Exhibit 10.1

Execution Version

 

JPMORGAN CHASE BANK, N.A.

383 Madison Avenue

New York, New York 10179

  

BANK OF AMERICA, N.A.

BofA SECURITIES, INC.

One Bryant Park

New York, NY 10036

BARCLAYS

745 Seventh Avenue

New York, NY 10019

  

CITIGROUP GLOBAL MARKETS INC.

388 Greenwich Street

New York, NY 10013

GOLDMAN SACHS BANK USA

200 West Street

New York, NY 10282

  

BNP PARIBAS

787 Seventh Avenue

New York, New York 10019

CREDIT SUISSE AG, NEW YORK BRANCH

Eleven Madison Avenue

New York, New York 10010

  

MIZUHO BANK, LTD.

1251 Avenue of the Americas

New York, NY 10020

MUFG UNION BANK, N.A.

1221 Avenue of the Americas

New York, New York 10020

  

WELLS FARGO BANK, NATIONAL ASSOCIATION

550 S Tryon St.

Charlotte, NC 28202

BANK OF MONTREAL, CHICAGO BRANCH

115 S LaSalle St.

Chicago, IL 60603

  

THE BANK OF NEW YORK MELLON

225 Liberty Street

New York, New York 10286

PERSONAL AND CONFIDENTIAL

May 26, 2020

Pacific Gas and Electric Company

77 Beale Street

P.O. Box 77000

San Francisco, California 94177

Attention: Margaret K. Becker

 

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Pacific Gas and Electric Company

RCF Commitment Letter

Ladies and Gentlemen:

Reference is hereby made to (i) the Chapter 11 bankruptcy cases, jointly
administered under lead case number 19-30088 (the “Chapter 11 Cases”), currently
pending before the United States Bankruptcy Court for the Northern District of
California (the “Bankruptcy Court”), in which PG&E Corporation, a California
corporation (or any domestic entity formed to hold all of the assets of PG&E
upon emergence from bankruptcy) (“PG&E”), and Pacific Gas and Electric Company,
a California corporation (the “Utility”) (together with any domestic entity
formed to hold all of the assets of the Utility upon emergence from bankruptcy,
the “Borrower” and together with PG&E, the “Debtors” or “you”), are debtors and
debtors in possession and (ii) the joint Chapter 11 plan of reorganization filed
by the Debtors and the shareholder proponents with the Bankruptcy Court on
May 22, 2020 [Docket No. 7521] (as may be further amended, modified or otherwise
changed in accordance with this Commitment Letter, the “Plan”) to implement the
terms and conditions of the reorganization of the Debtors as provided therein.
Capitalized terms used and not defined in this letter (together with Annexes A
and B hereto, this “Commitment Letter”) have the meanings assigned to them in
Annexes A and B hereto as the context may require. JPMorgan Chase Bank, N.A.
(“JPMorgan”), Bank of America, N.A. (“BANA”), BofA Securities, Inc. (or any of
its designated affiliates, “BofA”, and together with BANA, “Bank of America”),
Barclays Bank PLC (“Barclays”), Citigroup Global Markets Inc. on behalf of Citi
(as defined below), Goldman Sachs Bank USA (“GS Bank”) and those entities listed
in Schedule I attached hereto are referred to herein, collectively, as the
“Commitment Parties,” “we” or “us.”

You have informed us that, in connection with the consummation of the
transactions contemplated by the Plan, the Borrower intends to enter into a new
revolving credit facility in an aggregate committed amount of $3,500 million
(the “Facility”) having the terms and subject to the conditions set forth herein
and in the Annexes hereto.

The transactions described in the preceding paragraphs are collectively referred
to herein as the “Transactions.”

For purposes of this Commitment Letter, “Citi” shall mean Citigroup Global
Markets Inc., Citibank, N.A., Citicorp USA, Inc., Citicorp North America, Inc.
and/or any of their affiliates as any of them shall determine to be appropriate
to provide the services contemplated herein.

 

1.

Commitments; Titles and Roles.

(a) (i) Each of JPMorgan, BofA, Barclays, Citi and GS Bank is pleased to confirm
its agreement to act, and you hereby appoint each of JPMorgan, BofA, Barclays,
Citi and GS Bank to act, as a joint lead arranger and joint bookrunner (in such
capacities, the “Arrangers”) in connection with the Facility, (ii) each of BofA,
Barclays and GS Bank is pleased to confirm its agreement to act, and you hereby
appoint each of BofA, Barclays and GS Bank to act, as a co-syndication agent in
connection with the Facility and (iii) each of BNP Paribas (“BNP”), Credit
Suisse AG, New York Branch (“CS”), Mizuho Bank, Ltd (“Mizuho”), MUFG Union Bank,
N.A. (“MUFG”) and Wells Fargo Bank, National Association (“Wells Fargo”) is
pleased to confirm its agreement to act, and you hereby appoint each of BNP, CS,
Mizuho, MUFG and Wells Fargo to act, as a co-documentation agent in connection
with the Facility, (b) JPMorgan is pleased to confirm its agreement to act, and
you hereby appoint JPMorgan to act, as administrative agent (the “Administrative
Agent”) for the Facility; (c) Citibank, N.A. is pleased to confirm its agreement
to act, and you hereby appoint Citibank, N.A. to act, as co-administrative agent
(the “Co-Administrative Agent”) for the Facility and (d) each of JPMorgan, BANA,
Barclays, Citi, GS Bank and each of the other Commitment Parties is pleased to
commit, and hereby commits, on a several and not joint basis, to provide the
Borrower a portion of the aggregate principal amount of the Facility equal to
the principal amount set forth adjacent to its name on Schedule I hereto under
the heading “Commitment” and a portion of the L/C Commitment (as defined in the
Credit Agreement) equal to the principal amount set forth adjacent to its name
on Schedule I hereto under the heading “L/C Pro Rata Commitment” and agrees that
it shall execute and deliver a credit agreement in the form attached as Annex B
hereto (the “Credit Agreement”) with such modifications thereto as may be agreed
by the Borrower and each of the

 

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Commitment Parties (other than any modifications to Schedule 3.1, which
modifications only require the consent or approval of the Borrower and any
Commitment Party who has an Existing Letter of Credit being added, removed, or
otherwise modified from such Schedule 3.1), in each case, on the terms and
subject solely to the satisfaction or waiver of the conditions contained in
(i) Annex A of this Commitment Letter and (ii) Section 5.1 of the Credit
Agreement. It is further agreed that JPMorgan will appear on the top left (and
the Arrangers, other than JPMorgan, will appear in alphabetical order
immediately to the right thereof) of the cover page of any marketing materials
for the Facility and will hold the roles and responsibilities conventionally
understood to be associated with such name placement. Our fees for our
commitment and for services related to the Facility are set forth in one or more
separate fee letters (as amended, restated or otherwise modified from time to
time in accordance with the terms thereof, collectively, the “Fee Letter”)
entered into by you and the relevant Commitment Parties on or prior to the date
hereof. It is agreed that no other agents, co-agents, arrangers, co-arrangers or
bookrunners will be appointed and no other titles will be awarded in connection
with the Facility, and no compensation will be paid in order to obtain such
person’s commitment to participate in the Facility (other than the compensation
expressly contemplated by this Commitment Letter and the Fee Letter) in
connection with the Facility, unless the Arrangers and you shall so agree.

You agree that JPMorgan may perform its responsibilities hereunder through its
affiliate, J.P. Morgan Securities LLC.

 

2.

Conditions Precedent.

Notwithstanding anything to the contrary in this Commitment Letter, the Fee
Letter or any other agreement or other undertaking concerning the Transactions,
the commitments and agreements of the Commitment Parties hereunder with respect
to the Facility, including the obligation to execute and deliver the Credit
Agreement, are subject solely to the satisfaction or waiver of the conditions
set forth in (i) Annex A hereto and (ii) Section 5.1 of the Credit Agreement.

 

3.

Indemnification and Related Matters.

Subject to the approval of this Commitment Letter by the Bankruptcy Court, you
agree, jointly and severally, (a) to indemnify and hold harmless the Commitment
Parties and their respective affiliates and their respective officers,
directors, employees, advisors, and agents (each, an “indemnified person”) from
and against any and all losses, claims, damages, liabilities and related
expenses to which any such indemnified person may become subject arising out of
or in connection with this Commitment Letter, the Facility, the use of the
proceeds thereof or any related transaction or any actual or prospective claim,
litigation, investigation, arbitration or proceeding relating to any of the
foregoing (including in relation to enforcing the terms of this paragraph)
(each, a “Proceeding”), regardless of whether any indemnified person is a party
thereto, whether or not such Proceedings are brought by you, your equity
holders, affiliates, creditors or any other person, and to reimburse each
indemnified person upon demand for reasonable, documented and invoiced
out-of-pocket legal expenses of one primary firm of counsel, one regulatory
counsel and one special bankruptcy counsel for all such indemnified persons,
taken as a whole, and, if necessary, of a single firm of local counsel in each
appropriate jurisdiction (which may include a single firm of special counsel
acting in multiple jurisdictions) for all such indemnified persons, taken as a
whole (and, in the case of an actual or perceived conflict of interest where the
indemnified person affected by such conflict informs you of such conflict and
thereafter retains its own counsel, of another firm of counsel for such affected
indemnified person and, if necessary, of one regulatory counsel, one special
bankruptcy counsel and a single firm of local counsel in each appropriate
jurisdiction (which may include a single firm of special counsel acting in
multiple jurisdictions) for such affected indemnified person) or other
reasonable, documented and invoiced out-of-pocket expenses incurred in
connection with investigating or defending any of the foregoing; provided that
the foregoing indemnity will not, as to any

 

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indemnified person, apply to losses, claims, damages, liabilities or related
expenses to the extent they are found by a final, non-appealable judgment of a
court of competent jurisdiction to (i) have arisen or resulted from the willful
misconduct, bad faith or gross negligence of such indemnified person, (ii) have
resulted from a claim brought by you or any of your subsidiaries against such
indemnified person for material breach of such indemnified person’s obligations
hereunder or (iii) have not resulted from an act or omission by you or any of
your affiliates and have been brought by an indemnified person against any other
indemnified person (other than any claims against any Commitment Party in its
capacity or in fulfilling its role as an arranger or agent or any similar role
hereunder, except to the extent such acts or omissions are determined by a court
of competent jurisdiction by a final and non-appealable judgment to have
constituted the gross negligence, bad faith or willful misconduct of such
indemnified party in such capacity), and (b) to reimburse the Commitment Parties
and their respective affiliates on demand for all out-of-pocket expenses
(including due diligence expenses, syndication expenses, travel expenses, and
reasonable fees, charges and disbursements of counsel) incurred in connection
with the Facility and any related documentation (including this Commitment
Letter, the Fee Letter and the definitive documentation relating to the
Facility) or the administration, amendment, modification or waiver thereof. You
acknowledge that we may receive a benefit, including without limitation, a
discount, credit or other accommodation, from any of such counsel based on the
fees such counsel may receive on account of their relationship with us
including, without limitation, fees paid pursuant hereto. None of the
indemnified persons or you shall have any liability for any special, indirect,
consequential or punitive damages in connection with activities related to the
Facility or the Transactions; provided that nothing contained in this sentence
shall limit your indemnity and reimbursement obligations to the extent set forth
in this paragraph.

No indemnified person shall be liable for any damages arising from the use by
others of information or other materials obtained through electronic,
telecommunications or other information transmission systems, including one or
more internet sites or otherwise via the internet, and you agree, to the extent
permitted by applicable law, to not assert any claims against any indemnified
person with respect to the foregoing.

You shall not, without the prior written consent of an indemnified person (which
consent shall not be unreasonably withheld, conditioned or delayed), effect any
settlement of any pending or threatened Proceedings in respect of which
indemnity could have been sought hereunder by such indemnified person unless
such settlement (a) includes an unconditional release of such indemnified person
in form and substance reasonably satisfactory to such indemnified person from
all liability on claims that are the subject matter of such Proceedings and
(b) does not include any statement as to or any admission of fault, culpability
or a failure to act by or on behalf of any indemnified person or any injunctive
relief or other non-monetary remedy. You acknowledge that any failure to comply
with your obligations under the preceding sentence may cause irreparable harm to
the Commitment Parties and the other indemnified persons. You shall not be
liable for any settlement of any Proceeding if the amount of such settlement was
effected without your consent (which consent shall not be unreasonably withheld,
conditioned or delayed), but if settled with your written consent or if there is
a judgment by a court of competent jurisdiction in any such Proceeding, you
agree to indemnify and hold harmless each indemnified person from and against
any and all losses, claims, damages, penalties, liabilities and expenses by
reason of such settlement or judgment in accordance with the other provisions of
this paragraph.

You agree that the fees, expenses and indemnities payable hereunder and incurred
pursuant hereto, and as set forth in, this Commitment Letter and the Fee Letter
(a) are reasonable, (b) are actual and necessary costs and expenses of
preserving the Debtors’ estates and (c) subject to the approval of this
Commitment Letter and the Fee Letter by the Bankruptcy Court, constitute allowed
Administrative Claims against the Debtors on a joint and several basis under the
Plan.

 

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4.

Assignments.

This Commitment Letter may not be assigned by you without the prior written
consent of the Commitment Parties, nor by any Commitment Party without your
prior written consent (and any purported assignment without such consent will be
null and void), is intended to be solely for the benefit of the Commitment
Parties and the other parties hereto and, except as set forth in Section 3
above, is not intended to confer any benefits upon, or create any rights in
favor of, any person other than the parties hereto. Any Commitment Party may, in
consultation with the Borrower, assign its commitments and agreements hereunder,
in whole or in part, to any of its affiliates. Notwithstanding anything to the
contrary in this Section 4, GS Bank may assign its commitments hereunder to
Goldman Sachs Lending Partners LLC (or vice versa) at any time and such
assignment shall relieve GS Bank (or Goldman Sachs Lending Partners LLC, as
applicable) of its commitments.

 

5.

Confidentiality.

This Commitment Letter, the Fee Letter and the contents hereof and thereof are
confidential and may not be disclosed by you to any other person (other than any
Commitment Party) without our prior written consent (such consent not to be
unreasonably withheld, conditioned or delayed), except pursuant to a subpoena or
order issued by a court or administrative agency or by a judicial,
administrative or legislative body or committee (in which case you agree to
inform us promptly thereof to the extent practicable and not prohibited by
applicable law, rule or regulation); provided that we hereby consent to your
disclosure of (i) this Commitment Letter and the Fee Letter to your affiliates
and your and your affiliates’ respective officers, directors, employees, agents
and advisors (including legal counsel, independent auditors and other experts,
professional advisors or agents) who are involved in the consideration of the
Transactions (including in connection with providing accounting and tax advice
to the Borrower and its affiliates) on a confidential basis, (ii) this
Commitment Letter and the Fee Letter as required by applicable law or compulsory
legal process or, to the extent requested or required by governmental and/or
regulatory authorities (in which case you agree (except with respect to any
audit or examination conducted by bank examiners or any governmental bank
regulatory authority exercising examination or regulatory authority) to inform
us promptly thereof to the extent practicable and not prohibited by applicable
law, rule or regulation), (iii) following your acceptance of the provisions
hereof and return of an executed counterpart of this Commitment Letter to the
Commitment Parties as provided below, this Commitment Letter (but not the Fee
Letter other than the existence thereof) in any public record in which you are
required by law or regulation to file it (including the Bankruptcy Court to
obtain its approval) or with the Securities and Exchange Commission (“SEC”) and
other applicable regulatory authorities and stock exchanges to the extent
required to be in compliance therewith, (iv) the aggregate fee amounts contained
in the Fee Letter in financial statements or as part of projections, pro forma
information or a generic disclosure of aggregate sources and uses related to
aggregate compensation amounts related to the Transactions to the extent
customary or required in offering and marketing materials for the Facility or in
any public filing relating to the Transactions, in each case in a manner which
does not disclose the fees payable pursuant to the Fee Letter (except in the
aggregate), (v) this Commitment Letter and the information contained herein and
the Fee Letter in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Commitment Letter, Fee Letter or the
transactions contemplated thereby or enforcement thereof or hereof, (vi) the
information contained in Annexes A and B in any prospectus or other offering
memorandum or in any syndication or other marketing materials relating to the
Facility or the Transactions, (vii) any information set forth herein (including
in the Annexes hereto) to the extent that such information becomes publicly
available other than by reason of disclosure in violation of this agreement by
you or your affiliates or your or their respective officers, directors,
employees or advisors, and (viii) the existence of this Commitment Letter and
the information contained in Annexes A and B to any rating agency; provided that
such information is supplied to any such rating agency only on a confidential
basis. The obligations under this paragraph with respect to this Commitment
Letter (but not

 

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the Fee Letter) shall terminate automatically after the earlier of the date
(x) of any public filing permitted hereunder and (y) the Credit Agreement shall
have been executed and delivered by the parties thereto. To the extent not
earlier terminated, the provisions of this paragraph with respect to this
Commitment Letter (but not the Fee Letter) shall automatically terminate on the
second anniversary hereof.

Notwithstanding anything to the contrary herein, any disclosure of the Fee
Letter to obtain Bankruptcy Court approval shall only be made via a filing under
seal and, to the extent required, by providing an unredacted copy thereof
directly to the Bankruptcy Court, the Office of the United States Trustee and
advisors to the Official Committee of Unsecured Creditors, the Official
Committee of Tort Claimants and any other official committee established
pursuant to Section 1102 of the Bankruptcy Code on a confidential and
professionals’ eyes only basis; provided, however, that you shall be permitted
to publicly disclose the fees payable under the Fee Letter, solely on an
aggregate basis combined with all other fees payable by you in connection with
the financing for which you are seeking the approval of the Bankruptcy Court.

Each Commitment Party shall use all non-public information provided to it by or
on behalf of the Borrower or any of your subsidiaries or affiliates solely for
the purpose of providing the services which are the subject of this Commitment
Letter and otherwise in connection with the Transactions, and shall treat
confidentially all such information and shall not disclose such information to
any third party or circulate or refer publicly to such information; provided,
however, that nothing herein will prevent each Commitment Party from disclosing
any such information (a) pursuant to the order of any court or administrative
agency, or otherwise as required by applicable law or compulsory legal process
(in which case such person agrees to inform you promptly thereof to the extent
practicable and not prohibited by applicable law, rule or regulation), (b) upon
the request or demand of any regulatory authority having jurisdiction over such
person or any of its affiliates (in which case such person agrees (except with
respect to any audit or examination conducted by bank examiners or any
governmental bank regulatory authority exercising examination or regulatory
authority) to inform you promptly thereof to the extent practicable and not
prohibited by applicable law, rule or regulation), (c) to the extent that such
information is publicly available or becomes publicly available other than by
reason of disclosure by such person or any of such person’s affiliates or its or
their respective officers, directors, employees or advisors in violation of this
Commitment Letter, (d) to such person’s affiliates and to such person’s and such
affiliates’ respective officers, directors, partners, members, employees, legal
counsel, independent auditors, service providers and other experts or agents who
need to know such information in connection with the Transactions and who have
been informed of the confidential nature of such information and are instructed
to keep such information confidential in accordance with the provisions of this
Section 5, it being understood that the disclosing Commitment Party shall be
responsible for any violation of the provisions of this Section 5 by any such
person, (e) to potential and prospective lenders, participants and any direct or
indirect contractual counterparties to any swap or derivative transaction
relating to the Borrower or its obligations under the Facility, in each case,
who have agreed to keep such information confidential on terms not less
favorable than the provisions hereof in accordance with the standard syndication
processes of the Arrangers or customary market standards for the dissemination
of such type of information, (f) to Moody’s and S&P and other rating agencies;
provided that such information is limited to Annexes A and B and is supplied
only on a confidential basis, (g) to market data collectors, similar service
providers to the lending industry, and service providers to the Arrangers in
connection with the administration and management of the Facility; provided that
such information is limited to the existence of this Commitment Letter and
information of a type routinely provided regarding the closing date, size, type,
purpose of, and parties to, the Facility, (h) received by such person from a
source (other than you or any of your affiliates, advisors, members, directors,
employees, agents or other representatives) not known by such person to be
prohibited from disclosing such information to such person by a legal,
contractual or fiduciary obligation, (i) to the extent that such information was
already in the Commitment Parties’ possession on a non-confidential basis or is
independently developed by the Commitment Parties, (j) for

 

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purposes of establishing a “due diligence” defense or (k) in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating to
this Commitment Letter, the Fee Letter or the transactions contemplated hereby
or thereby or enforcement thereof or hereof. The obligations of the Commitment
Parties under this Section 5 shall remain in effect until the earlier of (i) two
years from the date hereof and (ii) the execution and delivery of the Credit
Agreement by such Commitment Party, at which time any confidentiality
undertaking in the Credit Agreement with respect to such Commitment Party shall
supersede the provisions in this paragraph to the extent covered thereby.

 

6.

Absence of Fiduciary Relationship; Affiliates; Etc.

As you know, each Commitment Party (together with its affiliates, the
“Commitment Entities”) is a full service financial institution engaged, either
directly or through its affiliates, in a broad array of activities, including
commercial and investment banking, financial advisory, market making and
trading, investment management (both public and private investing), investment
research, principal investment, financial planning, benefits counseling, risk
management, hedging, financing, brokerage and other financial and non-financial
activities and services globally. In the ordinary course of their various
business activities, the Commitment Entities and funds or other entities in
which the Commitment Entities invest or with which they co-invest, may at any
time purchase, sell, hold or vote long or short positions and investments in
securities, derivatives, loans, commodities, currencies, credit default swaps
and other financial instruments for their own account and for the accounts of
their customers. In addition, the Commitment Entities may at any time
communicate independent recommendations and/or publish or express independent
research views in respect of such assets, securities or instruments. Any of the
aforementioned activities may involve or relate to assets, securities and/or
instruments of the Borrower and/or other entities and persons which may (i) be
involved in transactions arising from or relating to the arrangement
contemplated by this Commitment Letter or (ii) have other relationships with the
Borrower or its affiliates. In addition, the Commitment Entities may provide
investment banking, commercial banking, underwriting and financial advisory
services to such other entities and persons. Although the Commitment Entities in
the course of such other activities and relationships may acquire information
about the transactions contemplated by this Commitment Letter or other entities
and persons which may be the subject of the financing contemplated by this
Commitment Letter, the Commitment Entities shall have no obligation to disclose
such information, or the fact that the Commitment Entities are in possession of
such information, to the Borrower or to use such information on the Borrower’s
behalf.

Consistent with the Commitment Entities’ policies to hold in confidence the
affairs of their customers, the Commitment Entities will not furnish
confidential information obtained from you by virtue of the transactions
contemplated by this Commitment Letter to any of their other customers and will
treat confidential information relating to the Borrower and its affiliates with
the same degree of care as they treat their own confidential information and in
accordance with Section 5 hereof. Furthermore, you acknowledge that the
Commitment Entities do not have an obligation to use in connection with the
Transactions, or to furnish to you, confidential information obtained or that
may be obtained by them from any other person.

Each of the Commitment Entities may have economic interests that conflict with
those of the Borrower, its equity holders and/or its affiliates. You agree that
each Commitment Entity will act under this Commitment Letter as an independent
contractor and that nothing in this Commitment Letter, the Fee Letter or
otherwise will be deemed to create an advisory, fiduciary or agency relationship
or fiduciary or other implied duty between the Commitment Entities and the
Borrower, its equity holders or its affiliates. You acknowledge and agree that
the transactions contemplated by this Commitment Letter and the Fee Letter
(including the exercise of rights and remedies hereunder and thereunder) are
arm’s-length commercial transactions between the Commitment Entities, on the one
hand, and the Borrower, on the other, and in connection therewith and with the
process leading thereto, (i) the Commitment Entities have

 

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not assumed (A) an advisory responsibility in favor of the Borrower, its equity
holders or its affiliates with respect to the financing transactions
contemplated hereby or (B) a fiduciary responsibility in favor of the Borrower,
its equity holders or its affiliates with respect to the transactions
contemplated hereby, or in each case, the exercise of rights or remedies with
respect thereto or the process leading thereto (irrespective of whether the
Commitment Entities have advised, are currently advising or will advise the
Borrower, its equity holders or its affiliates on other matters) or any other
obligation to the Borrower except the obligations expressly set forth in this
Commitment Letter and the Fee Letter and (ii) the Commitment Entities are acting
solely as principals and not as the agents or fiduciaries of the Borrower, its
management, equity holders, affiliates, or any other person. The Borrower
acknowledges and agrees that it has consulted its own legal, tax, investment,
accounting and financial advisors to the extent it deemed appropriate and that
it is responsible for making its own independent judgment with respect to such
transactions and the process leading thereto. To the fullest extent permitted by
law, the Borrower agrees that it will not bring any claim that the Commitment
Entities have breached any fiduciary or similar duty to the Borrower with
respect to the financing transactions contemplated hereby or owe a fiduciary or
similar duty to the Borrower, in connection with such financing transactions or
the process leading thereto. In addition, each Commitment Party may employ the
services of its affiliates in providing services and/or performing its or their
obligations hereunder and may, subject to Section 5, exchange with such
affiliates information concerning the Borrower and other companies that may be
the subject of this arrangement, and such affiliates will be entitled to the
benefits afforded to such Commitment Party hereunder (it being understood that
the persons to whom such disclosure is made will be informed of the confidential
nature of such information and instructed to keep such information
confidential). Notwithstanding the foregoing, nothing herein shall affect the
Borrower’s rights in respect of any separate engagement of any Commitment Party,
including as financial advisor, in connection with the Transactions or any other
matter.

You further acknowledge that certain of the Commitment Parties and/or their
affiliates currently are acting as lenders and as the administrative agent under
certain of the Borrower’s credit agreements, and your and your affiliates’
rights and obligations under any other agreement with any Commitment Party or
any of its affiliates that currently exist or hereafter may exist are, and shall
be, separate and distinct from the rights and obligations of the parties
pursuant to this Commitment Letter, and none of such rights and obligations
under such other agreements shall be affected by any Commitment Party’s
performance or lack of performance of services hereunder. You hereby agree that
each Commitment Party may render its services under this Commitment Letter
notwithstanding any actual or potential conflict of interest presented by the
foregoing, and you agree that you will not claim any conflict of interest
relating to the relationship among such Commitment Party and you and your
affiliates in connection with the commitments and services contemplated hereby,
on the one hand, and the exercise by any Commitment Party or any of its
affiliates of any of their rights and duties under any credit agreement or other
agreement on the other hand.

In addition, please note that the Commitment Entities do not provide accounting,
tax or legal advice.

 

7.

Miscellaneous.

Neither this Commitment Letter nor the Fee Letter may be amended or any term or
provision hereof or thereof waived or otherwise modified except by an instrument
in writing signed by each of the parties hereto or thereto, as applicable, and
any term or provision hereof or thereof may be amended or waived only by a
written agreement executed and delivered by all parties hereto or thereto.

The provisions set forth under Sections 3, 5 and 6 hereof (in each case other
than any provision therein that expressly terminates upon execution of the
Credit Agreement), this Section 7 and the provisions of the Fee Letter will
remain in full force and effect regardless of whether the Credit Agreement is
executed

 

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and delivered; provided that the foregoing provisions in this paragraph (other
than with respect to the provisions set forth in the Fee Letter and under
Sections 5, 6 and this Section 7, which will remain in full force and effect
notwithstanding the expiration or termination of this Commitment Letter or the
Commitment Parties’ respective commitments and agreements hereunder) shall be
superseded in each case, to the extent covered thereby, by the applicable
provisions contained in the Credit Agreement upon execution thereof and
thereafter shall have no further force and effect.

Each of the parties hereto (for itself and its affiliates) agrees that any suit
or proceeding arising in respect of this Commitment Letter or the Commitment
Parties’ commitments or agreements hereunder or the Fee Letter will be tried
exclusively in (i) subject to clause (ii)(B), until the Effective Date (as
defined in the Plan) of the Plan, the Bankruptcy Court and (ii)(A) thereafter or
(B) if the Bankruptcy Court refuses to accept, or the Bankruptcy Court or any
appellate court from the Bankruptcy Court determines in a final, non-appealable
order that the Bankruptcy Court does not have, jurisdiction, any Federal court
of the United States of America sitting in the Borough of Manhattan or, if that
court does not have subject matter jurisdiction, in any state court located in
the City and County of New York, and each party hereby submits to the
non-exclusive jurisdiction of, and to venue in, such court. Any right to trial
by jury with respect to any action or proceeding arising in connection with or
as a result of either the Commitment Parties’ commitments or agreements or any
matter referred to in this Commitment Letter or the Fee Letter is hereby waived
by the parties hereto (to the fullest extent permitted by applicable law). Each
of the parties hereto (for itself and its affiliates) agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Service of any process, summons, notice or document by
registered mail or overnight courier addressed to any of the parties hereto at
the addresses above shall be effective service of process against such party for
any suit, action or proceeding brought in any such court. This Commitment Letter
and the Fee Letter and any claim, controversy or dispute arising hereunder or
thereunder will be governed by and construed in accordance with the laws of the
State of New York without regard to principles of conflicts of laws.

 

8.

PATRIOT Act Notification.

The Commitment Parties hereby notify the Borrower that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Patriot Act”) and the requirements of 31 C.F.R. §
1010.230 (the “Beneficial Ownership Regulation”) the Commitment Parties may be
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow the Commitment Parties to identify the Borrower in
accordance with the Patriot Act and the Beneficial Ownership Regulation. This
notice is given in accordance with the requirements of the Patriot Act and is
effective for the Commitment Parties.

 

9.

Acceptance and Termination.

Each of the parties hereto agrees that this Commitment Letter is a binding and
enforceable agreement with respect to subject matter contained herein, including
an agreement to execute the Credit Agreement with such modifications thereto as
may be agreed by the Borrower and each of the Commitment Parties, it being
acknowledged and agreed that the obligation to execute and deliver the Credit
Agreement by the Commitment Parties is subject solely to the satisfaction or
waiver of the conditions set forth in Annex A hereto and Section 5.1 of the
Credit Agreement.

This Commitment Letter may be executed in any number of counterparts, each of
which when executed will be an original, and all of which, when taken together,
will constitute one agreement. The words

 

9

--------------------------------------------------------------------------------

“execution,” “signed,” “signature,” “delivery,” and words of like import in or
relating to this Commitment Letter and/or any document to be signed in
connection with this Commitment Letter and the transactions contemplated hereby
shall be deemed to include Electronic Signatures (as defined below), deliveries
or the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature,
physical delivery thereof or the use of a paper-based recordkeeping system, as
the case may be. As used herein, “Electronic Signatures” means any electronic
symbol or process attached to, or associated with, any contract or other record
and adopted by a person with the intent to sign, authenticate or accept such
contract or record. This Commitment Letter and the Fee Letter (and the Bank
Financing Engagement Letter dated as of October 4, 2019 among you and certain of
the Commitment Parties) are the only agreements that have been entered into
among the parties hereto with respect to the Facility and set forth the entire
understanding of the parties with respect thereto and supersede any prior
written or oral agreements among the parties hereto with respect to the
Facility.

The commitments and agreements of the Commitment Parties hereunder will
terminate upon the first to occur of:

 

(i)

the execution and delivery of the Credit Agreement by each of the parties
thereto;

 

(ii)

the Effective Date of the Plan without the Credit Agreement having been
executed;

 

(iii)

11:59 p.m., New York City time, on August 26, 2020;

 

(iv)

11:59 p.m., New York City time, on (I) June 30, 2020, if the Confirmation Order
has not been entered prior to such time or (II) the date the Backstop
Commitments (as defined in those certain Chapter 11 Plan Backstop Commitment
Letters, as in effect on the date hereof) are terminated prior to the receipt by
PG&E, including receipt in escrow, of at least $9,000,000,000 of gross proceeds
from the issuance of Qualifying Equity;

 

(v)

if at any time after the Escrow Closing Date (as defined below), any of the
Specified Debt (as defined in the Bridge Commitment Letters) is subject to a
mandatory redemption event or otherwise required to be redeemed, repurchased or
repaid in accordance with the terms thereof;

 

(vi)

prior to the occurrence of the Escrow Closing Date, the occurrence of the
following events:

 

  A.

(I) the Plan, the Confirmation Order, the Restructuring Support Agreement dated
as of January 22, 2020, the Noteholder RSA Approval Order or the Approval Order
is amended or modified or any condition contained therein waived, in a manner
that is adverse to the Commitment Parties in their capacities as such, in either
case without the consent of (i) the Administrative Agent and (ii) the Commitment
Parties holding greater than 50% of the commitments hereunder in respect of the
Facility (collectively clauses (i) and (ii), the “Required Commitment Parties”)
(such consent not to be unreasonably withheld, conditioned or delayed; provided
that modifications to the Plan solely as a result of an increase in roll-over,
“take-back” or reinstatement of any existing debt of the Debtors shall be deemed
not to be adverse to the Commitment Parties for the purposes of this clause (I))
or (II) any Plan Supplement or any Plan Document (each as defined in the Plan)
(other than any Plan Document or Plan Supplement that was filed prior to the
date hereof) that is adverse to the interests of the Commitment Parties in their
capacities as such is filed or finalized without the consent of the Required
Commitment Parties (such consent not to be unreasonably withheld, conditioned or
delayed);

 

10

--------------------------------------------------------------------------------

  B.

the Chapter 11 Case with respect to any Debtor is dismissed or converted to a
proceeding under chapter 7 of the Bankruptcy Code;

 

  C.

a trustee or examiner with enlarged powers (having powers beyond those set forth
in section 1106(a)(3) and 1106(a)(4) of the Bankruptcy Code) is appointed with
respect to any of the Debtors;

 

  D.

there is in effect an order of a governmental authority of competent
jurisdiction permanently restraining, enjoining or otherwise prohibiting the
consummation of any of the transactions contemplated by the Plan, or any law,
statute, rule, regulation or ordinance is adopted that makes consummation of the
transactions contemplated by the Plan illegal or otherwise prohibited;

 

  E.

the Debtors’ aggregate liability with respect to Fire Claims (as defined in the
Plan) is determined (whether (A) by the Bankruptcy Court (or the District Court
to which the reference has been partially withdrawn for estimation purposes),
(B) pursuant to an agreement between the Debtors and the holders of Fire Claims
that is subject to an order of the Bankruptcy Court approving such agreement, or
(C) through a combination thereof) to exceed $25.5 billion (the “Fire Claims
Cap”) (it being acknowledged that the aggregate liability, including any fees,
with respect to Fire Claims for the purposes of this clause (E), as set forth in
the Plan dated May 22, 2020 is agreed by the parties hereto not to exceed the
Fire Claims Cap);

 

  F.

since December 31, 2019, a Specified Material Adverse Effect (as defined in the
Credit Agreement) shall have occurred;

 

  G.

if at any time after the first day of the Confirmation Hearing (as defined in
the Plan), either (A) asserted Administrative Expense Claims (as defined in the
Plan) exceed $250 million (excluding all ordinary course Administrative Expense
Claims, Professional Fee Claims, Disallowed Administrative Expense Claims and
the portion of an Administrative Expense Claim that is covered by insurance (in
each case, as defined in the Plan) and including for the avoidance of doubt, any
such expenses or claims with respect to the Facility (collectively, the
“Excluded Administrative Expense Claims”)) or (B) the Debtors have reserved for
and/or paid more than $250 million in the aggregate for Administrative Expense
Claims, excluding the Excluded Administrative Expense Claims;

 

  H.

on or prior to June 30, 2020, the Borrower shall not have received from the
California Public Utilities Commission (the “CPUC”) all necessary approvals,
authorizations and final orders to implement the Plan, and to participate in the
Go-Forward Wildfire Fund (as defined in the Plan), including:

 

  1.

provisions satisfactory to the Required Commitment Parties (such approval not to
be unreasonably withheld, conditioned or delayed) pertaining to authorized
return on equity and regulated capital structure (it being agreed that the
provisions included in (x) the CPUC’s final decision dated December 19, 2019 in
the 2020 Cost of Capital Proceeding and (y) the Utility’s application dated
October 1, 2018, as modified by the application dated May 9, 2019, as updated by
the annual update filing dated November 27, 2019, in the Transmission Owner Rate
Case for 2019 are satisfactory to the Required Commitment Parties);

 

11

--------------------------------------------------------------------------------

  2.

a disposition, satisfactory to the Required Commitment Parties (such approval
not to be unreasonably withheld, conditioned or delayed), of proposals for
certain potential changes to PG&E’s corporate structure and authorizations for
the Utility to operate as a utility;

 

  3.

a resolution, satisfactory to the Required Commitment Parties (such approval not
to be unreasonably withheld, conditioned or delayed), of claims for monetary
fines or penalties under the California Public Utilities Code for conduct prior
to the Petition Date (it being agreed that (x) the settlement agreement dated
October 3, 2019, as modified by the decision dated January 17, 2020, with
respect to the Order Instituting Investigation to assess the Utility’s locate
and mark practices (Investigation 18-12-007), (y) the settlement agreements
approved by the CPUC on April 26, 2018 and December 5, 2019 in the Order
Instituting Investigation regarding violations of the ex parte communications
rules (Investigation 15-08-019) and (z) the Decision Different issued by
Commissioner Rechtschaffen on April 20, 2020 with respect to the investigation
into the Utility’s conduct with respect to the 2017 and 2018 Northern California
wildfires (Investigation 19-06-015) are satisfactory to the Required Commitment
Parties); and

 

  4.

approval (or exemption from approval) of the financing structure and the
securities to be issued under the Plan (it being agreed that the decisions
included within the Proposed Decision Approving the Reorganization Plan, dated
as of April 20, 2020, if finally approved on such terms, together with the terms
of the Purchase Option described in the Motion for Entry of an Order Approving
the Case Resolution Contingency Process and Granting Related Relief filed with
the Bankruptcy Court on March 20, 2020, are satisfactory);

 

  I.

if at any time the Bankruptcy Court determines that the Debtors are insolvent;

 

  J.

the Bankruptcy Court enters a final and non-appealable order to authorize, or
the Plan, any Plan Supplement or any Plan Document is amended, modified or
changed to include, in each case without the consent of the Required Commitment
Parties, a process for transferring the license and/or operating assets of the
Utility to the State of California or a third party (a “Transfer”) (it being
agreed that each of (i) the Transfer process included within the Proposed
Decision Approving the Reorganization Plan, dated as of April 20, 2020, if
finally approved on such terms, is satisfactory and (ii) the Transfer process
included within SB 350, if the amendment thereto introduced on May 14, 2020 is
passed into law, is satisfactory) or PG&E effects a Transfer other than pursuant
to the Plan; and

 

  K.

the CPUC has revoked or terminated the Utility’s Certificate of Public
Convenience and Necessity

(the earliest date in clauses (ii) through (vi) being the “Commitment
Termination Date”); provided that the termination of any commitment pursuant to
this sentence does not prejudice your rights and remedies in respect of any
breach of this Commitment Letter.

For the purposes of this Commitment Letter, the terms listed below shall have
the respective meanings set forth below:

“Approval Order” small mean that certain Order (I) Approving Terms of, and
Debtors’ Entry Into and Performance Under, Debt Financing Commitment Letters and
(II) Authorizing Incurrence, Payment and Allowance of Related Fees, Indemnities,
Costs and Expenses as Administrative Expense Claims [Docket No. 6323].

 

12

--------------------------------------------------------------------------------

“Bridge Commitment Letters” shall mean each of (i) that certain Commitment
Letter dated as of October 4, 2019 among Pacific Gas and Electric Company, as
the borrower, PG&E Corporation and the commitment parties from time to time
party thereto, as amended, modified or supplemented from time to time prior to
the date hereof and (ii) that certain Commitment Letter dated as of October 4,
2019 among PG&E Corporation, as the borrower, Pacific Gas and Electric Company
and the commitment parties from time to time party thereto, as amended, modified
or supplemented from time to time prior to the date hereof.

“Confirmation Order” shall mean an order confirming the Plan with respect to the
Debtors in form and substance reasonably satisfactory to the Required Commitment
Parties (including authorizing the Borrower’s entry into and performance under
this Commitment Letter and the Fee Letter) (it being understood and agreed that
the draft order confirming the Plan filed on May 26, 2020 is reasonably
satisfactory to the Required Commitment Parties).

“Escrow Closing Date” shall mean the date on which (i) the proceeds of the
Specified Debt (as defined in the Bridge Commitment Letters) shall have been
issued by the Borrower and PG&E (including, for the avoidance of doubt, in
escrow) and (ii) the commitments in respect to the facilities under the Bridge
Commitment Letters shall have been reduced to zero.

“Noteholder RSA Approval Order” shall mean that certain Order Pursuant to 11
U.S.C. §§ 363(b) and 105(a) and Fed. R. Bankr. P. 6004 and 9019 (I) Approving
and Authorizing the Debtors to Enter into Restructuring Support Agreement with
Consenting Noteholders and Shareholder Proponents, and (ii) Granting Related
Relief [Docket No. 5637].

Please confirm that the foregoing is in accordance with your understanding by
signing and returning to JPMorgan an executed copy of this Commitment Letter,
together with an executed copy of the Fee Letter, on or before 11:59 p.m., New
York City time, on May 26, 2020, whereupon this Commitment Letter and the Fee
Letter will become binding agreements between us. This offer will terminate on
such date if this Commitment Letter and the Fee Letter have not been signed and
returned as described in the preceding sentence. We look forward to working with
you on this transaction.

[Remainder of page intentionally left blank]

 

13

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Very truly yours, JPMORGAN CHASE BANK, N.A. By:  

/s/ Jeffrey Miller

  Name: Jeffrey Miller   Title:   Executive Director

 

[Signature Page to RCF Commitment Letter (Utility)]

--------------------------------------------------------------------------------

BofA SECURITIES, INC. By:  

/s/ Patrick Boultinghouse

  Name: Patrick Boultinghouse   Title:   Managing Director BANK OF AMERICA, N.A.
By:  

/s/ Dee Dee Farkas

  Name: Dee Dee Farkas   Title:   Director

 

[Signature Page to RCF Commitment Letter (Utility)]

--------------------------------------------------------------------------------

BARCLAYS BANK PLC By:  

/s/ Sydney G. Dennis

  Name: Sydney G. Dennis   Title:   Director

 

[Signature Page to RCF Commitment Letter (Utility)]

--------------------------------------------------------------------------------

CITIGROUP GLOBAL MARKETS INC. By:  

/s/ Rirchard Rivera

  Name: Richard Rivera   Title:   Authorized Signatory

 

[Signature Page to RCF Commitment Letter (Utility)]

--------------------------------------------------------------------------------

GOLDMAN SACHS BANK USA By:  

/s/ Jacob Elder

  Name: Jacob Elder   Title:   Authorized Signatory

 

[Signature Page to RCF Commitment Letter (Utility)]

--------------------------------------------------------------------------------

BNP PARIBAS By:  

/s/ Denis O’Meara

  Name: Denis O’Meara   Title:   Managing Director By:  

/s/ Francis Delaney

  Name: Francis Delaney   Title:   Managing Director

 

[Signature Page to RCF Commitment Letter (Utility)]

--------------------------------------------------------------------------------

CREDIT SUISSE AG, NEW YORK BRANCH By:  

/s/ Vipul Dhadda

  Name: Vipul Dhadda   Title:   Authorized Signatory By:  

/s/ Brady Bingham

  Name: Brady Bingham   Title:   Authorized Signatory

 

[Signature Page to RCF Commitment Letter (Utility)]

--------------------------------------------------------------------------------

MIZUHO BANK, LTD. By:  

/s/ Edward Sacks

  Name: Edward Sacks   Title:   Authorized Signatory

 

[Signature Page to RCF Commitment Letter (Utility)]

--------------------------------------------------------------------------------

MUFG UNION BANK, N.A. By:  

/s/ Nietzsche Rodricks

  Name: Nietzsche Rodricks   Title:   Managing Director

 

[Signature Page to RCF Commitment Letter (Utility)]

--------------------------------------------------------------------------------

WELLS FARGO BANK, NATIONAL ASSOCIATION By:  

/s/ Gregory R. Gredvig

  Name: Gregory R. Gredvig   Title:   Director

 

[Signature Page to RCF Commitment Letter (Utility)]

--------------------------------------------------------------------------------

BANK OF MONTREAL, CHICAGO BRANCH By:  

/s/ Darren Thomas

  Name: Darren Thomas   Title:   Vice President

 

[Signature Page to RCF Commitment Letter (Utility)]

--------------------------------------------------------------------------------

THE BANK OF NEW YORK MELLON By:  

/s/ Molly H. Ross

  Name: Molly H. Ross   Title:   Vice President

 

[Signature Page to RCF Commitment Letter (Utility)]

--------------------------------------------------------------------------------

ACCEPTED AND AGREED AS OF

THE DATE FIRST WRITTEN ABOVE:

PACIFIC GAS AND ELECTRIC COMPANY By:  

/s/ Margaret K. Becker

Name:   Margaret K. Becker Title:   Senior Director and Treasurer

 

[Signature Page to RCF Commitment Letter (Utility)]

--------------------------------------------------------------------------------

Schedule I

Commitments

 

Commitment Party

   Commitment      L/C Pro Rata Commitment  

JPMorgan Chase Bank, N.A.

   $ 424,307,692.30      $ 150,000,000.00  

Bank of America, N.A.

   $ 388,948,717.95      $ 150,000,000.00  

Barclays Bank PLC

   $ 388,948,717.95      $ 150,000,000.00  

Citibank, N.A.

   $ 367,500,000.00      $ 150,000,000.00  

Citicorp North America, Inc.

   $ 21,448,717.95        N/A  

Goldman Sachs Bank USA

   $ 388,948,717.95      $ 150,000,000.00  

BNP Paribas

   $ 268,728,205.13      $ 100,000,000.00  

Credit Suisse AG, New York Branch

   $ 268,728,205.13      $ 100,000,000.00  

Mizuho Bank, Ltd.

   $ 268,728,205.13      $ 100,000,000.00  

MUFG Union Bank, N.A.

   $ 268,728,205.13      $ 107,142,857.00  

Wells Fargo Bank, National Association

   $ 268,728,205.13      $ 100,000,000.00  

Bank of Montreal, Chicago Branch

   $ 123,756,410.25        N/A  

The Bank of New York Mellon

   $ 52,500,000.00        N/A     

 

 

    

 

 

     $ 3,500,000,000.00      $ 1,257,142,857.00     

 

 

    

 

 

 

--------------------------------------------------------------------------------

ANNEX A

Conditions1

The execution of the Credit Agreement by the Commitment Parties shall be subject
solely to the satisfaction or waiver by the Commitment Parties of

 

  (a)

the following conditions:

 

  (i)

the satisfaction or waiver by the Commitment Parties of the conditions set forth
in Section 5.1 of the Credit Agreement;

 

  (ii)

neither the Confirmation Order nor the Plan shall have been amended or modified
in a manner that is material and adverse to the Commitment Parties or any
condition material to the Commitment Parties contained therein waived, in either
case, without the consent of the Required Commitment Parties (such consent not
to be unreasonably withheld, conditioned or delayed); and

 

  (iii)

the transactions as described in the Plan to occur upon the Effective Date (as
defined in the Plan) of the Plan (including (i) the release of the proceeds of
the Specified Debt from any escrow arrangements, (ii) the issuance of at least
$9,000,000,000 of gross proceeds from the issuance of Qualifying Equity and
(iii) the payment in full of all obligations and the termination of all
commitments under the DIP Facilities (as defined in the Plan)) shall have been
consummated on, or substantially concurrently will be consummated with, the
Effective Date in accordance with their terms; and

 

  (b)

solely if the Escrow Closing Date has not occurred, the following conditions:

 

  (i)

the Borrower shall have received investment grade senior secured debt ratings of
(i) in the case of Moody’s, Baa3 or better and (ii) in the case of S&P, BBB- or
better and in each case, with a stable or better outlook;

 

  (ii)

total PG&E weighted average earning rate base (including electric generation,
electric transmission, electric distribution, gas distribution, gas transmission
and storage) for estimated 2021 as approved by the CPUC shall be no less than
95% of $48,000,000,000;

 

  (iii)

the Debtors’ aggregate liability with respect to Fire Claims shall be determined
(whether (i) by the Bankruptcy Court (or the District Court to which the
reference has been partially withdrawn for estimation purposes), (ii) pursuant
to an agreement between the Debtors and the holders of Fire Claims, or
(iii) through a combination thereof) not to exceed the Fire Claims Cap (it being
acknowledged that the aggregate liability, including any fees, with respect to
Fire Claims for the purposes of this clause (iii), as set forth in the Plan
dated May 22, 2020 is agreed by the parties hereto not to exceed the Fire Claims
Cap);

 

1

All capitalized terms used but not defined herein have the meanings given to
them in the Commitment Letter, as applicable, to which this Annex A is attached,
including Annex B thereto.

--------------------------------------------------------------------------------

  (iv)

PG&E shall have received, or on the Effective Date shall receive, at least
$9,000,000,000 of gross proceeds from the issuance of equity securities and/or
equity-linked securities and/or distribute rights to holders of PG&E common
stock to purchase shares of PG&E common stock, in each case, on terms acceptable
to the Required Commitment Parties in their sole discretion (collectively, the
“Qualifying Equity”). The economic benefit of the net operating loss
carryforwards and other tax attributes of PG&E, the Borrower or its subsidiaries
shall not have been transferred (pursuant to a tax monetization transaction or
otherwise) except on terms that could not reasonably be expected to negatively
impact the cash flows of PG&E, the Borrower or its subsidiaries as determined by
the Arrangers in their sole discretion;

 

  (v)

the Utility shall have received, or on the Effective Date shall receive, at
least $6,000,000,000 of gross proceeds from any issuance of debt securities or
other debt for borrowed money (including pursuant to any bank or other credit
facility and any securitization securities or facilities);

 

  (vi)

the Utility shall have both (i) elected, and received Bankruptcy Court approval,
to participate in the Go-Forward Wildfire Fund and (ii) satisfied the other
conditions to participation in the Go-Forward Wildfire Fund set forth in the
Wildfire Legislation (as defined in the Plan);

 

  (vii)

PG&E shall own directly 100% of the common stock of the Borrower; and

 

  (viii)

no order of a governmental authority of competent jurisdiction restraining,
enjoining or otherwise prohibiting the consummation or funding of any
transactions contemplated by the Plan shall have been received by the Debtors,
and no law, statute, rule, regulation or ordinance shall have been adopted that
makes the consummation or funding of any transactions contemplated by the Plan
illegal or otherwise prohibited.

--------------------------------------------------------------------------------

ANNEX B

[Attached]

--------------------------------------------------------------------------------

$3,500,000,000

CREDIT AGREEMENT

among

PACIFIC GAS AND ELECTRIC COMPANY,

as Borrower,

the Several Lenders from Time to Time Parties Hereto,

JPMORGAN CHASE BANK, N.A. and CITIBANK, N.A.,

as Co-Administrative Agents

CITIBANK, N.A.,

as Designated Agent,

BOFA SECURITIES, INC.,

BARCLAYS BANK PLC,

and GOLDMAN SACHS BANK USA,

as Co-Syndication Agents,

and

BNP PARIBAS,

CREDIT SUISSE AG, NEW YORK BRANCH,

MIZUHO BANK, LTD.,

MUFG UNION BANK, N.A.,

and WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agents

Dated as of [                    ], 2020

 

 

JPMORGAN CHASE BANK, N.A.,

BOFA SECURITIES, INC.,

BARCLAYS BANK PLC,

CITIBANK, N.A.

and GOLDMAN SACHS BANK USA

as Joint Lead Arrangers and

Joint Bookrunners

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

             Page   SECTION 1.  

DEFINITIONS

     1     1.1   Defined Terms      1     1.2   Other Definitional Provisions
and Interpretative Provisions      31     1.3   Divisions      32     1.4  
Interest Rates; LIBOR Notification      32   SECTION 2.  

AMOUNT AND TERMS OF COMMITMENTS

     33     2.1   Commitments      33     2.2   Procedure for Revolving Loan
Borrowing      33     2.3   Commitment Increases      33     2.4   [Reserved]   
  35     2.5   [Reserved]      35     2.6   Commitment Fees, Etc      35     2.7
  Termination or Reduction of Commitments; Extension of Termination Date      36
    2.8   Optional Prepayments      38     2.9   Conversion and Continuation
Options      38     2.10   Limitations on Eurodollar Tranches      39     2.11  
Interest Rates and Payment Dates      39     2.12   Computation of Interest and
Fees      40     2.13   Inability to Determine Interest Rate      40     2.14  
Pro Rata Treatment and Payments; Notes      42     2.15   Change of Law      43
    2.16   Taxes      45     2.17   Indemnity      49     2.18   Change of
Lending Office      49     2.19   Replacement of Lenders      49     2.20  
Defaulting Lenders      50     2.21   Illegality      51   SECTION 3.  

LETTERS OF CREDIT

     52     3.1   L/C Commitment      52     3.2   Procedure for Issuance of
Letters of Credit      53     3.3   Fees and Other Charges      54     3.4   L/C
Participations      55     3.5   Reimbursement Obligation of the Borrower     
56     3.6   Obligations Absolute      56     3.7   Letter of Credit Payments   
  57     3.8   Applications      57     3.9   Actions of Issuing Lenders      57
    3.10   Borrower’s Indemnification      58     3.11   Lenders’
Indemnification      59     3.12   Replacement and Resignation of an Issuing
Lender      59    

3.13

 

Existing Letters of Credit

     59  

 

i

--------------------------------------------------------------------------------

SECTION 4.  

REPRESENTATIONS AND WARRANTIES

     59     4.1   Financial Condition      59     4.2   No Change      60    
4.3   Existence; Compliance with Law      60     4.4   Power; Authorization;
Enforceable Obligations      60     4.5   No Legal Bar      61     4.6  
Litigation      61     4.7   No Default      61     4.8   Taxes      61     4.9
  Federal Regulations      61     4.10   ERISA      62     4.11   Investment
Company Act; Other Regulations      62     4.12   Use of Proceeds      62    
4.13   Environmental Matters      62     4.14   Regulatory Matters      63    
4.15   Sanctions; Anti-Corruption      63     4.16   Affected Financial
Institutions      63     4.17   Solvency      63     4.18   Disclosure      63  
  4.19   Status of Obligations      64     4.20   Ownership of Property      64
    4.21   Covered Entity      64   SECTION 5.  

CONDITIONS PRECEDENT

     64     5.1   Conditions to the Effective Date      64     5.2   Conditions
to Each Credit Event      66   SECTION 6.  

AFFIRMATIVE COVENANTS

     67     6.1   Financial Statements      67     6.2   Certificates; Other
Information      67     6.3   Payment of Taxes      68     6.4   Maintenance of
Existence; Compliance      68     6.5   Maintenance of Property; Insurance     
69     6.6   Inspection of Property; Books and Records; Discussions      69    
6.7   Notices      69     6.8   Maintenance of Licenses, etc      70     6.9  
Further Assurances      70     6.10   Use of Proceeds      70   SECTION 7.  

NEGATIVE COVENANTS

     70     7.1   Indebtedness      70     7.2   Consolidated Capitalization
Ratio      72     7.3   Liens      72  

 

ii

--------------------------------------------------------------------------------

 

7.4

 

Fundamental Changes

     72    

7.5

 

Sale and Lease Back Transactions

     73    

7.6

 

Swap Agreements

     73    

7.7

 

Amendments to FMB Indenture

     73   SECTION 8.  

EVENTS OF DEFAULT

     73   SECTION 9.  

THE AGENTS

     76     9.1   Appointment and Authority      76    

9.2

 

Delegation of Duties

     77    

9.3

 

Exculpatory Provisions

     77    

9.4

 

Reliance by Designated Agent

     78    

9.5

 

Notice of Default

     78    

9.6

 

Non-Reliance on Agents and Other Lenders

     79    

9.7

 

Indemnification

     79    

9.8

 

Agent in Its Individual Capacity

     79    

9.9

 

Successor Agents

     80    

9.10

 

Documentation Agents and Syndication Agents

     81    

9.11

 

Designated Agent May File Proofs of Claim

     81    

9.12

 

Certain ERISA Matters

     81   SECTION 10.  

MISCELLANEOUS

     83     10.1   Amendments and Waivers      83    

10.2

 

Notices

     85    

10.3

 

No Waiver; Cumulative Remedies

     86    

10.4

 

Survival of Representations and Warranties

     87    

10.5

 

Payment of Expenses and Taxes

     87    

10.6

 

Successors and Assigns; Participations and Assignments

     88    

10.7

 

Adjustments; Set off

     92    

10.8

 

Counterparts; Electronic Execution; Binding Effect

     93    

10.9

 

Severability

     94    

10.10

 

Integration

     94    

10.11

 

GOVERNING LAW

     94    

10.12

 

Submission To Jurisdiction; Waivers

     94    

10.13

 

Acknowledgments

     95    

10.14

 

Confidentiality

     95    

10.15

 

WAIVERS OF JURY TRIAL

     96    

10.16

 

USA Patriot Act; Beneficial Ownership Regulation

     96    

10.17

 

Judicial Reference

     96    

10.18

 

No Advisory or Fiduciary Responsibility

     96    

10.19

 

Acknowledgement Regarding Any Supported QFCs

     97    

10.20

 

Acknowledgement and Consent to Bail-In of Affected Financial Institutions

     98  

 

iii

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SCHEDULES:

 

1.1    Commitments 3.1    Existing Letters of Credit 7.5    Sale and Lease Back
Transactions

EXHIBITS:

 

A      Form of New Lender Supplement B      Form of Commitment Increase
Supplement C      Form of Compliance Certificate D      Form of Closing
Certificate E      Form of Assignment and Assumption F      [Reserved] G     
Forms of U.S. Tax Compliance Certificates H      Form of Note I      Form of
Solvency Certificate

 

iv

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This CREDIT AGREEMENT (this “Agreement”), dated as of [                    ],
2020, among PACIFIC GAS AND ELECTRIC COMPANY, a California corporation (the
“Borrower”), the several banks and other financial institutions or entities from
time to time parties to this Agreement (the “Lenders”) and JPMORGAN CHASE BANK,
N.A. and CITIBANK, N.A., as co-administrative agents (in such capacity, the
“Co-Administrative Agents”) and CITIBANK, N.A., as designated agent (in such
capacity, together with any permitted successor thereto, the “Designated
Agent”).

W I T N E S S E T H:

WHEREAS, on January 29, 2019, the Borrower and PG&E Corporation, a California
corporation and the holder of all of the issued and outstanding common stock of
the Borrower (“PCG”, and together with Borrower, each, a “Debtor” and
collectively, the “Debtors”) filed voluntary petitions for relief in the United
States Bankruptcy Court for the Northern District of California (the “Bankruptcy
Court”), and commenced their respective cases under chapter 11 of title 11 of
the United States Code;

WHEREAS, on May 22, 2020, the Debtors filed the Debtors’ and Shareholder
Proponents’ Joint Chapter 11 Plan of Reorganization Dated May 22, 2020 [Docket
No. 7521] (together with all exhibits, schedules, annexes, supplements, and
other attachments thereto, and as may be further amended, modified or otherwise
changed in accordance with this Agreement, the “Plan of Reorganization”);

WHEREAS, on [●], 2020, the Plan of Reorganization was confirmed by the
Bankruptcy Court and is to be consummated on the Effective Date; and

WHEREAS, in connection with the foregoing, the Borrower has requested that the
Lenders provide the commitments, loans and letters of credit set forth herein
and the Lenders are willing to make available to the Borrower such commitments,
loans and letters of credit upon the terms and subject to the conditions set
forth herein.

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

SECTION 1.    DEFINITIONS

1.1    Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.

“ABR”: for any day, a rate per annum equal to the greatest of (a) the Prime Rate
in effect on such day, (b) the NYFRB Rate in effect on such day plus 1⁄2 of 1%
and (c) the Eurodollar Rate for a one month Interest Period commencing on such
day (or if such day is not a Business Day, the immediately preceding Business
Day) plus 1%; provided that for the purpose of this definition, the Eurodollar
Rate for any day shall be based on the Eurodollar Screen Rate (or if the
Eurodollar Screen Rate is not available for such one month Interest Period, the
Interpolated Rate) at approximately 11:00 a.m. London time on such day. Any
change in the ABR due to a change in the Prime Rate, the NYFRB Rate or the
Eurodollar Rate shall be effective from and including the effective date of such
change in the Prime Rate, the NYFRB Rate or the Eurodollar Rate, respectively.
If ABR is being used as an alternate rate of interest pursuant to Section 2.13
(for

--------------------------------------------------------------------------------

the avoidance of doubt, only until any amendment has become effective pursuant
to Section 2.13(b)), then ABR shall be the greater of clauses (a) and (b) above
and shall be determined without reference to clause (c) above. If the ABR as
determined pursuant to the foregoing would be less than 1.00%, such rate shall
be deemed to be 1.00% for purposes of this Agreement.

“ABR Loans”: Loans the rate of interest applicable to which is based upon the
ABR.

“Affected Financial Institution”: (a) any EEA Financial Institution or (b) any
UK Financial Institution.

“Affiliate”: with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by
or is under common Control with the Person specified.

“Agent Parties”: as defined in Section 10.2(d)(ii).

“Agents”: the collective reference to the Syndication Agents, the Documentation
Agents, Co-Administrative Agents and the Designated Agent.

“Agreement”: as defined in the preamble hereto.

“Anti-Corruption Laws”: as defined in Section 4.15.

“Applicable Margin”: for any day, the applicable rate per annum set forth under
the relevant column heading below, based upon the Ratings then in effect:

 

Level

  

Rating
S&P/Moody’s/Fitch

   Applicable Margin
for
ABR Loans   Applicable Margin
for
Eurodollar Loans

1

  

Higher than

BBB+/Baa1/BBB+

   0.375%   1.375%

2

   BBB+/Baa1/BBB+    0.50%   1.50%

3

   BBB/Baa2/BBB    0.75%   1.75%

4

   BBB-/Baa3/BBB-    1.00%   2.00%

5

   BB+/Ba1/BB+    1.25%   2.25%

6

  

Lower than

BB+/Ba1/BB+

   1.50%   2.50%

Subject to the provisions of this paragraph regarding split ratings, changes in
the Applicable Margin shall become effective on the date on which S&P, Moody’s
and/or Fitch changes its relevant Rating. (a) If Ratings are issued by all three
rating agencies and the respective Ratings issued by two or more of the rating
agencies are in the same pricing level, that pricing level shall apply; (b) if
Ratings are issued by all three rating agencies and none of the respective
Ratings are in the same pricing level, the pricing level shall be determined
based on the middle Rating; (c) if only two Ratings are issued and they differ
by one level, then the pricing level for the higher of such Ratings shall apply;
(d) if only two Ratings are issued and they differ by more than one level, then
the pricing level that is one level lower than the pricing level of the higher
Rating

 

2

--------------------------------------------------------------------------------

shall apply; (e) if only one Rating is issued, the pricing level shall be
determined based on that Rating; and (f) if no such Ratings in clauses
(a) through (e) of this sentence are issued for the Borrower, but are generally
available for other companies, then the Applicable Margin shall be those set
forth above opposite pricing level 6.

“Application”: an application, in such form as the relevant Issuing Lender may
reasonably specify from time to time, requesting such Issuing Lender to issue a
Letter of Credit.

“Approved Fund”: with respect to any Lender, any Person (other than a natural
person) that is engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business that is administered or managed by (a) such Lender, (b) an Affiliate of
such Lender or (c) an entity or an Affiliate of any entity that administers or
manages such Lender.

“Arrangers”: the Joint Lead Arrangers and Joint Bookrunners identified on the
cover hereto.

“A/R Securitization Assets”: (i) any accounts receivable, notes receivable,
rights to future accounts receivable, notes receivable or residuals or other
similar rights to payments due or any other rights to payment or related assets
in respect of the provision of gas and electric service to consumers or
otherwise (whether then existing or arising in the future) of the Borrower or
any of its Subsidiaries and the proceeds thereof and (ii) all collateral
securing such receivable or asset, all contracts and contract rights, guarantees
or other obligations in respect of such receivable or asset, lockbox accounts
and records with respect to such receivables or asset and any other assets
customarily transferred (or in respect of which security interests are
customarily granted) together with receivables or assets in connection with a
securitization transaction involving such assets.

“A/R Securitization Subsidiary”: PG&E AR Facility, LLC and any other Subsidiary
formed and operating solely for the purpose of entering into A/R Securitization
Transactions and engaging in activities ancillary thereto.

“A/R Securitization Transaction”: any financing transaction or series of
financing transactions entered into by the Borrower or any Subsidiary of the
Borrower pursuant to which the Borrower may sell, convey or otherwise transfer
to any Person (including, without limitation, an A/R Securitization Subsidiary),
or may grant a security interest in any A/R Securitization Assets and that are
(other than to the extent of the Standard A/R Securitization Obligations)
non-recourse to the Borrower or any of its Subsidiaries (other than an A/R
Securitization Subsidiary).

“Assignee”: as defined in Section 10.6(b).

“Assignment and Assumption”: an Assignment and Assumption, substantially in the
form of Exhibit E.

“Auto-Extension Letter of Credit”: as defined in Section 3.2.

 

3

--------------------------------------------------------------------------------

“Available Commitment”: as to any Lender at any time, an amount equal to the
excess, if any, of (a) such Lender’s Commitment then in effect over (b) such
Lender’s Extensions of Credit then outstanding.

“Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the
applicable Resolution Authority in respect of any liability of an Affected
Financial Institution.

“Bail-In Legislation”: (a) with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law, regulation, rule or requirement for
such EEA Member Country from time to time which is described in the EU Bail-In
Legislation Schedule and (b) with respect to the United Kingdom, Part I of the
United Kingdom Banking Act 2009 (as amended from time to time) and any other
law, regulation or rule applicable in the United Kingdom relating to the
resolution of unsound or failing banks, investment firms or other financial
institutions or their affiliates (other than through liquidation, administration
or other insolvency proceedings).

“Bankruptcy Court”: as defined in the first recital paragraph.

“Benchmark Replacement”: the sum of: (a) the alternate benchmark rate (which may
be a SOFR-Based Rate) that has been selected by the Designated Agent and the
Borrower giving due consideration to (i) any selection or recommendation of a
replacement rate or the mechanism for determining such a rate by the Relevant
Governmental Body and/or (ii) any evolving or then-prevailing market convention
for determining a rate of interest as a replacement to the Eurodollar Base Rate
for U.S. dollar-denominated syndicated credit facilities and (b) the Benchmark
Replacement Adjustment; provided that, if the Benchmark Replacement as so
determined would be less than zero, the Benchmark Replacement will be deemed to
be zero for the purposes of this Agreement; provided further that any such
Benchmark Replacement shall be administratively feasible as determined by the
Designated Agent in its sole discretion.

“Benchmark Replacement Adjustment”: the spread adjustment, or method for
calculating or determining such spread adjustment (which may be a positive or
negative value or zero), that has been selected by the Designated Agent and the
Borrower giving due consideration to (i) any selection or recommendation of a
spread adjustment, or method for calculating or determining such spread
adjustment, for the replacement of the Eurodollar Base Rate with the applicable
Unadjusted Benchmark Replacement by the Relevant Governmental Body and/or
(ii) any evolving or then-prevailing market convention for determining a spread
adjustment, or method for calculating or determining such spread adjustment, for
the replacement of the Eurodollar Base Rate with the applicable Unadjusted
Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities
at such time (for the avoidance of doubt, such Benchmark Replacement Adjustment
shall not be in the form of a reduction to the Applicable Margin).

“Benchmark Replacement Conforming Changes”: with respect to any Benchmark
Replacement, any technical, administrative or operational changes (including
changes to the definition of “ABR,” the definition of “Interest Period,” timing
and frequency of determining rates and making payments of interest and other
administrative matters) that the Designated Agent decides in its reasonable
discretion may be appropriate to reflect the adoption and

 

4

--------------------------------------------------------------------------------

implementation of such Benchmark Replacement and to permit the administration
thereof by the Designated Agent in a manner substantially consistent with market
practice (or, if the Designated Agent decides that adoption of any portion of
such market practice is not administratively feasible or if the Designated Agent
determines that no market practice for the administration of the Benchmark
Replacement exists, in such other manner of administration as the Designated
Agent decides is reasonably necessary in connection with the administration of
this Agreement).

“Benchmark Replacement Date”: the earlier to occur of the following events with
respect to the Eurodollar Base Rate:

(1)    in the case of clause (1) or (2) of the definition of “Benchmark
Transition Event,” the later of (a) the date of the public statement or
publication of information referenced therein and (b) the date on which the
administrator of the Eurodollar Screen Rate permanently or indefinitely ceases
to provide the Eurodollar Screen Rate; and

(2)    in the case of clause (3) of the definition of “Benchmark Transition
Event,” the date of the public statement or publication of information
referenced therein.

“Benchmark Transition Event”: the occurrence of one or more of the following
events with respect to the Eurodollar Base Rate:

(1)    a public statement or publication of information by or on behalf of the
administrator of the Eurodollar Screen Rate announcing that such administrator
has ceased or will cease to provide the Eurodollar Screen Rate, permanently or
indefinitely, provided that, at the time of such statement or publication, there
is no successor administrator that will continue to provide the Eurodollar
Screen Rate;

(2)    a public statement or publication of information by the regulatory
supervisor for the administrator of the Eurodollar Screen Rate, the U.S. Federal
Reserve System, an insolvency official with jurisdiction over the administrator
for the Eurodollar Screen Rate, a resolution authority with jurisdiction over
the administrator for the Eurodollar Screen Rate or a court or an entity with
similar insolvency or resolution authority over the administrator for the
Eurodollar Screen Rate, in each case which states that the administrator of the
Eurodollar Screen Rate has ceased or will cease to provide the Eurodollar Screen
Rate permanently or indefinitely, provided that, at the time of such statement
or publication, there is no successor administrator that will continue to
provide the Eurodollar Screen Rate; and/or

(3)    a public statement or publication of information by the regulatory
supervisor for the administrator of the Eurodollar Screen Rate announcing that
the Eurodollar Screen Rate is no longer representative.

“Benchmark Transition Start Date”: (a) in the case of a Benchmark Transition
Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if
such Benchmark Transition Event is a public statement or publication of
information of a prospective event, the 90th day prior to the expected date of
such event as of such public statement or publication of information (or if the
expected date of such prospective event is fewer than 90 days after such
statement or publication, the date of such statement or publication) and (b) in
the case of an Early Opt-in

 

5

--------------------------------------------------------------------------------

Election, the date specified by the Designated Agent or the Required Lenders, as
applicable, by notice to the Borrower, the Designated Agent (in the case of such
notice by the Required Lenders) and the Lenders.

“Benchmark Unavailability Period”: if a Benchmark Transition Event and its
related Benchmark Replacement Date have occurred with respect to the Eurodollar
Base Rate and solely to the extent that the Eurodollar Base Rate has not been
replaced with a Benchmark Replacement, the period (a) beginning at the time that
such Benchmark Replacement Date has occurred if, at such time, no Benchmark
Replacement has replaced the Eurodollar Base Rate for all purposes hereunder in
accordance with Section 2.13 and (b) ending at the time that a Benchmark
Replacement has replaced the Eurodollar Base Rate for all purposes hereunder
pursuant to Section 2.13.

“Beneficial Owner”: as defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that in calculating the beneficial ownership of any particular
“person” (as that term is used in Sections 13(d) and 14(d) of the Exchange Act),
such “person” will be deemed to have beneficial ownership of all securities that
such “person” has the right to acquire by conversion or exercise of other
securities, whether such right is currently exercisable or is exercisable only
upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and
“Beneficially Owned” have correlative meanings.

“Beneficial Ownership Certification”: a certification regarding beneficial
ownership or control as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation”: 31 C.F.R. § 1010.230.

“Benefit Plan”: any of (a) an “employee benefit plan” (as defined in ERISA) that
is subject to Title I of ERISA, (b) a “plan” as defined in and subject to
Section 4975 of the Code or (c) any Person whose assets include (for purposes of
ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or
Section 4975 of the Code) the assets of any such “employee benefit plan” or
“plan”.

“Benefitted Lender”: as defined in Section 10.7(a).

“BHC Act Affiliate”: an “affiliate” (as such term is defined under, and
interpreted in accordance with, 12 U.S.C. 1841(k)).

“Board”: the Board of Governors of the Federal Reserve System of the United
States (or any successor).

“Bond Delivery Agreement”: (i) that certain Bond Delivery Agreement, dated as of
the Effective Date, between the Borrower and the Designated Agent and (ii) any
bond delivery agreement entered into in connection with the issuance of any new
First Mortgage Bonds to the Designated Agent pursuant to Sections 2.3(g) or
2.7(a).

“Bond Documents”: collectively, the FMB Indenture, the Supplemental Indenture,
the Senior Bond and the Bond Delivery Agreement.

 

6

--------------------------------------------------------------------------------

“Borrower”: as defined in the preamble hereto.

“Borrowing Date”: any Business Day specified by the Borrower as a date on which
the Borrower requests the Lenders to make Loans hereunder.

“Business Day”: a day other than a Saturday, Sunday or other day on which
commercial banks in New York City or San Francisco, California are authorized or
required by law to close, provided, that with respect to notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, such day is also a day for trading by and between banks in
Dollar deposits in the London interbank eurodollar market.

“Capital Lease Obligations”: as to any Person, the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
the balance sheet of such Person under GAAP and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with GAAP, subject to
Section 1.2(f).

“Capital Stock”: 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) and any
and all warrants, rights or options to purchase any of the foregoing.

“Cash Management Agreement”: any agreement to establish or maintain accounts or
provide cash management services, including treasury, depository, overdraft,
netting services, cash pooling arrangements, credit or debit card, purchasing
card, electronic funds transfer, automated clearing house, foreign exchange
facilities and other cash management arrangements.

“Change of Control”: the occurrence of one of the following:

(i)    (A) PCG shall at any time not be the Beneficial Owner of 100% of the
common stock of the Borrower or (B) PCG shall at any time not be the Beneficial
Owner of at least 70% of the voting Capital Stock of the Borrower; or

(ii)    any person or group (within the meaning of the Exchange Act and the
rules of the SEC thereunder as of the Effective Date) shall become the
Beneficial Owner of shares representing more than 35% of the voting power of the
Capital Stock of PCG; or

(iii)    at any point during any period of 24 consecutive months, commencing
after the Effective Date, individuals who at the beginning of such 24-month
period were directors of PCG, together with any directors whose election or
nomination for election to the board of directors of PCG (whether by the board
of directors of PCG or any shareholder of PCG) was approved by a majority of the
directors who either were directors of PCG at the beginning of such 24-month
period or whose election or nomination for election was so approved, cease to
constitute a majority of the board of directors of PCG (it being understood and
agreed that, for the avoidance of doubt, the change of directors of PCG
contemplated by the Plan of Reorganization shall not constitute a Change of
Control); or

 

7

--------------------------------------------------------------------------------

(iv)    there shall have been (A) a receiver appointed pursuant to an order from
the State of California or a revocation of Certificate of Public Convenience and
Necessity of the Borrower, in each case, in accordance with Order Instituting
Investigation on the Commission’s Own Motion to Consider the Ratemaking and
Other Implications of a Proposed Plan for Resolution of Voluntary Cases filed by
Pacific Gas and Electric Company Pursuant to Chapter 11 of the Bankruptcy Code,
in the United States Bankruptcy Court, Northern District of California, San
Francisco Division, In re Pacific Gas and Electric Corporation and Pacific Gas
and Electric Company, Case No. 19-30088 or otherwise or (B) a transfer of the
license and/or operating assets constituting more than 10% of the Net Tangible
Assets of the Borrower to the State of California, to any other Governmental
Authority or to a third party at the direction of State of California, the CPUC
or any similar Governmental Authority.

“Change of Law”: the occurrence, after the Effective Date, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation,
statute, treaty, policy, guideline or directive by any Governmental Authority,
(b) any change in any law, rule, regulation, statute, treaty, policy, guideline
or directive or in the application, interpretation, promulgation,
implementation, administration or enforcement thereof by any Governmental
Authority or (c) the making or issuance of any request, rule, guideline or
directive (whether or not having the force of law) by any Governmental
Authority; provided that notwithstanding anything herein to the contrary,
(x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change of Law”, regardless of the date enacted,
adopted or issued.

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

“Commitment”: as to any Lender, the obligation of such Lender, if any, to make
Revolving Loans and participate in Letters of Credit in an aggregate principal
and/or face amount not to exceed the amount set forth under the heading
“Commitment” opposite such Lender’s name on Schedule 1.1 or in the Assignment
and Assumption or New Lender Supplement pursuant to which such Lender became a
party hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original amount of the Total Commitments is $3,500,000,000.

“Commitment Fee Rate”: for any day, the rate per annum determined pursuant to
the grid set forth below, based upon the Ratings then in effect:

 

Level

  

Rating
S&P/Moody’s/Fitch

   Commitment Fee Rate

1

   Higher than BBB+/Baa1/BBB+    0.25%

2

   BBB+/Baa1/BBB+    0.275%

 

8

--------------------------------------------------------------------------------

Level

  

Rating
S&P/Moody’s/Fitch

   Commitment Fee Rate

3

   BBB/Baa2/BBB    0.325%

4

   BBB-/Baa3/BBB-    0.375%

5

   BB+/Ba1/BB+    0.425%

6

   Lower than BB+/Ba1/BB+    0.50%

Subject to the provisions of this paragraph regarding split ratings, changes in
the Commitment Fee Rate shall become effective on the date on which S&P, Moody’s
and/or Fitch changes its relevant Rating. (a) If Ratings are issued by all three
rating agencies and the respective Ratings issued by two or more of the rating
agencies are in the same pricing level, that pricing level shall apply; (b) if
Ratings are issued by all three rating agencies and none of the respective
Ratings are in the same pricing level, the Commitment Fee Rate shall be
determined based on the middle Rating; (c) if only two Ratings are issued and
they differ by one level, then the Commitment Fee Rate for the higher of such
Ratings shall apply; (d) if only two Ratings are issued and they differ by more
than one level, then the Commitment Fee Rate that is one level lower than the
Commitment Fee Rate of the higher Rating shall apply; (e) if only one Rating is
issued, the Commitment Fee Rate shall be determined based on that Rating; and
(f) if no such Ratings in clauses (a) through (e) of this sentence are issued
for the Borrower, but are generally available for other companies, then the
Commitment Fee Rate shall be that set forth above opposite pricing level 6.

“Commitment Increase Notice”: as defined in Section 2.3(a).

“Commitment Letter”: that certain RCF Commitment Letter dated as of May 26, 2020
among Pacific Gas and Electric Company, as the borrower, PG&E Corporation and
the commitment parties from time to time party thereto, as amended, modified or
supplemented from time to time prior to the date hereof.

“Commitment Period”: the period from and including the Effective Date to the
Termination Date.

“Commonly Controlled Entity”: an entity, whether or not incorporated, that is
under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group that includes the Borrower and that is treated as a
single employer under Section 414 of the Code.

“Communications”: as defined in Section 10.2(d)(ii).

“Compliance Certificate”: a certificate duly executed by a Responsible Officer
substantially in the form of Exhibit C.

 

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“Compounded SOFR”: the compounded average of SOFRs for the applicable
Corresponding Tenor, with the rate, or methodology for this rate, and
conventions for this rate (which may include compounding in arrears with a
lookback and/or suspension period as a mechanism to determine the interest
amount payable prior to the end of each Interest Period) being established by
the Designated Agent in accordance with:

(1)    the rate, or methodology for this rate, and conventions for this rate
selected or recommended by the Relevant Governmental Body for determining
compounded SOFR; provided that:

(2)    if, and to the extent that, the Designated Agent determines that
Compounded SOFR cannot be determined in accordance with clause (1) above, then
the rate, or methodology for this rate, and conventions for this rate that the
Designated Agent determines in its reasonable discretion are substantially
consistent with any evolving or then-prevailing market convention for
determining compounded SOFR for U.S. dollar-denominated syndicated credit
facilities at such time;

provided, further, that if the Designated Agent decides that any such rate,
methodology or convention determined in accordance with clause (1) or clause
(2) is not administratively feasible for the Designated Agent, then Compounded
SOFR will be deemed unable to be determined for purposes of the definition of
“Benchmark Replacement.”

“Conduit Lender”: any special purpose corporation organized and administered by
any Lender for the purpose of making Loans otherwise required to be made by such
Lender and designated by such Lender in a written instrument; provided, that the
designation by any Lender of a Conduit Lender shall not relieve the designating
Lender of any of its obligations to fund a Loan under this Agreement if, for any
reason, its Conduit Lender fails to fund any such Loan, and the designating
Lender (and not the Conduit Lender) shall have the sole right and responsibility
to deliver all consents and waivers required or requested under this Agreement
with respect to its Conduit Lender, and provided, further, that no Conduit
Lender shall (a) be entitled to receive any greater amount pursuant to Sections
2.15, 2.16, 2.17 or 10.5 than the designating Lender would have been entitled to
receive in respect of the extensions of credit made by such Conduit Lender or
(b) be deemed to have any Commitment.

“Connection Income Taxes”: Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consolidated Capitalization”: on any date of determination, the sum of
(a) Consolidated Total Debt on such date, plus without duplication, (b) (i) the
amounts set forth opposite the captions “common shareholders’ equity” (or any
similar caption) and “preferred stock” (or any similar caption) on the
consolidated balance sheet, prepared in accordance with GAAP, of the Borrower
and its Subsidiaries as of such date, and (ii) the outstanding principal amount
of any junior subordinated deferrable interest debentures or other similar
securities issued by the Borrower or any of its Subsidiaries after the Effective
Date.

“Consolidated Capitalization Ratio”: on any date of determination, the ratio of
(a) Consolidated Total Debt to (b) Consolidated Capitalization.

“Consolidated Total Debt”: at any date, the aggregate principal amount of all
obligations of the Borrower and its Significant Subsidiaries at such date that
in accordance with GAAP would be classified as debt on a consolidated balance
sheet of the Borrower, and without duplication all Guarantee Obligations of the
Borrower and its Significant Subsidiaries at such date in respect of obligations
of any other Person that in accordance with GAAP would be

 

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classified as debt on a consolidated balance sheet of such Person; provided
that, the determination of “Consolidated Total Debt” shall exclude, without
duplication, (a) the Securitized Bonds and any Indebtedness under any A/R
Securitization Transaction, (b) Indebtedness of the Borrower and its Significant
Subsidiaries in an amount equal to the amount of cash held as cash collateral
for any fully cash collateralized letter of credit issued for the account of the
Borrower or any Significant Subsidiary, (c) imputed Indebtedness of the Borrower
or any Significant Subsidiary incurred in connection with power purchase and
fuel agreements, (d) any junior subordinated deferrable interest debenture or
other similar securities issued by the Borrower and (e) as of any date of
determination, the amount of any securities included within the caption
“preferred stock” (or any similar caption) on a consolidated balance sheet,
prepared in accordance with GAAP, of the Borrower as of such date.

“Continuing Lender”: as defined in Section 2.7.

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

“Control”: the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ability to exercise voting power, by contract or otherwise. “Controlling”
and “Controlled” have meanings correlative thereto.

“Corresponding Tenor”: with respect to a Benchmark Replacement, a tenor
(including overnight) having approximately the same length (disregarding
business day adjustment) as the applicable tenor for the applicable Interest
Period with respect to the Eurodollar Base Rate.

“Covered Entity”: any of the following:

 

  (i)

a “covered entity” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 252.82(b);

 

  (ii)

a “covered bank” as that term is defined in, and interpreted in accordance with,
12 C.F.R. § 47.3(b); or

 

  (iii)

a “covered FSI” as that term is defined in, and interpreted in accordance with,
12 C.F.R. § 382.2(b).

“Covered Party”: as defined in Section 10.19.

“Co-Administrative Agents”: as defined in the preamble hereto.

“CPUC”: the California Public Utilities Commission or its successor.

“Credit Event”: as defined in Section 5.2.

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

 

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“Debtors”: as defined in the first recital paragraph.

“Default”: any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Default Right”: the meaning assigned to that term in, and shall be interpreted
in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“Defaulting Lender”: subject to the penultimate paragraph of Section 2.20, any
Lender, as reasonably determined by the Designated Agent, that has (a) failed to
fund any portion of its Revolving Loans or Participation Amounts within two
(2) Business Days of the date required to be funded by it under this Agreement,
unless such Lender notifies the Designated Agent in writing that such failure is
the result of such Lender’s good faith determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable Default, shall be specifically identified in such writing) has not
been satisfied, (b) notified the Borrower, the Designated Agent, any Issuing
Lender or any other Lender in writing that it does not intend to comply with any
of its funding obligations under this Agreement or has made a public statement
to the effect that it does not intend to comply with its funding obligations
under this Agreement (other than a notice of a good faith dispute or related
communications) or generally under other agreements in which it commits to
extend credit, unless such writing or public statement relates to such Lender’s
obligation to fund a Loan hereunder and states that such position is based on
such Lender’s good faith determination that a condition precedent to funding
(which condition precedent, together with any applicable Default, shall be
specifically identified in such writing or public statement) cannot be
satisfied, (c) failed, within two (2) Business Days after written request by the
Designated Agent or the Borrower, to confirm that it will comply with the terms
of this Agreement relating to its obligations to fund prospective Revolving
Loans and Participation Amounts, unless the subject of a good faith dispute
(provided that such Lender shall cease to be a Defaulting Lender pursuant to
this clause (c) upon receipt of such written confirmation by the Designated
Agent or the Borrower), (d) otherwise failed to pay over to the Designated Agent
or any other Lender any other amount required to be paid by it under this
Agreement within two (2) Business Days of the date when due, unless the subject
of a good faith dispute, or (e) has, or has a direct or indirect parent company
that has, (i) become the subject of a proceeding under any Debtor Relief Law,
(ii) had a custodian appointed for it, or has consented to, approved of or
acquiesced in any such proceeding or appointment or has a parent company that
has become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has consented
to, approved of or acquiesced in any such proceeding or appointment, or
(iii) become the subject of a Bail-In Action; provided that (x) if a Lender
would be a “Defaulting Lender” solely by reason of events relating to a parent
company of such Lender or solely because a Governmental Authority has been
appointed as receiver, conservator, trustee or custodian for such Lender, in
each case as described in clause (e) above, the Designated Agent and each
Issuing Lender may, in their discretion, determine that such Lender is not a
“Defaulting Lender” if and for so long as the Designated Agent and each Issuing
Lender is satisfied that such Lender will continue to perform its funding
obligations hereunder and (y) a Lender shall not be a

 

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Defaulting Lender solely by virtue of the ownership or acquisition of voting
stock or any other Capital Stock in such Lender or a parent company thereof by a
Governmental Authority or an instrumentality thereof, or the exercise of control
over such Lender or parent company thereof, by a Governmental Authority or
instrumentality thereof so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by the Designated Agent that a Lender is a Defaulting
Lender under any one or more of clauses (a) through (e) above shall be
conclusive and binding absent manifest error, and such Lender shall be deemed to
be a Defaulting Lender (subject to the penultimate paragraph of Section 2.20)
upon delivery of written notice of such determination to the Borrower, each
Issuing Lender and each Lender.

“Designated Agent”: as defined in the preamble hereto.

“Disposition”: with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
term “Dispose of” shall have a correlative meaning.

“Documentation Agents”: as defined on the cover hereto.

“Dollars” and “$”: dollars in lawful currency of the United States.

“Drawing Documents”: as defined in Section 3.6.

“Early Opt-in Election”: the occurrence of:

(1)    (i) a determination by the Designated Agent or (ii) a notification by the
Required Lenders to the Designated Agent (with a copy to the Borrower) that the
Required Lenders have determined that U.S. dollar-denominated syndicated credit
facilities being executed at such time, or that include language similar to that
contained in Section 2.13 are being executed or amended, as applicable, to
incorporate or adopt a new benchmark interest rate to replace the Eurodollar
Base Rate; and

(2)    (i) the election by the Designated Agent or (ii) the election by the
Required Lenders to declare that an Early Opt-in Election has occurred and the
provision, as applicable, by the Designated Agent of written notice of such
election to the Borrower and the Lenders or by the Required Lenders of written
notice of such election to the Designated Agent.

“EEA Financial Institution”: (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

 

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“EEA Member Country”: any of the member states of the European Union, Iceland,
Liechtenstein and Norway.

“EEA Resolution Authority”: any public administrative authority or any person
entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Effective Date”: the date on which the conditions precedent set forth in
Section 5.1 shall have been satisfied or waived.

“Eligible Assignee”: (a) any commercial bank or other financial institution
having a senior unsecured debt rating by Moody’s of A3 or better and by S&P of
A- or better, which is domiciled in a country which is a member of the OECD or
(b) with respect to any Person referred to in the preceding clause (a), any
other Person that is engaged in making, purchasing, holding or investing in bank
loans and similar extensions of credit in the ordinary course of business all of
the Capital Stock of which is owned, directly or indirectly, by such Person;
provided that in the case of clause (b), the Designated Agent and each Issuing
Lender shall have consented to the designation of such Person as an Eligible
Assignee (such consent not to be unreasonably withheld or delayed).

“Environmental Laws”: any and all foreign, Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time.

“ERISA Event”: (a) any Reportable Event; (b) the failure of the Borrower or any
Commonly Controlled Entity to timely make a required contribution with respect
to any Plan or any Multiemployer Plan; (c) the imposition of a Lien under
Section 430 of the Code or Section 303 of ERISA with respect to any Single
Employer Plan; (d) the failure of the Borrower or any Commonly Controlled Entity
to meet the minimum funding standard under Section 412 or 430 of the Code with
respect to any Plan or the filing of an application for a funding waiver with
respect to any Single Employer Plan; (e) the incurrence by the Borrower or any
Commonly Controlled Entity of any liability under Title IV of ERISA, including
with respect to the termination of any Plan (other than the payment of PBGC
premiums in the ordinary course); (f) (i) the termination of, or the filing or
receipt of a notice of intent to terminate, a Single Employer Plan under
Section 4041 of ERISA, or the treatment of a plan amendment as a termination
under Section 4041 of ERISA, or (ii) (A) the appointment of a trustee to
administer a Single Employer Plan under Section 4042, or (B) the institution by
the PBGC of proceedings to terminate a Single Employer Plan or to have a trustee
appointed to administer a Single Employer Plan, or receipt by the Borrower of
notice from the PBGC thereof, where such proceedings continue unstayed or in
effect for more than 60 days, or such notice is not withdrawn by the PBGC within
60 days following delivery by PBGC; (g) the incurrence by the Borrower or any
Commonly Controlled Entity of any liability with respect to the complete
withdrawal or partial withdrawal under Title

 

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IV of ERISA from any Multiemployer Plan; (h) the receipt by the Borrower or any
Commonly Controlled Entity of any notice from a Multiemployer Plan concerning
the imposition of Withdrawal Liability; (i) receipt of notification by Borrower
or any Commonly Controlled Entity from a Multiemployer Plan that such
Multiemployer Plan is in endangered or critical status (within the meaning of
Section 305 of ERISA) or in Insolvency; (j) the incurrence by the Borrower or
any Commonly Controlled Entity of any liability pursuant to Section 4063 or 4064
of ERISA or a substantial cessation of operations with respect to a Plan within
the meaning of Section 4062(e) of ERISA; (k) the posting of a bond or security
under Section 436(f) of the Code with respect to any Plan; or (l) the Borrower
incurs material tax liability with respect to any Plan (including Sections 4975,
4980B, 4980D, 4980H and 4980I of the Code, as applicable).

“Escrow Deposit and Disbursement Agreement”: that certain Escrow Deposit
Agreement and Disbursement Agreement, dated as of the Effective Date, by and
among the Borrower and the Indenture Trustee.

“EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published
by the Loan Market Association (or any successor person), as in effect from time
to time.

“Eurocurrency Liabilities”: as defined in Regulation D of the Board.

“Eurocurrency Reserve Requirements”: of any Lender for any Interest Period as
applied to a Eurodollar Loan, the reserve percentage applicable during such
Interest Period (or if more than one such percentage shall be so applicable, the
daily average of such percentages for those days in such Interest Period during
any such percentage shall be so applicable) under any regulations of the Board
or other Governmental Authority having jurisdiction with respect to determining
the maximum reserve requirement (including basic, supplemental and emergency
reserves) for such Lender with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities having a term equal to such Interest Period.

“Eurodollar Base Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the Eurodollar Screen Rate at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period; provided that if the Eurodollar Screen Rate shall not be
available at such time for such Interest Period (an “Impacted Interest Period”)
then the Eurodollar Base Rate shall be the Interpolated Rate.

“Eurodollar Loans”: Loans the rate of interest applicable to which is based upon
the Eurodollar Rate.

“Eurodollar Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upwards, if necessary, to the
next 1/16 of 1%):

 

                    Eurodollar Base Rate                     1.00 - Eurocurrency
Reserve Requirements

“Eurodollar Screen Rate”: for any day and time, with respect to any Eurodollar
Loan for any Interest Period, the London interbank offered rate as administered
by ICE Benchmark Administration (or any other Person that takes over the
administration of such rate) for a period

 

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equal in length to such Interest Period as displayed on such day and time on
pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in
the event such rate does not appear on a Reuters page or screen, on any
successor or substitute page on such screen that displays such rate, or on the
appropriate page of such other information service that publishes such rate from
time to time as selected by the Designated Agent in its reasonable discretion);
provided that if the Eurodollar Screen Rate as so determined would be less than
zero, such rate shall be deemed to zero for the purposes of this Agreement.

“Eurodollar Tranche”: the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have been
made on the same day).

“Event of Default”: any of the events specified in Section 8, provided that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Exchange Act”: Securities Exchange Act of 1934, as amended.

“Excluded Taxes”: any of the following Taxes imposed on or with respect to any
Recipient or required to be withheld or deducted from a payment to a Recipient,
(a) Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such
Recipient being organized under the laws of, or having its principal office or,
in the case of any Lender, its lending office located in, the jurisdiction
imposing such Tax (or any political subdivision thereof) or (ii) that are Other
Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes
imposed on amounts payable to or for the account of such Lender with respect to
an applicable interest in a Loan or Commitment pursuant to a law in effect on
the date on which (i) such Lender acquires such interest in the Loan or
Commitment (other than pursuant to an assignment request by the Borrower under
Section 2.19) or (ii) such Lender changes its lending office, except in each
case to the extent that, pursuant to Section 2.16(a) or (c), amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (c) Taxes attributable to such Recipient’s failure
to comply with Section 2.16(e) and (d) any U.S. federal withholding Taxes
imposed pursuant to FATCA.

“Existing Letter of Credit”: each letter of credit issued prior to the Effective
Date by a Person that shall be an Issuing Lender listed on Schedule 3.1.

“Extension Notice”: as defined in Section 2.7(b).

“Extensions of Credit”: as to any Lender at any time, an amount equal to the sum
of (a) the aggregate principal amount of all Revolving Loans held by such Lender
then outstanding and (b) such Lender’s Percentage of the L/C Obligations then
outstanding.

“FATCA”: Sections 1471 through 1474 of the Code, as of the Effective Date (or
any amended or successor version that is substantively comparable and not
materially more onerous to comply with), any current or future regulations or
official interpretations thereof and any agreements entered into pursuant to
Section 1471(b)(1) of the Code.

 

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“FCPA”: as defined in Section 4.15.

“Federal Funds Effective Rate”: for any day, the rate calculated by the NYFRB
based on such day’s federal funds transactions by depositary institutions, as
determined in such manner as shall be set forth on the Federal Reserve Bank of
New York’s Website from time to time, and published on the next succeeding
Business Day by the NYFRB as the effective federal funds rate; provided that if
the Federal Funds Effective Rate as so determined would be less than zero, such
rate shall be deemed to be zero for the purposes of this Agreement.

“Federal Reserve Bank of New York’s Website”: the website of the NYFRB at
http://www.newyorkfed.org, or any successor source.

“Fee Payment Date”: (a) the fifth Business Day following the last day of each
March, June, September and December during the Commitment Period and (b) the
last day of the Commitment Period.

“First Mortgage Bonds”: bonds issued by the Borrower pursuant to the FMB
Indenture.

“Fitch”: Fitch Ratings, Inc. and any successor thereto.

“FMB Indenture”: the Indenture of Mortgage (Mortgage), dated as of [●], 2020,
between the Borrower and the Indenture Trustee (as supplemented by the
Supplemental Indenture) and as further supplemented or amended from time to
time.

“Foreign Lender”: a Lender or an Issuing Lender that is not a U.S. Person.

“FPA”: the Federal Power Act, as amended, and the rules and regulations
promulgated thereunder.

“Fronting Exposure”: at any time there is a Defaulting Lender, such Defaulting
Lender’s Percentage of L/C Obligations other than L/C Obligations as to which
such Defaulting Lender’s participation obligation has been reallocated to other
Lenders or cash collateralized in accordance with the terms hereof.

“Funding Office”: the office of the Designated Agent specified in
Section 10.2(a) or such other office as may be specified from time to time by
the Designated Agent as its funding office by written notice to the Borrower and
the Lenders.

“GAAP”: generally accepted accounting principles in the United States as in
effect from time to time, except as noted below. In the event that any “Change
in Accounting Principles” (as defined below) shall occur and such change results
in a change in the method of calculation of financial covenants, standards or
terms in this Agreement, then, upon the request of the Borrower or the Required
Lenders, the Borrower and the Designated Agent agree to enter into negotiations
in order to amend such provisions of this Agreement so as to reflect equitably
such Change in Accounting Principles with the desired result that the criteria
for evaluating the Borrower’s financial condition shall be the same after such
Change in Accounting Principles as if such Change in Accounting Principles had
not been made. Until such time as such an amendment shall have been executed and
delivered by the Borrower, the Designated Agent and the Required

 

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Lenders, all financial covenants, standards and terms in this Agreement shall
continue to be calculated or construed as if such Change in Accounting
Principles had not occurred. “Change in Accounting Principles” refers to
(i) changes in accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion by the Financial Accounting Standards Board
of the American Institute of Certified Public Accountants or any successor
thereto, the SEC or, if applicable, the Public Company Accounting Oversight
Board and (ii) any change in the application of GAAP concurred by the Borrower’s
independent public accountants and disclosed in writing to the Designated Agent.

“Governmental Authority”: any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative functions of or pertaining to government,
any securities exchange and any self-regulatory organization (including the
National Association of Insurance Commissioners and supra-national bodies such
as the European Union or the European Central Bank).

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation, including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing person that guarantees any Indebtedness, leases, dividends
or other obligations (the “primary obligations”) of any other third Person (the
“primary obligor”) in any manner, whether directly or indirectly, including any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof or (v) to reimburse or
indemnify an issuer of a letter of credit, surety bond or guarantee issued by
such issuer in respect of primary obligations of a primary obligor other than
the Borrower or any Significant Subsidiary; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person’s reasonably anticipated liability in respect
thereof as determined by the Borrower in good faith.

“IBA”: as defined in Section 1.4.

“Indebtedness”: of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than trade
payables, including under energy procurement and transportation contracts,
incurred in the ordinary course of such Person’s business), (c) all

 

18

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obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations of such Person,
(f) all obligations of such Person, contingent or otherwise, as an account party
or applicant under or in respect of acceptances, letters of credit, surety bonds
or similar arrangements (other than reimbursement obligations, which are not due
and payable on such date, in respect of documentary letters of credit issued to
provide for the payment of goods and services in the ordinary course of
business), (g) the liquidation value of all mandatorily redeemable preferred
Capital Stock of such Person, (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (g) above,
(i) all obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not such Person
has assumed or become liable for the payment of such obligation (provided, that
if such Person is not liable for such obligation, the amount of such Person’s
Indebtedness with respect thereto shall be deemed to be the lesser of the stated
amount of such obligation and the value of the property subject to such Lien),
and (j) for the purposes of Sections 7.1 and 8(e) only, all obligations of such
Person in respect of Swap Agreements, provided that Indebtedness as used in this
Agreement shall exclude any Non-Recourse Debt and any obligations under any A/R
Securitization Transaction. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness expressly provide that such
Person is not liable therefor.

“Indebtedness Covenant Release Date”: the earlier to occur of (a) the
retirement, repayment or refinancing of all of the Borrower’s obligations under
the Temporary Utility Debt with proceeds of either equity contributions from
PCG, excess cash from operations or Securitized Bonds and (b) the expiration of
the temporary waiver from its authorized capital structure granted by the CPUC
on May 21, 2020.

“Indemnified Liabilities”: as defined in Section 10.5.

“Indemnified Taxes”: (a) Taxes, other than Excluded Taxes, imposed on or with
respect to any payment made by or on account of any obligation of the Borrower
under any Loan Document and (b) to the extent not otherwise described in (a),
Other Taxes.

“Indemnitee”: as defined in Section 10.5.

“Indenture Trustee”: The Bank of New York Mellon Trust Company, N.A. and any
successor thereto as trustee under the FMB Indenture.

“Insolvency”: with respect to any Multiemployer Plan, the condition that such
plan is insolvent within the meaning of Section 4245 of ERISA.

 

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“Interest Payment Date”: (a) as to any ABR Loan, the last day of each March,
June, September and December to occur while such Loan is outstanding and the
final maturity date of such Loan, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest Period,
(c) as to any Eurodollar Loan having an Interest Period longer than three
months, each day that is three months, or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest Period and
(d) as to any Loan, the date of any repayment or prepayment made in respect
thereof.

“Interest Period”: as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one week thereafter or one, two, three or six
or (if agreed to by all Lenders) twelve months thereafter, as selected by the
Borrower in its notice of borrowing or notice of conversion, as the case may be,
given with respect thereto; and (b) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three or six or (if agreed to by all Lenders) twelve
months thereafter, as selected by the Borrower by irrevocable notice to the
Designated Agent not later than 12:00 Noon, New York City time, on the date that
is three Business Days prior to the last day of the then current Interest Period
with respect thereto; provided that, all of the foregoing provisions relating to
Interest Periods are subject to the following:

(i)    if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;

(ii)    the Borrower may not select an Interest Period that would extend beyond
the Termination Date;

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

(iv)    the Borrower shall select Interest Periods so as not to require a
payment or prepayment of any Eurodollar Loan during an Interest Period for such
Loan; and

(v)    at the election of the Borrower, the initial Interest Period for any
Eurodollar Loans made on the Effective Date, shall commence on the Effective
Date and end on the last day of the calendar month during which the Effective
Date occurs.

“Interpolated Rate”: at any time, for any Interest Period, the rate per annum
(rounded to the same number of decimal places as the Eurodollar Screen Rate)
determined by the Designated Agent (which determination shall be conclusive and
binding absent manifest error) to be equal to the rate that results from
interpolating on a linear basis between: (a) the Eurodollar Screen Rate for the
longest period (for which the Eurodollar Screen Rate is available) that is
shorter than the Impacted Interest Period; and (b) the Eurodollar Screen Rate
for the shortest period (for which that Eurodollar Screen Rate is available)
that exceeds the Impacted Interest Period, in each case, at such time.

 

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“IRS”: the United States Internal Revenue Service.

“ISP”: the “International Standby Practices 1998” published by the Institute of
International Banking Law & Practice, Inc. (or such later version thereof as may
be in effect at the time of issuance).

“Issuing Lender”: (a) JPMorgan Chase Bank, N.A., Bank of America, N.A., Barclays
Bank PLC, Citibank, N.A., Goldman Sachs Bank USA, BNP Paribas, Credit Suisse AG,
New York Branch, Mizuho Bank, Ltd., MUFG Union Bank, N.A. and Wells Fargo Bank,
National Association and (b) any other Lender selected by the Borrower as an
Issuing Lender with the consent of such Lender and the Designated Agent. The
Borrower may, at any time upon giving at least 10 days’ prior written notice
thereof to the Lenders and the Designated Agent, remove any Issuing Lender,
provided that no Letters of Credit issued by such Issuing Lender are outstanding
or the Borrower terminates or cash collateralizes any Letters of Credit issued
by such Issuing Lender on or prior to such removal. Any Issuing Lender may, in
its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of such Issuing Lender, in which case the term “Issuing Lender” shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.

“knowledge of the Borrower”: actual knowledge of any Responsible Officer of the
Borrower.

“L/C Commitment”: $1,500,000,000.

“L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate
then undrawn and unexpired amount of the then outstanding Letters of Credit and
(b) the aggregate amount of drawings under issued Letters of Credit that have
not then been reimbursed pursuant to Section 3.5.

“L/C Participants”: in respect of any Letter of Credit, the collective reference
to all the Lenders other than the Issuing Lender that issued such Letter of
Credit.

“L/C Pro Rata Commitment”: with respect to each Issuing Lender, the commitment
of such Issuing Lender hereunder to make Letters of Credit available to the
Borrower in the amount set forth under the heading “L/C Pro Rata Commitment”
opposite its name on Schedule 1.1 hereto or as otherwise agreed to in writing
between the Borrower and the applicable Issuing Lender from time to time.

“Laws”: collectively, all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

 

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“Lenders”: as defined in the preamble hereto; provided, that unless the context
otherwise requires, each reference herein to the Lenders shall be deemed to
include any Conduit Lender.

“Letter of Credit Expiration Date”: as defined in Section 3.1(a).

“Letters of Credit”: as defined in Section 3.1.

“Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any Capital Lease Obligation having substantially the
same economic effect as any of the foregoing).

“Loan”: any loan made by any Lender pursuant to this Agreement.

“Loan Documents”: this Agreement, the Notes, the Applications, the Supplemental
Indenture, the Senior Bond, the Bond Delivery Agreement, the FMB Indenture and,
in each case, any amendment, waiver, supplement or other modification to any of
the foregoing; provided, that the term “Loan Documents” shall not include the
FMB Indenture for any purposes under Section 2.16, Section 8 or Section 10
(other than for the purposes of Sections 10.1(iv) and (ix)).

“Material Adverse Effect”: (a) a change in the business, property, operations or
financial condition of the Borrower and its Subsidiaries taken as a whole that
could reasonably be expected to materially and adversely affect the Borrower’s
ability to perform its obligations under the Loan Documents or (b) a material
adverse effect on (i) the validity or enforceability of this Agreement or any of
the other Loan Documents or (ii) the rights and remedies of the Agents and the
Lenders, taken as a whole, under this Agreement or any other Loan Document.

“Materials of Environmental Concern”: any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or under any
Environmental Law, including asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.

“Moody’s”: Moody’s Investors Service, Inc.

“Mortgaged Property”: as defined in the FMB Indenture.

“Multiemployer Plan”: a plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

“Net Tangible Assets”: the total amount of the Borrower’s assets determined on a
consolidated basis in accordance with GAAP as of the last day of the most
recently ended fiscal quarter for which financial statements have been delivered
under Section 6.1, less (a) the sum of the Borrower’s consolidated current
liabilities determined in accordance with GAAP, and (b) the amount of the
Borrower’s consolidated assets classified as intangible assets, determined in
accordance with GAAP.

“New Lender Supplement”: as defined in Section 2.3(b).

 

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“New Revolving Credit Lender”: as defined in Section 2.3(b).

“Non-Extending Lender”: as defined in Section 2.7.

“Non-Extension Notice Date”: as defined in Section 3.2.

“Non-Recourse Debt”: Indebtedness of the Borrower or any of its Significant
Subsidiaries that is incurred in connection with the acquisition, construction,
sale, transfer or other Disposition of specific assets, to the extent recourse,
whether contractual or as a matter of law, for non-payment of such Indebtedness
is limited (a) to such assets, or (b) if such assets are (or are to be) held by
a Subsidiary formed solely for such purpose, to such Subsidiary or the Capital
Stock of such Subsidiary.

“Notes”: as defined in Section 2.14(f).

“NYFRB”: the Federal Reserve Bank of New York.

“NYFRB Rate”: for any day, the greater of (a) the Federal Funds Effective Rate
in effect on such day and (b) the Overnight Bank Funding Rate in effect on such
day (or for any day that is not a Business Day, for the immediately preceding
Business Day); provided that if none of such rates are published for any day
that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds
transaction quoted at 11:00 a.m. (New York City time) on such day received by
the Designated Agent from a federal funds broker of recognized standing selected
by it; provided, further, that if any of the aforesaid rates as so determined
would be less than zero, such rate shall be deemed to be zero for purposes of
this Agreement.

“Obligations”: the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans, the
Reimbursement Obligations and all other obligations and liabilities of the
Borrower to the Agents or to any Issuing Lender or to any Lender, whether direct
or indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document or any other document made, delivered or
given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of counsel
to the Agents or to any Lender that are required to be paid by the Borrower
pursuant hereto) or otherwise.

“OECD”: the countries constituting the “Contracting Parties” to the Convention
on the Organisation For Economic Co-operation and Development, as such term is
defined in Article 4 of such Convention.

“Other Connection Taxes”: with respect to any Recipient, Taxes imposed as a
result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

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“Other Taxes”: all present or future stamp, court or documentary, intangible,
recording, filing or similar Taxes that arise from any payment made under, from
the execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a security interest under, or otherwise with respect
to, any Loan Document, except any such Taxes that are Other Connection Taxes
imposed with respect to an assignment (other than an assignment made pursuant to
Section 2.19).

“Overnight Bank Funding Rate”: for any day, the rate comprised of both overnight
federal funds and overnight Eurodollar borrowings by U.S.-managed banking
offices of depository institutions, as such composite rate shall be determined
by the NYFRB as set forth on the Federal Reserve Bank of New York’s Website from
time to time, and published on the next succeeding Business Day by the NYFRB as
an overnight bank funding rate.

“Participant”: as defined in Section 10.6(c).

“Participant Register”: as defined in Section 10.6(c)(iii).

“Participation Amount”: as defined in Section 3.4(b).

“Patriot Act”: as defined in Section 10.16.

“Payment Amount”: as defined in Section 3.5.

“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).

“PCG”: as defined in the first recital paragraph.

“Percentage”: as to any Lender at any time, the percentage which such Lender’s
Commitment then constitutes of the Total Commitments or, at any time after the
Commitments shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender’s Revolving Loans then outstanding constitutes
of the aggregate principal amount of the Revolving Loans then outstanding,
provided, that, in the event that the Revolving Loans are paid in full prior to
the reduction to zero of the Total Extensions of Credit, the Percentages shall
be determined in a manner designed to ensure that the other outstanding
Extensions of Credit shall be held by the Lenders on a comparable basis.

“Permitted Refinancing”: with respect to any Indebtedness (the “Refinanced
Indebtedness”), any extension, refinancing, refunding or replacement thereof
with Indebtedness provided that (i) the amount of such Indebtedness does not
exceed the aggregate principal amount of the Refinanced Indebtedness, plus any
premium, interest, fee or expenses payable in connection therewith, (ii) the
final maturity date of such Indebtedness is no earlier than the maturity date of
the Refinanced Indebtedness, and (iii) the weighted average life to maturity of
such Indebtedness is not shorter than the weighted average life to maturity of
the Refinanced Indebtedness.

 

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“Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.

“Plan”: at a particular time, any employee benefit plan that is covered by ERISA
and in respect of which the Borrower or a Commonly Controlled Entity is (or, if
such plan were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Plan of Reorganization”: as defined in the second recital paragraph.

“Platform”: as defined in Section 10.2(d).

“Prime Rate”: the rate of interest last quoted by The Wall Street Journal as the
“Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such
rate, the highest per annum interest rate published by the Federal Reserve Board
in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as
the “bank prime loan” rate or, if such rate is no longer quoted therein, any
similar rate quoted therein (as determined by the Designated Agent) or in any
similar release by the Federal Reserve Board (as determined by the Designated
Agent). Each change in the Prime Rate shall be effective from and including the
date such change is publicly announced or quoted as being effective.

“PTE”: a prohibited transaction class exemption issued by the U.S. Department of
Labor, as any such exemption may be amended from time to time.

“QFC”: the meaning assigned to the term “qualified financial contract” in, and
shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

“QFC Credit Support” in Section 10.19.

“Qualified Securitization Bond Issuer”: a Subsidiary of the Borrower formed and
operating solely for the purpose of (a) purchasing and owning property created
under a “financing order” (as such term is defined in the California Public
Utilities Code) or similar order issued by the CPUC, (b) issuing such securities
pursuant to such order, (c) pledging its interests in such property to secure
such securities and (d) engaging in activities ancillary to those described in
(a), (b) and (c).

“Rating”: each rating announced by S&P, Moody’s and Fitch in respect of the
Borrower’s senior secured debt.

“Recipient”: the Designated Agent, any Lender or any Issuing Lender.

“Register”: as defined in Section 10.6(b).

“Regulation U”: Regulation U of the Board as in effect from time to time.

 

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“Reimbursement Obligation”: the obligation of the Borrower to reimburse each
Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit
issued by such Issuing Lender.

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

“Relevant Governmental Body”: the Federal Reserve Board and/or the NYFRB, or a
committee officially endorsed or convened by the Federal Reserve Board and/or
the NYFRB or, in each case, any successor thereto.

“Removal Effective Date”: as defined in Section 9.9(b).

“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty-day notice period is waived under
subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

“Required Lenders”: at any time, the holders of more than 50% of the Total
Commitments then in effect or, if the Commitments have been terminated, the
Total Extensions of Credit then outstanding. The Total Commitments of any
Defaulting Lender shall be disregarded in determining Required Lenders at any
time; provided that, any Participation Amount that such Defaulting Lender has
failed to fund and that have not been reallocated to and funded by another
Lender shall be deemed to be held by the Lender that is an Issuing Lender, as
the case may be, in making such determination.

“Requirement of Law”: as to any Person, the Articles of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

“Resignation Effective Date”: as defined in Section 9.9(a).

“Resolution Authority”: with respect to any EEA Financial Institution, an EEA
Resolution Authority and, with respect to any UK Financial Institution, a UK
Resolution Authority.

“Responsible Officer”: the chief executive officer, president, chief financial
officer, treasurer or assistant treasurer of the Borrower, but in any event,
with respect to financial matters, the chief financial officer, treasurer or
assistant treasurer of the Borrower.

“Revolving Credit Offered Increase Amount”: as defined in Section 2.3(a).

“Revolving Credit Re-Allocation Date”: as defined in Section 2.3(d).

“Revolving Loans”: as defined in Section 2.1(a).

 

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“S&P”: Standard & Poor’s Global Ratings, a division of S&P Global Inc., and any
successor thereto.

“Sanctions”: as defined in Section 4.15.

“SEC”: the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.

“Securitized Bonds”: without duplication, securities, however denominated, that
are (i) issued by a Qualified Securitization Bond Issuer, (ii) secured by or
otherwise payable from charges authorized by the financing order referred to in
clause (a) of the definition of “Qualified Securitization Bond Issuer,” and
(iii) non-recourse to the Borrower or any of its Subsidiaries (other than the
issuer of such securities).

“Senior Bond”: (i) that certain First Mortgage Bond in the aggregate principal
amount of $3,500,000,000 issued to the Designated Agent pursuant to the
Supplemental Indenture and (ii) any new First Mortgage Bonds issued to the
Designated Agent pursuant to any Supplemental Indenture acceptable to the
Designated Agent in accordance with the issuance of such new First Mortgage
Bonds pursuant to Sections 2.3(g) or 2.7(a).

“Significant Subsidiary”: as defined in Article 1, Rule 1-02(w) of Regulation
S-X of the Exchange Act as of the Effective Date, provided that notwithstanding
the foregoing, no special purpose finance subsidiary, no A/R Securitization
Subsidiary (or Subsidiaries of any A/R Securitization Subsidiary) nor any
Qualified Securitization Bond Issuer (or Subsidiaries of any Qualified
Securitization Bond Issuer) shall constitute a Significant Subsidiary. Unless
otherwise qualified, all references to a “Significant Subsidiary” or to
“Significant Subsidiaries” in this Agreement shall refer to a “Significant
Subsidiary” or “Significant Subsidiaries” of the Borrower.

“Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but that
is not a Multiemployer Plan.

“SOFR”: with respect to any day, the secured overnight financing rate published
for such day by the NYFRB, as the administrator of the benchmark (or a successor
administrator), on the Federal Reserve Bank of New York’s Website.

“SOFR-Based Rate”: SOFR, Compounded SOFR or Term SOFR.

“Solvent”: with respect to the Borrower and its Subsidiaries, on a consolidated
basis, that as of the date of determination, (i) the fair value of the assets of
the Borrower and its Subsidiaries, on a consolidated basis, at a fair valuation
on a going concern basis, exceeds, on a consolidated basis, their debts and
liabilities, subordinated, contingent or otherwise, (ii) the present fair
saleable value of the property of the Borrower and its Subsidiaries, on a
consolidated and going concern basis, is greater than the amount that will be
required to pay the probable liability, on a consolidated basis, of their debts
and other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured in the ordinary course of
business, (iii) the Borrower and its Subsidiaries, on a consolidated basis, are
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such liabilities become absolute and matured

 

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in the ordinary course of business, (iv) the Borrower and its Subsidiaries are
not engaged in businesses, and are not about to engage in businesses for which
they have unreasonably small capital. 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 the facts and circumstances existing as of the Effective
Date, would reasonably be expected to become an actual and matured liability.

“Specified Exchange Act Filings”: the Borrower’s Form 10-K annual report for the
year ended December 31, 2019 and each and all of the Form 10-Qs and Form 8-Ks
(and to the extent applicable proxy statements) filed by the Borrower or PCG
with the SEC after December 31, 2019 and prior to the date that is one Business
Day before the date of this Agreement.

“Specified Material Adverse Effect”: any occurrence, fact, change, event,
effect, violation, penalty, inaccuracy or circumstance (whether or not
constituting a breach of a representation, warranty or covenant set forth in the
Plan of Reorganization) that, individually or in the aggregate with any such
other results, occurrences, facts, changes, events, effects, violations,
penalties, inaccuracies, or circumstances, (i) would have or would reasonably be
expected to have a material adverse effect on the business, operations, assets,
liabilities, capitalization, financial performance, financial condition or
results of operations, in each case, of PCG and the Borrower, taken as a whole,
or (ii) would reasonably be expected to prevent or materially delay the ability
of PCG and the Borrower to consummate the transactions contemplated by this
Agreement or the Plan of Reorganization or perform their obligations hereunder
or thereunder; provided, however, that none of the following results,
occurrences, facts, changes, events, effects, violations, penalties,
inaccuracies or circumstances shall constitute or be taken into account in
determining whether a Specified Material Adverse Effect has occurred, is
continuing or would reasonably be expected to occur: (A) the filing of the
Chapter 11 cases with respect to the Debtors, (B) results, occurrences, facts,
changes, events, violations, inaccuracies or circumstances affecting (1) the
electric or gas utility businesses in the United States generally or (2) the
economy, credit, financial, capital or commodity markets, in the United States
or elsewhere in the world, including changes in interest rates, monetary policy
or inflation, (C) changes or prospective changes in law (other than any law or
regulation of California or the United States that is applicable to any
electrical utility) or in GAAP or accounting standards, or any changes or
prospective changes in the interpretation or enforcement of any of the
foregoing, (D) any decline in the market price, or change in trading volume, of
any securities of the Debtors, (E) any failure to meet any internal or public
projections, forecasts, guidance, estimates, milestones, credit ratings, budgets
or internal or published financial or operating predictions of revenue,
earnings, cash flow or cash position, (F) any wildfire occurring after the
Petition Date (as defined in the Plan of Reorganization) and prior to January 1,
2020, and (G) one or more wildfires, occurring on or after January 1, 2020, that
destroys or damages fewer than 500 dwellings or commercial structures in the
aggregate (it being understood that (I) the exceptions in clauses (D) and
(E) shall not prevent or otherwise affect a determination that the underlying
cause of any such change, decline or failure referred to therein is a Specified
Material Adverse Effect, and (II) a Specified Material Adverse Effect shall
include the occurrence of one or more wildfires on or after January 1, 2020
destroying or damaging at least 500 dwellings or commercial structures within
PCG’s service area at a time when the portion of PCG’s system at the location of
such wildfire was not successfully de-energized.

 

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“Standard A/R Securitization Obligations”: representations, warranties,
covenants, indemnities, repurchase obligations, servicing obligations,
guarantees, intercompany notes and obligations relating to contributions of A/R
Securitization Assets to an A/R Securitization Subsidiary and other obligations
entered into by the Borrower or any of its Subsidiaries which are reasonably
customary in A/R Securitization Transactions.

“Subsidiary”: as to any Person, a corporation, partnership, limited liability
company or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries,
or both, by such Person. Unless otherwise qualified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Borrower.

“Supplemental Indenture”: (i) with respect to that certain First Mortgage Bond
in the aggregate principal amount of $3,500,000,000 issued to the Designated
Agent, the Supplemental Indenture, dated as of the Effective Date, by and
between the Borrower and the Indenture Trustee, and (ii) with respect to any new
First Mortgage Bonds issued to the Designated Agent in connection with the
Obligations hereunder, including, without limitation, pursuant to Sections
2.3(g) or 2.7(a).

“Supported QFC”: as defined in Section 10.19.

“Swap Agreement”: any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrower or any of
its Subsidiaries shall be a “Swap Agreement”.

“Syndication Agents”: as defined on the cover hereto.

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

“Temporary Utility Debt”: the $6,000,000,000 of Indebtedness of the Borrower in
the form of term loans existing as of the Effective Date under that certain Term
Loan Credit Agreement dated as of the Effective Date among the Borrower, the
lenders party thereto and JPMorgan Chase Bank, N.A. as administrative agent, or
under any Indebtedness (other than Securitized Bonds) of the Borrower issued or
incurred in lieu of or to replace any portion of such term loans.

“Term SOFR”: the forward-looking term rate based on SOFR that has been selected
or recommended by the Relevant Governmental Body.

 

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“Termination Date”: the date that is the third anniversary of the Effective Date
or such later date as may be determined pursuant to Section 2.7(b) or such
earlier date as otherwise determined pursuant to Section 2.7.

“Total Commitments”: at any time, the aggregate amount of the Commitments of all
Lenders at such time.

“Total Extensions of Credit”: at any time, the aggregate amount of the
Extensions of Credit of all Lenders at such time.

“Transferee”: any Assignee or Participant.

“Type”: as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

“UK Financial Institution”: any BRRD Undertaking (as such term is defined under
the PRA Rulebook (as amended form time to time) promulgated by the United
Kingdom Prudential Regulation Authority)) or any person falling within IFPRU
11.6 of the FCA Handbook (as amended from time to time) promulgated by the
United Kingdom Financial Conduct Authority, which includes certain credit
institutions and investment firms, and certain affiliates of such credit
institutions or investment firms.

“UK Resolution Authority”: the Bank of England or any other public
administrative authority having responsibility for the resolution of any UK
Financial Institution.

“Unadjusted Benchmark Replacement”: the Benchmark Replacement excluding the
Benchmark Replacement Adjustment; provided that, if the Unadjusted Benchmark
Replacement as so determined would be less than zero, the Unadjusted Benchmark
Replacement will be deemed to be zero for the purposes of this Agreement.

“United States” or “U.S.”: the United States of America.

“U.S. Person”: any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

“U.S. Special Resolution Regime”: as defined in Section 10.19.

“U.S. Tax Compliance Certificate”: as defined in Section 2.16(e)(ii)(B)(III).

“Withdrawal Liability”: any liability to a Multiemployer Plan as a result of a
complete or partial withdrawal by the Borrower or any Commonly Controlled Entity
from such Multiemployer Plan, as such terms are defined in Title IV of ERISA.

“Write-Down and Conversion Powers”: (a) with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the applicable Bail-In Legislation for the applicable
EEA Member Country, which write-down and conversion powers are described in the
EU Bail-In Legislation Schedule, and (b) with respect to any UK Resolution
Authority, any powers of such UK Resolution Authority under the applicable
Bail-In Legislation to cancel, reduce, modify or change the form of a

 

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liability of any UK Financial Institution or any contract or instrument under
which that liability arises, to convert all or part of that liability into
shares, securities or obligations of that person or any other person, to provide
that any such contract or instrument is to have effect as if a right had been
exercised under it or to suspend any obligation in respect of that liability or
any of the powers under that Bail-In Legislation that are related to or
ancillary to any of those powers.

1.2    Other Definitional Provisions and Interpretative Provisions.

(a)    Unless otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in the other Loan Documents or any
certificate or other document made or delivered pursuant hereto or thereto.

(b)    As used herein and, except as otherwise provided therein, in the other
Loan Documents, and any certificate or other document made or delivered pursuant
hereto or thereto, (i) accounting terms relating to the Borrower and its
Significant Subsidiaries defined in Section 1.1 and accounting terms partly
defined in Section 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP, (ii) the words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without limitation”,
(iii) the word “incur” shall be construed to mean incur, create, issue, assume
or become liable in respect of (and the words “incurred” and “incurrence” shall
have correlative meanings), (iv) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, Capital Stock,
securities, revenues, accounts, leasehold interests and contract rights, and
(v) references to agreements or other Contractual Obligations shall, unless
otherwise specified, be deemed to refer to such agreements or Contractual
Obligations as amended, supplemented, restated or otherwise modified from time
to time.

(c)    The words “hereof”, “herein” and “hereunder” and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.

(d)    The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

(e)    The Borrower shall not be required to perform, nor shall it be required
to guarantee the performance of, any of the affirmative covenants set forth in
Section 6 that apply to any of its Significant Subsidiaries nor shall any of the
Borrower’s Significant Subsidiaries be required to perform, nor shall any of
such Significant Subsidiaries be required to guarantee the performance of, any
of the Borrower’s affirmative covenants set forth in Section 6 or any of the
affirmative covenants set forth in Section 6 that apply to any other Significant
Subsidiary; provided, that nothing in this Section 1.2(e) shall prevent the
occurrence of a Default or an Event of Default arising out of the Borrower’s
failure to cause any Significant Subsidiary to comply with the provisions of
this Agreement applicable to such Significant Subsidiary.

(f)    Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios

 

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referred to herein shall be made, without giving effect to any change in
accounting for leases pursuant to GAAP resulting from the implementation of
Financial Accounting Standards Board ASU No. 2016-02, Leases (Topic 842), to the
extent such adoption would require treating any lease (or similar arrangement
conveying the right to use) as a capital lease where such lease (or similar
arrangement) would not have been required to be so treated under GAAP as in
effect on December 31, 2015.

1.3    Divisions. For all purposes under the Loan Documents, in connection with
any division or plan of division under Delaware law (or any comparable event
under a different jurisdiction’s laws): (a) if any asset, right, obligation or
liability of any Person becomes the asset, right, obligation or liability of a
different Person, then it shall be deemed to have been transferred from the
original Person to the subsequent Person, and (b) if any new Person comes into
existence, such new Person shall be deemed to have been organized and acquired
on the first date of its existence by the holders of its Capital Stock at such
time.

1.4    Interest Rates; LIBOR Notification. The London interbank offered rate is
intended to represent the rate at which contributing banks may obtain short-term
borrowings from each other in the London interbank market. In July 2017, the
U.K. Financial Conduct Authority announced that, after the end of 2021, it would
no longer persuade or compel contributing banks to make rate submissions to the
ICE Benchmark Administration (together with any successor to the ICE Benchmark
Administrator, the “IBA”) for purposes of the IBA setting the London interbank
offered rate. As a result, it is possible that commencing in 2022, the London
interbank offered rate may no longer be available or may no longer be deemed an
appropriate reference rate upon which to determine the interest rate on
Eurodollar Loans. In light of this eventuality, public and private sector
industry initiatives are currently underway to identify new or alternative
reference rates to be used in place of the London interbank offered rate. Upon
the occurrence of a Benchmark Transition Event or an Early Opt-In Election,
Section 2.13(b) provides a mechanism for determining an alternative rate of
interest. The Designated Agent will promptly notify the Borrower, pursuant to
Section 2.13(d), of any change to the reference rate upon which the interest
rate on Eurodollar Loans is based. However, the Designated Agent does not
warrant or accept any responsibility for, and shall not have any liability with
respect to, the administration, submission or any other matter related to the
London interbank offered rate or other rates in the definition of “Eurodollar
Base Rate” or with respect to any alternative or successor rate thereto, or
replacement rate thereof (including, without limitation, (i) any such
alternative, successor or replacement rate implemented pursuant to
Section 2.13(b), whether upon the occurrence of a Benchmark Transition Event or
an Early Opt-In Election, and (ii) the implementation of any Benchmark
Replacement Conforming Changes pursuant to Section 2.13(c)), including without
limitation, whether the composition or characteristics of any such alternative,
successor or replacement reference rate will be similar to, or produce the same
value or economic equivalence of, the Eurodollar Base Rate or have the same
volume or liquidity as did the London interbank offered rate prior to its
discontinuance or unavailability.

 

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SECTION 2.    AMOUNT AND TERMS OF COMMITMENTS

2.1    Commitments.

(a)    Subject to the terms and conditions hereof, each Lender severally agrees
to make revolving credit loans in Dollars (“Revolving Loans”) to the Borrower
from time to time on or after the Effective Date and during the Commitment
Period in an aggregate principal amount at any one time outstanding which, when
added to such Lender’s Percentage of the L/C Obligations then outstanding, does
not exceed the amount of such Lender’s Commitment; provided that, after giving
effect to the Revolving Loans requested to be made, the aggregate amount of the
Available Commitments shall not be less than zero and the Total Extensions of
Credit may not at any time exceed the outstanding principal amount of the Senior
Bond. During the Commitment Period, the Borrower may use the Commitments by
borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof. The Revolving Loans may
from time to time be Eurodollar Loans or ABR Loans, as determined by the
Borrower and notified to the Designated Agent in accordance with Sections 2.2
and 2.9.

(b)    The Borrower shall repay all outstanding Revolving Loans on the
Termination Date; provided, that any principal payment under the Senior Bond
shall automatically be deemed to be an equal principal payment in respect of the
Revolving Loans (but any such principal payment under the Senior Bond shall not
reduce the face amount thereof unless such payment is accompanied by an equal
permanent reduction in the Total Commitments).

2.2    Procedure for Revolving Loan Borrowing. The Borrower may borrow under the
Commitments during the Commitment Period on any Business Day, provided that the
Borrower shall give the Designated Agent irrevocable notice (which notice must
be received by the Designated Agent (a) prior to 12:00 Noon, New York City time,
three Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Loans, or (b) prior to 1:00 P.M., New York City time, on the
requested Borrowing Date, in the case of ABR Loans; provided that any notice of
ABR Loans to be incurred on the Effective Date must be received prior to 1:00
P.M., New York City time, one Business Day prior to the Effective Date)
specifying (i) the amount and Type of Revolving Loans to be borrowed, (ii) the
requested Borrowing Date and (iii) in the case of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor. Each borrowing under the Commitments shall be
in an amount equal to $1,000,000 or a whole multiple of $500,000 in excess
thereof (or, if the then aggregate Available Commitments are less than
$1,000,000, such lesser amount). Upon receipt of any such notice from the
Borrower, the Designated Agent shall promptly notify each Lender thereof. Each
Lender will make the amount of its pro rata share of each borrowing available to
the Designated Agent for the account of the Borrower at the Funding Office prior
to 3:00 P.M., New York City time (or, for any borrowing to occur on the
Effective Date, prior to 10:00 A.M., New York City time), on the Borrowing Date
requested by the Borrower in funds immediately available to the Designated
Agent. Such borrowing will then be made available to the Borrower by the
Designated Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Designated Agent
by the Lenders and in like funds as received by the Designated Agent.

2.3    Commitment Increases.

(a)    In the event that the Borrower wishes to increase the Total Commitments
at any time when no Default or Event of Default has occurred and is continuing
(or shall result of such increase) and subject to obtaining all necessary
regulatory approvals, it shall notify the

 

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Designated Agent in writing, given not more frequently than once per calendar
year, of the amount (the “Revolving Credit Offered Increase Amount”) of such
proposed increase (such notice, a “Commitment Increase Notice”) which shall be
in a minimum amount equal to $10,000,000 and shall not exceed, in the aggregate
for all increases, $500,000,000. The Borrower shall offer each of the Lenders
the opportunity to provide such Lender’s Percentage of the Revolving Credit
Offered Increase Amount, and if any Lender declines such offer, in whole or in
part, the Borrower may offer such declined amount to (i) other Lenders with the
consent of the Issuing Lenders (which consents of the Issuing Lenders shall not
be unreasonably withheld, conditioned or delayed) and/or (ii) other banks,
financial institutions or other entities with the consent of the Designated
Agent and the Issuing Lenders (which consents of the Designated Agent and the
Issuing Lenders shall not be unreasonably withheld, conditioned or delayed). The
Commitment Increase Notice shall specify the Lenders and/or banks, financial
institutions or other entities that will be requested to provide such Revolving
Credit Offered Increase Amount. The Borrower or, if requested by the Borrower,
the Designated Agent will notify such Lenders, and/or banks, financial
institutions or other entities of such offer.

(b)    Any additional bank, financial institution or other entity which the
Borrower selects to offer a portion of the increased Total Commitments and which
elects to become a party to this Agreement and obtain a Commitment in an amount
so offered and accepted by it pursuant to Section 2.3(a) shall execute a new
lender supplement (the “New Lender Supplement”) with the Borrower, the Issuing
Lenders and the Designated Agent, substantially in the form of Exhibit A,
whereupon such bank, financial institution or other entity (herein called a “New
Revolving Credit Lender”) shall become a Lender for all purposes and to the same
extent as if originally a party hereto and shall be bound by and entitled to the
benefits of this Agreement, provided that the Commitment of any such New
Revolving Credit Lender shall be in an amount not less than $5,000,000.

(c)    Any Lender which accepts an offer to it by the Borrower to increase its
Commitment pursuant to Section 2.3(a) shall, in each case, execute a commitment
increase supplement with the Borrower, the Issuing Lenders and the Designated
Agent, substantially in the form of Exhibit B, whereupon such Lender shall be
bound by and entitled to the benefits of this Agreement with respect to the full
amount of its Commitment as so increased.

(d)    If any bank, financial institution or other entity becomes a New
Revolving Credit Lender pursuant to Section 2.3(b) or any Lender’s Commitment is
increased pursuant to Section 2.3(c), additional Revolving Loans made on or
after the effectiveness thereof (the “Revolving Credit Re-Allocation Date”)
shall be made pro rata based on the Percentages in effect on and after such
Revolving Credit Re-Allocation Date (except to the extent that any such pro rata
borrowings would result in any Lender making an aggregate principal amount of
Revolving Loans in excess of its Commitment, in which case such excess amount
will be allocated to, and made by, such New Revolving Credit Lenders and/or
Lenders with such increased Commitments to the extent of, and pro rata based on,
their respective Commitments otherwise available for Revolving Loans), and
continuations of Eurodollar Loans outstanding on such Revolving Credit
Re-Allocation Date shall be effected by repayment of such Eurodollar Loans on
the last day of the Interest Period applicable thereto and the making of new
Eurodollar Loans pro rata based on such new Percentages. In the event that on
any such Revolving Credit Re-Allocation Date there is an unpaid principal amount
of ABR Loans, the Borrower shall make prepayments thereof and

 

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borrowings of ABR Loans so that, after giving effect thereto, the ABR Loans
outstanding are held pro rata based on such new Percentages. In the event that
on any such Revolving Credit Re-Allocation Date there is an unpaid principal
amount of Eurodollar Loans, such Eurodollar Loans shall remain outstanding with
the respective holders thereof until the expiration of their respective Interest
Periods (unless the Borrower elects to prepay any thereof in accordance with the
applicable provisions of this Agreement), and interest on and repayments of such
Eurodollar Loans will be paid thereon to the respective Lenders holding such
Eurodollar Loans pro rata based on the respective principal amounts thereof
outstanding.

(e)    Notwithstanding anything to the contrary in this Section 2.3, (i) no
Lender shall have any obligation to increase its Commitment unless it agrees to
do so in its sole discretion and unless the Designated Agent and the Issuing
Lenders consent to such increase (which consents of the Designated Agent and the
Issuing Lenders shall not be unreasonably withheld, conditioned or delayed);
provided, that any Lender not responding to the Commitment Increase Notice
within the time period prescribed therein shall be deemed to have declined to
increase its Commitment and (ii) in no event shall any transaction effected
pursuant to this Section 2.3 (A) cause the Total Commitments to exceed
$4,000,000,000 or (B) occur at a time at which a Default or an Event of Default
has occurred and is continuing.

(f)    The Designated Agent shall have received on or prior to the Revolving
Credit Re-Allocation Date, for the benefit of the Lenders, (i) a legal opinion
of counsel to the Borrower covering such matters as are customary for
transactions of this type as may be reasonably requested by the Designated
Agent, which opinions shall be substantially the same, to the extent
appropriate, as the opinions rendered by counsel to the Borrower on the
Effective Date and (ii) certified copies of resolutions of the board of
directors of the Borrower authorizing the Borrower to borrow the Revolving
Credit Offered Increase Amount.

(g)    In connection with any increase in the Total Commitments pursuant to this
Section 2.3, the Borrower shall cause to be issued to the Designated Agent a new
First Mortgage Bond (i) in the amount of the Total Commitment (giving effect to
such increase) (in which case such new First Mortgage Bond shall replace any
then-outstanding Senior Bonds) or (ii) in the amount of such increase, such that
the aggregate principal amount of the Senior Bonds will, when taken together,
equal the Total Commitment (giving effect to such increase).

2.4    [Reserved].

2.5    [Reserved].

2.6    Commitment Fees, Etc.

(a)    The Borrower agrees to pay to the Designated Agent for the account of
each Lender (other than a Defaulting Lender to the extent provided in
Section 2.20) a commitment fee for the period from and including the Effective
Date to the last day of the Commitment Period, in an amount equal to the
Commitment Fee Rate multiplied by the daily average Available Commitment of such
Lender during the period for which payment is made, payable quarterly in arrears
on each Fee Payment Date, commencing on the first such date to occur after the
Effective Date.

 

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(b)    The Borrower agrees to pay to the Designated Agent the fees in the
amounts and on the dates as set forth in any written, duly executed fee
agreements with the Designated Agent and to perform any other obligations
contained therein.

2.7    Termination or Reduction of Commitments; Extension of Termination Date.

(a)    The Borrower shall have the right, upon not less than three Business
Days’ notice to the Designated Agent, to terminate the Commitments or, from time
to time, to reduce the amount of the Commitments; provided that no such
termination or reduction of Commitments shall be permitted if, after giving
effect thereto and to any prepayments of the Revolving Loans made on the
effective date thereof, the Total Extensions of Credit would exceed the Total
Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a
whole multiple thereof, and shall reduce permanently the Commitments then in
effect. In connection with any such termination or reduction, the Borrower may
request that a new First Mortgage Bond be issued to the Designated Agent in the
amount of the Total Commitment (giving effect to such termination or reduction)
and such new First Mortgage Bond shall replace any then-outstanding Senior
Bonds.

(b)    The Borrower may, by written notice to the Designated Agent (such notice
being an “Extension Notice”) given no more frequently than once in each calendar
year, on not more than two occasions, request the Lenders to consider an
extension of the then applicable Termination Date to a later date (which shall
be a Business Day), which extension shall not exceed one year from the then
applicable Termination Date in each instance. The Designated Agent shall
promptly transmit any Extension Notice to each Lender. Each Lender shall notify
the Designated Agent whether it wishes to extend the then applicable Termination
Date not later than 30 days after the date of such Extension Notice, and any
such notice given by a Lender to the Designated Agent, once given, shall be
irrevocable as to such Lender. Any Lender which does not expressly notify the
Designated Agent prior to the expiration of such thirty-day period that it
wishes to so extend the then applicable Termination Date shall be deemed to have
rejected the Borrower’s request for extension of such Termination Date. Lenders
consenting to extend the then applicable Termination Date are hereinafter
referred to as “Continuing Lenders”, and Lenders declining to consent to extend
such Termination Date (or Lenders deemed to have so declined) are hereinafter
referred to as “Non-Extending Lenders”. If the Required Lenders have elected (in
their sole and absolute discretion) to so extend the Termination Date, the
Designated Agent shall promptly notify the Borrower of such election by the
Required Lenders, and effective on the date which is 30 days after the date of
such notice by the Designated Agent to the Borrower, the Termination Date shall
be automatically and immediately so extended with regard to the Continuing
Lenders. No extension will be permitted hereunder without the consent of the
Required Lenders. Upon the delivery of an Extension Notice and upon the
extension of the Termination Date pursuant to this Section, the Borrower shall
be deemed to have represented and warranted on and as of the date of such
Extension Notice and the effective date of such extension, as the case may be,
that no Default or Event of Default has occurred and is continuing.
Notwithstanding anything contained in this Agreement to the contrary, no Lender
shall have any obligation to extend the Termination Date, and each Lender may at
its option, unconditionally and without cause, decline to extend the Termination
Date.

 

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(c)    If the Termination Date shall have been extended in accordance with this
Section 2.7, all references herein to the “Termination Date” (except with
respect to any Non-Extending Lender) shall refer to the Termination Date as so
extended.

(d)    If any Lender shall determine (or be deemed to have determined) not to
extend the Termination Date as requested by any Extension Notice given by the
Borrower pursuant to this Section, the Commitment of such Non-Extending Lender
(including the obligations of such Lender under Section 3.4 and, if such
Non-Extending Lender is also an Issuing Lender, the obligation of such Issuing
Lender to issue Letters of Credit pursuant to Section 3) shall terminate on the
Termination Date without giving any effect to such proposed extension, and the
Borrower shall on such date pay to the Designated Agent, for the account of such
Non-Extending Lender, the principal amount of, and accrued interest on, such
Non-Extending Lender’s Loans and outstanding Reimbursement Obligations, together
with any amounts payable to such Lender pursuant to Section 2.17 and any and all
fees or other amounts owing to such Non-Extending Lender under this Agreement
(including, if such Non-Extending Lender is an Issuing Lender, such accrued
fronting fees as may have been agreed between the Borrower and such Issuing
Lender); provided that if the Borrower has replaced such Non-Extending Lender
pursuant to Section 2.7(e) then the provisions of such paragraph shall apply.
The Total Commitments (but not, for the avoidance of doubt, except as
hereinafter provided, the L/C Commitment) shall be reduced by the amount of the
Commitment of such Non-Extending Lender to the extent the Commitment of such
Non-Extending Lender has not been transferred to one or more Continuing Lenders
pursuant to Section 2.7(e), provided that, if the Total Commitments, after
giving effect to the reduction in the Total Commitments due to Non-Extending
Lenders which are not replaced pursuant to Section 2.7(e), is less than the L/C
Commitment, the L/C Commitment shall be reduced by an amount equal to such
excess.

(e)    A Non-Extending Lender shall be obligated, at the request of the Borrower
and subject to (i) payment by the successor Lender described below to the
Designated Agent for the account of such Non-Extending Lender of the principal
amount of, and accrued interest on, such Non-Extending Lender’s Loans, and
(ii) payment by the Borrower to such Non-Extending Lender of any amounts payable
to such Non-Extending Lender pursuant to Section 2.17 (as if the purchase of
such Non-Extending Lender’s Loans constituted a prepayment thereof) and any and
all fees or other amounts owing to such Non-Extending Lender under this
Agreement (including, if such Non-Extending Lender is an Issuing Lender, such
accrued fronting fees as may have been agreed between the Borrower and such
Issuing Lender), to transfer without recourse, representation, warranty (other
than a representation that such Lender has not created an adverse claim on its
Loans) or expense to such Non-Extending Lender, at any time prior to the
Termination Date applicable to such Non-Extending Lender, all of such
Non-Extending Lender’s rights and obligations hereunder to another financial
institution or group of financial institutions nominated by the Borrower and
willing to participate as a successor Lender in the place of such Non-Extending
Lender; provided that, if such transferee is not already a Lender, (1) such
transferee satisfies all the requirements of this Agreement, and (2) the
Designated Agent and each Issuing Lender that is a Continuing Lender shall have
consented to such transfer, which consent shall not be unreasonably withheld,
conditioned or delayed. Each such transferee successor Lender shall be deemed to
be a Continuing Lender hereunder in replacement of the transferor Non-Extending
Lender and shall enjoy all rights and assume all obligations on the part of such
Non-Extending Lender set forth in this Agreement. Each such transfer shall be
effected pursuant to an Assignment and Assumption.

 

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(f)    If the Termination Date shall have been extended in respect of Continuing
Lenders in accordance with this Section, any notice of borrowing pursuant to
Section 2.2 specifying a Borrowing Date occurring after the Termination Date
applicable to a Non-Extending Lender or requesting an Interest Period extending
beyond such date shall (i) have no effect in respect of such Non-Extending
Lender and (ii) not specify a requested aggregate principal amount exceeding the
aggregate Available Commitments (calculated on the basis of the Commitments of
the Continuing Lenders).

2.8    Optional Prepayments.

(a)    The Borrower may at any time and from time to time prepay the Loans, in
whole or in part, without premium or penalty, upon irrevocable notice delivered
to the Designated Agent no later than 12:00 Noon, New York City time, three
Business Days prior thereto, in the case of Eurodollar Loans, and no later than
2:00 p.m., New York City time, one Business Day prior thereto, in the case of
ABR Loans, which notice shall specify the date and amount of prepayment and
whether the prepayment is of Eurodollar Loans or ABR Loans; provided, that if a
Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 2.17. Upon receipt of any such notice the Designated Agent
shall promptly notify each relevant Lender thereof. If any such notice is given,
the amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to such date on the amount
prepaid. Partial prepayments of Revolving Loans which shall be in an aggregate
principal amount of $1,000,000 or a whole multiple of $500,000 in excess
thereof. Notwithstanding the foregoing, any notice of prepayment delivered in
connection with any refinancing of all of the Loans and Commitments with the
proceeds of such refinancing or of any other incurrence of Indebtedness or the
occurrence of some other identifiable event or condition, may be, if expressly
so stated to be, contingent upon the consummation of such refinancing or
incurrence or occurrence of such other identifiable event or condition and may
be revoked by the Borrower, subject to compliance with the obligations under
Section 2.17 in connection with any such revocation, in the event such
contingency is not met.

2.9    Conversion and Continuation Options.

(a)    The Borrower may elect from time to time to convert Eurodollar Loans to
ABR Loans by giving the Designated Agent prior irrevocable notice of such
election no later than 12:00 Noon, New York City time, on the Business Day
preceding the proposed conversion date, provided that any such conversion of
Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto. The Borrower may elect from time to time to convert ABR Loans
to Eurodollar Loans by giving the Designated Agent prior irrevocable notice of
such election no later than 12:00 Noon, New York City time, on the third
Business Day preceding the proposed conversion date (which notice shall specify
the length of the initial Interest Period therefor), provided that no ABR Loan
may be converted into a Eurodollar Loan when any Event of Default has occurred
and is continuing and the Required Lenders have determined in their sole
discretion not to permit such conversions. Upon receipt of any such notice the
Designated Agent shall promptly notify each relevant Lender thereof.

 

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(b)    Any Eurodollar Loan may be continued as such upon the expiration of the
then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Designated Agent, in accordance with the applicable
provisions of the defined term “Interest Period”, of the length of the next
Interest Period to be applicable to such Loans, provided that no Eurodollar Loan
may be continued as such when any Event of Default has occurred and is
continuing and the Required Lenders have determined in their sole discretion not
to permit such continuations; provided, further, that if the Borrower shall fail
to give any required notice as described above in this paragraph, subject to the
preceding proviso, such Loans shall be automatically continued as Eurodollar
Loans with an Interest Period of one month on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Designated Agent shall
promptly notify each relevant Lender thereof.

2.10    Limitations on Eurodollar Tranches. Notwithstanding anything to the
contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans and all selections of Interest Periods shall be in such amounts
and be made pursuant to such elections so that (a) after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $500,000
in excess thereof and (b) no more than 15 Eurodollar Tranches shall be
outstanding at any one time.

2.11    Interest Rates and Payment Dates.

(a)    Each Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the Eurodollar
Rate determined for such day plus the Applicable Margin.

(b)    Each ABR Loan shall bear interest at a rate per annum equal to the ABR
plus the Applicable Margin.

(c)    (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a default rate per annum equal to (x) in the case of the Loans, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section plus 2% or (y) in the case of Reimbursement Obligations, the rate
applicable to ABR Loans plus 2%, and (ii) if all or a portion of any interest
payable on any Loan or Reimbursement Obligation or any commitment fee, letter of
credit fee, or any other fee payable (excluding any expenses or other indemnity)
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a default
rate per annum equal to the rate then applicable to ABR Loans plus 2%, in each
case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).

(d)    Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to Section 2.11(c) shall be payable
from time to time on demand.

 

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(e)    The amount of each interest payment received by the Designated Agent
under the Senior Bond shall be deemed to be a payment of interest payable by the
Borrower hereunder and shall reduce, dollar-for-dollar, the amount of interest
then owing by the Borrower hereunder.

2.12    Computation of Interest and Fees.

(a)    Interest and fees payable pursuant hereto shall be calculated on the
basis of a 360-day year for the actual days elapsed, except that, with respect
to ABR Loans the rate of interest on which is calculated on the basis of ABR,
the interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Designated Agent shall as
soon as practicable notify the Borrower and the relevant Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the ABR or the Eurocurrency Reserve Requirements
shall become effective as of the opening of business on the day on which such
change becomes effective. The Designated Agent shall as soon as practicable
notify the Borrower and the relevant Lenders of the effective date and the
amount of each such change in interest rate.

(b)    Each determination of an interest rate by the Designated Agent pursuant
to any provision of this Agreement shall constitute prima facie evidence of such
amounts. The Designated Agent shall, at the request of the Borrower or any
Lender, deliver to the Borrower or such Lender a statement showing the
quotations used by the Designated Agent in determining any interest rate
pursuant to Section 2.11(a).

2.13    Inability to Determine Interest Rate.

(a)    If prior to the first day of any Interest Period:

(i)    the Designated Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower absent manifest error) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period,
provided that no Benchmark Transition Event shall have occurred at such time; or

(ii)    the Designated Agent shall have received notice from the Required
Lenders that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,

the Designated Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as ABR Loans, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans shall
be converted, on the last day of the then-current Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Designated Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrower have
the right to convert Loans to Eurodollar Loans.

 

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(b)    Notwithstanding anything to the contrary herein or in any other Loan
Document, upon the occurrence of a Benchmark Transition Event or an Early Opt-in
Election, as applicable, the Designated Agent and the Borrower may amend this
Agreement to replace the Eurodollar Base Rate with a Benchmark Replacement. Any
such amendment with respect to a Benchmark Transition Event will become
effective at 5:00 p.m. on the fifth Business Day after the Designated Agent has
posted such proposed amendment to all Lenders and the Borrower, so long as the
Designated Agent has not received, by such time, written notice of objection to
such proposed amendment from Lenders comprising the Required Lenders; provided
that, with respect to any proposed amendment containing any SOFR-Based Rate, the
Lenders shall be entitled to object only to the Benchmark Replacement Adjustment
contained therein. Any such amendment with respect to an Early Opt-in Election
will become effective on the date that Lenders comprising the Required Lenders
have delivered to the Designated Agent written notice that such Required Lenders
accept such amendment. No replacement of the Eurodollar Base Rate with a
Benchmark Replacement will occur prior to the applicable Benchmark Transition
Start Date.

(c)    In connection with the implementation of a Benchmark Replacement, the
Designated Agent will have the right to make Benchmark Replacement Conforming
Changes from time to time and, notwithstanding anything to the contrary herein
or in any other Loan Document, any amendments implementing such Benchmark
Replacement Conforming Changes will become effective without any further action
or consent of any other party to this Agreement.

(d)    The Designated Agent will promptly notify the Borrower and the Lenders of
(i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election,
as applicable, and its related Benchmark Replacement Date and Benchmark
Transition Start Date, (ii) the implementation of any Benchmark Replacement,
(iii) the effectiveness of any Benchmark Replacement Conforming Changes and
(iv) the commencement or conclusion of any Benchmark Unavailability Period. Any
determination, decision or election that may be made by the Designated Agent or
Lenders pursuant to this Section 2.13, including any determination with respect
to a tenor, rate or adjustment or of the occurrence or non-occurrence of an
event, circumstance or date and any decision to take or refrain from taking any
action, will be conclusive and binding absent manifest error and may be made in
its or their sole discretion and without consent from any other party hereto,
except, in each case, as expressly required pursuant to this Section 2.13.

(e)    Upon the Borrower’s receipt of notice of the commencement of a Benchmark
Unavailability Period, the Borrower may revoke any request for a borrowing of
Eurodollar Loans, or conversion or continuation of Eurodollar Loans to be made,
converted or continued during any Benchmark Unavailability Period and, failing
that, (x) any Eurodollar Loans requested to be made shall be made as ABR Loans,
(y) any Loans that were to have been converted to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the last day of the then-current Interest Period, to ABR Loans.

 

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2.14    Pro Rata Treatment and Payments; Notes.

(a)    Each borrowing by the Borrower from the Lenders hereunder, each payment
by the Borrower on account of any commitment fee and any reduction of the
Commitments of the Lenders shall be made pro rata according to the respective
Percentages of the Lenders.

(b)    Each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Revolving Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving Loans
then held by the Lenders. Each payment in respect of Reimbursement Obligations
in respect of any Letter of Credit shall be made to the Issuing Lender that
issued such Letters of Credit.

(c)    Notwithstanding anything to the contrary herein, all payments (including
prepayments) to be made by the Borrower hereunder, whether on account of
principal, Reimbursement Obligations, interest, fees or otherwise, shall be made
without setoff or counterclaim and shall be made prior to 4:00 P.M., New York
City time, on the due date thereof to the Designated Agent, for the account of
the Lenders or the Issuing Lenders, as applicable, at the Funding Office, in
Dollars and in immediately available funds. The Designated Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.

(d)    Unless the Designated Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that would
constitute its share of such borrowing available to the Designated Agent, the
Designated Agent may assume that such Lender is making such amount available to
the Designated Agent, and the Designated Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
amount is not made available to the Designated Agent by the required time on the
Borrowing Date therefor, such Lender shall pay to the Designated Agent, on
demand, such amount with interest thereon, at a rate equal to the greater of
(i) the Federal Funds Effective Rate and (ii) a rate determined by the
Designated Agent in accordance with banking industry rules on interbank
compensation, for the period until such Lender makes such amount immediately
available to the Designated Agent. A certificate of the Designated Agent
submitted to any Lender with respect to any amounts owing under this paragraph
shall be conclusive in the absence of manifest error. If such Lender’s share of
such borrowing is not made available to the Designated Agent by such Lender
within three Business Days after such Borrowing Date, the Designated Agent shall
also be entitled to recover such amount with interest thereon at the rate per
annum applicable to ABR Loans from the Borrower within 30 days after written
demand therefor.

(e)    Unless the Designated Agent shall have been notified in writing by the
Borrower prior to the date of any payment due to be made by the Borrower
hereunder that the Borrower will not make such payment to the Designated Agent,
the Designated Agent may assume that the

 

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Borrower is making such payment, and the Designated Agent may, but shall not be
required to, in reliance upon such assumption, make available to the Lenders
their respective pro rata shares of a corresponding amount. If such payment is
not made to the Designated Agent by the Borrower within three Business Days
after such due date, the Designated Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Designated Agent or any Lender
against the Borrower.

(f)    The Borrower agrees that, upon the request to the Designated Agent by any
Lender, the Borrower will promptly execute and deliver to such Lender a
promissory note (a “Note”) of the Borrower evidencing any Revolving Loans of
such Lender, substantially in the form of Exhibit H, with appropriate insertions
as to date and principal amount; provided, that delivery of Notes shall not be a
condition precedent to the occurrence of the Effective Date or the making of
Loans on the Effective Date.

(g)    If any Lender shall fail to make any payment required to be made by it
pursuant to Section 3.4 or 2.14(d), then the Designated Agent may, in its
discretion and notwithstanding any contrary provision hereof, (i) apply any
amounts thereafter received by the Designated Agent hereunder for the account of
such Lender for the benefit of the Designated Agent or any Issuing Lender to
satisfy such Lender’s obligations to the Designated Agent or such Issuing
Lender, as the case may be, under such Section until all such unsatisfied
obligations are fully paid, and/or (ii) so long as such Lender is a Defaulting
Lender, hold any such amounts in a segregated account as cash collateral for,
and application to, any future funding obligations of such Lender under any such
Section, in the case of each of clauses (i) and (ii) above, in any order as
determined by the Designated Agent in its discretion.

2.15    Change of Law.

(a)    If a Change of Law shall:

(i)    subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its Loans, Letters of Credit or
Commitments, or other obligations, or its deposits, reserves, other liabilities
or capital attributable thereto;

(ii)    impose, modify or hold applicable any reserve, special deposit,
compulsory loan, Federal Deposit Insurance Corporation insurance charge or other
similar insurance charge or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any Lender or any
Issuing Lender that is not otherwise included in the determination of the
Eurodollar Rate, which requirements are generally applicable to advances, loans
and other extensions of credit made by such Lender or such Issuing Lender; or

 

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(iii)    impose on any Lender or any Issuing Lender any other condition that is
generally applicable to loans made by such Lender or Letters of Credit issued by
such Issuing Lender or participations therein by a Lender;

and the result of any of the foregoing is to increase the cost to such Lender or
such other Recipient, by an amount that such Lender or such other Recipient
deems to be material, of making, converting into, continuing or maintaining
Loans or issuing or participating in Letters of Credit, or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrower
shall promptly pay such Lender or such other Recipient, within ten Business Days
after its demand, any additional amounts necessary to compensate such Lender or
such other Recipient for such increased cost or reduced amount receivable. If
any Lender or other Recipient becomes entitled to claim any additional amounts
pursuant to this paragraph, it shall promptly notify the Borrower (with a copy
to the Designated Agent) of the event by reason of which it has become so
entitled; provided, however, that no Lender or other Recipient shall be entitled
to demand such compensation more than 90 days following (x) the last day of the
Interest Period in respect of which such demand is made or (y) the repayment of
the Loan in respect of which such demand is made, and no Issuing Lender shall be
entitled to demand such compensation more than 90 days following the expiration
or termination (by drawing or otherwise) of the Letter of Credit issued by it in
respect of which such demand is made. Notwithstanding any other provision
herein, no Lender shall demand compensation pursuant to this Section 2.15 if it
shall not at the time be the general policy or practice of such Lender to demand
such compensation from similarly situated borrowers (to the extent that such
Lender has the right to do so under its credit facilities with similarly
situated borrowers).

(b)    If any Lender or any Issuing Lender shall have determined that a Change
of Law regarding capital or liquidity requirements shall have the effect of
reducing the rate of return on such Lender’s or such Issuing Lender’s capital or
the capital of any corporation controlling such Lender or such Issuing Lender as
a consequence of its obligations hereunder or under or in respect of any Letter
of Credit to a level below that which such Lender, such Issuing Lender or such
corporation could have achieved but for such Change of Law (taking into
consideration such Lender’s, such Issuing Lender’s or such corporation’s
policies with respect to capital adequacy or liquidity) by an amount deemed by
such Lender or such Issuing Lender to be material, then from time to time, after
submission by such Lender or such Issuing Lender to the Borrower (with a copy to
the Designated Agent) of a written request therefor, the Borrower shall pay to
such Lender or such Issuing Lender such additional amount or amounts as will
compensate such Lender, such Issuing Lender or such corporation for such
reduction.

(c)    A certificate as to any additional amounts payable pursuant to this
Section 2.15 submitted by any Lender, any Issuing Lender or any other Recipient
to the Borrower (with a copy to the Designated Agent) shall constitute prima
facie evidence of such costs or amounts. Notwithstanding anything to the
contrary in this Section 2.15, the Borrower shall not be required to compensate
a Lender, any Issuing Lender or any other Recipient pursuant to this
Section 2.15 for any amounts incurred more than six months prior to the date
that such Lender, such Issuing Lender or such other Recipient notifies the
Borrower of such Lender’s, such Issuing Lender’s or such other Recipient’s
intention to claim compensation therefor; provided that, if the circumstances
giving rise to such claim have a retroactive effect, then such six-month period
shall be extended to include the period of such retroactive effect not to exceed
twelve months.

 

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The obligations of the Borrower pursuant to this Section 2.15 shall survive for
90 days after the termination of this Agreement and the payment of the Loans and
all other amounts then due and payable hereunder.

2.16    Taxes.

(a)    Any and all payments by or on account of any obligation of the Borrower
under any Loan Document shall be made without deduction or withholding for any
Taxes, except as required by applicable laws. If any applicable laws (as
determined in the good faith discretion of the Borrower or Designated Agent
making the payment) require the deduction or withholding of any Tax from any
such payment, then (A) the Borrower or Designated Agent, as applicable shall
withhold or make such deductions as are determined by the Borrower or the
Designated Agent to be required, (B) the Borrower or Designated Agent, as
applicable shall timely pay the full amount withheld or deducted to the relevant
Governmental Authority in accordance with such laws, and (C) to the extent that
the withholding or deduction is made on account of Indemnified Taxes, the sum
payable by the Borrower shall be increased as necessary so that after any
required withholding or the making of all required deductions (including
deductions applicable to additional sums payable under this Section 2.16) the
applicable Recipient receives an amount equal to the sum it would have received
had no such withholding or deduction been made.

(b)    Without limiting the provisions of subsection (a) above, the Borrower
shall timely pay to the relevant Governmental Authority in accordance with
applicable law, or at the option of the Designated Agent timely reimburse it for
the payment of, any Other Taxes.

(c)    (i) The Borrower shall, and does hereby, indemnify each Recipient, and
shall make payment in respect thereof within 10 days after demand therefor, for
the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or
asserted on or attributable to amounts payable under this Section 2.16) payable
or paid by such Recipient or required to be withheld or deducted from a payment
to such Recipient, and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender or
another Recipient (with a copy to the Designated Agent), or by the Designated
Agent on its own behalf or on behalf of a Lender or another Recipient, shall be
conclusive absent manifest error.

(ii)    Each Lender and each Issuing Lender shall, and does hereby, severally
indemnify, and shall make payment in respect thereof within 10 days after demand
therefor, (x) the Designated Agent against any Indemnified Taxes attributable to
such Lender or such Issuing Lender (but only to the extent that the Borrower has
not already indemnified the Designated Agent for such Indemnified Taxes and
without limiting the obligation of the Borrower to do so), (y) the Designated
Agent against any Taxes attributable to such Lender’s or such Issuing Lender’s
failure to comply with the provisions of Section 10.6(c)(iii) relating to the
maintenance of a Participant Register and (z) the Designated Agent against any
Excluded Taxes attributable to such Lender or such Issuing Lender, in each case,
that are payable or paid by the Designated Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or

 

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asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to any Lender or any Issuing Lender by
the Designated Agent shall be conclusive absent manifest error. Each Lender and
each Issuing Lender hereby authorizes the Designated Agent to set off and apply
any and all amounts at any time owing to such Lender or such Issuing Lender, as
the case may be, under this Agreement or any other Loan Document against any
amount due to the Designated Agent under this clause (ii).

(d)    Upon request by the Borrower or the Designated Agent, as the case may be,
after any payment of Taxes by the Borrower or by the Designated Agent to a
Governmental Authority as provided in this Section 2.16, the Borrower shall
deliver to the Designated Agent or the Designated Agent shall deliver to the
Borrower, as the case may be, the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of any
return required by laws to report such payment or other evidence of such payment
reasonably satisfactory to the Borrower or the Designated Agent, as the case may
be.

(e)    (i) Any Lender or any Issuing Lender that is entitled to an exemption
from or reduction of withholding Tax with respect to payments made under any
Loan Document shall deliver to the Borrower and the Designated Agent, at the
time or times reasonably requested by the Borrower or the Designated Agent, such
properly completed and executed documentation reasonably requested by the
Borrower or the Designated Agent as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender or any
Issuing Lender, if reasonably requested by the Borrower or the Designated Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Designated Agent as will enable the
Borrower or the Designated Agent to determine whether or not such Lender or such
Issuing Lender is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in the preceding two
sentences, the completion, execution and submission of such documentation (other
than such documentation set forth in Sections 2.16(e)(ii)(A), (ii)(B) and
(ii)(D) below) shall not be required if in the Lender’s or any Issuing Lender’s
reasonable judgment such completion, execution or submission would subject such
Lender or such Issuing Lender to any material unreimbursed cost or expense or
would materially prejudice the legal or commercial position of such Lender or
such Issuing Lender.

(ii)    Without limiting the generality of the foregoing,

(A)    any Lender or any Issuing Lender that is a U.S. Person shall deliver to
the Borrower and the Designated Agent on or prior to the date on which such
Lender or such Issuing Lender becomes a Lender or an Issuing Lender under this
Agreement (and from time to time thereafter upon the reasonable request of the
Borrower or the Designated Agent), executed copies of IRS Form W-9 certifying
that such Lender or such Issuing Lender is exempt from U.S. federal backup
withholding tax;

(B)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Designated Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign

 

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Lender becomes a Lender or an Issuing Lender under this Agreement (and from time
to time thereafter upon the reasonable request of the Borrower or the Designated
Agent), whichever of the following is applicable:

(I)    in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BEN or
W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S.
federal withholding Tax pursuant to the “interest” article of such tax treaty
and (y) with respect to any other applicable payments under any Loan Document,
IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or
reduction of, U.S. federal withholding Tax pursuant to the “business profits” or
“other income” article of such tax treaty;

(II)    executed copies of IRS Form W-8ECI;

(III)    in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit G-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a
“10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed copies of IRS Form W-8BEN or W-8BEN-E, as
applicable; or

(IV)    to the extent a Foreign Lender is not the beneficial owner, executed
copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or
W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in the
form of Exhibit G-2 or Exhibit G-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit G-4 on behalf of each such direct and indirect partner.

(C)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Designated Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender or an Issuing Lender under this Agreement (and
from time to time thereafter upon the reasonable request of the Borrower or the
Designated Agent), executed copies of any other form prescribed by applicable
law as a basis for claiming exemption from or a reduction in U.S. federal
withholding Tax, duly completed, together with such supplementary documentation
as may be prescribed by applicable law to permit the Borrower or the Designated
Agent to determine the withholding or deduction required to be made; and

 

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(D)    if a payment made to a Lender or any Issuing Lender under any Loan
Document would be subject to U.S. federal withholding Tax imposed by FATCA if
such Lender or such Issuing Lender were to fail to comply with the applicable
reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Lender or such Issuing Lender shall
deliver to the Borrower and the Designated Agent at the time or times prescribed
by law and at such time or times reasonably requested by the Borrower or the
Designated Agent such documentation prescribed by applicable law (including as
prescribed by Section 1471(b)(3) (C)(i) of the Code) and such additional
documentation reasonably requested by the Borrower or the Designated Agent as
may be necessary for the Borrower and the Designated Agent to comply with their
obligations under FATCA and to determine that such Lender or such Issuing Lender
has complied with such Lender’s or such Issuing Lender’s obligations under FATCA
or to determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (D), “FATCA” shall include any amendments made to FATCA
after the Effective Date.

(iii)    Each Lender and each Issuing Lender agrees that if any form or
certification it previously delivered pursuant to this Section 2.16 expires or
becomes obsolete or inaccurate in any respect, it shall update such form or
certification or promptly notify the Borrower and the Designated Agent in
writing of its legal inability to do so.

(f)    At no time shall the Designated Agent have any obligation to file for or
otherwise pursue on behalf of a Lender or an Issuing Lender any refund of Taxes
withheld or deducted from funds paid for the account of such Lender or such
Issuing Lender, as the case may be. If any Recipient determines, in its sole
discretion exercised in good faith, that it has received a refund of, or credit
with respect to, any Taxes as to which it has been indemnified pursuant to this
Section 2.16 (including by the payment of additional amounts pursuant to this
Section 2.16), it shall pay to the Borrower an amount equal to such refund or
credit (but only to the extent of indemnity payments made under this
Section 2.16 with respect to the Taxes giving rise to such refund or credit),
net of all out-of-pocket expenses (including Taxes) of such indemnified party
and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund or credit). The Borrower, upon the request
of such indemnified party, shall repay to such indemnified party the amount paid
over pursuant to this paragraph (f) (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) in the event such
indemnified party is required to repay such refund or credit to such
Governmental Authority. Notwithstanding anything to the contrary in this
paragraph (f), in no event will the indemnified party be required to pay any
amount to the Borrower pursuant to this paragraph (f) the payment of which would
place the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund or credit had not been deducted, withheld or
otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph (f) shall not be
construed to require any Recipient to make available its tax returns (or any
other information relating to its Taxes that it deems confidential) to the
Borrower or any other Person.

 

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(g)    Each party’s obligations under this Section 2.16 shall survive for one
year after the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.

2.17    Indemnity. The Borrower agrees to indemnify each Lender for, and to hold
each Lender harmless from, any loss (other than the loss of Applicable Margin)
or expense that such Lender may sustain or incur as a consequence of (a) default
by the Borrower in making a borrowing of, conversion into or continuation of
Eurodollar Loans after the Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) default by the Borrower in
making any prepayment of or conversion from Eurodollar Loans after the Borrower
has given a notice thereof in accordance with the provisions of this Agreement
or (c) the making of a prepayment of Eurodollar Loans on a day that is not the
last day of an Interest Period with respect thereto. A certificate as to any
amounts payable pursuant to this Section submitted to the Borrower by any Lender
shall be conclusive in the absence of manifest error. This covenant shall
survive for 90 days after the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.

2.18    Change of Lending Office. Each Lender agrees that, upon the occurrence
of any event giving rise to the operation of Section 2.15 or 2.16 with respect
to such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans affected by such event with the object of avoiding
the consequences of such event; provided, that such designation is made on terms
that, in the sole but reasonable judgment of such Lender, cause such Lender and
its lending office(s) to suffer no unreimbursed economic disadvantage or any
legal or regulatory disadvantage, and provided, further, that nothing in this
Section shall affect or postpone any of the obligations of the Borrower or the
rights of any Lender pursuant to Section 2.15 or 2.16.

2.19    Replacement of Lenders. The Borrower shall be permitted to replace any
Lender that (a) requests (on its behalf or any of its Participants)
reimbursement for amounts owing pursuant to Section 2.15 or 2.16, (b) provides
notice under Section 2.21 or (c) becomes a Defaulting Lender, with a replacement
financial institution; provided that (i) such replacement does not conflict with
any Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall have taken no action under Section 2.18 which eliminates the
continued need for payment of amounts owing pursuant to Section 2.15 or 2.16,
(iv) the replacement financial institution shall purchase, at par, all Loans and
other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.17 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Designated Agent, (vii) the replaced Lender shall
be obligated to make such replacement in accordance with the provisions of
Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.15 or 2.16, as the case may be,
and (ix) any such replacement shall not be deemed to be a waiver of any rights
that the Borrower, the Designated Agent or any other Lender shall have against
the replaced Lender.

 

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2.20    Defaulting Lenders. Notwithstanding anything to the contrary contained
in this Agreement, if any Lender becomes a Defaulting Lender, then, until such
time as that Lender is no longer a Defaulting Lender, to the extent permitted by
applicable law:

(a)    any payment of principal, interest, fees or other amounts (other than
those described in Section 2.20(b)) received by the Designated Agent for the
account of that Defaulting Lender (whether voluntary or mandatory, at maturity,
pursuant to Section 7 or otherwise, and including any amounts made available to
the Designated Agent by that Defaulting Lender pursuant to Section 9.7), shall
be applied at such time or times as may be determined by the Designated Agent as
follows: first, to the payment of any amounts owing by that Defaulting Lender to
the Designated Agent hereunder; second, to the payment on a pro rata basis of
any amounts owing by that Defaulting Lender to any Issuing Lender hereunder;
third, if so requested by any Issuing Lender with a Letter of Credit outstanding
or with unreimbursed drawings owing under a Letter of Credit, to be held as cash
collateral in respect of such Defaulting Lender’s Percentage of such L/C
Obligations; fourth, if so determined by the Designated Agent or requested by
any Issuing Lender, to be held as cash collateral for future funding obligations
of that Defaulting Lender of any participation in any L/C Obligations; fifth, as
the Borrower may request (so long as no Default or Event of Default exists), to
the funding of any Loan in respect of which that Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Designated Agent; sixth, if so determined by the Borrower with the consent of
the Designated Agent, not to be unreasonably withheld, to be held in a
non-interest bearing deposit account and released in order to satisfy
obligations of that Defaulting Lender to fund Loans under this Agreement;
seventh, to the payment of any amounts owing to the Lenders or any Issuing
Lender as a result of any judgment of a court of competent jurisdiction obtained
by any Lender or any Issuing Lender against that Defaulting Lender as a result
of that Defaulting Lender’s breach of its obligations under this Agreement;
eighth, so long as no Default or Event of Default exists, to the payment of any
amounts owing to the Borrower as a result of any judgment of a court of
competent jurisdiction obtained by the Borrower against that Defaulting Lender
as a result of that Defaulting Lender’s breach of its obligations under this
Agreement; and ninth, to that Defaulting Lender or as otherwise directed by a
court of competent jurisdiction; provided that if such payment is a payment of
the principal amount of any Loans or unreimbursed drawings under Letters of
Credit in respect of which that Defaulting Lender has not fully funded its
appropriate share such payment shall be applied solely to pay the Loans and
unreimbursed drawings under Letters of Credit of all non-Defaulting Lenders on a
pro rata basis prior to being applied to the payment of any Loans of that
Defaulting Lender or participating interests of that Defaulting Lender in
unreimbursed drawings under Letters of Credit. Any payments, prepayments or
other amounts paid or payable to a Defaulting Lender that are applied (or held)
to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant
to this Section 2.20(a) shall be deemed paid to and redirected by that
Defaulting Lender, and each Lender irrevocably consents hereto;

(b)    [reserved];

(c)    during any period in which there is a Defaulting Lender, for purposes of
computing the amount of the obligation of each non-Defaulting Lender to acquire,
refinance or fund participations in Letters of Credit pursuant to Section 3.4,
the Percentage of each non-Defaulting Lender shall be computed without giving
effect to the Commitment of that Defaulting

 

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Lender; provided, that, (i) each such reallocation shall be given effect only
if, at the date the applicable Lender becomes a Defaulting Lender, no Default or
Event of Default exists; and (ii) the aggregate obligation of each
non-Defaulting Lender to acquire, refinance or fund participations in L/C
Obligations shall not exceed the positive difference, if any, of (1) the
Commitment of that non-Defaulting Lender minus (2) the aggregate outstanding
Loans of that Lender and that Lender’s Percentage of L/C Obligations. Subject to
Section 10.20, no reallocation hereunder shall constitute a waiver or release of
any claim of any party hereunder against a Defaulting Lender arising from that
Lender having become a Defaulting Lender, including any claim of a
non-Defaulting Lender as a result of such non-Defaulting Lender’s increased
exposure following such reallocation.

(d)    if the reallocation described in paragraph (c) above cannot, or can only
partially, be effected, the Borrower shall within one Business Day following
notice by the Designated Agent (after giving effect to any partial reallocation
pursuant to paragraph (c) above) deposit cash with the Designated Agent as
collateral to secure such Defaulting Lender’s Percentage of any outstanding L/C
Obligations for so long as any such L/C Obligation are outstanding; and

(e)    that Defaulting Lender’s right to approve or disapprove any amendment,
supplement, modification, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of “Required Lenders” and
Section 10.1.

If the Borrower, the Designated Agent and each Issuing Lender reasonably
determine in writing that a Defaulting Lender should no longer be deemed to be a
Defaulting Lender, the Designated Agent will so notify the parties hereto,
whereupon as of the effective date specified in such notice and subject to any
conditions set forth therein (which may include arrangements with respect to any
cash collateral), that Lender will, to the extent applicable, purchase that
portion of outstanding Loans and Participation Amounts of the other Lenders or
take such other actions as the Designated Agent may determine to be necessary to
cause the Loans and funded and unfunded participations in Letters of Credit to
be held on a pro rata basis by the Lenders in accordance with their Percentages
(without giving effect to Section 2.20(c)), whereupon that Lender will cease to
be a Defaulting Lender; provided that no adjustments will be made retroactively
with respect to fees accrued or payments made by or on behalf of the Borrower
while that Lender was a Defaulting Lender; and provided, further, that except to
the extent otherwise expressly agreed by the affected parties, no change
hereunder from Defaulting Lender to Lender will constitute a waiver or release
of any claim of any party hereunder arising from that Lender’s having been a
Defaulting Lender.

Cash collateral held by the Designated Agent to reduce Fronting Exposure shall
be released to the applicable Lender promptly following (i) the elimination of
the applicable Fronting Exposure or other obligations giving rise thereto
(including by the termination of Defaulting Lender status of the applicable
Lender (or, as appropriate, its assignee following compliance with
Section 10.6)); (ii) the Designated Agent’s good faith determination that there
exists excess cash collateral; and (iii) the termination of the Commitment
Period and the repayment in full of all outstanding Loans and L/C Obligations.

2.21    Illegality. If any Lender determines that any Law has made it unlawful,
or that any Governmental Authority has asserted that it is unlawful, for any
Lender or its applicable

 

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lending office to make, maintain, or fund Loans whose interest is determined by
reference to the Eurodollar Rate, or to determine or charge interest rates based
upon the Eurodollar Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, then, upon notice thereof
by such Lender to the Borrower (through the Designated Agent), (a) any
obligation of such Lender to make or continue Eurodollar Loans or to convert ABR
Loans to Eurodollar Loans shall be suspended, and (b) if such notice asserts the
illegality of such Lender making or maintaining ABR Loans the interest rate on
which is determined by reference to the Eurodollar Rate component of the ABR,
the interest rate on which ABR Loans of such Lender shall, if necessary to avoid
such illegality, be determined by the Designated Agent without reference to the
Eurodollar Rate component of the ABR, in each case until such Lender notifies
the Designated Agent and the Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, (i) the Borrower
shall, upon demand from such Lender (with a copy to the Designated Agent),
prepay or, if applicable, convert all Eurodollar Loans of such Lender to ABR
Loans (the interest rate on which ABR Loans of such Lender shall, if necessary
to avoid such illegality, be determined by the Designated Agent without
reference to the Eurodollar Rate component of the ABR), either on the last day
of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurodollar Loans to such day, or immediately, if such Lender may
not lawfully continue to maintain such Eurodollar Loans and (ii) if such notice
asserts the illegality of such Lender determining or charging interest rates
based upon the Eurodollar Rate, the Designated Agent shall during the period of
such suspension compute the ABR applicable to such Lender without reference to
the Eurodollar Rate component thereof until the Designated Agent is advised in
writing by such Lender that it is no longer illegal for such Lender to determine
or charge interest rates based upon the Eurodollar Rate. Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted, together with any additional amounts required
pursuant to Section 2.17.

SECTION 3.    LETTERS OF CREDIT

3.1    L/C Commitment.

(a)    Subject to the terms and conditions hereof, each Issuing Lender, in
reliance on the agreements of the other Lenders set forth in Section 3.4(a),
agrees to issue standby and commercial letters of credit (the letters of credit
issued pursuant to this Section 3 and including each Existing Letter of Credit,
collectively, the “Letters of Credit”) for the account of the Borrower on any
Business Day on or after the Effective Date and during the Commitment Period in
such form as may be approved from time to time by such Issuing Lender; provided,
that each of Goldman Sachs Bank USA, Credit Suisse AG, New York Branch, Barclays
Bank PLC and their respective Affiliates shall not be required to issue any
commercial letters of credit; provided further that no Issuing Lender shall
issue, amend or extend any Letter of Credit if, after giving effect to such
issuance, amendment or extension, (i) the aggregate amount of L/C Obligations
owed by the Borrower to any Issuing Lender shall exceed the amount of such
Issuing Lender’s L/C Pro Rata Commitment (or such higher amount agreed upon in
writing between the Borrower and such Issuing Lender), (ii) the L/C Obligations
would exceed the L/C Commitment, (iii) the aggregate amount of the Available
Commitments would be less than zero or (iv) the Total Extensions of Credit would
exceed the outstanding principal amount of the Senior Bond at any time (as
determined by the Designated Agent). Each Letter of Credit shall (i) be
denominated in

 

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Dollars and, (ii) subject to the second paragraph of Section 3.2, expire no
later than the earlier of (x) the first anniversary of its date of issuance and
(y) the date which is five Business Days prior to the Termination Date (such
fifth Business Day, the “Letter of Credit Expiration Date”).

(b)    No Issuing Lender shall at any time be obligated to issue, amend or
extend any Letter of Credit hereunder if such issuance, amendment or extension
would (i) conflict with, or cause such Issuing Lender or any L/C Participant to
exceed any limits imposed by, any applicable Requirement of Law, (ii) violate
one or more policies of the Issuing Lender applicable to letters of credit
generally or (iii) violate any order, judgment, or decree of any Governmental
Authority that, by its terms, purports to enjoin or restrain such Issuing Lender
from issuing such Letter of Credit, or any law applicable to such Issuing
Lender. No Issuing Lender shall be under any obligation to issue, amend or
extend any Letter of Credit that is not a standby Letter of Credit, unless
otherwise agreed by such Issuing Lender. In the event there is a Defaulting
Lender as of the date of any request for the issuance of a Letter of Credit, no
Issuing Lender shall be required to issue or arrange for such Letter of Credit
to the extent the Issuing Lender is not reasonably satisfied that the Defaulting
Lender’s L/C Obligations with respect to such Letter of Credit have been
reallocated and/or cash collateralized pursuant to Section 2.20.

(c)    Unless otherwise specified herein, the amount of a Letter of Credit at
any time shall be deemed to be the stated amount of such Letter of Credit in
effect at such time; provided, however, that with respect to any Letter of
Credit that provides for one or more automatic increases in the stated amount
thereof, the amount of such Letter of Credit shall be deemed to be the maximum
stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.

(d)    For all purposes of this Agreement, if on any date of determination, a
Letter of Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of any rule of law or uniform practices to
which any Letter of Credit is subject (including Rule 3.13 and Rule 3.14 of the
ISP) or similar terms in the Letter of Credit itself that permit a drawing to be
made under such Letter of Credit after the expiration thereof, such Letter of
Credit shall be deemed to be “outstanding” in the amount so remaining available
to be drawn.

3.2    Procedure for Issuance of Letters of Credit. The Borrower may from time
to time request that an Issuing Lender issue a Letter of Credit by delivering to
such Issuing Lender at its address for notices specified herein an Application
therefor, completed to the satisfaction of such Issuing Lender, and such other
certificates, documents and other papers and information as such Issuing Lender
may request. Concurrently with the delivery of an Application to an Issuing
Lender, the Borrower shall deliver a copy thereof to the Designated Agent and
the Designated Agent shall provide notice of such request to the Lenders. Upon
receipt of any Application, an Issuing Lender will process such Application and
the certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby by issuing the original of
such Letter of Credit to the beneficiary thereof or as otherwise may be agreed
to by such Issuing Lender and the Borrower (but in no event shall any Issuing
Lender be required to issue any Letter of Credit earlier than three Business
Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto).
Promptly after issuance by an Issuing Lender of a Letter of Credit, such Issuing
Lender shall

 

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furnish a copy of such Letter of Credit to the Borrower. The Borrower is
responsible for the final text of the Letter of Credit as issued by an Issuing
Lender, irrespective of any assistance such Issuing Lender may provide such as
drafting or recommending text or by Issuing Lender’s use or refusal to use text
submitted by the Borrower. The Borrower is solely responsible for the
suitability of the Letter of Credit for the Borrower’s purposes. Each Issuing
Lender shall promptly give notice to the Designated Agent of the issuance of
each Letter of Credit issued by such Issuing Lender (including the amount
thereof), and shall provide a copy of such Letter of Credit to the Designated
Agent as soon as possible after the date of issuance. Unless otherwise expressly
agreed by an Issuing Lender and the Borrower, when a Letter of Credit is issued
(i) the rules of the ISP shall apply to each standby Letter of Credit, and
(ii) the rules of the Uniform Customs and Practice for Documentary Credits, as
most recently published by the International Chamber of Commerce at the time of
issuance shall apply to each commercial Letter of Credit.

If the Borrower so requests in any applicable Application, the Issuing Lender
may, in its sole discretion, agree to issue a Letter of Credit that has
automatic extension provisions (each, an “Auto-Extension Letter of Credit”);
provided that any such Auto-Extension Letter of Credit must permit the Issuing
Lender to prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the “Non-Extension
Notice Date”) in each such twelve-month period to be agreed upon at the time
such Letter of Credit is issued. Unless otherwise directed by the Issuing
Lender, the Borrower shall not be required to make a specific request to the
Issuing Lender for any such extension. Once an Auto-Extension Letter of Credit
has been issued, the Lenders shall be deemed to have authorized (but may not
require) the Issuing Lender to permit the extension of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit Expiration Date;
provided, however, that the Issuing Lender shall not permit any such extension
if it has received notice (which may be by telephone or in writing) on or before
the day that is seven Business Days before the Non-Extension Notice Date
(1) from the Designated Agent that the Required Lenders have elected not to
permit such extension or (2) from the Designated Agent, any Lender or the
Borrower that one or more of the applicable conditions specified in Section 5.2
is not then satisfied, and in each such case directing the Issuing Lender not to
permit such extension.

3.3    Fees and Other Charges.

(a)    The Borrower will pay a fee on the aggregate drawable amount of all
outstanding Letters of Credit at a per annum rate equal to the Applicable Margin
then in effect with respect to Eurodollar Loans, shared ratably among the
Lenders (other than Defaulting Lenders to the extent provided in Section 2.20)
in accordance with their respective Percentages and payable quarterly in arrears
on each Fee Payment Date after the issuance date. In addition, the Borrower
shall pay to the relevant Issuing Lender for its own account a fronting fee on
the aggregate drawable amount of all outstanding Letters of Credit issued in an
amount to be agreed between the Borrower and such Issuing Lender, payable
quarterly in arrears on each Fee Payment Date after the issuance date.

(b)    In addition to the foregoing fees, the Borrower shall pay or reimburse
each Issuing Lender for such normal and customary costs and expenses as are
incurred or charged by such Issuing Lender in issuing, negotiating, effecting
payment under, amending, extending or otherwise administering any Letter of
Credit.

 

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3.4    L/C Participations.

(a)    Each Issuing Lender irrevocably agrees to grant and hereby grants to each
L/C Participant, and, to induce each Issuing Lender to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from each Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant’s own account and risk,
an undivided interest equal to such L/C Participant’s Percentage in each Issuing
Lender’s obligations and rights under each Letter of Credit issued by such
Issuing Lender hereunder and the amount of each drawing paid by such Issuing
Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees
with each Issuing Lender that, if a drawing is paid under any Letter of Credit
issued by such Issuing Lender for which such Issuing Lender is not reimbursed in
full by the Borrower in accordance with the terms of this Agreement, such L/C
Participant shall pay to the Designated Agent for the account of such Issuing
Lender upon demand at such Issuing Lender’s address for notices specified herein
(and thereafter the Designated Agent shall promptly pay to such Issuing Lender)
an amount equal to such L/C Participant’s Percentage of the amount of such
drawing, or any part thereof, that is not so reimbursed. Each L/C Participant’s
obligation to pay such amount shall be absolute and unconditional and shall not
be affected by any circumstance, including (i) any setoff, counterclaim,
recoupment, defense or other right that such L/C Participant may have against
the Issuing Lender, the Borrower or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 5, (iii) any
adverse change in the condition (financial or otherwise) of the Borrower,
(iv) any breach of this Agreement or any other Loan Document by the Borrower or
any other L/C Participant or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.

(b)    If any amount (a “Participation Amount”) required to be paid by any L/C
Participant to an Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by such Issuing Lender under any Letter
of Credit is not paid to such Issuing Lender within three Business Days after
the date such payment is due, such Issuing Lender shall so notify the Designated
Agent, which shall promptly notify the L/C Participants, and each L/C
Participant shall pay to the Designated Agent, for the account of such Issuing
Lender, on demand (and thereafter the Designated Agent shall promptly pay to
such Issuing Lender) an amount equal to the product of (i) such Participation
Amount, times (ii) the daily average Federal Funds Effective Rate during the
period from and including the date such payment is required to the date on which
such payment is immediately available to such Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any Participation Amount required
to be paid by any L/C Participant pursuant to Section 3.4(a) is not made
available to the Designated Agent for the account of the relevant Issuing Lender
by such L/C Participant within three Business Days after the date such payment
is due, the Designated Agent on behalf of such Issuing Lender shall be entitled
to recover from such L/C Participant, on demand, such Participation Amount with
interest thereon calculated from such due date at the rate per annum applicable
to ABR Loans. A certificate of the Designated Agent submitted on behalf of an
Issuing Lender to any L/C Participant with respect to any amounts owing under
this Section shall be conclusive in the absence of manifest error.

 

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(c)    Whenever, at any time after an Issuing Lender has made payment under any
Letter of Credit and has received from the Designated Agent any L/C
Participant’s pro rata share of such payment in accordance with Section 3.4(a),
such Issuing Lender receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by such Issuing Lender), or any payment of interest
on account thereof, such Issuing Lender will distribute to the Designated Agent
for the account of such L/C Participant (and thereafter the Designated Agent
will promptly distribute to such L/C Participant) its pro rata share thereof;
provided, however, that in the event that any such payment received by such
Issuing Lender shall be required to be returned by such Issuing Lender, such L/C
Participant shall return to the Designated Agent for the account of such Issuing
Lender (and thereafter the Designated Agent shall promptly return to such
Issuing Lender) the portion thereof previously distributed by such Issuing
Lender.

3.5    Reimbursement Obligation of the Borrower. The Borrower agrees to
reimburse each Issuing Lender on (i) the Business Day on which the Borrower
receives notice from an Issuing Lender of a drawing on a Letter of Credit issued
by such Issuing Lender and paid by such Issuing Lender, if such notice is
received on such Business Day prior to 11:00 A.M., New York City time, or
(ii) if clause (i) above does not apply, the Business Day immediately following
the day on which the Borrower receives such notice, for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by such Issuing Lender in connection with such payment which are
obligations of the Borrower hereunder (the amounts described in the foregoing
clauses (a) and (b) in respect of any drawing, collectively, the “Payment
Amount”). Each such payment shall be made to such Issuing Lender at its address
for notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on each Payment Amount
from the date of the applicable drawing until payment in full at the rate set
forth in (i) until the second Business Day following the date of the applicable
drawing, Section 2.11(b) and (ii) thereafter, Section 2.11(c). If the Borrower
fails to make such payment in accordance with the foregoing, such failure shall
be deemed to constitute a request by the Borrower to the Designated Agent for a
borrowing pursuant to Section 2.1 of ABR Loans in an amount equal to the Payment
Amount. The Borrowing Date with respect to such borrowing shall be the first
date on which a borrowing of Revolving Loans could be made, pursuant to
Section 2.1, if the Designated Agent had received a notice of such borrowing at
the time the Designated Agent receives notice from the relevant Issuing Lender
of such drawing under such Letter of Credit.

3.6    Obligations Absolute. The Borrower’s obligations under this Section 3
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment that the Borrower
may have or have had against any Issuing Lender, any beneficiary of a Letter of
Credit or any other Person. The Borrower also agrees with each Issuing Lender
that such Issuing Lender shall not be responsible for, and the Borrower’s
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such

 

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Letter of Credit may be transferred or any claims whatsoever of the Borrower
against any beneficiary of such Letter of Credit or any such transferee. No
Issuing Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions caused by such Issuing Lender’s gross negligence or willful misconduct
as determined by final non-appealable judgment by a court of competent
jurisdiction. The Borrower agrees that any action taken or omitted by an Issuing
Lender under or in connection with any Letter of Credit issued by it or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct as determined by final non-appealable judgment by a court of
competent jurisdiction, shall be binding on the Borrower and shall not result in
any liability of such Issuing Lender to the Borrower. The liability of an
Issuing Lender under, in connection with or arising out of any Letter of Credit
(or pre-advice), regardless of the form or legal grounds of the action or
proceeding, shall be limited to direct damages suffered by the Borrower that is
caused directly by such Issuing Lender’s gross negligence or willful misconduct,
in each case as determined in a final non-appealable judgment of a court of
competent jurisdiction, in (i) honoring a presentation under a Letter of Credit
that on its face does not at least substantially comply with the terms and
conditions of such Letter of Credit, (ii) failing to honor a presentation under
a Letter of Credit that strictly complies with the terms and conditions of such
Letter of Credit, or (iii) retaining documents presented for purposes of drawing
under any Letter of Credit, including by electronic transmission such as SWIFT,
electronic mail, facsimile or computer generated communication presented under a
Letter of Credit (collectively, “Drawing Documents”). The Borrower’s aggregate
remedies against any Issuing Lender for wrongfully honoring a presentation under
any Letter of Credit or wrongfully retaining honored Drawing Documents shall in
no event exceed the aggregate amount paid by the Borrower to the Issuing Lender
in respect of the honored presentation in connection with such Letter of Credit
under Section 3.5, plus interest at the rate then applicable to ABR Loans
hereunder.

3.7    Letter of Credit Payments. If any documents shall be presented for
payment under any Letter of Credit, the relevant Issuing Lender shall, within
the period stipulated by the terms and conditions of such Letter of Credit,
examine the drawing documents. After such examination and provided that the
drawing documents are compliant, such Issuing Lender will promptly notify the
Borrower and the Designated Agent of the date and amount thereof. The
responsibility of the relevant Issuing Lender to the Borrower in connection with
any documents presented for payment under any Letter of Credit, in addition to
any payment obligation expressly provided for in such Letter of Credit issued by
such Issuing Lender, shall be limited, in the absence of gross negligence or
willful misconduct, in each case as determined in a final non-appealable
judgment of a court of competent jurisdiction, to determining that the documents
(including each draft) delivered under such Letter of Credit in connection with
such presentment appear on their face to be in conformity with such Letter of
Credit.

3.8    Applications. To the extent that any provision of any Application related
to any Letter of Credit is inconsistent with the provisions of this Section 3,
the provisions of this Section 3 shall apply.

3.9    Actions of Issuing Lenders. Each Issuing Lender shall be entitled to
rely, and shall be fully protected in relying, upon any draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or

 

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other document believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by such Issuing Lender. Each Issuing Lender shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first have received such advice or concurrence of the Required Lenders as it
reasonably deems appropriate (provided that no Issuing Lender shall be under any
obligation to obtain such advice or concurrence and no L/C Participant’s
obligations hereunder shall be affected by the seeking or the failure to seek
any such advice or concurrence) or it shall first be indemnified to its
reasonable satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. Notwithstanding any other provision of this Section, as between the
Issuing Lenders and the Lenders, each Issuing Lender shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the
Lenders and any future holders of a participation in any Letter of Credit
(provided that no Issuing Lender shall be under any obligation to obtain such
request and no L/C Participant’s obligations hereunder shall be affected by the
seeking or the failure to seek any such request).

3.10    Borrower’s Indemnification. The Borrower hereby agrees to indemnify and
hold harmless each Lender, each Issuing Lender (and each of its branches and
Affiliates) and the Designated Agent, and their respective directors, officers,
agents and employees from and against any and all claims and damages, losses,
liabilities, costs or expenses which such Lender, such Issuing Lender or the
Designated Agent may incur (or which may be claimed against such Lender, such
Issuing Lender or the Designated Agent by any Person whatsoever) by reason of or
in connection with the issuance, execution and delivery or transfer of or
payment or failure to pay under any Letter of Credit or any actual or proposed
use of any Letter of Credit, including, without limitation, any claims, damages,
losses, liabilities, costs or expenses which such Issuing Lender may incur by
reason of or in connection with (i) the failure of any other Lender to fulfill
or comply with its obligations to an Issuing Lender hereunder (but nothing
herein contained shall affect any rights the Borrower may have against any
Defaulting Lender) or (ii) by reason of or on account of an Issuing Lender
issuing any Letter of Credit which specifies that the term “Beneficiary”
included therein includes any successor by operation of law of the named
Beneficiary, but which Letter of Credit does not require that any drawing by any
such successor Beneficiary be accompanied by a copy of a legal document,
satisfactory to such Issuing Lender, evidencing the appointment of such
successor Beneficiary; provided that the Borrower shall not be required to
indemnify any Lender, any Issuing Lender or the Designated Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, caused by (x) the willful misconduct or gross negligence of such Issuing
Lender in determining whether a request presented under any Letter of Credit
complied with the terms of such Letter of Credit as determined in a final
non-appealable judgment of a court of competent jurisdiction or (y) such Issuing
Lender’s failure to pay under any Letter of Credit after the presentation to it
of a request strictly complying with the terms and conditions of such Letter of
Credit. Nothing in this Section is intended to limit the obligations of the
Borrower under any other provision of this Agreement. This indemnification
provision shall survive termination of this Agreement and all Letters of Credit.

 

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3.11    Lenders’ Indemnification. Each Lender shall, ratably in accordance with
its Percentage, indemnify each Issuing Lender, its branches and Affiliates, and
their respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees’ gross negligence or willful
misconduct or such Issuing Lender’s failure to pay under any Letter of Credit
after the presentation to it of a request strictly complying with the terms and
conditions of the Letter of Credit in each case as determined in a final
non-appealable judgment of a court of competent jurisdiction) that such
indemnitees may suffer or incur in connection with this Section or any action
taken or omitted by such indemnitees hereunder. This indemnification provision
shall survive termination of this Agreement and all Letters of Credit.

3.12    Replacement and Resignation of an Issuing Lender. (i) An Issuing Lender
may be replaced at any time by written agreement among the Borrower, the
Designated Agent, the replaced Issuing Lender and the successor Issuing Lender.
The Designated Agent shall notify the Lenders of any such replacement of an
Issuing Lender. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Lender pursuant to Section 2.6. From and after the effective date of any
such replacement, (x) the successor Issuing Lender shall have all the rights and
obligations of an Issuing Lender under this Agreement with respect to Letters of
Credit to be issued by it thereafter and (y) references herein to the term
“Issuing Lender” shall be deemed to refer to such successor or to any previous
Issuing Lender, or to such successor and all previous Issuing Lenders, as the
context shall require. After the replacement of an Issuing Lender hereunder, the
replaced Issuing Lender shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Lender under this Agreement with
respect to Letters of Credit issued by it prior to such replacement, but shall
not be required to issue additional Letters of Credit or extend or otherwise
amend any existing Letter of Credit.

(ii)    Subject to the appointment and acceptance of a successor Issuing Lender,
any Issuing Lender may resign as an Issuing Lender at any time upon thirty days’
prior written notice to the Designated Agent, the Borrower and the Lenders, in
which case, such resigning Issuing Lender shall be replaced in accordance with
Section 3.12(i) above.

3.13    Existing Letters of Credit. Each Existing Letter of Credit shall be
deemed a Letter of Credit issued hereunder for all purposes under this Agreement
without need for any further action by the Borrower or any other Person.

SECTION 4.    REPRESENTATIONS AND WARRANTIES

To induce the Agents and the Lenders to enter into this Agreement and to make
the Loans and issue or participate in the Letters of Credit, the Borrower hereby
represents and warrants to each Agent and each Lender, on the Effective Date and
on the date of each Credit Event hereunder after the Effective Date, that:

4.1    Financial Condition. (a) The audited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as of December 31, 2019, and the
related consolidated statements of income and cash flows for the fiscal year
ended on such date, reported on by

 

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Deloitte & Touche LLP, and (b) the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as of March 31, 2020, and the related
consolidated statements of income and cash flows for the portion of the fiscal
year ended on such date, each delivered to the Designated Agent prior to the
Effective Date, in each case, (i) were prepared in accordance with GAAP
consistently applied throughout the periods covered thereby, except as otherwise
expressly noted therein, and (ii) present fairly in all material respects the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as of such date, and its consolidated income and its consolidated
cash flows for the respective fiscal year or portion of the fiscal year then
ended, subject, in the case of the financial statements referred to in clause
(b), to the absence of footnotes and to normal year-end audit adjustments.

4.2    No Change. Since December 31, 2019, no Specified Material Adverse Effect
has occurred.

4.3    Existence; Compliance with Law. Each of the Borrower and its Significant
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, (b) has the organizational power
and organizational authority to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation or other
organization and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification except to the extent that the failure to so qualify
could not reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except for any Requirements of Law being
contested in good faith by appropriate proceedings and except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.

4.4    Power; Authorization; Enforceable Obligations. The Borrower has the
corporate power and corporate authority to execute and deliver and to perform
its obligations under the Loan Documents and to obtain extensions of credit
hereunder. The Borrower has taken all necessary corporate action to authorize
the execution and delivery of, and performance of its obligations under, the
Loan Documents to which it is a party and to authorize the extensions of credit
on the terms and conditions of this Agreement. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the extensions of
credit hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, except
(i) consents, authorizations, filings and notices which have been obtained or
made and are in full force and effect, (ii) any consent, authorization or filing
that may be required in the future the failure of which to make or obtain could
not reasonably be expected to have a Material Adverse Effect and
(iii) applicable Requirements of Law (including the approval of the CPUC) prior
to foreclosure or other exercise of remedies under the Loan Documents. This
Agreement has been, and each other Loan Document upon execution and delivery
will be, duly executed and delivered. This Agreement constitutes, and each other
Loan Document upon execution will constitute, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, except as enforceability may be limited by (x) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally, laws of general application related to the
enforceability of securities secured by

 

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real estate and by general equitable principles (whether enforcement is sought
by proceedings in equity or at law) and (y) applicable Requirements of Law
(including the approval of the CPUC) prior to foreclosure or other exercise of
remedies hereunder or under the Loan Documents.

4.5    No Legal Bar. The execution and delivery of, and the performance of the
obligations under, this Agreement and the other Loan Documents, the issuance of
Letters of Credit, the borrowings hereunder and the use of the proceeds thereof
will not violate in any material respect any Requirement of Law or any
Contractual Obligation of the Borrower or any of its Significant Subsidiaries
and will not result in, or require, the creation or imposition of any Lien on
any of their respective properties or revenues pursuant to any Requirement of
Law or any such Contractual Obligation (other than the Liens created by the Loan
Documents and the FMB Indenture).

4.6    Litigation. (a) No litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the knowledge of the
Borrower, threatened in writing by or against the Borrower or any of its
Significant Subsidiaries or against any of their respective material properties
or revenues with respect to any of the Loan Documents.

(b)    No litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened in writing by or against the Borrower or any of its Significant
Subsidiaries or against any of their respective material properties or revenues,
except as disclosed in the Specified Exchange Act Filings, that could reasonably
be expected to have a Material Adverse Effect.

4.7    No Default. No Default or Event of Default has occurred and is
continuing.

4.8    Taxes. The Borrower and each of its Significant Subsidiaries has filed or
caused to be filed all Federal and state returns of income and franchise taxes
imposed in lieu of net income taxes and all other material tax returns that are
required to be filed and has paid all taxes shown to be due and payable on said
returns or with respect to any claims or assessments for taxes made against it
or any of its property by any Governmental Authority (other than (i) any amounts
the validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the Borrower or any of its Significant Subsidiaries, as
applicable, and (ii) claims which could not reasonably be expected to have a
Material Adverse Effect). No material tax Liens have been filed against the
Borrower or any of its Significant Subsidiaries other than (A) Liens for taxes
which are not delinquent or (B) Liens for taxes which are being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the Borrower or any of
its Significant Subsidiaries, as applicable.

4.9    Federal Regulations. No part of the proceeds of any Loans, and no other
extensions of credit hereunder, will be used for “buying” or “carrying” any
“margin stock” within the respective meanings of each of the quoted terms under
Regulation U as now and from time to time hereafter in effect or for any purpose
that violates the provisions of the Regulations of the Board.

 

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4.10    ERISA. No Reportable Event has occurred during the five year period
prior to the date on which this representation is made or deemed made with
respect to any Plan, and each Plan has complied with the applicable provisions
of ERISA and the Code, except, in each case, to the extent that any such
Reportable Event or failure to comply with the applicable provisions of ERISA or
the Code could not reasonably be expected to result in a Material Adverse
Effect. During the five year period prior to the date on which this
representation is made or deemed made, there has been no (i) failure to make a
required contribution to any Plan that would result in the imposition of a Lien
or other encumbrance or the provision of security under Section 430 of the Code
or Section 303 or 4068 of ERISA, or the arising of such a Lien or encumbrance;
or (ii) “unpaid minimum required contribution” or “accumulated funding
deficiency” (as defined or otherwise set forth in Section 4971 of the Code or
Part 3 of Subtitle B of Title I of ERISA), whether or not waived, except, in
each case, to the extent that such event could not reasonably be expected to
result in a Material Adverse Effect. No termination of a Single Employer Plan
has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plan) did not, as of
the last annual valuation date for which a certified actuarial valuation report
is available prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits, except as could not reasonably be expected to result in a Material
Adverse Effect. Neither the Borrower nor any Commonly Controlled Entity has had
a complete or partial withdrawal from any Multiemployer Plan during the five
year period prior to the date on which this representation is made or deemed
made that has resulted or could reasonably be expected to result in a material
liability under ERISA, and neither the Borrower nor any Commonly Controlled
Entity would become subject to any liability under ERISA if the Borrower or any
such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the date on
which this representation is made or deemed made, except as could not reasonably
be expected to result in a Material Adverse Effect. No such Multiemployer Plan
is in endangered or critical status (within the meaning of Section 305 of ERISA)
or in Insolvency.

4.11    Investment Company Act; Other Regulations. The Borrower is not an
“investment company”, or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended. On the
Effective Date, the Borrower is not subject to regulation under any Requirement
of Law (other than (a) Regulation X of the Board and (b) Sections 817-830, and
Sections 701 and 851 of the California Public Utilities Code) that limits its
ability to incur Indebtedness under this Agreement.

4.12    Use of Proceeds. The proceeds of the Revolving Loans and the Letters of
Credit shall be used (a) on the Effective Date, to fund the transactions
contemplated under the Plan of Reorganization and (b) to finance working capital
needs, capital expenditures and other general corporate purposes of the Borrower
and its Subsidiaries.

4.13    Environmental Matters. Except as disclosed in the Specified Exchange Act
Filings, the Borrower and its Significant Subsidiaries are not subject to any
pending violations or liabilities under Environmental Laws or relating to the
disposal, spill or other release of Materials of Environmental Concern that
would reasonably be expected to have a Material Adverse Effect, and, to the
knowledge of the Borrower, there are no facts, circumstances or conditions that
could reasonably be expected to give rise to such violations or liabilities.

 

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4.14    Regulatory Matters. Solely by virtue of the execution, delivery and
performance of, or the consummation of the transactions contemplated by this
Agreement, no Lender shall be or become subject to regulation (a) under the FPA
or (b) as a “public utility” or “public service corporation” or the equivalent
under any Requirement of Law.

4.15    Sanctions; Anti-Corruption. None of the Borrower, any of its
Subsidiaries, nor, to the knowledge of the Borrower, any director, officer,
agent, Affiliate or employee of the Borrower or any of its Subsidiaries is
currently (i) the subject of any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department or the U.S. State
Department (“Sanctions”) or (ii) located, organized or resident in a country or
territory that is, or whose government is, the subject of any Sanctions. None of
the Borrower, any of its Subsidiaries nor, to the knowledge of the Borrower, any
director, officer, agent, Affiliate or employee of the Borrower or any of its
Subsidiaries, has taken any action, directly or indirectly, that would result in
a violation in any material respect by any such Person of the United States
Foreign Corrupt Practices Act of 1977, as amended (“FCPA”) or of any other
anti-bribery or anti-corruption laws, rules, regulations legally applicable to
such Persons (collectively, “Anti-Corruption Laws”). The Borrower will not use
the proceeds of Revolving Loans or Letters of Credit, or lend, contribute or
otherwise make available such proceeds (a) to any Subsidiary, Affiliate, joint
venture partner or other Person or entity, to fund the activities of any Person,
or in any country or territory, that, at the time of such funding, is, or whose
government is, the subject of any Sanctions, or (b) directly, or, to the
knowledge of the Borrower, indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the FCPA or of any Anti-Corruption Laws.

4.16    Affected Financial Institutions. The Borrower is not an Affected
Financial Institution.

4.17    Solvency. The Borrower and its Subsidiaries, on a consolidated basis,
are Solvent as of the Effective Date (after giving effect to the Plan of
Reorganization and the transactions described therein).

4.18    Disclosure.

(a)    All written information relating to the Borrower, its Subsidiaries and
their respective businesses, other than any projections, estimates and other
forward-looking materials and information of a general economic or industry
specific nature, that has been provided by or on behalf of the Borrower to the
Agents or the Lenders in connection with the transactions contemplated hereby
does not, when taken as a whole, contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements were made (giving effect to all supplements and updates
thereto). Any projected information, estimates, other forward-looking materials
and pro forma financial information that have been made available to any Lenders
or Agents prior to the Effective Date in connection with the transactions

 

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contemplated hereby have been prepared in good faith based upon assumptions
believed by the Borrower to be reasonable as of the date such information was
furnished to the Lenders and as of the Effective Date (it being understood that
actual results may vary materially from such projections and pro forma
information and such projections and pro forma information are not a guarantee
of performance).

(b) As of the Effective Date, to the knowledge of the Borrower, the information
included in any Beneficial Ownership Certification provided on or prior to the
Effective Date to any Lender in connection with this Agreement is true and
correct in all respects.

4.19    Status of Obligations. The issuance to the Designated Agent of the
Senior Bond provides the Lenders, as beneficial holders of the Senior Bond
through the Designated Agent, the benefit of the Lien of the FMB Indenture
equally and ratably with the holders of other First Mortgage Bonds.

4.20    Ownership of Property. As of the Effective Date, each of the Borrower
and its Significant Subsidiaries has good title to, or valid leasehold interests
in, all its real and personal property material to its business, subject to no
Liens other than Liens permitted under Section 7.3, except for where the failure
would not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect.

4.21    Covered Entity. The Borrower is not a Covered Entity.

SECTION 5.    CONDITIONS PRECEDENT

5.1    Conditions to the Effective Date. The occurrence of the Effective Date
and the effectiveness of the Lenders’ Commitments hereunder is subject to the
satisfaction of the following conditions precedent:

(a)    Credit Agreement. The Designated Agent shall have received this Agreement
(including copies of all schedules attached hereto in a form reasonably
satisfactory to the Lenders), executed and delivered by the Designated Agent,
the Co-Administrative Agents, the Borrower and each Person listed on Schedule
1.1.

(b)    Consents and Approvals. All governmental and third party consents and
approvals necessary in connection with the execution and delivery of this
Agreement and the other Loan Documents and the consummation of the transactions
contemplated hereby shall have been obtained and be in full force and effect;
and the Designated Agent shall have received a certificate of a Responsible
Officer to the foregoing effect.

(c)    KYC Information. At least three (3) Business Days prior to the Effective
Date, the Designated Agent and each Lender shall have received all documentation
and information relating to the Borrower as is reasonably requested in writing
by the Designated Agent and/or any such Lender at least ten (10) Business Days
prior to the Effective Date that is required by Governmental Authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
including the Patriot Act and the Beneficial Ownership Regulation. If the
Borrower qualifies as a “legal entity customer” under the Beneficial Ownership
Regulation and the Designated Agent or any Lender so request at least five
(5) Business Days prior to the

 

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Effective Date, then at least three (3) Business Days prior to the Effective
Date, the Borrower shall have delivered to the Designated Agent and/or any such
Lender a Beneficial Ownership Certification in relation to the Borrower.

(d)    Bond Documents. The Designated Agent shall have received:

(i)    the Bond Delivery Agreement, duly executed and delivered by the Borrower
and Designated Agent;

(ii)    the Senior Bond in a face amount equal to the Total Commitments as of
the Effective Date, duly issued and authenticated under the FMB Indenture and in
a form reasonably satisfactory to the Designated Agent;

(iii)    the Supplemental Indenture, duly executed and delivered by the Borrower
and the Indenture Trustee and in a form reasonably satisfactory to the
Designated Agent;

(iv)    a certificate of a duly authorized officer of the Indenture Trustee
certifying that the Senior Bond has been authenticated and is outstanding under
the FMB Indenture;

(v)    copies of all legal opinions and other documents delivered to the
Indenture Trustee by or on behalf of the Borrower on or prior to the Effective
Date in connection with the issuance of the Senior Bond;

(vi)    copies of all title reports and commitments as of the Effective Date
with respect to the Mortgaged Property consisting of real property as to which
Liens in favor of the Indenture Trustee, for the benefit of the holders of the
First Mortgage Bond, has been granted; and

(vii)    the Escrow Deposit and Disbursement Agreement, duly executed and
delivered by the Borrower and the Indenture Trustee and in a form reasonably
satisfactory to the Designated Agent.

(e)    Fees. The Lenders, the Arrangers and the Agents shall have received all
fees required to be paid, and all expenses for which invoices have been
presented (including the reasonable fees and expenses of legal counsel) on or
before the date that is two (2) Business Days prior to the Effective Date.

(f)    Closing Certificate; Certified Articles of Incorporation; Good Standing
Certificates. The Designated Agent shall have received (i) a certificate of the
Borrower, dated the Effective Date, substantially in the form of Exhibit D, with
appropriate insertions and attachments, including the articles of incorporation
of the Borrower certified as of a recent date by the Secretary of State of the
State of California, (ii) a good standing certificate for the Borrower dated as
of a recent date from the Secretary of State of the State of California, and
(iii) a certificate of a Responsible Officer, dated the Effective Date,
confirming the satisfaction of the conditions precedent set forth in Sections
5.1(h) and (i).

 

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(g)    Legal Opinion. The Designated Agent shall have received the legal opinion
of Hunton Andrews Kurth LLP, counsel to the Borrower, in a form reasonably
satisfactory to the Designated Agent.

(h)    Representations and Warranties. Each of the representations and
warranties made by the Borrower in this Agreement that does not contain a
materiality qualification shall be true and correct in all material respects on
and as of the Effective Date, and each of the representations and warranties
made by the Borrower in this Agreement that contains a materiality qualification
shall be true and correct on and as of the Effective Date (or, in each case, to
the extent such representations and warranties specifically relate to an earlier
date, that such representations and warranties were true and correct in all
material respects, or true and correct, as the case may be, as of such earlier
date).

(i)    No Default. No Default or Event of Default shall have occurred and be
continuing on the Effective Date or after giving effect to any Credit Event
requested to be made on the Effective Date.

(j)    Solvency. The Designated Agent shall have received a solvency certificate
from the chief financial officer of the Borrower in substantially the form of
Exhibit I hereto.

5.2    Conditions to Each Credit Event. The agreement of each Lender to make any
Loan or to issue or extend the expiry date under, or participate in, a Letter of
Credit (other than the extension of a Letter of Credit pursuant to the evergreen
provisions therein) (each, a “Credit Event”), including each Issuing Lender to
issue a Letter of Credit, on any date (other than (except for clause (d)) the
Effective Date) is subject to the satisfaction of the following conditions
precedent:

(a)    Effective Date. The Effective Date shall have occurred.

(b)    Representations and Warranties. Each of the representations and
warranties made by the Borrower in this Agreement (other than the
representations and warranties set forth in Sections 4.2, 4.6(b) and 4.13) that
does not contain a materiality qualification shall be true and correct in all
material respects on and as of the date of such Credit Event as if made on and
as of such date, and each of the representations and warranties made by the
Borrower in this Agreement (other than the representations and warranties set
forth in Sections 4.2, 4.6(b) and 4.13) that contains a materiality
qualification shall be true and correct on and as of such date (or, to the
extent such representations and warranties specifically relate to an earlier
date, that such representations and warranties were true and correct in all
material respects, or true and correct, as the case may be, as of such earlier
date).

(c)    No Default. No Default or Event of Default shall have occurred and be
continuing on the date of such Credit Event or after giving effect to the Credit
Event requested to be made on such date.

(d)    Request for Credit Event. The Designated Agent and, if applicable, the
relevant Issuing Lender, shall have received a notice of borrowing or an
Application, as applicable, in accordance with the requirements of Section 2.2
or 3.2, as applicable.

 

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Each Credit Event (other than a Credit Event occurring on the Effective Date)
shall constitute a representation and warranty by the Borrower as of the date of
such Credit Event that the conditions contained in this Section 5.2 have been
satisfied.

SECTION 6.    AFFIRMATIVE COVENANTS

The Borrower hereby agrees that, so long as the Commitments remain in effect, or
any Letter of Credit, any Loan, any interest on any Loan or any fee payable to
any Lender or any Agent hereunder remains outstanding, or any other amount then
due and payable is owing to any Lender or any Agent hereunder, the Borrower
shall and, with respect to Sections 6.3 and 6.6(b), shall cause its Significant
Subsidiaries to:

6.1    Financial Statements. Furnish to the Designated Agent with a copy for
each Lender, and the Designated Agent shall deliver to each Lender:

(a)    as soon as available, but in any event within 120 days after the end of
each fiscal year of the Borrower, a copy of the audited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of such
year and the related audited consolidated statements of income and cash flows
for such year, setting forth in each case in comparative form the figures for
the previous year, reported on without a “going concern” or like qualification
or exception, or qualification arising out of the scope of the audit, by
Deloitte & Touche LLP or other independent certified public accountants of
nationally recognized standing; and

(b)    as soon as available, but in any event not later than 60 days after the
end of each of the first three quarterly periods of each fiscal year of the
Borrower, the unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and cash flows for such quarter and
the portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
the absence of footnotes and normal year-end audit adjustments).

All such financial statements shall (x) be complete and correct in all material
respects and (y) shall be prepared in reasonable detail and in accordance with
GAAP applied (except as approved by such accountants or officer, as the case may
be, and disclosed in reasonable detail therein) consistently throughout the
periods reflected therein and with prior periods, subject, in each case to the
absence of footnotes and to normal year-end audit adjustments. The Borrower
shall be deemed to have delivered the financial statements required to be
delivered pursuant to this Section 6.1 upon the filing of such financial
statements by the Borrower through the SEC’s EDGAR system (or any successor
electronic gathering system that is publicly available free of charge) or the
publication by the Borrower of such financial statements on its website.

6.2    Certificates; Other Information. Furnish to the Designated Agent, for
delivery to the Lenders:

(a)    within two Business Days after the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating that
such Responsible Officer has

 

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obtained no actual knowledge of any Default or Event of Default except as
specified in such certificate and (ii) a Compliance Certificate, substantially
in the form of Exhibit C, containing all information and calculations reasonably
necessary for determining compliance by the Borrower with the provisions of this
Agreement referred to therein as of the last day of the fiscal quarter or fiscal
year of the Borrower, as the case may be;

(b)    within five days after the same are sent, copies of all financial
statements and reports that the Borrower sends to the holders of any class of
its debt securities or public equity securities, provided that, such financial
statements and reports shall be deemed to have been delivered upon the filing of
such financial statements and reports by the Borrower through the SEC’s EDGAR
system (or any successor electronic gathering system that is publicly available
free of charge) or publication by the Borrower of such financial statements and
reports on its website;

(c)    promptly, such additional financial and other information (other than any
such information the disclosure of which is prohibited by applicable law or
binding agreement or subject to attorney-client privilege or constitutes
attorney-work product or constitutes non-financial trade secrets or
non-financial proprietary information so long as (x) such confidentiality
obligation was not entered into in contemplation hereof and (y) the Borrower
provides such Lender with notice that information is being withheld due to the
existence of such confidentiality obligation) as any Lender, through the
Designated Agent, may from time to time reasonably request; and

(d)    promptly, such documentation and other information that the Designated
Agent or such Lender reasonably requests in order to comply with its ongoing
obligations under applicable “know your customer” and anti-money laundering
rules and regulations, including the Patriot Act and the Beneficial Ownership
Regulation.

6.3    Payment of Taxes. Pay all taxes due and payable or any other tax
assessments made against the Borrower or any of its Significant Subsidiaries or
any of their respective property by any Governmental Authority (other than
(i) any amounts the validity of which are currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the Borrower or any of
its Significant Subsidiaries, as applicable or (ii) where the failure to effect
such payment could not reasonably be expected to have a Material Adverse
Effect).

6.4    Maintenance of Existence; Compliance. (a)(i) Preserve, renew and keep in
full force and effect its organizational existence and (ii) take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business, except, in each case, as otherwise
permitted by Section 7.4 and except, in the case of clause (ii) above, to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; (b) comply with all Contractual Obligations except to the extent
that failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect and (c) comply with all Requirements
of Law except for any Requirements of Law being contested in good faith by
appropriate proceedings or except to the extent that failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.

 

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6.5    Maintenance of Property; Insurance. (a) Keep all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear and casualty excepted, except to the extent that failure to do so could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect,
and (b) maintain with financially sound and reputable insurance companies
insurance on all its material property in at least such amounts and against at
least such risks as are usually insured against in the same general area by
companies engaged in the same or a similar business of comparable size and
financial strength and owning similar properties in the same general areas in
which the Borrower operates, which may include self-insurance, if determined by
the Borrower to be reasonably prudent.

6.6    Inspection of Property; Books and Records; Discussions. (a) Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) unless a
Default or Event of Default has occurred and is continuing, not more than once a
year and after at least five Business Days’ notice, (i) permit representatives
of any Lender to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time to discuss
the business, operations, properties and financial and other condition of the
Borrower and its Significant Subsidiaries with officers and employees of the
Borrower and its Significant Subsidiaries and (ii) use commercially reasonable
efforts to provide for the Lenders (in the presence of representatives of the
Borrower) to meet with the independent certified public accountants of the
Borrower and its Significant Subsidiaries; provided, that any such visits or
inspections shall be subject to such conditions as the Borrower and each of its
Significant Subsidiaries shall deem necessary based on reasonable considerations
of safety, security and confidentiality; and provided, further, that neither the
Borrower nor any Significant Subsidiary shall be required to disclose to any
Person any information the disclosure of which is prohibited by applicable law
or binding agreement or subject to attorney-client privilege or constitutes
attorney-work product or constitutes non-financial trade secrets or
non-financial proprietary information so long as (x) such confidentiality
obligation was not entered into in contemplation hereof and (y) the Borrower
provides such Lender with notice that information is being withheld due to the
existence of such confidentiality obligation.

6.7    Notices. Give notice to the Designated Agent, and the Designated Agent
shall deliver such notice to each Lender, promptly upon any Responsible Officer
obtaining knowledge of:

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

(b)    any change in the Rating issued by either S&P or Moody’s; and

(c)    the occurrence of an ERISA Event which, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect (provided,
that, any judicial proceeding instituted by PBGC that, within 60 days after the
institution of such proceeding, has been withdrawn or stayed by PBGC or
otherwise, shall be disregarded for the purpose of this Section 6.7(c)).

 

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6.8    Maintenance of Licenses, etc. Maintain in full force and effect any
authorization, consent, license or approval of any Governmental Authority
necessary for the conduct of the Borrower’s business as now conducted by it or
necessary in connection with this Agreement, except to the extent the failure to
do so could not reasonably be expected to have a Material Adverse Effect.

6.9    Further Assurances.

(a)    (i) Comply with Section 7.08(a) of the FMB Indenture, (ii) deliver to the
Designated Agent (A) within 120 days after the Effective Date, a copy of the
Opinion of Counsel (as defined in the FMB Indenture) delivered to the Indenture
Trustee under Section 7.08(a)(i) of the FMB Indenture relating the Supplemental
Indenture described in clause (i) of the definition of “Supplemental Indenture”,
and (B) within 120 days after the execution and delivery of any Supplemental
Indenture described in clause (ii) of the definition of “Supplemental
Indenture”, a copy of the Opinion of Counsel delivered to the Indenture Trustee
under Section 7.08(a)(i) of the FMB Indenture relating to such Supplemental
Indenture and (iii) deliver to the Designated Agent a copy of each Opinion of
Counsel delivered to the Indenture Trustee under Section 7.08(a)(ii) of the FMB
Indenture relating to the Supplemental Indenture.

(b)    Promptly upon the reasonable request by the Designated Agent, or by the
Required Lenders through the Designated Agent, (i) correct any material defect
or error that may be discovered in any Loan Document or the execution,
acknowledgment, filing or recordation thereof and (ii) do, execute, acknowledge
and deliver any and all such further certificates, documents, agreements and
other instruments as reasonably required from time to time to carry out more
effectively the purposes of the Loan Documents.

6.10    Use of Proceeds. The Borrower shall use the proceeds of the Loans or the
Letters of Credit in accordance with Section 4.12.

SECTION 7.    NEGATIVE COVENANTS

The Borrower hereby agrees that, so long as the Commitments remain in effect, or
any Letter of Credit, any Loan, or any interest on any Loan or any fee payable
to any Lender or any Agent hereunder remains outstanding, or any other amount
then due and payable is owing to any Lender or any Agent hereunder, the Borrower
shall not and shall not permit its Significant Subsidiaries to:

7.1    Indebtedness. At all times prior to the Indebtedness Covenant Release
Date, create, incur, assume or permit to exist any Indebtedness, except for:

(a)    Indebtedness and other Obligations created hereunder (including any
Indebtedness incurred pursuant to Section 2.3);

(b)    Indebtedness of the Borrower outstanding on the Effective Date in an
aggregate outstanding principal amount not to exceed $33,350,000,000 and any
Permitted Refinancing thereof;

 

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(c)    Indebtedness (i) pursuant to tenders, statutory obligations, bids,
leases, governmental contracts, trade contracts, surety, stay, customs, appeal,
performance and/or return of money bonds or other similar obligations incurred
in the ordinary course of business and (ii) in respect of letters of credit,
bank guaranties, surety bonds, performance bonds or similar instruments and
reimbursement obligations to support any of the foregoing items;

(d)    (i) Guarantee Obligations with respect to the obligations of suppliers,
customers and licensees and other third parties in the ordinary course of
business, (ii) Indebtedness incurred in the ordinary course of business to pay
the deferred purchase price of goods or services or progress payments in
connection with such goods and services and (iii) Indebtedness in respect of
letters of credit, bankers’ acceptances, bank guaranties or similar instruments
supporting trade payables, warehouse receipts or similar facilities entered into
in the ordinary course of business, workers compensation claims or other
employee benefits;

(e)    Guarantee Obligations with respect to Indebtedness otherwise permitted to
be incurred pursuant to this Section 7.1 and Guarantee Obligations with respect
to the obligations of Subsidiaries and joint ventures of the Borrower; provided
that no such Guarantee Obligations with respect to Indebtedness of the Borrower
constituting debt for borrowed money or evidenced by notes, bonds, debentures or
other similar instruments (including, for the avoidance of doubt, the First
Mortgage Bonds) shall be permitted except to the extent provided by a Person
that is, or concurrently with providing such Guarantee Obligations becomes, a
guarantor of the Obligations hereunder on terms and pursuant to documentation
reasonably satisfactory to the Designated Agent;

(f)    Indebtedness consisting of (i) the financing of insurance premiums and/or
(ii) take-or-pay obligations contained in supply arrangements;

(g)    Indebtedness with respect to Capital Lease Obligations and purchase money
Indebtedness; provided, that the aggregate outstanding principal amount of
Indebtedness with respect to Capital Lease Obligations shall not exceed
$500,000,000 at any one time;

(h)    (i) obligations under any Cash Management Agreement and (ii) Indebtedness
under any Swap Agreement permitted under Section 7.6;

(i)    Indebtedness arising from any agreement providing for indemnification,
adjustment or purchase price or similar obligations (including contingent
earn-out obligations) incurred in connection with any Disposition or any
purchase of assets or Capital Stock, and Indebtedness arising from guaranties,
letters of credit, bank guaranties, surety bonds, performance bonds or similar
instruments securing the performance of the Borrower or its Subsidiaries
pursuant to any such agreement;

(j)    Indebtedness in respect of banking services and incentive, supplier
finance or similar programs incurred in the ordinary course of business;

(k)    customer deposits and advance payments received in the ordinary course of
business from customers for goods and services purchased in the ordinary course
of business;

 

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(l)    Indebtedness representing deferred compensation to employees, consultants
or independent contractors incurred in the ordinary course of business;

(m)    Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or other similar instrument drawn against
insufficient funds in the ordinary course of business;

(n)    endorsements for collection or deposit in the ordinary course of
business;

(o)    Indebtedness issued or incurred to fund rate base growth in an aggregate
outstanding principal amount not to exceed $9,000,000,000 at any time and any
Permitted Refinancing thereof; and

(p)    other Indebtedness of the Borrower in an aggregate outstanding principal
amount not to exceed the excess, if any, of 10% of Net Tangible Assets of the
Borrower over the amount of Indebtedness incurred pursuant to clause (o) above.

Notwithstanding anything herein to the contrary, no Guarantee Obligations from
any Significant Subsidiary of the Borrower with respect to Indebtedness of the
Borrower constituting debt for borrowed money or evidenced by notes, bonds,
debentures or other similar instruments (including, for the avoidance of doubt,
the First Mortgage Bonds) shall be permitted hereunder except to the extent
provided by a Person that is, or concurrently with providing such Guarantee
Obligations becomes, a guarantor of the Obligations hereunder on terms and
pursuant to documentation reasonably satisfactory to the Designated Agent.

7.2    Consolidated Capitalization Ratio. Permit the Consolidated Capitalization
Ratio on the last day of any fiscal quarter, from and after the last day of the
first fiscal quarter ending after the Effective Date, to exceed 0.65 to 1.00.

7.3    Liens. Create, incur, assume or suffer to exist any Lien upon any assets
of the Borrower or any Significant Subsidiary, whether now owned or hereafter
acquired, except for (a) Liens securing the Obligations under this Agreement and
the other Loan Documents and (b) Liens permitted under Section 7.06(b) of the
FMB Indenture.

7.4    Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of all or substantially all of its
property or business (including, without limitation, rental equipment or
leasehold interests and excluding the sale or transfer of any accounts
receivable or of any amounts that are accrued and recorded in a regulatory
account for collections by the Borrower, in each case, in connection with a
securitization transaction, including, without limitation, any A/R
Securitization Transaction), except that the Borrower may be merged,
consolidated or amalgamated with another Person or Dispose of all or
substantially all of its property or business so long as, after giving effect to
such transaction, (a) no Default or Event of Default shall have occurred and be
continuing, (b) either (i) the Borrower is the continuing or surviving
corporation of such merger, consolidation or amalgamation or (ii) the continuing
or surviving corporation of such merger, consolidation or amalgamation, if not
the Borrower or the purchaser, (x) shall be an entity organized or existing
under the laws of the United States, any state thereof or the District of
Columbia, (y) shall have assumed all obligations of the Borrower under the Loan
Documents

 

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pursuant to arrangements reasonably satisfactory to the Designated Agent and
(z) to the extent requested by the Designated Agent or any Lender, shall have
promptly provided to the Designated Agent or such Lender all documentation and
other information that may be required by the Designated Agent or such Lender in
order to enable compliance with applicable “know-your-customer” and anti-money
laundering rules and regulations, including information required by the Patriot
Act and the Beneficial Ownership Regulation and (c) the ratings by Moody’s and
S&P of the continuing or surviving corporation’s or purchaser’s senior, secured
debt shall be at least the higher of (1) Baa3 from Moody’s and BBB- from S&P and
(2) the ratings by such rating agencies of the Borrower’s senior, secured debt
in effect before the earlier of the occurrence or the public announcement of
such event.

7.5    Sale and Lease Back Transactions. Enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any property
having fair market value in excess of $10,000,000, real or personal, used or
useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such property or other property that it intends to use for
substantially the same purpose or purposes as the property being sold or
transferred, except for (a) those transactions described on Schedule 7.5 and
(b) any other sale of any fixed or capital assets that is made for cash
consideration; provided that, in each case, if such sale and leaseback results
in a Capital Lease Obligation, such Capital Lease Obligation is permitted by
Section 7.1 and any Lien made the subject of such Capital Lease Obligation is
permitted by Section 7.3.

7.6    Swap Agreements. Enter into any Swap Agreement, other than Swap
Agreements entered into not for speculative purposes (a) to hedge or mitigate
risks to which the Borrower and its Subsidiaries are exposed in the conduct of
its business or the management of its liabilities (including, without
limitation, raw material, commodities, fuel, electricity or other supply costs
and currency risks), (b) to effectively cap, collar or exchange interest rates
(from fixed to floating rates, from one floating rate to another floating rate
or fixed rate or otherwise) with respect to any interest bearing Indebtedness of
the Borrower and its Subsidiaries permitted by this Agreement, (c) to swap
currency in connection with funding the business of the Borrower and its
Subsidiaries in the ordinary course of business or (d) entered into in
connection with any A/R Securitization Transaction.

7.7    Amendments to FMB Indenture. Amend, supplement, modify or waive the FMB
Indenture in any manner that is materially adverse to the Lenders hereunder;
provided that the foregoing shall not prohibit the Borrower from supplementing
the FMB Indenture in order to provide for the issuance of additional First
Mortgage Bonds in accordance with the FMB Indenture or to add property to the
Lien of the FMB Indenture.

SECTION 8.    EVENTS OF DEFAULT

If any of the following events shall occur and be continuing on or after the
Effective Date:

(a)    the Borrower shall fail to pay any principal of any Loan or Reimbursement
Obligation when due in accordance with the terms hereof; or the Borrower shall
fail to pay any interest on any Loan or Reimbursement Obligation, or any other
amount payable hereunder or under any other Loan Document, within five Business
Days after any such interest or other amount becomes due in accordance with the
terms hereof; or

 

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(b)    any representation or warranty made or deemed made by the Borrower herein
or in any other Loan Document or that is contained in any certificate, document
or financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall prove to
have been inaccurate in any material respect on or as of the date made or deemed
made, unless, as of any date of determination, the facts or circumstances to
which such representation or warranty relates have changed with the result that
such representation or warranty is true and correct in all material respects on
such date; or

(c)    the Borrower shall default in the observance or performance of any
agreement contained in Section 6.4(a)(i), Section 6.7(a), Section 6.10,
Section 7.1, Section 7.2, Section 7.3 or Section 7.4 of this Agreement; or

(d)    the Borrower shall default in the observance or performance of any other
agreement contained in this Agreement or any other Loan Document (other than as
provided in paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days after notice to the Borrower from
the Designated Agent at the request of the Required Lenders; or

(e)    the Borrower or any of its Significant Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including any Guarantee
Obligation, but excluding the Loans) on the due date with respect thereto (after
giving effect to any period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created); or (ii) default in making
any payment of any interest on any such Indebtedness beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness
was created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or (in the case of all Indebtedness other than
Indebtedness under any Swap Agreement) to permit the holder or beneficiary of
such Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such Indebtedness
to become due prior to its stated maturity or (in the case of any such
Indebtedness constituting a Guarantee Obligation) to become payable; provided,
that a default, event or condition described in clause (i), (ii) or (iii) of
this paragraph (e) shall not at any time constitute an Event of Default unless,
at such time, one or more defaults, events or conditions of the type described
in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal amount of
which exceeds in the aggregate $200,000,000; provided, further, that unless
payment of the Loans hereunder has already been accelerated, if such default
shall be cured by the Borrower or such Significant Subsidiary or waived by the
holders of such Indebtedness and any acceleration of maturity having resulted
from such default shall be rescinded or annulled, in each case, in accordance
with the terms of such agreement or instrument, without any modification of the
terms of such Indebtedness requiring the Borrower or such Significant Subsidiary
to furnish security or additional security therefor, reducing the average life
to maturity thereof or increasing the principal amount thereof, or any agreement
by the Borrower or

 

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such Significant Subsidiary to furnish security or additional security therefor
or to issue in lieu thereof Indebtedness secured by additional or other
collateral or with a shorter average life to maturity or in a greater principal
amount, then any Default hereunder by reason thereof shall be deemed likewise to
have been thereupon cured or waived; or

(f)    (i) the Borrower or any of its Significant Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or
(B) seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the
Borrower or any of its Significant Subsidiaries shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against the
Borrower or any of its Significant Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above that (A) results in the entry
of an order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii) there
shall be commenced against the Borrower or any of its Significant Subsidiaries
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Borrower or
any of its Significant Subsidiaries shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become due; or

(g)    there occurs any ERISA Event that, individually or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect; or

(h)    one or more judgments or decrees shall be entered against the Borrower or
any of its Significant Subsidiaries by a court of competent jurisdiction
involving in the aggregate a liability (not paid or, subject to customary
deductibles, fully covered by insurance as to which the relevant insurance
company has not denied coverage) of $200,000,000 or more, and all such judgments
or decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 45 days from the entry thereof unless, in the case of a discharge,
such judgment or decree is due at a later date in one or more payments and the
Borrower or such Significant Subsidiary satisfies the obligation to make such
payment or payments on or prior to the date such payment or payments become due
in accordance with such judgment or decree; or

(i)    there shall have occurred a Change of Control; or

(j)    any Loan Document, at any time after its execution and delivery and for
any reason other than as expressly permitted hereunder or thereunder or
satisfaction in full of all the Obligations, ceases to be in full force and
effect; or the Borrower contests in any manner in writing the validity or
enforceability of any Loan Document; or the Borrower denies in writing that it
has any or further liability or obligation under any Loan Document, or purports
in writing to revoke, terminate or rescind any Loan Document; or

 

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(k)    at any time (i) the Senior Bond shall cease to be outstanding for any
reason other than (A) the termination of the Total Commitments, the payment in
full of the Loans, Reimbursement Obligations and other obligations then due and
owing under the Loan Documents and the termination or expiration of the Letters
of Credit or (B) the payment in full of the Senior Bond, (ii) the Designated
Agent, on behalf of the Lenders, shall cease at any time to be the holder of the
Senior Bond for all purposes of the FMB Indenture (unless the Senior Bond is
transferred by the Designated Agent) or (iii) the Lien of the FMB Indenture
shall cease to constitute a valid and enforceable Lien on the Mortgaged
Property;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents (including all amounts of L/C Obligations, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both of
the following actions may be taken: (i) with the consent of the Required
Lenders, the Designated Agent may, or upon the request of the Required Lenders,
the Designated Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Designated Agent may, or
upon the request of the Required Lenders, the Designated Agent shall, by notice
to the Borrower, declare the Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in an interest-bearing cash collateral account opened by the Designated Agent
pursuant to the Escrow Deposit and Disbursement Agreement an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts
held in such interest-bearing cash collateral account shall be applied by the
Designated Agent to the payment of drafts drawn under such Letters of Credit,
and the unused portion thereof after all such Letters of Credit shall have
expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such interest-bearing cash collateral account
shall be returned to the Borrower (or such other Person as may be lawfully
entitled thereto). Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived by the Borrower.

SECTION 9.    THE AGENTS

9.1    Appointment and Authority. Each of the Lenders and the Issuing Lenders
hereby irrevocably appoints Citibank, N.A. to act on its behalf as the
Designated Agent hereunder and under the other Loan Documents and authorizes the
Designated Agent to take such actions on its behalf and to exercise such powers
as are delegated to the Designated Agent by the terms hereof

 

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or thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Section 9 are solely for the benefit of the
Agents, the Lenders and the Issuing Lenders, and the Borrower shall not have
rights as a third-party beneficiary of any of such provisions (other than with
respect to the Borrower’s rights under Sections 9.9(a) and (b)). It is
understood and agreed that the use of the term “agent” herein or in any other
Loan Documents (or any other similar term) with reference to any Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law. Instead such term is used
as a matter of market custom, and is intended to create or reflect only an
administrative relationship between contracting parties.

9.2    Delegation of Duties. The Designated Agent may perform any and all of its
duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by it. The
Designated Agent, and any such sub-agent may each perform any and all of its
duties and exercise its rights and powers by or through their respective Related
Parties. The exculpatory provisions of this Section shall apply to any such
sub-agent and to the Related Parties of the Designated Agent, and any such
sub-agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Designated Agent. The Designated Agent shall not be responsible for the
negligence or misconduct of any sub-agents except to the extent that a court of
competent jurisdiction determines in a final and nonappealable judgment that the
Designated Agent acted with gross negligence or willful misconduct in the
selection of such sub-agents.

9.3    Exculpatory Provisions.

(a)    No Agent shall have any duties or obligations except those expressly set
forth herein and in the other Loan Documents, and its duties hereunder shall be
administrative in nature. Without limiting the generality of the foregoing, no
Agent:

(i)    shall be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(ii)    shall have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that an Agent is required to
exercise as directed in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents); provided that no Agent shall be required to take any
action that, in its opinion or the opinion of its counsel, may expose such Agent
to liability or that is contrary to any Loan Document or applicable law,
including for the avoidance of doubt any action that may be in violation of the
automatic stay under any Debtor Relief Law or that may effect a forfeiture,
modification or termination of property of a Defaulting Lender in violation of
any Debtor Relief Law; and

(iii)    shall, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as an Agent or any of its
Affiliates in any capacity.

 

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(b)    No Agent shall be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as such Agent shall believe
in good faith shall be necessary, under the circumstances as provided in
Sections 10.1 and 8), or (ii) in the absence of its own gross negligence or
willful misconduct as determined by a court of competent jurisdiction by final
and nonappealable judgment.

(c)    No Agent shall be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any Default or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or (v) the satisfaction
of any condition set forth in Section 5 or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to such Agent.

9.4    Reliance by Designated Agent. The Designated Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person. The Designated Agent also may rely
upon any statement made to it orally or by telephone and believed by it to have
been made by the proper Person, and shall not incur any liability for relying
thereon. In determining compliance with any condition hereunder to the making of
a Loan, or the issuance, extension, renewal or increase of a Letter of Credit,
that by its terms must be fulfilled to the satisfaction of a Lender or an
Issuing Lender, the Designated Agent may presume that such condition is
satisfactory to such Lender or such Issuing Lender unless the Designated Agent
shall have received notice to the contrary from such Lender or such Issuing
Lender prior to the making of such Loan or the issuance, extension, renewal or
increase of such Letter of Credit. The Designated Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.

9.5    Notice of Default. The Designated Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Designated Agent has received notice from a Lender, an Issuing Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”. In the event that
the Designated Agent receives such a notice, the Designated Agent shall give
notice thereof to the Lenders and the Issuing Lenders. The Designated Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until such Agent shall have
received such directions, such Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the Lenders
and the Issuing Lenders.

 

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9.6    Non-Reliance on Agents and Other Lenders. Each Lender and Issuing Lender
acknowledges that it has, independently and without reliance upon the Agents, or
any other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender and Issuing Lender also
acknowledges that it will, independently and without reliance upon the Agents,
or any other Lender or any of their Related Parties and based on such documents
and information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document
furnished hereunder or thereunder. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Designated
Agent hereunder, the Designated Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower or any of its Affiliates that may come into the
possession of such Agent or any of its officers, directors, employees, agents,
attorneys in fact or Affiliates.

9.7    Indemnification. The Lenders and the Issuing Lenders agree to indemnify
each Agent in its capacity as such (to the extent not reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so), ratably according
to their respective Percentages in effect on the date on which indemnification
is sought under this Section (or, if indemnification is sought after the date
upon which the Commitments shall have terminated and the Loans shall have been
paid in full, ratably in accordance with such Percentages immediately prior to
such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (whether before or after the payment
of the Loans) be imposed on, incurred by or asserted against such Agent in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Agent under or in connection with any of the foregoing;
provided that no Lender or Issuing Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent’s gross negligence or willful misconduct.

9.8    Agent in Its Individual Capacity. Each Person serving as an Agent
hereunder shall have the same rights and powers in its capacity as a Lender or
an Issuing Lender as any other Lender or Issuing Lender and may exercise the
same as though it were not an Agent, and the terms “Lender”, “Issuing Lender”,
“Lenders” or “Issuing Lenders” shall, unless otherwise expressly indicated or
unless the context otherwise requires, include such Person serving as an Agent
hereunder in its individual capacity. Such Person and its Affiliates may accept
deposits from, lend money to, own securities of, act as the financial advisor or
in any other advisory capacity for, and generally engage in any kind of business
with, the Borrower or any Subsidiary or other Affiliate thereof as if such
Person were not an Agent hereunder and without any duty to account therefor to
the Lenders or the Issuing Lenders.

 

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9.9    Successor Agents.

(a)    The Designated Agent may resign upon 10 days’ notice to the Lenders and
the Borrower. If the Designated Agent shall so resign under this Agreement and
the other Loan Documents, then the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall (unless
an Event of Default under Section 8(f) with respect to the Borrower shall have
occurred and be continuing) be subject to approval by the Borrower (which
approval shall not be unreasonably withheld, conditioned or delayed), whereupon
such successor agent shall succeed to the rights, powers and duties of the
Designated Agent and the term “Designated Agent” shall mean such successor agent
effective upon such appointment and approval, and the former Agent’s rights,
powers and duties as Designated Agent shall be terminated, without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement or any holders of the Loans. If no successor agent has accepted
appointment as Designated Agent by the date that is 10 days following a retiring
Agent’s notice of resignation (the “Resignation Effective Date”), the retiring
Agent’s resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Designated Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After any retiring Agent’s resignation as
Designated Agent the provisions of Section 9.7 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was an Agent under this
Agreement and the other Loan Documents.

(b)    If the Person serving as Designated Agent is a Defaulting Lender pursuant
to clause (e) of the definition thereof, the Required Lenders may, to the extent
permitted by applicable law, by notice in writing to the Borrower and such
Person remove such Person as Designated Agent and, shall appoint a successor,
subject to the approval of the Borrower (unless an Event of Default under
Section 8(f) with respect to the Borrower shall have occurred and be
continuing), which approval shall not be unreasonably withheld, conditioned or
delayed. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days (or such earlier
day as shall be agreed by the Required Lenders) (the “Removal Effective Date”),
then such removal shall nonetheless become effective in accordance with such
notice on the Removal Effective Date.

(c)    With effect from the Resignation Effective Date or the Removal Effective
Date (as applicable) (i) the retiring or removed Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents (except
that in the case of the Senior Bond held by the Designated Agent on behalf of
the Lenders or any Issuing Lender, the retiring or removed Designated Agent
shall continue to hold such Senior Bond in its name until such time as a
successor Designated Agent is appointed) and (ii) except for any indemnity
payments or other amounts then owed to the retiring or removed Designated Agent,
all payments, communications and determinations provided to be made by, to or
through the Designated Agent shall instead be made by or to each Lender and each
Issuing Lender directly, until such time, if any, as the Required Lenders
appoint a successor Designated Agent as provided for above. Upon the acceptance
of a successor’s appointment as Designated Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring or removed Agent (other than any rights to indemnity
payments or other amounts owed to the retiring or removed Agent as of the
Resignation Effective Date or the Removal Effective Date (as applicable)), and
the retiring or removed Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents. The fees payable by the

 

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Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the retiring or removed Agent’s resignation or removal hereunder and under
the other Loan Documents, the provisions of this Section and Sections 2.17, 3.10
and 10.5 shall continue in effect for the benefit of such retiring or removed
Agent, its sub-agents and their respective Related Parties in respect of any
actions taken or omitted to be taken by any of them while the retiring or
removed Agent was acting as Agent.

9.10    Documentation Agents and Syndication Agents. None of the
Co-Administrative Agents, the Documentation Agents or the Syndication Agents
shall have any duties or responsibilities hereunder in its capacity as such.

9.11    Designated Agent May File Proofs of Claim. In case of the pendency of
any proceeding under any Debtor Relief Law, the Designated Agent (irrespective
of whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Designated Agent shall have made any demand on the Borrower) shall
be entitled and empowered (but not obligated) by intervention in such proceeding
or otherwise:

(a)    to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the Issuing
Lenders and the Designated Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the Issuing
Lenders and the Designated Agent and their respective agents and counsel and all
other amounts due the Lenders, the Issuing Lenders and the Designated Agent
under Sections 2.6, 2.17, 3.3, 3.10 and 10.5) allowed in such judicial
proceeding; and

(b)    to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and Issuing Lender to make such payments to the Designated Agent
and, in the event that the Designated Agent shall consent to the making of such
payments directly to the Lenders and the Issuing Lenders, to pay to the
Designated Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Designated Agent and its agents and counsel,
and any other amounts due the Designated Agent under Sections 2.6, 2.17, 3.10
and 10.5.

9.12    Certain ERISA Matters.

(a)    Each Lender (x) represents and warrants, as of the date such Person
became a Lender party hereto, to, and (y) covenants, from the date such Person
became a Lender party hereto to the date such Person ceases being a Lender party
hereto, for the benefit of, the Designated Agent, and not, for the avoidance of
doubt, to or for the benefit of the Borrower, that at least one of the following
is and will be true:

 

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(i)    such Lender is not using “plan assets” (within the meaning of
Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect
to such Lender’s entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments or this
Agreement,

(ii)    the transaction exemption set forth in one or more PTEs, such as PTE
84-14 (a class exemption for certain transactions determined by independent
qualified professional asset managers), PTE 95-60 (a class exemption for certain
transactions involving insurance company general accounts), PTE 90-1 (a class
exemption for certain transactions involving insurance company pooled separate
accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers), is applicable with respect
to such Lender’s entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement,

(iii)    (A) such Lender is an investment fund managed by a “Qualified
Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B)
such Qualified Professional Asset Manager made the investment decision on behalf
of such Lender to enter into, participate in, administer and perform the Loans,
the Letters of Credit, the Commitments and this Agreement, (C) the entrance
into, participation in, administration of and performance of the Loans, the
Letters of Credit, the Commitments and this Agreement satisfies the requirements
of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best
knowledge of such Lender, the requirements of subsection (a) of Part I of PTE
84-14 are satisfied with respect to such Lender’s entrance into, participation
in, administration of and performance of the Loans, the Letters of Credit, the
Commitments and this Agreement, or

(iv)    such other representation, warranty and covenant as may be agreed in
writing between the Designated Agent, in its sole discretion, and such Lender.

(b)    In addition, unless either (1) sub-clause (i) in the immediately
preceding clause (a) is true with respect to a Lender or (2) a Lender has
provided another representation, warranty and covenant in accordance with
sub-clause (iv) in the immediately preceding clause (a), such Lender further
(x) represents and warrants, as of the date such Person became a Lender party
hereto, to, and (y) covenants, from the date such Person became a Lender party
hereto to the date such Person ceases being a Lender party hereto, for the
benefit of, the Designated Agent, and not, for the avoidance of doubt, to or for
the benefit of the Borrower, that the Designated Agent is not a fiduciary with
respect to the assets of such Lender involved in such Lender’s entrance into,
participation in, administration of and performance of the Loans, the Letters of
Credit, the Commitments and this Agreement (including in connection with the
reservation or exercise of any rights by the Designated Agent under this
Agreement, any Loan Document or any documents related hereto or thereto).

 

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SECTION 10.    MISCELLANEOUS

10.1    Amendments and Waivers. Subject to Section 2.13(b) and (c), neither this
Agreement, any other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the provisions of
this Section 10.1. The Required Lenders and the Borrower may, or, with the
written consent of the Required Lenders, the Designated Agent and the Borrower
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Borrower hereunder or thereunder or
(b) waive, on such terms and conditions as the Required Lenders or the
Designated Agent, as the case may be, may specify in such instrument, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall:

(i)    forgive the principal amount or extend the final scheduled date of
maturity of any Loan, reduce the stated rate of any interest or fee payable
hereunder (except in connection with the waiver of applicability of any
post-default increase in interest rates (which waiver shall be effective with
the consent of the Required Lenders)) or extend the scheduled date of any
payment thereof, or increase the amount or extend the expiration date of any
Lender’s Commitment, in each case without the written consent of each Lender
directly affected thereby (except that only the Lenders who are increasing their
Commitments are required to consent to a request by the Borrower under
Section 2.3 to increase the Total Commitments);

(ii)    eliminate or reduce the voting rights of any Lender under this
Section 10.1 or Section 10.6(a)(i) without the written consent of such Lender;

(iii)    reduce any percentage specified in the definition of Required Lenders
without the written consent of all Lenders;

(iv)    amend, modify or waive any provision of Section 2.14, Section 10.07
(Application of Money Collected) of the FMB Indenture or any similar provision
in the Loan Documents related to pro rata treatment without the consent of each
Lender directly affected thereby;

(v)    amend, modify or waive any provision of Section 9 without the written
consent of the Designated Agent;

(vi)    [reserved];

(vii)    amend, modify or waive any provision of Section 5.1 without the written
consent of all the Lenders;

(viii)    amend, modify or waive any provision of Section 3 or any other
provision affecting the Issuing Lenders in their capacity as such without the
written consent of each Issuing Lender affected thereby; or

 

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(ix)    instruct the Designated Agent to vote the Senior Bond in favor of the
release of all or substantially all of the Mortgaged Property without the
written consent of all the Lenders.

Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrower, the
Lenders, the Designated Agent and all future holders of the Loans. In the case
of any waiver, the Borrower, the Lenders and the Designated Agent shall be
restored to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.

Notwithstanding anything to the contrary contained in this Section 10.1, if the
Designated Agent and the Borrower acting together identify any ambiguity,
omission, mistake, typographical error or other defect in any provision of this
Agreement or any other Loan Document, then the Designated Agent and the Borrower
shall be permitted to amend, modify or supplement such provision to cure such
ambiguity, omission, mistake, typographical error or other defect, and any such
amendment, modification or supplement shall become effective without any further
action or consent of any other party to this Agreement.

If the Required Lenders shall have approved any amendment which requires the
consent of all of the Lenders, the Borrower shall be permitted to replace any
non-consenting Lender with another financial institution, provided that, (i) the
replacement financial institution shall purchase at par, all Loans and other
amounts owing to such replaced Lender on or prior to the date of replacement,
(ii) the Borrower shall be liable to such replaced Lender under Section 2.17 if
any Eurodollar Loan owing to such replaced Lender shall be purchased other than
on the last day of the Interest Period relating thereto (as if such purchase
constituted a prepayment of such Loans), (iii) such replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Designated Agent and each Issuing Lender, (iv) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of
Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein) and (v) any such
replacement shall not be deemed to be a waiver of any rights the Borrower, the
Designated Agent, or any other Lender shall have against the replaced Lender.

Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, supplement, modification,
waiver or consent hereunder (and any amendment, supplement, modification, waiver
or consent which by its terms requires the consent of all Lenders or each
affected Lender may be effected with the consent of the applicable Lenders other
than Defaulting Lenders), except that (i) (x) an increase or extension of the
Commitment of such Defaulting Lender, or (y) any reduction of the amount of
principal or interest owed to such Defaulting Lender shall, in each case,
require the consent of such Defaulting Lender, and (ii) a Defaulting Lender’s
Percentage shall be taken into consideration along with the Percentage of
non-Defaulting Lenders when voting to approve or disapprove any waiver,
amendment or modification that by its terms affects any Defaulting Lender more
adversely than other affected Lenders.

 

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10.2    Notices.

(a)    All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered during the recipient’s normal business hours, or three
Business Days after being deposited in the mail, postage prepaid, or, in the
case of telecopy notice, when received during the recipient’s normal business
hours, addressed as follows in the case of the Borrower and the Designated
Agent, and as set forth in an administrative questionnaire delivered to the
Designated Agent in the case of the Lenders, or to such other address as may be
hereafter notified by the respective parties hereto:

 

Borrower:    Pacific Gas and Electric Company    c/o PG&E Corporation    P.O.
Box 770000    San Francisco, California 94177    Attention: Treasurer   
Telecopy: (415) 973-8968    Telephone: (415) 973-8956 with a copy to:    Pacific
Gas and Electric Company    c/o PG&E Corporation    P.O. Box 770000    San
Francisco, California 94177    Attention: General Counsel    Telecopy: (415)
973-5520 Designated Agent:    Citibank, N.A.    Citibank Delaware    One Penns
Way    OPS 2/2    New Castle, DE 19720    Attention: Agency Operations   
Telecopy: (646) 274-5080    Telephone: (302) 894-6010    Borrower Notifications
Email: AgencyABTFSupport@citi.com    Financial Reporting Email:
Oploanswebadmin@citi.com    Lender Inquiries Email:
global.loans.support@citi.com Issuing Lenders:    As notified by each Issuing
Lender to the Designated Agent and the Borrower.

provided that any notice, request or demand to or upon the Designated Agent, the
Issuing Lenders or any Lender shall not be effective until received.

(b)    Notices and other communications to the Designated Agent, the Issuing
Lenders or the Lenders hereunder may be delivered or furnished by electronic
communications pursuant to procedures approved by the Designated Agent; provided
that the foregoing shall not apply to notices pursuant to Section 2 unless
otherwise agreed by the Designated Agent, the applicable

 

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Issuing Lender and each Lender. The Designated Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

(c)    Unless the Designated Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient, at its e-mail address as described in the foregoing
clause (i), of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses
(i) and (ii) above, if such notice, email or other communication is not sent
during the normal business hours of the recipient, such notice or communication
shall be deemed to have been sent at the opening of business on the next
Business Day for the recipient.

(d)    (i) The Borrower agrees that the Designated Agent may, but shall not be
obligated to, make the Communications (as defined below) available to the
Issuing Lenders and the other Lenders by posting the Communications on Debt
Domain, Intralinks, Syndtrak or a substantially similar electronic transmission
system (the “Platform”).

(ii)    The Platform is provided “as is” and “as available.” The Agent Parties
(as defined below) do not warrant the adequacy of the Platform and expressly
disclaim liability for errors or omissions in the Communications. No warranty of
any kind, express, implied or statutory, including, without limitation, any
warranty of merchantability, fitness for a particular purpose, non-infringement
of third-party rights or freedom from viruses or other code defects, is made by
any Agent Party in connection with the Communications or the Platform. In no
event shall the Designated Agent or any of its Related Parties (collectively,
the “Agent Parties”) have any liability to the Borrower, any Lender, any Issuing
Lender or any other Person or entity for damages of any kind, including, without
limitation, direct or indirect, special, incidental or consequential damages,
losses or expenses (whether in tort, contract or otherwise) arising out of the
Borrower’s or the Designated Agent’s transmission of Communications through the
Platform, except to the extent such liability resulted from the gross negligence
or willful misconduct of the Designated Agent or any of its Related Parties as
determined by a court of competent jurisdiction in a final non-appealable
judgment. “Communications” means, collectively, any notice, demand,
communication, information, document or other material provided by or on behalf
of the Borrower pursuant to any Loan Document or the transactions contemplated
therein which is distributed to the Designated Agent, any Lender or any Issuing
Lender by means of electronic communications pursuant to this Section, including
through the Platform.

10.3    No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Designated Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude

 

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any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.

10.4    Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

10.5    Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Designated Agent, each Issuing Lender and the Lenders for all
their respective reasonable out of pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and thereby,
including the reasonable fees and disbursements of only one joint counsel and
one joint special California counsel and, if necessary, one joint local counsel
in each other relevant jurisdiction to the Designated Agent, the Issuing Lenders
and the Lenders (and in the case of an actual or perceived conflict of interest,
one additional counsel for each applicable jurisdiction to each group of
similarly situated affected persons) and filing and recording fees and expenses,
with statements with respect to the foregoing to be submitted to the Borrower
prior to the Effective Date (in the case of amounts to be paid on the Effective
Date) and from time to time thereafter on a quarterly basis or such other
periodic basis as the Designated Agent shall deem appropriate, (b) to pay or
reimburse each Lender, each Issuing Lender, and the Designated Agent for all its
costs and expenses incurred in connection with the enforcement or preservation
of its rights under this Agreement, the other Loan Documents and any such other
documents, including the reasonable fees and disbursements of only one joint
counsel, one joint special California counsel and, if necessary, one local
counsel in each other relevant jurisdiction to the Designated Agent, the Issuing
Lenders and the Lenders (and in the case of an actual or perceived conflict of
interest, one additional counsel for each applicable jurisdiction to each group
of similarly situated affected persons), and (c) to pay, indemnify, and hold
each Lender, each Issuing Lender, the Designated Agent and their respective
Affiliates and their respective officers, directors, employees and agents (each,
an “Indemnitee”) harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever whether brought by
the Borrower or any other Person, with respect to the execution, delivery,
enforcement and performance of, or arising out of or in connection with, this
Agreement, the other Loan Documents and any such other documents, including any
of the foregoing relating to the use of proceeds of the Loans or the violation
of, noncompliance with or liability under, any Environmental Law directly or
indirectly relating to the Borrower, its Significant Subsidiaries or any of the
facilities and properties owned, leased or operated by the Borrower or its
Significant Subsidiaries and the reasonable, documented and invoiced fees and
expenses of one joint counsel and one joint special California counsel and, if
necessary, one joint local counsel in each other relevant jurisdiction to the
applicable Indemnitee (and in the case of an actual or perceived conflict of
interest, one additional counsel for each applicable jurisdiction to each group
of similarly situated affected persons), in connection with claims, actions or
proceedings by any Indemnitee against the Borrower under any Loan Document (all
the foregoing in this clause (c), collectively, the “Indemnified Liabilities”),
provided, that the

 

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Borrower shall have no obligation hereunder to any Indemnitee with respect to
Indemnified Liabilities to the extent such Indemnified Liabilities resulted
from, as determined in a final non-appealable judgment by a court of competent
jurisdiction, (x) the gross negligence, bad faith or willful misconduct of such
Indemnitee or its Affiliates, (y) the material breach of such Indemnitee’s
funding obligations hereunder or (z) a dispute amongst one or more Lenders not
arising from the Borrower’s breach of its obligations under the Loan Documents
(other than a dispute involving a claim against an Indemnitee for its acts or
omissions in its capacity as an arranger, bookrunner, agent or similar role in
respect of the Loan Agreement, except, to the extent such acts or omissions are
determined by a court of competent jurisdiction by a final and non-appealable
judgment to have constituted the gross negligence, bad faith or willful
misconduct of such Indemnitee in such capacity). Without limiting the foregoing,
and to the extent permitted by applicable law, the Borrower agrees not to assert
and to cause its Significant Subsidiaries not to assert, and hereby waives and
agrees to cause its Significant Subsidiaries to waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section 10.5 shall be payable not later than 30 days after written
demand therefor, subject to the Borrower’s receipt of reasonably detailed
invoices. Statements payable by the Borrower pursuant to this Section 10.5 shall
be submitted to Treasurer (Telephone No. (415) 817-8199/(415) 267-7000)
(Telecopy No. (415) 267-7265/7268), at the address of the Borrower set forth in
Section 10.2(a) with a copy to Chief Counsel, Corporate (Telephone No. (415)
817-8200) (Telecopy No. (415) 817-8225), at the address of the Borrower set
forth in Section 10.2(a), or to such other Person or address as may be hereafter
designated by the Borrower in a written notice to the Designated Agent. The
agreements in this Section 10.5 shall survive for two years after repayment of
the Loans and all other amounts payable hereunder. This Section 10.5 shall not
apply with respect to Taxes, other than Taxes that represent claims, damages,
losses, liabilities, costs or expenses arising from non-Tax claims.

10.6    Successors and Assigns; Participations and Assignments.

(a)    The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Lender that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section 10.6.

(b)    (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees (each, an “Assignee”) other than a
Defaulting Lender, any Subsidiary of a Defaulting Lender, any natural person (or
holding company, investment vehicle or trust for, or owned or operated by or for
the primary benefit of, one or more natural persons), the Borrower or any of the
Borrower’s Affiliates or Subsidiaries, all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld or delayed) of:

 

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(A)    the Borrower, provided that no consent of the Borrower shall be required
for an assignment to a Lender (or an Affiliate of any Lender) or an Approved
Fund or, if an Event of Default under Section 8(a), (e) or (f) has occurred and
is continuing, any other Person, and provided further, that the Borrower shall
be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the Designated Agent within ten (10) Business Days
after having received notice thereof from the assigning Lender (with a copy to
the Designated Agent);

(B)    the Designated Agent, provided that no consent of the Designated Agent
shall be required for an assignment of any Commitment or Loan to an Assignee
that is a Lender (or an Affiliate of a Lender) with a Commitment or Loan
immediately prior to giving effect to such assignment; and

(C)    each Issuing Lender.

(ii)    Assignments shall be subject to the following additional conditions:

(A)    except in the case of an assignment to a Lender, an Eligible Assignee
that is an Affiliate of any Lender or an assignment of the entire remaining
amount of the assigning Lender’s Commitments or Loans, the amount of the
Commitments or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Designated Agent) shall not be less than
$10,000,000 (or, if such Assignee is an Eligible Assignee that is an Affiliate
of a Lender, $5,000,000) unless each of the Borrower and the Designated Agent
otherwise consent, provided that (1) no such consent of the Borrower shall be
required if an Event of Default has occurred and is continuing and (2) with
respect to any Lender party to this Agreement on the Effective Date, such
amounts shall be aggregated in respect of such Lender and any Affiliate of such
Lender that is an Eligible Assignee;

(B)    the parties to each assignment shall execute and deliver to the
Designated Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500; and

(C)    the Assignee, if it shall not be a Lender, shall deliver to the
Designated Agent an administrative questionnaire.

In connection with any assignment of rights and obligations of any Defaulting
Lender hereunder, no such assignment shall be effective unless and until, in
addition to the other conditions thereto set forth herein, the parties to the
assignment shall make such additional payments to the Designated Agent in an
aggregate amount sufficient, upon distribution thereof as appropriate (which may
be outright payment, purchases by the Assignee of participations or
subparticipations, or other compensating actions, including funding, with the
consent of the Borrower and the Designated Agent, the applicable pro rata share
of Loans and L/C Obligations previously requested but not funded by the
Defaulting Lender, to each of which the applicable

 

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Assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in
full all payment liabilities then owed by such Defaulting Lender to the
Designated Agent, any Issuing Lender or any Lender hereunder (and interest
accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata
share of all Loans and participations in Letters of Credit in accordance with
its Percentage. Notwithstanding the foregoing, in the event that any assignment
of rights and obligations of any Defaulting Lender hereunder shall become
effective under applicable law without compliance with the provisions of this
paragraph, then the Assignee of such interest shall be deemed to be a Defaulting
Lender for all purposes of this Agreement until such compliance occurs.

(iii)    Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) below, from and after the effective date specified in each Assignment
and Assumption the Assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, shall have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 10.5 but shall be subject to the limitations set forth
therein); provided, that except to the extent otherwise expressly agreed by the
affected parties, no assignment by a Defaulting Lender will constitute a waiver
or release of any claim of any party hereunder arising from the Lender’s having
been a Defaulting Lender. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.6
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

(iv)    The Designated Agent, acting for this purpose as a non-fiduciary agent
of the Borrower (and such agency being solely to establish that the relevant
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations), shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amount of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, the
Designated Agent, the Issuing Lenders and the Lenders shall treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, each
Issuing Lender and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

(v)    Upon its receipt of a duly completed Assignment and Assumption executed
by an assigning Lender and an Assignee, the Assignee’s completed administrative
questionnaire (unless the Assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the

 

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Designated Agent shall accept such Assignment and Assumption and record the
information contained therein in the Register. No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.

(c)    (i) Any Lender may, without the consent of the Borrower, the Designated
Agent or any Issuing Lender, sell participations to one or more banks or other
entities (other than a Defaulting Lender or the Borrower or any of the
Borrower’s Affiliates or Subsidiaries) (a “Participant”) in all or a portion of
such Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans owing to it); provided that (A) such
Lender’s obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrower, the Designated Agent, the
Issuing Lender and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement. Any agreement pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver that (1) requires the consent of each Lender
directly affected thereby pursuant to the proviso to the second sentence of
Section 10.1 and (2) directly affects such Participant. Subject to paragraph
(c)(ii) of this Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.

(ii)    Notwithstanding anything to the contrary herein, a Participant shall not
be entitled to receive any greater payment under Section 2.15 or 2.16 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent to such
greater payments. Any Participant that is a Foreign Lender shall not be entitled
to the benefits of Section 2.16 unless such Participant complies with
Section 2.16(e).

(iii)    Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower, maintain a register on which
it enters the name and address of each Participant and the principal amounts
(and stated interest) of each Participant’s interest in the Loans or other
obligations under the Loan Documents (the “Participant Register”); provided that
no Lender shall have any obligation to disclose all or any portion of the
Participant Register (including the identity of any Participant or any
information relating to a Participant’s interest in any commitments, loans,
letters of credit or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Designated Agent (in its capacity as Designated Agent) shall have no
responsibility for maintaining a Participant Register.

 

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(d)    Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank or other central bank having jurisdiction over such Lender, and
this Section shall not apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or Assignee for such Lender as a party hereto.

(e)    The Borrower, upon receipt of written notice from the relevant Lender,
agrees to issue Notes to any Lender requiring Notes to facilitate transactions
of the type described in paragraph (d) above.

(f)    Notwithstanding the foregoing, any Conduit Lender may assign any or all
of the Loans it may have funded hereunder to its designating Lender without the
consent of the Borrower, the Designated Agent or any Issuing Lender and without
regard to the limitations set forth in Section 10.6(b). Each of the Borrower,
each Lender and the Designated Agent hereby confirms that it will not institute
against a Conduit Lender or join any other Person in instituting against a
Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under any state bankruptcy or similar law, for one year
and one day after the payment in full of the latest maturing commercial paper
note issued by such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage, expense,
obligations, penalties, actions, judgments, suits or any kind whatsoever arising
out of its inability to institute such a proceeding against such Conduit Lender
during such period of forbearance.

(g)    Notwithstanding anything to the contrary in this Section, none of the
Agents, in their capacity as Lenders, will assign without the consent of the
Borrower, prior to the Effective Date, any of the Commitments held by them on
the date of this Agreement.

(h)    Notwithstanding anything to the contrary in this Section 10.6, for the
avoidance of doubt, Goldman Sachs Bank USA may assign any amount of its
Commitments or Loans hereunder to Goldman Sachs Lending Partners LLC (or vice
versa) without the prior written consent of any other Person.

10.7    Adjustments; Set off.

(a)    Except to the extent that this Agreement expressly provides for payments
to be allocated to a particular Lender, if any Lender (a “Benefitted Lender”)
shall receive any payment of all or part of the Obligations owing to it
hereunder, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender hereunder, such Benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender

 

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hereunder, or shall provide such other Lenders with the benefits of any such
collateral, as shall be necessary to cause such Benefitted Lender to share the
excess payment or benefits of such collateral ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.

(b)    In addition to any rights and remedies of the Lenders provided by law,
including other rights of set-off, each Lender shall have the right, without
prior notice to the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon any amount becoming due
and payable by the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise), after any applicable grace period, to set off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch, Affiliate or agency thereof to or for the
credit or the account of the Borrower; provided, that in the event that any
Defaulting Lender shall exercise any such right of setoff, (x) all amounts so
set off shall be paid over immediately to the Designated Agent for further
application in accordance with the provisions of Section 2.20 and, pending such
payment, shall be segregated by such Defaulting Lender from its other funds and
deemed held in trust for the benefit of the Designated Agent, the Issuing
Lenders and the Lenders, and (y) the Defaulting Lender shall provide promptly to
the Designated Agent a statement describing in reasonable detail the Obligations
owing to such Defaulting Lender as to which it exercised such right of setoff.
Each Lender agrees promptly to notify the Borrower and the Designated Agent
after any such setoff and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such setoff and
application.

10.8    Counterparts; Electronic Execution; Binding Effect. This Agreement may
be executed by one or more of the parties to this Agreement on any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Agreement by facsimile transmission, emailed pdf. or any
other electronic means that reproduces an image of the actual executed signature
page shall be effective as delivery of an original executed counterpart hereof.
The words “execution,” “signed,” “signature,” “delivery,” and words of like
import in or relating to any document to be signed in connection with this
Agreement and the transactions contemplated hereby shall be deemed to include an
electronic sound, symbol, or process attached to, or associated with, a contract
or other record and adopted by a Person with the intent to sign, authenticate or
accept such contract or record, deliveries or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature, physical delivery thereof or
the use of a paper-based recordkeeping system, as the case may be, to the extent
and as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act; provided that nothing herein shall require the
Designated Agent to accept electronic signatures in any form or format without
its prior written consent. Without limiting the generality of the foregoing, the
Borrower hereby (i) agrees that, for all purposes, including without limitation,
in connection with any workout, restructuring, enforcement of remedies,

 

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bankruptcy proceedings or litigation among the Designated Agent, the Lenders and
the Issuing Lenders, electronic images of this Agreement or any other Loan
Documents (in each case, including with respect to any signature pages thereto)
shall have the same legal effect, validity and enforceability as any paper
original, and (ii) waives any argument, defense or right to contest the validity
or enforceability of the Loan Documents based solely on the lack of paper
original copies of any Loan Documents, including with respect to any signature
pages thereto. This Agreement shall become binding on the parties hereto when it
shall have been executed by the Designated Agent and the Designated Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

10.9    Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Without limiting the foregoing provisions of this
Section 10.9, if and to the extent that the enforceability of any provisions in
this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief
Laws, as determined in good faith by the Designated Agent or any Issuing Lender,
as applicable, then such provisions shall be deemed to be in effect only to the
extent not so limited.

10.10    Integration. This Agreement and the other Loan Documents represent the
entire agreement of the Borrower, the Designated Agent, and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Designated Agent, or any
Lender relative to the subject matter hereof not expressly set forth or referred
to herein or in the other Loan Documents.

10.11    GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

10.12    Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably
and unconditionally:

(a)    submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive jurisdiction of the United States District Court for the Southern
District of New York sitting in the Borough of Manhattan (or if such court lacks
subject matter jurisdiction, the Supreme Court of the State of New York sitting
in the Borough of Manhattan), and any appellate court from any thereof;

(b)    consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

 

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(c)    agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 10.2(a) or at such other address of which the
Designated Agent shall have been notified pursuant thereto;

(d)    agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e)    waives, to the maximum extent not prohibited by law, and agrees not to
assert any right it may have to claim or recover in any legal action or
proceeding relating to this Agreement or any other Loan Document any special,
exemplary, punitive or consequential damages.

NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT THE DESIGNATED AGENT, ANY LENDER OR ANY ISSUING LENDER MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

10.13    Acknowledgments. The Borrower hereby acknowledges that:

(a)    it has been advised by counsel in the negotiation, execution and delivery
of this Agreement and the other Loan Documents;

(b)    none of the Designated Agent or any Lender has any fiduciary relationship
with or duty to the Borrower arising out of or in connection with this Agreement
or any of the other Loan Documents, and the relationship between Designated
Agent and Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and

(c)    no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Borrower and the Lenders.

10.14    Confidentiality. Each of the Designated Agent and each Lender agrees to
keep confidential in accordance with such party’s customary practices (and in
any event in compliance with applicable law regarding material non-public
information) all non-public information provided to it by the Borrower, the
Designated Agent or any Lender pursuant to or in connection with this Agreement
that is designated by the provider thereof as confidential; provided that
nothing herein shall prevent the Designated Agent or any Lender from disclosing
any such information (a) to the Designated Agent, any other Lender or any
Affiliate thereof, (b) subject to an agreement to comply with the provisions of
this Section or substantially equivalent provisions, to any actual or
prospective Transferee, any direct or indirect counterparty to any Swap
Agreement (or any professional advisor to such counterparty) or any credit
insurance providers, (c) to its employees, directors, agents, attorneys, service
providers, accountants and other professional advisors or those of any of its
Affiliates (as long as such attorneys, service providers, accountants and other
professional advisors are directed to comply with confidentiality requirements
substantially equivalent to this Section), (d) upon the request or demand of any

 

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Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed, (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender’s investment portfolio in connection with ratings issued with
respect to such Lender, (i) in connection with the exercise of any remedy
hereunder or under any other Loan Document, (j) any rating agency in connection
with rating of the Borrower or its Subsidiaries or the credit facilities
provided hereunder or (k) to the extent such information (i) becomes available
to the Designated Agent, any Lender, Issuing Lender or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower or
its Subsidiaries or (ii) is independently discovered or developed by a party
hereto without utilizing any information received from the Borrower or its
Subsidiaries or violating the terms of this Section 10.14, provided that, in the
case of clauses (d), (e) and (f) of this Section 10.14, with the exception of
disclosure to bank regulatory authorities, the Borrower (to the extent legally
permissible) shall be given prompt prior notice so that it may seek a protective
order or other appropriate remedy.

10.15    WAIVERS OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, THE
BORROWER, THE DESIGNATED AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

10.16    USA Patriot Act; Beneficial Ownership Regulation. Each Lender hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”), it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower
and other information that will allow such Lender to identify the Borrower in
accordance with the Patriot Act.

10.17    Judicial Reference. If any action or proceeding is filed in a court of
the State of California by or against any party hereto in connection with any of
the transactions contemplated by this Agreement or any other Loan Document,
(i) the court shall, and is hereby directed to, make a general reference
pursuant to California Code of Civil Procedure Section 638 to a referee (who
shall be a single active or retired judge) to hear and determine all of the
issues in such action or proceeding (whether of fact or of law) and to report a
statement of decision, provided that at the option of any party to such
proceeding, any such issues pertaining to a “provisional remedy” as defined in
California Code of Civil Procedure Section 1281.8 shall be heard and determined
by the court, and (ii) without limiting the generality of Section 10.5, the
Borrower shall be solely responsible to pay all fees and expenses of any referee
appointed in such action or proceeding.

10.18    No Advisory or Fiduciary Responsibility. In connection with all aspects
of each transactions contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
the Borrower acknowledges and agrees that: (i) (A) the arranging and other
services regarding this Agreement provided by the Agents, the Arrangers and the
Lenders are arm’s-length commercial transactions between the Borrower,

 

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on the one hand, and the Agents, the Arrangers and the Lenders, on the other
hand, (B) the Borrower has consulted its own legal, accounting, regulatory and
tax advisors to the extent it has deemed appropriate, and (C) the Borrower is
capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) each Agent, Arranger and Lender is and has been acting
solely as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for the Borrower or any other Person and (B) none of the Agents,
Arrangers or Lenders has any obligation to the Borrower or any of its Affiliates
with respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Loan Documents; and (iii) the
Agents, the Arrangers and the Lenders and their respective Affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of the Borrower and its Affiliates, and none of the Agents, Arrangers or
Lenders has any obligation to disclose any of such interests to the Borrower or
its Affiliates. To the fullest extent permitted by law, the Borrower hereby
waives and releases any claims that it may have against the Agents, the
Arrangers and the Lenders with respect to any breach or alleged breach of agency
or fiduciary duty in connection with any aspect of any transaction contemplated
hereby other than a breach of the confidentiality provisions set forth in
Section 10.14.

10.19    Acknowledgement Regarding Any Supported QFCs.

(a)    To the extent that the Loan Documents provide support, through a
guarantee or otherwise, for Swap Agreements or any other agreement or instrument
that is a QFC (such support “QFC Credit Support” and each such QFC a “Supported
QFC”), the parties acknowledge and agree as follows with respect to the
resolution power of the Federal Deposit Insurance Corporation under the Federal
Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (together with the regulations promulgated thereunder,
the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC
Credit Support (with the provisions below applicable notwithstanding that the
Loan Documents and any Supported QFC may in fact be stated to be governed by the
laws of the State of New York and/or of the United States or any other state of
the United States):

(b)    In the event a Covered Entity that is party to a Supported QFC (each, a
“Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution
Regime, the transfer of such Supported QFC and the benefit of such QFC Credit
Support (and any interest and obligation in or under such Supported QFC and such
QFC Credit Support, and any rights in property securing such Supported QFC or
such QFC Credit Support) from such Covered Party will be effective to the same
extent as the transfer would be effective under the U.S. Special Resolution
Regime if the Supported QFC and such QFC Credit Support (and any such interest,
obligation and rights in property) were governed by the laws of the United
States or a state of the United States. In the event a Covered Party or a BHC
Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S.
Special Resolution Regime, Default Rights under the Loan Documents that might
otherwise apply to such Supported QFC or any QFC Credit Support that may be
exercised against such Covered Party are permitted to be exercised to no greater
extent than such Default Rights could be exercised under the U.S. Special
Resolution Regime if the Supported QFC and the Loan Documents were governed by
the laws of the United States or a state of the United States. Without
limitation of the foregoing, it is understood and agreed that rights and
remedies of the parties with respect to a Defaulting Lender shall in no event
affect the rights of any Covered Party with respect to a Supported QFC or any
QFC Credit Support.

 

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10.20    Acknowledgement and Consent to Bail-In of Affected Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any Affected Financial
Institution arising under any Loan Document, to the extent such liability is
unsecured, may be subject to the Write-Down and Conversion Powers of the
applicable Resolution Authority and agrees and consents to, and acknowledges and
agrees to be bound by:

(a)    the application of any Write-Down and Conversion Powers by the applicable
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an Affected Financial Institution; and

(b)    the effects of any Bail-In Action on any such liability, including, if
applicable:

(i)    a reduction in full or in part or cancellation of any such liability;

(ii)    a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such Affected Financial Institution, its
parent undertaking, or a bridge institution that may be issued to it or
otherwise conferred on it, and that such shares or other instruments of
ownership will be accepted by it in lieu of any rights with respect to any such
liability under this Agreement or any other Loan Document; or

(iii)    the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion Powers of the applicable Resolution
Authority.

[Remainder of page intentionally left blank. Signature pages follow.]

 

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

 

PACIFIC GAS AND ELECTRIC COMPANY

By:  

 

Name:   Title:  

 

Signature Page to Credit Agreement

Pacific Gas and Electric Company

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, N.A.,
as Co-Administrative Agent, an Issuing Lender and as a Lender

By:  

 

Name:   Title:  

 

Signature Page to Credit Agreement

Pacific Gas and Electric Company

--------------------------------------------------------------------------------

CITIBANK, N.A.,
as Co-Administrative Agent, Designated Agent, an Issuing Lender and as a Lender

By:  

 

Name:   Title:  

 

Signature Page to Credit Agreement

Pacific Gas and Electric Company

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A., as an Issuing Lender and as a Lender

By:  

 

Name:   Title:  

 

Signature Page to Credit Agreement

Pacific Gas and Electric Company

--------------------------------------------------------------------------------

BARCLAYS BANK PLC, as an Issuing Lender and as a Lender

By:   Name:   Title:  

 

Signature Page to Credit Agreement

Pacific Gas and Electric Company

--------------------------------------------------------------------------------

GOLDMAN SACHS BANK USA, as an Issuing Lender and as a Lender

By:  

 

Name:   Title:  

 

Signature Page to Credit Agreement

Pacific Gas and Electric Company

--------------------------------------------------------------------------------

BNP PARIBAS, as an Issuing Lender and as a Lender

By:  

 

Name:   Title:  

 

Signature Page to Credit Agreement

Pacific Gas and Electric Company

--------------------------------------------------------------------------------

CREDIT SUISSE AG, NEW YORK BRANCH, as an Issuing Lender and as a Lender

By:  

 

Name:   Title:  

 

Signature Page to Credit Agreement

Pacific Gas and Electric Company

--------------------------------------------------------------------------------

MIZUHO BANK, LTD., as an Issuing Lender and as a Lender

By:  

 

Name:   Title:  

 

Signature Page to Credit Agreement

Pacific Gas and Electric Company

--------------------------------------------------------------------------------

MUFG UNION BANK, N.A., as an Issuing Lender and as a Lender

By:  

 

Name:   Title:  

 

Signature Page to Credit Agreement

Pacific Gas and Electric Company

--------------------------------------------------------------------------------

WELLS FARGO BANK, NATIONAL ASSOCIATION, as an Issuing Lender and as a Lender

By:  

 

Name:   Title:  

 

Signature Page to Credit Agreement

Pacific Gas and Electric Company

--------------------------------------------------------------------------------

BANK OF MONTREAL, CHICAGO BRANCH, as a Lender

By:  

 

Name:   Title:  

 

Signature Page to Credit Agreement

Pacific Gas and Electric Company

--------------------------------------------------------------------------------

THE BANK OF NEW YORK MELLON, as a Lender

By:  

 

Name:   Title:  

 

Signature Page to Credit Agreement

Pacific Gas and Electric Company

--------------------------------------------------------------------------------

Schedule 1.1

Commitments

[To come.]

 

[Schedules to Utility Revolver Credit Agreement]

--------------------------------------------------------------------------------

Schedule 3.1

Existing Letters of Credit

[Intentionally Omitted]

--------------------------------------------------------------------------------

Schedule 7.5

Sale and Lease Back Transactions

The sale and leaseback of the property described to the Designated Agent prior
to the Effective Date as the “SF Properties”.

 

[Schedules to Utility Revolver Credit Agreement]