CREDIT AND GUARANTY AGREEMENT

Exhibit 10.1

EXECUTION VERSION

CREDIT AND GUARANTY AGREEMENT

dated as of February 9, 2007

among

COVANTA ENERGY CORPORATION,

COVANTA HOLDING CORPORATION,
as a Guarantor,

CERTAIN SUBSIDIARIES OF COVANTA ENERGY CORPORATION,
as Guarantors,

VARIOUS LENDERS,

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent, Collateral Agent, Revolving Issuing Bank and
a Funded LC Issuing Bank,

UBS AG, STAMFORD BRANCH,
as a Funded LC Issuing Bank,

LEHMAN COMMERCIAL PAPER INC.
and
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
as Syndication Agents,

and

BANK OF AMERICA, N.A. and BARCLAYS BANK PLC,
as Documentation Agents

$1,270,000,000 Senior Secured Credit Facilities

J.P. MORGAN SECURITIES INC., LEHMAN BROTHERS INC. and
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
Joint Lead Arrangers and Bookrunners

TABLE OF CONTENTS

CREDIT AND GUARANTY AGREEMENT

     This CREDIT AND GUARANTY AGREEMENT , dated as of February 9, 2007 , is entered into by and among COVANTA ENERGY CORPORATION , a Delaware corporation (“ Company ”), COVANTA HOLDING CORPORATION , a Delaware corporation (“ Holding " ), CERTAIN SUBSIDIARIES OF COMPANY , as Guarantors, THE LENDERS PARTY HERETO FROM TIME TO TIME , JPMORGAN CHASE BANK, N.A. , as Administrative Agent (“ JPMC ”, together with its permitted successors in such capacity, the “ Administrative Agent ”) and as Collateral Agent (together with its permitted successors in such capacity, the “ Collateral Agent ”), Revolving Issuing Bank and a Funded LC Issuing Bank, UBS AG, STAMFORD BRANCH ( " UBS " ) , as a Funded LC Issuing Bank, LEHMAN COMMERCIAL PAPER INC. (“ LCPI ”) and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (“ MLPFS ”), as Syndication Agents (each in such capacity, a “ Syndication Agent ”), and BANK OF AMERICA, N.A. (“ BA ”) and BARCLAYS BANK PLC (“ Barclays ”), as Documentation Agents (each in such capacity, a “ Documentation Agent ”).

RECITALS:

      WHEREAS, capitalized terms used in these Recitals shall have the respective meanings set forth for such terms in Section 1.1 hereof;

      WHEREAS, Lenders have agreed to extend certain credit facilities to Company, in an aggregate amount not to exceed $1,270,000,000, consisting of (i) $650,000,000 in aggregate principal amount of Term Loans to be borrowed on the Closing Date and (ii) $300,000,000 in aggregate principal amount of Revolving Commitments and (iii) up to $320,000,000 in aggregate face amount of Funded Letters of Credit. The proceeds of the Term Loans will be used together with a portion of the proceeds of the Related Transactions to refinance the Existing Indebtedness of Company and certain of its Subsidiaries in accordance with the terms hereof (“ Refinancing ”) and to pay the related fees, commissions, premiums and expenses. The proceeds under the Revolving Loan will be used, after the Closing Date, to fund Restricted Junior Payments permitted hereunder, for Permitted Acquisitions and to provide for ongoing working capital requirements of Company and its Subsidiaries for general corporate purposes. The Funded Letters of Credit will be used to support obligation of Company and its Subsidiaries under waste to energy projects and other Contractual Obligations of Company and its Subsidiaries and for other general corporate purposes of Company and its Subsidiaries;

      WHEREAS, contemporaneously with the closing of this Agreement, Holding will issue the Convertible Debentures and consummate the Holding Equity Issuance, the proceeds of which, together with the proceeds from the loans provided under this Agreement, will be used to consummate the Refinancing;

      WHEREAS, Company has agreed to secure all of its Obligations by granting to Collateral Agent, for the benefit of Secured Parties, a First Priority Lien on substantially all of its assets, including to the extent permitted by existing Contractual Obligations and regulatory limitations binding on Company or any of its Subsidiaries, a pledge of all of the Capital Stock of each of its Domestic Subsidiaries (other than any Unrestricted Subsidiaries) directly owned by it

and 65% of all the Capital Stock of each of its Foreign Subsidiaries (other than any Unrestricted Subsidiaries) directly owned by it (except to the extent expressly provided in Section 3.1(h)(iv) and the Pledge and Security Agreement); and

      WHEREAS, Guarantors, have agreed to guarantee the obligations of Company hereunder and to the extent permitted by existing Contractual Obligations and regulatory limitations, binding on Company or any of its Subsidiaries, to secure their respective Obligations by granting to Collateral Agent, for the benefit of Secured Parties, a First Priority Lien on substantially all of their respective assets, including (to the extent so permitted) a pledge of all of the Capital Stock of each of their respective Domestic Subsidiaries (other than any Unrestricted Subsidiaries and certain immaterial Restricted Subsidiaries) directly owned by them (including in the case of Holding, Company) and 65% of all the Capital Stock of each of their respective Foreign Subsidiaries (other than any Unrestricted Subsidiaries and certain immaterial Foreign Subsidiaries) directly owned by them (except to the extent expressly provided in Section 3.1(h)(iv) and the Pledge and Security Agreement) and all intercompany debt.

      NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

SECTION 1. DEFINITIONS AND INTERPRETATION

      1.1 Definitions. The following terms used herein, including in the preamble, recitals, exhibits and schedules hereto, shall have the following meanings:

     “ Acquired EBITDA ” means, with respect to any Acquired Entity or Business for any period, the amount for such period of Consolidated Adjusted EBITDA of such Acquired Entity or Business (determined as if references to Company and the Restricted Subsidiaries in the definition of Consolidated Adjusted EBITDA were references to such Acquired Entity or Business and its Subsidiaries), all as determined on a consolidated basis for such Acquired Entity or Business.

     “ Acquired Entity or Business ” has the meaning set forth in the definition of the term “Consolidated Adjusted EBITDA”.

     “ Act ” as defined in Section 4.23.

     “ Additional Credit Linked Deposit ” as defined in Section 2.24.

     “ Additional Funded Letter of Credit ” as defined in Section 2.24.

     “ Additional Funded Letter of Credit Commitment ” as defined in Section 2.24.

     “ Additional Funded Letter of Credit Exposure ” means with respect to any Lender, at any time, the sum of (a) the amount of any Unpaid Drawings in respect of which payments from such Lender’s Additional Credit Linked Deposit have been made (or were required to be made) to a Funded LC Issuing Bank pursuant to Section 2.4(f) at such time and (b) such Lender’s Pro Rata Share of the Additional Funded Letters of Credit Outstanding of any Series at such time

(excluding the portion thereof consisting of Unpaid Drawings in respect of which payments from such Lender’s Additional Credit Linked Deposit have been made (or were required to be made) to a Funded LC Issuing Bank pursuant to Section 2.4(f)); provided that at any time when the Additional Funded Letters of Credit Outstanding of such Series is zero, the Additional Funded Letter of Credit Exposure of any Lender for such Series shall be equal to such Lender’s Additional Funded Letter of Credit Commitment of such Series.

     “ Additional Funded Letter of Credit Participant ” as defined in Section 2.24.

     “ Additional Funded Letter of Credit Termination Date ” means the earlier to occur of (i) the date on which the Additional Credit Linked Deposits with respect to a particular Series have been reduced to zero pursuant to Section 2.13(b)(iii), and (ii) the date of the termination of the Additional Funded Letter of Credit Commitments of such Series pursuant to Section 8.1.

     “ Additional Funded Letters of Credit Outstanding ” means at any time, the sum of, without duplication, (a) the aggregate Stated Amount of all outstanding Additional Funded Letters of Credit of any Series and (b) the aggregate amount of all Unpaid Drawings in respect of all Additional Funded Letters of Credit of such Series.

     “ Additional Revolving Commitment ” as defined in Section 2.24.

     “ Additional Revolving Lender ” as defined in Section 2.24.

     “ Additional Revolving Loan ” as defined in Section 2.24.

     “ Additional Term Loan ” as defined in Section 2.24.

     “ Additional Term Loan Commitment ” as defined in Section 2.24.

     “ Additional Term Loan Exposure ” means, with respect to any Lender as of any date of determination, the outstanding principal amount of the Additional Term Loans of such Lender for a Series.

     “ Additional Term Loan Lender ” as defined in Section 2.24.

     “ Additional Term Loan Maturity Date ” means the date that Additional Term Loans of a Series shall become due and payable in full hereunder, as specified in the applicable Joinder Agreement, including by acceleration or otherwise.

     “ Adjusted Eurodollar Rate ” means, for any Interest Rate Determination Date with respect to an Interest Period for a Eurodollar Rate Loan or Credit Linked Deposit, the rate per annum obtained by dividing (and rounding upward to the next whole multiple of 1/16 of 1.00%) (i) (a) the rate per annum (rounded to the nearest 1/100 of 1.00%) equal to the offered rate which appears on the page of the Telerate Screen which displays an average British Bankers Association Interest Settlement Rate (such page currently being page number 3740 or 3750, as applicable) for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, or (b) in the event the rate referenced in the preceding

clause (a) does not appear on such page or service or if such page or service shall cease to be available, the rate per annum (rounded to the nearest 1/100 of 1.00%) equal to the rate determined by Administrative Agent to be the offered rate on such other page or other service which displays an average British Bankers Association Interest Settlement Rate for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, or (c) in the event the rates referenced in the preceding clauses (a) and (b) are not available, the rate per annum (rounded to the nearest 1/100 of 1.00%) equal to the offered quotation rate to first class banks in the London interbank market by JPMC for deposits (for delivery on the first day of the relevant period) in Dollars of amounts in same day funds comparable to the principal amount of the applicable Loan or Credit Linked Deposit, for which the Adjusted Eurodollar Rate is then being determined with maturities comparable to such period as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, by (ii) an amount equal to (a) one minus (b) the Applicable Reserve Requirement.

     “ Administrative Agent ” as defined in the preamble hereto.

     “ Adverse Proceeding ” means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration at law or in equity, or before or by any Governmental Authority, domestic or foreign (including any Environmental Claims), whether pending or, to the knowledge of Company or any of its Subsidiaries, threatened against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries.

     “ Affected Lender ” as defined in Section 2.18(b).

     “ Affected Loans ” as defined in Section 2.18(b).

     “ Affiliate ” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

     “ Agent ” means each of Administrative Agent, Collateral Agent, Syndication Agents and Documentation Agents.

     “ Aggregatable Restricted Subsidiaries ” means two or more Restricted Subsidiaries (i) which for the most recent Fiscal Year individually accounted for less than 5.00%, but collectively accounted for more than 15.00%, of the consolidated revenues of Company and its Restricted Subsidiaries, or (ii) which as at the end of the most recent Fiscal Year, individually owned less than 5.00%, but collectively owned more than 15.00%, of the consolidated assets of Company and its Restricted Subsidiaries.

     “ Aggregate Amounts Due ” as defined in Section 2.17.

     “ Aggregate Payments ” as defined in Section 7.2.

     “ Agreement ” means this Credit and Guaranty Agreement, dated as of February 9, 2007 as it may be amended, supplemented or otherwise modified from time to time.

“ Applicable Margin ” means

     (i) with respect to Revolving Loans that are Eurodollar Rate Loans, (a) from the Closing Date until the date of delivery of the Compliance Certificate and the financial statements for the first full Fiscal Quarter ending after the Closing Date, 1.75% per annum; and (b) thereafter, a percentage per annum, determined by reference to Leverage Ratio in effect from time to time as set forth below:

     (ii) with respect to Swing Line Loans and Revolving Loans that are Base Rate Loans, an amount equal to the Applicable Margin for Eurodollar Rate Loans as set forth in clause (i) minus 1.00% per annum;

     (iii) with respect to the Term Loans that are Eurodollar Rate Loans, Funded Letters of Credit and Credit Linked Deposits, (a) from the Closing Date until the date of delivery of the Compliance Certificate and the financial statements for the first full Fiscal Quarter ending after the Closing Date, 1.50% per annum; and (b) thereafter, a percentage per annum, determined by reference to Leverage Ratio in effect from time to time as set forth above; and

     (iv) with respect to Term Loans that are Base Rate Loans, an amount equal to the Applicable Margin for Eurodollar Rate Loans as set forth in clause (iii) minus 1.00% per annum. No change in the Applicable Margin shall be effective until three Business Days after the date on which Administrative Agent shall have received the applicable financial statements and a Compliance Certificate pursuant to Section 5.1(c)(i) calculating the Leverage Ratio.

     At any time Company has not submitted to Administrative Agent the applicable information as and when required under Section 5.1(c)(i), the Applicable Margin shall be determined as if the Leverage Ratio were in excess of 4.00:1.00 until such time as each failure is cured. Within one Business Day of receipt of the applicable information under Section 5.1(c)(i),

Administrative Agent shall give each Lender telefacsimile or telephonic notice (confirmed in writing) of the Applicable Margin in effect from such date.

     “ Applicable Reserve Requirement ” means, at any time, for any Eurodollar Rate Loan or a Credit Linked Deposit, the maximum rate, expressed as a decimal, at which reserves (including, without limitation, any basic marginal, special, supplemental, emergency or other reserves) are required to be maintained with respect thereto against “Eurocurrency liabilities” (as such term is defined in Regulation D) under regulations issued from time to time by the Board of Governors of the Federal Reserve System or other applicable banking regulator. Without limiting the effect of the foregoing, the Applicable Reserve Requirement shall reflect any other reserves required to be maintained by such member banks with respect to (i) any category of liabilities which includes deposits by reference to which the applicable Adjusted Eurodollar Rate is to be determined, or (ii) any category of extensions of credit or other assets which include Eurodollar Rate Loans. A Eurodollar Rate Loan or a Credit Linked Deposit shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credit for proration, exceptions or offsets that may be available from time to time to the applicable Lender. The rate of interest on Eurodollar Rate Loans or a Credit Linked Deposit shall be adjusted automatically on and as of the effective date of any change in the Applicable Reserve Requirement.

     “ ARC Indenture ” means that certain Indenture, dated as of May 1, 2003, between American Ref-Fuel Company LLC and Wachovia Bank, National Association as supplemented by the First Supplemental Indenture, dated as of May 1, 2003 between American Ref-Fuel Company LLC and Wachovia Bank, National Association.

     “ ARC Notes ” means the “Notes” as defined in the ARC Indenture.

     “ Asset Sale ” means a sale, lease or sub-lease (as lessor or sublessor), sale and leaseback, assignment, conveyance, transfer or other disposition to, or any exchange of property with, any Person (other than Company or any Guarantor Subsidiary), in one transaction or a series of transactions, of all or any part of Company’s or any of its Restricted Subsidiaries’ businesses, assets or properties of any kind, whether real, personal, or mixed and whether tangible or intangible (other than Cash), whether now owned or hereafter acquired, including, without limitation, the Capital Stock of any of Company’s Restricted Subsidiaries, other than (i) inventory (or other assets) sold or leased in the ordinary course of business, (excluding any such sales by operations or divisions discontinued), and (ii) Excluded Asset Sales.

     “ Assignment Agreement ” means an Assignment and Acceptance Agreement substantially in the form of Exhibit E, with such amendments or modifications as may be approved by Administrative Agent and Company.

     “ Assignment Effective Date ” as defined in Section 10.6(b).

     “ Authorized Officer ” means, as applied to any Person, any individual holding the position of chief executive officer, general counsel, chief financial officer, chief accounting officer or treasurer.

     “ BA ” as defined in the preamble hereto.

     “ Bankruptcy Code ” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.

     “ Barclays ” as defined in the preamble hereto.

     “ Base Rate ” means, for any day, a rate per annum equal to the greater of (i) the Prime Rate in effect on such day and (ii) the Federal Funds Effective Rate in effect on such day plus ¹ / 2 of 1.00%. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

     “ Base Rate Loan ” means a Loan bearing interest at a rate determined by reference to the Base Rate.

     “ Beneficiary ” means each Agent, Issuing Bank, Lender and Lender Counterparty.

     “ Business Day ” means (i) any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close and (ii) with respect to all notices, determinations, fundings and payments in connection with the Adjusted Eurodollar Rate or any Eurodollar Rate Loans or Credit Linked Deposit, the term “ Business Day ” shall mean any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks in Dollar deposits in the London interbank market.

     “ Calyon ” means Calyon New York Branch.

     “ Calyon Hedge Agreements ” means (i) that certain Confirmation, dated July 8, 2005, between Calyon and Company relating to the “Swap Transaction” referred to therein and (ii) that certain Confirmation, dated March 17, 2006, between Calyon and Company relating to the “Swap Transaction” referred to therein.

     “ Capital Lease ” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.

     “ Capital Stock ” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing from the issuer thereof.

     “ Cash ” means money, currency or a credit balance in any demand or Deposit Account.

     “ Cash Equivalents ” means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed

by the full faith and credit of the United States, in each case maturing within one year after such date; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates of deposit or bankers’ acceptances maturing within one year after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; (v) shares of any money market mutual fund that (a) has at least 95% of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, and (b) has net assets of not less than $500,000,000; (vi) any repurchase agreement having a term of 30 days or less entered into with any commercial banking institution satisfying the criteria set forth in clause (iv) which is secured by a fully perfected security interest in any obligation of the type described in clause (i), above, (vii) securities and investments held by Foreign Subsidiaries pursuant to the requirements of Project documents to which they are a party, (viii) other investment-grade instruments and securities held by Foreign Subsidiaries, (ix) auction rate securities or auction rate preferred stock having a rate reset frequency of less than ninety (90) days and having, at the time of the acquisition thereof, a rating of at least A from S&P or from Moody’s and (x) such other securities and investments held by Excluded Subsidiaries and Foreign Subsidiaries as Company and Administrative Agent may agree.

     “ Certificate re Non-Bank Status ” means a certificate substantially in the form of Exhibit F.

     “ Change of Control ” means, at any time, (i) any Person other than Holding shall acquire direct ownership, beneficially or of record, of any voting stock of Company or (ii) any person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act, but excluding any employee benefit plan of Holding and its Subsidiaries and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than SZ Investments, LLC, Third Avenue Trust, LLC, D.E. Shaw Laminar Portfolios, LLC and EGI-FUND (05-07) Investors, L.L.C. or any of their Affiliates, shall at any time have acquired direct or indirect beneficial ownership (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act) of 35% of the outstanding voting stock of Holding or (iii) the majority of the seats (other than vacant seats) on the board of directors (or similar governing body) of Company cease to be occupied by Persons who either (A) were members of the board of directors of Company on the Closing Date or (B) were nominated for election by the board of directors of Company, a majority of whom were directors on the Closing Date or whose election or nomination for election was previously approved by a majority of such directors.

     “ Class ” means, in each case, under this Agreement as originally in effect or as amended in accordance with the terms hereof pursuant to Section 10.5, (i) with respect to Lenders, each of the following classes of Lenders: (a) Lenders having Term Loan Exposure, (b) Lenders having Additional Term Loan Exposure of each Series, (c) Lenders having Revolving Exposure

(including Swing Line Lender), (d) Lenders having Funded Letters of Credit Exposure and (e) Lenders having Additional Funded Letter of Credit Exposure of each Series; (ii) with respect to Loans, each of the following classes of Loans: (a) Term Loans, (b) each Series of Additional Term Loans, (c) Revolving Loans (including Swing Line Loans) and (d) Additional Revolving Loans; and (iii) with respect to Commitments, each of the following classes of Commitments: (a) Term Loan Commitments, (b) Revolving Commitments and (c) Funded Letter of Credit Commitments.

     “ Closing Date ” means the date on which the Term Loans are made.

     “ Closing Date Certificate ” means a Closing Date Certificate substantially in the form of Exhibit G-1.

     “ Collateral ” means, collectively, all of the real, personal and mixed property (including Capital Stock) in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations.

     “ Collateral Agent ” as defined in the preamble hereto.

     “ Collateral Documents ” means the Pledge and Security Agreement, the Holding Pledge Agreement and all other instruments, documents and agreements delivered by any Credit Party pursuant to this Agreement or any of the other Credit Documents in order to grant to Collateral Agent, for the benefit of Lenders, a Lien on any real, personal or mixed property of that Credit Party as security for the Obligations.

     “ Commitment ” means any Revolving Commitment, Term Loan Commitment or Funded Letter of Credit Commitment.

     “ Commitment Fee Rate ” means (a) from the Closing Date until the date of delivery of the Compliance Certificate and the financial statements for the first full Fiscal Quarter ending after the Closing Date, 0.50% per annum; and (b) thereafter, a percentage per annum, determined by reference to Leverage Ratio in effect from time to time as set forth below:

     “ Commodities Agreement ” means any long-term or forward purchase contract or option contract to buy, sell or exchange commodities or similar agreement or arrangement to which Company or any of its Restricted Subsidiaries is a party unless, under the terms of such ordinary course, non-speculative purchase contract, option contract agreement or arrangement Company expects to make or take delivery of all of the commodities which are the subject thereof.

     “ Company ” as defined in the preamble hereto.

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

     “ Consolidated Adjusted Debt ” means, as at any date of determination, the aggregate stated balance sheet amount of (x) all Indebtedness of the type identified in clauses (i) through (iv) of the definition of Indebtedness of Company and its Restricted Subsidiaries (excluding premiums and discounts) and (y) Guaranty Indebtedness, determined on a consolidated basis in accordance with GAAP minus (i) Restricted Project Cash, (ii) all Permitted Subordinated Indebtedness owing to Holding, and (iii) Indebtedness in respect of the ARC Notes and the MSW Notes for so long as such is permitted to be outstanding hereunder. For the avoidance of doubt, Performance Guaranties and undrawn Letters of Credit shall not constitute Consolidated Adjusted Debt.

     “ Consolidated Adjusted EBITDA ” means, for any period, an amount determined for Company and its Restricted Subsidiaries on a consolidated basis in accordance with GAAP equal to:

     (a) the sum, without duplication, of the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) provisions for taxes, (iv) total depreciation expense, (v) total amortization expense, (vi) decreases in unbilled service receivables, (vii) minority interests, (viii) non-Cash compensation expense from the issuance of restricted stock and stock options, (ix) Transaction Costs and all legal, accounting and other expenses incurred in connection with the Transactions or the Related Transactions or any Permitted Acquisition or Investment to the extent deducted in determining Consolidated Net Income for such period, (x) write-offs of deferred financing expenses in connection with repayment of any Indebtedness (including, without limitation, the Existing Indebtedness) and any amortization thereof, (xi) extraordinary losses and unusual or non-recurring charges, severance, relocation costs and curtailments or modifications to pensions and post-retirement employee benefit plans, (xii) amortization of deferred financing costs, (xiii) restructuring charges or reserves (including restructuring costs related to acquisitions after the date hereof and to closure/consolidation of facilities), (xiv) the amount of net cost savings projected by Company in good faith to be realized as a result of specified actions taken during such period (calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions, provided that (A) such cost savings are reasonably identifiable and factually supportable, (B) such actions are taken within 18 months after such actions, (C) no cost savings shall be added pursuant to this clause (xiv) to the extent duplicative of any expenses or charges relating to such cost savings that are included in clause (xiii) above with respect to such period and (D) a certificate executed by an Authorized Officer of Company shall be delivered to the Administrative Agent stating that such cost savings are based on reasonable estimates, information and assumptions and that such Authorized Officer has no reason to believe that the projected cost savings will not be achieved, (xv) (A) the Acquired EBITDA of any Person that is designated as a Restricted Subsidiary, property, business or asset acquired by Company or any Restricted Subsidiary during such period (but not the Acquired EBITDA of any related Person, property, business or assets to the extent not so acquired), to the extent not subsequently sold, transferred or otherwise disposed by Company or such Restricted Subsidiary (each such Person, property, business or asset acquired and not subsequently so disposed of, an “ Acquired Entity or Business ”), based on the actual Acquired

EBITDA of such Acquired Entity or Business for such period (including the portion thereof occurring prior to such acquisition) and (B) for the purposes of the definition of the term “Permitted Acquisition” and Section 6.7, an adjustment in respect of each Acquired Entity or Business equal to the amount of the Pro Forma Adjustment with respect to such Acquired Entity or Business for such period (including the portion thereof occurring prior to such acquisition) as specified in a certificate executed by an Authorized Officer of Company and delivered to the Administrative Agent, and (xvi) other non-Cash items reducing Consolidated Net Income (excluding any such non-Cash item to the extent that it represents an accrual or reserve for potential Cash items to be paid within the next twelve months or amortization of a prepaid Cash item that was paid in a prior period), minus

     (b) non-Cash items (excluding any non-Cash item to the extent it represents the reversal of an accrual or reserve for a potential Cash item that reduced Consolidated Adjusted EBITDA in any prior period) plus increases in unbilled service receivables;

provided that, to the extent included in Consolidated Net Income,

     (i) there shall be excluded in determining Consolidated Adjusted EBITDA non-Cash currency translation gains and losses related to currency remeasurements of Indebtedness (including the net loss or gain resulting from Hedge Agreements for currency exchange risk), and

     (ii) there shall be excluded in determining Consolidated Adjusted EBITDA for any period, any adjustments resulting from the application of Statement of Financial Accounting Standards No. 133,

     (iii) for purposes of determining the Leverage Ratio or Interest Coverage Ratio only, there shall be excluded in determining Consolidated Adjusted EBITDA for any period the Disposed EBITDA of any Person, property, business or asset sold, transferred or otherwise disposed of, closed or classified as discontinued operations by the Company or any Restricted Subsidiary during such period (each such Person, property, business or asset so sold or disposed of, a “ Sold Entity or Business ”), based on the actual Disposed EBITDA of such Sold Entity or Business for such period (including the portion thereof occurring prior to such sale, transfer or disposition);

provided that with respect to any calculation period ending prior to the first anniversary of the Closing Date, the foregoing shall be subject to adjustment as set forth in Schedule 1.1(a).

     “ Consolidated Capital Expenditures ” means, for any period, the aggregate of all expenditures of Company and its Restricted Subsidiaries during such period determined on a consolidated basis that, in accordance with GAAP, are or should be included in “additions to plant, property and equipment” or similar items reflected in the consolidated statement of cash flows of Company and its Restricted Subsidiaries. The following expenditures shall not constitute Consolidated Capital Expenditures: (i) expenditures that are to be reimbursed by the client (to the extent actually subsequently reimbursed) of a Project under the principal lease, service or operating agreement relating to such Project pursuant to a Contractual Obligation on the part of such client to reimburse such expenditures, (ii) expenditures incurred for the

development, construction or acquisition of Projects after the Closing Date and expenditures on Projects existing on the Closing Date for the purpose of increasing waste through-put, material recovery or power output, in each case, to the extent financed with the proceeds of Limited Recourse Debt expressly permitted pursuant to Section 6.1(i) or Investments expressly permitted pursuant to Section 6.6(j), (iii) expenditures made with Net Asset Sale Proceeds permitted to be retained by Company and its Subsidiaries for investment in long-term productive assets under Section 2.14(a) and (iv) expenditures that are made or committed to be made within three hundred sixty days of receipt of such proceeds from (or reimbursed through) Net Insurance/Condemnation Proceeds.

     “ Consolidated Current Assets ” means, as at any date of determination, the total assets of Holding and its Restricted Subsidiaries on a consolidated basis that may properly be classified as current assets in conformity with GAAP, excluding Cash and Cash Equivalents.

     “ Consolidated Current Liabilities ” means, as at any date of determination, the total liabilities of Company and its Restricted Subsidiaries on a consolidated basis that may properly be classified as current liabilities in conformity with GAAP, excluding the current portion of long term debt.

     “ Consolidated Interest Expense ” means, for any period, total interest expense (including that portion attributable to Capital Leases in accordance with GAAP and capitalized interest) of Company and its Restricted Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of Company and its Restricted Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and net costs under Hedge Agreements) plus the amount of any Restricted Junior Payments paid by Company to Holding pursuant to Section 6.4(c)(i), but excluding (to the extent otherwise included), however, (v) any amounts referred to in Section 2.11(f) of this Agreement payable on or before the Closing Date, (w) interest expense in respect of Permitted Subordinated Indebtedness owing to Holding, (x) interest that is capitalized in connection with construction financing, (y) all Transaction Costs and (z) (i) any write-offs of deferred financing expenses in connection with repayment of Indebtedness (including, without limitation, the Existing Indebtedness) and (ii) amortization of deferred financing costs.

     “ Consolidated Net Income ” means, for any period, (i) the net income (or loss) of Company and its Restricted Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP, minus , to the extent otherwise included and without duplication, (ii) (a) any after-tax gains (or losses) attributable to Asset Sales or returned surplus assets of any Pension Plan, (b) (to the extent not included in clause (a) above) any net extraordinary gains or (plus) net extraordinary losses and (c) income of any Unrestricted Subsidiary, provided that Consolidated Net Income shall be increased by the amount of dividends or other distributions actually paid to Company or one of the Restricted Subsidiaries by such Unrestricted Subsidiary during such period in respect of the income earned by such Unrestricted Subsidiary in such period or in any prior period (to the extent not previously included in Consolidated Net Income).

     “ Consolidated Working Capital ” means, as at any date of determination, the excess of Consolidated Current Assets over Consolidated Current Liabilities.

     “ Contractual Obligation ” means, as applied to any Person, any provision of any Security issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.

     “ Contributing Guarantors ” as defined in Section 7.2.

     “ Conversion/Continuation Date ” means the effective date of a continuation or conversion, as the case may be, as set forth in the applicable Conversion/Continuation Notice.

     “ Conversion/Continuation Notice ” means a Conversion/Continuation Notice substantially in the form of Exhibit A-2.

     “ Convertible Debenture Indenture ” means the Indenture dated as of January 18, 2007 between Holding and Wells Fargo Bank, National Association, as trustee, as amended from time to time in accordance with Section 6.12.

     “ Convertible Debentures ” means the $373,750,000 aggregate principal amount of 1.00% Senior Convertible Debentures due February 1, 2027, issued pursuant to the terms of the Convertible Debenture Indenture, including $48,750,000 aggregate principal amount of 1.00% Senior Convertible Debentures due February 1, 2027 issued pursuant to the exercise in full of the underwriters’ over-allotment option under the terms of the Convertible Debenture Indenture.

     “ Corporate Services Reimbursement Agreement ” means the corporate services and expense reimbursement agreement entered into by Holding and Company on March 10, 2004, as such agreement may be amended, restated, supplemented or otherwise modified from time to time to the extent permitted under Section 6.12.

     “ Counterpart Agreement ” means a Counterpart Agreement substantially in the form of Exhibit H delivered by a Subsidiary of Company pursuant to Section 5.10.

     “ Credit Date ” means the date of a Credit Extension.

     “ Credit Document ” means any of this Agreement, the Notes, if any, the Intercompany Subordination Agreement, the Collateral Documents, any letter of credit applications or reimbursement agreements or other documents or certificates requested by an Issuing Bank executed by Company in favor of an Issuing Bank relating to Letters of Credit, and all other certificates, instruments or agreements executed and delivered by a Credit Party for the benefit of any Agent, any Issuing Bank or any Lender in connection herewith.

     “ Credit Extension ” means and includes the making (but not the conversion or continuation) of a Loan, the funding of Credit Linked Deposit on the Closing Date and the issuance, amendment, extension or renewal of a Letter of Credit.

     “ Credit Linked Deposit ” means with respect to each Funded Letter of Credit Participant, the payment, if any, made by such Funded Letter of Credit Participant pursuant to Section 2.4(i) or such Funded Letter of Credit Participant’s Additional Credit Linked Deposit of any Series, as the same may be (a) reduced from time to time pursuant to Section 2.4(f) and (h)

or 2.13(b)(iii) or (b) reduced or increased from time to time pursuant to assignments by or to such Funded Letter of Credit Participant pursuant to Section 10.6.

     “ Credit Linked Deposit Account ” means one or more operating and/or investment accounts established by Administrative Agent that shall be used for the purposes set forth in Section 2.4.

     “ Credit Party ” means Company and each Guarantor and any other Restricted Subsidiary of Company which is a party to a Credit Document.

     “ Cumulative Excess Cash Flow ” as defined in Section 6.4.

     “ Currency Agreement ” means any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement, each of which is for the purpose of hedging the foreign currency risk associated with Company’s and its Subsidiaries’ operations and not for speculative purposes.

     “ Default ” means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.

     “ Default Excess ” means, with respect to any Defaulting Lender, the excess, if any, of such Defaulting Lender’s Pro Rata Share of the aggregate outstanding principal amount of Loans of all Lenders (calculated as if all Defaulting Lenders (other than such Defaulting Lender) had funded all of their respective Defaulted Loans) over the aggregate outstanding principal amount of all Loans of such Defaulting Lender.

     “ Default Period ” means, with respect to any Defaulting Lender, the period commencing on the date of the applicable Funding Default and ending on the earliest of the following dates: (i) the date on which all Commitments are cancelled or terminated and/or the Obligations are declared or become immediately due and payable, (ii) the date on which (a) the Default Excess with respect to such Defaulting Lender shall have been reduced to zero (whether by the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting Lender or by the non-pro rata application of any voluntary or mandatory prepayments of the Loans in accordance with the terms of Section 2.13 or Section 2.14 or by a combination thereof) and (b) such Defaulting Lender shall have delivered to Company and Administrative Agent a written reaffirmation of its intention to honor its obligations hereunder with respect to its Commitments, and (iii) the date on which Company, Administrative Agent and Requisite Lenders waive all Funding Defaults of such Defaulting Lender in writing.

     “ Defaulted Loan ” as defined in Section 2.22.

     “ Defaulting Lender ” as defined in Section 2.22.

     “ Deposit Account ” means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit.

     “ Detroit Letters of Credit ” means any Funded Letter of Credit as described on Schedule 1.1(e) in an aggregate amount no greater than the amount set forth thereon, requested by Company to be issued hereunder and having an expiration date no later than the date which is three years and thirty-five days from the date of issuance.

     “ Development Subsidiary ” means, solely for the purpose of excluding such Subsidiary from Company’s obligation to comply with Section 5.10 with respect to such Subsidiary, a Restricted Subsidiary established by Company or any of its Restricted Subsidiaries for the sole purpose of bidding on a prospective Project; provided that (i) any equity Investment in such Subsidiary by Company or another Subsidiary of Company in aggregate when taken together with all other equity Investments in Development Subsidiaries shall not exceed $10,000,000 at any one time outstanding; (ii) such Subsidiary shall have no assets other than Cash pursuant to clause (i) of this definition and intercompany Indebtedness permitted hereunder and the agreements to which it is party and which are entered into in the ordinary course of business and are necessary for it to develop or bid on prospective Projects and (iii) such Subsidiary’s sole business shall be limited to those actions necessary to develop or bid on prospective Projects. At such time, if any, as such Subsidiary shall incur any Indebtedness (other than intercompany Indebtedness permitted hereunder), grant any Liens or make any Investment or Restricted Junior Payment or carry on any activity after then that expressly permitted by sub-clause (iii) above, such Subsidiary shall cease to be a Development Subsidiary.

     “ Disposed EBITDA ” means, with respect to any Sold Entity or Business for any period, the amount for such period of Consolidated Adjusted EBITDA of such Sold Entity or Business (determined as if references to the Company and the Restricted Subsidiaries in the definition of Consolidated Adjusted EBITDA were references to such Sold Entity or Business and its Restricted Subsidiaries), all as determined on a consolidated basis for such Sold Entity or Business.

     “ Disqualified Lender ” means each Person identified in writing by Company prior to the Closing Date to Administrative Agent, unless Company shall subsequently otherwise agree in writing delivered to the Administrative Agent (and the Administrative Agent may provide a list of Disqualified Lenders to any Lender upon its reasonable request).

     “ Dollars ” and the sign “ $ ” mean the lawful money of the United States of America.

     “ Domestic Subsidiary ” means any Subsidiary of Company organized under the laws of the United States of America, any State thereof or the District of Columbia.

     “ Eligible Assignee ” means (i) any Lender, any Affiliate of any Lender and any Related Fund (any two or more Related Funds being treated as a single Eligible Assignee for purposes of Section 10.6), and (ii) any commercial bank, insurance company, investment or mutual fund or other entity that is an “accredited investor” (as defined in Regulation D under the Securities Act) and which extends credit or buys loans in the ordinary course; provided , that in the case of any assignee of any Revolving Commitment, such Person extends credit on a revolving basis as one of its businesses and provided , further , that no Disqualified Lender nor Affiliate of Company or Holding shall be an Eligible Assignee.

     “ Employee Benefit Plan ” means any “employee benefit plan” as defined in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed to by, Company or any of its Subsidiaries.

     “ Environmental Claim ” means any investigation, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive, by any Governmental Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law; (ii) in connection with any Release or threatened Release of Hazardous Material; or (iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.

     “ Environmental Laws ” means any and all current or future foreign or domestic, federal or state (or any subdivision of either of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (i) environmental matters, including those relating to any Release or threatened Release of Hazardous Materials; (ii) the generation, use, storage, transportation, treatment, processing, removal, remediation or disposal of Hazardous Materials; or (iii) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any manner applicable to Company or any of its Subsidiaries or any Facility.

     “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.

     “ ERISA Affiliate ” means, as applied to any Person, (i) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. Any former ERISA Affiliate of Company or any of its Subsidiaries shall continue to be considered an ERISA Affiliate of Company or any such Subsidiary within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of Company or such Subsidiary and with respect to liabilities arising after such period for which Company or such Subsidiary could be liable under the Internal Revenue Code or ERISA.

     “ ERISA Event ” means (i) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30-day notice to the PBGC has been waived by regulation); (ii) the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code or Section 302 of ERISA with respect to any Pension Plan (whether or not waived in accordance with Section 412(d) of the Internal Revenue Code or Section 303(d) of ERISA) or the failure to make by its due date a required installment under Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan pursuant to

Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by Company, any of its Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to Company, any of its Subsidiaries or any of their respective Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (vi) the imposition of liability on Company, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential material liability therefore, or the receipt by Company, any of its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or omission which could give rise to the imposition on Company, any of its Subsidiaries or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against Company, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.

     “ Eurodollar Rate Loan ” means a Loan bearing interest at a rate determined by reference to the Adjusted Eurodollar Rate.

     “ Event of Default ” means each of the conditions or events set forth in Section 8.1.

     “ Excess Cash Flow ” means, for any period, an amount equal to:

     (a) the sum, without duplication, of:

     (i) Consolidated Net Income for such period,

     (ii) an amount equal to the amount of all non-cash charges to the extent deducted in arriving at such Consolidated Net Income (excluding any such non-Cash item to the extent that it represents an accrual or reserve for potential Cash items to be paid within the next twelve months or amortization of a prepaid Cash item that was paid in a prior period),

     (iii) decreases in Consolidated Working Capital and long-term account receivables for such period (other than such decreases arising from acquisitions by the Company and the Restricted Subsidiaries completed during such period),

     (iv) an amount equal to the aggregate net non-cash loss on Asset Sales by the Company and the Restricted Subsidiaries during such period to the extent deducted in arriving at such Consolidated Net Income,

     (v) an amount equal to the loss, if any, of any Person accrued prior to the date it becomes a Restricted Subsidiary of Company or is merged into or consolidated with Company or any of its Restricted Subsidiaries or that Person’s assets are acquired by Company or any of its Restricted Subsidiaries during such period to the extent deducted in arriving at such Consolidated Net Income,

     (vi) an amount equal to the repayments, interest, returns, profits, distributions, income and similar amounts actually received in cash from any Joint Venture in which Company or any of its Restricted Subsidiaries owns a minority interest or (except with respect to distributions) from any Unrestricted Subsidiary, and

     (vii) an amount equal to minority interest expense during such period,

      minus

     (b) the sum, without duplication, of:

     (i) an amount equal to the amount of all non-cash credits included in arriving at such Consolidated Net Income and extraordinary cash charges included,

     (ii) without duplication of amounts deducted pursuant to clause (xi) below in prior fiscal years, the amount of Consolidated Capital Expenditures made in cash or accrued during such period pursuant to Section 6.7(b), except to the extent that such Consolidated Capital Expenditures were financed with the proceeds of Indebtedness of the Company or the Restricted Subsidiaries,

     (iii) the aggregate amount of all principal payments of Indebtedness of the Company and the Restricted Subsidiaries (including (A) the principal component of payments in respect of Capital Leases and (B) the amount of any mandatory prepayment of Term Loans pursuant to Section 2.14(a) to the extent required due to an Asset Sale that resulted in an increase to Consolidated Net Income and not in excess of the amount of such increase but excluding (X) all other prepayments of Term Loans and (Y) all prepayments of Revolving Loans and Swing Line Loans) made during such period (other than in respect of any revolving credit facility to the extent there is not an equivalent permanent reduction in commitments thereunder), except to the extent financed with the proceeds of other Indebtedness of the Company or the Restricted Subsidiaries,

     (iv) any amount equal to the aggregate net non-cash gain on Asset Sales by the Company and the Restricted Subsidiaries during such period to the extent included in arriving at such Consolidated Net Income,

     (v) increases in Consolidated Working Capital and long-term account receivables for such period (other than any such increases arising from acquisitions by the Company and the Restricted Subsidiaries during such period),

     (vi) cash payments by Company and the Restricted Subsidiaries during such period in respect of long-term liabilities of the Company and the Restricted Subsidiaries other than Indebtedness,

     (vii) without duplication of amounts deducted pursuant to clause (xi) below in prior fiscal years, the amount of Investments and acquisitions made during such period pursuant to Section 6.6 (other than Section 6.6(a)) to the extent that such Investments and acquisitions were financed with internally generated cash flow of Company and the Restricted Subsidiaries,

     (viii) the amount of Restricted Junior Payments paid during such period pursuant to Section 6.4(a), 6.4(b), 6.4(c) and 6.4(d) to the extent such Restricted Junior Payments were financed with internally generated cash flow of the Company and the Restricted Subsidiaries,

     (ix) the aggregate amount of expenditures actually made by the Company and the Restricted Subsidiaries in cash during such period (including expenditures for the payment of financing fees) to the extent that such expenditures are not expensed during such period,

     (x) the aggregate amount of any premium, make-whole or penalty payments actually paid in cash by the Company and the Restricted Subsidiaries during such period that are required to be made in connection with any prepayment of Indebtedness,

     (xi) without duplication of amounts deducted from Excess Cash Flow in prior periods, the aggregate consideration required to be paid in cash by the Company or any of the Restricted Subsidiaries pursuant to binding contracts (the “ Contract Consideration ”) entered into prior to or during such period relating to Permitted Acquisitions or Consolidated Capital Expenditures to be consummated or made during the period of four consecutive fiscal quarters of the Company following the end of such period, provided that to the extent the aggregate amount of internally generated cash actually utilized to finance such Permitted Acquisitions during such period of four consecutive fiscal quarters is less than the Contract Consideration, the amount of such shortfall shall be added to the calculation of Excess Cash Flow at the end of such period of four consecutive fiscal quarters,

     (xii) the amount of cash taxes paid in such period to the extent they exceed the amount of tax expense deducted in determining Consolidated Net Income for such period,

     (xiii) all amounts paid in respect of Transaction Costs and fees, costs and expenses in connection with the Related Transactions, any Permitted Acquisitions and Investments permitted under Section 6.6;

     (xiv) an amount equal to the income, if any, of any Person accrued prior to the date it becomes a Restricted Subsidiary of Company or is merged into or consolidated with Company or any of its Restricted Subsidiaries or that Person’s assets are acquired by Company or any of its Restricted Subsidiaries during such period to the extent included in arriving at such Consolidated Net Income;

     (xv) equity income from any Joint Venture in which Company or any of its Restricted Subsidiaries owns a minority interest to the extent included in arriving at such Consolidated Net Income; and

     (xvi) cash payments to minority interests in Subsidiaries.

     “ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

     “ Excluded Asset Sales ” means the collective reference to (i) any sale or discount, in each case without recourse, of notes or accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof or to resolve disputes that occur in the ordinary course of business, (ii) any exchange of specific items of equipment between Company and any of its Subsidiaries or among any Subsidiaries of Company, so long as the purpose of each such exchange is to acquire replacement items of equipment which are the functional equivalent of the item of equipment so exchanged, (iii) disposals of obsolete, worn out or surplus property in the ordinary course of business, including, without limitation, Intellectual Property, (iv) the sale, lease, license, transfer or other disposition of equipment, materials and other tangible assets by Company or any Subsidiary of Company to any Subsidiary of Company; provided , however, that the aggregate fair market value of all such equipment, materials and other tangible assets sold, leased, licensed, transferred or otherwise disposed of pursuant to this clause (iv) does not exceed $30,000,000 in the aggregate since the Closing Date, (v) sales of other assets for aggregate consideration of less than $2,000,000 per Fiscal Year with respect to any transaction or series of related transactions and less than $10,000,000 per Fiscal Year in the aggregate and (vi) any license (other than an exclusive license) of intellectual property owned by Company or its Subsidiaries in the ordinary course of business.

     “ Excluded Subsidiary ” means each (i) Domestic Subsidiary of Company or of any Subsidiary of Company for which becoming a Credit Party would constitute a violation of (a) a Contractual Obligation existing on the Closing Date or, thereafter, a bona fide Contractual Obligation (the prohibition contained in which was not entered into in contemplation of this provision), in favor of a Person (other than Company or any of its Subsidiaries or Affiliates) for which the required consents have not been obtained or (b) applicable law affecting such

Subsidiary, provided , that any such Subsidiary of Company or of another Subsidiary shall cease to be covered under this clause at such time as such Subsidiary’s becoming a Credit Party would no longer constitute a violation of such Contractual Obligation or applicable law, whether as a result of obtaining the required consents or otherwise and (ii) each Domestic Subsidiary of Company identified on Schedule 1.1(b)-1. The Excluded Subsidiaries, as of the Closing Date, by virtue of clause (i), above, are listed on Schedule 1.1(b)-2.

     “ Existing Indebtedness ” means the Indebtedness under (i) that certain Amended and Restated Credit Agreement, dated as of June 24, 2005, as amended and restated as of May 26, 2006, among Company, Holding, Goldman Sachs Credit Partners L.P., as Administrative Agent, and other parties thereto, (ii) that certain Second Lien Credit Agreement dated as of June 24, 2005 among Company, Holding, Credit Suisse Cayman Islands Branch, as Administrative Agent and the other parties thereto (as amended by the Amendment to Second Lien Credit Agreement dated as of May 26, 2006), (iii) the ARC Indenture and (iv) the MSW Indentures.

     “ Existing Indentures Amendments ” as defined in Section 3.1(d)(ii).

     “ Existing Letters of Credit ” means those letters of credit, listed on Schedule 1.1(c), outstanding on the Closing Date.

     “ Expansion ” means, with respect to any Project, additions or improvements to the existing facilities of such Projects.

     “ Facility ” means any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by Company or any of its Subsidiaries or any of their respective predecessors or Affiliates of Company, any of its Subsidiaries, or any such predecessors.

     “ Fair Share Contribution Amount ” as defined in Section 7.2.

     “ Fair Share ” as defined in Section 7.2.

     “ Federal Funds Effective Rate ” means for any day, the rate per annum (expressed, as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1.00%) 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 , (i) 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 (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average of the quotations received by Administrative Agent from three federal funds broker of recognized standing selected by Administrative Agent.

     “ Financial Plan ” as defined in Section 5.1(h).

     “ First Priority ” means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that such Lien is the only Lien to which such Collateral is subject, other than any Permitted Lien.

     “ Fiscal Quarter ” means a fiscal quarter of any Fiscal Year.

     “ Fiscal Year ” means the fiscal year of Company and its Restricted Subsidiaries ending on December 31 of each calendar year.

     “ Flood Hazard Property ” means any Real Estate Asset subject to a Mortgage in favor of Collateral Agent, for the benefit of the Lenders, and located in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards.

     “ Foreign Subsidiary ” means any Subsidiary that is not a Domestic Subsidiary. The Foreign Subsidiaries of Company, as of the Closing Date, are listed on Schedule 1.1(d).

     “ Funded LC Issuing Bank ” means initially each of JPMC and UBS and thereafter with respect to any Funded Letter of Credit, any Lender (including any Person who is a Lender as of the Closing Date but subsequently, after agreeing to become a Funded LC Issuing Bank, ceases to be a Lender) which, at the request of Company, and with the consent of Administrative Agent (not to be unreasonably withheld), agrees in such Lender’s sole discretion to become a Funded LC Issuing Bank for the purposes of issuing such Funded Letter of Credit, together with its permitted successors and assigns in such capacity.

     “ Funded LC Participation Interests ” means the right of any Funded Letter of Credit Participant to receive any payments contemplated by this Agreement in respect of such Funded Letter of Credit Participant’s Pro Rata Share of the Credit Linked Deposits in accordance with this Agreement.

     “ Funded Letter of Credit ” as defined in Section 2.4(b) or an Additional Funded Letter of Credit.

     “ Funded Letter of Credit Commitment ” means the commitment of a Lender to make or otherwise fund a Credit Linked Deposit and the Additional Funded Letter of Credit Commitment of such Lender and “ Funded Letter of Credit Commitments ” means such commitments of all Lenders in the aggregate. The amount of each Lender’s Funded Letter of Credit Commitment, if any, is set forth on Appendix A-3 or in the applicable Joinder Agreement pursuant to Section 2.24 or in the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Funded Letter of Credit Commitments as of the Closing Date is $320,000,000.

     “ Funded Letter of Credit Commitment Period ” means the period from the Closing Date to but excluding the Funded Letter of Credit Termination Date.

     “ Funded Letter of Credit Exposure ” means with respect to any Lender, at any time, the sum of (a) the amount of any Unpaid Drawings in respect of which payments from such Lender’s Credit Linked Deposit have been made (or were required to be made) to a Funded LC Issuing Bank pursuant to Section 2.4(f) at such time and (b) such Lender’s Pro Rata Share of the Funded Letters of Credit Outstanding at such time (excluding the portion thereof consisting of Unpaid Drawings in respect of which payments from such Lender’s Credit Linked Deposit have been made (or were required to be made) to a Funded LC Issuing Bank pursuant to Section 2.4(f)); provided that at any time when the Funded Letters of Credit Outstanding is zero, the Funded

Letter of Credit Exposure of any Lender shall be equal to such Lender’s Funded Letter of Credit Commitment.

     “ Funded Letter of Credit Fee ” as defined in Section 2.11(b).

     “ Funded Letter of Credit Participant ” means each Lender having a Funded Letter of Credit Commitment.

     “ Funded Letter of Credit Participation ” as defined in Section 2.4(h).

     “ Funded Letter of Credit Termination Date ” means the earliest to occur of (i) the seventh anniversary of the Closing Date; (ii) the date on which the Credit Linked Deposits have been reduced to zero pursuant to Section 2.13(b)(iii); and (iii) the date of the termination of the Funded Letter of Credit Commitments pursuant to Section 8.1.

     “ Funded Letters of Credit Outstanding ” means at any time, the sum of, without duplication, (a) the aggregate Stated Amount of all outstanding Funded Letters of Credit and (b) the aggregate amount of all Unpaid Drawings in respect of all Funded Letters of Credit.

     “ Funding Default ” as defined in Section 2.22.

     “ Funding Guarantors ” as defined in Section 7.2.

     “ Funding Notice ” means a notice substantially in the form of Exhibit A-1.

     “ GAAP ” means, subject to the limitations on the application thereof set forth in Section 1.2, United States generally accepted accounting principles in effect as of the date of determination thereof.

     “ Governmental Acts ” means any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority.

     “ Governmental Authority ” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality, political subdivision or any entity or officer thereof exercising executive, legislative, judicial, regulatory or administrative functions of any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government.

     “ Governmental Authorization ” means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.

     “ Grantor ” as defined in the Pledge and Security Agreement.

     “ GS ” means Goldman Sachs Capital Markets, L.P.

     “ GS Hedge Agreement ” that certain Confirmation, dated August 3, 2005, between GS and Company relating to the “Swap Transaction” referred to therein.

     “ Guaranteed Obligations ” as defined in Section 7.1.

     “ Guarantor ” means Holding and each Domestic Subsidiary of Company (other than Excluded Subsidiaries, Development Subsidiaries and Unrestricted Subsidiaries).

     “ Guarantor Subsidiary ” means each Guarantor other than Holding.

     “ Guaranty ” means the guaranty of each Guarantor set forth in Section 7.

     “ Guaranty Indebtedness ” means with respect to all Indebtedness of the type identified in clauses (i) through (iv) of the definition of Indebtedness, to the extent such Indebtedness is owed to any Person other than Holding or any Subsidiary of Company (x) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by Company or any of its Restricted Subsidiaries of such Indebtedness and (y) any obligation of Company or any of its Restricted Subsidiaries the primary purpose or intent of which is to provide assurance to an obligee with respect to such Indebtedness that the obligation of the obligor thereof will be paid or discharged, or any agreement relating thereto will be complied with, or the holders thereof will be protected (in whole or in part) against loss in respect thereof.

     “ Hazardous Materials ” means any chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority or which may or could pose a hazard to the health and safety of the owners, occupants or any Persons in the vicinity of any Facility or to the indoor or outdoor environment.

     “ Hedge Agreements ” means all interest rate or currency swaps, caps or collar agreements, foreign exchange agreements, commodity contracts or similar arrangements entered into by Company or its Subsidiaries providing for protection against fluctuations in interest rates, currency exchange rates, commodity prices or the exchange of nominal interest obligations, either generally or under specific contingencies, including any forward agreement or arrangement designed to hedge against fluctuation in electricity rates pertaining to electricity produced by a Project, so long as the contractual arrangements relating to such Project contemplate that Company or its Subsidiaries shall deliver such electricity to third parties.

     “ Highest Lawful Rate ” means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under the laws applicable to any Lender which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws now allow.

     “ Historical Financial Statements ” means as of the Closing Date, (i) the audited financial statements of Holding for Fiscal Years 2003, 2004 and 2005, the audited financial statements of Company for Fiscal Years 2003 and 2004 and the unaudited financial statements of Company for Fiscal Year 2005, in each case consisting of balance sheet and the related consolidated statements of income, stockholders’ equity and cash flows for such Fiscal Years, and (ii) the unaudited financial statements of Holding and Company as at the most recently ended Fiscal Quarter (if any) ending after the date of the most recent financial statements referenced in clause (i) hereof and more than 45 days prior to the Closing Date, consisting of a

balance sheet and the related consolidated statements of income, stockholders’ equity and cash flows for the three-, six-or nine-month period, as applicable, ending on such date, and, in the case of clauses (i) and (ii), (with respect to the financial statements of Holding and Company) certified by the chief financial officer or chief accounting officer of Company that they fairly present, in all material respects, the financial condition of Holding and Company at the dates indicated and the results of their operations and their cash flows for the periods ended as indicated, subject to changes resulting from audit and year-end adjustments.

     “ Holding ” as defined in the preamble hereto.

     “ Holding Capital Contribution ” means (i) any cash capital contribution or loan made to Company by Holding after the Closing Date (other than with the proceeds of the Related Transactions to the extent used to defease or repay the Existing Indebtedness), and (ii) in connection with any Permitted Acquisition or Investment, any issuance by Holding of its Capital Stock as consideration in whole or part therefor.

     “ Holding Equity Issuance ” means the issuance of 5,320,000 shares of common stock at $23.50 per share by Holding and up to an additional 798,000 shares that may be issued to cover over-allotments, if any.

     “ Holding Pledge Agreement ” means the Pledge Agreement executed by Holding in favor of the Collateral Agent on the Closing Date substantially in the form of Exhibit I-2, as it may be amended, supplemented or otherwise modified from time to time.

     “ Holding Tax Sharing Agreement ” means the tax sharing agreement among Danielson Holding Corporation (predecessor to Holding), Company and Covanta Power International Holdings, Inc. dated as of March 10, 2004, as amended by Amendment No. 1 thereto dated as of June 24, 2005, as such agreement may be amended, restated, supplemented or otherwise modified from time to time to the extent permitted under Section 6.12.

     “ Increased Amount Date ” as defined in Section 2.24.

     “ Increased-Cost Lenders ” as defined in Section 2.23.

     “ Indebtedness ”, as applied to any Person, means, without duplication, (i) all indebtedness for borrowed money; (ii) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money; (iv) any obligation owed for all or any part of the deferred purchase price of property or services (excluding trade payables incurred in the ordinary course of business, having a term of less than 12 months and payable in accordance with customary trade practices), which purchase price is due more than six months from the date of incurrence of the obligation in respect thereof; (v) all Indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the Indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person; (vi) the face amount of any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; (vii) the direct or indirect guaranty,

endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another; (viii) any obligation of such Person the primary purpose or intent of which is to provide assurance to an obligee that the obligation of the obligor thereof will be paid or discharged, or any agreement relating thereto will be complied with, or the holders thereof will be protected (in whole or in part) against loss in respect thereof; (ix) any liability of such Person for an obligation of another through any agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (b) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (a) or (b) of this clause (ix), the primary purpose or intent thereof is as described in clause (viii) above; and (x) all obligations of such Person in respect of any exchange traded or over the counter derivative transaction, including, without limitation, any Interest Rate Agreement and Currency Agreement (and Hedge Agreements that protect against fluctuations in electricity rates), whether entered into for hedging or speculative purposes; provided , in no event shall obligations under any Interest Rate Agreement and any Currency Agreement be deemed “Indebtedness” for any purpose under Section 6.7.

     “ Indemnified Liabilities ” means, collectively, any and all liabilities, obligations, losses, damages (including natural resource damages), penalties, claims (including Environmental Claims), reasonable out-of-pocket costs (including the costs of any investigation, study, sampling, testing, abatement, cleanup, removal, remediation or other response action necessary to remove, remediate, clean up or abate any Release or threatened Release of Hazardous Materials), and reasonable out-of-pocket expenses of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel for Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened by any Person, whether or not any such Indemnitee shall be designated as a party or a potential party thereto, and any fees or expenses incurred by Indemnitees in enforcing this indemnity), whether direct, indirect or consequential and whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations and Environmental Laws), on common law or equitable cause or on contract or otherwise, that may be imposed on or incurred by any such Indemnitee, in any manner relating to or arising out of (i) this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby (including the Lenders’ agreement to make the Credit Extensions or the use or intended use of the proceeds thereof, or any enforcement of any of the Credit Documents (including any sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Guaranty)); or (ii) any Environmental Claim or any Release or threatened Release of Hazardous Materials arising from any past or present activity, operation, land ownership, or practice of Company or any of its Subsidiaries, except to the extent, in any such case, that any liability, obligation, loss, damage, penalty, claim, costs, expense or disbursement results from the gross negligence, willful misconduct or bad faith of such Indemnitee.

     “ Indemnitee ” as defined in Section 10.3.

     “ Installment ” as defined in Section 2.12.

     “ Installment Date ” as defined in Section 2.12.

     “ Insurance Premium Financers ” means Persons who are non-Affiliates of Company that advance insurance premiums for Company and its Subsidiaries pursuant to Insurance Premium Financing Arrangements.

     “ Insurance Premium Financing Arrangements ” means, collectively, such agreements with Insurance Premium Financers pursuant to which such Insurance Premium Financers advance insurance premiums for Company and its Subsidiaries. Such Insurance Premium Financing Arrangements (i) shall provide for the benefit of such Insurance Premium Financers a security interest in no property of Company or any of its Restricted Subsidiaries other than gross unearned premiums for the insurance policies and related rights, (ii) shall not purport to prohibit any portion of the Liens created in favor of Collateral Agent (for the benefit of Secured Parties) pursuant to the Collateral Documents, and (iii) shall not contain any provision or contemplate any transaction prohibited by this Agreement and shall otherwise be in form and substance reasonably satisfactory to Administrative Agent.

     “ Insurance Subsidiaries ” means Danielson Indemnity Company and its Subsidiaries.

     “ Intercompany Master Note ” means a promissory note evidencing Indebtedness of Holding, Company and each of its Subsidiaries which (a) to the extent the Indebtedness evidenced thereby is owed to any Credit Party, is pledged pursuant to the Collateral Documents, and (b) to the extent the Indebtedness evidenced thereby is owed by a Subsidiary of Company, is senior Indebtedness of such Subsidiary (except to the extent that requiring such Indebtedness to be senior would breach a Contractual Obligation binding on such Subsidiary), except that any such Indebtedness owed by any Credit Party to any Subsidiary which is not a Credit Party shall be unsecured and subordinated in right of payment to the payment in full of the Obligations pursuant to the terms of such note.

     “ Intercompany Subordination Agreement ” means the Intercompany Subordination Agreement executed by Holding, Company and each of its Subsidiaries and the Administrative Agent on the Closing Date substantially in the form of Exhibit L, as it may be amended, supplemented or otherwise modified from time to time.

     “ Interest Coverage Ratio ” means the ratio as of the last day of any Fiscal Quarter of (i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period ending on such date to (ii) Consolidated Interest Expense for such period; provided that with respect to any calculation period ending prior to the first anniversary of the Closing Date, the foregoing shall be subject to adjustment as set forth in Schedule 1.1(a).

     “ Interest Payment Date ” means with respect to (i) any Base Rate Loan, each March 31, June 30, September 30 and December 31 of each year, commencing on the first such date to occur after the Closing Date and the final maturity date of such Loan; and (ii) any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan; provided , in the case of each Interest Period of longer than three months “Interest Payment Date” shall also include each date that is three months, or an integral multiple thereof, after the commencement of such Interest Period.

     “ Interest Period ” means, (i) in connection with a Eurodollar Rate Loan, an interest period of one-, two-, three- or six-months (or nine- or twelve-months, if consented to by each affected Lender, such consent not to be unreasonably withheld by any such Lender if such interest period is available to such Lender), as selected by Company in the applicable Funding Notice or Conversion/Continuation Notice, (a) initially, commencing on the Credit Date or Conversion/Continuation Date thereof, as the case may be; and (b) thereafter, commencing on the day on which the immediately preceding Interest Period expires and (ii) in connection with a Credit Linked Deposit, each period, the first commencing on or following the Closing Date in accordance with Section 2.4(i)(ii) and thereafter commencing on the day on which the immediately preceding Interest Period expires and ending on the numerically corresponding day in the calendar month that is three months thereafter; provided that a single Interest Period shall at all times apply to all Credit Linked Deposits; provided , in each case (1) if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day unless no further Business Day occurs in such month, in which case such Interest Period shall expire on the immediately preceding Business Day; (2) 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, subject to clauses (3) and (4) of this definition, end on the last Business Day of a calendar month; (3) no Interest Period with respect to any portion of Term Loan shall extend beyond the Term Loan Maturity Date, and (4) no Interest Period with respect to any portion of the Revolving Loans shall extend beyond the Revolving Commitment Termination Date.

     “ Interest Rate Agreement ” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement, each of which is for the purpose of hedging the interest rate exposure associated with Company’s and its Subsidiaries’ operations and not for speculative purposes.

     “ Interest Rate Determination Date ” means, with respect to any Interest Period, the date that is two Business Days prior to the first day of such Interest Period.

     “ Internal Revenue Code ” means the Internal Revenue Code of 1986, as amended to the Closing Date and from time to time thereafter, and any successor statute.

     “ Investment ” means (i) any direct or indirect purchase or other acquisition by Company or any of its Restricted Subsidiaries of, or of a beneficial interest in, any of the Securities of any other Person (other than a Guarantor Subsidiary); (ii) any direct or indirect redemption, retirement, purchase or other acquisition for value, by any Restricted Subsidiary of Company from any Person (other than Company or any Guarantor Subsidiary), of any Capital Stock of such Person; (iii) any direct or indirect loan, advance (other than advances to employees for moving, relocation, business, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by Company or any of its Restricted Subsidiaries to any other Person (other than Company or any Guarantor Subsidiary), including all Indebtedness and accounts receivable from that other Person but only to the extent that the same are not current assets or did not arise from sales to that other Person in the ordinary course of business and (iv) Commodities Agreements not constituting Hedge Agreements. The amount of any Investment shall be the original cost of such Investment plus the cost of all

additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment.

     “ Issuance Notice ” means an Issuance Notice substantially in the form of Exhibit A-3.

     “ Issuing Bank ” means each of a Funded LC Issuing Bank and a Revolving Issuing Bank.

     “ Joinder Agreement ” means an agreement substantially in the form of Exhibit K.

     “ Joint Venture ” means a joint venture, partnership or other similar arrangement, whether in partnership or other legal form.

     “ JPMC ” as defined in the preamble hereto.

     “ LCPI ” as defined in the preamble hereto.

     “ Lead Arranger ” as defined in the preamble hereto.

     “ Lender ” means each financial institution listed on the signature pages hereto as a Lender and any other Person that becomes a party hereto pursuant to an Assignment Agreement or a Joinder Agreement pursuant to Section 2.24.

     “ Lender Counterparty ” means each Lender or any Affiliate of a Lender counterparty to a Permitted Hedge Agreement (including any Person who is a Lender (and any Affiliate thereof) as of the Closing Date but subsequently, whether before or after entering into a Permitted Hedge Agreement, ceases to be a Lender) including, without limitation, each such Affiliate that enters into a joinder agreement with Collateral Agent; provided that, (i) solely with respect to the GS Hedge Agreement, GS shall be deemed a Lender Counterparty for purposes of the Credit Documents and (ii) solely with respect to the Calyon Hedge Agreements, Calyon shall be deemed a Lender Counterparty for purposes of the Credit Documents.

     “ Letter of Credit ” means a Revolving Letter of Credit or a Funded Letter of Credit.

     “ Leverage Ratio ” means the ratio as of the last day of any Fiscal Quarter of (i) Consolidated Adjusted Debt as of such day to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period ending on such date; provided that with respect to any calculation period ending prior to the first anniversary of the Closing Date, the foregoing shall be subject to adjustment as set forth in Schedule 1.1(a).

     “ Lien ” means any lien, mortgage, pledge, collateral assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing.

     “ Limited Recourse Debt ” means, with respect to any Restricted Subsidiary of Company, Indebtedness of such Subsidiary with respect to which the recourse of the holder or obligee of such Indebtedness is limited to (i) assets associated with the Project (which in any event shall not include assets held by any Guarantor Subsidiary other than a Guarantor Subsidiary, if any, whose

sole business is the ownership and/or operation of such Project and substantially all of whose assets are associated with such Project) in respect of which such Indebtedness was incurred and/or (ii) such Subsidiary or the equity interests in such Subsidiary, but in the case of clause (ii) only if such Subsidiary’s sole business is the ownership and/or operation of such Project and substantially all of such Subsidiary’s assets are associated with such Project. For purposes of this Agreement, Indebtedness of a Restricted Subsidiary of Company shall not fail to be Limited Recourse Debt solely by virtue of the fact that the holders of such Limited Recourse Debt have recourse to Company or another Subsidiary of Company pursuant to a contingent obligation supporting such Limited Recourse Debt or a Performance Guaranty, so long as such contingent obligation or Performance Guaranty is unsecured and permitted under Section 6.1.

     “ Loan ” means a Term Loan, a Revolving Loan and a Swing Line Loan.

     “ Margin Stock ” as defined in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time.

     “ Marketable Securities ” means auction rate securities or auction rate preferred stock having a rate reset frequency of less than ninety (90) days and having, at the time of the acquisition thereof, a rating of at least A from S&P or from Moody’s.

     “ Material Adverse Effect ” means a material adverse effect on (i) the business, operations, assets, liabilities or financial condition of Holding and its Subsidiaries taken as a whole; (ii) the ability of the Credit Parties as a whole to perform their respective Obligations; (iii) the rights, remedies and benefits available to, or conferred upon, the Secured Parties under any Credit Document.

     “ Material Contract ” means any contract or other arrangement to which Company or any of its Restricted Subsidiaries is a party (other than the Credit Documents and the principal agreements and instruments entered into in connection with any refinancing thereof) for which breach, nonperformance, cancellation or failure to renew could reasonably be expected to have a Material Adverse Effect.

     “ Material Real Estate Asset ” means any fee-owned Real Estate Asset having a fair market value in excess of $10,000,000 as of the date of the acquisition thereof.

     “ Material Restricted Subsidiary ” means any Restricted Subsidiary now existing or hereafter acquired or formed which, on a consolidated basis for Company and all of its Restricted Subsidiaries, (i) for the most recent Fiscal Year accounted for more than 5.00% of the consolidated revenues of Company and its Restricted Subsidiaries, or (ii) as at the end of such Fiscal Year, was the owner of more than 5.00% of the consolidated assets of Company and its Restricted Subsidiaries.

     “ MLPFS ” as defined in the preamble hereto.

     “ Moody’s ” means Moody’s Investor Services, Inc.

     “ Mortgage ” means a Mortgage, substantially in the form of Exhibit J, as it may be amended, supplemented or otherwise modified from time to time.

     “ MSW I Indenture ” means that certain Indenture in respect of the Series A and Series B 8 ¹ / ₂ % Senior Secured Notes due 2010, dated as of June 25, 2003, among MSW Energy Holdings LLC, MSW Energy Finance Co., Inc., the guarantors named therein and Wells Fargo Bank Minnesota, National Association, as trustee, as such indenture may be further amended, restated, supplemented, refinanced, replaced or modified from time to time.

     “ MSW II Indenture ” means that certain Indenture in respect of the Series A and Series B 7 ³ / ₈ % Senior Secured Notes due 2010, dated as of November 24, 2003, among MSW Energy Holdings II LLC, MSW Energy Finance Co. II, Inc., the guarantors named therein and Wells Fargo Bank Minnesota, National Association, as trustee, as such indenture may be further amended, restated, supplemented, refinanced, replaced or modified from time to time.

     “ MSW Indentures ” means the MSW I Indenture and the MSW II Indenture.

     “ MSW Notes ” means the notes issued under the MSW Indentures.

     “ Multiemployer Plan ” means a “multiemployer plan” as defined in Section 3(37) of ERISA which is contributed to by Company, any of its Subsidiaries or their respective ERISA Affiliates.

     “ NAIC ” means The National Association of Insurance Commissioners, and any successor thereto.

     “ Net Asset Sale Proceeds ” means, with respect to any Asset Sale, an amount equal to: (i) Cash payments (including any Cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) received by Company or any of its Restricted Subsidiaries from such Asset Sale, minus (ii) any bona fide direct costs incurred in connection with such Asset Sale (or if such costs have not then been incurred or invoiced, Company’s good faith estimate thereof), including (a) income or gains taxes payable by the seller as a result of any gain recognized in connection with such Asset Sale, (b) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is required to be repaid under the terms thereof as a result of such Asset Sale, (c) other taxes actually payable (to the extent actually subsequently so paid) upon or in connection with the closing of such Asset Sale (including any transfer taxes or taxes on gross receipts), (d) any taxes payable or reasonably estimated to be payable in connection with any transactions effected (or deemed effected) to make prepayments (e.g., taxes payable upon repatriation of funds from Subsidiaries), (e) actual, reasonable and documented out-of-pocket fees and expenses (including legal fees, fees to advisors and severance costs that are due (pursuant to a Contractual Obligation, or pursuant to a written employment policy applicable to terminated employees generally, of Company or any of its Restricted Subsidiaries in effect prior to such Asset Sale or pursuant to applicable law) and payable to employees of Company and its Restricted Subsidiaries that are terminated as a result thereof) paid to Persons other than Company and its Restricted Subsidiaries and their respective Affiliates in connection with such Asset Sale (including fees necessary to obtain any required consents of such Persons to such Asset Sale), and (f) a reasonable reserve for any indemnification payments (fixed or contingent) attributable to seller’s indemnities and representations and warranties to purchaser in respect of

such Asset Sale undertaken by Company or any of its Restricted Subsidiaries in connection with such Asset Sale; provided , however , that Net Asset Sale Proceeds shall be reduced in an amount equal to the amount of proceeds Restricted Subsidiaries of Company are legally bound or required, pursuant to agreements in effect on the Closing Date, or which were entered into after the Closing Date with respect to the financing or acquisition of a Project to use for prepayment thereunder (including any premium, penalty and interest due in connection with such prepayment).

     “ Net Insurance/Condemnation Proceeds ” means an amount equal to: (i) any Cash payments or proceeds received by Company or any of its Restricted Subsidiaries (a) under any casualty insurance policy in respect of a covered loss thereunder (other than payments for business interruption) occurring after the Closing Date or (b) as a result of the taking of any assets of Company or any of its Restricted Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or otherwise, or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, minus (ii) (a) any actual and reasonable costs incurred by Company or any of its Restricted Subsidiaries in connection with the adjustment or settlement of any claims of Company or such Subsidiary in respect thereof, and (b) any bona fide direct costs incurred in connection with any adjustment or settlement or any such sale as referred to in clause (i)(b) of this definition, including income taxes payable as a result of any gain recognized in connection therewith and any actual, reasonable and documented out-of-pocket fees and expenses (including legal fees, fees to advisors and severance costs that are due (pursuant to a Contractual Obligation, or pursuant to a written employment policy applicable to terminated employees generally, of Company or any of its Restricted Subsidiaries in effect prior to such event or pursuant to applicable law) and payable to employees of Company and its Restricted Subsidiaries that are terminated as a result thereof) paid to Persons other than Company and its Restricted Subsidiaries and their respective Affiliates in connection with such event; provided , that if any costs, fees or expenses that may be deducted under this clause (ii) have not been incurred or invoiced at the time of any determination of Net Insurance/Condemnation Proceeds, Company may deduct its good faith estimate thereof to the extent actually subsequently so paid; provided , however , that Net Insurance/Condemnation Proceeds shall be reduced in an amount equal to the amount of proceeds Restricted Subsidiaries of Company are legally bound or required, pursuant to agreements in effect on the Closing Date, or which were entered into after the Closing Date with respect to the financing or acquisition of a Project to use for prepayment thereunder (including any premium, penalty and interest due in connection with such prepayment).

     “ New Term Loans ” as defined in Section 2.4(f).

     “ Non-Consenting Lender ” as defined in Section 2.23.

     “ Non-US Agent ” means (a) each Agent that is a foreign person as defined in Treasury Regulations section 1.1441-1(c)(2) or (b) each Agent that is a wholly-owned domestic entity that is disregarded for United States federal tax purposes under Treasury Regulations section 301.7701-2(c)(2) as an entity separate from its owner and whose single owner is a foreign person within the meaning of Treasury Regulations section 1.1441-1(c)(2).

     “ Non-US Lender ” means (a) each Lender and each Issuing Bank that is a foreign person as defined in Treasury Regulations section 1.1441-1(c)(2) or (b) each Lender and each Issuing Bank that is a wholly-owned domestic entity that is disregarded for United States federal tax purposes under Treasury Regulations section 301.7701-2(c)(2) as an entity separate from its owner and whose single owner is a foreign person within the meaning of Treasury Regulations section 1.1441-1(c)(2).

     “ Nonpublic Information ” means information which has not been disseminated in a manner making it available to investors generally, within the meaning of Regulation D.

     “ Not Otherwise Applied ” means, with reference to any amount of Net Asset Sale Proceeds of any transaction or event or of Excess Cash Flow or any amount of a Holding Capital Contribution, that such amount (a) was not required to be applied to prepay the Loans pursuant to Section 2.14, and (b) was not previously applied in determining the permissibility of a transaction under the Credit Documents where such permissibility was (or may have been) contingent on receipt of such amount or utilization of such amount for a specified purpose. The Company shall promptly notify the Administrative Agent of any application of such amount as contemplated by (b) above.

     “ Note ” means a Term Loan Note, a Revolving Loan Note or a Swing Line Note.

     “ Notice ” means a Funding Notice, an Issuance Notice, or a Conversion/Continuation Notice.

     “ Obligations ” means all obligations of every nature of each Credit Party from time to time owed to the Agents (including former Agents), the Lenders or any of them, the Issuing Banks and Lender Counterparties, under any Credit Document or Permitted Hedge Agreement (including, without limitation, with respect to a Permitted Hedge Agreement, obligations owed thereunder to any person who was a Lender or an Affiliate of a Lender at the time such Permitted Hedge Agreement was entered into), whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Credit Party, would have accrued on any Obligation, whether or not a claim is allowed against such Credit Party for such interest in the related bankruptcy proceeding), reimbursement of amounts drawn under Letters of Credit, payments for early termination of Permitted Hedge Agreements, fees, expenses, indemnification or otherwise.

     “ Obligee Guarantor ” as defined in Section 7.7.

     “ Organizational Documents ” means (i) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its by-laws, as amended, (ii) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended, (iii) with respect to any general partnership, its partnership agreement, as amended, and (iv) with respect to any limited liability company, its articles of organization, as amended, and its operating agreement, as amended. In the event any term or condition of this Agreement or any other Credit Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to

any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official.

     “ Outstanding ARC Notes ” means the ARC Notes not tendered pursuant to the Tender Offer and Consent Solicitation and outstanding as of the Closing Date, the aggregate principal amount of which shall not exceed $192,000,000.

     “ Outstanding MSW Notes ” means, collectively, the Outstanding MSW I Notes and the Outstanding MSW II Notes.

     “ Outstanding MSW I Notes ” means the MSW Notes under the MSW I Indenture not tendered pursuant to the Tender Offer and Consent Solicitation and outstanding as of the Closing Date, the aggregate principal amount of which shall not exceed $196,000,000.

     “ Outstanding MSW II Notes ” means the MSW Notes under the MSW I Indenture not tendered pursuant to the Tender Offer and Consent Solicitation and outstanding as of the Closing Date, the aggregate principal amount of which shall not exceed $224,100,000.

     “ PBGC ” means the Pension Benefit Guaranty Corporation or any successor thereto.

     “ Pension Plan ” means any employee benefit plan, other than a Multiemployer Plan, which is subject to Title IV of ERISA, Section 412 of the Internal Revenue Code or Section 302 of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed to by, Company, any of its Subsidiaries or any of their respective ERISA Affiliates.

     “ Performance Guaranty ” means any performance guaranty agreement entered into by Company or any of its Subsidiaries under which Company or any such Subsidiary (i) guarantees the performance of a Subsidiary of Company under a principal lease, service, construction or operating agreement relating to a Project or (ii) is otherwise obligated to provide support in connection with Projects.

     “ Permitted Acquisition ” means any acquisition by Company or any of its Restricted Subsidiaries, whether by purchase, merger or otherwise, of all or substantially all of the assets of or a business line or unit or a division of, any Person, or all or a majority of the Capital Stock of any Person (or the acquisition of any additional Capital Stock of a Person which is a Subsidiary of Company (but not then a wholly-owned direct or indirect Subsidiary)); provided , that

     (i) immediately prior to, and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing or would result therefrom;

     (ii) all transactions in connection therewith shall be consummated, in all material respects, in accordance with all applicable laws and in conformity with all applicable Governmental Authorizations;

     (iii) to the extent a Guarantor Subsidiary is acquired, Company shall have taken, or caused to be taken, as of the date such Person becomes a Guarantor Subsidiary of Company, each of the actions set forth in Sections 5.10 and/or 5.11, as applicable,

unless, following a request by Company, such actions are not required by Administrative Agent;

     (iv) Company and its Restricted Subsidiaries shall be in compliance with the financial covenants set forth in Section 6.7 on a Pro Forma Basis after giving effect to such acquisition as of the last day of the Fiscal Quarter most recently ended;

     (v) Company shall have delivered to Administrative Agent (A) at least 10 Business Days prior to such proposed acquisition, a Compliance Certificate evidencing compliance with Section 6.7 as required under clause (iv) above, together with all relevant financial information with respect to such acquired assets, including, without limitation, the aggregate consideration for such acquisition and any other information required to demonstrate compliance with Section 6.7; and

     (vi) any Person or assets or division as acquired in accordance herewith shall be in the same business or lines of business in which Company and/or its Restricted Subsidiaries are engaged as of the Closing Date or in which Company and/or its Restricted Subsidiaries are expressly permitted hereunder to engage in.

     “ Permitted Hedge Agreement ” means each of the GS Hedge Agreement, the Calyon Hedge Agreements and any Hedge Agreement entered into with a Lender Counterparty.

     “ Permitted Liens ” means each of the Liens permitted pursuant to Section 6.2.

     “ Permitted Refinancing ” means, with respect to any Person, any refinancing, replacement, renewal or extension of any Indebtedness of such Person in whole or in part; provided that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so refinanced, replaced, renewed or extended except by an amount equal to any reasonable and customary transaction costs and fees and any premium on the Indebtedness required to be paid in connection with such refinancing, replacement, renewal or extension unless the increase in the principal amount of such Indebtedness is permitted under Section 6.1 ( provided that such limitation shall not apply with respect to Indebtedness that a client of a Project undertakes to service through the lease, service or operating agreement for such Project), (b) at the time thereof, no Event of Default shall have occurred and be continuing or would result therefrom, and (c) with respect to a Permitted Refinancing in respect of Indebtedness permitted pursuant to Section 6.1(i), 6.1(g) or 6.1(n), (i) such refinancing, replacement, renewal or extension has a final maturity date equal to or 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 refinanced, replaced, renewed or extended ( provided , that such limitation shall not apply with respect to Indebtedness that a client of a Project undertakes to service through the lease, service or operating agreement for such Project), (ii) such refinancing, replacement, renewal or extension shall be at the then prevailing market rates and the non-economic terms and conditions thereof are not less favorable to the obligor therein or to the Lenders than the Indebtedness being refinanced, replaced, renewed or extended, taken as a whole (considering the economic benefits and disadvantages to Company and its Restricted Subsidiaries from such refinancing, replacement, renewal or extension, as well as the economic

benefits and disadvantages to Company and its Restricted Subsidiaries of the Project (if any) to which such Indebtedness relates), (iii) to the extent such Indebtedness being refinanced, replaced, renewed or extended is subordinated in right of payment to the Obligations, such refinancing, replacement, renewal or extension is subordinated in right of payment to the Obligations on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being refinanced, replaced, renewed or extended, and (iv) such refinancing, replacement, renewal or extension is incurred by the Person who is an obligor under the Indebtedness being refinanced, replaced, renewed or extended and no other Person is an obligor thereunder.

     “ Permitted Subordinated Indebtedness ” means all unsecured Indebtedness of Company or any Guarantor Subsidiary that shall have been subordinated to all Indebtedness of Company or any Guarantor Subsidiary under this Agreement and otherwise containing terms and conditions set forth in Schedule 6.1(x)(1) with respect to Indebtedness of Company or any Guarantor Subsidiary to Affiliates thereof or in Schedule 6.1(x)(2) with respect to Indebtedness of Company or any Guarantor Subsidiary to non-Affiliates thereof.

     “ Permitted Subordinated Indebtedness Documentation ” means any documentation governing any Permitted Subordinated Indebtedness.

     “ Person ” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.

     “ Phase I Environmental Assessment ” means, with respect to any Facility, a report that (i) conforms to the ASTM Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process, E 1527-00, or, if reasonably requested by Administrative Agent, the USEPA’s standards for all appropriate inquiry, (ii) was conducted no more than six months prior to the date such report is required to be delivered hereunder, by one or more environmental consulting firms reasonably satisfactory to Administrative Agent, and (iii) shall expressly specify, or shall be accompanied by a letter stating, in form and substance reasonably satisfactory to Administrative Agent, that the report may be relied on by Administrative Agent and the Lenders or Administrative Agent shall have received a letter so stating in form and substance reasonably satisfactory to Administrative Agent.

     “ Platform ” as defined in Section 5.1(k).

     “ Pledge and Security Agreement ” means the Pledge and Security Agreement executed by Company and each Guarantor Subsidiary on the Closing Date substantially in the form of Exhibit I-1, as it may be amended, supplemented or otherwise modified from time to time.

     “ Post-Acquisition Period ” means, with respect to any Permitted Acquisition, the period beginning on the date such Permitted Acquisition is consummated and ending on the last day of the sixth full consecutive fiscal quarter immediately following the date on which such Permitted Acquisition is consummated.

     “ Prime Rate ” means the rate of interest quoted in The Wall Street Journal Money Rates Section as the Prime Rate (currently defined as the base rate on corporate loans posted by at least 75% of the nation’s thirty (30) largest banks), as in effect from time to time. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. Administrative Agent or any other Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

     “ Principal Office ” means, for each of Administrative Agent, Swing Line Lender and the Issuing Banks, such Person’s “Principal Office” as set forth on Appendix B, or such other office or office of a third party or sub-agent, as appropriate, as such Person may from time to time designate in writing to Company, Administrative Agent and each Lender.

     “ Pro Forma Adjustment ” means, for any Test Period that includes all or any part of a fiscal quarter included in any Post-Acquisition Period, with respect to the Acquired EBITDA of the applicable Acquired Entity or Business or the Consolidated Adjusted EBITDA of Company, the pro forma increase or decrease in such Acquired EBITDA or such Consolidated Adjusted EBITDA, as the case may be, projected by Company in good faith as a result of (a) actions taken during such Post-Acquisition Period for the purposes of realizing reasonably identifiable and factually supportable cost savings or (b) any additional costs incurred during such Post-Acquisition Period, in each case in connection with the combination of the operations of such Acquired Entity or Business with the operations of Company and the Restricted Subsidiaries; provided that, so long as such actions are taken during such Post-Acquisition Period or such costs are incurred during such Post-Acquisition Period, as applicable, the cost savings related to such actions or such additional costs, as applicable, it may be assumed, for purposes of projecting such pro forma increase or decrease to such Acquired EBITDA or such Consolidated Adjusted EBITDA, as the case may be, that such cost savings will be realizable during the entirety of such Test Period, or such additional costs, as applicable, will be incurred during the entirety of such Test Period; provided further , that any such pro forma increase or decrease to such Acquired EBITDA or such Consolidated Adjusted EBITDA, as the case may be, shall be without duplication for cost savings or additional costs already included in such Acquired EBITDA or such Consolidated Adjusted EBITDA, as the case may be, for such Test Period; provided further , that no Pro Forma Adjustment may be made unless a certificate executed by an Authorized Officer of Company is delivered to the Administrative Agent stating that such cost savings or costs are based on reasonable estimates, information and assumptions and that such Authorized Officer has no reason to believe that the projected cost savings or costs will not be achieved.

     “ Pro Forma Basis ” means, with respect to compliance with any test or covenant hereunder, that (A) to the extent applicable, the Pro Forma Adjustment shall have been made and (B) all Specified Transactions and the following transactions in connection therewith shall be deemed to have occurred as of the first day of the applicable period of measurement in such test or covenant: (a) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (i) in the case of a disposition of all or substantially all Capital Stock in any Subsidiary of Company or any division, product line, or facility used for operations of Company or any of its Subsidiaries, shall be excluded, and (ii) in the case of a Permitted Acquisition or Investment described in the definition of “Specified Transaction,” shall be included, (b) any retirement of Indebtedness, and (c) any Indebtedness

incurred or assumed by Company or any of the Restricted Subsidiaries in connection therewith and if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination; provided that, without limiting the application of the Pro Forma Adjustment pursuant to (A) above, the foregoing pro forma adjustments may be applied to any such test or covenant solely to the extent that such adjustments are consistent with the definition of Consolidated Adjusted EBITDA and give effect to events (including operation expense reductions) that are (i) (x) directly attributable to such transaction, (y) expected to have a continuing impact on Company or the Restricted Subsidiaries and (z) factually supportable or (ii) otherwise consistent with the definition of Pro Forma Adjustment.

     “ Project ” means any waste-to-energy facility, waste disposal, treatment, transfer, transportation or collection facility and facilities and operations related or ancillary thereto, electrical generation plant, cogeneration plant, water treatment facility, renewable energy facility or other facility for the generation of electricity or other forms of energy (including steam) or engaged in another line of business in which Company and its Subsidiaries are permitted to be engaged hereunder for which a Subsidiary or Subsidiaries of Company was, is or will be (as the case may be) an owner, operator, manager or builder, provided , however , that a Project shall cease to be a Project of Company and its Subsidiaries at such time that Company or any of its Subsidiaries ceases to have any existing or future rights or obligations (whether direct or indirect, contingent or matured) associated therewith.

     “ Projections ” as defined in Section 4.8.

     “ Pro Rata Share ” means (i) with respect to all payments, computations and other matters relating to the Term Loan of any Lender, the percentage obtained by dividing (a) the Term Loan Exposure of that Lender by (b) the aggregate Term Loan Exposure of all Lenders; (ii) with respect to all payments, computations and other matters relating to the Revolving Commitment or Revolving Loans of any Lender or any Revolving Letters of Credit issued or participations purchased therein by any Lender or any participations in any Swing Line Loans purchased by any Lender, the percentage obtained by dividing (a) the Revolving Exposure of that Lender by (b) the aggregate Revolving Exposure of all Lenders; (iii) with respect to all payments, computations and other matters relating to Additional Term Loans of a particular Series, the percentage obtained by dividing (a) the Additional Term Loan Exposure of that Lender with respect to that Series by (b) the aggregate Additional Term Loan Exposure of all Lenders with respect to that Series; (iv) with respect to all payments, computations and other matters relating to Funded Letters of Credit or Credit Linked Deposit or Funded Letter of Credit Participations of any Lender, the percentage obtained by dividing (a) the Funded Letter of Credit Exposure of that Lender by (b) the aggregate Funded Letter of Credit Exposure of all Lenders; and (v) with respect to all payments, computations and other matters relating to Additional Funded Letters of Credit or Additional Credit Linked Deposit or Additional Funded Letter of Credit Participations of any Lender of a particular Series, the percentage obtained by dividing (a) the Additional Funded Letter of Credit Exposure of that Lender with respect to that Series by (b) the aggregate Additional Funded Letter of Credit Exposure of all Lenders with respect to that Series. For all other purposes with respect to each Lender, “Pro Rata Share” means the percentage obtained by dividing (A) an amount equal to the sum of the Term Loan Exposure,

Additional Term Loan Exposure, the Revolving Exposure, Funded Letter of Credit Exposure and Additional Funded Letter of Credit Exposure of that Lender, by (B) an amount equal to the sum of the aggregate Term Loan Exposure, the aggregate Additional Term Loan Exposure, the aggregate Revolving Exposure, the aggregate Funded Letter of Credit Exposure and the aggregate Additional Funded Letter of Credit Exposure of all Lenders.

     “ Real Estate Asset ” means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by Company or any Guarantor Subsidiary in any real property.

     “ Reduced Leverage Ratio Amount ” means, with respect to the last day of any Fiscal Quarter, a correlative ratio set forth for such day in Section 6.7(a) except that 0.5 shall be deducted from the first term in such ratio.

     “ Refinancing ” as defined in the second recital.

     “ Refunded Swing Line Loans ” as defined in Section 2.3(b)(iv).

     “ Register ” as defined in Section 2.7(b).

     “ Regulation D ” means Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

     “ Reimbursement Date ” as defined in Section 2.4(e).

     “ Related Fund ” means, with respect to any Lender that is an investment fund, any other investment fund that invests in commercial loans and that is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

     “ Related Transactions ” means each of (i) Holding Equity Issuance and (ii) Convertible Debentures offering.

     “ Release ” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater.

     “ Relevant Return ” as defined in Section 2.4(i)(ii).

     “ Remedial Action ” means all actions taken to (i) clean up, remove, remediate, contain, treat, monitor, assess, evaluate or in any other way address Hazardous Materials in the environment; (ii) perform pre-remedial studies and investigations and post-remedial operation and maintenance activities; or (iii) any response actions authorized by 42 U.S.C. 9601 et seq. or applicable state law.

     “ Replacement Lender ” as defined in Section 2.23.

     “ Requisite Class Lenders ” means, at any time of determination, (i) for the Class of Lenders having Term Loan Exposure, Lenders holding more than 50% of the aggregate Term Loan Exposure of all Lenders; (ii) for the Class of Lenders having Revolving Exposure, Lenders holding more than 50% of the aggregate Revolving Exposure of all Lenders; (iii) for each Class of Lenders having Additional Term Loan Exposure, Lenders holding more than 50% of the aggregate Additional Term Loan Exposure of that Class; (iv) for the Class of Lenders having Funded Letter of Credit Exposure, Lenders holding more than 50% of the aggregate Funded Letter of Credit Exposure of all Lenders; and (v) for each Class of Lenders having Additional Funded Letter of Credit Exposure, Lenders holding more than 50% of the aggregate Additional Funded Letter of Credit Exposure of that Class.

     “ Requisite Lenders ” means one or more Lenders having or holding Term Loan Exposure, Revolving Exposure, Additional Term Loan Exposure, Funded Letter of Credit Exposure and Additional Funded Letter of Credit Exposure and representing more than 50% of the sum of (i) the aggregate Term Loan Exposure of all Lenders, (ii) the aggregate Revolving Exposure of all Lenders, (iii) the aggregate Additional Term Loan Exposure of all Lenders, (iv) the aggregate Funded Letter of Credit Exposure of all Lenders, and (v) the aggregate Additional Funded Letter of Credit Exposure of all Lenders.

     “ Restricted Junior Payment ” means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock of Company now or hereafter outstanding, except a dividend payable solely in shares of stock to the holders of that class; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock of Company now or hereafter outstanding; (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock of Company now or hereafter outstanding; (iv) management or similar fees payable to Holding or any of its Affiliates (other than Company or Guarantor Subsidiary) or (v) any payment or prepayment of principal of, premium, if any, or interest on, or any other amount in respect of any Permitted Subordinated Indebtedness of Company or any Restricted Subsidiary owed to Holding.

     “ Restricted Project Cash ” means, as of any date of determination, the sum of the amounts on deposit in each collateral account specified on Schedule 6.7(a) that are designated to pay debt service principal or construction costs, as debt service reserves or to redeem the Indebtedness secured thereby to the extent excess proceeds remain in the relevant account after completion of construction of the relevant Project and each other collateral account identified in writing to the Administrative Agent which is established after the Closing Date by a Restricted Subsidiary which is not a Guarantor Subsidiary as a debt service principal account, a debt service reserve fund or a reserve account (which such reserve account secures the Limited Recourse Debt that is the source of the amounts therein) so long as the proceeds in such reserve account are designated to pay construction costs or debt service during construction or, if excess proceeds remain in such account after completion of construction of the relevant Project, to redeem the Limited Recourse Debt secured thereby.

     “ Restricted Subsidiary ” means any Subsidiary of Company other than an Unrestricted Subsidiary.

     “ Revolving Commitment ” means the commitment of a Lender to make or otherwise fund any Revolving Loan pursuant to Section 2.2(a) and/or Section 2.24 and to acquire participations in Revolving Letters of Credit and Swing Line Loans hereunder and “ Revolving Commitments ” means such commitments of all Lenders in the aggregate. The amount of each Lender’s Revolving Commitment, if any, is set forth on Appendix A-2 or in the applicable Joinder Agreement pursuant to Section 2.24 or in the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Revolving Commitments as of the Closing Date is $300,000,000.

     “ Revolving Commitment Period ” means the period from the Closing Date to but excluding the Revolving Commitment Termination Date.

     “ Revolving Commitment Termination Date ” means the earliest to occur of (i) the sixth anniversary of the Closing Date, (ii) the date the Revolving Commitments are permanently reduced to zero pursuant to Section 2.13(b), and (iii) the date of the termination of the Revolving Commitments pursuant to Section 8.1.

     “ Revolving Exposure ” means, with respect to any Lender as of any date of determination, (i) prior to the termination of the Revolving Commitments, that Lender’s Revolving Commitment; and (ii) after the termination of the Revolving Commitments, the sum of (a) the aggregate outstanding principal amount of the Revolving Loans of that Lender, (b) in the case of any Issuing Bank, the aggregate Revolving Letter of Credit Usage in respect of all Revolving Letters of Credit issued by that Lender (net of any participations by Lenders in such Revolving Letters of Credit), (c) the aggregate amount of all participations by that Lender in any outstanding Revolving Letters of Credit or any unreimbursed drawing under any Revolving Letter of Credit, (d) in the case of Swing Line Lender, the aggregate outstanding principal amount of all Swing Line Loans (net of any participations therein by other Lenders), and (e) the aggregate amount of all participations therein by that Lender in any outstanding Swing Line Loans.

     “ Revolving Issuing Bank ” means with respect to any Revolving Letter of Credit, any Lender (including any Person who is a Lender as of the Closing Date but subsequently, after agreeing to become a Revolving Issuing Bank, ceases to be a Lender) which, at the request of Company, and with the consent of Administrative Agent (not to be unreasonably withheld), agrees in such Lender’s sole discretion to become a Revolving Issuing Bank for the purposes of issuing such Revolving Letter of Credit, together with its permitted successors and assigns in such capacity. As of the Closing Date, JPMC shall be a Revolving Issuing Bank.

     “ Revolving Lender ” means a Lender having a Revolving Commitment.

     “ Revolving Letter of Credit ” means a commercial or standby letter of credit issued or to be issued by an Issuing Bank pursuant to Section 2.4(a) of this Agreement.

     “ Revolving Letter of Credit Participant ” as defined in Section 2.4(g).

     “ Revolving Letter of Credit Sublimit ” means the lesser of (i) $200,000,000 and (ii) the aggregate unused amount of the Revolving Commitments then in effect.

     “ Revolving Letter of Credit Usage ” means, as at any date of determination, the sum of (i) the aggregate Stated Amount of all outstanding Revolving Letters of Credit, and (ii) the aggregate amount of all drawings under Revolving Letters of Credit honored by an Issuing Bank and not theretofore reimbursed by or on behalf of Company.

     “ Revolving Loan ” means a Loan made by a Lender to Company pursuant to Section 2.2(a) or any Additional Revolving Loan.

     “ Revolving Loan Note ” means a promissory note in the form of Exhibit B-2, as it may be amended, supplemented or otherwise modified from time to time.

     “ S&P ” means Standard & Poor’s Ratings Group, a division of The McGraw Hill Corporation.

     “ Secured Parties ” has the meaning assigned to that term in the Pledge and Security Agreement.

     “ Securities ” means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of Indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

     “ Securities Act ” means the Securities Act of 1933, as amended from time to time, and any successor statute.

     “ Series ” as defined in Section 2.24.

     “ Sold Entity or Business ” has the meaning set forth in the definition of the term “Consolidated Adjusted EBITDA”.

     “ Solvency Certificate ” means a Solvency Certificate of the chief financial officer of Holding substantially in the form of Exhibit G-2.

     “ Solvent ” means, with respect to any Credit Party, that as of the date of determination, both (i) (a) the sum of such Credit Party’s debt (including contingent liabilities) does not exceed the present fair saleable value of such Credit Party’s and its Subsidiaries, present assets; (b) such Credit Party’s capital is not unreasonably small in relation to its business as contemplated on the Closing Date and reflected in the Projections or with respect to any transaction contemplated or undertaken after the Closing Date; and (c) such Person has not incurred and does not intend to incur, or believe that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (ii) such Person is “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured

liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

     “ Specified Transaction ” means, with respect to any period, any Investment, incurrence or repayment of Indebtedness, Restricted Junior Payment, Subsidiary designation, Additional Term Loan, Additional Revolving Commitment or Additional Funded Letter of Credit Commitment that by the terms of this Agreement requires a test or covenant hereunder to be calculated on a “Pro Forma Basis.”

     “ Stated Amount ” of any Letter of Credit shall mean the maximum amount from time to time available to be drawn thereunder, determined without regard to whether any conditions to drawing could then be met.

     “ Subsidiary ” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; provided , in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of Company.

     “ Swing Line Lender ” means JPMC in its capacity as Swing Line Lender hereunder, together with its permitted successors and assigns in such capacity.

     “ Swing Line Loan ” means a Loan made by the Swing Line Lender to Company pursuant to Section 2.3.

     “ Swing Line Note ” means a promissory note in the form of Exhibit B-3, as it may be amended, supplemented or otherwise modified from time to time.

     “ Swing Line Sublimit ” means the lesser of (i) $25,000,000, and (ii) the aggregate unused amount of Revolving Commitments then in effect.

     “ Syndication Agent ” as defined in the preamble hereto.

     “ Tax ” means any present or future tax, levy, impost, duty, assessment, charge, fee, deduction or withholding of any nature and whatever called, by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or assessed; provided , “Tax on the overall net income” of a Person shall be construed as a reference to a tax imposed by the jurisdiction in which that Person is organized or in which that Person’s applicable principal office (and/or, in the case of a Lender, its lending office) is located or in which that Person (and/or, in the case of a Lender, its lending office) is deemed to be doing business on all or part of the net income, profits or gains (whether worldwide, or only insofar as such income, profits or gains are considered to

arise in or to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in the case of a Lender, its applicable lending office).

     “ Tender Offer and Consent Solicitation ” as defined in Section 3.1(d)(ii).

     “ Tender Offer and Consent Solicitation Statement ” means the Offer to Purchase and Consent Solicitation Statement, dated January 23, 2007, with respect to the ARC Notes and the MSW Notes.

     “ Term Loan ” means (i) a Term Loan made by a Lender to Company on the Closing Date pursuant to Section 2.1(a), (ii) a New Term Loan subsequently deemed made pursuant to Section 2.4(f) or (iii) an Additional Term Loan.

     “ Term Loan Commitment ” means the commitment of a Lender to make or otherwise fund a Term Loan and the Additional Term Loan Commitment of a Lender; “Term Loan Commitments” means such commitments of all Lenders in the aggregate. The amount of each Lender’s Term Loan Commitment, if any, is set forth on Appendix A-1 or in the applicable Joinder Agreement pursuant to Section 2.24 or the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Term Loan Commitments as of the Closing Date is $650,000,000.

     “ Term Loan Exposure ” means, with respect to any Lender, as of any date of determination, the outstanding principal amount of the Term Loans of such Lender; provided , at any time prior to the making of the Term Loans, the Term Loan Exposure of any Lender shall be equal to such Lender’s Term Loan Commitment.

     “ Term Loan Maturity Date ” means the earlier of (i) the seventh anniversary of the Closing Date, and (ii) the date that all the Term Loans, the New Term Loans and the Additional Term Loans of any Series shall become due and payable in full hereunder, whether by acceleration or otherwise.

     “ Term Loan Note ” means a promissory note in the form of Exhibit B-1, as it may be amended, supplemented or otherwise modified from time to time.

     “ Termination Date ” means the first date on which (i) each Commitment has expired or been terminated, (ii) the principal amount of all Loans and all other Obligations then due and payable have been paid in full, (iii) all Letters of Credit have been cancelled or have expired or have been cash collateralized or otherwise secured to the satisfaction of the Issuing Bank thereof and (iv) the Funded LC Issuing Banks have repurchased all outstanding Funded LC Participation Interests with the remaining Credit Linked Deposits and deposited such purchase price with the Administrative Agent to be repaid to the Funded Letter of Credit Participants according to their Pro Rata Shares of the Credit Linked Deposits.

     “ Terminated Lender ” as defined in Section 2.23.

     “ Test Period ” means, for any determination under this Agreement, the four consecutive Fiscal Quarters of the Company then last ended.

     “ Total Credit Linked Deposit ” means, at any time, the sum of all Credit Linked Deposits at such time.

     “ Total Funded Letter of Credit Commitment ” means the sum of the Funded Letter of Credit Commitments of all the Lenders.

     “ Total Utilization of Revolving Commitments ” means, as at any date of determination, the sum of (i) the aggregate principal amount of all outstanding Revolving Loans (other than Revolving Loans made for the purpose of repaying any Refunded Swing Line Loans or reimbursing an Issuing Bank for any amount drawn under any Revolving Letter of Credit, but not yet so applied), (ii) the aggregate principal amount of all outstanding Swing Line Loans, and (iii) the Revolving Letter of Credit Usage.

     “ Transaction Costs ” means the fees, costs and expenses payable by Company in connection with the Transactions within 180 days of the Closing Date.

     “ Transactions ” means the Refinancing, the Tender Offer and Consent Solicitation and the entering into the Credit Documents.

     “ Treasury Regulations ” means the final and temporary (but not proposed) income tax regulations promulgated under the Internal Revenue Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

     “ Type of Loan ” means (i) with respect to either Term Loans or Revolving Loans, a Base Rate Loan or a Eurodollar Rate Loan, and (ii) with respect to Swing Line Loans, a Base Rate Loan.

     “ UBS ” as defined in the preamble hereto.

     “ UCC ” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

     “ Unadjusted Eurodollar Rate Component ” means that component of the interest costs to Company in respect of a Eurodollar Rate Loan that is based upon the rate obtained pursuant to clause (i) of the definition of Adjusted Eurodollar Rate.

     “ Unpaid Drawing ” as defined in Section 2.4(e).

     “ Unrestricted Subsidiary ” means (i) each Subsidiary of Company listed on Schedule 4.26 and (ii) any Subsidiary of the Company designated by the board of directors of Holding as an Unrestricted Subsidiary pursuant to Section 5.14 subsequent to the date hereof, and in each case, any Subsidiary formed or acquired by an Unrestricted Subsidiary following such Unrestricted Subsidiary’s designation pursuant to clause (i) or (ii).

     “ Weighted Average Life to Maturity ” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (i) 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 thereof, 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 (ii) the then outstanding principal amount of such Indebtedness.

      1.2 Accounting Terms. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP. Financial statements and other information required to be delivered by Company to Lenders pursuant to Sections 5.1(a) and 5.1(b) shall be prepared in accordance with GAAP (subject, in the case of Section 5.1(a), to final year-end adjustments and the absence of footnotes) as in effect at the time of such preparation (and delivered together with the reconciliation statements provided for in Section 5.1(d), if applicable). Subject to the foregoing, calculations in connection with the definitions, covenants and other provisions used in Section 6.7 hereof shall utilize accounting principles and policies in conformity with those used to prepare the Historical Financial Statements. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Credit Document, and Company or Administrative Agent shall so request, Administrative Agent and Company 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 Requisite Lenders), provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and Company shall provide to Administrative Agent and Lenders reconciliation statements provided for in Section 5.1(d).

      1.3 Interpretation, etc. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. References herein to any Section, Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically provided. The use herein of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not no limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. The use herein of the word “issue” or “issuance” with respect to any Letter of Credit shall be deemed to include any amendment, extension or renewal thereof.

SECTION 2. LOANS AND LETTERS OF CREDIT

      2.1 Term Loans.

          (a) Loan Commitments . Subject to the terms and conditions hereof, each Lender severally agrees to make, on the Closing Date, a Term Loan to Company in an amount equal to such Lender’s Term Loan Commitment.

Company may make only one borrowing under the Term Loan Commitment which shall be on the Closing Date. Any amount borrowed under this Section 2.1 and subsequently repaid or prepaid may not be reborrowed. Subject to Sections 2.13(a) and 2.14, all amounts owed hereunder with respect to the Term Loans shall be paid in full no later than the Term Loan

Maturity Date. Each Lender’s Term Loan Commitment shall terminate immediately and without further action on the Closing Date after giving effect to the funding of such Lender’s Term Loan Commitment on such date.

          (b) Borrowing Mechanics for Term Loans .

          (i) Company shall deliver to Administrative Agent a fully executed Funding Notice no later than one day prior to the Closing Date. Promptly upon receipt by Administrative Agent of such Certificate, Administrative Agent shall notify each Lender of the proposed borrowing.

          (ii) Each Lender shall make its Term Loan available to Administrative Agent not later than 12:00 p.m. (New York City time) on the Closing Date, by wire transfer of same day funds in Dollars, at the Principal Office designated by Administrative Agent. Upon satisfaction or waiver of the conditions precedent specified herein, Administrative Agent shall make the proceeds of the Term Loans available to Company on the Closing Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Loans received by Administrative Agent from Lenders to be credited to the account of Company at the Principal Office designated by Administrative Agent or to such other account as may be designated in writing to Administrative Agent by Company.

      2.2 Revolving Loans.

          (a) Revolving Commitments . During the Revolving Commitment Period, subject to the terms and conditions hereof, each Lender severally agrees to make Revolving Loans to Company in an aggregate amount up to but not exceeding such Lender’s Revolving Commitment; provided , that after giving effect to the making of any Revolving Loans in no event shall the Total Utilization of Revolving Commitments exceed the Revolving Commitments then in effect. Amounts borrowed pursuant to this Section 2.2(a) may be repaid and reborrowed during the Revolving Commitment Period. Each Lender’s Revolving Commitment shall expire on the Revolving Commitment Termination Date and all Revolving Loans and all other amounts owed hereunder with respect to the Revolving Loans and the Revolving Commitments shall be paid in full no later than such date.

          (b) Borrowing Mechanics for Revolving Loans .

          (i) Except pursuant to Section 2.4(d), Revolving Loans that are Base Rate Loans shall be made in an aggregate minimum amount of $500,000 and integral multiples of $250,000 in excess of that amount, and Revolving Loans that are Eurodollar Rate Loans shall be in an aggregate minimum amount of $500,000 and integral multiples of $250,000 in excess of that amount.

          (ii) Whenever Company desires that Lenders make Revolving Loans, Company shall deliver to Administrative Agent a fully executed and delivered Funding Notice no later than 10:00 a.m. (New York City time) at least three Business Days in advance of the proposed Credit Date in the case of a Eurodollar Rate Loan, and at least one Business Day in advance of the proposed Credit Date in the case of a Revolving

Loan that is a Base Rate Loan. Except as otherwise provided herein, a Funding Notice for a Revolving Loan that is a Eurodollar Rate Loan shall be irrevocable on and after the related Interest Rate Determination Date, and Company shall be bound to make a borrowing in accordance therewith.

          (iii) Notice of receipt of each Funding Notice in respect of Revolving Loans, together with the amount of each Lender’s Pro Rata Share thereof, if any, together with the applicable interest rate, shall be provided by Administrative Agent to each applicable Lender by telefacsimile or electronic transmission means with reasonable promptness, but ( provided Administrative Agent shall have received such notice by 10:00 a.m. (New York City time)) not later than 2:00 p.m. (New York City time) on the same day as Administrative Agent’s receipt of such Notice from Company.

          (iv) Each Lender shall make the amount of its Revolving Loan available to Administrative Agent not later than 12:00 p.m. (New York City time) on the applicable Credit Date by wire transfer of same day funds in Dollars, at the Principal Office designated by Administrative Agent. Except as provided herein, upon satisfaction or waiver of the conditions precedent specified herein, Administrative Agent shall make the proceeds of such Revolving Loans available to Company on the applicable Credit Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Revolving Loans received by Administrative Agent from Lenders to be credited to the account of Company as may be designated in writing to Administrative Agent by Company.

      2.3 Swing Line Loans.

          (a) Swing Line Loans Commitments . During the Revolving Commitment Period, subject to the terms and conditions hereof, Swing Line Lender hereby agrees to make Swing Line Loans to Company in the aggregate amount up to but not exceeding the Swing Line Sublimit; provided , that after giving effect to the making of any Swing Line Loan, in no event shall the Total Utilization of Revolving Commitments exceed the Revolving Commitments then in effect. Amounts borrowed pursuant to this Section 2.3 may be repaid and reborrowed during the Revolving Commitment Period. Swing Line Lender’s Revolving Commitment shall expire on the Revolving Commitment Termination Date and all Swing Line Loans and all other amounts owed hereunder with respect to the Swing Line Loans and the Revolving Commitments shall be paid in full no later than such date.

          (b) Borrowing Mechanics for Swing Line Loans .

          (i) Swing Line Loans shall be made in an aggregate minimum amount of $500,000 and integral multiples of $250,000 in excess of that amount.

          (ii) Whenever Company desires that Swing Line Lender make a Swing Line Loan, Company shall deliver to Administrative Agent a Funding Notice no later than 12:00 p.m. (New York City time) on the proposed Credit Date.

          (iii) Swing Line Lender shall make the amount of its Swing Line Loan available to Administrative Agent not later than 2:00 p.m. (New York City time) on the

applicable Credit Date by wire transfer of same day funds in Dollars, at Administrative Agent’s Principal Office. Except as provided herein, upon satisfaction or waiver of the conditions precedent specified herein, Administrative Agent shall make the proceeds of such Swing Line Loans available to Company on the applicable Credit Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Swing Line Loans received by Administrative Agent from Swing Line Lender to be credited to the account of Company as may be designated in writing to Administrative Agent by Company.

          (iv) With respect to any Swing Line Loans which have not been voluntarily prepaid by Company pursuant to Section 2.13, Swing Line Lender may at any time in its sole and absolute discretion, deliver to Administrative Agent (with a copy to Company), no later than 11:00 a.m. (New York City time) at least one Business Day in advance of the proposed Credit Date, a notice (which shall be deemed to be a Funding Notice given by Company) requesting that each Lender holding a Revolving Commitment make Revolving Loans that are Base Rate Loans to Company on such Credit Date in an amount equal to the amount of such Swing Line Loans (the “ Refunded Swing Line Loans ”) outstanding on the date such notice is given which Swing Line Lender requests Lenders to prepay. Anything contained in this Agreement to the contrary notwithstanding, (1) the proceeds of such Revolving Loans made by the Lenders other than Swing Line Lender shall be immediately delivered by Administrative Agent to Swing Line Lender (and not to Company) and applied to repay a corresponding portion of the Refunded Swing Line Loans and (2) on the day such Revolving Loans are made, Swing Line Lender’s Pro Rata Share of the Refunded Swing Line Loans shall be deemed to be paid with the proceeds of a Revolving Loan made by Swing Line Lender to Company, and such portion of the Swing Line Loans deemed to be so paid shall no longer be outstanding as Swing Line Loans and shall no longer be due under the Swing Line Note of Swing Line Lender but shall instead constitute part of Swing Line Lender’s outstanding Revolving Loans to Company and shall be due under the Revolving Loan Note issued by Company to Swing Line Lender. Company hereby authorizes Administrative Agent and Swing Line Lender to charge Company’s accounts with Administrative Agent and Swing Line Lender (up to the amount available in each such account) in order to immediately pay Swing Line Lender the amount of the Refunded Swing Line Loans to the extent of the proceeds of such Revolving Loans made by Lenders, including the Revolving Loans deemed to be made by Swing Line Lender, are not sufficient to repay in full the Refunded Swing Line Loans. If any portion of any such amount paid (or deemed to be paid) to Swing Line Lender should be recovered by or on behalf of Company from Swing Line Lender in bankruptcy, by assignment for the benefit of creditors or otherwise, the loss of the amount so recovered shall be ratably shared among all Lenders in the manner contemplated by Section 2.17.

          (v) If for any reason Revolving Loans are not made pursuant to Section 2.3(b)(iv) in an amount sufficient to repay any amounts owed to Swing Line Lender in respect of any outstanding Swing Line Loans on or before the third Business Day after demand for payment thereof by Swing Line Lender, each Lender holding a Revolving Commitment shall be deemed to, and hereby agrees to, have purchased a participation in such outstanding Swing Line Loans, and in an amount equal to its Pro

Rata Share of the applicable unpaid amount together with accrued interest thereon. Upon one Business Day’s notice from Swing Line Lender, each Lender holding a Revolving Commitment shall deliver to Swing Line Lender an amount equal to its respective participation in the applicable unpaid amount in same day funds at the Principal Office of Swing Line Lender. In order to evidence such participation each Lender holding a Revolving Commitment agrees to enter into a participation agreement at the request of Swing Line Lender in form and substance reasonably satisfactory to Swing Line Lender. In the event any Lender holding a Revolving Commitment fails to make available to Swing Line Lender the amount of such Lender’s participation as provided in this paragraph, Swing Line Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon for three Business Days at the rate customarily used by Swing Line Lender for the correction of errors among banks and thereafter at the Base Rate, as applicable.

          (vi) Notwithstanding anything contained herein to the contrary, (1) each Lender’s obligation to make Revolving Loans for the purpose of repaying any Refunded Swing Line Loans pursuant to the second preceding paragraph and each Lender’s obligation to purchase a participation in any unpaid Swing Line Loans pursuant to the immediately preceding paragraph shall be absolute and unconditional and shall not be affected by any circumstance, including without limitation (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against Swing Line Lender, any Credit Party or any other Person for any reason whatsoever; (B) the occurrence or continuation of a Default or Event of Default; (C) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of any Credit Party; (D) any breach of this Agreement or any other Credit Document by any party thereto; or (E) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing; provided that such obligations of each Lender are subject to the condition that Swing Line Lender believed in good faith that all conditions under Section 3.2 to the making of the applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, were satisfied at the time such Refunded Swing Line Loans or unpaid Swing Line Loans were made, or the satisfaction of any such condition not satisfied had been waived by the Requisite Lenders prior to or at the time such Refunded Swing Line Loans or other unpaid Swing Line Loans were made; and (2) Swing Line Lender shall not be obligated to make any Swing Line Loans (A) if it has elected not to do so after the occurrence and during the continuation of a Default or Event of Default or (B) at a time when a Funding Default exists unless Swing Line Lender has entered into arrangements satisfactory to it and Company to eliminate Swing Line Lender’s risk with respect to the Defaulting Lender’s participation in such Swing Line Loan, including by cash collateralizing such Defaulting Lender’s Pro Rata Share of the outstanding Swing Line Loans.

      2.4 Issuance of Letters of Credit and Purchase of Participations Therein.

          (a) Revolving Letters of Credit . During the Revolving Commitment Period, subject to the terms and conditions hereof, each Revolving Issuing Bank agrees to issue Revolving Letters of Credit for the account of Company and for the benefit of Company or any of its Subsidiaries in the aggregate amount up to but not exceeding the Revolving Letter of

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Credit Sublimit; provided , (i) each Revolving Letter of Credit shall be denominated in Dollars; (ii) the Stated Amount of each Revolving Letter of Credit shall not be less than $5,000 or such lesser amount as is acceptable to the applicable Revolving Issuing Bank; (iii) after giving effect to such issuance, in no event shall the Total Utilization of Revolving Commitments exceed the Revolving Commitments then in effect; (iv) after giving effect to such issuance, in no event shall the Revolving Letter of Credit Usage exceed the Revolving Letter of Credit Sublimit then in effect; (v) in no event shall any standby Revolving Letter of Credit have an expiration date later than the earlier of (1) the date that is five (5) Business Days prior to the Revolving Commitment Termination Date and (2) the date which is one year from the date of issuance of such standby Revolving Letter of Credit; (vi) in no event shall any commercial Revolving Letter of Credit (x) have an expiration date later than the earlier of (1) the Revolving Commitment Termination Date and (2) the date which is 180 days from the date of issuance of such commercial Revolving Letter of Credit or (y) be issued if such commercial Revolving Letter of Credit is otherwise unacceptable to the applicable Revolving Issuing Bank in its reasonable discretion, and (vii) regarding Revolving Letters of Credit issued by JPMC, the same shall be subject to the terms of letter of credit documentation executed by Company in connection therewith (it being agreed and understood that in the event of any conflict or inconsistency between the provisions of such documentation and the provisions of this Agreement, the provisions of this Agreement shall govern and control in all respects). Subject to the foregoing, a Revolving Issuing Bank may agree that a standby Revolving Letter of Credit will automatically be extended for one or more successive periods each not to exceed one year each, unless such Revolving Issuing Bank elects not to extend for any such additional period; provided , a Revolving Issuing Bank shall not extend any such Revolving Letter of Credit if it has received written notice from Administrative Agent not to do so and that an Event of Default has occurred and is continuing at the time such Revolving Issuing Bank must elect to allow such extension; provided , further , in the event a Funding Default exists, a Revolving Issuing Bank shall not be required to issue any Revolving Letter of Credit unless Revolving Issuing Bank has entered into arrangements reasonably satisfactory to it and Company to eliminate such Revolving Issuing Bank’s risk with respect to the participation in Revolving Letters of Credit of the Defaulting Lender, including by cash collateralizing such Defaulting Lender’s Pro Rata Share of the Revolving Letter of Credit Usage.

          (b) Funded Letters of Credit . Subject to and upon the terms and conditions herein set forth, at any time and from time to time on and after the Closing Date and during the Funded Letter of Credit Commitment Period, Company may request that a Funded LC Issuing Bank issue or extend for the account of Company a commercial or standby letter of credit or letters of credit under the Funded Letter of Credit Commitment (each, a “ Funded Letter of Credit ”), provided that each Funded Letter of Credit shall be used by Company solely to support the obligations of Company and its Subsidiaries under Projects and other Contractual Obligations of Company and its Subsidiaries and for other general corporate uses of Company and its Subsidiaries. Notwithstanding the foregoing, (i) each Funded Letter of Credit shall be denominated in Dollars; (ii) the Stated Amount of each Funded Letter of Credit shall not be less than $5,000 or such lesser amount as is acceptable to such Funded LC Issuing Bank issuing the same; (iii) no Funded Letter of Credit shall be issued the Stated Amount of which, (x) when added to all other Funded Letters of Credit Outstanding at such time, would exceed the Total Funded Letter of Credit Commitment or the Total Credit Linked Deposit then in effect (with such Funded LC Issuing Bank being entitled to rely on a certificate from Company as to this item) or (y) when added to all other Funded Letters of Credit Outstanding at such time issued by

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such Funded LC Issuing Bank, would exceed the amount corresponding to such Funded LC Issuing Bank that is set forth in Schedule 1.1(c) (as each amount may be adjusted pursuant to the terms of such Funded Letter of Credit or Section 2.4(m)) or the amount of the Credit Linked Deposits held by such Funded LC Issuing Bank at such time; (iv) in no event shall any standby Funded Letter of Credit have an expiration date later than the earlier of (1) the date that is five (5) Business Days prior to the Funded Letter of Credit Termination Date and (2) (other than in respect of Detroit Letters Of Credit, which shall initially and upon each renewal thereof, each be available for a term of up to three years and thirty-five days but in no event later than July 1, 2009) the date which is one year from the date of issuance of such standby Funded Letter of Credit; (v) in no event shall any commercial Funded Letter of Credit (x) have an expiration date later than the earlier of (1) the Funded Letter of Credit Termination Date and (2) the date which is 180 days from the date of issuance of such commercial Funded Letter of Credit or (y) be issued if such commercial Funded Letter of Credit is otherwise unacceptable to such Funded LC Issuing Bank in its reasonable discretion; (vi) the Letters of Credit specified on Schedule 1.1(c)(1) shall in accordance with Section 2.4(l) be deemed Funded Letters of Credit issued by JPMC and the Letters of Credit specified on Schedule 1.1(c)(2) shall be deemed Funded Letters of Credit issued by UBS, each, in its capacity as Funded LC Issuing Bank hereunder; and (vii) regarding Funded Letters of Credit issued by JPMC, the same shall be subject to the terms of letter of credit documentation executed by Company in connection therewith (it being agreed and understood that in the event of any conflict or inconsistency between the provisions of such documentation and the provisions of this Agreement, the provisions of this Agreement shall govern and control in all respects). Subject to the foregoing, a Funded LC Issuing Bank may (but shall not be obligated to) agree that a standby Funded Letter of Credit will automatically be extended for one or more successive periods not to exceed one year each (other than in respect of Detroit Letters Of Credit), unless such Funded LC Issuing Bank elects not to extend for any such additional period; provided , a Funded LC Issuing Bank shall not extend any such Funded Letter of Credit if it has received written notice that an Event of Default has occurred and is continuing at the time such Funded LC Issuing Bank must elect to allow such extension. The Total Funded Letter of Credit Commitment shall terminate on the Funded Letter of Credit Termination Date.

          (c) Notice of Issuance . Whenever Company desires the issuance of a Letter of Credit, it shall deliver to Administrative Agent and to the relevant Issuing Bank, an Issuance Notice no later than 12:00 p.m. (New York City time) at least three Business Days (in the case of standby letters of credit) or five Business Days (in the case of commercial letters of credit), or in each case such shorter period as may be agreed to by an Issuing Bank in any particular instance, in advance of the proposed date of issuance. Upon satisfaction or waiver of the conditions set forth in Section 3.2, an Issuing Bank shall issue the requested Letter of Credit only in accordance with such Issuing Bank’s standard operating procedures. Upon the issuance of any Revolving Letter of Credit or amendment or modification to a Revolving Letter of Credit, the applicable Issuing Bank shall promptly notify each Revolving Lender of such issuance, which notice shall be accompanied by a copy of such Revolving Letter of Credit or amendment or modification to a Revolving Letter of Credit and the amount of such Revolving Lender’s respective participation in such Revolving Letter of Credit pursuant to Section 2.4(g). Upon the issuance of any Funded Letter of Credit or amendment or modification to a Funded Letter of Credit, the applicable Funded LC Issuing Bank shall promptly notify the Administrative Agent of such issuance and the Administrative Agent shall notify each Funded Letter of Credit Participant of such issuance, which notice shall be accompanied by a copy of such Funded Letter of Credit or amendment or

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modification to a Funded Letter of Credit and the amount of such Funded Letter of Credit Participant’s respective participation in such Funded Letter of Credit pursuant to Section 2.4(h).

          (d) Responsibility of Issuing Banks With Respect to Requests for Drawings and Payments . In determining whether to honor any drawing under any Letter of Credit by the beneficiary thereof, such Issuing Bank shall be responsible only to examine the documents delivered under such Letter of Credit with reasonable care so as to ascertain whether they appear on their face to be in accordance with the terms and conditions of such Letter of Credit. As between Company and such Issuing Bank, Company assumes all risks of the acts and omissions of, or misuse of the Letters of Credit issued by such Issuing Bank or by the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, but subject to the first sentence of this subsection (d), such Issuing Bank shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary of any such Letter of Credit to comply fully with any conditions required in order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of such Issuing Bank, including any Governmental Acts; none of the above shall affect or impair, or prevent the vesting of, any of such Issuing Bank’s rights or powers hereunder. Without limiting the foregoing and in furtherance thereof, any action taken or omitted by such Issuing Bank under or in connection with the Letters of Credit or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not give rise to any liability on the part of such Issuing Bank to Company. Notwithstanding anything to the contrary contained in this Section 2.4(d), Company shall retain any and all rights it may have against an Issuing Bank for any liability arising solely out of the gross negligence or willful misconduct of such Issuing Bank.

          (e) Reimbursement by Company of Amounts Drawn or Paid Under Letters of Credit . (i) In the event an Issuing Bank has determined to honor a drawing under a Letter of Credit (each such amount so paid until reimbursed, an “ Unpaid Drawing ”), it shall promptly notify Company and Administrative Agent, and Company may reimburse such Issuing Bank on or before the Business Day immediately following the date on which such notice of such drawing is provided (the “ Reimbursement Date ”) in an amount in Dollars and in same day funds equal to the amount of such honored drawing; provided , anything contained herein to the contrary notwithstanding, (i) unless Company shall have notified Administrative Agent and such Issuing Bank prior to 10:00 a.m. (New York City time) on or before the Business Day immediately following the date such drawing is honored that Company intends to reimburse such Issuing Bank for the amount of such honored drawing with funds other than the proceeds of Revolving Loans with respect to any Revolving Letter of Credit, Company shall be deemed, in

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the case of any Revolving Letters of Credit, to have given a timely Funding Notice to Administrative Agent requesting Lenders to make Revolving Loans that are Base Rate Loans on the Reimbursement Date in an amount in Dollars equal to the amount of such honored drawing, and (ii) provided no Event of Default under Sections 8.1(a), (f) or (g) shall have occurred and be continuing, Lenders shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans in the amount of such honored drawing, the proceeds of which shall be applied directly by Administrative Agent to reimburse such Revolving Issuing Bank for the amount of such honored drawing; and provided further , if for any reason proceeds of Revolving Loans are not received by such Revolving Issuing Bank on the Reimbursement Date in an amount equal to the amount of such honored drawing, Company shall reimburse such Revolving Issuing Bank, on demand, in an amount in same day funds equal to the excess of the amount of such honored drawing over the aggregate amount of such Revolving Loans, if any, which are so received. Nothing in this Section 2.4(e) shall be deemed to relieve any Lender from its obligation to make Revolving Loans on the terms and conditions set forth herein, and Company shall retain any and all rights it may have against any Lender resulting from the failure of such Lender to make such Revolving Loans under this Section 2.4(e).

          (f) Repayment by Funded Letter of Credit Participants of Amounts Drawn or Paid Under Funded Letters of Credit . In the event that a Funded LC Issuing Bank makes any payment under any Funded Letter of Credit and Company shall not have repaid such amount in full to such Funded LC Issuing Bank pursuant to Section 2.4(e), such Funded LC Issuing Bank shall notify Administrative Agent and Administrative Agent shall notify each affected Funded Letter of Credit Participant of such failure, and such Funded LC Issuing Bank shall apply from the applicable Credit Linked Deposits held by such Funded LC Issuing Bank toward the reimbursement of such payment each affected Funded Letter of Credit Participant’s Pro Rata Share of such unreimbursed payment from the applicable Credit Linked Deposit Account held by such Funded LC Issuing Bank. In the event a Funded LC Issuing Bank applies the applicable Credit Linked Deposits held by such Funded LC Issuing Bank to an unreimbursed disbursement under a Funded Letter of Credit pursuant to the preceding sentence, Company shall have the right, one time only following the Closing Date ( provided no Default or Event of Default shall have occurred and be continuing), within 5 Business Days of the Reimbursement Date, to pay over to Administrative Agent in reimbursement thereof an amount equal to the full amount of such unreimbursed disbursement, and such payment shall be applied by Administrative Agent in accordance with clause (ii) of the immediately following sentence. Promptly following receipt by Administrative Agent of any payment by Company in respect of any disbursement under a Funded Letter of Credit, Administrative Agent shall distribute such payment (i) to the Funded LC Issuing Bank that issued such Funded Letters of Credit or (ii) subject to the immediately preceding sentence, to the extent payments have been made from the applicable Credit Linked Deposits, to the applicable Credit Linked Deposit Account with respect to such Funded Letter of Credit to be added to the applicable Credit Linked Deposits held by such Funded LC Issuing Bank. Company acknowledges that each payment made pursuant to this paragraph in respect of any unreimbursed payment is required to be made for the benefit of the Funded LC Issuing Bank indicated in the immediately preceding sentence. Provided no Event of Default under Section 8.1(f) or (g) shall have occurred and be continuing, any payment made from any Credit Linked Deposit Account (except to the extent of a one-time repayment by Company within 5 Business Days of the Reimbursement Date as expressly permitted above) pursuant to this paragraph to reimburse a Funded LC Issuing Bank for any unreimbursed payment shall be deemed an

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extension of Term Loans made on such date by the relevant Funded Letter of Credit Participants ratably in accordance with their Pro Rata Share of the relevant Total Credit Linked Deposit, and the amount so funded shall permanently reduce such Total Credit Linked Deposit; any amount so funded pursuant to this paragraph shall, on and after the funding date thereof, be deemed to be Term Loans for all purposes hereunder and have the same terms as other Terms Loans hereunder (such deemed Term Loan, a “ New Term Loan ”). Any New Term Loans deemed made on the same day shall be designated a separate series of New Term Loans for all purposes of this Agreement. In the event that Company is required to reimburse a Funded LC Issuing Bank for any disbursement under a Funded Letter of Credit issued by such Funded LC Issuing Bank, for a period of 91 days following such reimbursement payment by Company, the Funded Letter of Credit Exposures or Additional Funded Letter of Credit Exposures, as applicable, shall be deemed to include (as if such Funded Letter of Credit were still outstanding) for purposes of determining availability for the issuance of any new Funded Letter of Credit during such period, the amount of such reimbursement payment until the end of such 91-day period.

          (g) Lenders’ Purchase of Participations in Revolving Letters of Credit . Immediately upon the issuance of each Revolving Letter of Credit, each Lender having a Revolving Commitment (each, a “ Revolving Letter of Credit Participant ”) shall be deemed to have purchased, and hereby agrees to irrevocably purchase, from the applicable Revolving Issuing Bank a participation in such Revolving Letter of Credit and any drawings honored thereunder in an amount equal to such Lender’s Pro Rata Share (with respect to the Revolving Commitments) of the maximum amount which is or at any time may become available to be drawn thereunder. In the event that Company shall fail for any reason to reimburse a Revolving Issuing Bank as provided in Section 2.4(e), such Revolving Issuing Bank shall promptly notify each Revolving Letter of Credit Participant of the unreimbursed amount of such honored drawing and of such Revolving Letter of Credit Participant’s respective participation therein based on such Revolving Letter of Credit Participant’s Pro Rata Share of the Revolving Commitments. Each Revolving Letter of Credit Participant shall make available to such Revolving Issuing Bank