those terms in the UCC, except where the context otherwise requires.

ARTICLE 2.

OBLIGATIONS OF EQUITY INVESTOR AND THE BORROWER

2.1 Equity Contributions.

(a) Contributions by Equity Investor. Notwithstanding any provision to the contrary
contained herein (but subject to the last sentence of the definition of Equity Commitment), the
Equity Investor hereby agrees, for the benefit of the Borrower and the Collateral Agent (on behalf
of the Secured Parties), as follows:

(i) from and after the date on which (A) the proceeds of the Term Loans and the
Construction Loans and the proceeds of any Permitted Tax-Exempt Bonds (to the extent such
Permitted Tax Exempt Bonds are funded in accordance with the terms of the Credit Agreement)
have been fully utilized (and prior to the Term Conversion Date) or (B) a Default (but not
an Event of Default) arises prior to the Term Conversion Date under Section 7.01(l)(iii) of
the Credit Agreement (and, in the case of each of (A) and (B) above, the Holdco Equity
Contributions funded in accordance with the terms and conditions of the Holdco Equity
Commitment Agreement have been fully utilized), the Equity Investor hereby agrees to make,
or cause to be made through its direct or indirect subsidiaries, an Equity Contribution to
the Borrower in an amount equal to the Investor Percentage of Project Costs as they are
incurred (each, a “Project Cost Funding Contribution”) until the Equity Commitment
is fully funded (or, in the case of clause (B) above, the earlier date when the applicable
Default has been cured in accordance with the terms of the Credit Agreement), each such
Project Cost Funding Contribution to be made not less than two (2) Business Days prior to
the date on which such Project Costs are reasonably expected to become due and payable
unless, prior to such second Business Day, such Project Costs are paid with Drawstop Equity
Contributions (provided that, in the case of clause (B) above, the Equity Investor
shall have received at least ten (10) Business Days prior written notice of the applicable
Default from the Borrower or the Collateral Agent);

(ii) upon the occurrence of an Event of Default under the Credit Agreement at any time
prior to the Term Conversion Date, the Equity Investor hereby agrees to make, or cause to be
made through its direct or indirect subsidiaries, an
Equity Contribution to the Borrower in an amount equal to the then-unfunded Equity
Commitment (each, a “Default Funding Contribution”), such Default Funding
Contribution to be made not less than five (5) Business Days from receipt by the applicable
Equity Investor of notice from the Collateral Agent that an Event of Default has occurred
and is continuing;

 

6

 

(iii) if the Term Conversion Date has not occurred by the Date Certain, the Equity
Investor hereby agrees to make, or cause to be made through its direct or indirect
subsidiaries, an Equity Contribution to the Borrower in an amount equal to the then-unfunded
Equity Commitment (a “Date Certain Funding Contribution”), such Date Certain Funding
Contribution to be made on the Date Certain; and

(iv) if and to the extent that on the Term Conversion Date any portion of the Equity
Commitment remains unfunded, the Equity Investor hereby agrees to make, or cause to be made
through its direct or indirect subsidiaries, an Equity Contribution to the Borrower in an
amount equal to the Investor Percentage of the Final Equity Contribution (a “Term
Conversion Date Funding Contribution”), such Term Conversion Date Funding Contribution
to be made on the Term Conversion Date.

(b) Treatment of Proceeds. (i) (i) Not later than two (2) Business Days prior to
each Equity Contribution Date, the Equity Investor shall notify the Collateral Agent whether
it intends to fund all or any portion of its applicable Funding Contribution (such notice, a
“Funding Notice”). If the Equity Investor elects to fund all or any portion of its
Funding Contribution, it shall deposit such Funding Contribution in Dollars and immediately
available funds directly into the relevant Project Account as set forth below in clause (ii)
for application in accordance with such clause. If the Equity Investor funds a portion (but
not all) of any Funding Contribution in Dollars, the Equity Investor shall notify the
Collateral Agent which Equity Letters of Credit should be drawn on a Pro Rata Basis to fund
the balance of such Funding Contribution (provided, however, that the
Collateral Agent’s failure to draw in any particular manner or on any particular Equity
Letter of Credit shall not limit or relieve the obligations of the Equity Investor hereunder
or prevent the Collateral Agent from making any other drawing on any other Equity Letter of
Credit in accordance with the terms hereof so long as the aggregate of all such drawings
does not exceed the Drawing Amount). If the Equity Investor does not pay any of its Funding
Contribution in accordance with this Section 2.1(b)(i), the Collateral Agent shall draw upon
all Equity Letters of Credit on a Pro Rata Basis in the amount of such Funding Contribution,
and, on the applicable Equity Contribution Date, the Collateral Agent shall deposit the
proceeds of such draw (or draws) into the relevant Project Account as set forth below in
clause (ii) for application in accordance with such clause (provided,
however, that the Collateral Agent’s failure to draw in any particular manner or on
any particular Equity Letter of Credit shall not limit or relieve the obligations of the
Equity Investor hereunder or prevent the Collateral Agent from making any other drawing on
any other Equity Letter of Credit in accordance with the terms hereof so long as the
aggregate of all such drawings does not exceed the Drawing Amount).

 

7

 

(ii) The proceeds of each Project Cost Funding Contribution, Default Funding
Contribution and Date Certain Funding Contribution shall be deposited directly into the
Construction Account and applied solely to the payment of Project Costs in accordance with
Section 3.1 of the Depositary Agreement. The proceeds of each Term Conversion Date Funding
Contribution shall be deposited directly into the Prepayment Account and applied to the
prepayment of the Loans in accordance with Section 3.11(c) of the Depositary Agreement.
Notwithstanding that the Equity Contributions of the Equity Investor shall be deposited
directly into the Construction Account or the Prepayment Account, as applicable, the Equity
Investor and the Borrower hereby agree that any and all Equity Contributions made by the
Equity Investor in accordance with the terms hereof shall be deemed to be Equity
Contributions by the Equity Investor (or its direct or indirect subsidiary) in the Borrower
(which Equity Contributions shall be evidenced solely by one or more certificates that have
been previously delivered to the Collateral Agent, together with applicable transfer powers
executed in blank, in accordance with the terms of the applicable Security Documents). The
Equity Investor irrevocably consents to the application of Equity Contributions to the
payment of Project Costs and to the prepayment of the Loans as specified above or in a
manner otherwise permitted by the Loan Documents.

(iii) Any draw upon the Acceptable Credit Support which is paid by the issuing bank
thereof to the Collateral Agent to fund a Funding Contribution shall satisfy the funding
obligations of the Equity Investor in respect of such Funding Contribution.

(c) Permitted Project Interest Transfers. In connection with any Permitted Project
Interest Transfer that is conducted in accordance with the terms of the applicable Loan Documents,
including, without limitation, the obligation to prepay the Loans under and in accordance with
Section 3.10(b) of the Depositary Agreement, from and after the date on which such prepayment has
been made, the Equity Commitment shall be reduced by an amount equal to the Equity Investor’s
original Equity Commitment (as in effect on the date hereof) multiplied by the Permitted Project
Transfer Interest Percentage applicable to such Permitted Project Interest Transfer.

(d) Pro Rata Treatment of Acceptable Credit Support. Subject to Section 2.1(b)(i), in
the event that the Equity Investor has provided more than one Equity Letter of Credit and the
Collateral Agent is permitted to draw upon such Acceptable Credit Support in any amount as
permitted hereunder (the “Drawing Amount”), the Collateral Agent shall draw upon all such
Equity Letters of Credit on a Pro Rata Basis; provided, however, the Collateral
Agent’s failure to draw in any particular manner or on any particular Equity Letter of Credit shall
not limit or relieve the obligations of the Equity Investor hereunder or prevent the Collateral
Agent from making any other drawing on any other Equity Letter of Credit in accordance with the
terms hereof so long as the aggregate of all such drawings does not exceed the Drawing Amount. If
and to the extent that any Drawing Amount has been funded in Dollars, the Collateral Agent shall
not draw upon an Equity Letter of Credit unless and to the extent that the obligations of the
Equity Investor in respect of such cash contributions have been reinstated in accordance with
Section 3.1.

 

8

 

(e) Contribution Requests. The Borrower shall deliver to each Sponsor a written
request (a “Contribution Request”), with a copy to the Collateral Agent, at any time that a
Project Cost Funding Contribution is reasonably anticipated to be required in accordance with
Section 2.1(a)(i). Each Contribution Request shall specify the Project Costs then incurred, the
amount of such Contribution Request, each Sponsor’s Investor Percentage of such amount (such amount
for each such Sponsor, such Sponsor’s “Contribution Amount”) and the requested date of
contribution (which shall be at least ten (10) calendar days following the date of such
Contribution Request) (the “Contribution Date”). No later than the applicable Contribution
Date, the Equity Investor shall pay or cause to be paid to the Collateral Agent its Contribution
Amount pursuant to Section 2.1(b).

(f) Failure to Provide Acceptable Credit Support. (i) If at any time the Equity
Investor shall have failed to cause its Equity Commitment to be supported by Acceptable Credit
Support in accordance with Section 6.3 (or if any Equity Letter of Credit previously delivered to
the Collateral Agent by the Equity Investor ceases to be Acceptable Credit Support) and, in either
case, such condition has continued for a period of fifteen (15) days, the Collateral Agent shall
make a drawing under such Acceptable Credit Support in an amount equal to the full available amount
of such Acceptable Credit Support at such time on the Business Day immediately following the
conclusion of the fifteen (15) day period referred to above in accordance with the terms of such
Acceptable Credit Support, and the Collateral Agent shall promptly deposit or cause to be deposited
the proceeds thereof in the Construction Account for application in accordance with this Agreement.

(ii) In the event that the Equity Investor elects to fund any Funding Contributions in Dollars
and immediately available funds instead of by a drawing on the Acceptable Credit Support in
accordance with Section 2.1(b)(i), or the Equity Commitment is reduced in accordance with Section
2.1(c) or Section 2.1(g), the Equity Investor shall be entitled to deliver to the Collateral Agent,
and the Collateral Agent thereafter (if it has determined that such reduction is permitted
hereunder and such Funding Contribution has not been reinstated in accordance with Section 3.1 at
any time within ninety-one (91) days after such Equity Contribution has been made; provided
that the Collateral Agent shall not be entitled to draw under such Equity Letter of Credit unless
and to the extent that such amounts have been reinstated in accordance with Section 3.1) shall
countersign and, promptly after the applicable Equity Contribution Date or the date of reduction in
the Equity Commitment, deliver to the issuer of such Acceptable Credit Support, an Equity Letter of
Credit reduction certificate in the form attached to such Acceptable Credit Support (or otherwise
satisfactory to the issuer of such Acceptable Credit Support) and the face amount of such
Acceptable Credit Support may be reduced from time to time as provided in such certificate.

(iii) If the issuer of any Equity Letter of Credit has notified the Collateral Agent in
accordance with the terms hereof (and the Collateral Agent has so notified the Equity Investor
within 10 days thereafter), that such Equity Letter of Credit will not be extended beyond the
scheduled expiration date therefor (such date, the “Scheduled Expiration Date”), the Equity
Investor shall cause such Equity Letter of Credit to be renewed or replaced at least thirty (30)
days prior to the Scheduled Expiration Date with Acceptable Credit Support.

 

9

 

(g) Permitted Sell-Down. In connection with a transfer by the Equity Investor of all
or a portion of its ownership interest in the Equity Interests of the Borrower that is permitted
under the terms of the applicable Loan Documents, any portion of the unfunded Equity Commitment may
be transferred to and assumed by the applicable transferee (a “Transferee”) on a pro rata
basis (based on the Equity Interests so transferred) and the Equity Commitment shall be reduced on
a dollar-for-dollar basis (based on the amount so transferred to and assumed by such Transferee);
provided that (i) no Default or Event of Default shall have occurred as a result of such
transfer and be continuing and no Change of Control shall have occurred; (ii) such Transferee shall
have executed an equity commitment agreement on substantially the same terms and conditions as this
Agreement with respect to the portion of the Equity Commitment so assumed and (iii) such
Transferee’s obligations under such equity commitment agreement shall be supported at all times by
Acceptable Credit Support. In connection with any such transfer and assumption (and related
execution of a new equity commitment agreement), the Investor Percentage of the Equity Investor
shall be reduced by a corresponding amount of Equity Interests so transferred and the applicable
Transferee’s Investor Percentage will be deemed to be the amount by which the Equity Investor’s
Investor Percentage has been reduced.

(h) Notwithstanding anything contained herein to the contrary (but subject to Section 3.1), in
no event shall the Equity Contributions made by the Equity Investor pursuant to this Agreement,
when taken together with all purchases of undivided participating interests under Section 4.1,
exceed the Equity Commitment of the Equity Investor.

2.2 Payments.

2.2.1. Taxes. Except as otherwise required by applicable Legal Requirements, each payment
required to be made by the Equity Investor to the Borrower hereunder shall be made without
deduction or withholding for or on account of any Taxes. If such deduction or withholding is so
required, the Equity Investor shall (a) pay the amount required to be deducted or withheld to the
appropriate authorities before penalties attach thereto or interest accrues thereon and (b)
forthwith pay to the Borrower (for deposit in the applicable Project Account in accordance with
Section 2.1) such additional amount as may be necessary to ensure that the net amount actually
received by the Borrower is equal to the amount that the Borrower would have received had there
been no such deduction or withholding.

2.2.2. Late Payment. In the event that any Equity Contribution is not made on the related
Equity Contribution Date, the amount of such delinquent Equity Contribution shall bear interest at
a per annum rate equal to 2% plus the interest rate then applicable to ABR Loans as provided in
Section 2.13(a) of the Credit Agreement until such time as such Equity Contribution is deposited in
the applicable Project Account in accordance with Section 2.1.

 

10

 

2.3 Waiver of Defenses; Obligations Unconditional.

2.3.1. Waiver of Defenses. To the extent permitted by applicable law, the Equity Investor
hereby unconditionally and irrevocably waives and relinquishes all rights and remedies accorded by
applicable Legal Requirements to sureties or guarantors and agrees not to assert or take advantage
of any such rights or remedies, including (a) any right to require the Collateral Agent or any Secured Party to proceed against the Borrower or any other person or to proceed
against or exhaust any security held by the Collateral Agent or any other Secured Party at any time
or to pursue any other remedy in the Collateral Agent’s or any Secured Party’s power before
proceeding against the Equity Investor, (b) any defense that may arise by reason of the incapacity,
lack of power or authority, death, dissolution, merger, termination or disability of the Borrower
or any other person or the failure of the Collateral Agent or any other Secured Party to file or
enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of the
Borrower or any other person, (c) demand, presentment, protest and notice of any kind (other than
any notice required pursuant to the express provisions of this Agreement), including notice of the
existence, creation or incurring of any new or additional indebtedness or obligation or of any
action or non-action on the part of the Borrower, the Collateral Agent, the Secured Parties, any
endorser or creditor of the foregoing or on the part of any other person under this or any other
instrument in connection with any obligation or evidence of indebtedness held by the Collateral
Agent or any Secured Party as collateral or in connection with any of the Secured Obligations, (d)
any defense based upon an election of remedies by the Collateral Agent or the Secured Parties,
including an election to proceed by non-judicial rather than judicial foreclosure, which destroys
or otherwise impairs the subrogation rights of the Equity Investor, the right of the Equity
Investor to proceed against the Borrower or another person for reimbursement, or both, (e) any
defense based on any offset against any amounts which may be owed by any person to the Equity
Investor or the Borrower for any reason whatsoever, (f) any defense based on any act, failure to
act, delay or omission whatsoever on the part of the Borrower or the failure by the Borrower to do
any act or thing or to observe or perform any covenant, condition or agreement to be observed or
performed by it under the EPC Contract, the Credit Agreement or any other Transaction Document, (g)
any defense based upon any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than that of the principal
(provided that in no event shall the obligations of the Equity Investor hereunder exceed
its Equity Commitment), (h) any defense, setoff or counterclaim which may at any time be available
to or asserted by the Borrower against the Collateral Agent, the Secured Parties or any other
person under the EPC Contract, the Credit Agreement or the other Transaction Document, (i) any duty
on the part of the Collateral Agent or any Secured Party to disclose to the Equity Investor any
facts the Collateral Agent or any Secured Party may now or hereafter know about the Borrower,
regardless of whether the Collateral Agent or any Secured Party has reason to believe that any such
facts materially increase the risk beyond that which the Equity Investor intends to assume, or have
reason to believe that such facts are unknown to the Equity Investor, or have a reasonable
opportunity to communicate such facts to the Equity Investor, since the Equity Investor
acknowledges that it is fully responsible for being and keeping informed of the financial condition
of the Borrower, (j) any defense based on any change in the time, manner or place of any payment
under, or in any other term of, the EPC Contract, the Credit Agreement or any other Transaction
Document or any other amendment, renewal, extension, acceleration, compromise or waiver of or any
consent or departure from the terms of the EPC Contract, the Credit Agreement or any other
Transaction Document, (k) any defense arising because of the Collateral Agent’s or any Secured
Party’s election, in any proceeding instituted under the Federal Bankruptcy Code, of the
application of Section 1111(b)(2) of the Federal Bankruptcy Code, (l) any defense based upon any
borrowing or grant of a security interest under Section 364 of the Federal Bankruptcy Code and (m)
any other circumstance (including any statute of limitations) or any existence of or reliance on
any representation by the Collateral Agent or any Secured Party that might otherwise constitute a
defense available to, or discharge of, any guarantor or surety (in each of the foregoing cases
other than, subject to Section 3.1, defense of payment of the applicable amounts).

 

11

 

2.3.2. Obligations Unconditional. All rights of the Collateral Agent and the Secured Parties
and all obligations of the Equity Investor and the Borrower hereunder shall be absolute and
unconditional irrespective of:

(a) any lack of validity, legality or enforceability of the Credit Agreement, this Agreement
or any other Loan Document;

(b) the failure of any Secured Party (i) to assert any claim or demand or to enforce any right
or remedy against the Borrower, the Equity Investor or any other Person (including any guarantor)
under the provisions of the EPC Contract, the Credit Agreement, any other Loan Document or
otherwise, or (ii) to exercise any right or remedy against any other guarantor of, or collateral
securing, any of the Secured Obligations;

(c) any change in the time, manner or place of payment of, or in any other term of, all of the
Secured Obligations, or any other extension or renewal of any Secured Obligation of the Borrower,
the Equity Investor or otherwise;

(d) any reduction, limitation, impairment or termination of any of the Secured Obligations for
any reason other than the written agreement of the Secured Parties to terminate the Secured
Obligations in full, including any claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to, and the Equity Investor hereby waives any right to or claim of, any
defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or
occurrence affecting, any Secured Obligation of the Borrower, the Equity Investor or otherwise;

(e) any amendment to, rescission, waiver, or other modification of, or any consent to
departure from, any of the terms of the EPC Contract, the Credit Agreement, this Agreement or any
other Transaction Document;

(f) any addition, exchange, release, surrender or non-perfection of any collateral, or any
amendment to or waiver or release or addition of, or consent to departure from, any other security
interest held by the Collateral Agent or any Secured Party; or

(g) any other circumstance which might otherwise constitute a defense available to, or a legal
or equitable discharge of the Borrower, the Equity Investor, any surety or any guarantor (in each
of the foregoing cases other than the defense, subject to Section 3.1, of payment of the applicable
amounts).

 

12

 

2.4 Subrogation. So long as any of the Secured Obligations remain outstanding (subject to
Section 3.1 and other than those contingent Secured Obligations that are intended to survive the termination of, as applicable, the Credit Agreement, the other Loan Documents or the other
applicable documents), (a) the Equity Investor shall not have any right of subrogation and the
Equity Investor waives all rights to enforce any remedy which the Collateral Agent and/or the other
Secured Parties now have or may hereafter have against the Borrower or the Pledgors, that arises
hereunder or from the performance by the Equity Investor hereunder, and waives the benefit of, and
all rights to participate in, any security now or hereafter held by the Collateral Agent (for the
benefit of the Secured Parties) from the Borrower or the Pledgors, and (b) the Equity Investor
waives any claim, right or remedy which it may now have or hereafter acquire against the Borrower
or the Pledgors that arises hereunder and/or from the performance by the Equity Investor hereunder,
including any claim, remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim, right or remedy of the Collateral Agent and/or the
other Secured Parties against Borrower or the Pledgors or any security or collateral which the
Collateral Agent and/or the other Secured Parties now have or hereafter acquire, whether or not
such claim, right or remedy arises in equity, under contract, by statute, under common law or
otherwise. Any amount paid to the Equity Investor on account of any such subrogation rights prior
to the indefeasible payment in full in cash of the Secured Obligations, the termination of all
Secured Commodity Hedges, Interest Rate Hedging Agreements and Other Interest Rate Hedging
Agreements and the termination of all Commitments and other obligations of the Collateral Agent and
the other Secured Parties (subject to Section 3.1 and other than those contingent Secured
Obligations that are intended to survive the termination of, as applicable, the Credit Agreement,
the other Loan Documents or the other applicable documents) shall be held in trust for the benefit
of the Collateral Agent and shall immediately thereafter be paid to the Collateral Agent for
application in accordance with this Agreement and the Intercreditor Agreement.

ARTICLE 3.

SPECIFIC PROVISIONS

3.1 Reinstatement. This Agreement and the obligations of the Equity Investor hereunder
shall automatically be reinstated if and to the extent that for any reason any payment made
pursuant to this Agreement is rescinded or otherwise restored to the Equity Investor, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise with respect to Borrower or
any other person or as a result of any settlement or compromise with any person (including the
Equity Investor) in respect of such payment, and the Equity Investor shall pay the Collateral Agent
on demand all of its reasonable costs and expenses (including reasonable fees of counsel) incurred
by the Collateral Agent in connection with such rescission or restoration.

3.2 Specific Performance. The Equity Investor hereby irrevocably waives, to the extent it
may do so under applicable Legal Requirements, any defense based on the adequacy of a remedy at law
that may be asserted as a bar to the remedy of specific performance in any action brought against
the Equity Investor for specific performance of this Agreement by the Borrower, the Collateral
Agent or any successor or assign thereof or for their benefit by a receiver, custodian or trustee
appointed for the Borrower or in respect of all or a substantial part of its assets, under the
bankruptcy or insolvency laws of any jurisdiction to which the Borrower or its assets are subject.

 

13

 

3.3 Bankruptcy Code Waiver by Equity Investor. The Equity Investor hereby irrevocably
waives, to the extent it may do so under applicable Legal Requirements, any protection to which it
may be entitled under Sections 365(c)(1), 365(c)(2) and 365(e)(2) of the Bankruptcy Law or
equivalent provisions of the laws or regulations of any other jurisdiction with respect to any
proceedings, or any successor provision of law of similar import, in the event of any Bankruptcy
Event with respect to the Borrower. Specifically, in the event that the trustee (or similar
official) in a Bankruptcy Event with respect to the Borrower or the debtor-in-possession takes any
action (including the institution of any action, suit or other proceeding for the purpose of
enforcing the rights of the Borrower under this Agreement), the Equity Investor shall not assert
any defense, claim or counterclaim denying liability hereunder on the basis that this Agreement is
an executory contract or a “financial accommodation” that cannot be assumed, assigned or enforced
or on any other theory directly or indirectly based on Section 365(c)(1), 365(c)(2) or 365(e)(2) of
the Bankruptcy Law, or equivalent provisions of the laws or regulations of any other jurisdiction
with respect to any proceedings or any successor provision of law of similar import. If a
Bankruptcy Event with respect to the Borrower shall occur, the Equity Investor agrees, after the
occurrence of such Bankruptcy Event, to reconfirm in writing, to the extent permitted by applicable
Legal Requirements, its pre-petition waiver of any protection to which it may be entitled under
Sections 365(c)(1), 365(c)(2) and 365(e)(2) of the Bankruptcy Law or equivalent provisions of the
laws or regulations of any other jurisdiction with respect to proceedings and, to give effect to
such waiver, the Equity Investor consents to the assumption and enforcement of each provision of
this Agreement by the debtor-in-possession or the Borrower’s trustee in bankruptcy, as the case may
be.

3.4 Commencement of Bankruptcy Proceedings. None of the obligations of the Equity
Investor under this Agreement shall be altered, limited or affected by any proceeding, voluntary or
involuntary, involving the bankruptcy, reorganization, insolvency, receivership, liquidation or
arrangement of the Borrower or the Equity Investor, or by any defense which the Borrower or the
Equity Investor may have by reason of any order, decree or decision of any court or administrative
body resulting from any such proceeding.

3.5 Grant of Security Interest; Actions by Collateral Agent. The Equity Investor hereby
consents to the assignment, pursuant to the applicable Security Documents, by the Borrower of all
of its right, title and interest in, to and under this Agreement to the Collateral Agent (for the
benefit of the Secured Parties). Each of the Equity Investor and the Borrower agrees that the
Collateral Agent and any assignee thereof shall be entitled to enforce this Agreement in its own
name and to exercise any and all rights of the Borrower under this Agreement in accordance with the
terms hereof (either in its own name, or in the name of the Borrower, as the Collateral Agent may
elect), and the Equity Investor and the Borrower each agree to comply and cooperate in all respects
with such exercise. Without limiting the generality of the foregoing, the Collateral Agent and any
assignee thereof shall have the full right and power to enforce directly against the Equity
Investor all obligations of the Equity Investor under this Agreement, and otherwise to exercise all
remedies available to the Borrower hereunder and to make all demands and give all notices and make
all requests (either in its own name or in the name of the Borrower, as the Collateral Agent may
elect) required or permitted to be made or given by the Borrower under this Agreement, including
the right to make demand for payment of Equity Contributions in accordance with Article 2 and to make a claim under any Acceptable Credit Support, and the
Equity Investor acknowledges and agrees that any such action taken by the Collateral Agent shall be
deemed effective for all purposes of this Agreement to the same extent as if such action had been
taken directly by the Borrower. If the Equity Investor shall receive inconsistent directions under
this Agreement from the Borrower and the Collateral Agent, the directions of the Collateral Agent
shall be deemed the effective directions, and the Equity Investor shall accordingly comply with
such directions of the Collateral Agent to the extent such directions comply with the provisions
hereof.

 

14

 

3.6 Set-Off. In addition to any rights now or hereafter granted under applicable Legal
Requirements or otherwise, and not by way of limitation of any such rights, upon the failure of the
Equity Investor to make any Equity Contribution as and when required hereunder and the failure of
any Acceptable Credit Provider to make such Equity Contribution in accordance with the terms of any
Applicable Credit Support, the Collateral Agent is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to the Equity Investor or to
any other person, any such notice being hereby expressly waived, to set-off and to appropriate and
apply any and all deposits (general or special) and any other indebtedness at any time held or
owing by the Collateral Agent or any Secured Party (including by branches and agencies of the
Collateral Agent and each Secured Party wherever located) to or for the credit or the account of
the Equity Investor, against and on account of the obligations of the Equity Investor under this
Agreement, irrespective of whether or not the Collateral Agent or any Secured Party shall have made
any demand hereunder.

ARTICLE 4.

PURCHASE OF PARTICIPATING INTEREST

4.1 Required Purchase of Participating Interest. If by reason of a Bankruptcy Event or
any act of a Governmental Authority, (a) any Equity Contribution due hereunder has not been
deposited in the applicable account within five (5) Business Days after the date on which such
amount is payable hereunder, or (b) any Equity Contribution theretofore deposited pursuant to
Article 2 is rescinded or otherwise restored to the Equity Investor and five (5) Business Days have
elapsed after the date that such Equity Contribution was rescinded or otherwise restored (such
Equity Contribution, whether required but not made as provided in clause (a) or made and returned
as provided in clause (b), being herein called the “Defaulted Payment”), the Equity
Investor shall, without any further notice or demand by the Collateral Agent or any Secured Party,
purchase an undivided participating interest in each of the Loans, Letters of Credit and
Commitments which shall then be outstanding, as provided in the following sentence, in an aggregate
principal amount equal to the amount of the Defaulted Payment. The Equity Investor’s purchase of
an undivided participating interest in such Loans, Letters of Credit and Commitments shall be made
pro rata among such Loans, Letters of Credit and Commitments based on the respective outstanding
amounts thereof. The Equity Investor shall effect its purchase of undivided participating
interests in such Loans, Letters of Credit and Commitments pursuant to this Section 4.1 by paying
to the Collateral Agent, for the account of the holders of such Loans, Letters of Credit and
Commitments, in immediately available funds in Dollars, the amount of the Defaulted Payment.

 

15

 

4.2 Effect of Purchase of Participating Interest. The Equity Investor’s purchase of an
undivided participating interest in the Loans, Letters of Credit and Commitments in the full amount
(if any) required pursuant to Section 4.1 following a Defaulted Payment in respect of Equity
Contributions, shall satisfy the Equity Investor’s obligation pursuant to Section 2.1 to make
Equity Contributions to the extent of the amount of such Loans, Letters of Credit and Commitments
so purchased by the Equity Investor.

4.3 Subordinate Nature of Participating Interest. The Equity Investor hereby agrees that
its participating interest in the Loans, Letters of Credit and Commitments purchased by it pursuant
to Section 4.1 shall be subordinate in all respects to the interest in such Loans, Letters of
Credit and Commitments retained by the holders (other than the Equity Investor) thereof (the
“Retained Interest”), so that all payments received or collected on account of such Loans,
Letters of Credit and Commitments and applied to the payment or termination thereof, whether
received or collected through repayment of such Loans, Letters of Credit or Commitments by the
Borrower or through right of set-off with respect thereto or realization upon any collateral
security therefor or otherwise, shall first be applied to the payment of the principal, interest,
fees and other amounts then due (whether at its stated maturity, by acceleration or otherwise) on
the Retained Interest until such principal, interest, fees and other amounts are paid in full,
before any such payments are applied pro rata on account of the Equity Investor’s and the
other Sponsor’s participating interest (if any) in such Loans, Letters of Credit and Commitments.

4.4 Rights of Agents and the Secured Parties. Notwithstanding the purchase and ownership
by the Equity Investor of participating interests in the Loans, Letters of Credit and Commitments,
and notwithstanding the rights of participants under the Credit Agreement, the Collateral Agent
and, to the extent permitted, each Secured Party shall have the right, in their sole discretion in
each instance and without any notice to the Equity Investor, (a) to agree to the modification or
waiver of any of the terms of any of the Loan Documents or any other agreement or instrument
relating thereto (but not to reduce any amount payable in respect of the portion of the Loans,
Letters of Credit subject to participations purchased pursuant to Section 4.1), (b) to consent to
any action or failure to act by the Borrower, the Equity Investor or any other person party to a
Loan Document and (c) to exercise or refrain from exercising any rights or remedies which the
Collateral Agent or any Secured Party may have under the Loan Documents or any other agreement or
instrument relating thereto, including the right at any time to declare, or refrain from declaring,
the Secured Obligations due and payable upon the occurrence of any event of default thereunder, and
to rescind and annul any such declaration, and to foreclose and sell or exercise any other remedy,
or refrain from foreclosing and selling or exercising any other remedy, with respect to any
collateral securing the Secured Obligations. Neither the Collateral Agent nor any Secured Party
shall be liable to the Equity Investor for any error in judgment or for any action taken or omitted
to be taken by it while the Equity Investor holds a participating interest in the Loans, Letters of
Credit and/or Commitments, except to the extent found in a final and non-appealable judgment of a
court of competent jurisdiction to have resulted primarily from the gross negligence or willful
misconduct of such person. Neither the Collateral Agent nor any Secured Party shall have any duty
or responsibility to provide the Equity Investor with any credit or other information concerning
the affairs, financial condition or business of the Borrower or any other party to a Loan Document
or which may come into their possession or the possession of any of their respective Affiliates, or to notify the Equity Investor of any default by the
Borrower or any other person under any of the Loan Documents.

 

16

 

4.5 No Voting Rights. Without limiting the generality of the provisions of Section 4.4,
in determining whether the required consent of the Lenders (or any portion thereof) has been
obtained for all purposes under the Loan Documents the participating interests in the Loans,
Letters of Credit and Commitments purchased by the Equity Investor pursuant to Section 4.1 shall
not be deemed to be outstanding.

4.6 Outright Purchase; Obligations Unconditional. The obligations of the Equity Investor
under this Article 4 to purchase participating interests in or purchase and take an assignment of
the Loans, Letters of Credit and Commitments, as the case may be, is absolute and unconditional and
shall not be affected by the occurrence of any default or event of default or any other
circumstance, including any circumstance of the nature described in Section 2.3.

ARTICLE 5.

REPRESENTATIONS AND WARRANTIES

The Equity Investor hereby represents and warrants to and in favor of the Borrower, the
Collateral Agent and the Secured Parties that:

5.1 Corporate Existence and Business. The Equity Investor (a) is a limited liability
company duly organized, validly existing and in good standing under the laws of the State of
Delaware and (b) is duly qualified to do business and in good standing in each jurisdiction in
which such qualification is necessary to execute, deliver and perform this Agreement and each of
the other Transaction Documents to which it is a party.

5.2 Power and Authorization; Enforceable Obligations. The Equity Investor has all limited
liability company power and authority to execute, deliver and perform this Agreement and each other
Transaction Document to which it is a party and to take all action as may be necessary to complete
the transactions contemplated hereunder and thereunder. The Equity Investor has taken all
necessary limited liability company action to authorize the execution, delivery and performance of
this Agreement and each other Transaction Document to which it is a party and to complete the
transactions contemplated hereby. No consent or authorization of, filing with, or other act by or
in respect of any other person or Governmental Authority is required in connection with the
execution, delivery or performance by the Equity Investor, or the validity or enforceability as to
the Equity Investor, of this Agreement and each other Transaction Document to which it is a party,
except such consents or authorizations or filings or other acts as have already been obtained or
made or where the failure to obtain such consent or authorization would not reasonably be expected
to have a Material Adverse Effect. This Agreement and each other Transaction Document to which the
Equity Investor is a party have been duly executed and delivered by the Equity Investor and
constitute, and each other Transaction Document to which it is a party will upon execution and
delivery thereof by the Equity Investor and the other parties thereto (if any) constitute, a legal,
valid and binding obligation of the Equity Investor enforceable against it in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity.

 

17

 

5.3 No Legal Bar. The execution, delivery and performance by the Equity Investor of this
Agreement and each other Transaction Document to which it is a party and the consummation of the
transactions contemplated hereby (including the making by the Equity Investor of any payments
hereunder) or under any other Transaction Document to which it is a party will not violate any
applicable Legal Requirement or any material contractual obligation of the Equity Investor and will
not result in, or require, the creation or imposition of any Lien on any of the properties or
revenues of the Equity Investor pursuant to any applicable Legal Requirement or any such
contractual obligation except, in each case, where such violation, creation or imposition would not
reasonably be expected to have a Material Adverse Effect.

5.4 Ownership Interests. As of the Closing Date, the Equity Investor indirectly owns 50%
of the ownership interests in the Borrower.

5.5 EPC Contract and Credit Documents. The Equity Investor has reviewed and is familiar
with the terms of the EPC Contract and the other Transaction Documents that are material to its
obligations hereunder.

5.6 Solvency Matters

5.6.1. Financial Information. The Equity Investor has established adequate means of
obtaining financial and other information pertaining to the businesses, operations and condition
(financial and otherwise) of the Borrower and its properties on a continuing basis (including any
amendments to any relevant Transaction Document that are material to its obligations hereunder),
and the Equity Investor now is and hereafter will be completely familiar with the businesses,
operations and condition (financial and otherwise) of the Borrower and its properties.

5.6.2. Insolvency.

(a) After giving effect to the transactions contemplated by this Agreement and the contingent
obligations evidenced hereby, the Equity Investor is not insolvent as such term is used or defined
in any applicable Bankruptcy Law, and the Equity Investor has and will have assets which, fairly
valued, exceed its indebtedness, liabilities or obligations.

(b) The Equity Investor is not executing this Agreement with any intention to hinder, delay or
defraud any creditor or creditors of any of them.

5.7 Compliance with Laws. The Equity Investor is in compliance with applicable Legal
Requirements, except to the extent any non-compliance would not reasonably be expected to have a
Material Adverse Effect.

5.8 No Litigation or Proceeding. No litigation or proceeding of or before any arbitrator
or Governmental Authority is pending or, to the Equity Investor’s knowledge, threatened against or
affecting the Equity Investor or against or affecting any of its properties or assets or the
transactions contemplated by this Agreement and the other Transaction Documents to which it is
a party, which would reasonably be expected to have a Material Adverse Effect.

 

18

 

5.9 Investment Company Act. The Equity Investor is not an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

ARTICLE 6.

COVENANTS

The Equity Investor hereby covenants and agrees for the benefit of the Borrower, the
Collateral Agent and the Secured Parties that from and after the date hereof until the Discharge
Date:

6.1 Existence. The Equity Investor shall maintain and preserve its existence in good
standing in the state of its formation and its qualification to do business in each other
jurisdiction where such qualification is necessary to perform its obligations hereunder and each
other Transaction Document to which it is a party and all material rights, privileges and
franchises necessary in the normal course of conduct of its business.

6.2 Compliance with Laws. The Equity Investor shall comply with all Legal Requirements
applicable to it, except where such non-compliance would not reasonably be expected to have a
Material Adverse Effect.

6.3 Credit Support. Notwithstanding anything to the contrary herein or in any other Loan
Document the Equity Investor shall cause its Equity Commitment to be supported at all times by
Acceptable Credit Support.

ARTICLE 7.

MISCELLANEOUS

7.1 Successions or Assignments.

(a) This Agreement shall inure to the benefit of the Collateral Agent, the Secured Parties and
their respective successors and permitted assigns.

(b) This Agreement is binding upon the Equity Investor and the Borrower and their respective
successors and permitted assigns. Neither the Equity Investor nor the Borrower may assign any of
their respective rights and obligations hereunder without the prior written consent of the Required
Lenders (and any purported assignment in violation of this Section shall be void), except as
provided in Section 2.1(g).

(c) This Agreement shall inure to the benefit of the Equity Investor and its successors and
permitted assigns.

 

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7.2 Waivers.

(a) No delay or omission on the part of the Collateral Agent or any Secured Party in
exercising any of their rights (including those hereunder) and no partial or single exercise
thereof and no action or non-action by the Collateral Agent or any Secured Party, with or without
notice to the Equity Investor or anyone else, shall constitute a waiver of any rights or shall
affect or impair this Agreement.

(b) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE COLLATERAL AGENT, THE BORROWER, AND
THE EQUITY INVESTOR HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT, THE CREDIT AGREEMENT, OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE COLLATERAL
AGENT, THE OTHER SECURED PARTIES, THE BORROWER, OR THE EQUITY INVESTOR. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES
HERETO AND THE SECURED PARTIES TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE.

7.3 Interpretation. The section headings in this Agreement are for the convenience of
reference only and shall not affect the meaning or construction of any provision hereof.

7.4 Remedies Cumulative. Each and every right and remedy of the Collateral Agent and the
Secured Parties hereunder shall be cumulative and shall be in addition to any other right or remedy
given hereunder or under the Credit Agreement or any other Loan Document, or now or hereafter
existing at law or in equity.

7.5 Severability. Any provision of this Agreement that may be determined by competent
authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.

7.6 Amendments. This Agreement may be amended, waived or otherwise modified only with the
written consent of the parties hereto and otherwise in accordance with the Credit Agreement.

 

20

 

7.7 Jurisdiction. The Collateral Agent, the Borrower and the Equity Investor agree that
any legal action or proceeding by or against the Borrower or the Equity Investor or with respect to
or arising out of this Agreement, the Credit Agreement, or any other Loan Document may be brought
in or removed to the courts of the State of New York, in and for the County of New York, or of the
United States of America for the Southern District of New York, as the Collateral Agent may elect. By execution and delivery of this Agreement, the Collateral Agent, the
Borrower, and the Equity Investor accept, for themselves and in respect of their property,
generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts. The
Collateral Agent, the Borrower and the Equity Investor irrevocably consent to the service of
process out of any of the aforementioned courts in any manner permitted by Legal Requirements. Any
such process or summons in connection with any such action or proceeding may also be served by
mailing a copy thereof by certified or registered mail, or any substantially similar form of mail,
addressed to the Borrower, the Equity Investor or the Collateral Agent as provided for notices
hereunder. Nothing herein shall affect the right of the Collateral Agent to bring legal action or
proceedings in any other competent jurisdiction. The Collateral Agent, the Borrower and the Equity
Investor further agree that the aforesaid courts of the State of New York and of the United States
of America shall have exclusive jurisdiction with respect to any claim or counterclaim of the
Borrower or the Equity Investor based upon the assertion that the rate of interest charged on or
under this Agreement, the Credit Agreement and/or the other Loan Documents is usurious. To the
fullest extent permitted by applicable law, the Collateral Agent, the Borrower, and the Equity
Investor hereby waive any right to stay or dismiss any action or proceeding under or in connection
with any or all of the Project, this Agreement, the Credit Agreement or any other Loan Document
brought before the foregoing courts on the basis of improper venue or forum non-conveniens. The
Equity Investor hereby irrevocably appoints CT Corporation System, 111 8th Avenue,
13th Floor, New York, New York 10011 as its agent for service of process in relation to
any proceedings before any courts located in the State of New York in connection with this
Agreement, the Credit Agreement and the other Loan Documents to which it is a party.

7.8 Governing Law. This Agreement and the rights and obligations of the parties hereunder
shall be governed by, and construed in accordance with, the law of the State of New York without
reference to principles of conflicts of law (other than Section 5-1401 of the New York General
Obligations Law).

7.9 Integration of Terms. This Agreement, together with other agreements attached hereto
or referred to herein, contains the entire agreement among the parties hereto relating to the
subject matter hereof and supersedes all oral statements and prior writings with respect hereto.

7.10 Notices. All notices required or permitted under the terms and provisions hereof
shall be in writing and any such notice shall be effective if given in accordance with the
provisions of Section 9.01 of the Credit Agreement. Notices to the Equity Investor shall be sent
to the following address:

Dynegy Sandy Creek Holdings, LLC

1000 Louisiana St., Suite 5800

Houston, Texas 77002-5050

Attn: Charles C. Cook, Senior Vice President and Treasurer

Facsimile No.: 713-356-2200

Tel. No.: 713-767-8648

      and a copy to:

J. Kevin Blodgett

Executive Vice President and General Counsel

Facsimile No.: 713-356-2185

Tel. No.: 713-507-6847

 

21

 

7.11 Counterparts. This Agreement may be executed in counterparts, and when executed and
delivered by all of the parties listed below shall constitute a single binding agreement. Delivery
of a facsimile counterpart signature shall be effective as delivery of a manually executed
counterpart signature.

7.12 Further Assurances. The parties hereto hereby agree to execute and deliver all such
instruments and take all such action as may be necessary to effectuate fully the purposes of this
Agreement.

7.13 Termination of Agreement. Notwithstanding anything contained herein to the contrary
(but subject to Section 3.1), this Agreement and the obligations of the Borrower and the Equity
Investor hereunder shall terminate on the earlier to occur of: (a) the Discharge Date; (b) the
payment and satisfaction by the Equity Investor of all of its obligations under Articles 2 and 4;
and (c) the date that is 180 days after the Term Conversion Date.

7.14 No Third Party Beneficiaries. Subject to Section 7.1, there shall be no third party
beneficiaries to this Agreement or any provision hereof.

7.15 Consequential Damages. Anything in this Agreement to the contrary notwithstanding, in
no event shall any party be liable under or in connection with this Agreement for indirect,
special, incidental, punitive or consequential losses or damages of any kind whatsoever, including
but not limited to lost profits, whether or not foreseeable, even if such party has been advised of
the possibility thereof and regardless of the form and action in what such damages are sought.

7.16 Scope of Liability. Section 9.21 of the Credit Agreement is hereby incorporated by
reference, mutatis mutandis, as if fully set forth herein.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

22

 

IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized, intending to
be legally bound, have caused this Equity Commitment Agreement to be duly executed as of the date
first above written.

	 	 	 	 	 
	 	 	SANDY CREEK ENERGY ASSOCIATES, L.P.

as Borrower
	 
	 	 	 	 
	 
	 	By:	 	/s/ Joe Esteves
	 
	 	 	 	 
	 
	 	 	 	Name: Joe Esteves
	 
	 	 	 	Title: Authorized Signatory
	 
	 	 	 	 
	 	 	DYNEGY SANDY CREEK HOLDINGS, LLC

as Equity Investor
	 
	 	 	 	 
	 
	 	By:	 	/s/ Charles C. Cook
	 
	 	 	 	 
	 
	 	 	 	Name: Charles C. Cook
	 
	 	 	 	Title: Senior Vice President and
Treasurer
	 
	 	 	 	 
	 	 	CREDIT SUISSE, Cayman Islands Branch

as Collateral Agent
	 
	 	 	 	 
	 
	 	By:	 	/s/ Thomas Cantello
	 
	 	 	 	 
	 
	 	 	 	Name: Thomas Cantello
	 
	 	 	 	Title: Director
	 
	 	 	 	 
	 
	 	By:	 	/s/ Nupur Kumar
	 
	 	 	 	 
	 
	 	 	 	Name: Nupur Kumar
	 
	 	 	 	Title: AssociateFiled by Bowne Pure Compliance

 

Exhibit 10.2

EXECUTION COPY

 

 

EQUITY COMMITMENT AGREEMENT

among

SANDY CREEK ENERGY ASSOCIATES, L.P.,

a Delaware limited partnership,

as Borrower

and

SANDY CREEK HOLDINGS, LLC,

a Delaware limited liability company,

as Equity Investor

and

CREDIT SUISSE,

as Collateral Agent

Dated as of August 29, 2007

 

 

 

 

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1. DEFINITIONS
	 	 	3	 
	1.1 Defined Terms 
	 	 	3	 
	1.2 Rules of Interpretation 
	 	 	5	 
	1.3 UCC Definitions 
	 	 	5	 
	ARTICLE 2. OBLIGATIONS OF EQUITY INVESTOR AND THE BORROWER 
	 	 	5	 
	2.1 Equity Contributions
	 	 	5	 
	2.2 Payments 
	 	 	9	 
	2.3 Waiver of Defenses; Obligations Unconditional 
	 	 	9	 
	2.4 Subrogation 
	 	 	12	 
	ARTICLE 3. SPECIFIC PROVISIONS 
	 	 	12	 
	3.1 Reinstatement 
	 	 	12	 
	3.2 Specific Performance 
	 	 	12	 
	3.3 Bankruptcy Code Waiver by Equity Investor 
	 	 	13	 
	3.4 Commencement of Bankruptcy Proceedings 
	 	 	13	 
	3.5 Grant of Security Interest; Actions by Collateral Agent 
	 	 	13	 
	3.6 Set-Off 
	 	 	14	 
	ARTICLE 4. PURCHASE OF PARTICIPATING INTEREST 
	 	 	14	 
	4.1 Required Purchase of Participating Interest 
	 	 	14	 
	4.2 Effect of Purchase of Participating Interest 
	 	 	15	 
	4.3 Subordinate Nature of Participating Interest 
	 	 	15	 
	4.4 Rights of Agents and the Secured Parties 
	 	 	15	 
	4.5 No Voting Rights 
	 	 	16	 
	4.6 Outright Purchase; Obligations Unconditional 
	 	 	16	 
	ARTICLE 5. REPRESENTATIONS AND WARRANTIES 
	 	 	16	 
	5.1 Corporate Existence and Business 
	 	 	16	 
	5.2 Power and Authorization; Enforceable Obligations 
	 	 	16	 
	5.3 No Legal Bar 
	 	 	17	 
	5.4 Ownership Interests 
	 	 	17	 
	5.5 EPC Contract and Credit Documents 
	 	 	17	 
	5.6 Solvency Matters 
	 	 	17	 
	5.7 Compliance with Laws 
	 	 	18	 
	5.8 No Litigation or Proceeding 
	 	 	18	 
	5.9 Investment Company Act 
	 	 	18	 
	ARTICLE 6. COVENANTS 
	 	 	18	 
	6.1 Existence 
	 	 	18	 
	6.2 Compliance with Laws 
	 	 	18	 
	6.3 Credit Support 
	 	 	18	 
	ARTICLE 7. MISCELLANEOUS 
	 	 	18	 
	7.1 Successions or Assignments
	 	 	18	 
	7.2 Waivers
	 	 	19	 
	7.3 Interpretation 
	 	 	19	 
	7.4 Remedies Cumulative 
	 	 	19	 
	7.5 Severability 
	 	 	19	 
	7.6 Amendments 
	 	 	19	 
	7.7 Jurisdiction 
	 	 	20	 
	7.8 Governing Law 
	 	 	20	 
	7.9 Integration of Terms 
	 	 	20	 
	7.10 Notices 
	 	 	20	 
	7.11 Counterparts 
	 	 	20	 
	7.12 Further Assurances 
	 	 	21	 
	7.13 Termination of Agreement 
	 	 	21	 
	7.14 No Third Party Beneficiaries 
	 	 	21	 
	7.15 Consequential Damages 
	 	 	21	 
	7.16 Scope of Liability 
	 	 	22	 

 

i

 

EQUITY COMMITMENT AGREEMENT

This EQUITY COMMITMENT AGREEMENT, dated as of August 29, 2007 (this “Agreement”), by
and among SANDY CREEK ENERGY ASSOCIATES, L.P., a limited partnership organized and existing under
the laws of the State of Delaware (the “Borrower”), SANDY CREEK HOLDINGS, LLC, a limited
liability company organized and existing under the laws of the State of Delaware (the “Equity
Investor”) and CREDIT SUISSE, in its capacity as collateral agent for the Secured Parties under
the Intercreditor Agreement (in such capacity, together with its successors and permitted assigns,
the “Collateral Agent”).

RECITALS 

WHEREAS, the Borrower desires to develop, construct, finance and operate, together with one or
more Co-Participants (with such term and each other capitalized term used but not defined in this
preamble having the meaning assigned thereto in Article I of the Credit Agreement referred to
below), an approximately 900 net megawatt coal-fired power generation facility, to be located in
Riesel, Texas, known as the “Sandy Creek Energy Station” (as more fully defined in the Credit
Agreement referred to below, the “Project”).

WHEREAS, in order to finance the development, construction, operation and maintenance of its
interests in the Project, (a) the Borrower has entered into that certain Credit Agreement, dated as
of the date hereof (as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among the Borrower, the lenders from time to time party
thereto, Credit Suisse, as administrative agent for the Lenders under the Credit Agreement, the
Collateral Agent, and, among others, Credit Suisse Securities (USA) LLC and RBS Securities
Corporation as joint lead arrangers and as joint book managers, and (b) the Sponsors and the Equity
Investor have agreed to contribute (or cause to be contributed) cash in the form of common equity
to the Borrower to fund a portion of the Project Costs, in the case of the Equity Investor,
pursuant to this Agreement, and, in the case of the Sponsors, pursuant to the other Equity
Commitment Agreements.

WHEREAS, as of the Closing Date, the Equity Investor is the indirect owner of 100% of the
outstanding economic and beneficial ownership interests in the Borrower.

WHEREAS, the Equity Investor has agreed to make Equity Contributions (as defined below) in
accordance with this Agreement in order to finance a portion of the cost of developing and
constructing the Project and to satisfy certain other conditions under and in accordance with the
Loan Documents.

WHEREAS, the Equity Investor has agreed to provide credit support for its Equity Commitment
obligations in the form of one or more irrevocable letters of credit, in form and substance
reasonably acceptable to the Collateral Agent, issued by one or more Acceptable Credit Providers
(each such letter of credit, “Acceptable Credit Support”).

WHEREAS, the execution and delivery of this Agreement, and the provision of Acceptable Credit
Support, is a condition precedent to the Lenders’ obligation to make Loans and other extensions of
credit to the Borrower under the Credit Agreement.

 

2

 

AGREEMENT

NOW, THEREFORE, in consideration of the promises contained herein, and in order to induce the
Lenders to enter into the Credit Agreement and the other Loan Documents and to make the advances of
credit contemplated thereby, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1.

DEFINITIONS

1.1 Defined Terms. Each capitalized term used and not otherwise defined herein
(including the preamble and recitals) shall have the meaning assigned to such term (whether
directly or by reference to another agreement or document) in the Credit Agreement. In addition to
the terms defined in the Credit Agreement, the following terms shall have the following respective
meanings:

“Acceptable Credit Support” has the meaning given in the recitals.

“Act of Required Secured Parties” has the meaning given in the Intercreditor
Agreement.

“Agreement” has the meaning given in the preamble.

“Borrower” has the meaning given in the preamble.

“Borrower Interests” has the meaning give in the Pledge Agreement.

“Collateral Agent” has the meaning given in the preamble.

“Contribution Amount” has the meaning given in Section 2.1(e).

“Contribution Date” has the meaning given in Section 2.1(e).

“Contribution Request” has the meaning given in Section 2.1(e).

“Credit Agreement” has the meaning given in the recitals.

“Date Certain Funding Contribution” has the meaning given in Section
2.1(a)(iii).

“Debt Equity Ratio” has the meaning given in the Depositary Agreement.

“Default Funding Contribution” has the meaning given in Section 2.1(a)(ii).

“Defaulted Payment” has the meaning given in Section 4.1.

“Discharge Date” has the meaning given in the Intercreditor Agreement.

 

3

 

“Discharge of Secured Obligations” has the meaning given in the Intercreditor
Agreement.

“Drawing Amount” has the meaning given in Section 2.1(d).

“Drawstop Equity Contributions” has the meaning given in the Depositary
Agreement.

“Equity Commitment” means, at any time, the Equity Contribution to be made by
the Equity Investor at such time (and in such amounts) as specified in Section 2.1(a), as
may be reduced from time to time in accordance with (i) Section 2.1(c) in connection with a
Permitted Project Interest Transfer and (ii) Section 2.1(g) in connection with a transfer by
the Equity Investor of all or a portion of its ownership interest in the Equity Interests of
the Borrower. The initial Equity Commitment of the Equity Investor, which may be reduced as
specified in the preceding sentence, as of the Closing Date is $200,000,000 (the
“Initial Equity Commitment”). Notwithstanding any contrary provision contained in
any Transaction Document, the aggregate Equity Commitment shall not exceed the Initial
Equity Commitment.

“Equity Contribution” means any Equity Funds provided by the Equity Investor in
accordance with the terms of this Agreement.

“Equity Contribution Date” means each Contribution Date and each other date on
which any Equity Contribution is required to be made hereunder.

“Equity Funds” means any cash capital contribution in exchange for or in
respect of common equity interests provided by the Equity Investor to the Borrower either
directly or indirectly through one or more companies in which the Equity Investor has
ownership interest, in each case pursuant to the terms of this Agreement.

“Equity Investor” has the meaning given in the preamble.

“Equity Letter of Credit” means each letter of credit provided in accordance
with this Agreement that constitutes Acceptable Credit Support.

“Funding Contribution” means each Project Cost Funding Contribution, each
Default Funding Contribution, each Date Certain Funding Contribution and each Term
Conversion Date Funding Contribution.

“Holdco Percentage” means 100%, as may be adjusted in accordance with Section
2.1(g).

“Limited Partnership Agreement” means the Amended and Restated Agreement of
Limited Partnership of Sandy Creek Energy Associates, L.P., dated as of August 29, 2007.

 

4

 

“Pro Rata Basis” means, with respect to any Equity Letter of Credit drawn to
fund a Funding Contribution, a percentage equal to the undrawn amount of such Equity Letter
of Credit divided by the total undrawn amount of the Equity Letters of Credit being drawn to
fund such Funding Contribution.

“Project Cost Funding Contribution” has the meaning given in Section 2.1(a)(i).

“Retained Interest” has the meaning given in Section 4.3.

“Secured Obligations” has the meaning given such term in the Intercreditor
Agreement.

“Secured Parties” has the meaning given such term in the Intercreditor
Agreement.

“Term Conversion Date Funding Contribution” has the meaning given in Section
2.1(a)(iv).

“Transferee” has the meaning given in Section 2.1(g).

“Trigger Event” shall have the meaning given such term in the Intercreditor
Agreement.

“UCC” shall mean the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the perfection or priority of
the security interest in any Pledged Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean
the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or priority and for purposes of definitions
related to such provisions.

1.2 Rules of Interpretation. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, the rules of interpretation set forth
in Section 1.02 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis, as
if fully set forth herein.

1.3 UCC Definitions. All terms defined in the UCC shall have the respective meanings
given to those terms in the UCC, except where the context otherwise requires.

ARTICLE 2.

OBLIGATIONS OF EQUITY INVESTOR AND THE BORROWER

2.1 Equity Contributions.

 

5

 

(a) Contributions by Equity Investor. Notwithstanding any provision to the contrary
contained herein (but subject to the last sentence of the definition of Equity Commitment), the
Equity Investor hereby agrees, for the benefit of the Borrower and the Collateral Agent (on behalf
of the Secured Parties), as follows:

(i) from and after the date on which (A) the proceeds of the Term Loans and the
Construction Loans and the proceeds of any Permitted Tax-Exempt Bonds (to the extent such
Permitted Tax Exempt Bonds are funded in accordance with the terms of the Credit Agreement)
have been fully utilized (and prior to the Term Conversion Date) or (B) a Default (but not
an Event of Default) arises prior to the Term Conversion Date under Section 7.01(l)(iii) of
the Credit Agreement, the Equity Investor hereby agrees to make, or cause to be made through
its direct or indirect subsidiaries, an Equity Contribution to the Borrower in an amount
equal to the Equity Investor’s Holdco Percentage of all Project Costs as they are incurred
(each, a “Project Cost Funding Contribution”) until the Equity Commitment is fully
funded (or, in the case of clause (B) above, the earlier date when the applicable Default
has been cured in accordance with the terms of the Credit Agreement), each such Project Cost
Funding Contribution to be made not less than two (2) Business Days prior to the date on
which such Project Costs are reasonably expected to become due and payable unless, prior to
such second Business Day, such Project Costs are paid with Drawstop Equity Contributions
(provided that, in the case of clause (B) above, the Equity Investor shall have
received at least ten (10) Business Days prior written notice of the applicable Default from
the Borrower or the Collateral Agent);

(ii) upon the occurrence of an Event of Default under the Credit Agreement at any time
prior to the Term Conversion Date, the Equity Investor hereby agrees to make, or cause to be
made through its direct or indirect subsidiaries, an Equity Contribution to the Borrower in
an amount equal to the then-unfunded Equity Commitment (each, a “Default Funding
Contribution”), such Default Funding Contribution to be made not less than five (5)
Business Days from receipt by the applicable Equity Investor of notice from the Collateral
Agent that an Event of Default has occurred and is continuing;

(iii) if the Term Conversion Date has not occurred by the Date Certain, the Equity
Investor hereby agrees to make, or cause to be made through its direct or indirect
subsidiaries, an Equity Contribution to the Borrower in an amount equal to the then-unfunded
Equity Commitment (a “Date Certain Funding Contribution”), such Date Certain Funding
Contribution to be made on the Date Certain; and

(iv) if and to the extent that on the Term Conversion Date any portion of the Equity
Commitment remains unfunded, the Equity Investor hereby agrees to make, or cause to be made
through its direct or indirect subsidiaries, an Equity Contribution to the Borrower in an
amount equal to its then unfunded Equity Commitment (the “Term Conversion Date Funding
Contribution”), such Term Conversion Date Funding Contribution to be made on the Term
Conversion Date.

 

6

 

(b) Treatment of Proceeds. (i) (i) Not later than two (2) Business Days prior
to each Equity Contribution Date, the Equity Investor shall notify the Collateral Agent
whether it intends to fund all or any portion of its applicable Funding Contribution (such
notice, a “Funding Notice”). If the Equity Investor elects to fund all or any
portion of its Funding Contribution, it shall deposit such Funding Contribution in Dollars
and immediately available funds directly into the relevant Project Account as set forth
below in clause (ii) for application in accordance with such clause. If the Equity Investor
funds a portion (but not all) of any Funding Contribution in Dollars, the Equity Investor
shall notify the Collateral Agent which Equity Letters of Credit should be drawn to fund the
balance of such Funding Contribution. If the Equity Investor does not pay any of its
Funding Contribution in accordance with this Section 2.1(b)(i), the Collateral Agent shall
draw upon the Equity Letters of Credit specified by the Equity Investor (provided,
however, that if the Equity Investor has failed to notify the Collateral Agent as to
which Equity Letters of Credit should be drawn on or prior to the applicable Equity
Contribution Date, the Collateral Agent shall draw upon all Equity Letters of Credit on a
Pro Rata Basis) in the amount of such Funding Contribution, and, on the applicable Equity
Contribution Date, the Collateral Agent shall deposit the proceeds of such draw (or draws)
into the relevant Project Account as set forth below in clause (ii) for application in
accordance with such clause.

(ii) The proceeds of each Project Cost Funding Contribution, Default Funding
Contribution and Date Certain Funding Contribution shall be deposited directly into the
Construction Account and applied solely to the payment of Project Costs in accordance with
Section 3.1 of the Depositary Agreement. The proceeds of each Term Conversion Date Funding
Contribution shall be deposited directly into the Prepayment Account and applied to the
prepayment of the Loans in accordance with Section 3.11(c) of the Depositary Agreement.
Notwithstanding that the Equity Contributions of the Equity Investor shall be deposited
directly into the Construction Account or the Prepayment Account, as applicable, the Equity
Investor and the Borrower hereby agree that any and all Equity Contributions made by the
Equity Investor in accordance with the terms hereof shall be deemed to be Equity
Contributions by the Equity Investor (or its direct or indirect subsidiary) in the Borrower
(which Equity Contributions shall be evidenced solely by one or more certificates that have
been previously delivered to the Collateral Agent, together with applicable transfer powers
executed in blank, in accordance with the terms of the applicable Security Documents). The
Equity Investor irrevocably consents to the application of Equity Contributions to the
payment of Project Costs and to the prepayment of the Loans as specified above or in a
manner otherwise permitted by the Loan Documents.

(iii) Any draw upon the Acceptable Credit Support which is paid by the issuing bank
thereof to the Collateral Agent to fund a Funding Contribution shall satisfy the funding
obligations of the Equity Investor in respect of such Funding Contribution.

 

7

 

(c) Permitted Project Interest Transfers. In connection with any Permitted Project
Interest Transfer that is conducted in accordance with the terms of the applicable Loan Documents,
including, without limitation, the obligation to prepay the Loans under and in accordance with
Section 3.10(b) of the Depositary Agreement, from and after the date on which such prepayment has
been made, the Equity Commitment shall be reduced by an amount equal to the Equity Investor’s
original Equity Commitment (as in effect on the date hereof) multiplied by the Permitted Project
Transfer Interest Percentage applicable to such Permitted Project Interest Transfer.

(d) Pro Rata Treatment of Acceptable Credit Support. Subject to Section 2.1(b)(i), in
the event that the Equity Investor has provided more than one Equity Letter of Credit and the
Collateral Agent is permitted to draw upon such Acceptable Credit Support in any amount as
permitted hereunder (the “Drawing Amount”), the Collateral Agent shall draw upon such
Equity Letters of Credit as directed by the Equity Investor (provided, however,
that if Equity Investor has failed to direct the Collateral Agent as to the drawing of Equity
Letters of Credit as and when specified in this Agreement, the Collateral Agent shall draw upon all
Equity Letters of Credit on a Pro Rata Basis). If and to the extent that any Drawing Amount has
been funded in Dollars, the Collateral Agent shall not draw upon an Equity Letter of Credit unless
and to the extent that the obligations of the Equity Investor in respect of such cash contributions
have been reinstated in accordance with Section 3.1.

(e) Contribution Requests. The Borrower shall deliver to the Equity Investor a written
request (a “Contribution Request”), with a copy to the Collateral Agent, at any time that a
Project Cost Funding Contribution is reasonably anticipated to be required in accordance with
Section 2.1(a)(i). Each Contribution Request shall specify the Project Costs then incurred, the
amount of such Contribution Request, the Equity Investor’s Holdco Percentage of such amount (the
“Contribution Amount”) and the requested date of contribution (which shall be at least ten
(10) calendar days following the date of such Contribution Request) (the “Contribution
Date”). No later than the applicable Contribution Date, the Equity Investor shall pay or cause
to be paid to the Collateral Agent its Contribution Amount pursuant to Section 2.1(b).

(f) Failure to Provide Acceptable Credit Support. (i) If at any time the Equity
Investor shall have failed to cause its Equity Commitment to be supported by Acceptable Credit
Support in accordance with Section 6.3 (or if any Equity Letter of Credit previously delivered to
the Collateral Agent by the Equity Investor ceases to be Acceptable Credit Support) and, in either
case, such condition has continued for a period of fifteen (15) days, the Collateral Agent shall
make a drawing under such Acceptable Credit Support in an amount equal to the full available amount
of such Acceptable Credit Support at such time on the Business Day immediately following the
conclusion of the fifteen (15) day period referred to above in accordance with the terms of such
Acceptable Credit Support, and the Collateral Agent shall promptly deposit or cause to be deposited
the proceeds thereof in the Construction Account for application in accordance with this Agreement.

 

8

 

(ii) In the event that the Equity Investor elects to fund any Funding Contributions in Dollars
and immediately available funds instead of by a drawing on the Acceptable Credit Support in
accordance with Section 2.1(b)(i), or the Equity Commitment is reduced in accordance with Section
2.1(c) or Section 2.1(g), the Equity Investor shall be entitled to deliver to the Collateral Agent,
and the Collateral Agent thereafter (if it has determined that such reduction is permitted
hereunder and such Funding Contribution has not been reinstated in accordance with Section 3.1 at
any time within ninety-one (91) days after such Equity Contribution has been made; provided
that the Collateral Agent shall not be entitled to draw under such Equity Letter of Credit unless
and to the extent that such amounts have been reinstated in accordance with Section 3.1) shall
countersign and, promptly after the applicable Equity Contribution Date or the date of reduction in
the Equity Commitment, deliver to the issuer of such Acceptable Credit Support, an Equity Letter of
Credit reduction certificate in the form attached to such Acceptable Credit Support (or otherwise
satisfactory to the issuer of such Acceptable Credit Support) and the face amount of such
Acceptable Credit Support may be reduced from time to time as provided in such certificate.

(iii) If the issuer of any Equity Letter of Credit has notified the Collateral Agent in
accordance with the terms hereof (and the Collateral Agent has so notified the Equity Investor
within 10 days thereafter), that such Equity Letter of Credit will not be extended beyond the
scheduled expiration date therefor (such date, the “Scheduled Expiration Date”), the Equity
Investor shall cause such Equity Letter of Credit to be renewed or replaced at least thirty (30)
days prior to the Scheduled Expiration Date with Acceptable Credit Support.

(g) Permitted Sell-Down. In connection with a transfer by the Equity Investor of all
or a portion of its ownership interest in the Equity Interests of the Borrower that is permitted
under the terms of the applicable Loan Documents, any portion of the unfunded Equity Commitment may
be transferred to and assumed by the applicable transferee (a “Transferee”) on a pro rata
basis (based on the Equity Interests so transferred) and the Equity Commitment shall be reduced on
a dollar-for-dollar basis (based on the amount so transferred to and assumed by such Transferee);
provided that (i) no Default or Event of Default shall have occurred as a result of such
transfer and be continuing and no Change of Control shall have occurred; (ii) such Transferee shall
have executed an equity commitment agreement on substantially the same terms and conditions as this
Agreement with respect to the portion of the Equity Commitment so assumed and (iii) such
Transferee’s obligations under such equity commitment agreement shall be supported at all times by
Acceptable Credit Support. In connection with any such transfer and assumption (and related
execution of a new equity commitment agreement), the Holdco Percentage of the Equity Investor shall
be reduced by a corresponding amount of Equity Interests so transferred and the applicable
Transferee’s Holdco Percentage will be deemed to be the amount by which the Equity Investor’s
Holdco Percentage has been reduced.

(h) Notwithstanding anything contained herein to the contrary (but subject to Section 3.1), in
no event shall the Equity Contributions made by the Equity Investor pursuant to this Agreement,
when taken together with all purchases of undivided participating interests under Section 4.1,
exceed the Equity Commitment of the Equity Investor.

2.2 Payments.

2.2.1. Taxes. Except as otherwise required by applicable Legal Requirements, each
payment required to be made by the Equity Investor to the Borrower hereunder shall be made without
deduction or withholding for or on account of any Taxes. If such deduction or withholding is so
required, the Equity Investor shall (a) pay the amount required to be deducted or withheld to the
appropriate authorities before penalties attach thereto or interest accrues thereon and (b)
forthwith pay to the Borrower (for deposit in the applicable Project Account in accordance with
Section 2.1) such additional amount as may be necessary to ensure that the net amount actually
received by the Borrower is equal to the amount that the Borrower would have received had there
been no such deduction or withholding.

 

9

 

2.2.2. Late Payment. In the event that any Equity Contribution is not made on the
related Equity Contribution Date, the amount of such delinquent Equity Contribution shall bear
interest at a per annum rate equal to 2% plus the interest rate then applicable to ABR Loans as
provided in Section 2.13(a) of the Credit Agreement until such time as such Equity Contribution is
deposited in the applicable Project Account in accordance with Section 2.1.

2.3 Waiver of Defenses; Obligations Unconditional.

2.3.1. Waiver of Defenses. To the extent permitted by applicable law, the Equity
Investor hereby unconditionally and irrevocably waives and relinquishes all rights and remedies
accorded by applicable Legal Requirements to sureties or guarantors and agrees not to assert or
take advantage of any such rights or remedies, including (a) any right to require the Collateral
Agent or any Secured Party to proceed against the Borrower or any other person or to proceed
against or exhaust any security held by the Collateral Agent or any other Secured Party at any time
or to pursue any other remedy in the Collateral Agent’s or any Secured Party’s power before
proceeding against the Equity Investor, (b) any defense that may arise by reason of the incapacity,
lack of power or authority, death, dissolution, merger, termination or disability of the Borrower
or any other person or the failure of the Collateral Agent or any other Secured Party to file or
enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of the
Borrower or any other person, (c) demand, presentment, protest and notice of any kind (other than
any notice required pursuant to the express provisions of this Agreement), including notice of the
existence, creation or incurring of any new or additional indebtedness or obligation or of any
action or non-action on the part of the Borrower, the Collateral Agent, the Secured Parties, any
endorser or creditor of the foregoing or on the part of any other person under this or any other
instrument in connection with any obligation or evidence of indebtedness held by the Collateral
Agent or any Secured Party as collateral or in connection with any of the Secured Obligations, (d)
any defense based upon an election of remedies by the Collateral Agent or the Secured Parties,
including an election to proceed by non-judicial rather than judicial foreclosure, which destroys
or otherwise impairs the subrogation rights of the Equity Investor, the right of the Equity
Investor to proceed against the Borrower or another person for reimbursement, or both, (e) any
defense based on any offset against any amounts which may be owed by any person to the Equity
Investor or the Borrower for any reason whatsoever, (f) any defense based on any act, failure to
act, delay or omission whatsoever on the part of the Borrower or the failure by the Borrower to do any act or thing or to observe or perform any covenant, condition or agreement
to be observed or performed by it under the EPC Contract, the Credit Agreement or any other
Transaction Document, (g) any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other respects more burdensome than
that of the principal (provided that in no event shall the obligations of the Equity
Investor hereunder exceed its Equity Commitment), (h) any defense, setoff or counterclaim which may
at any time be available to or asserted by the Borrower against the Collateral Agent, the Secured
Parties or any other person under the EPC Contract, the Credit Agreement or the other Transaction
Document, (i) any duty on the part of the Collateral Agent or any Secured Party to disclose to the
Equity Investor any facts the Collateral Agent or any Secured Party may now or hereafter know about
the Borrower, regardless of whether the Collateral Agent or any Secured Party has reason to believe
that any such facts materially increase the risk beyond that which the Equity Investor intends to
assume, or have reason to believe that such facts are unknown to the Equity Investor, or have a
reasonable opportunity to communicate such facts to the Equity Investor, since the Equity Investor
acknowledges that it is fully responsible for being and keeping informed of the financial condition
of the Borrower, (j) any defense based on any change in the time, manner or place of any payment
under, or in any other term of, the EPC Contract, the Credit Agreement or any other Transaction
Document or any other amendment, renewal, extension, acceleration, compromise or waiver of or any
consent or departure from the terms of the EPC Contract, the Credit Agreement or any other
Transaction Document, (k) any defense arising because of the Collateral Agent’s or any Secured
Party’s election, in any proceeding instituted under the Federal Bankruptcy Code, of the
application of Section 1111(b)(2) of the Federal Bankruptcy Code, (l) any defense based upon any
borrowing or grant of a security interest under Section 364 of the Federal Bankruptcy Code and (m)
any other circumstance (including any statute of limitations) or any existence of or reliance on
any representation by the Collateral Agent or any Secured Party that might otherwise constitute a
defense available to, or discharge of, any guarantor or surety (in each of the foregoing cases
other than, subject to Section 3.1, defense of payment of the applicable amounts).

 

10

 

2.3.2. Obligations Unconditional. All rights of the Collateral Agent and the Secured
Parties and all obligations of the Equity Investor and the Borrower hereunder shall be absolute and
unconditional irrespective of:

(a) any lack of validity, legality or enforceability of the Credit Agreement, this Agreement
or any other Loan Document;

(b) the failure of any Secured Party (i) to assert any claim or demand or to enforce any right
or remedy against the Borrower, the Equity Investor or any other Person (including any guarantor)
under the provisions of the EPC Contract, the Credit Agreement, any other Loan Document or
otherwise, or (ii) to exercise any right or remedy against any other guarantor of, or collateral
securing, any of the Secured Obligations;

(c) any change in the time, manner or place of payment of, or in any other term of, all of the
Secured Obligations, or any other extension or renewal of any Secured Obligation of the Borrower,
the Equity Investor or otherwise;

(d) any reduction, limitation, impairment or termination of any of the Secured Obligations for
any reason other than the written agreement of the Secured Parties to terminate the Secured
Obligations in full, including any claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to, and the Equity Investor hereby waives any right to or claim of, any
defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or
occurrence affecting, any Secured Obligation of the Borrower, the Equity Investor or otherwise;

 

11

 

(e) any amendment to, rescission, waiver, or other modification of, or any consent to
departure from, any of the terms of the EPC Contract, the Credit Agreement, this Agreement or any
other Transaction Document;

(f) any addition, exchange, release, surrender or non-perfection of any collateral, or any
amendment to or waiver or release or addition of, or consent to departure from, any other security
interest held by the Collateral Agent or any Secured Party; or

(g) any other circumstance which might otherwise constitute a defense available to, or a legal
or equitable discharge of the Borrower, the Equity Investor, any surety or any guarantor (in each
of the foregoing cases other than the defense, subject to Section 3.1, of payment of the applicable
amounts).

2.4 Subrogation. So long as any of the Secured Obligations remain outstanding
(subject to Section 3.1 and other than those contingent Secured Obligations that are intended to
survive the termination of, as applicable, the Credit Agreement, the other Loan Documents or the
other applicable documents), (a) the Equity Investor shall not have any right of subrogation and
the Equity Investor waives all rights to enforce any remedy which the Collateral Agent and/or the
other Secured Parties now have or may hereafter have against the Borrower or the Pledgors that
arises hereunder or from the performance by the Equity Investor hereunder, and waives the benefit
of, and all rights to participate in, any security now or hereafter held by the Collateral Agent
(for the benefit of the Secured Parties) from the Borrower or the Pledgors, and (b) the Equity
Investor waives any claim, right or remedy which it may now have or hereafter acquire against the
Borrower or the Pledgors that arises hereunder and/or from the performance by the Equity Investor
hereunder, including any claim, remedy or right of subrogation, reimbursement, exoneration,
contribution, indemnification, or participation in any claim, right or remedy of the Collateral
Agent and/or the other Secured Parties against Borrower or the Pledgors or any security or
collateral which the Collateral Agent and/or the other Secured Parties now have or hereafter
acquire, whether or not such claim, right or remedy arises in equity, under contract, by statute,
under common law or otherwise. Any amount paid to the Equity Investor on account of any such
subrogation rights prior to the indefeasible payment in full in cash of the Secured Obligations,
the termination of all Secured Commodity Hedges, Interest Rate Hedging Agreements and Other
Interest Rate Hedging Agreements and the termination of all Commitments and other obligations of
the Collateral Agent and the other Secured Parties (subject to Section 3.1 and other than those
contingent Secured Obligations that are intended to survive the termination of, as applicable, the
Credit Agreement, the other Loan Documents or the other applicable documents) shall be held in trust for the benefit of the Collateral Agent and
shall immediately thereafter be paid to the Collateral Agent for application in accordance with
this Agreement and the Intercreditor Agreement.

ARTICLE 3.

SPECIFIC PROVISIONS

3.1 Reinstatement. This Agreement and the obligations of the Equity Investor
hereunder shall automatically be reinstated if and to the extent that for any reason any payment
made pursuant to this Agreement is rescinded or otherwise restored to the Equity Investor, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise with respect to
Borrower or any other person or as a result of any settlement or compromise with any person
(including the Equity Investor) in respect of such payment, and the Equity Investor shall pay the
Collateral Agent on demand all of its reasonable costs and expenses (including reasonable fees of
counsel) incurred by the Collateral Agent in connection with such rescission or restoration.

 

12

 

3.2 Specific Performance. The Equity Investor hereby irrevocably waives, to the
extent it may do so under applicable Legal Requirements, any defense based on the adequacy of a
remedy at law that may be asserted as a bar to the remedy of specific performance in any action
brought against the Equity Investor for specific performance of this Agreement by the Borrower, the
Collateral Agent or any successor or assign thereof or for their benefit by a receiver, custodian
or trustee appointed for the Borrower or in respect of all or a substantial part of its assets,
under the bankruptcy or insolvency laws of any jurisdiction to which the Borrower or its assets are
subject.

3.3 Bankruptcy Code Waiver by Equity Investor. The Equity Investor hereby irrevocably
waives, to the extent it may do so under applicable Legal Requirements, any protection to which it
may be entitled under Sections 365(c)(1), 365(c)(2) and 365(e)(2) of the Bankruptcy Law or
equivalent provisions of the laws or regulations of any other jurisdiction with respect to any
proceedings, or any successor provision of law of similar import, in the event of any Bankruptcy
Event with respect to the Borrower. Specifically, in the event that the trustee (or similar
official) in a Bankruptcy Event with respect to the Borrower or the debtor-in-possession takes any
action (including the institution of any action, suit or other proceeding for the purpose of
enforcing the rights of the Borrower under this Agreement), the Equity Investor shall not assert
any defense, claim or counterclaim denying liability hereunder on the basis that this Agreement is
an executory contract or a “financial accommodation” that cannot be assumed, assigned or enforced
or on any other theory directly or indirectly based on Section 365(c)(1), 365(c)(2) or 365(e)(2) of
the Bankruptcy Law, or equivalent provisions of the laws or regulations of any other jurisdiction
with respect to any proceedings or any successor provision of law of similar import. If a
Bankruptcy Event with respect to the Borrower shall occur, the Equity Investor agrees, after the
occurrence of such Bankruptcy Event, to reconfirm in writing, to the extent permitted by applicable
Legal Requirements, its pre-petition waiver of any protection to which it may be entitled under
Sections 365(c)(1), 365(c)(2) and 365(e)(2) of the Bankruptcy Law or equivalent provisions of the
laws or regulations of any other jurisdiction with respect to proceedings and, to give effect to
such waiver, the Equity Investor consents to the assumption and enforcement of each provision of this Agreement by the debtor-in-possession or
the Borrower’s trustee in bankruptcy, as the case may be.

3.4 Commencement of Bankruptcy Proceedings. None of the obligations of the Equity
Investor under this Agreement shall be altered, limited or affected by any proceeding, voluntary or
involuntary, involving the bankruptcy, reorganization, insolvency, receivership, liquidation or
arrangement of the Borrower or the Equity Investor, or by any defense which the Borrower or the
Equity Investor may have by reason of any order, decree or decision of any court or administrative
body resulting from any such proceeding.

 

13

 

3.5 Grant of Security Interest; Actions by Collateral Agent. The Equity Investor
hereby consents to the assignment, pursuant to the applicable Security Documents, by the Borrower
of all of its right, title and interest in, to and under this Agreement to the Collateral Agent
(for the benefit of the Secured Parties). Each of the Equity Investor and the Borrower agrees that
the Collateral Agent and any assignee thereof shall be entitled to enforce this Agreement in its
own name and to exercise any and all rights of the Borrower under this Agreement in accordance with
the terms hereof (either in its own name, or in the name of the Borrower, as the Collateral Agent
may elect), and the Equity Investor and the Borrower each agree to comply and cooperate in all
respects with such exercise. Without limiting the generality of the foregoing, the Collateral
Agent and any assignee thereof shall have the full right and power to enforce directly against the
Equity Investor all obligations of the Equity Investor under this Agreement, and otherwise to
exercise all remedies available to the Borrower hereunder and to make all demands and give all
notices and make all requests (either in its own name or in the name of the Borrower, as the
Collateral Agent may elect) required or permitted to be made or given by the Borrower under this
Agreement, including the right to make demand for payment of Equity Contributions in accordance
with Article 2 and to make a claim under any Acceptable Credit Support, and the Equity Investor
acknowledges and agrees that any such action taken by the Collateral Agent shall be deemed
effective for all purposes of this Agreement to the same extent as if such action had been taken
directly by the Borrower. If the Equity Investor shall receive inconsistent directions under this
Agreement from the Borrower and the Collateral Agent, the directions of the Collateral Agent shall
be deemed the effective directions, and the Equity Investor shall accordingly comply with such
directions of the Collateral Agent to the extent such directions comply with the provisions hereof.

3.6 Set-Off. In addition to any rights now or hereafter granted under applicable
Legal Requirements or otherwise, and not by way of limitation of any such rights, upon the failure
of the Equity Investor to make any Equity Contribution as and when required hereunder and the
failure of any Acceptable Credit Provider to make such Equity Contribution in accordance with the
terms of any Applicable Credit Support, the Collateral Agent is hereby authorized at any time or
from time to time, without presentment, demand, protest or other notice of any kind to the Equity
Investor or to any other person, any such notice being hereby expressly waived, to set-off and to
appropriate and apply any and all deposits (general or special) and any other indebtedness at any
time held or owing by the Collateral Agent or any Secured Party (including by branches and agencies
of the Collateral Agent and each Secured Party wherever located) to or for the credit or the
account of the Equity Investor, against and on account of the obligations of the Equity Investor under this Agreement, irrespective of whether or not the Collateral Agent or
any Secured Party shall have made any demand hereunder.

ARTICLE 4.

PURCHASE OF PARTICIPATING INTEREST

4.1 Required Purchase of Participating Interest. If by reason of a Bankruptcy Event
or any act of a Governmental Authority, (a) any Equity Contribution due hereunder has not been
deposited in the applicable account within five (5) Business Days after the date on which such
amount is payable hereunder, or (b) any Equity Contribution theretofore deposited pursuant to
Article 2 is rescinded or otherwise restored to the Equity Investor and five (5) Business Days have
elapsed after the date that such Equity Contribution was rescinded or otherwise restored (such
Equity Contribution, whether required but not made as provided in clause (a) or made and returned
as provided in clause (b), being herein called the “Defaulted Payment”), the Equity
Investor shall, without any further notice or demand by the Collateral Agent or any Secured Party,
purchase an undivided participating interest in each of the Loans, Letters of Credit and
Commitments which shall then be outstanding, as provided in the following sentence, in an aggregate
principal amount equal to the amount of the Defaulted Payment. The Equity Investor’s purchase of
an undivided participating interest in such Loans, Letters of Credit and Commitments shall be made
pro rata among such Loans, Letters of Credit and Commitments based on the respective outstanding
amounts thereof. The Equity Investor shall effect its purchase of undivided participating
interests in such Loans, Letters of Credit and Commitments pursuant to this Section 4.1 by paying
to the Collateral Agent, for the account of the holders of such Loans, Letters of Credit and
Commitments, in immediately available funds in Dollars, the amount of the Defaulted Payment.

 

14

 

4.2 Effect of Purchase of Participating Interest. The Equity Investor’s purchase of
an undivided participating interest in the Loans, Letters of Credit and Commitments in the full
amount (if any) required pursuant to Section 4.1 following a Defaulted Payment in respect of Equity
Contributions, shall satisfy the Equity Investor’s obligation pursuant to Section 2.1 to make
Equity Contributions to the extent of the amount of such Loans, Letters of Credit and Commitments
so purchased by the Equity Investor.

4.3 Subordinate Nature of Participating Interest. The Equity Investor hereby agrees
that its participating interest in the Loans, Letters of Credit and Commitments purchased by it
pursuant to Section 4.1 shall be subordinate in all respects to the interest in such Loans, Letters
of Credit and Commitments retained by the holders (other than the Equity Investor) thereof (the
“Retained Interest”), so that all payments received or collected on account of such Loans,
Letters of Credit and Commitments and applied to the payment or termination thereof, whether
received or collected through repayment of such Loans, Letters of Credit or Commitments by the
Borrower or through right of set-off with respect thereto or realization upon any collateral
security therefor or otherwise, shall first be applied to the payment of the principal, interest,
fees and other amounts then due (whether at its stated maturity, by acceleration or otherwise) on
the Retained Interest until such principal, interest, fees and other amounts are paid in full,
before any such payments are applied pro rata on account of the Equity Investor’s and any
Sponsors’ participating interest (if any) in such Loans, Letters of Credit and Commitments.

4.4 Rights of Agents and the Secured Parties. Notwithstanding the purchase and
ownership by the Equity Investor of participating interests in the Loans, Letters of Credit and
Commitments, and notwithstanding the rights of participants under the Credit Agreement, the
Collateral Agent and, to the extent permitted, each Secured Party shall have the right, in their
sole discretion in each instance and without any notice to the Equity Investor, (a) to agree to the
modification or waiver of any of the terms of any of the Loan Documents or any other agreement or
instrument relating thereto (but not to reduce any amount payable in respect of the portion of the
Loans, Letters of Credit subject to participations purchased pursuant to Section 4.1), (b) to
consent to any action or failure to act by the Borrower, the Equity Investor or any other person
party to a Loan Document and (c) to exercise or refrain from exercising any rights or remedies
which the Collateral Agent or any Secured Party may have under the Loan Documents or any other
agreement or instrument relating thereto, including the right at any time to declare, or refrain
from declaring, the Secured Obligations due and payable upon the occurrence of any event of default
thereunder, and to rescind and annul any such declaration, and to foreclose and sell or exercise
any other remedy, or refrain from foreclosing and selling or exercising any other remedy, with
respect to any collateral securing the Secured Obligations. Neither the Collateral Agent nor any
Secured Party shall be liable to the Equity Investor for any error in judgment or for any action
taken or omitted to be taken by it while the Equity Investor holds a participating interest in the
Loans, Letters of Credit and/or Commitments, except to the extent found in a final and
non-appealable judgment of a court of competent jurisdiction to have resulted primarily from the
gross negligence or willful misconduct of such person. Neither the Collateral Agent nor any
Secured Party shall have any duty or responsibility to provide the Equity Investor with any credit
or other information concerning the affairs, financial condition or business of the Borrower or any
other party to a Loan Document or which may come into their possession or the possession of any of
their respective Affiliates, or to notify the Equity Investor of any default by the Borrower or any
other person under any of the Loan Documents.

 

15

 

4.5 No Voting Rights. Without limiting the generality of the provisions of Section
4.4, in determining whether the required consent of the Lenders (or any portion thereof) has been
obtained for all purposes under the Loan Documents the participating interests in the Loans,
Letters of Credit and Commitments purchased by the Equity Investor pursuant to Section 4.1 shall
not be deemed to be outstanding.

4.6 Outright Purchase; Obligations Unconditional. The obligations of the Equity
Investor under this Article 4 to purchase participating interests in or purchase and take an
assignment of the Loans, Letters of Credit and Commitments, as the case may be, is absolute and
unconditional and shall not be affected by the occurrence of any default or event of default or any
other circumstance, including any circumstance of the nature described in Section 2.3.

ARTICLE 5.

REPRESENTATIONS AND WARRANTIES

The Equity Investor hereby represents and warrants to and in favor of the Borrower, the
Collateral Agent and the Secured Parties that:

5.1 Corporate Existence and Business. The Equity Investor (a) is a limited liability
company duly organized, validly existing and in good standing under the laws of the State of
Delaware and (b) is duly qualified to do business and in good standing in each jurisdiction in
which such qualification is necessary to execute, deliver and perform this Agreement and each of
the other Transaction Documents to which it is a party.

5.2 Power and Authorization; Enforceable Obligations. The Equity Investor has all
limited liability company power and authority to execute, deliver and perform this Agreement and
each other Transaction Document to which it is a party and to take all action as may be necessary
to complete the transactions contemplated hereunder and thereunder. The Equity Investor has taken
all necessary limited liability company action to authorize the execution, delivery and performance
of this Agreement and each other Transaction Document to which it is a party and to complete the
transactions contemplated hereby. No consent or authorization of, filing with, or other act by or
in respect of any other person or Governmental Authority is required in connection with the
execution, delivery or performance by the Equity Investor, or the validity or enforceability as to
the Equity Investor, of this Agreement and each other Transaction Document to which it is a party,
except such consents or authorizations or filings or other acts as have already been obtained or
made or where the failure to obtain such consent or authorization would not reasonably be expected
to have a Material Adverse Effect. This Agreement and each other Transaction Document to which the
Equity Investor is a party have been duly executed and delivered by the Equity Investor and
constitute, and each other Transaction Document to which it is a party will upon execution and
delivery thereof by the Equity Investor and the other parties thereto (if any) constitute, a legal,
valid and binding obligation of the Equity Investor enforceable against it in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors generally and by
general principles of equity.

 

16

 

5.3 No Legal Bar. The execution, delivery and performance by the Equity Investor of
this Agreement and each other Transaction Document to which it is a party and the consummation of
the transactions contemplated hereby (including the making by the Equity Investor of any payments
hereunder) or under any other Transaction Document to which it is a party will not violate any
applicable Legal Requirement or any material contractual obligation of the Equity Investor and will
not result in, or require, the creation or imposition of any Lien on any of the properties or
revenues of the Equity Investor pursuant to any applicable Legal Requirement or any such
contractual obligation except, in each case, where such violation, creation or imposition would not
reasonably be expected to have a Material Adverse Effect.

5.4 Ownership Interests. As of the Closing Date, the Equity Investor indirectly owns
100% of the ownership interests in the Borrower.

5.5 EPC Contract and Credit Documents. The Equity Investor has reviewed and is
familiar with the terms of the EPC Contract and the other Transaction Documents that are material
to its obligations hereunder.

5.6 Solvency Matters

5.6.1. Financial Information. The Equity Investor has established adequate means of
obtaining financial and other information pertaining to the businesses, operations and condition
(financial and otherwise) of the Borrower and its properties on a continuing basis (including any
amendments to any relevant Transaction Document that are material to its obligations hereunder),
and the Equity Investor now is and hereafter will be completely familiar with the businesses,
operations and condition (financial and otherwise) of the Borrower and its properties.

5.6.2. Insolvency.

 

17

 

(a) After giving effect to the transactions contemplated by this Agreement and the contingent
obligations evidenced hereby, the Equity Investor is not insolvent as such term is used or defined
in any applicable Bankruptcy Law, and the Equity Investor has and will have assets which, fairly
valued, exceed its indebtedness, liabilities or obligations.

(b) The Equity Investor is not executing this Agreement with any intention to hinder, delay or
defraud any creditor or creditors of any of them.

5.7 Compliance with Laws. The Equity Investor is in compliance with applicable Legal
Requirements, except to the extent any non-compliance would not reasonably be expected to have a
Material Adverse Effect.

5.8 No Litigation or Proceeding. No litigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the Equity Investor’s knowledge, threatened
against or affecting the Equity Investor or against or affecting any of its properties or assets or
the transactions contemplated by this Agreement and the other Transaction Documents to which it is
a party, which would reasonably be expected to have a Material Adverse Effect.

5.9 Investment Company Act. The Equity Investor is not an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.

ARTICLE 6.

COVENANTS

The Equity Investor hereby covenants and agrees for the benefit of the Borrower, the
Collateral Agent and the Secured Parties that from and after the date hereof until the Discharge
Date:

6.1 Existence. The Equity Investor shall maintain and preserve its existence in good
standing in the state of its formation and its qualification to do business in each other
jurisdiction where such qualification is necessary to perform its obligations hereunder and each other
Transaction Document to which it is a party and all material rights, privileges and franchises
necessary in the normal course of conduct of its business.

6.2 Compliance with Laws. The Equity Investor shall comply with all Legal
Requirements applicable to it, except where such non-compliance would not reasonably be expected to
have a Material Adverse Effect.

6.3 Credit Support. Notwithstanding anything to the contrary herein or in any other
Loan Document the Equity Investor shall cause its Equity Commitment to be supported at all times by
Acceptable Credit Support.

ARTICLE 7.

MISCELLANEOUS

7.1 Successions or Assignments.

 

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(a) This Agreement shall inure to the benefit of the Collateral Agent, the Secured Parties and
their respective successors and permitted assigns.

(b) This Agreement is binding upon the Equity Investor and the Borrower and their respective
successors and permitted assigns. Neither the Equity Investor nor the Borrower may assign any of
their respective rights and obligations hereunder without the prior written consent of the Required
Lenders (and any purported assignment in violation of this Section shall be void), except as
provided in Section 2.1(g).

(c) This Agreement shall inure to the benefit of the Equity Investor and its successors and
permitted assigns.

7.2 Waivers.

(a) No delay or omission on the part of the Collateral Agent or any Secured Party in
exercising any of their rights (including those hereunder) and no partial or single exercise
thereof and no action or non-action by the Collateral Agent or any Secured Party, with or without
notice to the Equity Investor or anyone else, shall constitute a waiver of any rights or shall
affect or impair this Agreement.

(b) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE COLLATERAL AGENT, THE BORROWER, AND
THE EQUITY INVESTOR HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT, THE CREDIT AGREEMENT, OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE COLLATERAL
AGENT, THE OTHER SECURED PARTIES, THE BORROWER, OR THE EQUITY INVESTOR. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES HERETO AND THE SECURED PARTIES TO ENTER INTO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS, AS APPLICABLE.

7.3 Interpretation. The section headings in this Agreement are for the convenience of
reference only and shall not affect the meaning or construction of any provision hereof.

7.4 Remedies Cumulative. Each and every right and remedy of the Collateral Agent and
the Secured Parties hereunder shall be cumulative and shall be in addition to any other right or
remedy given hereunder or under the Credit Agreement or any other Loan Document, or now or
hereafter existing at law or in equity.

 

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7.5 Severability. Any provision of this Agreement that may be determined by competent
authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.

7.6 Amendments. This Agreement may be amended, waived or otherwise modified only with
the written consent of the parties hereto and otherwise in accordance with the Credit Agreement.

7.7 Jurisdiction. The Collateral Agent, the Borrower and the Equity Investor agree
that any legal action or proceeding by or against the Borrower or the Equity Investor or with
respect to or arising out of this Agreement, the Credit Agreement, or any other Loan Document may
be brought in or removed to the courts of the State of New York, in and for the County of New York,
or of the United States of America for the Southern District of New York, as the Collateral Agent
may elect. By execution and delivery of this Agreement, the Collateral Agent, the Borrower, and
the Equity Investor accept, for themselves and in respect of their property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts. The Collateral Agent, the
Borrower and the Equity Investor irrevocably consent to the service of process out of any of the
aforementioned courts in any manner permitted by Legal Requirements. Any such process or summons
in connection with any such action or proceeding may also be served by mailing a copy thereof by
certified or registered mail, or any substantially similar form of mail, addressed to the Borrower,
the Equity Investor or the Collateral Agent as provided for notices hereunder. Nothing herein
shall affect the right of the Collateral Agent to bring legal action or proceedings in any other
competent jurisdiction. The Collateral Agent, the Borrower and the Equity Investor further agree
that the aforesaid courts of the State of New York and of the United States of America shall have
exclusive jurisdiction with respect to any claim or counterclaim of the Borrower or the Equity
Investor based upon the assertion that the rate of interest charged on or under this Agreement, the
Credit Agreement and/or the other Loan Documents is usurious. To the fullest extent permitted by applicable law, the Collateral
Agent, the Borrower, and the Equity Investor hereby waive any right to stay or dismiss any action
or proceeding under or in connection with any or all of the Project, this Agreement, the Credit
Agreement or any other Loan Document brought before the foregoing courts on the basis of improper
venue or forum non-conveniens. The Equity Investor hereby irrevocably appoints CT Corporation
System, 111 8th Avenue, 13th Floor, New York, New York 10011 as its agent for
service of process in relation to any proceedings before any courts located in the State of New
York in connection with this Agreement, the Credit Agreement and the other Loan Documents to which
it is a party.

7.8 Governing Law. This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and construed in accordance with, the law of the State of New York
without reference to principles of conflicts of law (other than Section 5-1401 of the New York
General Obligations Law).

 

20

 

7.9 Integration of Terms. This Agreement, together with other agreements attached
hereto or referred to herein, contains the entire agreement among the parties hereto relating to
the subject matter hereof and supersedes all oral statements and prior writings with respect
hereto.

7.10 Notices. All notices required or permitted under the terms and provisions hereof
shall be in writing and any such notice shall be effective if given in accordance with the
provisions of Section 9.01 of the Credit Agreement. Notices to the Equity Investor shall be sent
to the following addresses:

Sandy Creek Holdings, LLC

c/o Dynegy Sandy Creek Holdings, LLC

1000 Louisiana St., Suite 5800

Houston, Texas 77002-5050

Attn: Charles C. Cook, Senior Vice President and Treasurer

Tel: 713-767-8648

Fax: 713-356-2200

and

Sandy Creek Holdings, LLC

Two Tower Center, 11th Floor

East Brunswick, NJ 08816

Attn: General Counsel

Fax: (732) 249-7290

With a copy to:

Sandy Creek Holdings, LLC

c/o Dynegy Sandy Creek Holdings, LLC

1000 Louisiana St., Suite 5800

Houston, Texas 77002-5050

Attn: J. Kevin Blodgett

Executive Vice President and General Counsel

Tel: 713-507-6847

Fax: 713-356-2185

7.11 Counterparts. This Agreement may be executed in counterparts, and when executed
and delivered by all of the parties listed below shall constitute a single binding agreement.
Delivery of a facsimile counterpart signature shall be effective as delivery of a manually executed
counterpart signature.

7.12 Further Assurances. The parties hereto hereby agree to execute and deliver all
such instruments and take all such action as may be necessary to effectuate fully the purposes of
this Agreement.

 

21

 

7.13 Termination of Agreement. Notwithstanding anything contained herein to the
contrary (but subject to Section 3.1), this Agreement and the obligations of the Borrower and the
Equity Investor hereunder shall terminate on the earlier to occur of: (a) the Discharge Date; (b)
the payment and satisfaction by the Equity Investor of all of its obligations under Articles 2 and
4; and (c) the date that is 180 days after the Term Conversion Date.

7.14 No Third Party Beneficiaries. Subject to Section 7.1, there shall be no third
party beneficiaries to this Agreement or any provision hereof.

7.15 Consequential Damages. Anything in this Agreement to the contrary
notwithstanding, in no event shall any party be liable under or in connection with this Agreement
for indirect, special, incidental, punitive or consequential losses or damages of any kind
whatsoever, including but not limited to lost profits, whether or not foreseeable, even if such
party has been advised of the possibility thereof and regardless of the form and action in what
such damages are sought.

7.16 Scope of Liability. Section 9.21 of the Credit Agreement is hereby incorporated
by reference, mutatis mutandis, as if fully set forth herein.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

22

 

IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized, intending to be
legally bound, have caused this Equity Commitment Agreement to be duly executed as of the date
first above written.

	 	 	 	 	 
	 	 	SANDY CREEK ENERGY ASSOCIATES, L.P.

as Borrower
	 
	 	 	 	 
	 
	 	By:	 	/s/ Joe Esteves
	 
	 	 	 	 
	 
	 	 	 	Name: Joe Esteves
	 
	 	 	 	Title: Authorized Signatory
	 
	 	 	 	 
	 	 	SANDY CREEK HOLDINGS, LLC

as Equity Investor
	 
	 	 	 	 
	 
	 	By:	 	LSP SANDY CREEK MANAGEMENT CO, LLC,
	 
	 	 	 	its manager
	 
	 	 	 	 
	 
	 	By:	 	/s/  James Pagano
	 
	 	 	 	 
	 

	 	 	 	Name: James Pagano
	 

	 	 	 	Title: President
	 
	 	 	 	 
	 	 	CREDIT SUISSE, Cayman Islands Branch

as Collateral Agent
	 
	 	 	 	 
	 

	 	By:	 	/s/ Thomas Cantello
	 

	 	 	 	 
	 

	 	 	 	Name: Thomas Cantello
	 

	 	 	 	Title: Director
	 
	 	 	 	 
	 

	 	By:	 	/s/ Nupur Kumar
	 

	 	 	 	 
	 

	 	 	 	Name: Nupur Kumar
	 

	 	 	 	Title: Associate

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