Document:

Exhibit 10.1

 

COMMITMENT
INCREASE AGREEMENT

 

THIS
COMMITMENT INCREASE AGREEMENT (the “Agreement”) is made as of October 7,
2005 between Western Gas Resources, Inc. (the “Borrower”) and Bank of
America, N.A., (the “Lender”).

 

W I T N E S S E T
H

 

WHEREAS, the
Borrower, the Administrative Agent, and the Lenders have entered into that
certain Credit Agreement dated as of June 29, 2004 (as amended to the date
hereof, the “Credit Amendment”);

 

WHEREAS,
pursuant to Section 2.13 of the Credit Agreement, the Borrower has
requested that the Aggregate Commitments be increased by $80,000,000 (the “Commitment
Increase Amount”);

 

WHEREAS,
Lender has agreed to increase its Commitment by the Commitment Increase Amount;

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained in the Credit Agreement, the Lender hereby agrees as
follows:

 

(a)                                  Definitions.  Unless the context otherwise requires or
unless otherwise expressly defined herein, the terms defined in the Credit
Agreement shall have the same meanings whenever used in this Agreement.

 

(b)                                 Increase
in Commitment.  The Lender hereby
increases its Commitment by $80,000,000 to $133,000,000.

 

(c)                                  Loan
Documents.  This Agreement is a Loan
Document, and all provisions in the Credit Agreement pertaining to Loan
Documents apply hereto.

 

IN WITNESS
WHEREOF, this Agreement is executed as of the date first above written.

 

	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph F. Scott

  	
   

  
	
   

  	
   

  	
  Name: Joseph F. Scott

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WESTERN GAS RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vance
  Blalock

  	
   

  
	
   

  	
   

  	
  Name: Vance Blalock

  
	
   

  	
   

  	
  Title: Vice President and TreasurerExhibit 10.1

 

EXECUTION
VERSION

 

 

 

CREDIT
AND GUARANTY AGREEMENT

 

Dated as of October 7,
2005

 

among

 

RELIANT
ENERGY, INC.,

as the Borrower,

 

The Other Loan
Parties Referred To Herein,

as Guarantors,

 

The Other Lenders
Party Hereto,

 

and

 

DEUTSCHE
BANK AG, NEW YORK BRANCH

as Administrative
Agent,

 

 

DEUTSCHE
BANK SECURITIES INC.

Sole Lead
Arranger, Sole Bookrunner, and Sole Syndication Agent

 

 

 

 

TABLE
OF CONTENTS

 

 

	
  ARTICLE I. DEFINITIONS AND ACCOUNTING
  TERMS

  	
   

  
	
  1.1 Defined
  Terms

  	
   

  
	
  1.2 Other
  Interpretive Provisions

  	
   

  
	
  1.3 Accounting Terms

  	
   

  
	
  1.4 Rounding

  	
   

  
	
  1.5 Times of
  Day

  	
   

  
	
   

  	
   

  
	
  ARTICLE II.
  THE COMMITMENTS AND THE LOANS

  	
   

  
	
  2.1 The Loans

  	
   

  
	
  2.2
  Borrowings, Conversions and Continuations of Loans

  	
   

  
	
  2.3 [Reserved]

  	
   

  
	
  2.4 Optional
  and Mandatory Prepayments

  	
   

  
	
  2.5
  Termination of Commitments

  	
   

  
	
  2.6 Repayment
  of Loans

  	
   

  
	
  2.7 Interest

  	
   

  
	
  2.8 Fees

  	
   

  
	
  2.9
  Computation of Interest

  	
   

  
	
  2.10 Evidence of Debt

  	
   

  
	
  2.11 Payments
  Generally; Administrative Agent’s Clawback

  	
   

  
	
  2.12 Sharing
  of Payments by Lenders

  	
   

  
	
   

  	
   

  
	
  ARTICLE III.
  TAXES, YIELD PROTECTION AND ILLEGALITY

  	
   

  
	
  3.1 Taxes

  	
   

  
	
  3.2 Illegality

  	
   

  
	
  3.3 Inability
  to Determine Rates

  	
   

  
	
  3.4 Increased
  Costs; Capital Adequacy; Reserves on Eurodollar Rate Loans

  	
   

  
	
  3.5
  Compensation for Losses

  	
   

  
	
  3.6 Mitigation
  Obligations; Replacement of Lenders

  	
   

  
	
  3.7 Survival

  	
   

  
	
   

  	
   

  
	
  ARTICLE IV.
  CONDITIONS PRECEDENT TO LOANS

  	
   

  
	
  4.1 General
  Conditions

  	
   

  
	
  4.2 Funding
  Conditions

  	
   

  
	
  4.3 Post
  Closing Covenant

  	
   

  
	
   

  	
   

  
	
  ARTICLE V.
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  5.1 Existence,
  Qualification and Power; Compliance with Laws

  	
   

  
	
  5.2
  Authorization; No Contravention

  	
   

  
	
  5.3
  Governmental Authorization; Other Consents

  	
   

  
	
  5.4 Binding
  Effect

  	
   

  
	
  5.5 Financial
  Statements; No Material Adverse Effect

  	
   

  
	
  5.6 Litigation

  	
   

  

 

i

 

	
  5.7 No Default

  	
   

  
	
  5.8 Ownership
  of Property; Liens

  	
   

  
	
  5.9
  Environmental Matters

  	
   

  
	
  5.10 Insurance

  	
   

  
	
  5.11 Taxes

  	
   

  
	
  5.12 ERISA Compliance

  	
   

  
	
  5.13
  Subsidiaries; Equity Interests

  	
   

  
	
  5.14 Margin
  Regulations; Investment Company Act; Public Utility Holding Company Act

  	
   

  
	
  5.15
  Disclosure

  	
   

  
	
  5.16
  Compliance with Laws

  	
   

  
	
  5.17
  Intellectual Property; Licenses, Etc.

  	
   

  
	
  5.18 Solvency

  	
   

  
	
  5.19 Perfection, Etc

  	
   

  
	
  5.20 Parity
  Secured Obligations

  	
   

  
	
   

  	
   

  
	
  ARTICLE VI.
  AFFIRMATIVE COVENANTS

  	
   

  
	
  6.1 Financial
  Statements

  	
   

  
	
  6.2
  Certificates; Other Information

  	
   

  
	
  6.3 Notices

  	
   

  
	
  6.4 Payment of
  Obligations

  	
   

  
	
  6.5
  Preservation of Existence, Etc.

  	
   

  
	
  6.6
  Maintenance of Properties

  	
   

  
	
  6.7
  Maintenance of Insurance

  	
   

  
	
  6.8 Compliance
  with Laws

  	
   

  
	
  6.9 Books and
  Records

  	
   

  
	
  6.10
  Inspection Rights

  	
   

  
	
  6.11 Use of
  Proceeds

  	
   

  
	
  6.12
  Additional Loan Parties; Security Interests

  	
   

  
	
  6.13 Further
  Assurances

  	
   

  
	
  6.14 Florida
  Mortgaged Properties

  	
   

  
	
   

  	
   

  
	
  ARTICLE VII.
  NEGATIVE COVENANTS

  	
   

  
	
  7.1 Liens

  	
   

  
	
  7.2
  Investments

  	
   

  
	
  7.3
  Indebtedness

  	
   

  
	
  7.4
  Consolidation and Mergers

  	
   

  
	
  7.5 Asset
  Sales

  	
   

  
	
  7.6 Restricted
  Payments

  	
   

  
	
  7.7 Line of
  Business

  	
   

  
	
  7.8
  Transactions with Affiliates

  	
   

  
	
  7.9
  Restrictive Agreements

  	
   

  
	
  7.10 Use of
  Proceeds

  	
   

  
	
  7.11 Financial
  Covenants

  	
   

  
	
  7.12 Capital
  Expenditures

  	
   

  
	
  7.13
  Modification of Certain Agreements

  	
   

  
	
  7.14 Fiscal
  Year

  	
   

  

 

ii

 

	
  7.15 Commodity
  Hedging

  	
   

  
	
  7.16
  Collateral Trust Agreement; Prepayment of Parity Secured Obligations

  	
   

  
	
  7.17 Orion Subsidiaries

  	
   

  
	
  7.18
  Designated Entities

  	
   

  
	
  7.19 Foreign
  Investments

  	
   

  
	
   

  	
   

  
	
  ARTICLE VIII. GUARANTY

  	
   

  
	
  8.1 Guaranty;
  Limitation of Liability

  	
   

  
	
  8.2 Guaranty
  Absolute

  	
   

  
	
  8.3 Waivers
  and Acknowledgments

  	
   

  
	
  8.4
  Subrogation

  	
   

  
	
  8.5 Assumption
  and Joinder

  	
   

  
	
  8.6
  Subordination

  	
   

  
	
  8.7 Continuing
  Guaranty; Assignments

  	
   

  
	
   

  	
   

  
	
  ARTICLE IX.
  EVENTS OF DEFAULT AND REMEDIES

  	
   

  
	
  9.1 Events of
  Default

  	
   

  
	
  9.2 Remedies
  upon Event of Default

  	
   

  
	
  9.3
  Application of Funds

  	
   

  
	
   

  	
   

  
	
  ARTICLE X.
  THE ADMINISTRATIVE AGENT

  	
   

  
	
  10.1
  Appointment and Authority

  	
   

  
	
  10.2 Rights As
  a Lender

  	
   

  
	
  10.3
  Exculpatory Provisions

  	
   

  
	
  10.4 Reliance
  by the Administrative Agent

  	
   

  
	
  10.5
  Delegation of Duties

  	
   

  
	
  10.6
  Resignation of Administrative Agent

  	
   

  
	
  10.7
  Non-Reliance on Administrative Agent and Other Lenders

  	
   

  
	
  10.8 No Other
  Duties, Etc.

  	
   

  
	
  10.9
  Administrative Agent May File Proofs of Claim

  	
   

  
	
  10.10
  Collateral and Guaranty Matters

  	
   

  
	
   

  	
   

  
	
  ARTICLE XI. MISCELLANEOUS

  	
   

  
	
  11.1
  Amendments, Etc.

  	
   

  
	
  11.2 Notices;
  Effectiveness; Electronic Communication

  	
   

  
	
  11.3 No
  Waiver; Cumulative Remedies

  	
   

  
	
  11.4 Expenses;
  Indemnity; Damage Waiver

  	
   

  
	
  11.5 Payments
  Set Aside

  	
   

  
	
  11.6
  Successors and Assigns

  	
   

  
	
  11.7
  Confidentiality

  	
   

  
	
  11.8 Right of
  Setoff

  	
   

  
	
  11.9 Interest
  Rate Limitation

  	
   

  
	
  11.10
  Counterparts; Integration; Effectiveness

  	
   

  
	
  11.11 Survival
  of Representations and Warranties

  	
   

  
	
  11.12
  Severability

  	
   

  
	
  11.13
  Replacement of Lenders

  	
   

  
	
  11.14
  Governing Law; Jurisdiction; Etc.

  	
   

  

 

iii

 

	
  11.15 Waiver
  of Jury Trial

  	
   

  
	
  11.16 USA
  PATRIOT Act Notice

  	
   

  
	
  11.17 No Oral
  Agreements

  	
   

  
	
  11.18
  Intercreditor Confirmation

  	
   

  
	
  11.19
  Designated Senior Debt

  	
   

  

 

iv

 

	
  SIGNATURES

  	
   

  

 

i

 

	
  SCHEDULES

  
	
   

  
	
  1.1(a)

  	
   

  	
  Guarantors

  
	
  1.1(b)

  	
   

  	
  Contracts Relating to
  the California Receivables

  
	
  1.1(c)

  	
   

  	
  Subordination Terms

  
	
  1.1(d)

  	
   

  	
  Mortgages and Title
  Policies

  
	
  1.1(e)

  	
   

  	
  Existing Indebtedness

  
	
  2.1

  	
   

  	
  Commitments and Pro
  Rata Shares

  
	
  5.8(c)

  	
   

  	
  Closing Date Mortgaged
  Properties

  
	
  5.9(c)

  	
   

  	
  Environmental Matters

  
	
  5.13

  	
   

  	
  Subsidiaries and Other
  Equity Investments

  
	
  5.17

  	
   

  	
  Intellectual Property
  Matters

  
	
  7.3(k)

  	
   

  	
  List of Agreements
  Prohibiting Subordination of Intercompany Indebtedness

  
	
  11.2

  	
   

  	
  Administrative Agent’s
  Office; Certain Addresses for Notices

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  
	
   

  
	
  Form of

  
	
   

  
	
  A

  	
   

  	
  Borrowing Notice

  
	
  B

  	
   

  	
  Continuation/Conversion
  Notice

  
	
  C

  	
   

  	
  Note

  
	
  D

  	
   

  	
  Compliance Certificate

  
	
  E

  	
   

  	
  Assignment and
  Assumption

  
	
  F

  	
   

  	
  Assumption and Joinder

  

 

ii

 

CREDIT
AND GUARANTY AGREEMENT

 

This CREDIT AND GUARANTY AGREEMENT (as further
amended, restated, supplemented or otherwise modified from time to time, this “Agreement”)
dated as of October 7, 2005, is among RELIANT ENERGY, INC., a Delaware
corporation (the “Borrower”), the other LOAN PARTIES referred to herein,
as Guarantors, each lender from time to time party hereto (collectively, the “Lenders”
and individually, a “Lender”), and DEUTSCHE BANK AG, NEW YORK BRANCH, as
Administrative Agent.

 

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

 

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

 

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

 

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

 

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

 

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

 

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

 

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

 

“Actionable Default” means (1) the failure
to pay any payment of principal of or interest on any Series of Secured
Debt outstanding in the amount of $50,000,000 or more resulting in an event of
default under the applicable Series of Secured Debt after payment is due,
including payments that are due (or if any required offer had been timely made
would be due) in respect of any mandatory offer to purchase Parity Secured Debt
resulting in an event of default under the applicable Series of Secured
Debt, (2) the failure to pay in full, when due and payable in full
(whether at maturity, upon acceleration or otherwise), either the Secured Notes
or the Loans or any other Series of Secured Debt outstanding in the amount
of $50,000,000 or more, (3) the exercise by the Collateral Trustee or any
of its co-trustees or agents (including the Administrative Agent) of any right
or power that is exercisable by it only upon default to take sole and exclusive
dominion or control over any deposits in a deposit account, commodity

 

 

contract in a commodity account or financial asset in
a securities account constituting any Shared Collateral or the delivery of any
instructions to the Collateral Trustee directing it to foreclose or otherwise
enforce, or to disburse the proceeds of enforcement of, any Lien upon any
Collateral, or (4) the occurrence of any Event of Default under this
Agreement or the Secured Note Agreements arising from the commencement of any
bankruptcy case, receivership or other insolvency or liquidation proceeding by
or against the Borrower or any of its Subsidiaries or any similar default
provision at any time in effect under any indenture or agreement governing any Series of
Secured Debt.

 

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

 

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

 

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

 

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

 

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

 

 “Agreement”
is defined in the preamble.

 

“Applicable Margin” means a per annum rate
equal to (a) 1.375% with respect to Base Rate Loans and (b) 2.375%
with respect to Eurodollar Rate Loans.

 

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

 

“Asset Sale” means:

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

“Assignment of Leases and Rents” means any
assignment of leases and rents or equivalent document now existing or hereafter
entered into, that is executed and delivered by one or more of the Loan Parties
to the Collateral Trustee (for the benefit of the Secured Parties), and in each
case, as such document may be amended, restated, supplemented or otherwise
modified from time to time.

 

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

 

“Audited Financial Statements” means the
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries for the Fiscal Year ended December 31, 2004, and the related
consolidated statements of income or operations, shareholders’ equity and
comprehensive income (loss) and cash flows for such Fiscal Year of the Borrower
and its consolidated Subsidiaries, including the notes thereto.

 

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

 

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

 

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

 

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

 

“Board of Directors” means:

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“California Receivables” means all amounts
currently owing to a Loan Party and withheld on the Closing Date in connection
with the contracts set forth on Schedule 1.1(b).

 

“Capital Expenditure” means, with respect to
any Person for any period, the aggregate amount of all expenditures by such
Person during that period which, in accordance with GAAP, are or should be
included in “additions to property, plant and equipment”, “capital expenditures”
or similar items reflected in the statement of cash flows of such Person for
such period.  For purposes of this
definition, the purchase price of equipment that is purchased simultaneously
with the trade-in of existing equipment or with insurance or proceeds of any
Condemnation shall be included in Capital Expenditures only to the extent of
the gross amount of such purchase price, less the credit granted by the seller
of such equipment for the equipment being traded in at such time or the amount
of such insurance or proceeds of any Condemnation, as the case may be.

 

“Capital Lease Obligation” means, as applied to
any Person, at the time any determination is to be made, the amount of the liability
in respect of a capital lease that would at that time be required to be
capitalized on a balance sheet of such Person in accordance with GAAP in the
reasonable judgment of such Person, and the Stated Maturity thereof shall be
the

 

5

 

date of the last payment of rent or any other amount
due under such lease prior to the first date upon which such lease may be
prepaid by the lessee without payment of a penalty.

 

“Capital Stock” means:

 

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

 

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

 

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

 

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

 

“Cash Equivalents” means:

 

(1)                                  United
States dollars;

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(e)                                  the
Borrower consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Borrower, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of the
Borrower or such other Person is converted into or exchanged for cash,
securities or other property, other than any such transaction where the Voting
Stock of the Borrower outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock

 

7

 

(other than Disqualified
Stock) of the surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock of such surviving or transferee Person
(immediately after giving effect to such issuance).

 

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

 

“Closing Date” means the first date all the
conditions precedent in Section 4.1 are satisfied or waived in
accordance with Section 11.10.

 

“Closing Date Mortgaged Properties” has the
meaning specified in Section 4.1(b)(i).

 

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

 

“Collateral” means the “Shared Collateral” as
defined in the Collateral Trust Agreement.

 

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

 

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

 

“Commitment” means, as to each Lender, its
obligation to make Loans to the Borrower pursuant to Section 2.1 in
an aggregate amount at any one time outstanding not to exceed the amount set
forth opposite such Lender’s name on Schedule 2.1 under the caption
“Commitment” or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable (in an aggregate amount for all Lenders
not to exceed $299,000,000).

 

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

 

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

 

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

 

“Consolidated EBITDAR” means, for any Person
for any period determined on a consolidated basis in accordance with GAAP, an
amount equal to, without any duplication, (a) net income (before giving
effect to the cumulative effect of changes in accounting principles and
discontinued operations (including Liberty Electric Power LLC, a Delaware
limited liability

 

8

 

company) and before income taxes and franchise taxes
to the extent based on the income of such Person and its Subsidiaries) for such
period, plus (b) Consolidated Interest Charges for such period, plus
(c) depreciation, depletion, impairment, abandonment and amortization
expense for such period, plus (d) the book accounting lease expense
under the REMA Lease for such period, plus (e) interest and fees
expensed under any receivables monetization or securitization during such
period (other than interest and fees arising out of a securitization or
monetization of the California Receivables), plus (f) net
unrealized losses related to non-trading energy derivatives, plus (g) cash
dividends or distributions actually received during such period from an entity
which is not a consolidated Subsidiary of such Person other than El Dorado
Energy, LLC, plus (h) the Borrower’s pro  rata share
of the EBITDAR of El Dorado Energy, LLC, and minus (i) net
unrealized gains related to non-trading energy derivatives;

 

provided, however, for purposes of this definition, (i) gains
and losses on the disposition of assets not in the ordinary course of business,
(ii) any other noncash charge or gain, and (iii) any extraordinary or
other non-recurring item or expense, including severance costs, shall be
excluded to the extent incurred or realized during such period in accordance
with GAAP from the calculation of Consolidated EBITDAR.

 

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

 

“Consolidated Interest Charges” means, without
duplication, for any period for the Borrower and its Subsidiaries on a
consolidated basis, (a) the total interest expense for such period, plus
(b) the interest expense during such period attributable to (i) the
REMA Lease, (ii) the fees and yield paid in connection with, or interest
expense attributable to, any account receivables securitization or monetization
permitted hereunder (other than with respect to the California Receivables), (iii) the
Borrower’s pro  rata share of the net interest expense of El
Dorado Energy, LLC, and (iv) any capitalized interest during such period, plus
(c) all cash dividends and distributions paid on preferred or preference
stock, plus (d) to the extent deducted in determining total
interest expense, net unrealized gains of any Hedging Agreements permitted
hereunder and existing on or prior to December 22, 2004 (excluding any
ongoing settlement payments in connection with permitted interest rate swap
agreements), minus (e) (i) the total interest income of such
Person and its Subsidiaries, including interest income from any escrow or trust
account, but excluding any interest income attributable to the California
Receivables, including any settlement and collection of the California
Receivables for such period, (ii) in all cases whether expensed or
amortized, any interest expense attributable to (A) any makewhole or
premium paid in connection with the repayment of any Debt permitted hereunder, (B) any
upfront direct or indirect costs, expenses, or fees incurred in connection
with, including those arising out of the preparation for the maturity of, (1) the
Existing Credit Agreement, this

 

9

 

Agreement and other Debt, and the restructuring or
payoff of the Debt of OPC and its Subsidiaries or (2) the incurrence of
any Debt after December 22, 2004, (C) to the extent added in
determining total interest expense, the upfront cost and net unrealized losses
of any Hedging Agreements permitted hereunder and existing on or prior to December 22,
2004 (excluding ongoing settlement payments in connection with permitted
interest rate swap agreements), and (D) any of the RRI Warrants; (iii) any
interest expense attributable to the Liberty Project Financing, (iv) any
interest expense attributable to the California Receivables, including any
settlement or collection thereof, and (v) all non-recurring interest
expense with respect to items not constituting Indebtedness.

 

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

 

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

 

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

 

“Continuing Directors” means, as of any date of
determination, any member of the Board of Directors of the Borrower who (a) was
a member of such Board of Directors on December 22, 2004; or (b) was
nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board at the
time of such nomination or election.

 

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

 

“Contribution Agreement” means the Contribution
Agreement dated as of the date hereof and executed by each of the Loan Parties,
as such agreement may be amended, restated, supplemented or otherwise modified
from time to time.

 

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

 

10

 

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

 

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

 

“Core Asset Consent” means, as of any date of
determination, the consent of Required Aggregate Term Lenders.

 

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

 

 “Debt”
means, as of any date of determination with respect to the Borrower and its
Subsidiaries, without duplication, in accordance with GAAP the following:  (a) the total amount of indebtedness,
including any fair value adjustments, and other obligations of the Borrower and
its Subsidiaries for borrowed money (whether by loan or the issuance of debt
securities), including the unreimbursed amount of any drawings under letters of
credit issued for the account of the Borrower or any of its Subsidiaries, (b) all
Capital Lease Obligations and, except for the REMA Lease, Attributable Debt in
respect of sale and leaseback transactions, Synthetic Lease Obligations or
financing leases, (c) the unpaid balance owed to the certificate holders
under the REMA Lease, (d) obligations under any accounts securitization or
monetization arrangement permitted hereunder and not recorded on the Borrower
balance sheet for that period (other than with respect to any securitization or
monetization of the California Receivables), and (e) all guaranties of
payment or collection of any obligations described in clauses (a) through
(d) of this definition of any other Person;

 

provided, however, that Debt shall not include:  (i) any guaranties that may be incurred
by endorsement of negotiable instruments for deposit or collection in the
ordinary course of business or similar transactions, (ii) any Obligations
or guaranties of performance of Obligations under performance bonds, (iii) trade
accounts payable in the ordinary course of business, (iv) customer advance
payments and customer deposits arising in the ordinary course of business, (v) the
liability of any Person as a general partner of a partnership for Debt of such
partnership, if the partnership is not a Subsidiary of such Person, and (vi) any
completion or performance guarantees (or similar guarantees that a project or a
Subsidiary perform as planned).

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

“Designated Entities” means, collectively, OPH,
REMA, Channelview and their respective Subsidiaries.

 

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

 

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

 

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

 

12

 

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

 

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

 

“Environmental Laws” means any and all Federal,
state, local, regional and foreign statutes, laws, rules of common law,
constitutional provisions, regulations, ordinances, rules judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or governmental restrictions relating to pollution and the protection of the
environment or Hazardous Materials, including, without limitation, those
relating to the use analysis, generation, manufacture, storage, discharge,
emission, release, disposal, transportation treatment, investigation, removal,
or remediation of Hazardous Materials. 
Environmental Laws include, without limitation, those acts commonly
referred to as the Comprehensive Environmental Response, Compensation and
Liability Act of 1980; the Superfund Amendments and Reauthorization Act; the
National Environmental Policy Act; the Hazardous Materials Transportation Act;
the Resource Conservation and Recovery Act, the Solid Waste Disposal Act, the
Clean Water Act, the Clean Air Act, the Toxic Substances Control Act, and the
Occupational Safety and Health Act, and their state counterparts.

 

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

 

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

 

(1)                                  shall
be allocated and distributed to the applicable Parity Secured Debt
Representative for account of the holders of Secured Notes, to the
Administrative Agent for account of the Lenders and to the Secured Debt
Representative for each other Series of Secured Debt for account of the
holders of such Series of Secured Debt, ratably in proportion to the
principal, interest, fees and premium (if any) outstanding, when the allocation
or distribution is made, on (i) the Secured Notes, (ii) Credit
Agreement Obligations, (iii) Hedging Obligations and amounts payable to a
Lender (as defined in the Existing Credit Agreement) in connection with a bank
account or any other banking services, in each case, that are required by the
Existing Credit Agreement to be secured

 

13

 

on an equal and ratable
basis with the Credit Agreement Obligations (as defined in the Existing Credit
Agreement) and (iv) all other Series of Secured Debt (allocated
proportionately to the Secured Debt Representative for each other Series of
Secured Debt if there is more than one), respectively; and thereafter

 

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

 

For this purpose:

 

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

 

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

 

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

 

14

 

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

 

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

 

“ERCOT” means the Electric Reliability Council
of Texas.

 

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

 

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

 

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

 

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

 

15

 

London interbank eurodollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.

 

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

 

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

 

“Excepted Debt” means Indebtedness
expressly permitted to be incurred or issued pursuant to Section 7.3(a),
(b), (c), (d), (e), (f), (h), (j)
(other than a refinancing of the Loans), (k), and (s).

 

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

 

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

 

“Excluded Proceeds” means any Net Asset Sale
Proceeds that are designated by the Borrower as Excluded Proceeds; provided,
that (a) not more than $300,000,000 of such Net Asset Sale Proceeds may be
designated as Excluded Proceeds during any single calendar year, (b) not
more than $750,000,000 of such Net Asset Sale Proceeds may be designated as
Excluded Proceeds on or after December 22, 2004, and (c) Net Asset
Sale Proceeds from Asset Sales of generation assets or other businesses, in
each case acquired by the Borrower or any Restricted Subsidiary after December 22,
2004 pursuant to an Acquisition may not be designated as Excluded Proceeds.

 

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

 

16

 

“Existing Credit Agreement” means the “Credit
Agreement” as defined in the Collateral Trust Agreement.

 

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

 

“Existing Indebtedness” means Indebtedness
(other than intercompany Indebtedness) of the Borrower and its Restricted
Subsidiaries in existence on December 22, 2004 and set forth on Schedule 1.1(e).

 

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

 

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

 

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

 

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

 

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

 

“Fee Letter” means the letter agreements dated
as of October 7, 2005 between the Borrower and the Administrative Agent or
one of its Affiliates, as amended, restated, supplemented or otherwise modified
from time to time.

 

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

 

“Fiscal Year” means any period of twelve
consecutive calendar months ending on December 31; references to a Fiscal
Year with a number corresponding to any calendar year (e.g., the “2004
Fiscal Year”) refer to the Fiscal Year ending on December 31 of such
calendar year.

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

plus

 

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

 

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

 

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

 

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

 

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

 

minus

 

(e)                                  capital
expenditures during such period;

 

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

 

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

 

 “GAAP”
means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board

 

18

 

or in such other statements by such other entity as
have been approved by a significant segment of the accounting profession, which
are in effect from time to time.

 

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

 

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

 

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

 

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

 

“Guarantors” means each of:

 

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

 

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

 

and their respective successors and assigns.

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)                                  in
respect of borrowed money;

 

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

 

(c)                                  in
respect of banker’s acceptances;

 

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

 

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

 

(f)                                    representing
any Hedging Obligations; or

 

(g)                                 consisting of Disqualified Stock.

 

whether or not any of the preceding items appear as a
liability upon a balance sheet of the specified Person prepared in accordance
with GAAP.  In addition, the term “Indebtedness”
includes all Indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such Indebtedness is assumed by the specified
Person) and, to the extent not otherwise included, the Guarantee by the
specified Person of any Indebtedness of any other Person.  If obligations of a Securitization Entity are
Indebtedness, for the purposes of calculating

 

20

 

the amount of Indebtedness of a Securitization Entity
outstanding as of any date, the face or notional amount of any interest in
receivables or equipment that is outstanding as of such date shall be deemed to
be Indebtedness but any such interests held by Affiliates of such
Securitization Entity shall be excluded for purposes of such calculation.  The amount of any Indebtedness outstanding as
of any date will be:

 

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

 

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

 

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

 

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

 

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

 

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

 

“Indemnified Taxes” means Taxes other than
Excluded Taxes.

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

“Investment” means, with respect to any Person,
all direct or indirect investments by such Person in other Persons (including
Affiliates) in the forms of loans (including Guarantees or similar
obligations), advances or capital contributions (excluding payroll, commission,
travel and similar advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.  “Investment” shall
exclude extensions of trade credit by the Borrower and its Restricted
Subsidiaries in the ordinary course of business and Permitted PEDFA Bond
Indebtedness.  The acquisition by the
Borrower or any Subsidiary of the Borrower of a Person that holds an Investment
in a third Person will be deemed to be an Investment by the Borrower or such
Subsidiary in such third Person in an amount equal to the Fair Market Value of
the Investments held by the acquired Person in such third Person.  Except as otherwise provided in this
Agreement, the amount of an Investment shall be its Fair Market Value at the
time the Investment is made and without giving effect to subsequent changes in
value.

 

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

 

“IRS” means the United States Internal Revenue
Service.

 

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

 

“Laws” means, collectively, all international,
foreign, federal, state and local statutes, treaties, rules, guidelines,
regulations, ordinances, codes and administrative or judicial precedents or
authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof,

 

22

 

and all applicable administrative orders, directed
duties, requests, licenses, authorizations and permits of, and agreements with,
any Governmental Authority.

 

“Lender” has the meaning specified in the
introductory paragraph hereto.

 

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

 

“Liberty Project Financing” means the
Indebtedness incurred by Liberty Electric PA, LLC and Liberty Electric Power,
LLC to finance the 568 Megawatt combined cycle gas-fueled electric generating
plant located in the Borough of Eddystone, Delaware County, Pennsylvania,
together with any extensions, amendments, or refinancings thereof to the extent
permitted hereunder.

 

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

 

“Loan” means an extension of credit by a Lender
to the Borrower under Article II.

 

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

 

“Loan Party” means the Borrower and each
Guarantor.

 

“Material Adverse Effect” means a material
adverse effect upon (a) the business, operations, property, financial
condition or prospects of the Borrower and its Subsidiaries taken as a whole;
or (b) the validity or enforceability against any Loan Party of any Loan
Document to which it is a party or the material rights and remedies of the
Administrative Agent and the Lenders thereunder.

 

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

 

“Maturity Date” means April 30, 2010.

 

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

 

23

 

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

 

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

 

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

 

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

 

“Net Asset Sale Proceeds” means the aggregate
cash proceeds received by the Borrower or any of its Restricted Subsidiaries in
respect of any Asset Sale (including any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale and payments made to retire
Indebtedness (other than the Loans) required to be repaid in connection
therewith, including legal, accounting and investment banking fees, and sales
commissions, and any relocation expenses incurred as a result of the Asset
Sale, taxes paid or payable as a result of the Asset Sale, in each case, after
taking into account any available tax credits or deductions and any tax sharing
arrangements, and amounts reserved for adjustment in respect of the sale price
of such asset or assets established in accordance with GAAP.

 

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

 

“Net Financing Proceeds” means with respect to
the incurrence or issuance after December 22, 2004 by the Borrower to any
Person of any Senior Debt or Junior Securities permitted under this Agreement,
the excess of:

 

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

 

24

 

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

 

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

 

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

 

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

 

(1)                                  in the case of an
Unrestricted Subsidiary, no default on the Indebtedness of such Unrestricted
Subsidiary (including any rights that the holders of the Indebtedness may have
to take enforcement action against an Unrestricted Subsidiary) would permit upon
notice, lapse of time or both any holder of Indebtedness of the Borrower or any
of its Restricted Subsidiaries to declare a default on such Indebtedness of the
Borrower or any of its Restricted Subsidiaries or cause the payment of such
Indebtedness of the Borrower or any of its Restricted Subsidiaries to be
accelerated or payable prior to its stated maturity.

 

“Note” means a promissory note made by the
Borrower in favor of a Lender evidencing Loans made by such Lender,
substantially in the form of Exhibit C.

 

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

 

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

 

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

 

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

 

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

 

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

 

25

 

“OPH Revolving Notes” means, collectively, the
OPMW Revolving Note and the OPNY Revolving Note.

 

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

 

“OPMW New Term Note” means the term note, dated
as of December 22, 2004, issued by OPMW to the Borrower in an original
principal amount of $188,421.290.18, as amended, restated, supplemented or
otherwise modified from time to time.

 

“OPMW Refinancing Note” means the term note,
dated as of December 22, 2004, issued by OPMW to the Borrower in an
original principal amount of $211,578,709.82, as amended, restated,
supplemented or otherwise modified from time to time.

 

“OPMW Revolving Note” means the revolving note,
dated as of December 22, 2004, issued by OPMW to the Borrower in the
maximum principal amount of $75,000,000 as amended, restated, supplemented or
otherwise modified from time to time.

 

“OPMW Term Notes” means, collectively, the OPMW
Refinancing Note and the OPMW New Term Note.

 

“OPNY Revolving Note” means the revolving note,
dated as of December 22, 2004, issued by OPMW to the Borrower in the
maximum principal amount of $50,000,000, as amended, restated, supplemented or
otherwise modified from time to time.

 

“OPNY Term Note” means the term note, dated as
of December 22, 2004, issued by OPNY to the Borrower in the original
principal amount of $400,000,000, as amended, restated, supplemented, or
otherwise modified from time to time.

 

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

 

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

 

“Orion Guarantors” means, collectively, OPC,
OPMW, OPNY, Orion Power Midwest GP, Inc., Orion Power New York GP, Inc.,
Orion Power Midwest LP, LLC, Orion Power New York LP, LLC, Twelvepole Creek LLC
and Astoria Generating Company, L.P.

 

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

 

26

 

“Orion Notes” means, collectively, the OPMW
Refinancing Note, the OPMW New Term Note, the OPMW Revolving Note, the OPNY
Term Note and the OPNY Revolving Note.

 

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

 

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

 

“Outstanding Amount” means on any date the
aggregate outstanding principal amount of the Loans after giving effect to any
borrowings and prepayments or repayments of Loans occurring on such date.

 

“Parity Secured Debt” means, collectively:

 

(1)                                  the
Secured Notes;

 

(2)                                  the
PEDFA Guaranties;

 

(3)                                  the
Credit Agreement Obligations (as defined in the Existing Credit Agreement) and
the Credit Agreement Obligations; and

 

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

 

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

 

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

 

“PBGC” means the Pension Benefit Guaranty
Corporation.

 

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

 

“PEDFA Guaranty Obligations” means:

 

(1)                                  the
Obligations of the Borrower under the PEDFA Guaranties issued on December 22,
2004; or

 

27

 

(2)                                  the
Obligations of the Borrower under the PEDFA Guaranties issued after December 22,
2004 that constitute another Series of Secured Debt.

 

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

 

“Permitted Acquisition” means any Acquisition
by the Borrower or any of its Restricted Subsidiaries that satisfies all of the
following conditions:  (1) the
aggregate Acquisition Consideration paid or incurred by the Borrower and its
Restricted Subsidiaries in connection with such Acquisition, together with the
aggregate Acquisition Consideration paid by Borrower and its Restricted
Subsidiaries in connection with all other Acquisitions since December 22,
2004, does not exceed the Permitted Acquisition Limit, (2) no Default
shall have occurred and be continuing or would result therefrom on the date of
the closing of such Acquisition, (3) the Borrower shall have delivered to
the Administrative Agent a certificate of an Authorized Officer certifying
compliance with Section 7.11 on a pro
forma basis after giving effect to the Acquisition (without supporting calculations),
(4) the acquired Person is in (or the acquired assets are useful in) a
Permitted Business, and (5) the assets, including any Capital Stock,
acquired pursuant to such Acquisition shall be pledged as additional collateral
for the Credit Agreement Obligations, and any acquired entity shall become a
Guarantor, in each case in accordance with Section 6.12.

 

“Permitted Acquisition Limit” means, as of any
date, an amount equal to the sum of (a) the lesser of (i) 50% of Free
Cash Flow for the period from December 22, 2004 through such date and (ii) $1,000,000,000,
(b) in the case of the acquisition of a Permitted ERCOT Asset, the amount
of additional senior secured Indebtedness issued for such Acquisition, not to
exceed $500,000,000, (c) the amount of additional senior secured
Indebtedness issued since December 22, 2004, not to exceed $300,000,000, (d) the
amount of unsecured Indebtedness and Specified Junior Securities issued since December 22,
2004, but only to the extent not required hereunder to be applied to the
prepayment of Term Loans (as defined in the Existing Credit Agreement), (e) with
respect to acquisitions of Permitted ERCOT Assets through the second
anniversary of December 22, 2004, an amount, not less than zero, equal to
$500,000,000 less the amounts under clauses (a), (b), (c),
(d), and (f) of this definition used for Acquisition
Consideration of Permitted ERCOT Assets; provided, that not more than
$200,000,000 of the foregoing $500,000,000 amount under this clause (e) may
be utilized for Acquisition Consideration from the first through the second
anniversary of December 22, 2004, and (f) the amount of Excluded
Proceeds since December 22, 2004, in each case to the extent such amounts
are actually received by the Borrower and permitted to be retained by it under
this Agreement.

 

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

 

“Permitted Debt” has the meaning assigned to it
in Section 7.3.

 

28

 

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

 

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

 

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

 

“Permitted Investments” means:

 

(1)                                  any
Investment by the Borrower or any Restricted Subsidiary in the Borrower or in a
Restricted Subsidiary;

 

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

 

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

 

(4)                                  any
Investments in any Person having an aggregate Fair Market Value (measured on
the date each such Investment was made and without giving effect to subsequent
changes in value), when taken together with (i) all other Investments made
pursuant to this clause that are at the time outstanding and (ii) the
aggregate amount of Restricted Payments made pursuant to Section 7.6,
not to exceed $75,000,000 since December 22, 2004;

 

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

 

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

 

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

 

29

 

(8)                                  Investments
represented by Hedging Obligations;

 

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

 

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

 

(11)                            repurchases
of the Secured Notes or other Parity Secured Debt;

 

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

 

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

 

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

 

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

 

“Permitted Liens” means:

 

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

 

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

 

(3)                                  Liens
on assets of REMA and its Subsidiaries securing Indebtedness of REMA and its
Subsidiaries permitted to be incurred pursuant to clause (c) of Section 7.3,
including cash collateral for letters of credit issued thereunder and Liens
encumbering assets of REMA and/or any of its Subsidiaries securing obligations
under, or in

 

30

 

connection with, or which
constitute, Qualifying Credit Support (as defined in the participation
agreements to which REMA is a party);

 

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

 

(5)                                  Liens
on assets of a Restricted Subsidiary in existence on the date on which such
Person becomes a Restricted Subsidiary (provided, that (i) such
Liens existed at the time such Person became a Restricted Subsidiary and were
not created in anticipation thereof, (ii) no such Lien shall attach to any
asset acquired by such Person, after such Person became a Restricted
Subsidiary, pursuant to an Investment in such Person by the Borrower or any
Restricted Subsidiary, or in an Affiliate Transaction that does not satisfy the
requirements of Section 7.8(a) and (iii) the amount of
Indebtedness secured thereby is not increased);

 

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

 

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

 

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

 

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

 

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

 

(11)                            survey
exceptions, encumbrances, easements or reservations, including those for
licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines,
other utilities, mineral reservations and rights and leases, zoning
restrictions and other restrictions as to the use of real property or other
exceptions to title that were not incurred in connection with Indebtedness and
that (A) existed on December 22, 2004 and are recorded on such date, (B) are
permitted under the terms of the Security Documents or (C) do not in the
aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such Person;

 

(12)                            Liens
to secure any Permitted Refinancing Indebtedness permitted to be incurred under
this Agreement if such Permitted Refinancing Indebtedness is incurred by the
same obligor on the Indebtedness being extended, refinanced, renewed, replaced,

 

31

 

defeased or refunded
(except as provided in clause (4) of the definition of Permitted
Refinancing Indebtedness); provided, that:

 

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

 

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

 

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

 

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

 

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

 

(16)                            inchoate
statutory Liens arising under ERISA;

 

(17)                            Liens
(A) on cash and short-term investments (i) deposited by the Borrower
or any of its Subsidiaries in margin accounts with or on behalf of futures
contract brokers or paid over to other counterparties or (ii) pledged or
deposited as collateral to a contract counterparty or issuer of surety bonds by
the Borrower or any of its Subsidiaries, in the case of clause (i) or
(ii), to secure obligations with respect to (a) contracts for
commercial and trading activities in the ordinary course of business and

 

32

 

contracts (including
physical delivery, option (whether cash or financial), exchange, swap and
futures contracts) for the purchase, transmission, distribution, sale, lease or
hedge of any energy-related commodity or service or (b) interest rate,
commodity price, or currency rate management contracts or derivatives and (B) encumbering
assets other than accounts or receivables arising out of contracts or
agreements relating to the generation, distribution or transmission of energy; provided,
that all such agreements or contracts are entered into in the ordinary course
of business;

 

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

 

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

 

(20)                            Liens
created under the Secured Trading Counterparty Collateral Trust Agreement and
the related Security Documents, as such term is defined in the Secured Trading
Counterparty Collateral Trust Agreement, securing up to $250,000,000 of
obligations of the Borrower or its Subsidiaries from time to time owing to any
Secured Trading Counterparties, as such term is defined in the Secured Trading
Counterparty Collateral Trust Agreement, as each may be amended, amended and
restated, supplemented or otherwise modified, renewed or replaced from time to
time, provided, that such Liens are subject always to the terms of any
Secured Trading Counterparty Intercreditor Agreement;

 

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

 

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

 

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

 

33

 

(24)                            Liens
on assets of Reliant Energy Channelview L.P. and Liens on the Equity Interests
in Reliant Energy Channelview (Delaware) LLC and Reliant Energy Channelview
(Texas) LLC, to the extent such Liens are existing on December 22, 2004;

 

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

 

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

 

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

 

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

 

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

 

(30)                            Liens
constituting Permitted Separate Liens.

 

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

 

(a)                                  to
build the Seward Facility;

 

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

 

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

 

“Permitted Prior Liens” means (1) Liens
described in clauses (5), (6), (7), (9), (10),
(11), (14), (17), (18), (19), (20), (21),
(22), (26), (27) and (29) of the definition of “Permitted
Liens,” (2) Liens refinancing or replacing any of the Liens contemplated
in clause (1) of this definition, and (3) Liens that arise by
operation of law and are not voluntarily granted, to the extent entitled by law
to priority over the security interests created by the Security Documents.

 

“Permitted Refinancing Indebtedness” means any
Indebtedness of the Borrower or any of its Restricted Subsidiaries issued in
exchange for, or the net proceeds of which are used to

 

34

 

extend, refinance, renew, replace, defease or refund
other Indebtedness of the Borrower or any of its Restricted Subsidiaries (other
than intercompany Indebtedness); provided, that:

 

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

 

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

 

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

 

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

 

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

 

(6)                                  such
Indebtedness (other than Indebtedness permitted pursuant to clause (d) or
(e) of Section 7.3 and letter of credit facilities
refinancing the Revolving Credit Facility (as defined in the Existing Credit
Agreement) and permanently reducing the Revolving Credit Commitments (as
defined in the Existing Credit Agreement), Dollar for Dollar) has a final
maturity date that is at least six years after December 22, 2004 and
provides for the amortization of not more than 10% of its original outstanding
principal amount prior to such final maturity date.

 

35

 

“Permitted Separate
Liens” means Liens on Excluded Property as defined in the Collateral Trust
Agreement which either (x) secure the obligations under the Existing Credit Agreement
or (y) secure obligations on a pari passu basis with the Credit Agreement
Obligations.

 

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

 

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

 

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

 

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

 

“Pro Rata Share” means, with respect to each
Lender, a fraction (expressed as a percentage, carried out to the ninth decimal
place), the numerator of which is the outstanding principal amount of the Loans
of the relevant Lender at such time and the denominator of which is the
Outstanding Amount at such time.

 

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

 

“Qualified Securitization Transaction” means
any transaction or series of transactions that may be entered into by the
Borrower or any of its Restricted Subsidiaries pursuant to which

 

36

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Required Agreement Lenders” means, as of any
date of determination, Lenders having more than 50% of the Outstanding Amount.

 

“Required Aggregate Revolver and Term Lenders”
means, as of any date of determination, lenders under the Existing Credit
Agreement and Lenders under this Agreement having, in the aggregate, more than
50% of the sum of (a) the Total Outstandings (as defined in the Existing
Credit Agreement)(with the aggregate amount of each Lender’s (as defined in the
Existing Credit Agreement) risk participation and funded participation in L/C
Obligations (as defined in the Existing Credit Agreement) being deemed “held”
by such Lender for purposes of this definition), (b) the aggregate unused
Revolving Credit Commitments (as defined in the Existing Credit Agreement), and
(c) the Outstanding Amount,

 

37

 

“Required Aggregate Term Lenders” means, as of
any date of determination, lenders under the Existing Credit Agreement and
Lenders under this Agreement having, in the aggregate, more than 50% of the sum
of (a) the Total Outstandings (as defined in the Existing Credit
Agreement) with respect to the Term Loans (as defined in the Existing Credit
Agreement) and (b) the Outstanding Amount,

 

“Required Lenders” means, as of any date of
determination,

 

(a)                                  the Required Aggregate Revolver and Term
Lenders, for purposes of (i) approving amendments or waivers to any of the
provisions set forth in Section 2.4(b), Article VI, Article VII
(other than Section 7.16 or the definition of Permitted Separate
Liens) Article VIII or Article IX (other than Section 9.1(a))
of this Agreement (including, in each case, the defined terms used therein), (ii) except
to the extent provided in clause (c) below, exercising remedies or taking
other actions under Section 9.2, and (iii) except to the
extent provided in Section 7.16(a), approving amendments or waivers
to any of the provisions of the Loan Documents (other than the Notes and the Fee
Letter) other than this Agreement;

 

(b)                                 the Required Aggregate Term Lenders, for
the purposes of determining any Core Asset Consent or any amendment or waiver
with respect thereto;

 

(c)                                  the Required Agreement Lenders, for
purposes of exercising remedies under Section 9.2 (i) by
reason of an Event of Default under Section 9.1(a) at a time
when an Event of Default under Section 9.1(a) of the Existing
Credit Agreement caused by the failure to pay a proportional amount under the
Existing Credit Agreement does not exist, (ii) by reason of an Event of
Default under Section 9.1(c) caused by a failure to perform or
observe performance of the covenants set forth in Section 4.3 or 7.16,
(iii) by reason of an Event of Default under Section 9.1(d) or
(iv) at any time after the obligations under the Existing Credit Agreement
have been accelerated; and

 

(d)                                 the Required Agreement Lenders, for the
purposes of any other amendment, waiver or other action specified for the
Required Lenders under this Agreement not covered by clauses (a) (including
the definitions covered in such clause), (b), or (c) above.

 

For the purpose of determining whether or not any approval,
authorization or similar action under this Agreement has been taken by the
Required Lenders, the approval, authorization or similar action with respect to
the applicable lenders under the Existing Credit Agreement shall be deemed to
have been taken to the extent (1) such lenders have approved, authorized
or taken similar action regarding a substantially similar action with respect
to the provisions of the Existing Credit Agreement or (2) such lenders
actually provide any such approval, authorization or similar action with
respect to this Agreement. 
Notwithstanding the foregoing, no amendment or modification of this
Agreement approved by the Required Aggregate Revolver and Term Lenders shall be
effective without the consent of the Requirement Agreement Lenders if such
amendment or modification (A) is made in contemplation of the repayment of
all or substantially all of the Indebtedness under the Existing Credit
Agreement (including pursuant to a refinancing thereof), (B) is to Section 2.4
and non-ratably impairs the rights to prepayment of the Lenders under this
Agreement in comparison with the effect of a corresponding amendment or waiver
to the rights of the Term Lenders (as such term is defined under the Existing
Credit Agreement)

 

38

 

under the Existing Credit Agreement, (C) is not made in connection
with a substantially corresponding amendment or waiver under the Existing
Credit Facility which has or will substantially contemporaneously become
effective, or (D) permits the granting of additional Collateral to secure
obligations under the Exiting Credit Agreement unless such additional
Collateral constitutes Shared Collateral or Excluded Property as defined in the
Collateral Trust Agreement as in effect on the date hereof.  The Lenders and Administrative Agent
acknowledge and accept that the provisions of this Agreement may cause
amendments, waivers or other actions with respect to this Agreement or the Loan
Documents that have not been approved by any Lenders or the Administrative
Agent, and waive any claims against the lenders under the Existing Credit
Agreement with respect thereto absent gross negligence or willful misconduct.

 

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

 

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

 

“Restricted Payment” means any of the
following:

 

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

 

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

 

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

 

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

 

39

 

“Revolver Administrative Agent” means the “Credit
Agreement Agent” as defined in the Collateral Trust Agreement.

 

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

 

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

 

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

 

“Secured Debt Documents” means, collectively,
the Credit Documents, the Credit Documents (as defined in the Existing Credit
Agreement), any Secured Trading Counterparty Intercreditor Agreement, the
Secured Note Agreements, the PEDFA Guaranties and the indenture, agreement and
other documents governing each other Series of Secured Debt and all
agreements binding on any obligor related thereto.

 

“Secured Debt Representative” means:

 

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

 

(2)                                  the
Seward Bond Trustee;

 

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

 

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

 

“Secured Hedge Agreement” means any Hedging
Agreement permitted under Article VI or VII that is entered
into by and between the Borrower and a counterparty that is (or at the time
such Secured Hedge Agreement was entered into, was) a Lender or an Affiliate
thereof.

 

“Secured Note Agreements” means, collectively (a) the
Indenture, dated as of July 1, 2003, among the Borrower, the guarantors
referred to therein, and Wilmington Trust Company, as trustee, pursuant to
which the Borrower’s 9.25% Secured Notes due 2010 were issued, (b) the
Indenture, dated as of July 1, 2003, among the Borrower, the guarantors
referred to therein, and Wilmington Trust Company, as trustee, pursuant to
which the Borrower’s 9.50% Secured Notes due 2013 were issued, (c) the
Indenture, dated as of December 22, 2004 among the Borrower, the
guarantors referred to therein, and Wilmington Trust Company, as trustee,
pursuant to which the

 

40

 

New Secured Notes were issued, and (d) each other
indenture among the Borrower, the guarantors referred to therein (if
applicable) and the indenture trustee thereunder, and each other loan or note
purchase agreement among the Borrower, the guarantors referred to therein (if
applicable), the Lenders or note purchasers thereunder and the administrative
agent (if any) thereunder, in each case pursuant to which a series of Secured
Notes was issued or a loan was made constituting a series of Secured Notes, as
each such agreement or indenture may be amended, restated, supplemented or
otherwise modified from time to time.

 

“Secured Note Obligations” means:

 

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

 

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

 

(3)                                  all
related exchange notes;

 

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

 

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

 

“Secured Parties” means, collectively, the
Lenders, the Administrative Agent, each counterparty to a Secured Hedge
Agreement and (in each case) each of their respective successors, transferees
and assigns and each of the other “Secured Parties” as defined in the
Collateral Trust Agreement.

 

“Secured Trading Counterparty Collateral Trust
Agreement” means the Collateral Trust Agreement dated as of June 14,
2005, among the Borrower, Reliant Energy Electric Solutions, LLC, Reliant
Energy Retail Services, LLC, Reliant Energy Solutions East, LLC, and the
Secured Trading Counterparty Collateral Trustee, as the same may be amended,
amended and restated, supplemented or otherwise modified, renewed or replaced
from time to time.

 

“Secured Trading Counterparty Collateral Trustee”
means Wachovia Bank, National Association, as Collateral Trustee under the
Secured Trading Counterparty Collateral Trust Agreement, and any successors
from time to time acting as such thereunder.

 

“Secured Trading Counterparty Intercreditor
Agreement” means (1) the Second Amended and Restated Intercreditor
Agreement dated as of June 14, 2005, among the Secured Trading
Counterparty Collateral Trustee, the Collateral Trustee, and Bank of America,
N.A., as Sub-Agent, and (2) any other intercreditor agreement on similar
terms, or other terms approved by the Collateral Trustee, relating to the liens
granted under the Secured Trading Counterparty

 

41

 

Collateral Trust Agreement, as the same may be
amended, amended and restated, supplemented or otherwise modified, renewed or
replaced from time to time.

 

“Securities Account” shall mean any securities
account as such term is defined in the UCC, now or hereafter held in the name
of any Loan Party.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

42

 

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

 

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

 

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

 

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

 

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

 

“Separate Collateral” has the meaning assigned
to it in the Collateral Trust Agreement.

 

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

 

“Seward Bond Issuer” has the meaning given to
such term in the definition of “Seward Bond Trust Indentures” set forth in this
Article.

 

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

 

43

 

December 22, 2004 as permitted hereunder in
connection with any Seward Tax-Exempt Bonds issued after December 22,
2004.

 

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

 

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

 

“Seward Series 2001A Bonds” has the
meaning given to such term in the definition of “Seward Tax-Exempt Bonds”.

 

“Seward Series 2002A Bonds” has the
meaning given to such term in the definition of “Seward Tax-Exempt Bonds”.

 

“Seward Series 2002B Bonds” has the
meaning given to such term in the definition of “Seward Tax-Exempt Bonds”.

 

“Seward Series 2003A Bonds” has the
meaning given to such term in the definition of “Seward Tax Exempt Bonds.”

 

“Seward Series 2004A Bonds” has the
meaning given to such term in the definition of “Seward Tax Exempt Bonds.”

 

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

 

“Seward Tax-Exempt Bonds” shall mean (1) the
Pennsylvania Economic Financing Authority Exempt Facilities Revenue Bonds
(Reliant Energy Seward, LLC Project), Series 2001A, in the original
aggregate principal amount of $150,000,000 (the “Seward Series 2001A
Bonds”), (2) the Pennsylvania Economic Financing Authority Exempt
Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2002A,
in the original aggregate principal amount of $75,000,000 (the “Seward Series 2002A
Bonds”), (3) the Pennsylvania Economic Financing Authority Exempt
Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2002B,
in the original aggregate principal amount of $75,000,000 (the “Seward Series 2002B
Bonds”), (4) the Pennsylvania Economic Financing Authority Exempt
Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2003A,
in the original aggregate principal amount of $100,000,000 (the “Seward Series 2003A
Bonds”), and (5) any bonds issued by PEDFA on or after December 22,
2004 as permitted hereunder and supported by letters of credit outstanding
hereunder.

 

“Shared Collateral” has the meaning assigned to
it in the Collateral Trust Agreement.

 

“Sharing Eligible Debt” means:

 

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

 

44

 

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

 

(3)                                  the
Secured Notes;

 

(4)                                  the
PEDFA Guaranties;

 

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

 

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

 

provided, that each category of Indebtedness described above:

 

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

 

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

 

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

 

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

 

45

 

“Solvency” is used refers to a Person together with
its Subsidiaries, Person as used above shall be deemed to be a reference to
such Person together with its Subsidiaries.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Standard Securitization Undertakings” means
representations, warranties, covenants and indemnities entered into by the
Borrower or any Subsidiary of the Borrower, which are substantially similar to
those in existence on December 22, 2004 or are otherwise reasonably
customary in an accounts receivable or equipment securitization transaction, in
each case, as determined by the Borrower.

 

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

 

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

 

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

 

“Subsidiary” of a Person means a corporation,
partnership, joint venture, limited liability company or other business entity
of which a majority of the shares of securities or other interests having
ordinary voting power for the election of directors or other governing body
(other than securities or interests having such power only by reason of the
happening of a contingency) are at the time beneficially owned, or the
management of which is otherwise controlled, directly, or

 

46

 

indirectly through one or more intermediaries, or
both, by such Person.  Unless otherwise
specified, all references herein to a “Subsidiary”, “Restricted Subsidiary”, “Restricted
Subsidiaries” or “Subsidiaries” shall refer to a Subsidiary, Restricted
Subsidiary, Restricted Subsidiaries or Subsidiaries of the Borrower.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Unrestricted Subsidiary” means (a) as of
the Closing Date, RE Retail Receivables, LLC, and (b) thereafter, any
Subsidiary of the Borrower that is designated by the Board of Directors of the
Borrower as an Unrestricted Subsidiary pursuant to a Board Resolution, but only
to the extent that:

 

47

 

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

 

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

 

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

 

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

 

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

 

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

 

“Waivable Repayment” has the meaning specified
in Section 2.4(b)(ix).

 

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

 

48

 

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

 

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

 

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

 

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

 

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

 

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

 

1.3  Accounting
Terms.

 

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

 

49

 

conformity with, GAAP applied on a consistent basis,
except as otherwise specifically prescribed herein.

 

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

 

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

 

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

 

ARTICLE II.

THE COMMITMENTS AND THE LOANS

 

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

 

2.2  Borrowings, Conversions and Continuations of
Loans.

 

(a)                                  Each Borrowing, each conversion of Loans
from one Type to the other, and each continuation of Eurodollar Rate Loans
shall be made upon the Borrower’s irrevocable notice to the Administrative
Agent, which may be given by telephone. 
Each such notice must be received by the Administrative Agent not later
than 11:00 a.m. (New York time) (i) three Business Days prior to the
requested date of any Borrowing of, conversion to or continuation of Eurodollar
Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans and
(ii) on the requested date of any Borrowing of Base Rate Loans.  Each telephonic notice by the Borrower
pursuant to this clause must be confirmed promptly by delivery to the
Administrative Agent of a written Borrowing Notice, appropriately completed and
signed by a Responsible Officer of the

 

50

 

Borrower.  Each
Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be
in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof.  Except as provided in Section 2.3(c),
each Borrowing of or conversion to Base Rate Loans shall be in a principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof.  Each Borrowing Notice (whether telephonic or
written) shall specify (i) whether the Borrower is requesting a Borrowing,
a conversion of Loans from one Type to the other, or a continuation of
Eurodollar Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(iii) the principal amount of Loans to be borrowed, converted or continued,
(iv) the Type of Loans to be borrowed or to which existing Loans are to be
converted, and (v) if applicable, the duration of the Interest Period with
respect thereto.  If the Borrower fails
to specify a Type of Loan in a Borrowing Notice or if the Borrower fails to
give a timely notice requesting a conversion or continuation, then the
applicable Loans shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans in any such Borrowing
Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.

 

(b)                                 Following receipt of a Borrowing Notice,
the Administrative Agent shall promptly notify each Lender of the amount of its
Pro Rata Share of the Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans
described in

Section 2.2(a).  In the case
of a Borrowing, each Lender shall make the amount of its Loan available to the
Administrative Agent in immediately available funds at the Administrative Agent’s
Office not later than noon (New York time) on the Business Day specified in the
Borrowing Notice.  Upon satisfaction of
the applicable conditions set forth in Sections 4.1 and 4.2, the
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent by 1:00 p.m. (New
York time) on the Business Day specified in the Borrowing Notice, either by (i) crediting
the account of the Borrower on the books of Deutsche Bank with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance
with instructions provided to (and reasonably acceptable to) the Administrative
Agent by the Borrower.

 

(c)                                  Except as otherwise provided herein, a
Eurodollar Rate Loan may be continued or converted only on the last day of an
Interest Period for such Eurodollar Rate Loan. 
During the existence of an Event of Default, no Loans may be requested
as, converted to or continued as Eurodollar Rate Loans without the consent of
Lenders holding in the aggregate more than 50% of the Outstanding Amount.

 

(d)                                 The Administrative Agent shall promptly
notify the Borrower and the Lenders of the interest rate applicable to any
Interest Period for Eurodollar Rate Loans upon determination of such interest
rate.  The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error.  At any time that Base
Rate Loans are outstanding, the Administrative Agent shall notify the Borrower
and the Lenders of any change in the Administrative Agent’s prime rate used in
determining the Base Rate promptly following the public announcement of such
change.

 

51

 

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

 

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

 

(g)                                 Notwithstanding anything to the contrary
set forth herein, all Loans incurred on the Closing Date shall be Eurodollar
Rate Loans with a one month Interest Period.

 

2.3  [Reserved].

 

2.4  Optional and Mandatory Prepayments.

 

(a)                                  Optional Prepayments. 
Subject to Section 2.4(b)(ix), the Borrower may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay Loans
in whole or in part without premium or penalty; provided, that (1) such
notice must be received by the Administrative Agent not later than 11:00 a.m.
(A) three Business Days prior to any date of prepayment of Eurodollar Rate
Loans and (B) on the date of prepayment of Base Rate Loans; (2) any
prepayment of Eurodollar Rate Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof; (3) any
prepayment of Base Rate Loans shall be in a principal amount of $5,000,000 or a
whole multiple of $1,000,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding; and (4) any prepayments
of Loans shall be applied ratably to the principal repayment installments
thereof on a pro  rata basis. 
Each such notice shall specify the date and amount of such prepayment
and the Type(s) of Loans to be prepaid. 
The Administrative Agent will promptly notify each Lender of its receipt
of each such notice, and of the amount of such Lender’s Pro Rata Share of such
prepayment.  If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein.  Any prepayment of a Eurodollar
Rate Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section 3.5.  Each such prepayment shall be applied to the
Loans of the Lenders in accordance with their respective Pro Rata Shares.

 

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

 

52

 

within
three Business Days after the date of receipt thereof by the Borrower or such
Restricted Subsidiary subject to the provisions of Section 2.4(b)(viii)), as follows:

 

(A)                              to the extent such Net Asset Sale Proceeds are not OPH
Asset Sale Proceeds, (X) if none of such Net Asset Sale Proceeds is required by
the terms of any Parity Secured Debt to be offered to any holder of any Parity
Secured Debt (including the Existing Credit Agreement) or otherwise used to
repurchase or prepay any Parity Secured Debt (including the Existing Credit
Agreement), to prepay Loans (determined as provided in Section 2.4(b)(vii) below) in an amount equal to 100% of such Net Asset Sale
Proceeds received and (Y) if any of such Net Asset Sale Proceeds is required by
the terms of any Parity Secured Debt to be offered to any holder of any Parity
Secured Debt (including the Existing Credit Agreement) or otherwise used to
repurchase or prepay any Parity Secured Debt (including the Existing Credit
Agreement), to prepay Loans (determined as provided in Section 2.4(b)(vii) below) in an amount equal to 100% of such Net
Asset Sale Proceeds received multiplied by the Pro Rata Percentage; and

 

(B)                                to the extent such Net Asset Sale Proceeds are OPH Asset
Sale Proceeds, (X) if none of such Net Asset Sale Proceeds is required by the
terms of any Parity Secured Debt (including the Existing Credit Agreement)or
the OPH Note Indenture to be offered to any holder of any Parity Secured Debt
(including the Existing Credit Agreement)or any holder of an OPH Note or
otherwise used to repurchase or prepay any Parity Secured Debt (including the
Existing Credit Agreement)or OPH Notes, to prepay Loans (determined as provided
in Section 2.4(b)(vii) below) in an amount equal to 100% of such Net
Asset Sale Proceeds received, to the extent the OPH Note Indenture does not
prohibit the distribution of such Net Asset Sale Proceeds to the Borrower, (Y)
to the extent such OPH Asset Sale Proceeds in the aggregate are equal to or
less than the outstanding principal amount of the OPMW Term Notes and the OPNY
Term Note, to prepay (without any offer to repurchase or prepay any OPH Notes)
on first, the OPMW New Term Note and the OPNY Term Note on a pro
rata basis and second the OPMW Refinancing Note, and, in turn, to prepay
Loans (determined as provided in Section 2.4(b)(vii) below) (without any offer to repurchase or prepay
any other Parity Secured Debt (other than the Existing Credit Agreement)), and
(Z) to the extent such OPH Asset Sale Proceeds (I) in the aggregate exceed the
outstanding principal amount of the OPMW Term Notes and the OPNY Term Note,
(II) are not otherwise required, in accordance with the OPH Note Indenture, to
be offered to prepay any OPH Notes, and (III) are required by the terms of any
Parity Secured Debt to be offered to any holder of Parity Secured Debt or
otherwise used to repurchase or prepay any Parity Secured Debt, to pay a
dividend in the amount of such proceeds to the Borrower and, in turn, to prepay
Loans (determined as provided in Section 2.4(b)(vii) below) in an amount equal to 100% of such Net Asset Sale
Proceeds received multiplied by the Pro Rata Percentage, but only (so long as
and to the extent such Net Asset Sale Proceeds are not accepted by any such
holder of Parity Secured Debt) to the extent the OPH Note Indenture does not
prohibit the distribution of such Net Asset Sale Proceeds to the Borrower.

 

In
addition, in the event any such Net Asset Sale Proceeds described in the
foregoing sentence (x) are required by the terms of any Parity Secured Debt to
be and are offered to any holder of Parity Secured Debt but are not accepted by
such holder, or

 

53

 

(y) are required by the terms of the OPH Note Agreement to
be and are offered to any holder of an OPH Note but are accepted neither by
such holder nor subsequently by any holder of any Parity Secured Debt to whom
they are required by the terms of any Parity Secured Debt Agreement to be and
are offered, and are permitted in accordance with the OPH Note Indenture to be
distributed to the Borrower (such Net Asset Sale Proceeds being referred to
herein as “Available Proceeds”), then promptly, but in any event no later than three (3) Business
Days after the last day for, in each case, such holder of any Parity Secured
Debt to accept the repurchase or prepayment offer, the Borrower shall prepay
Loans (determined as provided in Section 2.4(b)(vii) below) in an amount equal to 100% of such Available
Proceeds.

 

(ii)                                  Upon the incurrence or issuance by the Borrower or any
of its Subsidiaries of any secured Senior Debt (other than Excepted Debt) and
any Permitted Refinancing Indebtedness of any of the foregoing, the Borrower
shall prepay an aggregate principal amount of Loans equal to 100% of all Net
Financing Proceeds received therefrom within three Business Days after the date
of receipt thereof by the Borrower or such Subsidiary subject to the provisions
of

Section 2.4(b)(viii).

 

(iii)                               Upon the incurrence or issuance by the Borrower or any of
its Subsidiaries of any unsecured Senior Debt (other than Excepted Debt), the
Borrower shall prepay an aggregate principal amount of Loans equal to (x) if
the Consolidated Leverage Ratio determined on a pro forma basis after giving
effect to such incurrence or issuance as of the last day of the Fiscal Quarter
most recently ended equals or exceeds to 4.0:1, 75% of all Net Financing
Proceeds received therefrom and (y) if the Consolidated Leverage Ratio so
determined is less than 4.0:1, 50% of all Net Financing Proceeds received
therefrom, within three Business Days after the date of receipt thereof by the
Borrower or such Subsidiary subject to the provisions of Section 2.4(b)(viii); provided, that so long as no Event of Default shall have
occurred and be continuing, (A) if the Borrower intends to reinvest any
Net Financing Proceeds in accordance with this proviso, it shall deliver
written notice of such intention to the Administrative Agent on or prior to the
third Business Day immediately following the date on which Borrower receives
such Net Financing Proceeds, (B) if the Borrower shall have delivered such
notice, it may reinvest all or any portion of such Net Financing Proceeds in an
aggregate amount, together with the aggregate amount of Net Financing Proceeds
reinvested pursuant to Section 2.4(b)(iv), not to exceed $500,000,000 in ERCOT Assets so long as,
pending such reinvestment, the Net Financing Proceeds are applied to repay
Revolving Credit Loans or maintained as Collateral for the Credit Agreement Obligations,
and (C) on the date the Borrower consummates such purchase of ERCOT
Assets, it shall deliver a certificate of a Responsible Officer to the
Administrative Agent certifying that all, or, subject to the immediately
succeeding proviso, part of, such Net Financing Proceeds have been reinvested
in accordance with the proviso of this clause (b)(iii) and, as a result, no mandatory prepayments are required
under this clause (b)(iii); provided, further, that any Net Financing Proceeds not so reinvested shall
be immediately applied to the prepayment of the Loans as set forth in this
Section.

 

(iv)                              Upon the incurrence or issuance by the Borrower of any
Junior Securities (other than Excepted Debt and other than in connection with
the exercise of employee

 

54

 

options or the RRI
Warrants), the Borrower shall prepay an aggregate principal amount of Loans
equal to 50% of all Net Financing Proceeds received therefrom, within three
Business Days after the date of receipt thereof by the Borrower subject to the
provisions of Section 2.4(b)(viii); provided, that so long as no Event of Default shall have
occurred and be continuing, (A) if the Borrower intends to reinvest any
Net Financing Proceeds in accordance with this proviso, it shall deliver
written notice of such intention to the Administrative Agent on or prior to the
Business Day immediately following the date on which Borrower receives such Net
Financing Proceeds, (B) if the Borrower shall have delivered such notice,
it may reinvest all or any portion of such Net Financing Proceeds in an
aggregate amount, together with the aggregate amount of Net Financing Proceeds
reinvested pursuant to Section 2.4(b)(iii), not to exceed $500,000,000 in ERCOT Assets so long as,
pending such reinvestment, the Net Financing Proceeds are applied to repay
Revolving Credit Loans or maintained as Collateral for the Credit Agreement
Obligations, and (C) on the date the Borrower consummates such purchase of
ERCOT Assets, it shall deliver a certificate of a Responsible Officer to the
Administrative Agent certifying that all, or, subject to the immediately
succeeding proviso, part of, such Net Financing Proceeds have been reinvested
in accordance with the proviso of this clause (b)(iv) and, as a result, no mandatory prepayments are
required under this clause (b)(iv); provided, further, that any Net Financing Proceeds not so reinvested
shall be immediately applied to the prepayment of the Loans as set forth in
this Section.

 

(v)                                 Upon any Extraordinary Receipt received by or paid to or
for the account of the Borrower, any of the Loan Parties or OPH or any of its
Subsidiaries in respect of its property or assets, and not otherwise included
in clause (i), (ii), (iii) or (iv) of this clause (b), the Borrower shall prepay an aggregate principal
amount of Loans equal to 100% of all Net Casualty Proceeds received therefrom
within three Business Days after the date of receipt thereof by the Borrower or
such Subsidiary subject to the provisions of Section 2.4(b)(viii); provided, that with respect to proceeds of insurance and
Condemnation awards (or payments in lieu thereof), (A) if the Borrower
intends to reinvest the Net Casualty Proceeds thereof in accordance with this
proviso, it shall deliver written notice of such intention to the
Administrative Agent on or prior to the Business Day immediately following the
date on which Borrower receives such Net Casualty Proceeds, (B) if the
Borrower shall have delivered such notice, the Net Casualty Proceeds thereof may
be reinvested, so long as such reinvestment is to restore, repair or replace
the assets or property or purchase other assets with substantially the same
utility and in the same line of business in respect of which such Net Casualty
Proceeds were received, and so long as such reinvestment is consummated or
irrevocably committed to be consummated within 365 days after the receipt of
such Net Casualty Proceeds so long as, pending such reinvestment, the Net
Casualty Proceeds are applied to repay Revolving Credit Loans or maintained as
Collateral for the Credit Agreement Obligations, and (C) on the date the
Borrower consummates or commits to consummate such restoration, repair or
replacement or purchase, it shall deliver a certificate of a Responsible
Officer to the Administrative Agent certifying that all, or, subject to the
immediately succeeding proviso, part of, such Net Casualty Proceeds have been
reinvested in accordance with the first proviso of this clause (b)(v) and, as a result, no mandatory prepayments are
required under this clause (b)(v); provided, further, that any Net Casualty Proceeds not so reinvested (or
such lesser percentage which represents the remaining portion of such

 

55

 

proceeds not expended or
committed pursuant to the foregoing and less any amounts required to pay for
necessary remediation expenses with respect to a condition affecting the
applicable property, to pay reasonable expenses incurred in connection with the
closure of the applicable property and to pay any costs reasonably incurred in
connection with such casualty event) shall be immediately applied to the
prepayment of the Loans in accordance with the foregoing or, to the extent the
Collateral Trustee is loss payee under any insurance policy (if applicable),
the Borrower shall irrevocably direct the Collateral Trustee to transfer to the
Administrative Agent to be applied (in each case, promptly, but in no event
later than three (3) Business Days following receipt of such proceeds) as
a prepayment of Loans in accordance with the foregoing; provided, that if an Event of Default shall have occurred and be
continuing, all Net Casualty Proceeds 
which would otherwise be payable to the Borrower pursuant to this clause (b)(v) shall be paid to the Collateral Trustee and
applied pursuant to the Collateral Trust Agreement; provided, however, that with respect to tangible property subject to any
Permitted Encumbrance, no such prepayment shall be required to the extent that
this clause (b)(v) would require an application of Net Casualty
Proceeds that would violate or breach any of the provisions of the instruments
or documents under which such Permitted Encumbrance arises or which governs the
application of proceeds.

 

(vi)                              Notwithstanding anything to the contrary set forth
above, the Company shall not be required to prepay the Loans pursuant to the clause (b)(i)(B)(Y), the last paragraph of clause (b)(i), and clauses (b)(ii) through
clauses (b)(v) (the “Specified Provisions”) if the Borrower is required to make any prepayment of
the loans under the Existing Credit Agreement by reason of the circumstances
set forth therein.  The Borrower agrees
that it will not incur revolving loans under the Existing Credit Agreement for
the primary purpose of avoiding the making of a prepayment of Loans under the
Specified Provisions.

 

(vii)                           Each prepayment of Loans pursuant to clauses (i), (ii), (iii), (iv) or (v) of this clause (b) shall be applied ratably to the Loans to the
principal repayment installments thereof on a pro rata basis.

 

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

 

(ix)                                Notwithstanding anything to the contrary contained
herein, the Lenders with outstanding Loans shall have the option
to waive a voluntary prepayment of the Loans pursuant to Section 2.4(a) and
a mandatory repayment of such Loans pursuant to clauses (i), (ii),
(iii), (iv) or (v) of this clause (b) (each
such prepayment or repayment, a

 

56

 

“Waivable Repayment”),
provided that no Lender shall have the right to waive any such voluntary
or mandatory prepayment at a time when no Term Loans under and as defined in
the Existing Credit Agreement are outstanding. 
The Borrower shall give to the Administrative Agent written notice of a
Waivable Repayment at least five Business Days prior to such repayment, which
notice the Administrative Agent shall promptly forward to all Lenders
(indicating in such notice the amount of such repayment to be applied to each such
Lender’s outstanding Loans).  In the
event any such Lender desires to waive such Lender’s right to receive any such
Waivable Repayment in whole or in part, such Lender shall so advise the
Administrative Agent no later than the close of business two Business Days
after the date of such notice from the Administrative Agent, which notice shall
also include the amount such Lender desires to receive in respect of such
repayment.  If any Lender does not reply
to the Administrative Agent within the aforementioned two Business Day period,
such Lender will be deemed not to have waived any part of such repayment.  If any Lender does not specify an amount such
Lender wishes to receive, it will be deemed to have waived 100% of the amount
of its share of such payment.

 

2.5  Termination of Commitments. 
The Commitments shall be automatically and permanently reduced to zero
on the Closing Date (after giving effect to the Borrowing of the Loans).

 

2.6  Repayment of Loans. 
The Borrower shall repay to the Administrative Agent for the ratable
account of the Lenders on each Quarterly Payment Date the aggregate principal
amount of Loans set forth opposite such Quarterly Payment Date (which amounts
shall be reduced as a result of the application of prepayments in accordance with
the order of priority set forth in Section 2.4); provided,
that the final principal repayment installment of the Loans shall be repaid on
the Maturity Date in an amount equal to the aggregate principal amount of all
Loans outstanding on such date:

 

	
  Quarterly Payment Date

  	
   

  	
  Amount of Loan

  Repayment

  
	
  January 1, 2006 (through (and
  including) (January 1, 2010)

  	
   

  	
  $747,500

  
	
  April 30, 2010

  	
   

  	
  The remaining amount of Loans

  

 

2.7  Interest.

 

(a)                                  Subject to the provisions of clause (b) below,
(i) each Eurodollar Rate Loan shall bear interest on the outstanding
principal amount thereof for each Interest Period at a rate per annum equal to
the Eurodollar Rate for such Interest Period plus the Applicable Margin;
and (ii) each Base Rate Loan shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per annum
equal to the Base Rate plus the Applicable Margin.

 

(b)                                 (i)                                     During all times that an Event of Default under Section 9.1(a) shall
have occurred and be continuing, the Borrower shall pay interest on the
principal amount of all outstanding Loans and Unreimbursed Amounts and all
overdue interest, fees and other amounts,

 

57

 

at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(ii)                                  Accrued
and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.

 

(c)                                  Interest on each Loan shall be due and payable
in arrears on each Interest Payment Date applicable thereto and at such other
times as may be specified herein. 
Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

 

2.8  Fees.  The Borrower
shall pay to the Administrative Agent for its own accounts fees in the amounts
and at the times specified in the Fee Letter. 
Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.

 

2.9  Computation of Interest. 
All computations of interest for Base Rate Loans when the Base Rate is
determined by Deutsche Bank’s “prime rate” shall be made on the basis of a year
of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of interest shall be
made on the basis of a 360-day year and actual days elapsed (which results in
more interest, as applicable, being paid than if computed on the basis of a 365-day
year).  Interest shall accrue on each
Loan for the day on which the Loan is made, and shall not accrue on a Loan, or
any portion thereof, for the day on which the Loan or such portion is paid, provided,
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.11(a), bear interest for one day.  Each determination by the Administrative
Agent of an interest rate hereunder shall be conclusive and binding for all
purposes, absent manifest error.

 

2.10  Evidence
of Debt.

 

(a)                                  The Loans made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Loans made by the Lenders to the Borrower and the interest
and payments thereon.  Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrower hereunder to pay any amount owing with respect
to the Credit Agreement Obligations.  In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall
control in the absence of manifest error. 
Upon the request of any Lender made through the Administrative Agent,
the Borrower shall promptly execute and deliver to such Lender (through the
Administrative Agent) a Note, which shall evidence such Lender’s Loans in
addition to such accounts or records. 
Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.

 

(b)                                 Entries made in good faith by the
Administrative Agent in the Register pursuant to Section 2.10(a),
and by each Lender in its account or accounts pursuant to Section 2.10(a),

 

58

 

shall be prima facie evidence of the amount of principal and
interest due and payable or to become due and payable from the Borrower to, in
the case of the Register, each Lender and, in the case of such account or
accounts, such Lender, under this Agreement and the other Loan Documents,
absent manifest error; provided, that the failure of the Administrative
Agent or such Lender to make an entry, or any finding that an entry is
incorrect, in the Register or such account or accounts shall not limit or
otherwise affect the obligations of the Borrower under this Agreement and the
other Loan Documents.

 

2.11  Payments Generally; Administrative Agent’s
Clawback.

 

(a)                                  General.  All payments
to be made by the Borrower shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff. 
Except as otherwise expressly provided herein, all payments by the
Borrower hereunder shall be made to the Administrative Agent, for the account
of the respective Lenders to which such payment is owed, at the Administrative
Agent’s Office in Dollars and in immediately available funds not later than
2:00 p.m. on the date specified herein. 
The Administrative Agent will promptly distribute to each Lender its Pro
Rata Share (or other applicable share as provided herein) of such payment in
like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding
Business Day and any applicable interest shall continue to accrue.  If any payment to be made by the Borrower
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in
computing interest.

 

(b)                                 (i)                                     Funding by Lenders; Presumption by Administrative
Agent.  Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of any Borrowing that
such Lender will not make available to the Administrative Agent such Lender’s
share of such Borrowing, the Administrative Agent may assume that such Lender
has made such share available on such date in accordance with Section 2.2
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount.  In such event, if
a Lender has not in fact made its share of the initial Borrowing available to
the Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each day from
and including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the
case of a payment to be made by such Lender, the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation and (B) in the case
of a payment to be made by the Borrower, the interest rate applicable to Base
Rate Loans.  If the Borrower and such
Lender shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the initial
Borrowing to the Administrative Agent, then the amount so paid shall constitute
such Lender’s Loan included in such Borrowing. 
Any payment by the Borrower shall be without prejudice to any claim the
Borrower may have against a Lender that shall have failed to make such payment
to the Administrative Agent.

 

(ii)                                  Payments
by Borrower; Presumptions by Administrative Agent.  Unless the Administrative Agent shall have
received notice from the Borrower prior to the date

 

59

 

on which any payment is
due to the Administrative Agent for the account of the Lenders that the
Borrower will not make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders the amount due.  In such event, if the Borrower has not in
fact made such payment, then each of the Lenders severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender in immediately available funds with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the date
of payment to the Administrative Agent, at the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.

 

A notice of the Administrative Agent to any Lender or
the Borrower with respect to any amount owing under this clause shall be
conclusive, absent manifest error.

 

(c)                                  Failure to Satisfy Conditions Precedent. 
If any Lender makes available to the Administrative Agent funds for any
Loan to be made by such Lender as provided in the foregoing provisions of this
Article, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the making of the Loans set
forth in Article IV are not satisfied or waived in accordance with
the terms hereof, the Administrative Agent shall return such funds (in like
funds as received from such Lender) to such Lender, without interest.

 

(d)                                 Obligations of Lenders Several. 
The obligations of the Lenders hereunder to make Loans and to make
payments pursuant to Section 11.4(c) are several and not
joint.  The failure of any Lender to make
any Loan or to make any payment under Section 11.4(c) on any
date required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Loan, to purchase its participation
or to make its payment under Section 11.4(c).

 

(e)                                  Funding Source. 
Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

 

2.12  Sharing of Payments by Lenders. 
If any Lender shall, by exercising any right of setoff or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of the Loans made by it resulting in such Lender’s receiving payment of a
proportion of the aggregate amount of such Loans and accrued interest thereon
greater than its pro rata share thereof as
provided herein, then the Lender receiving such greater proportion shall (a) notify
the Administrative Agent of such fact, and (b) purchase (for cash at face
value) participations in the Loans, or make such other adjustments as shall be
equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and other amounts owing them; provided,
that:

 

60

 

(i)                                     if
any
such participations or subparticipations are purchased and all or any portion
of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

 

(ii)                                  the
provisions of this Section shall not be construed to apply to (x) any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Borrower or any Subsidiary
thereof (as to which the provisions of this Section shall apply).

 

Each Loan Party consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Loan Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Loan
Party in the amount of such participation.

 

ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.1  Taxes.

 

(a)                                  Payments Free of Taxes. 
Any and all payments by or on account of any obligation of the Borrower
hereunder or under any other Loan Document shall be made free and clear of and
without reduction or withholding for any Indemnified Taxes or Other Taxes; provided,
that if the Borrower shall be required by applicable law to deduct any
Indemnified Taxes (including any Other Taxes) from such payments, then (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent or each Lender, as the case may be,
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

 

(b)                                 Payment of Other Taxes by the Borrower. 
Without limiting the provisions of clause (a) above, the
Borrower shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

 

(c)                                  Indemnification by the Borrower. 
The Borrower shall indemnify the Administrative Agent and each Lender,
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) paid by the
Administrative Agent or such Lender, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender

 

61

 

(with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

 

(d)                                 Evidence of Payments. 
As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

 

(e)                                  Status of Lenders. 
Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
resident for tax purposes, or any treaty to which such jurisdiction is a party,
with respect to payments hereunder or under any other Loan Document shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law or reasonably requested by the Borrower
or the Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by the
Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.

 

Without limiting the generality of the foregoing, in
the event that the Borrower is resident for tax purposes in the United States,
any Foreign Lender shall deliver to the Borrower and the Administrative Agent
(in such number of copies as shall be requested by the recipient) on or prior
to the date on which such Foreign Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the request of the Borrower or the Administrative
Agent, but only if such Foreign Lender is legally entitled to do so), whichever
of the following is applicable:

 

(i)                                     duly
completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is
a party,

 

(ii)                                  duly
completed copies of Internal Revenue Service Form W-8ECI,

 

(iii)                               in the case of a Foreign
Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of
the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a
“bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a
“10 percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of
the Code and (y) duly completed copies of 
Internal Revenue Service Form W-8BEN, or

 

(iv)                              any
other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in United States Federal withholding tax duly completed together
with such supplementary documentation as may be prescribed by applicable law to
permit the Borrower to determine the withholding or deduction required to be
made.

 

62

 

(f)                                    Treatment of Certain Refunds. 
If the Administrative Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay to
the Borrower an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent or such
Lender, as the case may be, and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund); provided,
that the Borrower, upon the request of the Administrative Agent or such Lender,
agrees to repay the amount paid over to the Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to
the Administrative Agent or such Lender in the event the Administrative Agent
or such Lender is required to repay such refund to such Governmental
Authority.  This clause shall not be
construed to require the Administrative Agent or any Lender to make available
its tax returns (or any other information relating to its taxes that it deems
confidential) to the Borrower or any other Person.

 

3.2  Illegality.  If any Lender
determines that any Law has made it unlawful, or that any Governmental
Authority has asserted that it is unlawful, for any Lender or its applicable
Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine
or charge interest rates based upon the Eurodollar Rate, or any Governmental
Authority has imposed material restrictions on the authority of such Lender to
purchase or sell, or to take deposits of, Dollars in the London interbank
market, then, on notice thereof by such Lender to the Borrower through the
Administrative Agent, any obligation of such Lender to make or continue Eurodollar
Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be
suspended until such Lender notifies the Administrative Agent and the Borrower
that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrower
shall, upon demand from such Lender (with a copy to the Administrative Agent),
prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to
Base Rate Loans, either on the last day of the Interest Period therefor, if such
Lender may lawfully continue to maintain such Eurodollar Rate Loans to such
day, or immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans.  Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted.

 

3.3  Inability to Determine Rates. 
If the Required Lenders determine that for any reason in connection with
any request for a Eurodollar Rate Loan or a conversion to or continuation
thereof that (a) Dollar deposits are not being offered to banks in the
London interbank eurodollar market for the applicable amount and Interest
Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do
not exist for determining the Eurodollar Rate for any requested Interest Period
with respect to a proposed Eurodollar Rate Loan, or (c) the Eurodollar
Rate for any requested Interest Period with respect to a proposed Eurodollar
Rate Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Loan, the Administrative Agent will promptly so notify the
Borrower and each Lender.  Thereafter,
the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall
be suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice.  Upon
receipt of such notice, the Borrower may revoke any pending request for a
Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have

 

63

 

converted such request into a request for a Borrowing
of Base Rate Loans in the amount specified therein.

 

3.4  Increased Costs; Capital Adequacy; Reserves
on Eurodollar Rate Loans.

 

(a)                                  Increased Costs Generally. 
If any Change in Law shall:

 

(i)                                     impose,
modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended or participated in by, any Lender (except
any reserve requirement contemplated by Section 3.4(e));

 

(ii)                                  subject
any Lender to any tax of any kind whatsoever with respect to this Agreement or
any Eurodollar
Rate Loan made by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered
by Section 3.1 and the imposition of, or any change in the rate of,
any Excluded Tax payable by such Lender); or

 

(iii)                               impose on any Lender or
the London interbank market any other condition, cost or expense affecting this
Agreement or Eurodollar Rate Loans made by such Lender;

 

and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Rate
Loan (or of maintaining its obligation to make any such Loan) or to reduce the
amount of any sum received or receivable by such Lender hereunder (whether of
principal, interest or any other amount) then, upon request of such Lender, the
Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction
suffered.

 

(b)                                 Capital Requirements. 
If any Lender determines that any Change in Law affecting such Lender or
any Lending Office of such Lender or such Lender’s holding company, if any,
regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender’s capital or on the capital of such Lender’s
holding company, if any, as a consequence of this Agreement, the Commitments of
such Lender or the Loans made by such Lender to a level below that which such
Lender or such Lender’s holding company could have achieved but for such Change
in Law (taking into consideration such Lender’s policies and the policies of
such Lender’s holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender such additional amount or amounts
as will compensate such Lender or such Lender’s for any such reduction
suffered.

 

(c)                                  Certificates for Reimbursement. 
A certificate of a Lender setting forth the amount or amounts necessary
to compensate such Lender or its holding company, as the case may be, as
specified in clause (a) or (b) of this Section and
delivered to the Borrower shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.

 

(d)                                 Delay in Requests. 
Failure or delay on the part of any Lender to demand compensation
pursuant to the foregoing provisions of this Section shall not constitute
a waiver of

 

64

 

such Lender’s right to demand such compensation; provided,
that the Borrower shall not be required to compensate a Lender pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than six months prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall
be extended to include the period of retroactive effect thereof).

 

(e)                                  Reserves on Eurodollar Rate Loans. 
The Borrower shall pay to each Lender, as long as such Lender shall be
required to maintain reserves with respect to liabilities or assets consisting
of or including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each
Eurodollar Rate Loan equal to the actual costs of such reserves allocated to
such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), which shall be due and payable on each date
on which interest is payable on such Loan; provided, that the Borrower
shall have received at least 10 days’ prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender.  If a Lender fails to give notice 10 days
prior to the relevant Interest Payment Date, such additional interest shall be
due and payable 10 days from receipt of such notice.

 

3.5  Compensation for Losses. 
Upon demand of any Lender (with a copy to the Administrative Agent) from
time to time, the Borrower shall promptly compensate such Lender for and hold
such Lender harmless from any loss, cost or expense incurred by it as a result
of:

 

(a)                                  any continuation, conversion, payment or
prepayment of any Loan other than a Base Rate Loan on a day other than the last
day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);

 

(b)                                 any failure by the Borrower (for a reason
other than the failure of such Lender to make a Loan) to prepay, borrow,
continue or convert any Loan other than a Base Rate Loan on the date or in the
amount notified by the Borrower; or

 

(c)                                  any assignment of a Eurodollar Rate Loan
on a day other than the last day of the Interest Period therefor as a result of
a request by the Borrower pursuant to Section 11.13;

 

excluding any loss of anticipated profits, but
including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate
the deposits from which such funds were obtained.  The Borrower shall also pay any customary
administrative fees charged by such Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by the
Borrower to the Lenders under this Section, each Lender shall be deemed to have
funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such
Loan by a matching deposit or other borrowing in the London interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such Eurodollar Rate Loan was in fact so funded.

 

65

 

3.6  Mitigation Obligations; Replacement of
Lenders.

 

(a)                                  Designation of a Different Lending Office. 
If any Lender requests compensation under Section 3.4, or
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.1,
or if any Lender gives a notice pursuant to Section 3.2, then such
Lender shall use reasonable efforts to designate a different Lending Office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 3.1 or 3.4,
as the case may be, in the future, or eliminate the need for the notice
pursuant to Section 3.2, as applicable, and (ii) in each case,
would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. 
The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

 

(b)                                 Replacement of Lenders. 
If any Lender requests compensation under Section 3.4, or if
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.1,
the Borrower may replace such Lender in accordance with Section 11.13.

 

3.7  Survival.  All of the
Borrower’s obligations under this Article shall survive termination of the
Commitments and repayment of all other Credit Agreement Obligations hereunder.

 

ARTICLE IV.

CONDITIONS PRECEDENT TO LOANS

 

4.1  General Conditions. 
The obligation of each Lender to make its Loans hereunder is subject to
satisfaction of the following conditions precedent:

 

(a)                                  The Administrative Agent’s receipt of the
following, each of which shall be originals or telecopies (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Loan Party, each dated the Closing Date (or, in the case
of certificates of governmental officials, a recent date before the Closing
Date) and each in form and substance satisfactory to the Administrative Agent
and each of the Lenders:

 

(i)                                     executed
counterparts of this Agreement, sufficient in number for distribution to the Administrative
Agent, each Lender and the Borrower;

 

(ii)                                  a
Note executed by the Borrower in favor of each Lender requesting a Note;

 

(iii)                               such certificates of
resolutions or other action, incumbency certificates and/or other certificates
of Responsible Officers of each Loan Party as the Administrative Agent may
require evidencing the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in connection with
this Agreement and the other Loan Documents to which such Loan Party is a
party;

 

66

 

(iv)                              such
documents and certifications as the Administrative Agent may reasonably require
to evidence that the Borrower is duly organized or formed, is validly existing, in good standing
and qualified to engage in business in Texas and Delaware;

 

(v)                                 a
favorable opinion of Bracewell and Giuliani LLP, counsel to the Loan Parties,
addressed to the Administrative Agent and each Lender, in form and substance
reasonably satisfactory to the Administrative Agent;

 

(vi)                              a
favorable opinion of general counsel to the Loan Parties in form and substance
reasonably satisfactory to the Administrative Agent; and

 

(vii)                           a certificate signed by a
Responsible Officer of the Borrower certifying (A) that the conditions
specified in Sections 4.2(a) and (b) have been
satisfied, and (B) that there has been no event or circumstance since December 31,
2004 that, except as disclosed in any Exchange Act filings made on or before
five Business Days before the Closing Date, has had or could be reasonably
expected to have, either individually or in the aggregate, a Material Adverse
Effect;

 

(b)                                 The Administrative Agent’s receipt of the
following, each of which shall be originals or telecopies (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Loan Party:

 

(i)                                     recorded
copies of the Existing Mortgages with respect to each of the properties
indicated on

Schedule 5.8(c) hereto (the “Closing Date Mortgaged
Properties”), which, upon the Closing Date, will create valid and
subsisting Liens on the Closing Date Mortgaged Properties in favor of the
Collateral Trustee for the benefit of the Secured Parties;

 

(ii)                                  such
assurances as Administrative Agent may reasonably request that no other
filings, encumbrances or transfers (other than in connection with Permitted
Liens and Permitted Encumbrances) exist;

 

(iii)                               copies of the Existing
Credit Agreement, the Secured Notes and the indentures and other documents
relating thereto and the Security Documents, in each case certified as being
true and complete copies thereof; and

 

(iv)                              such
other assurances, certificates, documents, consents or opinions as the
Administrative Agent reasonably may require.

 

(c)                                  Any fees required to be paid on or before
the Closing Date shall have been paid.

 

(d)                                 Unless waived by the Administrative
Agent, the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative
Agent to the extent invoiced prior to or on the Closing Date.

 

(e)                                  All governmental authorizations and all
third party consents and approvals necessary in connection with the Loan
Documents shall have been obtained (without the imposition of any conditions
that are not acceptable to the Lenders) and shall remain in effect.

 

67

 

(f)                                    Since December 31, 2004, there shall
not have occurred any event, development, condition or circumstance not
disclosed in the Borrower’s 2004 report filed on SEC Form 10-K, first- or
second-quarter 2005 reports filed on SEC Form 10-Q, or any report filed on
SEC form 8-K at least five Business Days before the Closing Date, that shall
have had a Material Adverse Effect.

 

(g)                                 The Administrative Agent shall have
received evidence reasonably satisfactory to it that all notices and other
actions required under Section 2.6 of the Collateral Trust Agreement in
order that the Credit Agreement Obligations constitute “Parity Secured
Obligations” under the Security Documents have been taken, given or made (or
will be taken, given or made contemporaneously with the making of the Loans).

 

Without limiting the generality of the provisions of Section 11.4,
for purposes of determining compliance with the conditions specified in this
Section, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

 

4.2  Funding Conditions. 
The obligation of each Lender to make its Loans is subject to the following
conditions precedent:

 

(a)                                  The representations and warranties of the
Borrower and each other Loan Party contained in Article V or any
other Loan Document, or which are contained in any document furnished at any
time under or in connection herewith or therewith, shall be true and correct in
all material respects on and as of the date of the making of the Loans; provided,
that representations and warranties which have Material Adverse Effect
qualifiers shall be true and correct in all respects to the extent such
Material Adverse Effect qualifier is applicable thereto.

 

(b)                                 No Default
shall exist, or would result from the making of the Loans or from the
application of the
proceeds thereof.

 

(c)                                  The Administrative Agent shall have
received a Borrowing Notice in accordance with the requirements hereof.

 

(d)                                 The 
date of the Borrowing shall have occurred on or before October 12,
2005.

 

The initial Borrowing Notice submitted by the Borrower
shall be deemed to be a representation and warranty that the conditions
specified in Sections 4.2(a) and (b) have been
satisfied on and as of the date of the initial Borrowing.

 

4.3  Post Closing Covenant. 
The Borrower shall, within 30 days after the Closing Date, deliver to
the Administrative Agent:

 

(a)                                  such documents and certifications as the
Administrative Agent may reasonably require to evidence that each Loan Party is
duly organized or formed, and that each of the

 

68

 

Borrower and its Subsidiaries is validly existing, in
good standing and qualified to engage in business in each jurisdiction where
its ownership, lease or operation of properties or the conduct of its business
requires such qualification, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect;

 

(b)                                 favorable opinions of local counsel for
the Loan Parties in jurisdictions in which the Closing Date Mortgaged
Properties are located, including, among other things, opinions with respect to
the enforceability and perfection of the Mortgages covering the Closing Date
Mortgaged Properties and any related fixture filings, in form and substance
reasonably satisfactory to the Administrative Agent;

 

(c)                                  pro forma modification endorsements that
the Title Companies have agreed to issue to the Collateral Trustee that, when
issued by the Title Companies, will provide the Collateral Trustee (for benefit
of the Secured Parties in accordance with the Collateral Trust Agreement) with
mortgagee’s title insurance through the Closing Date under the Existing Title
Policies insuring that the Existing Mortgages (not including the Existing
Florida Mortgages), as supplemented by the Mortgage Supplements, create a first
priority Lien (subject to Permitted Encumbrances) on the Closing Date Mortgaged
Properties (not including the Florida Mortgaged Properties) securing the Parity
Secured Obligations; provided that the coverage effectuated by the Title
Companies’ issuance of the modification endorsements shall be the substantially
the same as or better than the coverage under the Existing Title Policies prior
to the date of issuance of the modification endorsements, except for the
addition of Liens (as defined in and permitted under the Existing Credit
Agreement) arising between the date the Existing Title Policies were last
modified by the Title Companies and a date on or after the Closing Date;

 

(d)                                 such tax and Uniform Commercial Code lien
searches as the Administrative Agent may reasonably request and demonstrating
that no other filings, encumbrances or transfers (other than in connection with
Permitted Liens and Permitted Encumbrances) with regard to any Collateral are
of record in any jurisdiction in which it shall be reasonably necessary or
desirable for the Collateral Trustee to make a Uniform Commercial Code filing
in order to provide the Collateral Trustee (for the benefit of the Secured
Parties) with a perfected security interest in the Collateral and if
applicable, evidence reasonably satisfactory to the Administrative Agent that any
Liens indicated by such financing statements (or similar documents) that are
not permitted under this Agreement, have been or will be released within 45
days after the Closing Date; and

 

(e)                                  such amendments to the Security Documents
contemplated by the Collateral Trust Agreement and not requiring an Act of
Secured Debtholders as the Administrative Agent may reasonably request.

 

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the
Administrative Agent and the Lenders that:

 

5.1  Existence, Qualification and Power;
Compliance with Laws.  Each Loan
Party and each Subsidiary thereof (a) is duly organized or formed, validly
existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all

 

69

 

requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own
its assets and carry on its business and (ii) execute, deliver and perform
its obligations under the Loan Documents to which it is a party, (c) is
duly qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is
in compliance with all Laws; except in each case referred to in clause
(b)(i), (c) or (d), to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect.

 

5.2  Authorization; No Contravention. 
The execution, delivery and performance by each Loan Party of each Loan
Document to which such Person is party, have been duly authorized by all
necessary corporate or other organizational action, and do not and will not (a) contravene
the terms of any of such Person’s Organization Documents; (b) conflict
with or result in any breach or contravention of, or the creation of any Lien
under, or require any payment to be made under (i) any Contractual
Obligation to which such Person is a party or affecting such Person or the
properties of such Person or any of its Subsidiaries, where such Contractual
Obligation (x) evidences Indebtedness of the Borrower or any of its
Subsidiaries or (y) is identified in the exhibit list from time to time in filings
made by the Borrower with the SEC as material to the Borrower, or (ii) any
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Person or its property is subject that could reasonably be
expected to have a Material Adverse Effect; (c) violate any Law that could
reasonably be expected to have a Material Adverse Effect; or (d) result in
the creation of any Lien other than a Permitted Lien.  Each Loan Party and each Subsidiary thereof
is in compliance with all Contractual Obligations referred to in clause
(b)(i), except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.

 

5.3  Governmental Authorization; Other Consents. 
No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or any other Person is
necessary or required in connection with (i) the execution, delivery or
performance by any Loan Party of this Agreement or any other Loan Document, (ii) the
grant by any Loan Party of the Liens granted by it pursuant to the Loan
Documents, or (iii) the perfection or maintenance of the Liens created
under the Loan Documents (including the first priority nature thereof) (other
than the filing of supplements to the Mortgages), all of which have been duly
obtained, taken, given or made and are in full force and effect.

 

5.4  Binding Effect. 
This Agreement has been, and each other Loan Document, when delivered
hereunder, will have been, duly executed and delivered by each Loan Party that
is party thereto.  This Agreement
constitutes, and each other Loan Document when so delivered will constitute, a
legal, valid and binding obligation of such Loan Party, enforceable against
each Loan Party that is party thereto in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally and by
general principles of equity, whether such enforceability is considered in a
proceeding at law or in equity.

 

70

 

5.5  Financial Statements; No
Material Adverse Effect.

 

(a)                                  The Audited Financial Statements (i) were
prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein and (ii) fairly present in all material respects
the consolidated financial condition of the Borrower and its consolidated Subsidiaries as of the
date thereof and their results of operations and cash flows for the period
covered thereby in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein.

 

(b)                                 The unaudited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries dated June 30, 2005, and
the related consolidated statements of income and cash flows and the related
notes and supplemental information for the Fiscal Quarter ended on that date (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein, and (ii) fairly
present in all material respects the financial condition of the Borrower and
its Subsidiaries as of the date thereof and their results of operations and
cash flows for the period covered thereby, subject, in the case of clauses (i) and
(ii), to the absence of footnotes and to normal year-end audit
adjustments.

 

(c)                                  Since the date of the Audited Financial
Statements, there has been no event or circumstance, either individually or in
the aggregate, except as disclosed in the Borrower’s Exchange Act filings made
on or before the five Business Days before the Closing Date, that has had or
could reasonably be expected to have a Material Adverse Effect.

 

5.6  Litigation.  There are no
actions, suits, proceedings, claims or disputes pending or, to the knowledge of
the Borrower, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Borrower or any of its
Subsidiaries or against any of their properties or revenues that (a) purport
to affect or pertain to this Agreement or any other Loan Document, or any of
the transactions contemplated hereby, or (b) except as disclosed in the
Borrower’s Exchange Act filings made on or before the five Business Days before
the Closing Date, either individually or in the aggregate, if determined
adversely, could reasonably be expected to have a Material Adverse Effect.

 

5.7  No Default.  No Default has
occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.

 

5.8  Ownership of Property; Liens.

 

(a)                                  Each of the Borrower and each Subsidiary
has good and marketable title in fee simple to, or valid leasehold interests
in, all real property necessary or used in the ordinary conduct of its
business, except for Permitted Liens and Permitted Encumbrances and such
defects in title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

(b)                                 The property of the Borrower and its
Restricted Subsidiaries is subject to no Liens, other than Permitted Liens and
Permitted Encumbrances.

 

(c)                                  Set forth on Schedule 5.8(c) hereto
is a complete and accurate list of all real property interests owned as of the
Closing Date by the Borrower and its Subsidiaries which are material to their
business and are reflected on the financial statements referred to in Section 5.5

 

71

 

(other than such properties or assets disposed of
since the date of such financial statements), showing as of the date hereof the
street address, county or other relevant jurisdiction, state, and record owner
thereof.  Except as set forth on Schedule 5.8(c),
the Borrower and each Subsidiary has good, marketable and insurable fee simple
title to such real property, free and clear of all Liens, other than Permitted
Liens and Permitted Encumbrances.

 

5.9  Environmental Matters.

 

(a)                                  Borrower and its Subsidiaries have been
and are in compliance with all Environmental Laws, including obtaining and
complying with all required environmental permits, other than non-compliances
that could not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.

 

(b)                                 Neither the Borrower nor any of its
Subsidiaries nor any property currently or, to the knowledge of Borrower or any
of its Subsidiaries, previously owned, operated or leased by or for Borrower or
any of its Subsidiaries is subject to any pending or, to the knowledge of
Borrower or any of its Subsidiaries, threatened, claim, order, agreement,
notice of violation, notice of potential liability or is the subject of any
pending or threatened proceeding or governmental investigation under or
pursuant to Environmental Laws other than those that could not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse
Effect.

 

(c)                                  Except as set forth on Schedule 5.9(c),
as of December 22, 2004 neither the Borrower nor any of its Subsidiaries
has a treatment, storage or disposal facility requiring a permit under the
Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the
regulations thereunder or any state analog.

 

(d)                                 There are no facts, circumstances or
conditions known to Borrower or any of its Subsidiaries arising out of or
relating to the operations or ownership of Borrower or any of its Subsidiaries
or of the property owned, operated or leased by Borrower or any of its Subsidiaries
that are not specifically included in the financial information furnished to
the Lenders that could be reasonably expected to result in any Environmental
Liabilities that could reasonably be expected to have a Material Adverse
Effect, unless such liabilities are (i) covered by environmental liability
insurance, (ii) subject to an indemnity from any Governmental Authority,
or (iii) subject to an indemnity satisfactory to the Borrower from a
Person that is not an Affiliate of the Borrower that the Borrower has
determined in good faith is appropriately credit worthy in relation to the
potential amount of such liabilities.

 

(e)                                  As of the Closing Date, no environmental
Lien has attached to any property of Borrower or its Subsidiaries and, to the
knowledge of Borrower or its Subsidiaries, no facts, circumstance or conditions
exist that could, individually or in the aggregate, reasonably be expected to
result in an environmental Lien that would have a Material Adverse Effect.

 

(f)                                    Neither Borrower nor any of its
Subsidiaries is undertaking, and has not completed, either individually or
together with other potentially responsible parties, any investigation or
assessment or Remedial Action relating to any actual or threatened release of
Hazardous Materials at any site, location or operation, either voluntarily or
pursuant to the order of any Governmental Authority or the requirements of any
Environmental Law that could

 

72

 

reasonably be expected to have a Material Adverse
Effect; and all Hazardous Materials generated, used, treated, handled or stored
at, or transported to or from, any property currently or formerly owned or
operated by Borrower or any of its Subsidiaries have been disposed of in a
manner that could not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.

 

5.10  Insurance.  The properties
of the Borrower and its Subsidiaries are insured with financially sound and
reputable insurance companies not Affiliates of the Borrower, in such amounts
(after giving effect to any self-insurance compatible with the following
standards), with such deductibles and covering such risks as are customarily
carried by companies of same or similar size engaged in similar businesses and
owning similar properties in localities where the Borrower or the applicable
Subsidiary operates.

 

5.11  Taxes.  The Borrower
and its Subsidiaries have filed all Federal, state and other material tax
returns and reports required to be filed after giving effect to applicable
extensions, except for tax returns or reports the failure of which to timely
file could not reasonably be expected to have a Material Adverse Effect, and
have paid all Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings diligently conducted and for which
adequate reserves have been provided in accordance with GAAP.  There is no proposed tax assessment against
the Borrower or any Subsidiary that would, if made, have a Material Adverse
Effect.  Except for (y) the Tax Sharing
Agreement referred to in clause (13) of Permitted Investments and (z) the Tax
Allocation Agreement dated as of December 31, 2000, by and among Reliant
Energy, Inc. (now known as Centerpoint Energy, Inc.) and its
affiliates parties thereto and Reliant Resources, Inc. and its affiliates
parties thereto, on the Closing Date, neither any Loan Party nor any Subsidiary
thereof is party to any tax sharing agreement.

 

5.12  ERISA
Compliance.

 

(a)                                  Each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
Federal or state Laws.  Each Plan that is
intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best knowledge
of the Borrower, nothing has occurred which would prevent, or cause the loss
of, such qualification.  The Borrower and
each ERISA Affiliate have made all required contributions (both quarterly and
annually) to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any
Plan.

 

(b)                                 There are no pending or, to the best
knowledge of the Borrower, threatened claims, actions or lawsuits, or action by
any Governmental Authority, with respect to any Plan that could reasonably be
expected to have a Material Adverse Effect. 
There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could
reasonably be expected to result in a Material Adverse Effect.

 

73

 

(c)                                  (i)  No ERISA Event has occurred or
is reasonably expected to occur that could reasonably be expected to have a
Material Adverse Effect; (ii) no Pension Plan has any Unfunded Pension
Liability, whether or not waived, that could reasonably be expected to have a
Material Adverse Effect, and no application for a waiver of the minimum funding
standard has been filed with respect to any Pension Plan; (iii) neither
any Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA)
that could reasonably be expected to have a Material Adverse Effect; (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan that could
reasonably be expected to have a Material Adverse Effect; and (v) neither
the Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.

 

5.13  Subsidiaries; Equity Interests. 
On the Closing Date, the Borrower has no Subsidiaries other than those
specifically disclosed in Part (a) of Schedule 5.13,
and all of the outstanding Equity Interests in such Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned in the amounts
specified on Part (a) of Schedule 5.13 free and
clear of all Liens except those created under the Loan Documents and the
Permitted Liens.  On the Closing Date,
the Borrower and its Subsidiaries have no equity investments in any other
Person other than those specifically disclosed in Part (b) of Schedule 5.13.  All of the outstanding Equity Interests in
the Borrower have been validly issued and are fully paid and
nonassessable.  Set forth on Part (c) of
Schedule 5.13 is a complete and accurate list of all Loan Parties,
showing as of the Closing Date (as to each Loan Party) the jurisdiction of its
incorporation, the address of its principal place of business and its U.S.
taxpayer identification number.

 

5.14  Margin Regulations; Investment Company Act;
Public Utility Holding Company Act.

 

(a)                                  The Borrower is not engaged and will not
engage, principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock and no proceeds of any Loans will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying margin stock.

 

(b)                                 None of the Borrower, any Person
Controlling the Borrower, or any Subsidiary (i) is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act or
any foreign, federal or local statute or any other Law of the United States of
America or any other jurisdiction, in each case limiting its ability to incur
indebtedness for money borrowed as contemplated hereby or by any other Loan
Document or (ii) is or is required to be registered as an “investment
company” under the Investment Company Act of 1940.  Neither the making of any Loan nor the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated by the Loan Documents, will
violate any provision of any such Act or any rule, regulation or order of the
SEC thereunder.

 

74

 

5.15  Disclosure.  The Borrower
has disclosed to the Administrative Agent and the Lenders all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it (other than general
industry, political, and economic conditions), that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.  No report, financial statement,
certificate or other information furnished (whether in writing or orally) by or
on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the transactions contemplated hereby and the negotiation of
this Agreement or delivered hereunder or under any other Loan Document (in each
case, as modified or supplemented by other information so furnished), at the
time furnished or delivered, contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein,
taken as a whole, in the light of the circumstances under which they were made,
not misleading; provided, that with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time made.

 

5.16  Compliance with Laws. 
Each Loan Party and each Subsidiary is in compliance in all material
respects with the requirements of all Laws and all orders, writs, injunctions
and decrees applicable to it or to its properties, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is
being contested in good faith by appropriate proceedings diligently conducted
or (b) the failure to comply therewith, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

5.17  Intellectual Property; Licenses, Etc. 
The Borrower and its Subsidiaries own, or possess the right to use, all
of the trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that are necessary for the operation of their respective
businesses, without conflict with the rights of any other Person, unless the
failure to so own or possess the right to use could not reasonably be expected
to have a Material Adverse Effect.  To
the best knowledge of the Borrower, except as set forth on Schedule 5.17,
no slogan or other advertising device, product, process, method, substance,
part or other material now employed, or now contemplated to be employed, by the
Borrower or any Subsidiary infringes upon any rights held by any other Person
in a manner that could reasonably be expected to have a Material Adverse
Effect.  Except as set forth on Schedule 5.17,
no claim or litigation regarding any of the foregoing is pending or, to the
best knowledge of the Borrower, threatened, which, either individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

5.18  Solvency.  The Borrower
is, together with its Subsidiaries on a consolidated basis, Solvent.

 

5.19  Perfection,
Etc.

 

(a)                                  The Security Documents (other than the
Mortgages and the Assignments of Leases and Rents), create and grant to the
Collateral Trustee for the benefit of the applicable Secured Parties, together
with (i) the filing of appropriate UCC-1 and, if applicable, UCC 3,
financing statements with the filing offices required under the Security
Agreement, and (ii) the possession of certificated Pledged Securities
(together with blank executed stock powers with

 

75

 

respect thereto), a valid, first priority, perfected
security interest in the Collateral, subject (other than in the case of
investment property) only to Permitted Encumbrances and, as to perfection,
subject to the terms and provisions of the Security Agreement.

 

(b)                                 The Mortgages and the Assignments of
Leases and Rents, as supplemented by the Mortgage Supplements, will create in
favor of the Collateral Trustee, for the benefit of the applicable Secured
Parties, a legal, valid and enforceable Lien on all of the Loan Parties’
respective right, title and interest in and to the real property assets (except
personalty that does not constitute fixtures) covered thereby and the proceeds
thereof.  When each of the Mortgage
Supplements are filed in the appropriate offices specified by a Loan Party and
the proper amount of mortgage recording or similar taxes (if any) are paid,
each of the Mortgages and the Assignments of Leases and Rents together with the
UCC-1 financing statements relating to fixtures previously filed in connection
with the Mortgages, shall constitute fully perfected Liens on, and fully
perfected security interest in, all right, title and interest of the applicable
Loan Parties in the real property assets (except personalty that does not
constitute fixtures) covered thereby and the proceeds thereof, subject only to
Permitted Encumbrances and, as to perfection, subject to the terms and
provisions of the Mortgages and the Assignments of Leases and Rents.

 

5.20  Parity Secured Obligations. 
The Credit Agreement Obligations constitute Parity Secured Obligations
under the Collateral Trust Agreement and the other Security Documents; the
Company has delivered a “Notice of Additional Secured Debt” with respect to
this Agreement to the Collateral Trustee and each Secured Debt Representative
at least three Business Days prior to the Closing Date and the Collateral
Trustee has not received a notice from any Secured Debt Representative that any
of the certifications set forth in such Notice of Additional Secured Debt was
incorrect.  On the Closing Date, no
Indebtedness is outstanding over the amount of $1,000,000 which has been
incurred in under the basket set forth in Section 7.2(s) of the Existing
Credit Agreement.

 

ARTICLE VI.

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment
hereunder, any Loan or other Credit Agreement Obligation hereunder shall remain
unpaid or unsatisfied, the Borrower shall, and shall (except in the case of the
covenants set forth in Sections 6.1, 6.2, and 6.3) cause
each Subsidiary to:

 

6.1  Financial Statements. 
Deliver to the Administrative Agent and each Lender, in form and detail
satisfactory to the Administrative Agent:

 

(a)                                  as soon as available, but in any event
within 90 days after the end of each Fiscal Year of the Borrower, an audited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such Fiscal Year, and the related consolidated statements of
income or operations, stockholders’ equity, comprehensive income (loss) and
cash flows for such Fiscal Year, setting forth in each case in comparative form
the figures as of the end of, and for, the previous Fiscal Year, all in reasonable
detail and prepared in accordance with GAAP, such consolidated statements to be
audited and accompanied by a report and opinion of an independent registered
public accounting firm of nationally recognized standing, which report

 

76

 

and opinion shall be prepared in accordance with the
standards of the Public Company Accounting Oversight Board or its successor and
shall not be subject to any “going concern” or like qualification or exception;

 

(b)                                 as soon as available, but in any event
within 45 days after the end of each of the first three Fiscal Quarters of each
Fiscal Year of the Borrower, an unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such Fiscal
Quarter, and the related unaudited consolidated statements of income or
operations for such Fiscal Quarter and for the portion of the Borrower’s Fiscal
Year then ended and cash flows for the portion of the Borrower’s Fiscal Year
then ended, setting forth in each case in comparative form the figures for the
corresponding Fiscal Quarter of the previous Fiscal Year and the corresponding
portion of the previous Fiscal Year, all in reasonable detail, certified by a
Responsible Officer of the Borrower as fairly presenting in all material
respects the financial condition, results of operations and cash flows of the
Borrower and its consolidated Subsidiaries in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of footnotes;

 

(c)                                  as soon as available, but in any event
within thirty (30) days after the end of the first and second calendar months
of each Fiscal Quarter, a copy of the Borrower’s (i) internal monthly
consolidated corporate reporting package (i.e., flash reports) and (ii) monthly
historical collateral postings (liquidity) reports; and

 

(d)                                 within 15 days after approval thereof by
the Borrower’s Board of Directors for each Fiscal Year, a consolidated plan and
financial forecast for such Fiscal Year and the two immediately succeeding
Fiscal Years (or portion thereof) through the Maturity Date (a “Financial
Plan”), including (i) a forecasted consolidated balance sheet and
forecasted consolidated statements of income or operations and cash flows of
the Borrower and its Subsidiaries for each such Fiscal Year, (ii) forecasted
consolidated statements of income or operations and cash flows of the Borrower
and its Subsidiaries for each month of such Fiscal Year (but not subsequent
Fiscal Years) and (iii) forecasts of calculations under Section 7.11
for each Fiscal Quarter of such Fiscal Year, and for each Fiscal Year in the
case of subsequent Fiscal Years.

 

As to any information contained in materials furnished
pursuant to Section 6.2(c), the Borrower shall not be separately
required to furnish such information under clause (a) or (b) above,
but the foregoing shall not be in derogation of the obligation of the Borrower
to furnish the information and materials described in clauses (a) and
(b) above at the times specified therein.

 

6.2  Certificates; Other Information. 
Deliver to the Administrative Agent and each Lender, in form and detail
satisfactory to the Administrative Agent:

 

(a)                                  concurrently with the delivery of the
financial statements referred to in Sections 6.1(a) and (b),
a duly completed Compliance Certificate signed by a Responsible Officer of the
Borrower;

 

(b)                                 promptly after any request by the
Administrative Agent or any Lender, copies of any detailed audit reports,
management letters or recommendations submitted to the board of

 

77

 

directors (or the audit committee of the board of
directors) of the Borrower by independent accountants in connection with the
accounts or books of the Borrower or any Subsidiary, or any audit of any of
them;

 

(c)                                  promptly after the same are available,
copies of all quarterly and annual reports filed by the Borrower with the SEC
on Forms 10-Q and 10-K, and all current reports filed by the Borrower with the
SEC on Form 8-K;

 

(d)                                 promptly after the furnishing thereof,
copies of any notice of default furnished to any holder of debt securities of
any Loan Party or any Subsidiary thereof pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to Section 6.1 or any other
clause of this Section;

 

(e)                                  promptly, and in any event within five
Business Days after receipt thereof by any Loan Party or any Subsidiary
thereof, copies of each material, non-routine, written notice or other
material, non-routine, written correspondence received from the SEC concerning
any investigation or possible investigation or other inquiry by such agency
regarding financial or other operational results of any Loan Party or any
Subsidiary thereof; and

 

(f)                                    promptly, such additional information
regarding the business, financial or corporate affairs of the Borrower or any
Subsidiary, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender may from time to time reasonably request.

 

Documents required to be delivered pursuant to Section 6.1(a) or
(b) or Section 6.2(c) (to the extent any such
documents are included in materials otherwise filed with the SEC) may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower’s website on the Internet at the
website address listed on Schedule 11.2; or (ii) on which such
documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided, that: (i) the Borrower shall
deliver paper copies of such documents to the Administrative Agent or any
Lender that requests the Borrower to deliver such paper copies and (ii) the
Borrower shall notify the Administrative Agent and each Lender (by telecopier
or electronic mail) of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents. 
Notwithstanding anything contained herein, in every instance the
Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.2(a) to the Administrative
Agent.  Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by the Borrower with
any such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.

 

The Borrower hereby acknowledges that (a) the
Administrative Agent will make available to the Lenders materials and/or
information provided by or on behalf of the Borrower hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks

 

78

 

or another similar electronic system (the “Platform”)
and (b) certain of the Lenders may be “public-side” Lenders (i.e.,
Lenders that do not wish to receive material non-public information with
respect to the Borrower or its securities) (each, a “Public Lender”).  The Borrower hereby agrees that (w) all
Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that
the word “PUBLIC” shall appear prominently on the first page thereof; (x)
by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have
authorized the Administrative Agent and the Lenders to treat such Borrower
Materials as either publicly available information or not material information
(although it may be sensitive and proprietary) with respect to the Borrower or
its securities for purposes of United States Federal and state securities laws;
(y) all Borrower Materials marked “PUBLIC” are permitted to be made available
through a portion of the Platform designated “Public Investor;” and (z) the
Administrative Agent shall be entitled to treat any Borrower Materials that are
not marked “PUBLIC” as being suitable only for posting on a portion of the
Platform not designated “Public Investor.”

 

6.3  Notices.  Promptly
notify the Administrative Agent and each Lender:

 

(a)                                  after any Responsible Officer’s obtaining
knowledge of the occurrence of any Default;

 

(b)                                 of any matter that has resulted or could
reasonably be expected to result in a Material Adverse Effect (including as a
result of (i) breach or non-performance of, or any default under, a
Contractual Obligation of the Borrower or any Subsidiary; (ii) any
dispute, litigation, investigation, proceeding or suspension between the
Borrower or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws);

 

(c)                                  after any Responsible Officer’s obtaining
knowledge of the occurrence of any ERISA Event or of any contribution failure
under Code Section 412, or ERISA Section 302 with respect to any
Pension Plan; and

 

(d)                                 of the (i) occurrence of any Asset
Sale for which the Borrower is required to make a mandatory repayment pursuant
to Section 2.4(b)(i), and (ii) incurrence or issuance of any
Indebtedness for which the Borrower is required to make a mandatory repayment
pursuant to Section 2.4(b)(ii), (iii) or (iv), in each case after the
effect of Section 2.4(b)(vi).

 

Each notice pursuant to this Section (other than
subsection (d)) shall be accompanied by a statement of a Responsible
Officer of the Borrower setting forth details of the occurrence referred to
therein and stating what action the Borrower has taken and proposes to take
with respect thereto.  Each notice
pursuant to Section 6.3(a) shall describe with particularity
any and all provisions of this Agreement and any other Loan Document that have
been breached.

 

6.4  Payment of Obligations. 
Pay and discharge as the same shall become due and payable (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by

 

79

 

the Borrower or such Subsidiary; and (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property
that is not a Permitted Lien.

 

6.5  Preservation of Existence, Etc.  (a) 
Preserve, renew and maintain in full force and effect its legal existence and
good standing under the Laws of the jurisdiction of its organization except in
a transaction permitted by Section 7.4 or 7.5; (b) take all
reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect.

 

6.6  Maintenance of Properties.  (a) 
Maintain, preserve and protect all of its material properties and equipment
necessary in the operation of its business in good working order and condition,
ordinary wear and tear excepted; (b) make all necessary repairs thereto
and renewals and replacements thereof; and (c) use the standard of care
typical in the industry in the operation and maintenance of its facilities, in
each of cases (a), (b) and (c), except where the failure to do so could
not reasonably be expected to have a Material Adverse Effect.

 

6.7  Maintenance of Insurance. 
Maintain with financially sound and reputable insurance companies,
insurance with respect to its properties and business against loss or damage of
the kinds customarily insured against by Persons of same or similar size
engaged in the same or similar business, of such types and in such amounts
(after giving effect to any self-insurance compatible with the following
standards) as are customarily carried under similar circumstances by such other
Persons and providing for not less than 30 days’ (or such other period as
required by law) prior notice to the Collateral Trustee of termination, lapse
or cancellation of such insurance.

 

6.8  Compliance with Laws. 
Comply in all material respects with the requirements of all Laws and
all orders, writs, injunctions and decrees applicable to it or to its business
or property, except in such instances in which (a) such requirement of Law
or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted; or (b) the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.

 

6.9  Books and Records.  (a) 
Maintain proper books of record and account, in which entries in conformity
with GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Borrower or such Subsidiary,
as the case may be; and (b) maintain such books of record and account in
material conformity with all applicable requirements of any Governmental
Authority having regulatory jurisdiction over the Borrower or such Subsidiary,
as the case may be.

 

6.10  Inspection Rights. 
Permit representatives and independent contractors of the Administrative
Agent to visit and inspect any of its properties (subject in the case of access
to its properties and assets, to any applicable restrictions contained in the
leases for the Mortgaged Real Property Assets and the applicable Loan Party’s
site safety and security requirements), to examine its corporate, financial and
operating records, and make copies thereof or abstracts

 

80

 

therefrom, and to discuss its affairs, finances and
accounts with its officers, and independent public accountants, all at the
expense of the Borrower and at such reasonable times during normal business
hours and as often as may be reasonably desired, upon reasonable advance notice
to the Borrower; provided, that when an Event of Default exists the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.

 

6.11  Use of Proceeds. 
Use the
proceeds of the Loans for general corporate purposes.

 

6.12  Additional Loan Parties; Security Interests.

 

(a)                                  Subject to the provisions of clause (b) below,
promptly and in any event within thirty (30) Business Days (i) after the
formation or acquisition after the Closing Date of any new Subsidiary (other
than a Subsidiary that is prohibited from becoming a Loan Party pursuant to an
agreement for Indebtedness in existence on December 22, 2004 which is
permitted under Section 7.3, or an agreement for any refinancing or
renewal of any such Indebtedness pursuant to, and in accordance with, Section 7.3)
that has satisfied the Threshold Amount, (ii) with respect to any
Subsidiary (other than a Subsidiary that is prohibited from becoming a Loan
Party pursuant to an agreement for Indebtedness in existence on December 22,
2004 which is permitted under Section 7.3, or an agreement for any
refinancing or renewal of any such Indebtedness pursuant to, and in accordance
with, Section 7.3) which was formed or acquired after the Closing
Date and which did not initially satisfy the Threshold Amount, after such
Subsidiary does satisfy the Threshold Amount, (iii) after any Subsidiary
ceases to be an Excluded Entity or (iv) after any Subsidiary Guarantees
any Indebtedness of the Borrower other than the Obligations (as the case may
be), deliver to the Collateral Trustee (with copies to the Administrative
Agent) the following: (x) in the case of the Domestic Subsidiaries, (A) an
Instrument of Assumption and Joinder executed by such Subsidiary pursuant to
which, among other things, such Subsidiary shall become a Loan Party hereunder;
and a Joinder Agreement (in substantially the form of Exhibit A to the
Collateral Trust Agreement) pursuant to which, among other things, such
Subsidiary shall become a party to the Collateral Trust Agreement and the
Security Agreement, (B) appropriate UCC-1 financing statements with
respect to the collateral under the Security Agreement, (C) all applicable
Lien searches with respect to such Subsidiary, (D) Organizational
Documents described in Sections 4.1(a)(iii) and 4.3(a) with
respect to such Subsidiary, (E) a written opinion of counsel covering
those matters addressed in the opinion delivered on the Closing Date but
limited to such Subsidiary, (F) Mortgages for any of such Subsidiary’s
real property assets having a book value in excess of  $20,0000,000, (G) such other security
documents as may be reasonably requested by the Administrative Agent or its
counsel and all of the foregoing in form and substance reasonably satisfactory
to the Administrative Agent and its counsel, and (H) if applicable and the
same would not be Excluded Securities (as such term is defined in the
Collateral Trust Agreement), certificates or other instruments (if any)
representing 100% of the Equity Interests in such Subsidiary owned by a Loan
Party together with an undated stock power (or other appropriate document) executed
in blank for each such certificate or other instrument; and (y) if applicable
and the same would not be Excluded Securities (as such term is defined in the
Collateral Trust Agreement) in the case of Foreign Subsidiaries, such security
documents as may be reasonably requested by, and in form and substance
reasonably satisfactory to, the Administrative Agent or its counsel, in order
to cause the pledge by the applicable Loan Parties

 

81

 

of the Equity Interests of such Subsidiary owned by
such Loan Parties if such Foreign Subsidiary is a direct Subsidiary of a Loan
Party; provided, that no more than 65% of the total outstanding Equity
Interests of such Foreign Subsidiary shall be required to be pledged by the
Loan Parties pursuant to this Section. 
Neither the Collateral Trustee nor any other Person shall be required to
release any Subsidiary from the Guaranty nor release any Lien on the Equity
Interests or assets of any Subsidiary solely for the reason that such
Subsidiary ceases to satisfy the Threshold Amount at any time.

 

(b)                                 If at any time after the Closing Date,
any one or more Domestic Subsidiaries (other than Domestic Subsidiaries that
are prohibited from becoming a Loan Party pursuant to an agreement for
Indebtedness in existence on December 22, 2004 which is permitted under Section 7.3,
or an agreement for any refinancing or renewal of any such Indebtedness
pursuant to, and in accordance with, Section 7.3) have been formed
or acquired which Subsidiaries are not Loan Parties hereunder and have
individually or in the aggregate satisfied the Threshold Amount, promptly
following its determination that the Threshold Amount has been satisfied, cause
one or more of such Subsidiaries to become Loan Parties hereunder and to
provide the documents required by Section 6.12(a) above, so
that (i) the aggregate book value of the assets of all Domestic
Subsidiaries that have been formed or acquired after December 22, 2004 and
are not Loan Parties hereunder is, at all times, less than $50,000,000 and (ii) the
aggregate Consolidated EBITDAR during the four-Fiscal Quarter period most
recently ended attributable to all such Subsidiaries formed or acquired after December 22,
2004 that are not Loan Parties does not exceed $25,000,000.

 

(c)                                  At any time and from time to time,
promptly execute and deliver any and all further instruments and documents and
take all such other action as the Administrative Agent may reasonably deem
necessary or desirable in obtaining the full benefits of, or in perfecting and
preserving the Liens of, such Guaranties, Instruments of Assumption and
Joinder, and Security Documents.

 

Notwithstanding anything to the contrary contained
herein, none of the foregoing actions shall be required to be taken by, or with
respect to, REMA or any of its Subsidiaries.

 

6.13  Further Assurances. 
Promptly upon request by the Administrative Agent, or any Lender through
the Administrative Agent, (a) correct any material defect or error that
may be discovered in any Loan Document or in the execution, acknowledgment,
filing or recordation thereof, and (b) do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register any and all such
further acts, deeds, certificates, assurances and other instruments as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably require from time to time in order to (i) carry out more
effectively the purposes of the Loan Documents, (ii) to the fullest extent
permitted by applicable law, subject any Loan Party’s or any of its
Subsidiaries’ properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Loan Documents, (iii) perfect
and maintain the validity, effectiveness and priority of any of the Loan
Documents and any of the Liens intended to be created thereunder and (iv) assure,
convey, grant, assign, transfer, preserve, protect and confirm more effectively
unto the Secured Parties the rights granted or now or hereafter intended to be
granted to the Secured Parties under any Loan Document or under any other
instrument executed in connection

 

82

 

with any Loan Document to which any Loan Party or any
of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries
to do so.

 

6.14  Florida Mortgaged Properties. 
Upon the occurrence and during the continuation of any Event of Default,
at the request of the Required Aggregate Revolver and Term Lenders, the
Borrower shall cause each of the Florida Mortgage Supplements to be filed in
the appropriate offices and the proper amount of mortgage recording or similar
taxes (if any) to be paid in connection therewith, in order to grant a fully
perfected Lien on, and fully perfected security interest in, all right, title
and interest of the applicable Loan Parties in the real property assets (except
personalty that does not constitute fixtures) covered thereby and the proceeds
thereof, subject only to Permitted Encumbrances and, as to perfection, subject
to the terms and provisions of the Existing Florida Mortgages and the
Assignments of Leases and Rents.

 

ARTICLE VII.

NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment
hereunder, any Loan or other Credit Agreement Obligation hereunder shall remain
unpaid or unsatisfied, the Borrower shall not, nor shall it permit any
Restricted Subsidiary to, directly or indirectly:

 

7.1  Liens.  Create, incur,
assume or otherwise cause or suffer to exist or become effective any Lien of
any kind on any asset now owned or hereafter acquired, except Permitted Liens.

 

7.2  Investments.  Subject to Sections
7.18 and 7.19, make or hold any Investments, except for Permitted
Investments.

 

7.3  Indebtedness. 
Create, incur, issue, assume, suffer to exist, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect
to any Indebtedness (including Acquired Debt and Disqualified Stock), and the
Borrower shall not permit any of its Restricted Subsidiaries to issue any shares
of preferred stock, in each case, other than the following (collectively, “Permitted
Debt”):

 

(a)                                  the Credit Agreement Obligations (as
defined in the Existing Credit Agreement) and the Credit Agreement Obligations
,provided that no increases in the outstanding amount or the commitments
under the Existing Credit Agreement from that existing on the Closing Date
shall be permitted unless approved by the Required Aggregate Revolver and Term
Lenders;

 

(b)                                 Indebtedness of Securitization Entities
under Qualified Securitization Transactions in an aggregate principal amount at
any one time outstanding under this clause not to exceed $450,000,000;

 

(c)                                  Indebtedness of REMA and its Subsidiaries in an aggregate principal amount at
any one time outstanding under this clause (with letters of credit being
deemed to have a principal amount equal to the maximum potential liability of
REMA and its Subsidiaries thereunder) not to exceed $60,000,000;

 

83

 

(d)                                 the following Indebtedness of the
Borrower and the Guarantors: (i) Permitted PEDFA Bond Indebtedness and/or
the guarantee thereof by the Borrower or the Guarantors or (ii) Indebtedness
evidenced by or in support of
the Seward Tax-Exempt Bonds, in an aggregate principal amount at any one time
outstanding under this clause, not to exceed $500,000,000 less the aggregate
amount of all repayments, optional or mandatory, of the principal of any
Indebtedness incurred pursuant to this clause that have been made by the
Borrower and/or the Guarantors since December 22, 2004;

 

(e)                                  Indebtedness
of the Borrower, including Parity Secured Debt, pursuant to a letter of credit
or synthetic letter of credit facility not to exceed the sum of (i) the
difference of (x) $500,000,000 minus (y) the aggregate principal amount
of the Seward Tax-Exempt Bonds refinanced as fixed-rate Permitted PEDFA Bond
Indebtedness on or after December 22, 2004 in accordance with clause (d) above
plus (ii) the aggregate amount by which the Revolving Credit
Commitments (as defined in the Existing Credit Agreement) have been permanently
reduced since December 22, 2004;

 

(f)                                    Indebtedness of the Borrower, including
Parity Secured Debt, in an aggregate principal amount at any one time
outstanding under this clause, not to exceed $500,000,000, the proceeds of
which are used to purchase (or which Indebtedness is assumed in connection with
the purchase of) Permitted ERCOT Assets (provided, that such ERCOT
Assets become Collateral securing the Credit Agreement Obligations on (or
promptly following) such purchase);

 

(g)                                 Specified Junior Securities issued by the
Borrower; provided, that if there is any change in the terms of such
Specified Junior Securities that results in such securities no longer meeting
all of the requirements of the definition of “Specified Junior Securities,”
then such change will be deemed to constitute an incurrence of Indebtedness by
the Borrower that was not permitted by this clause;

 

(h)                                 Existing Indebtedness of the Borrower and
its Restricted Subsidiaries;

 

(i)                                     Senior Debt of the Borrower that is not
secured by any Lien;

 

(j)                                     Permitted Refinancing Indebtedness of the
Borrower or any of its Restricted Subsidiaries in exchange for, or the net
proceeds of which are used to refund, refinance or replace Indebtedness (other
than intercompany Indebtedness) that was permitted to be incurred under clauses
(a), (b), (c), (d), (f), (g), (h),
(i), (j) or (s) of this Section;

 

(k)                                  intercompany Indebtedness between or among the Borrower and any of its
Restricted Subsidiaries; provided, that:

 

(i)                                     such Indebtedness (except Permitted PEDFA
Bond Indebtedness, Indebtedness restricted from being subordinated pursuant to
agreements identified on Schedule 7.3(k) and the Orion Notes) must
be subordinated to the prior payment in full in cash of the Credit Agreement
Obligations; and

 

(ii)                                  (A) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness being held
by a Person other than the Borrower or any Restricted Subsidiary, and (B) any
sale or other transfer of any such Indebtedness to a Person that is

 

84

 

not the Borrower or any Restricted Subsidiary (except
transfers to the Collateral Trustee to secure Parity Secured Obligations) shall
be deemed, in each case, to constitute an incurrence of such Indebtedness by
the Borrower or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause;

 

(l)                                     shares of preferred stock issued by any
Restricted Subsidiary to the Borrower or to any Restricted Subsidiary; provided,
that:

 

(i)                                     any subsequent issuance or transfer of
Equity Interests that results in any such preferred stock being held by a
Person other than the Borrower or any Restricted Subsidiary; and

 

(ii)                                  any sale or other transfer of any such
preferred stock to a Person that is not either the Borrower or any Restricted
Subsidiary,

 

shall be deemed, in each case, to constitute an
issuance of such preferred stock by the Borrower or such Restricted Subsidiary,
as the case may be, that was not permitted by this clause;

 

(m)                               Hedging Obligations incurred by the
Borrower or any of its Restricted Subsidiaries in the ordinary course of
business and not for speculative purposes;

 

(n)                                 Indebtedness of the Borrower or any of
its Restricted Subsidiaries in respect of workers’ compensation claims,
self-insurance obligations, bankers’ acceptances, performance and surety bonds
provided by the Borrower or a Restricted Subsidiary in the ordinary course of
business;

 

(o)                                 Indebtedness of the Borrower or any of
its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently drawn against insufficient funds, so
long as such Indebtedness is covered within five business days;

 

(p)                                 Indebtedness arising from agreements of
the Borrower or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar
obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or Equity Interests of a Subsidiary; provided,
that the maximum aggregate liability in respect of all such Indebtedness shall
at no time exceed the gross proceeds (including non-cash proceeds) actually
received by the Borrower and/or such Restricted Subsidiary in connection with
such disposition;

 

(q)                                 the Guarantee by the Borrower or any
Guarantor of Indebtedness of the Borrower or any Guarantor that is permitted by
clause (d) (e), (f), (g), (i), (j)
or (s) of this Section;

 

(r)                                    the Guarantee by OPC and its Subsidiaries
of the Orion Notes; and

 

(s)                                  additional Indebtedness of the Borrower
or any of its Restricted Subsidiaries, including Parity Secured Debt,
Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, and Disqualified Stock of the Borrower, in an
aggregate principal amount (or accreted value, as applicable) at any time
outstanding, not to exceed $300,000,000, less the Outstanding Amount at such
time, the proceeds of which are used

 

85

 

for, or assumed in connection with, general corporate
purposes of the Borrower or any of its Restricted Subsidiaries.

 

Notwithstanding any of the foregoing, neither OPH nor
any of its Subsidiaries shall create, incur, issue, assume, suffer to exist,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to any Indebtedness (including Acquired Debt and
Disqualified Stock), or issue any shares of preferred stock, in each case,
except to the extent permitted under clauses (h) (but not any
Permitted Refinancing Indebtedness thereunder), (k), (l), (m),
(n), (o), (p) and (r) of this Section.

 

7.4  Consolidation and Mergers.

 

(a)                                  Consolidate or merge with or into another
Person, or sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Borrower and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person, except that:

 

(i)                                     so long as no Default exists or would
result therefrom, any Subsidiary may merge with or dissolve into (i) the
Borrower; provided, that the Borrower shall be the continuing or
surviving Person or (ii) any one or more other Subsidiaries; provided,
that when any Guarantor is merging with or dissolving into another Subsidiary,
the Guarantor shall be the continuing or surviving Person or such other
Subsidiary shall become a Guarantor upon the consummation of such merger or
dissolution in compliance with Section 6.12;

 

(ii)                                  in connection with any Asset Sale
permitted under Section 7.5, any Subsidiary of the Borrower may
dissolve, liquidate, consolidate or merge with any other Person or permit any
other Person to consolidate or merge with or into it; and

 

(iii)                               so long as no Default exists or would result
therefrom, in connection with any Investment permitted under Section 7.2,
any Subsidiary of the Borrower may dissolve, liquidate, consolidate or merge
with or into any other Person or permit any other Person to merge or
consolidate with it; provided, that the Person surviving such merger,
dissolution or consolidation shall be a Guarantor in compliance with Section 6.12.

 

(b)                                 In addition, the Borrower shall not, nor
shall it permit any of its Restricted Subsidiaries to, directly or indirectly,
lease all or substantially all of the properties or assets of the Borrower and
its Restricted Subsidiaries, in one or more related transactions, to any other
Person.

 

(c)                                  This Section shall not apply to (i) any
sale, transfer, assignment, conveyance, lease or other disposition of assets
between or among the Borrower and the Restricted Subsidiaries, or (ii) the
merger of the Borrower with an Affiliate solely for the purpose of
reincorporating or re-forming the Borrower in another jurisdiction.

 

7.5  Asset Sales.

 

(a)                                  Consummate an Asset Sale unless:

 

86

 

(i)                                     the Borrower (or the Restricted
Subsidiary, as the case may be) receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the assets or Equity
Interests issued or sold or otherwise disposed of (as reasonably determined by
the Borrower or such Restricted Subsidiary); and

 

(ii)                                  at least 90% of the consideration
therefor received in the Asset Sale by the Borrower or such Restricted
Subsidiary is in the form of cash or Cash Equivalents.  For purposes of this provision, each of the
following shall be deemed to be cash:

 

(A)                              any liabilities, as shown on the Borrower’s
most recent consolidated balance sheet, of the Borrower or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by their
terms subordinated to the Loans or any Guaranty thereof) that are assumed by
the transferee of any such assets pursuant to a customary novation agreement
that releases the Borrower or such Restricted Subsidiary from further
liability;

 

(B)                                any securities, notes or other
Obligations received by the Borrower or any such Restricted Subsidiary from
such transferee that are converted (by sale or other disposition) by the
Borrower or such Restricted Subsidiary into cash, to the extent of the cash
received in that conversion within 60 days; and

 

(C)                                reasonable reserves for indemnity
obligations and purchase price adjustments funded in cash or held back by the
purchaser.

 

(b)                                 In addition, without having obtained the
Core Asset Consent in writing, the Borrower shall not, and shall not permit any
of its Restricted Subsidiaries to, consummate (i) an Asset Sale of (x) any
Equity Interest in RERH or (y) any “price-to-beat” small commercial or
residential retail customers of RERH or any of its Subsidiaries that are
located in the “greater Houston area” or (ii) an Asset Sale of any Equity
Interest in REMA or OPH, or any assets of RERH (other than any asset to which clause
(b)(i)(y) applies), REMA or OPH (and, in each case, their respective
Subsidiaries), where the gross proceeds of the portion of the Equity Interest
or asset being sold, together with the gross proceeds of any other such Equity
Interest or assets sold in an Asset Sale on or after December 22, 2004,
would exceed $2,500,000,000.  For
purposes of calculating the amount under the foregoing clause (b)(ii),
upon the first closing of any in a series of transactions, all of the Equity
Interests or assets whose sale is contemplated by such series shall be deemed
to have then been sold for their gross proceeds as at the time of such first
closing.

 

(c)                                  If any Net Asset Sale Proceeds from any
sale of Shared Collateral or from any issuance of Equity Securities that
constitute an Asset Sale are required pursuant to the terms of any of the
Secured Debt Documents to be deposited into a cash collateral or similar
account, then such Net Proceeds shall be deposited into a Cash Collateral
Account (as defined in the Existing Credit Agreement) as part of the Shared
Collateral.

 

7.6  Restricted Payments. 
Make any Restricted Payment by way of the payment of any dividend or
distribution in cash or Cash Equivalents on any Equity Interests of the
Borrower or otherwise, make any Restricted Payment except for the following:

 

87

 

(a)                                  the payment of any dividend within 60
days after the date of declaration of the dividend, if at the date of
declaration the dividend would have complied with the provisions of this
Agreement (and, in the case of any dividends to be paid by the Borrower, no
Default had occurred and was continuing on the date of such declaration);

 

(b)                                 so long as no Default has occurred and is
continuing or would be caused thereby, the making of any Restricted Payment in
exchange for, or out of the net cash proceeds of, the substantially concurrent
sale (other than to a Restricted Subsidiary of the Borrower) of, Equity
Interests of the Borrower (other than Disqualified Stock) or of the
substantially concurrent contribution of common equity capital or surplus to
the Borrower;

 

(c)                                  the defeasance, redemption, repurchase or
other acquisition of Subordinated Indebtedness of the Borrower or any Guarantor with the net cash proceeds from a
substantially concurrent incurrence of Permitted Refinancing Indebtedness;

 

(d)                                 the payment of any dividend (or, in the
case of any partnership or limited liability company, any similar distribution)
by a Restricted Subsidiary of the Borrower to the holders of its Equity
Interests on a pro rata basis;

 

(e)                                  so long as no Default has occurred and is
continuing or would be caused thereby, (i) the repurchase, redemption or
other acquisition or retirement for value of any Equity Interests of the Borrower
or any Restricted Subsidiary of the Borrower in connection with any management
equity subscription agreement, stock option agreement, shareholders’ agreement,
severance agreement, employee benefit plan or agreement or similar agreement,
in each case, as in existence and as in effect on December 22, 2004, (ii) the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Borrower or any Restricted Subsidiary of the Borrower
in connection with any management equity subscription agreement, stock option
agreement, shareholders’ agreement, severance agreement, employee benefit plan
or agreement or similar agreement other than any such agreement or plan
described in clause (i) above, or (ii) the repurchase for value
of any Equity Interests of the Borrower in the open market to satisfy stock
options issued by the Borrower that are outstanding; provided, that with
respect to clauses (ii) and (iii) above, the aggregate price paid for
all such repurchased, redeemed, acquired or retired Equity Interests after December 22,
2004 may not exceed $25,000,000 in any calendar year (or the pro  rata
portion thereof for the calendar year 2004);

 

(f)                                    the repurchase of Equity Interests deemed
to occur upon the exercise of stock options to the extent such Equity Interests
represent a portion of the exercise price of those stock options;

 

(g)                                 the purchase by the Borrower of
fractional shares upon conversion of any securities of the Borrower into Equity
Interests of the Borrower;

 

(h)                                 so long as no Default has occurred and is
continuing or would be caused thereby, the declaration and payment of dividends
to holders of any class or series of Disqualified Stock of the Borrower or any
Restricted Subsidiary of the Borrower issued on or after December 22, 2004
in accordance with Section 7.3(s) hereof;

 

88

 

(i)                                     the transactions with any Person
(including any Affiliate of the Borrower) set forth in clauses (b)(i) and
(b)(iv) of Section 7.8(b) hereof and the funding
of any obligations in connection therewith;

 

(j)                                     the issuance of Equity Interests of the
Borrower (other than Disqualified Stock) for other Equity Interests of the
Borrower in connection with any rights offering and payments for the redemption
of fractional shares in connection with any rights offering; and

 

(k)                                  so long as no Default has occurred and is
continuing or would be caused thereby, additional Restricted Payments, other
than the payment by the Borrower of any cash dividends or other cash
distributions in respect of the Borrower’s Equity Interests, in an aggregate
amount not to exceed, together with the aggregate amount of Investments made
pursuant to clause (4) of the definition of “Permitted Investments,”
$75,000,000 since December 22, 2004.

 

The amount of all Restricted Payments (other than
cash) shall be the Fair Market Value on the date of the Restricted Payment of
the asset(s) or securities proposed to be transferred or issued by the Borrower
or such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment.

 

7.7  Line of Business. 
Not, nor permit any of its Restricted Subsidiaries to, engage in any
business other than the Permitted Business, except to such extent as would not
be material to the Borrower and its Subsidiaries taken as a whole.

 

7.8  Transactions with Affiliates.

 

(a)                                  Not, and not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate of the Borrower (each, an “Affiliate Transaction”),
unless such Affiliate Transaction is on terms that are no less favorable (as
reasonably determined by the Borrower) to the Borrower or the relevant
Restricted Subsidiary than those that would have been obtained in a comparable
transaction by the Borrower or such Restricted Subsidiary with an unrelated
Person.

 

(b)                                 The following items shall not be deemed
to be Affiliate Transactions and, therefore, shall not be subject to the
provisions of Section 7.8(a) hereof:

 

(i)                                     any employment agreement or director’s
engagement agreement, employee benefit plan, officer and director
indemnification agreement or any similar arrangement entered into by the
Borrower or any of its Restricted Subsidiaries in the ordinary course of
business or approved by the Board of Directors;

 

(ii)                                  transactions between or among the
Borrower and/or its Restricted Subsidiaries (other than Foreign Subsidiaries);

 

(iii)                               transactions with a Person that is an Affiliate of the
Borrower solely because the Borrower owns, directly or through a Restricted
Subsidiary, an Equity Interest in, or controls, such Person;

 

89

 

(iv)                              payment of reasonable directors’ fees to
Persons who are not otherwise Affiliates of the Borrower;

 

(v)                                 any issuance of Equity Interests (other
than Disqualified Stock) of the Borrower to Affiliates of the Borrower;

 

(vi)                              Restricted Payments that do not violate
the provisions of Section 7.6 hereof;

 

(vii)                           transactions effected as part of a Qualified
Securitization Transaction;

 

(viii)                        loans or advances to employees in the ordinary course
of business not to exceed $10,000,000 in the aggregate outstanding at any one
time;

 

(ix)                                any agreement, instrument or arrangement
as in effect as of December 22, 2004, or any amendment thereto or any
transaction contemplated thereby (including pursuant to any amendment thereto)
in any replacement agreement thereto so long as any such amendment or
replacement agreement is not more disadvantageous to the Lenders in any
material respect than the original agreement as in effect on December 22,
2004 as determined by the Borrower; and

 

(x)                                   any pro rata
distribution (including a rights offering) to all holders of a class of Equity
Interests or Indebtedness of the Borrower or any of its Restricted
Subsidiaries, including Persons who are Affiliates of the Borrower or any of
its Restricted Subsidiaries.

 

7.9  Restrictive Agreements. 
Enter into, incur or permit to exist any agreement or other arrangement
that prohibits, restricts or imposes any condition upon (a) the ability of
the Borrower or any Restricted Subsidiary to create, incur or permit to exist
any Lien upon any of its property or assets, or (b) the ability of any
Restricted Subsidiary to pay dividends or make any other distributions with
respect to any shares of its capital stock or any other Equity Interest or
participation in its profits owned by a Restricted Subsidiary, or (c) the
ability of any Restricted Subsidiary to make or repay loans or advances to the
Borrower or any other Restricted Subsidiary or to Guarantee Indebtedness of the
Borrower or any other Restricted Subsidiary or to transfer any of its
properties or assets to the Borrower or any other Restricted Subsidiary; provided,
that the foregoing shall not apply to (i) restrictions and conditions
imposed by Laws, or by any Loan Document, (ii) restrictions and conditions
in any agreement or contract existing on December 22, 2004 and any
amendments, modifications, restatements, renewals or replacements thereof that
are not more restrictive, taken as a whole, than the restrictions existing on December 22
, 2004, (iii) customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary or asset pending such sale; provided,
that such restrictions and conditions apply only to the Subsidiary or asset
that is to be sold and such sale is permitted hereunder, (iv) restrictions
or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only to
the property or assets securing such Indebtedness, (v) customary
non-assignment provisions in any contract, easement or lease, and other
customary encumbrances and restrictions entered into in the ordinary course of
business that are not more restrictive, taken as a whole, than the encumbrances
existing on

 

90

 

December 22, 2004, (vi) restrictions or
conditions contained in any trading, netting, operating, construction, service,
supply, purchase, sale or similar agreement to which any Restricted Subsidiary
is a party and which is entered into in the ordinary course of business; provided,
that such agreement prohibits the encumbrance of solely the property or assets
of such Restricted Subsidiary that are the subject of such agreement, the payment
rights arising thereunder and/or the proceeds thereof and not to any other
asset or property of such Restricted Subsidiary or the assets or property of
any other Restricted Subsidiary and (vii) restrictions contained in
documents evidencing Indebtedness existing at the time at which any such Person
first becomes a Restricted Subsidiary, so long as such restriction was not
agreed to or entered into solely in contemplation of such change in status, and
any amendments, modifications, restatements, renewals or replacements thereof
that are not more restrictive, taken as a whole, than the restrictions existing
at the time such Person first becomes a Restricted Subsidiary.

 

7.10  Use of Proceeds. 
Use the proceeds of the Loans, whether directly or indirectly, and
whether immediately, incidentally or ultimately, to purchase or carry margin
stock (within the meaning of Regulation U of the FRB) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose.

 

7.11  Financial
Covenants.

 

(a)                                  Consolidated Interest Coverage Ratio. 
Permit the Consolidated Interest Coverage Ratio as of the end of any
Fiscal Quarter of the Borrower to be less than the ratio set forth below
opposite such Fiscal Quarter:

 

	
  Four Fiscal Quarters Ending

  	
   

  	
  Minimum

  Consolidated

  Interest Coverage Ratio

  	
   

  
	
  Closing Date through September 30,
  2007

  	
   

  	
  1.8:1.0

  	
   

  
	
  December 31, 2007 and each Fiscal
  Quarter thereafter

  	
   

  	
  2.0:1.0

  	
   

  

 

(b)                                 Consolidated Leverage Ratio. 
Permit the Consolidated Leverage Ratio as of the end of any Fiscal
Quarter of the Borrower set forth below to be greater than the ratio set forth
below opposite such period:

 

	
  Four Fiscal Quarters Ending

  	
   

  	
  Maximum

  Consolidated

  Leverage Ratio

  	
   

  
	
  Closing Date through September 30,
  2006

  	
   

  	
  6.0:1.0

  	
   

  
	
  December 31, 2006 through September 30,
  2007

  	
   

  	
  5.5:1.0

  	
   

  
	
  December 31, 2007 and each Fiscal
  Quarter thereafter

  	
   

  	
  5.0:1.0

  	
   

  

 

91

 

7.12  Capital Expenditures. 
Make or become legally obligated to make any Capital Expenditure, except

 

(a)                                  for Capital Expenditures other than in
connection with an Acquisition, in an amount not exceeding $250,000,000 in the
aggregate for the Borrower and its Restricted Subsidiaries during each Fiscal
Year; provided, that (i) any portion of the $250,000,000 amount
permitted in any Fiscal Year that is not used during such Fiscal Year (the “Carry
Amount”) may be carried forward for a period of one Fiscal Year and added
to the amount of permitted Capital Expenditures in the immediately succeeding
Fiscal Year (but no portion of any Carry Amount shall be used (or deemed to be
used) in the applicable Fiscal Year until the entire amount of the Capital
Expenditures permitted to be made in such Fiscal Year (i.e., without giving
effect to any Carry Amount) as provided in this Section shall first have
been used in full) and (ii) any portion of the $250,000,000 amount
permitted in any Fiscal Year may be subtracted from the total amount permitted
in such Fiscal Year and added to the permitted amount in the immediately
preceding Fiscal Year; and

 

(b)                                 in the case of Capital Expenditures in
connection with an Acquisition, an amount that, together with the aggregate
amount of Acquisition Consideration paid by the Borrower or its Subsidiaries on
or after December 22, 2004, in the aggregate does not exceed the Permitted
Acquisition Limit;

 

provided, that in the case of both clauses (a) and
(b), regulatory and environmental capital expenditures necessary to
operate assets or to comply with law or permits and emergency capital
expenditures, shall not be limited and shall not be included in calculating
compliance with such limitations.

 

7.13  Modification of Certain Agreements. 
Consent to any amendment, supplement, waiver or other modification of,
or enter into any forbearance from exercising any rights with respect to the
terms or provisions contained in,

 

(a)                                  documents relating to Subordinated
Indebtedness (other than intercompany Indebtedness) of the Borrower or any
Restricted Subsidiary in any way that:

 

(i)                                     increases the rate of or shortens the
time for payment of interest on any Subordinated Indebtedness;

 

(ii)                                  increases the principal of, shortens the
final maturity date of or shortens the Weighted Average Life to Maturity of any
Subordinated Indebtedness;

 

(iii)                               alters in a manner adverse to the Borrower the
redemption provisions or the price or terms at which the Borrower or such
Restricted Subsidiary is required to offer to purchase any Subordinated
Indebtedness; or

 

(iv)                              amends the subordination provisions of
the agreements governing any Subordinated Indebtedness;

 

92

 

(b)                                 the Organization Documents of the
Borrower or any of its Subsidiaries, if the result could reasonably expected to
have a Material Adverse Effect; or

 

(c)                                  any Orion Note Document in any way that (i) reduces
the rate of interest or extends in a material manner the date scheduled for
payment of principal of or interest on, or reduces the principal amount (other
than as a result of a Dollar for Dollar repayment) of, any of the Orion Notes, (ii) modifies,
waives or deletes the terms of the Orion Note Documents which provide for a
cross-default to Indebtedness of OPH under the OPH Note Indenture or the OPH
Notes, or (iii) releases collateral securing the Orion Note Documents,
except in connection with any asset disposition that is not prohibited
hereunder and the Net Asset Sale Proceeds of which are applied in accordance
herewith.

 

7.14  Fiscal Year.  Not, nor
permit any of its Restricted Subsidiaries to, directly or indirectly, change
its Fiscal Year from a Fiscal Year ending December 31.

 

7.15  Commodity Hedging. 
Not, nor permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or assume any Commodity Hedging Obligations except in
the ordinary course of business and not for speculative purposes.

 

7.16  Collateral Trust Agreement; Prepayment of
Parity Secured Obligations.  Not, nor
permit any of its Restricted Subsidiaries to, (a) take any action which
requires an “Act of Secured Debtholders” under the Collateral Trust Agreement
unless such action has been approved by the Administrative Agent or the
Required Aggregate Revolver and Term Lenders or (b) agree to any amendment
or waiver with respect to any provision of the Existing Credit Agreement which
corresponds to a provision of this Agreement described under clause (a) of
the definition of Required Lenders, unless the corresponding provision of this
Agreement is amended or modified in a substantially similar manner and the
applicable Lenders shall have received a ratable amount of the consideration,
if any, paid to the lenders under the Existing Credit Agreement in respect of
such amendment or modification (including, without limitation, any increase in
pricing) on the same basis as the lenders under the Existing Credit Agreement
(provided that this clause (b) shall not apply if the requisite consent
required to make the corresponding amendment or modification to this Agreement
is not obtained).

 

7.17  Orion
Subsidiaries.

 

(a)                                  The Borrower shall not permit OPH or any
of OPH’s Subsidiaries to distribute any cash (except Net Asset Sale Proceeds)
to the Borrower or any of its Subsidiaries, except as follows:  first, to pay principal of and
interest on the OPH Revolving Notes; second, to the extent permitted
under the OPH Note Indenture, as a dividend paid by OPH to the Borrower; and third,
to pay principal of and interest on the OPMW Term Notes and OPNY Term Note.

 

(b)                                 The Borrower shall not take or permit any
action that would cause a “Change of Control” (as defined in the OPH Note
Indenture) to occur, without the consent of the Required Aggregate Revolver and
Term Lenders.

 

93

 

(c)                                  The Borrower shall cause OPH and its
Subsidiaries to apply any OPH Asset Sale Proceeds to the prepayment of the OPMW
Term Notes and OPNY Term Notes, in each case until repaid in full.

 

7.18  Designated Entities. 
Notwithstanding anything to the contrary contained herein (including
this Article):

 

(a)                                  neither the Borrower nor any Restricted
Subsidiary shall make any Investment in or otherwise transfer any asset to any
Designated Entity other than (i) pursuant to cash loans evidenced by
promissory notes that are pledged as Collateral under the Security Documents; provided,
that to the extent any Designated Entity has Contractual Obligations existing
on December 22, 2004 which prohibit the incurrence by such Designated
Entity of Indebtedness (including pursuant to such promissory notes), the
Borrower and the Restricted Subsidiaries may, to the extent of such
prohibitions, make cash equity contributions to such Designated Entity, (ii) credit
support provided in the ordinary course of business to support obligations
other than Debt of such Designated Entity (such as and including posting of
cash and/or letters of credit, delivery of performance guarantees or similar
agreements and arrangements to guaranty the timely and complete performance of
such Designated Entity) and (iii) Investments and transfers of assets
(other than cash, Cash Equivalents, or any power generation facility) and
payments for goods and services in the ordinary course of business; and

 

(b)                                 no Designated Entity shall incur or
permit to exist any Indebtedness other than (i) pursuant to clause
(a)(i) above,
(ii) Existing Indebtedness in respect of which it is obligated and (iii) Permitted
Refinancing  Indebtedness with respect to
any such Existing Indebtedness.

 

7.19  Foreign Investments. 
Notwithstanding anything to the contrary contained herein (including
this Article), neither the Borrower nor any Restricted Subsidiary (other than a
Foreign Subsidiary) shall make any Investment in any Foreign Subsidiary unless
the Borrower shall have taken all actions required by Section 6.12
with respect thereto; provided, that the aggregate amount of Investments
made by the Borrower and/or Restricted Subsidiaries (other than a Foreign
Subsidiary) in Foreign Subsidiaries after December 22, 2004 shall not
exceed $50,000,000.

 

ARTICLE VIII.

GUARANTY

 

8.1  Guaranty; Limitation of Liability.

 

(a)                                  Each Guarantor, jointly and severally,
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Credit Agreement
Obligations of the Borrower now or hereafter existing (including any
extensions, modifications, substitutions, amendments or renewals of any or all
of the foregoing Credit Agreement Obligations), whether direct or indirect,
absolute or contingent, and whether for principal, interest, premiums, fees,
indemnities, contract causes of action, costs, expenses or otherwise (such
Credit Agreement Obligations being the “Guaranteed Obligations”), and
agrees to pay any and all expenses (including reasonable fees and expenses of
counsel) incurred by the

 

94

 

Administrative Agent or any other Secured Party in
enforcing any rights under this Guaranty or any other Loan Document.  Without limiting the generality of the
foregoing, each Guarantor’s liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any other
Loan Party to any Secured Party under or in respect of the Loan Documents but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving such other Loan
Party.

 

(b)                                 Each Guarantor, and by its acceptance of
this Guaranty, the Administrative Agent and each other Secured Party, hereby
confirms that it is the intention of all such Persons that this Guaranty and
the Obligations of each Guarantor hereunder not constitute a fraudulent
transfer or conveyance for purposes of Debtor Relief Laws, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
foreign, federal or state law to the extent applicable to this Guaranty and the
Obligations of each Guarantor hereunder. 
To effectuate the foregoing intention, the Administrative Agent, the
other Secured Parties and the Guarantors hereby irrevocably agree that the
Obligations of each Guarantor under this Guaranty at any time shall be limited
to the maximum amount as will result in the Credit Agreement Obligations of
such Guarantor under this Guaranty not constituting a fraudulent transfer or
conveyance.

 

(c)                                  Each Guarantor hereby unconditionally and
irrevocably agrees that in the event any payment shall be required to be made
to any Secured Party under this Guaranty or any Instrument of Assumption and
Joinder, such Guarantor will contribute, to the maximum extent permitted by
law, such amounts to each other 
Guarantor and each other Guarantor so as to maximize the aggregate
amount paid to the Secured Parties under or in respect of the Loan Documents.

 

8.2  Guaranty Absolute. 
Each Guarantor guarantees that the Guaranteed Obligations will be paid
strictly in accordance with the terms of the Loan Documents, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of any Secured Party with respect
thereto.  The Credit Agreement
Obligations of each Guarantor under or in respect of this Guaranty are
independent of the Guaranteed Obligations or any other Credit Agreement
Obligations of any other Loan Party under or in respect of the Loan Documents,
and a separate action or actions may be brought and prosecuted against each
Guarantor to enforce this Guaranty, irrespective of whether any action is
brought against the Borrower or any other Loan Party or whether the Borrower or
any other Loan Party is joined in any such action or actions.  The liability of each Guarantor under this
Guaranty shall be irrevocable, absolute and unconditional irrespective of, and
each Guarantor hereby irrevocably waives any defenses it may now have or
hereafter acquire in any way relating to, any or all of the following:

 

(a)                                  any lack of validity or enforceability of
any Loan Document or any agreement or instrument relating thereto;

 

(b)                                 any change in the time, manner or place
of payment of, or in any other term of, all or any of the Guaranteed
Obligations or any other Credit Agreement Obligations of any other Loan Party
under or in respect of the Loan Documents, or any other amendment or waiver of
or any consent to departure from any Loan Document, including any increase in
the Guaranteed

 

95

 

Obligations resulting from the extension of additional
credit to any Loan Party or any of its Subsidiaries or otherwise;

 

(c)                                  any taking, exchange, release or non-perfection of any Collateral or any
other collateral, or any taking, release or amendment or waiver of, or
consent to departure from, any other guaranty, for all or any of the Guaranteed
Obligations;

 

(d)                                 any manner of application of Collateral
or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner
of sale or other disposition of any Collateral or any other collateral
for all or any of the Guaranteed Obligations or any other Credit Agreement
Obligations of any Loan Party under the Loan Documents or any other assets of
any Loan Party or any of its Subsidiaries;

 

(e)                                  any change, restructuring or termination
of the corporate structure or existence of any Loan Party or any of its
Subsidiaries;

 

(f)                                    any failure of any Secured Party to
disclose to any Loan Party any information relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any other Loan Party now or hereafter known to such Secured Party (each
Guarantor waiving any duty on the part of the Secured Parties to disclose such
information);

 

(g)                                 the failure of any other Person to
execute or deliver this Guaranty, any Instrument of Assumption and Joinder or
any other guaranty or agreement or the release or reduction of liability of any
Guarantor or other guarantor or surety with respect to the Guaranteed
Obligations; or

 

(h)                                 any other circumstance (including any
statute of limitations) or any existence of or reliance on any representation
by any Secured Party that might otherwise constitute a defense available to, or
a discharge of, any Loan Party or any other guarantor or surety.

 

This Guaranty shall survive termination of this
Agreement and shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by any Secured Party or any other
Person upon the insolvency, bankruptcy or reorganization of the Borrower or any
other Loan Party or otherwise, all as though such payment had not been made.

 

8.3  Waivers and Acknowledgments.

 

(a)                                  Each Guarantor hereby unconditionally and
irrevocably waives promptness, diligence, notice of acceptance, presentment,
demand for performance, notice of nonperformance, default, acceleration,
protest or dishonor and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that any Secured Party
protect, secure, perfect or insure any Lien or any property subject thereto or
exhaust any right or take any action against any Loan Party or any other Person
or any Collateral.

 

(b)                                 Each Guarantor hereby unconditionally and
irrevocably waives any right to revoke this Guaranty and acknowledges that this
Guaranty is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future.

 

96

 

(c)                                  Each Guarantor hereby unconditionally and
irrevocably waives (i) any defense arising by reason of any claim or
defense based upon an election of remedies by any Secured Party that in any
manner impairs, reduces, releases or otherwise adversely affects the
subrogation, reimbursement, exoneration, contribution or indemnification rights
of such Guarantor or other rights of such Guarantor to proceed against any of
the other Loan Parties, any other guarantor or any other Person or any
Collateral and (ii) any defense based on any right of set-off or
counterclaim against or in respect of the Credit Agreement Obligations of such
Guarantor hereunder.

 

(d)                                 Each Guarantor acknowledges that the
Administrative Agent or the Collateral Trustee may, without notice to or demand
upon such Guarantor and without affecting the liability of such Guarantor under
this Guaranty, foreclose under any mortgage by nonjudicial sale, and each
Guarantor hereby waives any defense to the recovery by the Collateral Trustee
and the other Secured Parties against such Guarantor of any deficiency after
such nonjudicial sale and any defense or benefits that may be afforded by
applicable law.

 

(e)                                  Each Guarantor hereby unconditionally and
irrevocably waives any duty on the part of any Secured Party to disclose to
such Guarantor any matter, fact or thing relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any other Loan Party or any of its Subsidiaries now or hereafter known by such
Secured Party.

 

(f)                                    Each Guarantor acknowledges that it will
receive substantial direct and indirect benefits from the financing
arrangements contemplated by the Loan Documents and that the waivers set forth
in Section 8.2 and this Section are knowingly made in
contemplation of such benefits.

 

8.4  Subrogation.  Each Guarantor
hereby unconditionally and irrevocably agrees not to exercise any rights that
it may now have or hereafter acquire against the Borrower, any other Loan Party
or any other insider guarantor that arise from the existence, payment,
performance or enforcement of such Guarantor’s Guaranteed Obligations under or
in respect of this Guaranty or any other Loan Document, including any right of
subrogation, reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of any Secured Party against
the Borrower, any other Loan Party or any other insider guarantor or any
Collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including the right to take or receive
from the Borrower, any other Loan Party or any other insider guarantor,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right, unless
and until all of the Guaranteed Obligations and all other amounts payable under
this Guaranty shall have been paid in full in cash and the Commitments shall
have expired or been terminated.  If any
amount shall be paid to any Guarantor in violation of the immediately preceding
sentence at any time prior to the latest of (a) the payment in full in
cash of the Guaranteed Obligations and all other amounts payable under this
Guaranty and (b) Maturity Date, such amount shall be received and held in
trust for the benefit of the Secured Parties, shall be segregated from other
property and funds of such Guarantor and shall forthwith be paid or delivered
to the Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guaranty, whether matured
or unmatured, in accordance with the terms of the

 

97

 

Loan Documents, or to be held as Collateral for any
Guaranteed Obligations or other amounts payable under this Guaranty thereafter
arising.  If (i) any Guarantor shall
make payment to any Secured Party of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full in cash, and (iii) Maturity
Date shall have occurred, the Secured Parties will, at such Guarantor’s request
and expense, execute and deliver to such Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to such Guarantor of an interest in the Guaranteed
Obligations resulting from such payment made by such Guarantor pursuant to this
Guaranty.

 

8.5  Assumption and Joinder. 
Upon the execution and delivery by any Additional Guarantor of an
Instrument of Assumption and Joinder as required under Section 6.12(a),
(a) such Person shall become and be a Guarantor hereunder, and each
reference in this Guaranty to a “Guarantor” shall also mean and be a reference
to such Additional Guarantor, and each reference in any other Loan Document to
a “Guarantor” shall also mean and be a reference to such Additional Guarantor,
and (b) each reference herein to “this Guaranty,” “hereunder,” “hereof” or
words of like import referring to this Guaranty, and each reference in any
other Loan Document to the “Guaranty,” “thereunder,” “thereof” or words of like
import referring to this Guaranty, shall mean and be a reference to this
Guaranty as supplemented by such Instrument of Assumption and Joinder.

 

8.6  Subordination. 
Each Guarantor hereby subordinates any and all debts, liabilities and
other Obligations owed to such Guarantor by each other Loan Party (the “Subordinated
Obligations”) to the Guaranteed Obligations to the extent and in the manner
hereinafter set forth in this Section:

 

(a)                                  Prohibited Payments, Etc. 
Except during the continuance of a Default (including the commencement
and continuation of any proceeding under any Debtor Relief Law relating to any
other Loan Party), each Guarantor may receive regularly scheduled payments from
any other Loan Party on account of the Subordinated Obligations.  After the occurrence and during the
continuance of any Default (including the commencement and continuation of any
proceeding under any Debtor Relief Law relating to any other Loan Party),
however, unless the Required Aggregate Revolver and Term Lenders otherwise
agree, no Guarantor shall demand, accept or take any action to collect any
payment on account of the Subordinated Obligations.

 

(b)                                 Prior Payment of Guaranteed Obligations. 
In any proceeding under any Debtor Relief Law relating to any other Loan
Party, each Guarantor agrees that the Secured Parties shall be entitled to
receive payment in full in cash of all Guaranteed Obligations (including all
Post-Petition Interest) before such Guarantor receives payment of any
Subordinated Obligations.

 

(c)                                  Turn-Over.  After the
occurrence and during the continuance of any Default (including the
commencement and continuation of any proceeding under any Debtor Relief Law
relating to any other Loan Party), each Guarantor shall, if the Administrative
Agent so request, collect, enforce and receive payments on account of the Subordinated
Obligations as trustee for the Secured Parties and deliver such payments to the
Administrative Agent on account of the Guaranteed Obligations (including all
Post-Petition Interest), together with any necessary

 

98

 

endorsements or other instruments of transfer, but
without reducing or affecting in any manner the liability of such Guarantor
under the other provisions of this Guaranty.

 

8.7  Continuing Guaranty; Assignments. 
This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the latest of (i) the payment in full in cash of
the Guaranteed Obligations and all other amounts payable under this Guaranty, (ii) the
Maturity Date, and (iii)  the release thereof in accordance with Section 10.10,
(b) be binding upon the Guarantor, its successors and assigns and (c) inure
to the benefit of and be enforceable by the Secured Parties and their
successors, transferees and assigns. 
Upon the occurrence of the latest date specified in clause (a) above,
the Guarantors shall be released from other Credit Agreement Obligations under
the Loan Documents.  Without limiting the
generality of clause (c) of the immediately preceding sentence, any
Secured Party may assign or otherwise transfer all or any portion of its rights
and Obligations under this Agreement (including all or any portion of its
Commitments, the Advances owing to it and the Note or Notes held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party herein or otherwise,
in each case as and to the extent provided in this Section.  No Guarantor shall have the right to assign
its rights hereunder or any interest herein without the prior written consent
of the Secured Parties.

 

ARTICLE IX.

EVENTS OF DEFAULT AND REMEDIES

 

9.1  Events of Default. 
Any of the following shall constitute an Event of Default:

 

(a)                                  Non-Payment. 
The Borrower or any other Loan Party fails to pay (i) when and as
required to be paid herein, any amount of principal of any Loan, or (ii) within
three Business Days after the same becomes due, any interest on any Loan, or
any fee or other amount payable hereunder or under any other Loan Document; or

 

(b)                                 Specific Covenants. 
The Borrower fails to perform or observe any term, covenant or agreement
contained in any of Section 6.3, 6.5 (only with respect to
the existence of the Borrower), 6.11 or 6.12 or Article VII;
or

 

(c)                                  Other Defaults. 
Any Loan Party fails to perform or observe any other covenant or
agreement (not specified in clause (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days after the earlier to occur of (i) a Loan
Party receiving notice thereof from the Administrative Agent (which notice
shall be given at the request of any Lender) or any other Person, or (ii) a
Responsible Officer or other executive officer of a Loan Party obtains
knowledge of such occurrence; or

 

(d)                                 Representations and Warranties. 
Any representation, warranty, certification or statement of fact made or
deemed made by or on behalf of the Borrower or any other Loan Party herein, in
any other Loan Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading in any material respect when made or
deemed made; or

 

(e)                                  Cross-Default.  (i) Any
Loan Party, any Person required to become a Loan Party pursuant to Section 6.12,
REMA, OPH or any Subsidiary of REMA or OPH (A) fails to make

 

99

 

any payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) in respect of any
Indebtedness under or Guarantee in respect of the REMA Lease or any other Indebtedness
or Guarantee (other than Indebtedness hereunder and Indebtedness under Hedging
Agreements) having an aggregate principal amount (including amounts owing to
all creditors under any combined or syndicated credit arrangement) of more than
$50,000,000, or (B) fails to observe or perform any other agreement or
condition relating to any such Indebtedness or Guarantee or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, the effect of which default or other event is (x) in the case of
all such Indebtedness or Guarantees (including under or in respect of the REMA
Lease), to cause, or (y) in the case of all such Indebtedness or Guarantees
(other than under or in respect of the REMA Lease), to permit the holder or
holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to become due or to be repurchased,
prepaid, defeased or redeemed (automatically or otherwise), or an offer to
repurchase, prepay, defease or redeem such Indebtedness to be made, prior to
its Stated Maturity, or such Guarantee to become payable or cash collateral in
respect thereof to be demanded; or (ii) there occurs under any Hedging
Agreement an Early Termination Date (as defined in such Hedging Agreement)
resulting from (A) any event of default under such Hedging Agreement as to
which the Borrower or any Subsidiary is the Defaulting Party (as defined in
such Hedging Agreement) or (B) any Termination Event (as so defined) under
such Hedging Agreement as to which the Borrower or any Subsidiary is an
Affected Party (as so defined) and, in either event, the Hedge Termination
Value owed by the Borrower or such Subsidiary as a result thereof is greater
than $50,000,000 and not paid when due; or

 

(f)                                    Insolvency Proceedings, Etc. 
The Borrower or any Loan Party (or Person that is required to become a
Loan Party pursuant to Section 6.12) that is a Material Subsidiary
or REMA, OPH or any Subsidiary of REMA or OPH institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of
their respective property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
their respective property is instituted without the consent of such Person and
continues undismissed or unstayed for 60 calendar days, or an order for relief
is entered in any such proceeding; or

 

(g)                                 Inability to Pay Debts; Attachment. 
The Borrower or any Loan Party (or Person that is required to become a
Loan Party pursuant to Section 6.12)
that is a Material Subsidiary or REMA, OPH or any Subsidiary of REMA or OPH
becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due; or

 

(h)                                 Judgments.  There is
entered against the Borrower, any Loan Party, any Person that is required to
become a Loan Party pursuant to Section 6.12, OPH, REMA or any
Subsidiary of OPH or REMA a final judgment or order for the payment of money in
an aggregate amount exceeding $50,000,000 (to the extent not covered by
independent third-party insurance or that

 

100

 

has not been paid), and (A) enforcement
proceedings are commenced by any creditor upon such judgment or order, or (B) within
thirty (30) days from the later of (X) the entry of any such judgment or the
date of any such order (as applicable) and (Y) the date any payment is required
to be made on or with respect to any such judgment or order pursuant to the
terms thereof, the same shall not have been paid, discharged or vacated or, in
the case of a judgment, stayed pending appeal, or shall not have been
discharged or vacated within thirty (30) days from the entry of a final order
of affirmance on appeal; or

 

(i)                                     ERISA.  (i) An
ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which
has resulted or could reasonably be expected to result in liability of the
Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the
PBGC in an aggregate amount in excess of $50,000,000, or (ii) the Borrower
or any ERISA Affiliate fails to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an
aggregate amount in excess of $50,000,000; or the Borrower fails to make a
contribution under Code Section 412 or ERISA Section 302 with respect
to a Pension Plan, within 30 days after the date on which the Borrower obtains
knowledge that such contribution is due, in an aggregate amount in excess of
$50,000,000; or

 

(j)                                     Change of Control. 
There occurs any Change of Control; or

 

(k)                                  Invalidity of Documents.  (i) Any
Security Agreement, Mortgage or other Security Document after delivery thereof
pursuant to Section 4.1 or 6.12 shall for any reason (other
than pursuant to the terms thereof or as expressly permitted thereby) cease to
create a valid and perfected first priority Lien (subject to Permitted
Encumbrances and Permitted Liens) on and security interest in the Collateral
purported to be covered thereby; provided, that no such defects pursuant
to this clause with respect to a Lien granted or purported to be granted by any
of the Loan Documents shall give rise to an Event of Default under this clause
unless such defects shall adversely affect the aggregate value of the
Collateral by an aggregate amount of $50,000,000 or more; or (ii) any Loan
Party shall so assert such invalidity or lack of perfection or priority; or (iii) any
other Loan Document, at any time after its execution and delivery and for any
reason other than as expressly permitted hereunder or thereunder or
satisfaction in full of all the Credit Agreement Obligations thereunder, ceases
to be in full force and effect; or any Loan Party or any other Person contests
in any manner the validity or enforceability of any provision of any other Loan
Document; or any Loan Party denies that it has any or further liability or
obligation under any other Loan Document, or purports to revoke, terminate or
rescind any provision of any other Loan Document; or

 

(l)                                     Failure of Subordination. 
Unless otherwise waived or consented to by the Administrative Agent and
the Required Aggregate Revolver and Term Lenders in writing, the subordination
provisions relating to any Subordinated Indebtedness (the “Subordination
Provisions”) shall fail to be enforceable by the Administrative Agent and
the Lenders in accordance with the terms thereof, or the monetary Credit
Agreement Obligations shall fail to constitute “Senior Indebtedness” or “Senior
Debt” (or similar term) referring to the Credit Agreement Obligations; or the
Borrower or any of its Restricted Subsidiaries shall, directly or indirectly,
disavow or contest in any manner (i) the effectiveness, validity or
enforceability of any of the Subordination Provisions, (ii) that the
Subordination Provisions exist for the benefit of

 

101

 

the Secured Parties or (iii) that all payments of
principal of or premium and interest on the Subordinated Debt, or realized from
the liquidation of any property of any Loan Party, shall be subject to any of
such Subordination Provisions.

 

9.2  Remedies upon Event of Default. 
If any Event of Default occurs and is continuing, the Administrative
Agent shall, at the request of, or may, with the consent of, the Required
Lenders, take any or all of the following actions:

 

(a)                                  declare by written notice to the Borrower
the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower and

 

(b)                                 exercise on behalf of itself and the
Lenders all rights and remedies available to it and the Lenders under the Loan
Documents;

 

provided, that upon the occurrence of an actual or deemed
entry of an order for relief with respect to the Borrower under the Bankruptcy
Code of the United States, the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable without further act of the Administrative Agent or any Lender.

 

9.3  Application of Funds. 
After the exercise of remedies provided for in Section 9.2
(or after the Loans have automatically become immediately due and payable as
set forth in the proviso to Section 9.2), any amounts received on
account of the Credit Agreement Obligations shall be applied by the
Administrative Agent in the following order:

 

(a)                                  to payment of that portion of the Credit
Agreement Obligations constituting fees, indemnities, expenses and other
amounts (including fees, charges and disbursements of counsel to the
Administrative Agent and amounts payable under Article III) payable
to the Administrative Agent in its capacity as such;

 

(b)                                 to payment of that portion of the Credit
Agreement Obligations constituting fees, indemnities and other amounts (other
than principal and interest) payable to the Lenders (including reasonable fees,
charges and disbursements of counsel to the respective Lenders (including fees
and time charges for attorneys who may be employees of any Lender) and amounts
payable under Article III), ratably among them in proportion to the
amounts described in this clause payable to them;

 

(c)                                  to payment of Hedging Obligations and
that portion of the Credit Agreement Obligations constituting accrued and
unpaid interest on the Loans and other Credit Agreement Obligations, ratably
among the Lenders in proportion to the respective amounts described in this
clause payable to them;

 

(d)                                 to payment of that portion of the Credit
Agreement Obligations constituting unpaid principal of the Loans, ratably among
the Lenders in proportion to the respective amounts described in this clause
held by them;

 

102

 

(e)                                  to the payment of all other Credit
Agreement Obligations of the Loan Parties owing under or in respect of the Loan
Documents that are due and payable to the Secured Parties on such date, ratably
based upon the respective aggregate amounts of all such Credit Agreement
Obligations owing to the Secured Parties on such date; and

 

(f)                                    the balance, if any, after all of the
Credit Agreement Obligations have been indefeasibly paid in full, to the
Borrower or as otherwise required by Law.

 

ARTICLE X.

THE ADMINISTRATIVE AGENT

 

10.1  Appointment and Authority. 
Each of the Lenders hereby irrevocably appoints Deutsche Bank to act on
its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto.  The provisions
of this Article are solely for the benefit of the Administrative Agent and
the Lenders, and neither the Borrower nor any other Loan Party shall have
rights as a third party beneficiary of any of such provisions.

 

10.2  Rights As a Lender. 
The Person serving as the Administrative Agent or hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent and the
term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless
the context otherwise requires, include the Person serving as the
Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept
deposits from, lend money to, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with the
Borrower or any Subsidiary or other Affiliate thereof as if such Person were
not the Administrative Agent hereunder and without any duty to account therefor
to the Lenders.

 

10.3  Exculpatory Provisions. 
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the
foregoing, the Administrative Agent:

 

(a)                                  shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing;

 

(b)                                 shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that the Administrative Agent is required to exercise as directed in writing by
the Required Lenders (or such other number or percentage of the Lenders as
shall be expressly provided for herein or in the other Loan Documents); provided,
that the Administrative Agent shall not be required to take any action that, in
its opinion or the opinion of its counsel, may expose the Administrative Agent
to liability or that is contrary to any Loan Document or applicable law; and

 

(c)                                  shall not, except as expressly set forth
herein and in the other Loan Documents, have any duty to disclose, and shall
not be liable for the failure to disclose, any information

 

103

 

relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative
Agent or any of its Affiliates in any capacity.

 

The Administrative Agent shall not be liable for any
action taken or not taken by it, WHETHER OR
NOT RELATED TO ANY SINGULAR, JOINT OR CONCURRENT NEGLIGENCE OF THE
ADMINISTRATIVE AGENT, (i) with the consent or at the request of
Lenders holding in the aggregate more than 50% of the Outstanding Amount (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 11.1 and 9.2) or (ii) in
the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until notice describing such
Default is given to the Administrative Agent by the Borrower or a Lender.

 

The Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty
or representation made in or in connection with this Agreement or any other
Loan Document, (ii) the contents of any certificate, report or other
document delivered hereunder or thereunder or in connection herewith or
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than
to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

10.4  Reliance by the Administrative Agent. 
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing (including any
electronic message, Internet or intranet website posting or other distribution)
believed by them to be genuine and to have been signed, sent or otherwise
authenticated by the proper Person.  The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon. 
In determining compliance with any condition hereunder to the making of
a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the
Administrative Agent may presume that such condition is satisfactory to such
Lender unless the Administrative Agent shall have received notice to the
contrary from such Lender prior to the making of such Loan.  The Administrative Agent may consult with
legal counsel (who may be counsel for the Borrower), independent accountants
and other experts selected by them, and shall not be liable for any action
taken or not taken by them in accordance with the advice of any such counsel,
accountants or experts.

 

10.5  Delegation of Duties. 
The Administrative Agent may perform any and all of their respective
duties and exercise their respective rights and powers hereunder or under any
other Loan Document by or through any one or more sub agents appointed by the
Administrative Agent.  The Administrative
Agent and any such sub agent may perform any and all of their respective duties
and exercise their respective rights and powers by or through their respective
Related Parties.  The exculpatory
provisions of this Article shall apply to any such sub agent and to the
Related Parties of the Administrative Agent and any such sub agent, and shall
apply to

 

104

 

their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.

 

10.6  Resignation of Administrative Agent. 
The Administrative Agent may at any time give notice of its resignation
to the Lenders and the Borrower.  Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor, which shall
be a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States.  If
no such successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders, appoint a successor
Administrative Agent meeting the qualifications set forth above; provided,
that if the Administrative Agent shall notify the Borrower and the Lenders that
no qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the Administrative Agent on behalf of
the Lenders under any of the Loan Documents, the retiring Administrative Agent
shall continue to hold such collateral security until such time as a successor
Administrative Agent is appointed) and (2) all payments, communications
and determinations provided to be made by, to or through the Administrative
Agent shall instead be made by or to each Lender directly, until such time as
the Required Lenders appoint a successor Administrative Agent as provided for
above in this Section.  Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and
the retiring Administrative Agent shall be discharged from all of its duties
and obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this Section).  The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such
successor.  After the retiring Administrative
Agent’s resignation hereunder and under the other Loan Documents, the
provisions of this Article and Section 11.4 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while the retiring Administrative Agent was acting
as Administrative Agent.

 

10.7  Non-Reliance on Administrative Agent and
Other Lenders.  Each Lender acknowledges that it has, independently
and without reliance upon the Administrative Agent or any other Lender or any
of their Related Parties and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement.  Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

 

10.8  No Other Duties, Etc. 
Anything herein to the contrary notwithstanding, none of the Sole
Bookrunner, Sole Lead Arranger or Sole Syndication Agent listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any
of the other

 

105

 

Loan Documents, except in its capacity, as applicable,
as the Administrative Agent or a Lender hereunder.

 

10.9  Administrative Agent May File Proofs of
Claim.  In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to any Loan Party, the
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise

 

(a)                                  to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the Loans
and all other Credit Agreement Obligations that are owing and unpaid and to
file such other documents as may be necessary or advisable in order to have the
claims of the Lenders and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders
and the Administrative Agent and their respective agents and counsel and all
other amounts due the Lenders and the Administrative Agent under Sections
2.8 and 11.4) allowed in such judicial proceeding; and

 

(b)                                 to collect and receive any monies or
other property payable or deliverable on any such claims and to distribute the
same;

 

and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall
consent to the making of such payments directly to the Lenders, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections
2.8 and 11.4.

 

Nothing contained herein shall be deemed to authorize
the Administrative Agent to authorize or consent to or accept or adopt on
behalf of any Lender any plan of reorganization, arrangement, adjustment or
composition affecting the Credit Agreement Obligations or the rights of any
Lender or to authorize the Administrative Agent to vote in respect of the claim
of any Lender in any such proceeding.

 

10.10  Collateral and Guaranty Matters.

 

(a)                                  Subject to the terms of the Security
Documents, the Administrative Agent is irrevocably authorized, at the
discretion of the Administrative Agent from time to time, to take any of the
following actions or to direct the appropriate Persons to take any of the
following actions or to confirm the taking of the same, in each case as the
Administrative Agent shall determine to be in the interest of the Lenders:

 

(i)                                     accept, release, subordinate or otherwise modify any Lien on any real
or personal property,
including any security issued by or other ownership interest in any Person, (A) with
respect to acceptances, at any time, (B) with respect to releases, upon
payment in full of all Credit Agreement Obligations (other than contingent

 

106

 

indemnification obligations), (C) with respect to
releases, to the extent of property that is or will be sold, monetized,
securitized, leased or otherwise transferred or disposed of as part of or in
connection with any transaction required or permitted under any Loan Document
or otherwise to the extent contemplated by any transaction required or
permitted under any Loan Document (and without limiting any other applicable
releases, to the extent any Subsidiary ceases to be a Subsidiary of the
Borrower, or all or substantially all of its assets is sold or otherwise
transferred or disposed of, then regardless of the form of such transaction
such release may extend to all of the ownership interests in such Subsidiary
and the assets of such Subsidiary), (D) with respect to subordinations, to
the extent the Lien which benefits from the subordination is permitted by Section 7.1,
or (E) under other circumstances, to the extent such actions under such
other circumstances are approved, authorized or ratified in writing by the
Required Lenders or such greater percentage of Lenders required under Section 11.1(i) or
(j); provided that in any circumstances when any release is
authorized, any lesser modification such as a partial release or subordination
is also authorized;

 

(ii)                                  accept, release, subordinate or otherwise
modify the Guaranty, any other Guarantee of any Credit Agreement Obligations or
as applicable any Person obligated under the Guaranty or any such Guarantee, (A) with
respect to acceptances, at any time, (B) with respect to releases, if the
applicable guarantor ceases to be a Subsidiary as a result of a transaction
permitted hereunder or otherwise to the extent contemplated by any transaction
required or permitted under any Loan Document (and without limiting any other
applicable releases, to the extent any Subsidiary that is an issuer of “Excluded
Securities” as defined in the Collateral Trust Agreement is released from the
Guaranty or any such Guarantee, then such release may extend to a release of
Liens in the Excluded Securities issued by such Subsidiary) or (C) under
other circumstances, to the extent such other actions under such circumstances
are approved, authorized or ratified in writing by the Required Lenders or such
greater percentage of Lenders required under Section 11.1(i) or
(j); provided that in any circumstances when any release is
authorized, any lesser modification such as a partial release or subordination
is also authorized;

 

(iii)                               take or direct the taking of or confirm any action to
which clause (i) above applies (other than the release of, or the
subordination of the Secured Parties’ Lien on, all or substantially all of the
Collateral in any transaction or series of related transactions) if and to the
extent determined by the Administrative Agent that the cost to the Credit
Parties of not taking such action, including administrative costs, is
disproportionate to the benefit to be maintained by the Secured Parties by not
taking such action;

 

(iv)                              enter into any Secured Trading
Counterparty Intercreditor Agreement and other intercreditor agreements,
subordination agreements and other agreements related to the Security Documents
or the Guaranty or any other Guarantee of any Credit Agreement Obligations
determined by the Administrative Agent or the Collateral Trustee to be in the
interest of the Lenders, (A) with Persons who have been granted Liens
permitted by Section 7.1, (B) to the extent contemplated by
any transaction required or permitted under any Loan Document or (C) under
other circumstances to the extent such other circumstances are approved,
authorized or ratified in writing by the Required Lenders or such greater
percentage of Lenders required under Section 11.1(i) or (j);
and

 

107

 

(v)                                 exercise rights (other than enforcement
rights unless authorized by the Required Lenders) and perform obligations under
the Collateral Trust Agreement and the other Security Documents, the Guaranty
and any other Guarantee of any Credit Agreement Obligations, the documents and
agreements referred to in clause (iv) above and related documents
and agreements, in each case as required or as deemed appropriate in the
discretion of the Administrative Agent or the Collateral Trustee, including
amending, supplementing, waiving, providing consent under or otherwise
modifying any of the foregoing documents or agreements, directing or providing
notices or other communications to the Collateral Trustee and becoming or
appointing any agent, co-agent, sub-agent, trustee, co-trustee, sub-trustee or
the like for the Collateral Trustee or for other Persons.

 

(b)                                 The Administrative Agent hereby agrees at
the option of the Borrower to take or direct the Collateral Trustee or other
applicable Person to take or to confirm, to the extent not otherwise prohibited
by this Agreement, (1) any of the actions described under clause
(a)(i)(A)-(D), (a)(ii)(A) or (B), or (iv)(A) or
(B) above upon the occurrence of any of the applicable
circumstances set forth in such clauses and the receipt of the Borrower’s written
request that such action be taken.  The
manner of taking such actions shall be determined by the Administrative Agent
in its reasonable discretion after consultation with the Borrower following the
occurrence of any of such applicable circumstances.  In connection therewith, the Administrative
Agent shall timely execute and deliver, provide, return or otherwise make
available or direct the execution and delivery, provision, return or otherwise
making available of all filings, recordings, notices, and other documents and
agreements, including financing statements, recordable real property documents
and general releases and notices, directions and other communications to the
Collateral Trustee, required by the terms of this Agreement or reasonably requested
by the Borrower.

 

(c)                                  Upon request by the Administrative Agent
at any time, the Required Lenders will confirm in writing any authority to take
or direct the taking of or to confirm any of the actions in accordance with
this Section.

 

(d)                                 Any actions taken or directed to be taken
or confirmed by the Administrative Agent under the authority granted under this
Section shall be deemed for all purposes to be authorized by and shall be
binding on and may be made on behalf of the Lenders and the other Secured Parties
under this Agreement.  In addition,
whether or not so authorized, the Collateral Trustee, any agent, co-agent,
sub-agent, trustee, co-trustee, sub-trustee or the like for the Collateral
Trustee and any other Person to whom these provisions may relate are directed
to follow, and shall be entitled to rely upon as so authorized by the Lenders
and the other Secured Parties under this Agreement, any document or agreement,
notice, direction or other communication signed by or received from the
Administrative Agent purporting to be authorized by or to be on behalf of the
Lenders or any other Secured Parties under this Agreement or any subset thereof
under this Section or otherwise.

 

(e)                                  Contemporaneously with the execution
hereof, in addition to all other authorizations provided in this Section, the
Administrative Agent is irrevocably authorized to, and direct the Collateral
Trustee and any agent, co-agent, sub-agent, trustee, co-trustee, sub-trustee or
the like to, and hereby so direct all of them to, execute and deliver, provide,
return or

 

108

 

otherwise make available all filings, recordings,
notices and documents and agreements (i) necessary or desirable to satisfy
the conditions set forth in Section 4.1 and (ii) otherwise deemed
necessary or desirable by the Administrative Agent to effect the transactions
contemplated in connection with the execution and delivery of this Agreement.

 

ARTICLE XI.

MISCELLANEOUS

 

11.1  Amendments, Etc.  11.1 
No amendment or waiver of any provision of this Agreement or any other
Loan Document (other than the Fee Letter), and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall be effective unless
approved, authorized or otherwise similarly acted upon in favor by the Required
Lenders in accordance with the definition thereof unless otherwise specified
herein (or the Administrative Agent with the approval, authorization or vote of
such Required Lenders) and the Borrower or the applicable Loan Party, as the
case may be, and, if not signed by the Administrative Agent, acknowledged by
the Administrative Agent (which acknowledgement shall not be withheld to the
extent so approved, authorized or similarly acted upon by such Required
Lenders), and each such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided, that
no such amendment, waiver or consent shall:

 

(a)                                  waive
any condition set forth in Section 4.1(a) or Section 4.2,
without the written consent of each Lender;

 

(b)                                 extend
or increase the Commitment of any Lender without the written consent of such
Lender;

 

(c)                                  postpone
any date fixed by this Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Lenders (or any of them)
without the written consent of each Lender directly affected thereby;

 

(d)                                 reduce
the principal of, or the rate of interest specified herein on, any Loan, or
(subject to clause (iii) of the second proviso to this Section) any fees
or other amounts payable hereunder or under any other Loan Document without the
written consent of each Lender directly affected thereby; provided, that only
the consent of the Required Agreement Lenders shall be necessary to amend the definition
of “Default Rate”;

 

(e)                                  change
Section 2.12 or Section 9.3 in a manner that would
alter the pro rata sharing of payments required thereby without the written
consent of each Lender;

 

(f)                                    change
any provision of this Section, the definitions of “Core Asset Consent”, “Required
Agreement Lenders”, “Required Aggregate Revolver and Term Lenders”, “Required
Aggregate Term Lenders”, or “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders and lenders under the Existing
Credit Agreement required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender;

 

109

 

(g)                                 change
any provision of Section 11.6 the effect of which would impose
additional restrictions on assignments and participations by Lenders without
the written consent of each Lender;

 

(h)                                 except
as otherwise permitted, authorized or required by any Loan Document, release
any Guarantor from the Guaranty without the written consent of each Lender; or

 

(i)                                     except
as otherwise permitted, authorized or required by any Loan Document, release
all or substantially all of the Collateral in any transaction or series of
related transactions, without the written consent of each Lender;

 

and, provided, further, that (i) no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent in addition to
the Lenders required above, affect the rights or duties of the Administrative
Agent under this Agreement or any other Loan Document; and (ii) Section 11.6(h) may
not be amended, waived or otherwise modified without the consent of each
Granting Lender all or any part of whose Loans are being funded by an SPC at
the time of such amendment, waiver or other modification; and (iii) the
Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto.

 

11.2  Notices;
Effectiveness; Electronic Communication.

 

(a)                                  Notices Generally. 
Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in clause (b) below),
all notices and other communications provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopier as follows, and all notices
and other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:

 

(i)                                     if to the Borrower or the Administrative
Agent, to the address, telecopier number, electronic mail address or telephone
number specified for such Person on Schedule 11.2; and

 

(ii)                                  if to any other Lender, to the address,
telecopier number, electronic mail address or telephone number specified in its
Administrative Questionnaire.

 

Notices sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices sent by telecopier shall be deemed to have been given when
sent (except that, if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
business day for the recipient).  Notices
delivered through electronic communications to the extent provided in clause
(b) below, shall be effective as provided in such clause (b).

 

(b)                                 Electronic Communications. 
Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communication (including e mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided, that the foregoing shall not apply to
notices to any Lender pursuant to Article II if such Lender has
notified the Administrative Agent that it is incapable of receiving notices
under such

 

110

 

Article by electronic communication.  The Administrative Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it; provided,
that approval of such procedures may be limited to particular notices or
communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices
and other communications sent to an e-mail address shall be deemed received
upon the sender’s receipt of an acknowledgement from the intended recipient
(such as by the “return receipt requested” function, as available, return
e-mail or other written acknowledgement); provided, that if such notice
or other communication is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at
the opening of business on the next business day for the recipient, and (ii) notices
or communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification
that such notice or communication is available and identifying the website
address therefor.

 

(c)                                  Change of Address, Etc. 
Each of the Borrower and the Administrative Agent may change its
address, telecopier or telephone number for notices and other communications
hereunder by notice to the other parties hereto.  Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder
by notice to the Borrower and the Administrative Agent.

 

(d)                                 Reliance by Administrative Agent and
Lenders.  The Administrative Agent and the Lenders
shall be entitled to rely and act upon any notices (including telephonic
Borrowing Notices) purportedly given by or on behalf of the Borrower even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof received after any action was taken in accordance with such terms.  The Borrower shall indemnify the
Administrative Agent, each Lender and the Related Parties of each of them from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower.  All telephonic notices to and other
telephonic communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

11.3  No Waiver; Cumulative Remedies. 
No failure by any Lender or the Administrative Agent to exercise, and no
delay by any such Person in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege.  The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

 

11.4  Expenses; Indemnity; Damage Waiver.

 

(a)                                  Costs and Expenses. 
The Borrower shall pay (i) all reasonable out of pocket
expenses incurred by the Administrative Agent and its Affiliates (including the
reasonable fees,

 

111

 

charges and disbursements of one principal counsel and
reasonably required local counsel for the Administrative Agent), in connection
with the syndication of the credit facilities provided for herein, the
preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), and (ii)  all
reasonable out of pocket expenses incurred by the Administrative Agent or any
Lender (including the reasonable fees, charges and disbursements of any counsel
for the Administrative Agent or any Lender), and shall pay all fees and time
charges for attorneys who may be employees of the Administrative Agent or any
Lender, in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Loan Documents, including its
rights under this Section, or (B) in connection with the Loans made
hereunder, including all such out of pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans.

 

(b)                                 Indemnification by the Borrower. 
The Borrower shall indemnify the Administrative Agent (and any sub-agent
thereof), each Lender, and each Related Party of any of the foregoing Persons
(each such Person being called an “Indemnitee”) against, WHETHER OR NOT RELATED TO ANY NEGLIGENCE OF THE
INDEMNIFIED PARTIES, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses (including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee),
and shall indemnify and hold harmless each Indemnitee from all fees and time
charges and disbursements for attorneys who may be employees of any Indemnitee,
incurred by any Indemnitee or asserted against any Indemnitee by any third
party or by the Borrower or any other Loan Party arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations
hereunder or thereunder or the consummation of the transactions contemplated
hereby or thereby, (ii) any Loan or the use or proposed use of the
proceeds therefrom, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Borrower
or any of its Subsidiaries, or any Environmental Liability related in any way
to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Borrower or any other Loan Party, and
regardless of whether any Indemnitee is a party thereto, in all cases, whether
or not caused by or arising, in whole or in part, out of the comparative,
contributory or sole negligence of the Indemnitee; provided, that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses (x) are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee,
(y) result from a claim brought by the Borrower or any other Loan Party against
an Indemnitee for breach in bad faith of such Indemnitee’s obligations
hereunder or under any other Loan Document, if the Borrower or such Loan Party
has obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction or (z) result from any dispute
arising solely between or among any Lenders or Administrative Agent, which
dispute is not a result of any act or omission of any Loan Party.

 

112

 

(c)                                  Reimbursement by Lenders.  To
the extent that the Borrower for any reason fails to indefeasibly pay any amount required under clause
(a) or (b) of this Section to be paid by it to
the Administrative Agent (or any sub-agent thereof) or any Related Party of any
of the foregoing, each Lender severally agrees to pay to the Administrative
Agent (or any such sub-agent) or such Related Party, as the case may be, such
Lender’s Pro Rata Share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided,
that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) in its capacity as such or against
any Related Party of any of the foregoing acting for the Administrative Agent
(or any such sub-agent) in connection with such capacity.  The obligations of the Lenders under this clause
(c) are subject to the provisions of Section 2.11(d).

 

(d)                                 Waiver of Consequential Damages, Etc. 
To the fullest extent permitted by applicable law, the Borrower shall
not assert, and hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as
a result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or
thereby, any Loan or the use of the proceeds thereof.  No Indemnitee referred to in clause (b) above
shall be liable for any damages arising from the use by unintended recipients
of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.

 

(e)                                  Payments.  All amounts
due under this Section shall be payable not later than ten Business Days
after the Borrower’s receipt of a written demand therefor.

 

(f)                                    Survival.  The
agreements in this Section shall survive the resignation of the
Administrative Agent, the replacement of any Lender, the termination of the
Commitments and the repayment, satisfaction or discharge of all the other
Credit Agreement Obligations.

 

11.5  Payments Set Aside. 
To the extent that any payment by or on behalf of the Borrower is made
to the Administrative Agent or any Lender, or the Administrative Agent or any
Lender exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to
the extent of such recovery, the Credit Agreement Obligation or part thereof
originally intended to be satisfied shall be revived and continued in full
force and effect as if such payment had not been made or such setoff had not
occurred, and (b) each Lender severally agrees to pay to the
Administrative Agent upon demand its applicable share (without duplication) of
any amount so recovered from or repaid by the Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time in
effect.  The Obligations of the Lenders
under clause (b) of the preceding sentence shall survive the
payment in full of the Credit Agreement Obligations and the termination of this
Agreement.

 

113

 

11.6  Successors and Assigns.

 

(a)                                  Successors and Assigns Generally. 
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that neither the Borrower nor any other Loan Party may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Administrative Agent and each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the
provisions of clause (b) of this Section, (ii) by way of
participation in accordance with the provisions of clause (d) of
this Section, or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of clause (f) of this Section,
or (iv) to an SPC in accordance with the provisions of clause (h) of
this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void).  Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in clause (d) of
this Section and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 Assignments by Lenders. 
Any Lender may at any time assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans at the time owing to it); provided,
that:

 

(i)                                     except in the case of an assignment of
the entire remaining amount of the assigning Lender’s Commitment and the Loans
at the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund with respect to a Lender, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $1,000,000, unless each of the Administrative
Agent and, so long as no Event of Default has occurred and is continuing, the
Borrower otherwise consents (each such consent not to be unreasonably withheld
or delayed);

 

(ii)                                  each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned; and

 

(iii)                               the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500, and the Eligible Assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire; provided that only one such fee shall be
required in connection with a concurrent assignment by a Lender to one or more
Approved Funds.

 

114

 

Subject to acceptance and recording thereof by the
Administrative Agent pursuant to clause (c) of this Section, from
and after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 3.1, 3.4, 3.5, and 11.4 with
respect to facts and circumstances occurring prior to the effective date of
such assignment.  Upon request, the
Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this clause shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with clause
(d) of this Section.

 

(c)                                  Register.  The Administrative
Agent, acting solely for this purpose as an agent of the Borrower, shall
maintain at the Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”).  The entries in the
Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by each of the Borrower at any reasonable time and from time to time
upon reasonable prior notice.  In
addition, at any time that a request for a consent for a material or
substantive change to the Loan Documents is pending, any Lender wishing to
consult with other Lenders in connection therewith may request and receive from
the Administrative Agent a copy of the Register.

 

(d)                                 Participations. 
Any Lender may at any time, without the consent of, or notice to, the
Borrower or the Administrative Agent, sell participations to any Person (other
than a natural person or the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans owing to it); provided, that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative
Agent, and the Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.

 

Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided, that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in
the first proviso to Section 11.1 that affects such
Participant.  Subject to clause (e) of
this Section, the Borrower

 

115

 

agrees that each Participant shall be entitled to the
benefits of Sections 3.1, 3.4 and 3.5 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to clause
(b) of this Section.  To the
extent permitted by law, each Participant also shall be entitled to the
benefits of Section 11.8 as though it were a Lender, provided,
that such Participant agrees to be subject to Section 2.11 as
though it were a Lender.

 

(e)                                  Limitations upon Participant Rights. 
A Participant shall not be entitled to receive any greater payment under
Section 3.1 or 3.4 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower’s prior written consent. 
A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 3.1 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 3.1(e) as
though it were a Lender.

 

(f)                                    Certain Pledges. 
Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement (including under its Note, if any) to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided, that no such pledge or assignment shall
release such Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.

 

(g)                                 Electronic Execution of Assignments. 
The words “execution,” “signed,” “signature,” and words of like import
in any Assignment and Assumption shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the case may be,
to the extent and as provided for in any applicable law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.

 

(h)                                 Special Purpose Funding Vehicles. 
Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an “SPC”) the option to provide
all or any part of any Loan that such Granting Lender would otherwise be
obligated to make pursuant to this Agreement; provided, that (i) nothing
herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if
an SPC elects not to exercise such option or otherwise fails to make all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant
to the terms hereof or, if it fails to do so, to make such payment to the
Administrative Agent as is required under Section 2.11(b)(ii).  Each party hereto hereby agrees that (i) neither
the grant to any SPC nor the exercise by any SPC of such option shall increase
the costs or expenses or otherwise increase or change the obligations of the
Borrower under this Agreement (including its obligations under Section 3.4),
(ii) no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement for which a Lender would be liable, and (iii) the
Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the lender of record hereunder.

 

116

 

The making of a Loan by an SPC hereunder shall utilize
the Commitment of the Granting Lender to the same extent, and as if, such Loan
were made by such Granting Lender.  In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that
is one year and one day after the payment in full of all outstanding commercial
paper or other senior debt of any SPC, it will not institute against, or join
any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof. 
Notwithstanding anything to the contrary contained herein, any SPC may (i) with
notice to, but without prior consent of the Borrower and the Administrative
Agent and without paying any processing fee therefor, assign all or any portion
of its right to receive payment with respect to any Loan to the Granting Lender
and (ii) disclose on a confidential basis any non-public information
relating to its funding of Loans to any rating agency, commercial paper dealer
or provider of any surety or Guarantee or credit or liquidity enhancement to
such SPC.

 

11.7  Confidentiality. 
Each of the Administrative Agent and the Lenders understands that some
of the information furnished to it pursuant to this Agreement and the other
Loan Documents may be received by it prior to the time that such information
shall have been made public, and each of the Administrative Agent and the
Lenders hereby agrees that it will keep all the Information (as defined below)
received by it confidential except that such Person shall be permitted to
disclose Information (i) only to such of its officers, directors,
employees, agents, representatives, auditors, consultants, advisors, trustees,
investment advisors, lawyers and affiliates as need to know such Information in
connection with this Agreement or any other Loan Document and who will be
advised of the confidential nature of such Information; (ii) to any other
party to this Agreement; (iii) to a proposed assignee or participant in
accordance with Section 11.6 hereof; provided that prior to
any such disclosure each such proposed assignee or participant shall agree in
writing to be bound by the provisions of this Section 11.7; (iv) to
the extent required by Law and regulations or by any subpoena or other legal
process; (v) to the extent requested by any bank regulatory authority or
other regulatory authority; (vi) to the extent such information (A) becomes
publicly available other than as a result of a breach of this Agreement or (B) becomes
available to such Lender on a nonconfidential basis from a source other than a
Loan Party or any of its Affiliates; (vii) to the extent the Borrower
shall have consented to such disclosure; (viii) in connection with the
servicing of the Loans hereunder, in protecting, exercising or enforcing any
rights and/or remedies in connection with any Loan Document or in any
proceeding in connection with any Loan Document or any of the transactions
contemplated thereby or (ix) to the Collateral Trustee.  For the purposes of this Section, “Information”
means all information received from the Borrower, any other Loan Party or their
respective officers, directors, employees, agents, representatives, auditors,
consultants, advisors, trustees, investment advisors, lawyers and affiliates
(collectively, “Credit Party Agents”) relating to the Borrower, any Loan
Party, any Subsidiary of a Loan Party or any of their respective businesses,
other than any such information that is available to the Administrative Agent
or any Lender on a nonconfidential basis prior to disclosure by the Borrower,
any Loan Party or any Subsidiary of a Loan Party.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential
information.  In the event of any
required disclosure of Information, any Person required to maintain the
confidentiality of such Information as provided in this Section agrees to
use reasonable efforts to inform the

 

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Borrower as promptly as practicable of the
circumstances and the Information required to be disclosed to the extent not
prohibited by Law.

 

11.8  Right of Setoff. 
If an Event of Default shall have occurred and be continuing, each
Lender and each of its respective Affiliates is hereby authorized at any time
and from time to time, to the fullest extent permitted by applicable law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender or any such
Affiliate to or for the credit or the account of the Borrower or any other Loan
Party against any and all of the Credit Agreement Obligations of the Borrower
or such Loan Party now or hereafter existing under this Agreement or any other
Loan Document to such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement or any other Loan Document and
although such Credit Agreement Obligations of the Borrower or such Loan Party
may be contingent or unmatured or are owed to a branch or office of such Lender
different from the branch or office holding such deposit or obligated on such
indebtedness.  The rights of each Lender
and its respective Affiliates under this Section are in addition to other
rights and remedies (including other rights of setoff) that such Lender or its
respective Affiliates may have.  Each
Lender agrees to notify the Borrower and the Administrative Agent promptly
after any such setoff and application; provided, that the failure to
give such notice shall not affect the validity of such setoff and application.

 

11.9  Interest Rate Limitation. 
Notwithstanding anything to the contrary contained in any Loan Document,
the interest paid or agreed to be paid under the Loan Documents shall not
exceed the maximum rate of non-usurious interest permitted by applicable Law (the
“Maximum Rate”).  If the
Administrative Agent or any Lender shall receive interest in an amount that
exceeds the Maximum Rate, the excess interest shall be applied to the principal
of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower.  In determining whether the interest
contracted for, charged, or received by the Administrative Agent or a Lender
exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate,
and spread in equal or unequal parts the total amount of interest throughout
the contemplated term of the Credit Agreement Obligations hereunder.

 

11.10  Counterparts; Integration; Effectiveness. 
This Agreement may be executed in counterparts (and by different parties
hereto in different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof.  Except as provided in Section 4.1,
this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto.  Delivery of an
executed counterpart of a signature page of this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

118

 

11.11  Survival of Representations and Warranties. 
All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery
hereof and thereof.  Such representations
and warranties have been or will be relied upon by the Administrative Agent and
each Lender, regardless of any investigation made by the Administrative Agent
or any Lender or on their behalf and notwithstanding that the Administrative
Agent or any Lender may have had notice or knowledge of any Default at the time
of the making of the Loans, and shall continue in full force and effect as long
as any Loan or any other Credit Agreement Obligation hereunder shall remain
unpaid or unsatisfied.

 

11.12  Severability. 
If any provision of this Agreement or the other Loan Documents is held
to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan
Documents shall not be affected or impaired thereby and (b) the parties
shall endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions.  The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

11.13  Replacement of Lenders. 
If (i) any Lender requests compensation under Section 3.4,
(ii) the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section 3.1,
or (iii) any other circumstance exists hereunder that gives the Borrower
the right to replace a Lender as a party hereto, then the Borrower may, at its
sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 11.6), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided, that:

 

(a)                                  the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 11.6(b);

 

(b)                                 such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents (including any amounts under Section 3.5)
from the assignee (to the extent of such outstanding principal and accrued
interest) or the Borrower (in the case of all other amounts);

 

(c)                                  in the case of any such assignment
resulting from a claim for compensation under Section 3.4 or
payments required to be made pursuant to Section 3.1, such
assignment will result in a reduction in such compensation or payments
thereafter; and

 

(d)                                 such assignment does not conflict with
applicable Laws.

 

119

 

A Lender shall not be required to make any such
assignment or delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.

 

11.14  Governing
Law; Jurisdiction; Etc.

 

(a)                                  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

(b)                                 SUBMISSION TO
JURISDICTION.  THE BORROWER AND
EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK SITTING IN NEW YORK CITY AND OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT COURT OF THE STATE OF NEW YORK, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, IN SUCH FEDERAL COURT. 
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW.  NOTHING IN THIS AGREEMENT OR IN ANY
OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY
LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)                                  WAIVER OF VENUE.  THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN CLAUSE (b) OF
THIS SECTION.  EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

 

(d)                                 SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.2.  NOTHING IN THIS AGREEMENT WILL AFFECT THE

 

120

 

RIGHT OF ANY PARTY HERETO TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

11.15  Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

11.16  USA PATRIOT Act Notice. 
Each Lender that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”),
it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.

 

11.17  No Oral Agreements.  THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

11.18  Intercreditor Confirmation.

 

(a)                                  Notwithstanding (i) anything to the
contrary contained in the Secured Debt Documents, (ii) the time of
incurrence of any Series of Secured Debt, (iii) the order or method
of attachment or perfection of any Liens securing any Series of Secured
Debt, (iv) the time or order of filing or recording of financing
statements, mortgages or other documents filed or recorded to perfect any Lien
upon any Shared Collateral, (v) the time of taking possession or control
over any Shared Collateral or (vi) the rules for determining priority
under any law governing relative priorities of Liens:

 

(A)                              all Liens at any time granted by the
Borrower or any of its Subsidiaries in the Shared Collateral to secure any of
the Parity Secured Debt shall secure, Equally and

 

121

 

Ratably, all liabilities of the Borrower or such
Subsidiary under or in respect of the Parity Secured Debt and other Parity
Secured Obligations; and

 

(B)                                all proceeds of all Liens at any time
granted by the Borrower or any its Subsidiaries in the Shared Collateral to
secure any of the Parity Secured Debt shall be allocated and distributed
Equally and Ratably on account of all liabilities of the Borrower or such
Subsidiary under or in respect of the Parity Secured Debt and other Parity
Secured Obligations.

 

(b)                                 Each Lender agrees to the provisions described in the Order of
Application and the definition of the term “Equally and Ratably.”

 

(c)                                  The provisions of Section 11.18(a) hereof
are intended for the benefit of, and will be enforceable as a third party
beneficiary by, each present and future holder of Secured Obligations and each
present and future Secured Debt Representative.

 

11.19  Designated Senior Debt For purposes of the Convertible Notes,
the Credit Agreement Obligations shall constitute “Designated Senior Debt”, as
such term is defined in the indenture relating thereto.

 

122

 

IN
WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed as of the
date first above written.

 

	
   

  	
  RELIANT ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RELIANT ENERGY ASSET
  MANAGEMENT, LLC

  
	
   

  	
  RELIANT ENERGY
  BROADBAND, INC.

  
	
   

  	
  RELIANT ENERGY
  CALIFORNIA HOLDINGS, LLC

  
	
   

  	
  RELIANT ENERGY
  COMMUNICATIONS, INC.

  
	
   

  	
  RELIANT ENERGY
  COOLWATER, INC.

  
	
   

  	
  RELIANT ENERGY
  CORPORATE SERVICES, LLC

  
	
   

  	
  RELIANT ENERGY ELLWOOD,
  INC.

  
	
   

  	
  RELIANT ENERGY
  ETIWANDA, INC.

  
	
   

  	
  RELIANT ENERGY FLORIDA,
  LLC

  
	
   

  	
  RELIANT ENERGY FLORIDA
  HOLDINGS, LLC

  
	
   

  	
  RELIANT ENERGY KEY/CON
  FUELS, LLC

  
	
   

  	
  RELIANT ENERGY
  MANDALAY, INC.

  
	
   

  	
  RELIANT ENERGY NET
  VENTURES, INC.

  
	
   

  	
  RELIANT ENERGY
  NORTHEAST GENERATION, INC.

  
	
   

  	
  RELIANT ENERGY
  NORTHEAST HOLDINGS, INC.

  
	
   

  	
  RELIANT ENERGY ORMOND
  BEACH, INC.

  
	
   

  	
  RELIANT ENERGY POWER
  GENERATION, INC.

  
	
   

  	
  RELIANT ENERGY RETAIL
  HOLDINGS, LLC

  
	
   

  	
  RELIANT ENERGY SABINE
  (TEXAS), INC.

  
	
   

  	
  RELIANT ENERGY SERVICES
  DESERT BASIN, LLC

  
	
   

  	
  RELIANT ENERGY SERVICES
  MID-STREAM, LLC

  
	
   

  	
  RELIANT ENERGY SEWARD,
  LLC

  
	
   

  	
  RELIANT ENERGY TRADING
  EXCHANGE, INC.

  
	
   

  	
  RELIANT ENERGY
  VENTURES, INC.

  
	
   

  	
  RELIANT ENERGY
  WHOLESALE GENERATION, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:  Andrew
  Johannesen

  
	
   

  	
  Title:  Assistant
  Treasurer of the corporations and limited liability companies, and of the
  general partners of the limited partnerships, listed above

  
							

 

 

	
   

  	
  RELIANT ENERGY
  SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:  Andrew
  Johannesen

  
	
   

  	
  Title:    Vice
  President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RELIANT ENERGY RETAIL
  SERVICES, LLC

  
	
   

  	
  RELIANT ENERGY ELECTRIC
  SOLUTIONS, LLC

  
	
   

  	
  RELIANT ENERGY
  SOLUTIONS EAST, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:  Lloyd
  A. Whittington

  
	
   

  	
  Title:    Vice
  President and Treasurer of the limited liability companies listed above

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RELIANT ENERGY CAPTRADES
  HOLDING CORP.

  
	
   

  	
  RELIANT ENERGY SABINE
  (DELAWARE), INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:  Patricia
  F. Genzel

  
	
   

  	
  Title:    President

  

 

 

	
   

  	
  DEUTSCHE BANK AG, NEW
  YORK

  
	
   

  	
  BRANCH, as
  Administrative Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

 

	
   

  	
  DEUTSCHE BANK
  SECURITIES INC., as Sole Lead

  
	
   

  	
  Arranger, Sole
  Bookrunner, and Sole Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]