Exhibit 10.01

EXECUTION COPY

$150,000,000

CREDIT AGREEMENT

dated as of

April 11, 2006,

among

EL PASO ELECTRIC COMPANY,

JPMORGAN CHASE BANK, N.A.,

not in its individual capacity,

but solely in its capacity as trustee of the

Rio Grande Resources Trust II,

THE LENDERS PARTY HERETO,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

and Issuing Bank

and

UNION BANK OF CALIFORNIA, N.A.,

as Syndication Agent

J.P. MORGAN SECURITIES INC.

as Book Manager and Lead Arranger

 

LOGO [g76163image001.jpg]JPMORGAN

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TABLE OF CONTENTS

 

         Page   ARTICLE I      Definitions   

SECTION 1.01.

  Defined Terms    1

SECTION 1.02.

  Terms Generally    17   ARTICLE II      The Credits   

SECTION 2.01.

  Commitments    17

SECTION 2.02.

  Loans    18

SECTION 2.03.

  Borrowing Procedure    19

SECTION 2.04.

  Evidence of Debt; Repayment of Loans    20

SECTION 2.05.

  Fees    21

SECTION 2.06.

  Interest on Loans    21

SECTION 2.07.

  Default Interest    22

SECTION 2.08.

  Alternate Rate of Interest    22

SECTION 2.09.

  Termination and Reduction of Commitments    22

SECTION 2.10.

  Conversion and Continuation of Borrowings    23

SECTION 2.11.

  Optional Prepayment    24

SECTION 2.12.

  Reserve Requirements; Change in Circumstances    25

SECTION 2.13.

  Change in Legality    26

SECTION 2.14.

  Indemnity    27

SECTION 2.15.

  Pro Rata Treatment    28

SECTION 2.16.

  Sharing of Setoffs    28

SECTION 2.17.

  Payments    29

SECTION 2.18.

  Taxes    29

SECTION 2.19.

  Assignment of Commitments Under Certain Circumstances; Duty to Mitigate    31

SECTION 2.20.

  Letters of Credit    32

SECTION 2.21.

  Increase of Commitments    37   ARTICLE III      Representations and
Warranties   

SECTION 3.01.

  Organization; Powers    38

SECTION 3.02.

  Authorization    38

 

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SECTION 3.03.

  Enforceability    39

SECTION 3.04.

  Governmental Approvals    39

SECTION 3.05.

  Financial Statements    39

SECTION 3.06.

  No Material Adverse Change    40

SECTION 3.07.

  Title to Properties; Possession Under Leases    40

SECTION 3.08.

  Subsidiaries    40

SECTION 3.09.

  Litigation; Compliance with Laws    40

SECTION 3.10.

  Agreements    40

SECTION 3.11.

  Federal Reserve Regulations    41

SECTION 3.12.

  Investment Company Act    41

SECTION 3.13.

  Use of Proceeds    41

SECTION 3.14.

  Tax Returns    41

SECTION 3.15.

  No Material Misstatements    41

SECTION 3.16.

  Employee Benefit Plans    41

SECTION 3.17.

  Environmental Matters    42

SECTION 3.18.

  Insurance    42

SECTION 3.19.

  Labor Matters    42

SECTION 3.20.

  Solvency    43   ARTICLE IV      Conditions of Lending   

SECTION 4.01.

  All Credit Events    43

SECTION 4.02.

  Closing Date    44   ARTICLE V      Affirmative Covenants   

SECTION 5.01.

  Existence; Businesses and Properties    46

SECTION 5.02.

  Insurance    46

SECTION 5.03.

  Obligations and Taxes    46

SECTION 5.04.

  Financial Statements, Reports, etc    47

SECTION 5.05.

  Litigation and Other Notices    48

SECTION 5.06.

  Employee Benefits    48

SECTION 5.07.

  Maintaining Records; Access to Properties and Inspections    48

SECTION 5.08.

  Use of Proceeds    48

SECTION 5.09.

  Compliance with Environmental Laws    48

SECTION 5.10.

  Further Assurances    49

SECTION 5.11.

  Maintenance of Ratings    49

 

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  ARTICLE VI      Negative Covenants   

SECTION 6.01.

  Subsidiary Indebtedness    49

SECTION 6.02.

  Liens    50

SECTION 6.03.

  Sale and Lease-Back Transactions    52

SECTION 6.04.

  Investments, Loans and Advances    52

SECTION 6.05.

  Mergers, Consolidations and Sales of Assets and Acquisitions    52

SECTION 6.06.

  Transactions with Affiliates    53

SECTION 6.07.

  Businesses of Borrowers and Subsidiaries    53

SECTION 6.08.

  Other Agreements    53

SECTION 6.09.

  Debt to Capitalization Ratio    53

SECTION 6.10.

  Fiscal Year    53   ARTICLE VII      Events of Default      ARTICLE VIII     
The Administrative Agent      ARTICLE IX      Guarantee   

SECTION 9.01.

  Guarantee    58

SECTION 9.02.

  Obligations Not Waived    59

SECTION 9.03.

  Security    59

SECTION 9.04.

  Guarantee of Payment    59

SECTION 9.05.

  No Discharge or Diminishment of Guarantee    59

SECTION 9.06.

  Defenses of the Trustee Waived    60

SECTION 9.07.

  Agreement to Pay; Subrogation    60

SECTION 9.08.

  Information    61

SECTION 9.09.

  Termination    61   ARTICLE X      Miscellaneous   

SECTION 10.01.

  Notices    61

SECTION 10.02.

  Survival of Agreement    62

SECTION 10.03.

  Binding Effect    62

 

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SECTION 10.04.

  Successors and Assigns    62

SECTION 10.05.

  Expenses; Indemnity    66

SECTION 10.06.

  Right of Setoff    67

SECTION 10.07.

  Applicable Law    67

SECTION 10.08.

  Waivers; Amendment    67

SECTION 10.09.

  Interest Rate Limitation    68

SECTION 10.10.

  Entire Agreement    68

SECTION 10.11.

  Waiver of Jury Trial    69

SECTION 10.12.

  Severability    69

SECTION 10.13.

  Counterparts    69

SECTION 10.14.

  Headings    69

SECTION 10.15.

  Jurisdiction; Consent to Service of Process    69

SECTION 10.16.

  Confidentiality    70

SECTION 10.17.

  Texas Revolving Credit Statute    71

SECTION 10.18.

  No Recourse; Multiple Capacities    71

SECTION 10.19.

  Limited Representations, Warranties and Covenants of Trustee    71

SECTION 10.20.

  USA Patriot Act Notice    71

 

SCHEDULES   Schedule 1.01(a)   Existing Indebtedness Schedule 2.01   Commitments
Schedule 3.04   Governmental Approvals Schedule 3.09   Litigation and Compliance
with Laws Schedule 3.17   Environmental Matters Schedule 3.18   Insurance
Schedule 4.02(a)   Local Regulatory Counsel Schedule 6.02   Liens Schedule 6.04
  Certain Investments EXHIBITS   Exhibit A   Form of Administrative
Questionnaire Exhibit B   Form of Assignment and Acceptance Exhibit C   Form of
Borrowing Request Exhibit D   Form of Subsidiary Guarantee Agreement Exhibit E-1
  Form of Opinion of Counsel for El Paso Exhibit E-2   Form of Opinion of
Counsel for the Trustee Exhibit E-3   Form of Opinion of Federal Regulatory
Counsel Exhibit E-4   Form of Opinion of State Regulatory Counsel Exhibit E-5  
Form of Opinion of General Counsel of El Paso

 

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CREDIT AGREEMENT dated as of April 11, 2006, among EL PASO ELECTRIC COMPANY, a
Texas corporation (“El Paso”), JPMORGAN CHASE BANK, N.A., not in its individual
capacity, but solely in its capacity as trustee of the Rio Grande Resources
Trust II (the “Trustee”; each of El Paso and the Trustee is referred to
individually herein as a “Borrower” and collectively as the “Borrowers”), the
Lenders (as defined in Article I) and JPMORGAN CHASE BANK, N.A., as issuing bank
(in such capacity, the “Issuing Bank”) and as administrative agent (in such
capacity, the “Administrative Agent”) for the Lenders.

The Borrowers have requested that the Lenders extend credit in the form of Loans
(such term and each other capitalized term used but not defined herein having
the meaning given to it in Article I) at any time and from time to time prior to
the Maturity Date, in an aggregate principal amount not to exceed $150,000,000.
The proceeds of the Loans are to be used (a) by El Paso solely (i) to repay the
principal of, interest on and accrued fees with respect to the outstanding loans
to El Paso under the Existing Credit Agreement, (ii) to provide working capital
to El Paso, (iii) for general corporate purposes in the ordinary course of
El Paso’s business, including commercial paper back-up, and (iv) to pay related
fees and expenses and (b) by the Trustee solely (i) to repay the principal of,
interest on and accrued fees with respect to the outstanding loans to the
Trustee under the Existing Credit Agreement, (ii) to finance the purchase of
Nuclear Fuel by the Trustee in accordance with the Trust Agreement and the
Purchase Contract, (iii) to pay interest and other amounts payable hereunder by
the Trustee as needed and (iv) to pay related fees and expenses. The Letters of
Credit shall be issued, if for the account of El Paso, solely for general
corporate purposes incurred in the ordinary course of business, and, if for the
account of the Trustee, solely to support obligations incurred in the ordinary
course of business by the Trustee in respect of the purchase of Nuclear Fuel in
accordance with the Trust Agreement and the Purchase Contract.

Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:

“ABR Borrowing” shall mean a Borrowing comprised of ABR Loans.

“ABR Loan” shall mean any Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of
Article II.

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“Administrative Agent Fees” shall have the meaning assigned to such term in
Section 2.05(b).

“Administrative Questionnaire” shall mean an Administrative Questionnaire in the
form of Exhibit A, or such other form as shall be approved by the Administrative
Agent.

“Affiliate” shall mean, when used 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.

“Aggregate Credit Exposure” shall mean the aggregate amount of the Lenders’
Credit Exposures.

“Alternate Base Rate” shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus  1/2 of 1%. If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms of the definition thereof,
the Alternate Base Rate shall be determined without regard to clause (b) of the
preceding sentence until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.

“Applicable Percentage” of any Lender at any time shall mean the percentage of
the Total Commitment represented by such Lender’s Commitment. In the event the
Commitments shall have expired or been terminated, the Applicable Percentages
shall be determined on the basis of the Commitments most recently in effect.

“Applicable Ratings” shall mean at any time the credit ratings at such time by
the Rating Agencies of the Index Debt.

“Applicable Spread” shall mean, for any day, with respect to any Eurodollar
Loan, or with respect to the Commitment Fee, as the case may be, the applicable
percentage set forth below under the caption “LIBOR Spread” or “Commitment Fee”,
as the case may be, based upon the higher of the Applicable Ratings:

 

    

Applicable Ratings

(S&P/Moody’s)

  

LIBOR

Spread

   

Commitment

Fee

 

Category 1

   A-/A3 or better    0.300 %   0.080 %

Category 2

   BBB+/Baa1    0.400 %   0.090 %

Category 3

   BBB/Baa2    0.500 %   0.110 %

 

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Category 4

   BBB-/Baa3    0.650 %   0.150 %

Category 5

   BB+/Ba1    0.875 %   0.175 %

Category 6

   Less than BB+/Ba1    1.000 %   0.200 %

Notwithstanding the foregoing (x) if (i) both Rating Agencies cease to provide a
current Applicable Rating or (ii) if the Applicable Rating of either Rating
Agency shall be below BB+ or Ba1, as the case may be, the Applicable Spread
shall correspond to the percentages listed in Category 6; and (y) at any time
after the occurrence and during the continuation of an Event of Default, the
Applicable Spread shall correspond to the percentages listed in Category 6.

“Arizona Public Utility Act” shall mean Chapter 2, Title 40 of the Arizona
Revised Statutes and the rules and regulations promulgated thereunder, as
amended from time to time.

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee, and accepted by the Administrative Agent, in the
form of Exhibit B or such other form as shall be approved by the Administrative
Agent.

“Atomic Energy Act” shall mean the Atomic Energy Act of 1954, 42 U.S.C. §§ 2011
et seq. and the rules and regulations promulgated thereunder, as amended from
time to time.

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States of America.

“Borrowing” shall mean a group of Loans of a single Type made by the Lenders to
the same Borrower on a single date and as to which a single Interest Period is
in effect.

“Borrowing Request” shall mean a request by a Borrower in accordance with the
terms of Section 2.03 and substantially in the form of Exhibit C.

“Business Day” shall mean any day other than a Saturday, Sunday or day on which
banks in New York City are authorized or required by law to close; provided,
however, that when used in connection with a Eurodollar Loan, the term “Business
Day” shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market.

“Capital Lease Obligations” of any person shall mean 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 a balance sheet of such person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

 

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A “Change in Control” shall be deemed to have occurred if (a) any person or
group (within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934
as in effect on the date hereof) shall own directly or indirectly, beneficially
or of record, shares representing more than 50% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of El Paso or
(b) a majority of the members of the Board of Directors of El Paso are not
Continuing Directors.

“Closing Date” shall mean April 11, 2006.

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

“Commitment” shall mean, with respect to each Lender, the commitment of such
Lender to make Loans hereunder as set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender assumed its Commitment,
as applicable, as the same may be (a) reduced from time to time pursuant to
Section 2.09 or pursuant to Section 2.19, (b) increased (with the consent of
such Lender) from time to time pursuant to Section 2.21 and (c) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04.

“Commitment Fee” shall have the meaning assigned to such term in
Section 2.05(a).

“Confidential Information Memorandum” shall mean the Confidential Information
Memorandum of El Paso dated February 2006.

“Continuing Directors” shall mean, as of any date of determination, any member
of the board of directors of El Paso who (i) was a member of such board of
directors on the Closing Date or (ii) was nominated for election or elected to
such board of directors with the approval of a majority of Continuing Directors
who were members of such board at the time of such nomination or election.

“Control” shall mean 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 ownership of voting securities, by contract or otherwise, and
“Controlling” and “Controlled” shall have meanings correlative thereto.

“Credit Event” shall have the meaning assigned to such term in Section 4.01.

“Credit Exposure” shall mean, with respect to any Lender at any time, the
aggregate principal amount at such time of all outstanding Loans of such Lender
plus the aggregate amount at such time of such Lender’s L/C Exposure.

“Default” shall mean any event or condition which upon notice, lapse of time or
both would constitute an Event of Default.

“dollars” or “$” shall mean lawful money of the United States of America.

 

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“Domestic Subsidiary” shall mean any Subsidiary that is incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.

“El Paso L/C Exposure” shall mean that part of the L/C Exposure attributable to
all Letters of Credit issued for the account of El Paso.

“El Paso Obligations” shall mean (i) the due and punctual payment of (A) the
principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans made to El Paso, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (B) all
monetary obligations of El Paso pursuant to the Guarantee in Article IX hereof,
(C) each payment required to be made by El Paso under this Agreement in respect
of any Letter of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to provide cash
collateral and (D) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of El Paso to the
Administrative Agent and the Lenders under this Agreement and the other Loan
Documents and (ii) the due and punctual performance of all covenants,
agreements, obligations and liabilities of El Paso under or pursuant to this
Agreement and the other Loan Documents.

“environment” shall mean ambient air, surface water and groundwater (including
potable water, navigable water and wetlands), the land surface or subsurface
strata, the workplace or as otherwise defined in any Environmental Law.

“Environmental Claim” shall mean any written accusation, allegation, notice of
violation, claim, demand, order, directive, consent decree, cost recovery action
or other cause of action by, or on behalf of, any Governmental Authority or any
person for damages, injunctive or equitable relief, personal injury (including
sickness, disease or death), Remedial Action costs, tangible or intangible
property damage, natural resource damages, nuisance, pollution, any adverse
effect on the environment caused by any Hazardous Material, or for fines,
penalties or restrictions, resulting from or based upon: (a) the existence, or
the continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental Releases); (b) exposure to any Hazardous Material;
(c) the presence, use, handling, transportation, storage, treatment or disposal
of any Hazardous Material; or (d) the violation or alleged violation of any
Environmental Law or Environmental Permit.

“Environmental Law” shall mean any and all applicable present and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
Release or threatened Release of any

 

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Hazardous Material or to health and safety matters, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et
seq. (collectively “CERCLA”), the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. §§ 6901 et seq., the Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et
seq., the Clean Air Act of 1970, 42 U.S.C. §§ 7401 et seq., as amended, the
Toxic Substances Control Act of 1976, 15 U.S.C. §§ 2601 et seq., the
Occupational Safety and Health Act of 1970, as amended by 29 U.S.C. §§ 651 et
seq., the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
§§ 11001 et seq., the Safe Drinking Water Act of 1974, as amended by 42 U.S.C.
§§ 300(f) et seq., the Hazardous Materials Transportation Act, 49 U.S.C. §§ 5101
et seq., the Atomic Energy Act and Low-Level Radioactive Waste Policy Act, 42
U.S.C. §§ 2014 et seq., as amended, and any similar or implementing state or
local law, and all amendments or regulations promulgated thereunder.

“Environmental Permit” shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended from time to time.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with El Paso, is treated as a single employer under
Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043
of ERISA or the regulations issued thereunder, with respect to a Plan; (b) the
adoption of any amendment to a Plan that would require the provision of security
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c) the
existence with respect to any Plan of an “accumulated funding deficiency” (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the incurrence of any liability under Title IV of ERISA
with respect to the termination of any Plan or the withdrawal or partial
withdrawal of El Paso or any of its ERISA Affiliates from any Plan or
Multiemployer Plan; (f) the receipt by El Paso or any ERISA Affiliate from the
PBGC or a plan administrator of any notice relating to the intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan;
(g) the receipt by El Paso or any ERISA Affiliate of any notice concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA; (h) the occurrence of a “prohibited transaction” with respect
to which El Paso or any of the Subsidiaries is a “disqualified person” (within
the meaning of Section 4975 of the Code) or with respect to which El Paso or any
such Subsidiary could otherwise be liable; and (i) any other event

 

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or condition with respect to a Plan or Multiemployer Plan that could reasonably
be expected to result in liability of El Paso.

“Eurodollar Borrowing” shall mean a Borrowing comprised of Eurodollar Loans.

“Eurodollar Loan” shall mean any Loan bearing interest at a rate determined by
reference to the LIBO Rate in accordance with the provisions of Article II.

“Event of Default” shall have the meaning assigned to such term in Article VII.

“Existing Credit Agreement” shall mean the Credit Agreement dated as of
December 17, 2004, among the Borrowers, the lenders party thereto, the Issuing
Bank, the Administrative Agent and JPMorgan, as collateral agent.

“Existing Indebtedness” shall mean the Indebtedness of El Paso and its
Subsidiaries set forth in Schedule 1.01(a).

“Federal Funds Effective Rate” shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.

“Federal Power Act” shall mean the Federal Power Act of 1920, 16 U.S.C. §§ 791a
et seq., and the rules and regulations promulgated thereunder, as amended from
time to time.

“Fee Letter” shall mean the Fee Letter dated February 7, 2006, among El Paso,
the Administrative Agent and J.P. Morgan Securities Inc.

“Fees” shall mean the Commitment Fees, the Administrative Agent Fees, the L/C
Participation Fees and the Issuing Bank Fees.

“FERC” shall mean the Federal Energy Regulatory Commission, or any Governmental
Authority succeeding to any or all of such Commission’s authority.

“Financial Officer” of any person shall mean the chief financial officer,
principal accounting officer, treasurer, controller or other vice president with
financial planning responsibilities of such person.

“Finsub” shall mean a corporation organized under the laws of a state of the
United States of America which is a special purpose wholly-owned subsidiary of
El Paso formed solely for the purpose of engaging in the Receivables Program.

 

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“First Mortgage Bonds” shall mean any series of First Mortgage Bonds of El Paso
issued pursuant to the Mortgage Indenture after the Closing Date.

“GAAP” shall mean generally accepted accounting principles in the United States
of America applied on a consistent basis.

“Governmental Authority” shall mean any Federal, state, local or foreign court
or governmental agency, authority, instrumentality or regulatory body.

“Guarantee” of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the “primary obligor”) in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that the
term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.

“Hazardous Materials” shall mean all explosive or radioactive substances or
wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or
gaseous wastes, including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls (“PCBs”) or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

“Inactive Subsidiary” shall mean, at any time, any Subsidiary that (a) has
assets at such time of $1,000,000 or less and (b) has not conducted any new
business activity during the prior six-month period.

“Incremental Facility Amount” shall mean, at any time, the excess, if any, of
(a) $50,000,000 over (b) the aggregate increase in the Total Commitment
established prior to such time pursuant to Section 2.21.

“Indebtedness” of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the

 

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holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by such person, whether or
not the obligations secured thereby have been assumed, (g) all Guarantees by
such person of Indebtedness of others, (h) all Capital Lease Obligations of such
person, (i) all obligations of such person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest or
exchange rate hedging arrangements, (j) all obligations of such person as an
account party in respect of letters of credit and (k) all obligations of such
person as an account party in respect of bankers’ acceptances. The Indebtedness
of any person shall include the Indebtedness of any partnership in which such
person is a general partner.

“Index Debt” shall mean the senior, unsecured, non-credit enhanced, long-term
debt of El Paso.

“Interest Payment Date” shall mean, (a) with respect to any ABR Loan, the last
day of each March, June, September and December, and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months’ duration, each day that would have
been an Interest Payment Date had successive Interest Periods of three months’
duration been applicable to such Borrowing.

“Interest Period” shall mean, as to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
applicable Borrower may elect; provided, however, that if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day. Interest shall accrue from
and including the first day of an Interest Period to but excluding the last day
of such Interest Period.

“Issuing Bank Fees” shall have the meaning assigned to such term in
Section 2.05(c).

“JPMorgan” shall mean JPMorgan Chase Bank, N.A., together with its successors
and assigns.

“L/C Commitment” shall mean the commitment of the Issuing Bank to issue Letters
of Credit pursuant to Section 2.20.

“L/C Disbursement” shall mean a payment or disbursement made by the Issuing Bank
pursuant to a Letter of Credit.

“L/C Exposure” shall mean at any time the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
principal amount of all L/C Disbursements that have not yet been reimbursed at
such

 

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time. The L/C Exposure of any Lender at any time shall mean its Applicable
Percentage of the aggregate L/C Exposure at such time.

“L/C Participation Fee” shall have the meaning assigned to such term in
Section 2.05(c).

“Lenders” shall mean (a) the financial institutions listed on Schedule 2.01
(other than any such financial institution that has ceased to be a party hereto
pursuant to an Assignment and Acceptance) and (b) any financial institution that
has become a party hereto pursuant to an Assignment and Acceptance.

“Letter of Credit” shall mean any letter of credit issued pursuant to
Section 2.20.

“LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the “LIBO Rate” with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.

“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, encumbrance, charge or security interest in or on such asset,
(b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset and (c) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities.

“Loan Documents” shall mean this Agreement, the Letters of Credit and each
Subsidiary Guarantee Agreement.

“Loan Parties” shall mean the Borrowers and any Subsidiary that shall become a
guarantor of the El Paso Obligations pursuant to Section 5.10.

“Loans” shall mean the loans made by the Lenders to the Borrowers pursuant to
Section 2.01. Each Loan shall be a Eurodollar Loan or an ABR Loan.

“Margin Stock” shall have the meaning assigned to such term in Regulation U.

 

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“Material Adverse Effect” shall mean (a) a materially adverse effect on the
business, assets, operations, prospects or condition, financial or otherwise, of
El Paso and the Subsidiaries, taken as a whole, (b) material impairment of the
ability of the Trustee, El Paso or any other Loan Party to perform any of its
obligations under any Loan Document to which it is or will be a party or
(c) material impairment of the rights of the Lenders under any Loan Document.

“Maturity Date” shall mean April 11, 2011.

“Moody’s” shall mean Moody’s Investors Service, Inc., and its successors.

“Mortgage Indenture” shall mean the General Mortgage Indenture and Deed of Trust
dated as of February 1, 1996, by El Paso to the Mortgage Indenture Trustee, as
supplemented by the First Supplemental Indenture dated as of February 1, 1996,
the Second Supplemental Indenture dated as of August 19, 1997, the Third
Supplemental Indenture dated as of January 29, 1999, the Fourth Supplemental
Indenture dated as of January 28, 2002, the Fifth Supplemental Indenture dated
as of December 17, 2004, the Sixth Supplemental Indenture dated as of May 5,
2005 and the Seventh Supplemental Indenture dated as of the date hereof and as
the same may be further supplemented, amended or otherwise modified from time to
time in accordance with the provisions thereof and hereof.

“Mortgage Indenture Trustee” shall mean the State Street Bank and Trust Company,
as trustee under the Mortgage Indenture, together with its successors and
assigns in such capacity.

“Multiemployer Plan” shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

“New Mexico Public Utility Act” shall mean the New Mexico Public Utility Act,
N.M. Stat. Ann. §§ 62-13-1 et seq., and the rules and regulations promulgated
thereunder, as amended from time to time.

“Nuclear Fuel” shall have the meaning assigned to such term in the Purchase
Contract.

“Nuclear Waste Act” shall mean the Nuclear Waste Policy Act of 1982, 42 U.S.C.
§§ 10101 et seq., the Nuclear Waste Policy Amendments Act of 1987, 42 U.S.C.
§§ 10172, 10172a et seq., and the rules and regulations promulgated thereunder,
as amended from time to time.

“Obligations” shall mean, collectively, the Trust Obligations and the El Paso
Obligations.

“Operating Property” shall mean, as of any particular time, (a) all of the real,
personal and mixed property which is an integral part of or is used or to be
used as an integral part of the regulated electric generating, transmission
and/or distribution operations of El Paso, (b) any undivided legal interest of
El Paso in any such property

 

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which is jointly owned by El Paso and any other person or persons and
(c) franchises and permits owned by El Paso in connection with the regulated
electric generating, transmission and/or distribution operations of El Paso,
including, without limitation, all of such property which is acquired by El Paso
after the Closing Date; provided, however, that Operating Property shall not be
deemed to include “Excepted Property” (as defined in the Mortgage Indenture).

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.

“Permitted Investments” shall mean:

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or Moody’s;

(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank (including the Trustee)
organized under the laws of the United States of America or any state thereof
which has a combined capital and surplus and undivided profits of not less than
$250,000,000;

(d) investments in obligations of United States Federal agencies sponsored by
the Federal government, including the Federal Home Loan Bank, the Federal Farm
Credit Bank, the Federal Home Loan Mortgage Corporation, the Federal National
Mortgage Association and the Student Loan Marketing Association;

(e) repurchase obligations with a term of not more than seven days for
underlying securities of the type described in clauses (a) and (d) entered into
with financial institutions which have a combined capital and surplus and
undivided profits of not less than $250,000,000;

(f) investments in tax exempt securities, including municipal issued notes and
bonds and variable-rate demand notes and bonds, having a rating at the time of
acquisition thereof of at least BBB from S&P or Baa from Moody’s;

(g) investments in corporate bonds or notes having maturities of not more than
three years from the date of acquisition thereof and having a rating at the time
of acquisition thereof of at least BBB from S&P or Baa from Moody’s;

 

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(h) investments in auction rate securities having maturities of not more than 90
days from the date of acquisition thereof and having a rating of at least BBB
from S&P or Baa from Moody’s;

(i) investments in money market or other mutual funds substantially all of the
assets of which consist of investments of the types described in clauses (a)
through (h) above; and

(j) other investment instruments approved in writing by the Required Lenders and
offered by financial institutions which have a combined capital and surplus and
undivided profits of not less than $250,000,000.

“person” shall mean any natural person, corporation, business trust, joint
venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof.

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 307 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Prime Rate” shall mean the rate of interest per annum publicly announced from
time to time by the Administrative Agent as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced as being effective.

“Purchase Contract” shall mean the Purchase Contract dated as of February 12,
1996, as amended as of February 11, 1999, between the Trustee and El Paso, as
the same may be further amended, supplemented or otherwise modified from time to
time in accordance with the provisions thereof and hereof.

“Purchase Contract Default” shall have the meaning assigned to the term “Event
of Default” in Section 19(a) of the Purchase Contract.

“Rating Agency” shall mean S&P and Moody’s.

“Receivables Program” shall mean, collectively, (a) the sale of, or transfer of
interests in, account receivables and related contract rights (“Receivables”) of
El Paso to Finsub and (b) the transfer of such Receivables by Finsub to a
special purpose trust or corporation which is not an Affiliate of El Paso or
Finsub; provided, that all terms and conditions of, and all documentation
relating to, the Receivables Program shall be (i) in form and substance
customary to a comparable Receivables Program and (ii) non-recourse to El Paso
or a Subsidiary (other than Finsub) other than pursuant to customary
representations, warranties, covenants and indemnities entered into in
connection with a Receivables Program.

 

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“Receivables Program Documents” shall mean all agreements, in form and substance
customary to a Receivables Program, that may from time to time be entered into
by El Paso or a Subsidiary in connection with any Receivables Program, as such
agreements may be amended, supplemented or otherwise modified from time to time
in accordance with the provisions thereof and hereof.

“Regional Transmission Organization” shall mean an entity that satisfies the
minimum characteristics, performs the functions, and accommodates the open
architecture condition set forth in FERC regulations.

“Register” shall have the meaning given such term in Section 10.04(d).

“Regulation T” shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Release” shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the environment.

“Remedial Action” shall mean (i) ”remedial action” as such term is defined in
CERCLA, 42 U.S.C. § 9601(24), and (ii) all other actions required by any
Governmental Authority or voluntarily undertaken to: (x) cleanup, remove, treat,
abate or in any other way address any Hazardous Material in the environment;
(y) prevent the Release or threat of Release, or minimize the further Release of
any Hazardous Material so it does not migrate or endanger or threaten to
endanger public health, welfare or the environment; or (z) perform studies and
investigations in connection with, or as a precondition to, (x) or (y) above.

“Required Lenders” shall mean, at any time, Lenders having Loans, L/C Exposure
and unused Commitments representing more than 50% of the sum of all Loans
outstanding, L/C Exposure and unused Commitments at such time.

“Responsible Officer” of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof responsible for the administration of the obligations of such person in
respect of this Agreement.

“Rio Grande Resources Trust II” shall mean the trust created by the Trust
Agreement.

 

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“Securities Act” shall mean the Securities Act of 1933, as amended from time to
time.

“Securities Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time.

“Senior Unsecured Notes” shall mean El Paso’s 6.0% Senior Notes due May 15,
2035, in an initial aggregate principal amount of $400,000,000, issued pursuant
to the Indenture dated as of May 1, 2005, between El Paso and JPMorgan.

“S&P” shall mean Standard & Poor’s Rating Services and its successors.

“Statutory Reserves” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch,
Affiliate, or other fronting office making or holding a Loan) is subject for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board). Statutory Reserves shall be adjusted automatically
on and as of the effective date of any change in any reserve percentage.

“Stockholders’ Equity” shall mean, as at any date of determination, the
stockholders’ equity at such date of El Paso, as determined in accordance with
GAAP.

“subsidiary” shall mean, with respect to any person (herein referred to as the
“parent”), any corporation, partnership, association or other business entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or more than 50% of
the general partnership interests are, at the time any determination is being
made, owned, controlled or held, or (b) that is, at the time any determination
is made, otherwise Controlled, by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.

“Subsidiary” shall mean any subsidiary of El Paso.

“Subsidiary Guarantee Agreement” shall mean each guarantee agreement delivered
pursuant to Section 5.10, each substantially in the form of Exhibit D.

“Subsidiary Guarantor” shall mean each Subsidiary that becomes a party to a
Subsidiary Guarantee Agreement.

“Texas Public Utility Regulatory Act” shall mean the Texas Public Utility
Regulatory Act of 1995, and the rules and regulations promulgated thereunder, as
amended from time to time.

 

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“Total Consolidated Capital” shall mean, as at any date of determination, the
sum of Total Consolidated Debt on such date and Stockholders’ Equity at such
date.

“Total Commitment” shall mean, at any time, the aggregate amount of the
Commitments, as in effect at such time. The Total Commitment as of the Closing
Date is $150,000,000.

“Total Consolidated Debt” shall mean, as of any date of determination, all
Indebtedness (other than (a) Indebtedness of the type referred to in clause (i)
of the definition of the term “Indebtedness”, (b) Indebtedness of the type
referred to in clause (j) of the definition of the term “Indebtedness”, except
to the extent of unreimbursed drawings thereunder, and (c) Indebtedness of the
type referred to in clause (k) of the definition of the term “Indebtedness”) of
El Paso at such date.

“Transactions” shall have the meaning assigned to such term in Section 3.02.

“Trust Agreement” shall mean the Trust Agreement dated as of February 12, 1996,
between the Trustee and El Paso, providing for the creation of the Rio Grande
Resources Trust II, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the provisions thereof and hereof.

“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, and the rules
and regulations promulgated thereunder, as amended from time to time.

“Trust Obligations” shall have the meaning assigned to such term in
Section 9.01.

“Trust Termination Date” shall mean the date of any termination of the Purchase
Contract.

“Trustee L/C Exposure” shall mean that part of the L/C Exposure attributable to
all Letters of Credit issued for the account of the Trustee.

“Type”, when used in respect of any Loan or Borrowing, shall refer to the Rate
by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term “Rate” shall include the
LIBO Rate and the Alternate Base Rate.

“USA Patriot Act” shall mean The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

“Wholly Owned Subsidiary” of any person (the “Parent”) shall mean a subsidiary
of the Parent of which securities (except for directors’ qualifying shares) or
other ownership interests representing 100% of the equity or 100% of the
ordinary voting power or 100% of the general partnership interests are, at the
time any determination is

 

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being made, owned, controlled or held by the Parent and/or one or more Wholly
Owned Subsidiaries of the Parent.

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation” All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise expressly
provided herein, (a) any reference in this Agreement to any Loan Document shall
mean such document as amended, restated, supplemented or otherwise modified from
time to time and (b) all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided,
however, that, if El Paso notifies the Administrative Agent that El Paso wishes
to amend any covenant in Article VI or any related definition to eliminate the
effect of any change in GAAP occurring after the Closing Date on the operation
of such covenant (or if the Administrative Agent notifies El Paso that the
Required Lenders wish to amend Article VI or any related definition for such
purpose), then El Paso’s compliance with such covenant shall be determined on
the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to El Paso and the Required Lenders.

ARTICLE II

The Credits

SECTION 2.01. Commitments. Subject to the terms and conditions and relying upon
the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, to make Loans to the Trustee or El Paso, at any time
and from time to time on or after the date on which the conditions set forth in
Section 4.02 are satisfied, and until the earlier of the Maturity Date and the
termination of the Commitment of such Lender in accordance with the terms
hereof, in an aggregate principal amount at any time outstanding that will not
result in such Lender’s Credit Exposure exceeding such Lender’s Commitment;
provided, however, that at no time shall the sum of (x) the aggregate principal
amount of Loans outstanding to the Trustee and (y) the Trustee L/C Exposure
exceed $70,000,000 (as such amount may be increased from time to time pursuant
to Section 2.21). Within the limits set forth in the preceding sentence and
subject to the terms, conditions and limitations set forth herein, the Borrowers
may borrow, pay or prepay and reborrow Loans.

 

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SECTION 2.02. Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
respective Commitments; provided, however, that the failure of any Lender to
make any Loan shall not in itself relieve any other Lender of its obligation to
lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to be
made by such other Lender). Except for Loans deemed made pursuant to
Section 2.02(f), the Loans comprising any Borrowing shall be in an aggregate
principal amount that is (i)(A) with respect to any Eurodollar Borrowing, an
integral multiple of $1,000,000 and not less than $5,000,000 or (B) with respect
to any ABR Borrowing, an integral multiple of $1,000 and not less than $100,000
or (ii) equal to the remaining available balance of the Commitments.

(b) Subject to Sections 2.08 and 2.13, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the applicable Borrower may request
pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided, however, that the Borrowers shall not be entitled to request any
Borrowing that, if made, would result in more than seven Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.

(c) Each Lender shall make each Loan to be made by it hereunder on the proposed
date thereof by wire transfer of immediately available funds to such account in
New York City as the Administrative Agent may designate not later than
11:00 a.m., New York City time, and the Administrative Agent shall by
12:00 (noon), New York City time, credit the amounts so received to an account
in the name of the applicable Borrower maintained with the Administrative Agent
and designated by such Borrower in the applicable Borrowing Request or, if a
Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, return the amounts so received to the
respective Lenders.

(d) Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender’s portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
paragraph (c) above and the Administrative Agent may, in reliance upon such
assumption, make available to the applicable Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the applicable Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the applicable Borrower until the date such
amount is repaid to the Administrative Agent at (i) in the case of either
Borrower,

 

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the interest rate applicable at the time to the Loans comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Effective Rate. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount shall constitute such Lender’s Loan as part of such Borrowing for
purposes of this Agreement.

(e) Notwithstanding any other provision of this Agreement, (i) neither Borrower
shall be entitled to request any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date and (ii) the Trustee shall not
be entitled to request any Borrowing on or after the Trust Termination Date.

(f) If the Issuing Bank shall not have received from the Trustee or El Paso, as
the case may be, the payment required to be made by Section 2.20(e) within the
time specified in such Section, the Issuing Bank will promptly notify the
Administrative Agent of the L/C Disbursement and the Administrative Agent will
promptly notify each Lender of such L/C Disbursement and its Applicable
Percentage thereof. Each Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., New York
City time, on such date (or, if such Lender shall have received such notice
later than 12:00 (noon), New York City time, on any day, not later than
10:00 a.m., New York City time, on the immediately following Business Day), an
amount equal to such Lender’s Applicable Percentage of such L/C Disbursement (it
being understood that such amount shall be deemed to constitute an ABR Loan of
such Lender and such payment shall be deemed to have reduced the L/C Exposure by
such amount), and the Administrative Agent will promptly pay to the Issuing Bank
amounts so received by it from the Lenders. The Administrative Agent will
promptly pay to the Issuing Bank any amounts received by it from the Trustee or
El Paso, as the case may be, pursuant to Section 2.20(e) prior to the time that
any Lender makes any payment pursuant to this paragraph (f); any such amounts
received by the Administrative Agent thereafter will be promptly remitted by the
Administrative Agent to the Lenders that shall have made such payments and to
the Issuing Bank, as their interests may appear. If any Lender shall not have
made its Applicable Percentage of such L/C Disbursement available to the
Administrative Agent as provided above, such Lender and the Trustee or El Paso,
as the case may be, severally agree to pay interest on such amount, for each day
from and including the date such amount is required to be paid in accordance
with this paragraph to but excluding the date such amount is paid, to the
Administrative Agent at (i) in the case of the Trustee or El Paso, as the case
may be, a rate per annum equal to the interest rate applicable to ABR Loans
pursuant to Section 2.06(a), and (ii) in the case of such Lender, for the first
such day, the Federal Funds Effective Rate, and for each day thereafter, the
Alternate Base Rate.

SECTION 2.03. Borrowing Procedure. In order to request a Borrowing (other than a
deemed Borrowing pursuant to Section 2.02(f), as to which this Section 2.03
shall not apply), the applicable Borrower shall hand deliver or telecopy to the
Administrative Agent a duly completed Borrowing Request (a) in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before a proposed Borrowing, and (b) in the case of an ABR
Borrowing, not later than 12:00 noon, New York City time, on the day of the
proposed Borrowing. Each Borrowing Request shall be irrevocable, shall be signed
by or on behalf of the applicable

 

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Borrower and shall specify the following information: (i) whether the Borrowing
then being requested is to be a Eurodollar Borrowing or an ABR Borrowing;
(ii) the date of such Borrowing (which shall be a Business Day); (iii) the
number and location of the account to which funds are to be disbursed (which
shall be an account that complies with the requirements of Section 2.02(c));
(iv) the amount of such Borrowing; and (v) if such Borrowing is to be a
Eurodollar Borrowing, the Interest Period with respect thereto; provided,
however, that, notwithstanding any contrary specification in any Borrowing
Request, each requested Borrowing shall comply with the requirements set forth
in Section 2.02. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the applicable Borrower shall be deemed to have selected an
Interest Period of one month’s duration. The Administrative Agent shall promptly
advise the Lenders of any notice given pursuant to this Section 2.03 (and the
contents thereof), and of each Lender’s portion of the requested Borrowing.

SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) Each Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Loan made to such Borrower
on the Maturity Date; provided, however, that if the Purchase Contract shall
terminate prior to the Maturity Date, the Trustee shall repay the unpaid
principal amount of each Loan made to it on the earlier of (i) the Maturity
Date, (ii) the 150th day following the Trust Termination Date, (iii) if any
Event of Default that is not a Purchase Contract Default shall be in existence
on the Trust Termination Date or shall thereafter occur, the 10th day following
the later to occur of the Trust Termination Date or such Event of Default or
(iv) if a Purchase Contract Default shall have occurred, on (A) the date of such
occurrence or (B) such later date as the Administrative Agent may elect.

(b) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of each Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid such Lender from time to time
under this Agreement.

(c) The Administrative Agent shall maintain accounts in which it will record
(i) the amount of each Loan made hereunder, the Type thereof and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from each Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent hereunder
from each Borrower and each Lender’s share thereof.

(d) The entries made in the accounts maintained pursuant to paragraphs (b) and
(c) above shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrowers to repay the Loans in
accordance with their terms.

 

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(e) Notwithstanding any other provision of this Agreement, in the event any
Lender shall request and receive a promissory note payable to such Lender and
its registered assigns, the interests represented by such note shall at all
times (including after any assignment of all or part of such interests pursuant
to Section 10.04) be represented by one or more promissory notes payable to the
payee named therein or its registered assigns.

SECTION 2.05. Fees. (a) The Borrowers agree, jointly and severally, to pay to
each Lender, through the Administrative Agent, on the last day of March, June,
September and December in each year and on each date on which the Commitment of
such Lender shall expire or be terminated as provided herein, a commitment fee
(a “Commitment Fee”) equal to the Applicable Spread per annum in effect from
time to time on the daily unused amount of the Commitment of such Lender during
the preceding quarter (or other period commencing on the Closing Date or ending
on the Maturity Date or the date on which the Commitments of such Lender shall
expire or be terminated). All Commitment Fees shall be computed on the basis of
the actual number of days elapsed in a year of 360 days. The Commitment Fees due
to each Lender shall commence to accrue on the Closing Date and shall cease to
accrue on the date on which the Commitment of such Lender shall expire or be
terminated as provided herein.

(b) The Borrowers agree, jointly and severally, to pay to the Administrative
Agent the fees set forth in the Fee Letter at the times and in the amounts
specified therein (the “Administrative Agent Fees”).

(c) The Borrowers agree, jointly and severally, to pay (i) to each Lender,
through the Administrative Agent, on the last day of March, June, September and
December of each year and on the date on which the Commitment of such Lender
shall be terminated as provided herein, a fee (an “L/C Participation Fee”)
calculated on such Lender’s Applicable Percentage of the daily aggregate L/C
Exposure (excluding the portion thereof attributable to unreimbursed L/C
Disbursements) during the preceding quarter (or shorter period commencing on the
Closing Date or ending on the Maturity Date or the date on which all Letters of
Credit have been canceled or have expired and the Commitments of all Lenders
shall have been terminated) at a rate per annum equal to the Applicable Spread
from time to time used to determine the interest rate on Eurodollar Loans
pursuant to Section 2.06(b) and (ii) to the Issuing Bank with respect to each
Letter of Credit the fronting fees set forth in the Fee Letter (the “Issuing
Bank Fees”). All L/C Participation Fees and Issuing Bank Fees shall be computed
on the basis of the actual number of days elapsed in a year of 360 days.

(d) All Fees shall be paid on the dates due, in immediately available funds, to
the Administrative Agent for distribution, if and as appropriate, among the
Lenders, except that the Issuing Bank Fees shall be paid directly to the Issuing
Bank. Once paid, none of the Fees shall be refundable under any circumstances.

SECTION 2.06. Interest on Loans. (a) Subject to the provisions of Section 2.07,
the Loans comprising each ABR Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the

 

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case may be, when the Alternate Base Rate is determined by reference to the
Prime Rate and over a year of 360 days at all other times) at a rate per annum
equal to the Alternate Base Rate.

(b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Spread in effect from time to time.

(c) Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. The
applicable Alternate Base Rate, LIBO Rate and Applicable Spread for each
Interest Period or day within an Interest Period, as the case may be, shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.

SECTION 2.07. Default Interest. If either Borrower shall default in the payment
of the principal of or interest on any Loan or any other amount becoming due
hereunder, by acceleration or otherwise, or under any other Loan Document, such
Borrower shall on demand from time to time pay interest, to the extent permitted
by law, on such defaulted amount to but excluding the date of actual payment
(after as well as before judgment) (a) in the case of overdue principal, at the
rate otherwise applicable to such Loan pursuant to Section 2.06 plus 2.00% per
annum and (b) in all other cases, at a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the case
may be, when determined by reference to the Prime Rate and over a year of
360 days at all other times) equal to the sum of the Alternate Base Rate plus
2.00%.

SECTION 2.08. Alternate Rate of Interest. In the event, and on each occasion,
that on the day two Business Days prior to the commencement of any Interest
Period for a Eurodollar Borrowing the Administrative Agent shall have determined
that dollar deposits in the principal amounts of the Loans comprising such
Borrowing are not generally available in the London interbank market, or that
the rates at which such dollar deposits are being offered will not adequately
and fairly reflect the cost to any Lender of making or maintaining its
Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the LIBO Rate, the Administrative Agent shall, as soon as
practicable thereafter, give written or telecopy notice of such determination to
the Borrowers and the Lenders. In the event of any such determination, until the
Administrative Agent shall have advised the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, any request by either
Borrower for a Eurodollar Borrowing pursuant to Section 2.03 shall be deemed to
be a request for an ABR Borrowing. Each determination by the Administrative
Agent hereunder shall be conclusive absent manifest error.

SECTION 2.09. Termination and Reduction of Commitments. (a) The Commitments and
the L/C Commitment shall automatically terminate on the Maturity Date.

 

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(b) Upon at least three Business Days’ prior irrevocable written or telecopy
notice to the Administrative Agent, the Borrowers may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Commitments; provided, however, that (i) each partial reduction of the
Commitments shall be in an integral multiple of $1,000,000 and in a minimum
amount of $5,000,000 and (ii) the Total Commitment shall not be reduced to an
amount that is less than the Aggregate Credit Exposure at the time.

(c) Each reduction in the Commitments hereunder shall be made ratably among the
Lenders in accordance with their respective Commitments. The Borrowers shall pay
to the Administrative Agent for the account of the applicable Lenders, on the
date of each termination or reduction, the Commitment Fees on the amount of the
Commitments so terminated or reduced accrued to but excluding the date of such
termination or reduction.

SECTION 2.10. Conversion and Continuation of Borrowings. The applicable Borrower
shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (a) not later than 12:00 (noon), New York City time, on the
day of conversion, to convert any Eurodollar Borrowing into an ABR Borrowing,
(b) not later than 10:00 a.m., New York City time, three Business Days prior to
conversion or continuation, to convert any ABR Borrowing into a Eurodollar
Borrowing or to continue any Eurodollar Borrowing as a Eurodollar Borrowing for
an additional Interest Period, and (c) not later than 10:00 a.m., New York City
time, three Business Days prior to conversion, to convert the Interest Period
with respect to any Eurodollar Borrowing to another permissible Interest Period,
subject in each case to the following:

(i) each conversion or continuation shall be made pro rata among the Lenders in
accordance with the respective principal amounts of the Loans comprising the
converted or continued Borrowing;

(ii) if less than all the outstanding principal amount of any Borrowing shall be
converted or continued, then each resulting Borrowing shall satisfy the
limitations specified in Sections 2.02(a) and 2.02(b) regarding the principal
amount and maximum number of Borrowings of the relevant Type;

(iii) each conversion shall be effected by each Lender and the Administrative
Agent by recording for the account of such Lender the new Loan of such Lender
resulting from such conversion and reducing the Loan (or portion thereof) of
such Lender being converted by an equivalent principal amount; accrued interest
on any Eurodollar Loan (or portion thereof) being converted shall be paid by
such Borrower at the time of conversion;

(iv) if any Eurodollar Borrowing is converted at a time other than the end of
the Interest Period applicable thereto, such Borrower shall pay, upon demand,
any amounts due to the Lenders pursuant to Section 2.14;

 

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(v) any portion of a Borrowing maturing in less than one month may not be
converted into or continued as a Eurodollar Borrowing;

(vi) any portion of a Eurodollar Borrowing that cannot be converted into or
continued as a Eurodollar Borrowing by reason of the immediately preceding
clause shall be automatically converted at the end of the Interest Period in
effect for such Borrowing into an ABR Borrowing; and

(vii) upon notice to the Borrowers from the Administrative Agent given at the
request of the Required Lenders, after the occurrence and during the continuance
of a Default or Event of Default, no outstanding Loan may be converted into, or
continued as, a Eurodollar Loan.

Each notice pursuant to this Section 2.10 shall be irrevocable and shall refer
to this Agreement and specify (w) the identity and amount of the Borrowing that
the applicable Borrower requests be converted or continued, (x) whether such
Borrowing is to be converted to or continued as a Eurodollar Borrowing or an
ABR Borrowing, (y) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day) and (z) if such Borrowing is to be
converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar Borrowing, the
applicable Borrower shall be deemed to have selected an Interest Period of one
month’s duration. The Administrative Agent shall advise the Lenders of any
notice given pursuant to this Section 2.10 and of each Lender’s portion of any
converted or continued Borrowing. If a Borrower shall not have given notice in
accordance with this Section 2.10 to continue any Borrowing into a subsequent
Interest Period (and shall not otherwise have given notice in accordance with
this Section 2.10 to convert such Borrowing), such Borrowing shall, at the end
of the Interest Period applicable thereto (unless repaid pursuant to the terms
hereof), automatically be continued into an ABR Borrowing.

SECTION 2.11. Optional Prepayment. (a) Each Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, upon
written or telecopy notice (or telephone notice promptly confirmed by written or
telecopy notice) to the Administrative Agent before 12:00 (noon), New York City
time (i) in the case of any prepayment of a Eurodollar Borrowing, at least three
Business Days prior to the date designated for such prepayment or (ii) in the
case of any prepayment of an ABR Borrowing, on the date of such prepayment;
provided, however, that each partial prepayment shall be in an amount that is
(x) in the case of any partial prepayment of a Eurodollar Borrowing, an integral
multiple of $1,000,000 and not less than $5,000,000 or (y) in the case of any
partial prepayment of an ABR Borrowing, an integral multiple of $1,000 and not
less than $100,000.

(b) In the event of any termination of all the Commitments, each Borrower shall
repay or prepay all its outstanding Borrowings on the date of such termination,
together with accrued interest to but excluding the date of such payment. In the
event of any partial reduction of the Commitments, then (i) at or prior to the
effective

 

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date of such reduction or termination, the Administrative Agent shall notify the
Borrowers and the Lenders of the Aggregate Credit Exposure after giving effect
thereto and (ii) if the Aggregate Credit Exposure would exceed the Total
Commitment after giving effect to such reduction or termination, then the
Borrowers shall, on the date of such reduction or termination, repay or prepay
Borrowings in an amount sufficient to eliminate such excess.

(c) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the applicable Borrower to prepay such Borrowing by
the amount stated therein on the date stated therein. All prepayments under this
Section 2.11 shall be subject to Section 2.14 but otherwise without premium or
penalty. All prepayments under this Section 2.11 (other than prepayments of ABR
Loans prior to the Maturity Date) shall be accompanied by accrued interest on
the principal amount being prepaid to the date of payment.

SECTION 2.12. Reserve Requirements; Change in Circumstances. (a) Notwithstanding
any other provision of this Agreement, if after the date of this Agreement, but
prior to the first date on which the events described in clauses (w), (x),
(y) and (z) of subsection (d) of this Section 2.12 shall have occurred (the
“Obligation Termination Date”), any change in applicable law or regulation or in
the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof (whether or not having
the force of law) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of or credit extended by any Lender or the Issuing Bank or shall impose
on such Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein, and the result of any of the
foregoing shall be to increase the cost to such Lender or the Issuing Bank of
making or maintaining any Eurodollar Loan or increase the cost to any Lender or
the Issuing Bank of issuing or maintaining any Letter of Credit or purchasing or
maintaining a participation therein or to reduce the amount of any sum received
or receivable by such Lender or the Issuing Bank hereunder (whether of
principal, interest or otherwise) by an amount deemed by such Lender or the
Issuing Bank to be material, then the applicable Borrower will pay to such
Lender or the Issuing Bank, as the case may be, upon demand such additional
amount or amounts as will compensate such Lender or the Issuing Bank, as the
case may be, for such additional costs incurred or reduction suffered.

(b) If any Lender or the Issuing Bank shall have determined that the adoption
after the date hereof, but prior to the Obligation Termination Date, of any law,
rule, regulation, agreement or guideline regarding capital adequacy, or any
change after the date hereof, but prior to the Obligation Termination Date, in
any such law, rule, regulation, agreement or guideline (whether such law, rule,
regulation, agreement or guideline has been adopted) or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or the Issuing Bank or any Lender’s or the
Issuing Bank’s holding company with any request or directive

 

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regarding capital adequacy (whether or not having the force of law) of any
Governmental Authority has or would have the effect of reducing the rate of
return on such Lender’s or the Issuing Bank’s capital or on the capital of such
Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this
Agreement or the Loans made or participation in Letters of Credit purchased by
such Lender pursuant hereto or the Letters of Credit issued by the Issuing Bank
pursuant hereto to a level below that which such Lender or the Issuing Bank or
such Lender’s or the Issuing Bank’s holding company could have achieved but for
such applicability, adoption, change or compliance (taking into consideration
such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s
or the Issuing Bank’s holding company with respect to capital adequacy) by an
amount deemed by such Lender or the Issuing Bank to be material, then from time
to time the applicable Borrower shall pay to such Lender or the Issuing Bank, as
the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding
company for any such reduction suffered.

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding
company, as applicable, as specified in paragraph (a) or (b) above shall be
delivered to the applicable Borrower and shall be conclusive absent manifest
error. The applicable Borrower shall pay such Lender or the Issuing Bank the
amount shown as due on any such certificate delivered by it within 10 days after
its receipt of the same.

(d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender’s or the Issuing Bank’s right to demand such compensation under this
Section 2.12 for any costs incurred or reduction suffered with respect to any
date so long as such Lender or the Issuing Bank, as applicable, shall have
notified the applicable Borrower that it will demand compensation for such costs
or reduction under paragraph (c) above, not more than 90 days after the later of
(i) such date and (ii) the date on which such Lender or the Issuing Bank, as
applicable, shall have become aware of such costs or reduction. Notwithstanding
the foregoing, no notification contemplated by the preceding sentence shall in
any event be made more than 30 days after the date that (w) all the Obligations
have been indefeasibly paid in full, (x) the Lenders have no further commitment
to lend to either of the Borrowers under this Agreement, (y) the L/C Exposure
has been reduced to zero and (z) the Issuing Bank has no further obligation to
issue Letters of Credit under this Agreement. The protection of this
Section 2.12 shall be available to each Lender and the Issuing Bank regardless
of any possible contention of the invalidity or inapplicability of the law,
rule, regulation, agreement, guideline or other change or condition that shall
have occurred or been imposed.

SECTION 2.13. Change in Legality. (a) Notwithstanding any other provision of
this Agreement, if, after the date hereof, any change in any law or regulation
or in the interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby

 

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with respect to any Eurodollar Loan, then, by written notice to the Borrowers
and to the Administrative Agent:

(i) such Lender may declare that Eurodollar Loans will not thereafter (for the
duration of such unlawfulness) be made by such Lender hereunder (or be continued
for additional Interest Periods and ABR Loans will not thereafter (for such
duration) be converted into Eurodollar Loans), whereupon any request for a
Eurodollar Borrowing (or to convert an ABR Borrowing to a Eurodollar Borrowing
or to continue a Eurodollar Borrowing for an additional Interest Period) shall,
as to such Lender only, be deemed a request for an ABR Loan (or a request to
continue an ABR Loan as such or to convert a Eurodollar Loan into an ABR Loan,
as the case may be), unless such declaration shall be subsequently withdrawn;
and

(ii) such Lender may require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such notice as
provided in paragraph (b) below.

In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.

(b) For purposes of this Section 2.13, a notice to the Borrowers by any Lender
shall be effective as to each Eurodollar Loan made by such Lender, if lawful, on
the last day of the Interest Period currently applicable to such Eurodollar
Loan; in all other cases such notice shall be effective on the date of receipt
by the Borrowers.

SECTION 2.14. Indemnity. Each Borrower shall indemnify each Lender against any
loss or expense that such Lender may sustain or incur as a consequence of
(a) any event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Loan
to such Borrower prior to the end of the Interest Period in effect therefor,
(ii) the conversion of any Eurodollar Loan to such Borrower to an ABR Loan, or
the conversion of the Interest Period with respect to any Eurodollar Loan to
such Borrower, in each case other than on the last day of the Interest Period in
effect therefor, or (iii) any Eurodollar Loan to be made by such Lender to such
Borrower (including any Eurodollar Loan to be made pursuant to a conversion or
continuation under Section 2.10) not being made after notice of such Loan shall
have been given by such Borrower hereunder (any of the events referred to in
this clause (a) being called a “Breakage Event”) or (b) any default by such
Borrower in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage
Event for the period from the date of such Breakage Event to the last

 

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day of the Interest Period in effect (or that would have been in effect) for
such Loan over (ii) the amount of interest likely to be realized by such Lender
in redeploying the funds released or not utilized by reason of such Breakage
Event for such period. A certificate of any Lender setting forth any amount or
amounts which such Lender is entitled to receive pursuant to this Section 2.14
shall be delivered to the applicable Borrower and shall be conclusive absent
manifest error.

SECTION 2.15. Pro Rata Treatment. Except as required under Section 2.13, each
Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Commitment Fees and the
L/C Participation Fees, each reduction of the Commitments and each conversion of
any Borrowing to or continuation of any Borrowing as a Borrowing of any Type
shall be allocated pro rata among the Lenders in accordance with their
respective applicable Commitments (or, if such Commitments shall have expired or
been terminated, in accordance with the respective principal amounts of their
outstanding Loans). Each Lender agrees that in computing such Lender’s portion
of any Borrowing to be made hereunder, the Administrative Agent may, in its
discretion, round each Lender’s percentage of such Borrowing to the next higher
or lower whole dollar amount.

SECTION 2.16. Sharing of Setoffs. Each Lender agrees that if it shall, through
the exercise of a right of banker’s lien, setoff or counterclaim against either
Borrower, or pursuant to a secured claim under Section 506 of Title 11 of the
United States Code or other security or interest arising from, or in lieu of,
such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Loan or Loans or L/C
Disbursement as a result of which the unpaid principal portion of its Loans and
participation in L/C Disbursements shall be proportionately less than the unpaid
principal portion of the Loans and participation in L/C Disbursements of any
other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the Loans and L/C Exposure of such other
Lender, so that the aggregate unpaid principal amount of the Loans and L/C
Exposure and participation in Loans and L/C Exposure held by each Lender shall
be in the same proportion to the aggregate unpaid principal amount of all Loans
and L/C Exposure then outstanding as the principal amount of its Loans and L/C
Exposure prior to such exercise of banker’s lien, setoff or counterclaim or
other event was to the principal amount of all Loans and L/C Exposure
outstanding prior to such exercise of banker’s lien, setoff or counterclaim or
other event; provided, however, that if any such purchase or purchases or
adjustments shall be made pursuant to this Section 2.16 and the payment giving
rise thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest. Each Borrower expressly
consents to the foregoing arrangements and agrees that any Lender holding a
participation in a Loan or L/C Disbursement deemed to have been so purchased may
exercise any and all rights of banker’s lien, setoff or counterclaim with
respect to any and all moneys owing by such Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to such Borrower in
the amount of such participation.

 

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SECTION 2.17. Payments. (a) Each Borrower shall make each payment (including
principal of or interest on any Borrowing or any L/C Disbursement or any Fees or
other amounts) hereunder and under any other Loan Document not later than
12:00 (noon), New York City time, on the date when due in immediately available
dollars, without setoff, defense or counterclaim. Each such payment (other than
Issuing Bank Fees, which shall be paid directly to the Issuing Bank if other
than the Administrative Agent) shall be made to the Administrative Agent at its
offices at 1111 Fannin Street, 10th Floor, Houston, TX 77002.

(b) Whenever any payment (including principal of or interest on any Borrowing or
any Fees or other amounts) hereunder or under any other Loan Document shall
become due, or otherwise would occur, on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of interest or Fees, if
applicable.

SECTION 2.18. Taxes. (a) Any and all payments by or on behalf of either Borrower
hereunder and under any other Loan Document shall be made, in accordance with
Section 2.17, free and clear of and without deduction for any and all current or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding (i) income taxes imposed on the net
income of the Administrative Agent, any Lender or the Issuing Bank (or any
transferee or assignee thereof, including a participation holder (any such
entity a “Transferee”) and (ii) franchise taxes imposed on the net income of the
Administrative Agent, any Lender or the Issuing Bank (or Transferee), in each
case by the jurisdiction under the laws of which the Administrative Agent, such
Lender or the Issuing Bank (or Transferee) is organized or any political
subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities, collectively or individually, being
called “Taxes”. If a Borrower shall be required to deduct any Taxes from or in
respect of any sum payable hereunder or under any other Loan Document to the
Administrative Agent, any Lender or the Issuing Bank (or any Transferee),
(i) the sum payable shall be increased by the amount (an “additional amount”)
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.18) the
Administrative Agent, such Lender or the Issuing Bank (or Transferee), as the
case may be, shall receive an amount equal to the sum it would have received had
no such deductions been made, (ii) such Borrower shall make such deductions and
(iii) such Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

(b) In addition, each Borrower agrees to pay to the relevant Governmental
Authority in accordance with applicable law any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under any other Loan
Document or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any other Loan Document (“Other Taxes”).

(c) The Borrowers jointly and severally agree to indemnify the Administrative
Agent, each Lender and the Issuing Bank (or Transferee) for the full

 

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amount of Taxes and Other Taxes paid by the Administrative Agent, such Lender or
the Issuing Bank (or Transferee), as the case may be, and any liability
(including penalties, interest and expenses (including reasonable attorney’s
fees, charges and disbursements)) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant Governmental Authority. A certificate as to the amount of such
payment or liability prepared by the Administrative Agent, a Lender or the
Issuing Bank (or Transferee), or the Administrative Agent on its behalf, absent
manifest error, shall be final, conclusive and binding for all purposes. Such
indemnification shall be made within 30 days after the date the Administrative
Agent, any Lender or the Issuing Bank (or Transferee), as the case may be, makes
written demand therefor.

(d) As soon as practicable after the date of any payment of Taxes or Other Taxes
by either Borrower to the relevant Governmental Authority, such Borrower will
deliver to the Administrative Agent, at its address referred to in
Section 10.01, the original or a certified copy of a receipt issued by such
Governmental Authority evidencing payment thereof.

(e) Each Lender (or Transferee) that is organized under the laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (a “Non-U.S. Lender”) shall deliver to the Borrowers and the
Administrative Agent two copies of either United States Internal Revenue Service
Form W-8BEN or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming
exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of “portfolio interest”, a Form W-8BEN, or any
subsequent versions thereof or successors thereto (and, if such Non-U.S. Lender
delivers a Form W-8BEN, a certificate representing that such Non-U.S. Lender is
not a bank for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of either Borrower and is not a controlled foreign corporation related to either
Borrower (within the meaning of Section 864(d)(4) of the Code)), properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from, or reduced rate of, U.S. Federal withholding tax on payments by the
Borrowers under this Agreement and the other Loan Documents. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement (or, in the case of a Transferee that is a participation holder,
on or before the date such participation holder becomes a Transferee hereunder)
and on or before the date, if any, such Non-U.S. Lender changes its applicable
lending office by designating a different lending office (a “New Lending
Office”). In addition, each Non-U.S. Lender shall deliver such forms promptly
upon the obsolescence or invalidity of any form previously delivered by such
Non-U.S. Lender. Notwithstanding any other provision of this Section 2.18(e), a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.18(e) that such Non-U.S. Lender is not legally able to deliver.

(f) Neither Borrower shall be required to indemnify any Non-U.S. Lender or to
pay any additional amounts to any Non-U.S. Lender, in respect of United States
Federal withholding tax pursuant to paragraph (a) or (c) above to the extent
that (i) the obligation to withhold amounts with respect to United States
Federal withholding tax

 

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existed on the date such Non-U.S. Lender became a party to this Agreement (or,
in the case of a Transferee that is a participation holder, on the date such
participation holder became a Transferee hereunder) or, with respect to payments
to a New Lending Office, the date such Non-U.S. Lender designated such New
Lending Office with respect to a Loan; provided, however, that this
paragraph (f) shall not apply (x) to any Transferee or New Lending Office that
becomes a Transferee or New Lending Office as a result of an assignment,
participation, transfer or designation made at the request of the Borrowers and
(y) to the extent the indemnity payment or additional amounts any Transferee, or
any Lender (or Transferee), acting through a New Lending Office, would be
entitled to receive (without regard to this paragraph (f)) do not exceed the
indemnity payment or additional amounts that the person making the assignment,
participation or transfer to such Transferee, or Lender (or Transferee) making
the designation of such New Lending Office, would have been entitled to receive
in the absence of such assignment, participation, transfer or designation or
(ii) the obligation to pay such additional amounts would not have arisen but for
a failure by such Non-U.S. Lender to comply with the provisions of paragraph (e)
above.

(g) Nothing contained in this Section 2.18 shall require any Lender or the
Issuing Bank (or any Transferee) or the Administrative Agent to make available
any of its tax returns (or any other information that it deems to be
confidential or proprietary).

SECTION 2.19. Assignment of Commitments Under Certain Circumstances; Duty to
Mitigate. (a) In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.12, (ii) any Lender or
the Issuing Bank delivers a notice described in Section 2.13, (iii) either
Borrower is required to pay any additional amount to any Lender or the Issuing
Bank or any Governmental Authority on account of any Lender or the Issuing Bank
pursuant to Section 2.18 or (iv) any Lender refuses to consent to any amendment,
waiver or other modification of any Loan Document requested by either Borrower
that requires the consent of a greater percentage of the Lenders than the
Required Lenders and such amendment, waiver or other modification is consented
to by the Required Lenders, the Borrowers may, at their sole expense and effort
(including with respect to the processing and recordation fee referred to in
Section 10.04(b)), upon notice to such Lender or the Issuing Bank and the
Administrative Agent, require such Lender or the Issuing Bank to transfer and
assign, without recourse (in accordance with and subject to the restrictions
contained in Section 10.04), all of its interests, rights and obligations under
this Agreement to an assignee that shall assume such assigned obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (x) such assignment shall not conflict with any law, rule or regulation or
order of any court or other Governmental Authority having jurisdiction,
(y) except in connection with an assignment to another Lender or an Affiliate
thereof, the Borrowers shall have received the prior written consent of the
Administrative Agent and the Issuing Bank, which consent shall not unreasonably
be withheld, and (z) the Borrowers or such assignee shall have paid to the
affected Lender or the Issuing Bank in immediately available funds an amount
equal to the sum of the principal of and interest accrued to the date of such
payment on the outstanding Loans or L/C Disbursements of such Lender or the
Issuing Bank, respectively, plus all Fees and other amounts accrued for the
account of such

 

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Lender or the Issuing Bank hereunder (including any amounts under Section 2.12
and Section 2.14); provided further that, if prior to any such transfer and
assignment the circumstances or event that resulted in such Lender’s or the
Issuing Bank’s claim for compensation under Section 2.12 or notice under
Section 2.13 or the amounts paid pursuant to Section 2.18, as the case may be,
cease to cause such Lender or the Issuing Bank to suffer increased costs or
reductions in amounts received or receivable or reduction in return on capital,
or cease to have the consequences specified in Section 2.13, or cease to result
in amounts being payable under Section 2.18, as the case may be (including as a
result of any action taken by such Lender or the Issuing Bank pursuant to
paragraph (b) below), or if such Lender or the Issuing Bank shall waive its
right to claim further compensation under Section 2.12 in respect of such
circumstances or event or shall withdraw its notice under Section 2.13 or shall
waive its right to further payments under Section 2.18 in respect of such
circumstances or event or shall consent to the proposed waiver, amendment or
other modification, as the case may be, then such Lender or the Issuing Bank
shall not thereafter be required to make any such transfer and assignment
hereunder.

(b) If (i) any Lender or the Issuing Bank shall request compensation under
Section 2.12, (ii) any Lender or the Issuing Bank delivers a notice described in
Section 2.13 or (iii) either Borrower is required to pay any additional amount
to any Lender or the Issuing Bank or any Governmental Authority on account of
any Lender or the Issuing Bank pursuant to Section 2.18, then such Lender or the
Issuing Bank shall use reasonable efforts (which shall not require such Lender
or the Issuing Bank to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden deemed by
it to be significant) (x) to file any certificate or document reasonably
requested in writing by the Borrowers or (y) to assign its rights and delegate
and transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.12 or enable it to withdraw its notice pursuant to
Section 2.13 or would reduce amounts payable pursuant to Section 2.18, as the
case may be, in the future. The Borrowers hereby agree, jointly and severally,
to pay all reasonable costs and expenses incurred by any Lender or the Issuing
Bank in connection with any such filing or assignment, delegation and transfer.

SECTION 2.20. Letters of Credit. (a) General. Each of the Borrowers may request
the issuance of a Letter of Credit, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, appropriately completed, for the
account of such Borrower, at any time and from time to time while the
Commitments remain in effect and the Trust Termination Date has not occurred.
This Section 2.20 shall not be construed to impose an obligation upon the
Issuing Bank to issue any Letter of Credit that is inconsistent with the terms
and conditions of this Agreement.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. In
order to request the issuance of a Letter of Credit (or to amend, renew or
extend an existing Letter of Credit), the requesting Borrower shall hand deliver
or telecopy to the Issuing Bank and the Administrative Agent (reasonably in
advance of the

 

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requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, the date of issuance, amendment, renewal or
extension, the date on which such Letter of Credit is to expire (which shall
comply with paragraph (c) below), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare such Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended for the account of the Trustee, only if, and upon
issuance, amendment, renewal or extension of each Letter of Credit for the
account of the Trustee, the Trustee shall be deemed to represent and warrant
that, after giving effect to such issuance, amendment, renewal or extension
(A) the sum of (i) the aggregate principal amount of the Loans outstanding to
the Trustee and (ii) the Trustee L/C Exposure shall not exceed $70,000,000 (as
such amount may be increased from time to time pursuant to Section 2.21) and
(B) the Aggregate Credit Exposure shall not exceed the Total Commitment. A
Letter of Credit shall be issued, amended, renewed or extended for the account
of El Paso only if, and upon issuance, amendment, renewal or extension of each
Letter of Credit for the account of El Paso, El Paso shall be deemed to
represent and warrant that, after giving effect to such issuance, amendment,
renewal or extension, the Aggregate Credit Exposure shall not exceed the Total
Commitment.

(c) Expiration Date. Each Letter of Credit shall expire at the close of business
on the earlier of the date one year after the date of the issuance of such
Letter of Credit and the date that is five Business Days prior to the Maturity
Date, unless such Letter of Credit expires by its terms on an earlier date. Each
Letter of Credit may, upon the request of the applicable Borrower, include a
provision whereby such Letter of Credit shall be renewed automatically for
additional consecutive periods of 12 months or less (but not beyond the date
that is five Business Days prior to the Maturity Date) unless the Issuing Bank
notifies the beneficiary thereof at least 30 days prior to the then-applicable
expiry date that such Letter of Credit will not be renewed.

(d) Participation. By the issuance of a Letter of Credit and without any further
action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby
grants to each Lender, and each such Lender hereby acquires from the applicable
Issuing Bank, a participation in such Letter of Credit equal to such Lender’s
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit, effective upon the issuance of such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, such Lender’s Applicable Percentage of each L/C
Disbursement made by the Issuing Bank and not reimbursed by the Trustee or
El Paso, as the case may be, forthwith on the date due as provided in
Section 2.02(f). Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or an Event of Default, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.

 

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(e) Reimbursement. If the Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit, the Trustee or El Paso, as the case may be, shall
pay to the Administrative Agent an amount equal to such L/C disbursement not
later than 4:00 p.m., New York City time on the Business Day on which the
Trustee or El Paso, as the case may be, shall have received notice from the
Issuing Bank that payment of such draft will be made, or, if the Trustee or
El Paso, as the case may be, shall have received such notice later than
10:00 a.m., New York City time, on any Business Day, not later than 1:00 p.m.,
New York City time, on the immediately following Business Day. Any failure by
the Trustee or El Paso, as the case may be, to make a payment under this
Section 2.20(e) shall not constitute a Default or an Event of Default if the
Issuing Bank shall have been reimbursed for such L/C disbursement out of the
proceeds of a deemed Borrowing pursuant to Section 2.02(f).

(f) Obligations Absolute. The obligations of the Trustee or El Paso, as the case
may be, to reimburse L/C Disbursements as provided in paragraph (e) above shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under any and all circumstances
whatsoever, and irrespective of:

(i) any lack of validity or enforceability of any Letter of Credit or any other
Loan Document, or any term or provision therein;

(ii) any amendment or waiver of or any consent to departure from all or any of
the provisions of any Letter of Credit or any other Loan Document;

(iii) the existence of any claim, setoff, defense or other right that the
Trustee, El Paso or any other party guaranteeing, or otherwise obligated with,
the Trustee or El Paso, as the case may be, any Subsidiary or other Affiliate
thereof or any other person may at any time have against the beneficiary under
any Letter of Credit, the Issuing Bank, the Administrative Agent or any Lender
or any other person, whether in connection with this Agreement, any other Loan
Document or any other related or unrelated agreement or transaction;

(iv) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;

(v) payment by the Issuing Bank under a Letter of Credit against presentation of
a draft or other document that does not comply with the terms of such Letter of
Credit; and

(vi) any other act or omission to act or delay of any kind of the Issuing Bank,
the Lenders, the Administrative Agent or any other person or any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.20, constitute a legal or
equitable discharge of the obligations of the Trustee or El Paso, as the case
may be, hereunder.

 

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Without limiting the generality of the foregoing, it is expressly understood and
agreed that the absolute and unconditional obligation of the Trustee or El Paso,
as the case may be, hereunder to reimburse L/C Disbursements will not be excused
by the gross negligence or willful misconduct of the Issuing Bank. However, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
the Trustee or El Paso, as the case may be, to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Trustee or El Paso, as the case may be, to the extent permitted by
applicable law) suffered by the Trustee or El Paso, as the case may be, that are
caused by the Issuing Bank’s gross negligence or willful misconduct in
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof; it is understood that the Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) the Issuing Bank’s exclusive reliance on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuing Bank.

(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by telecopy, to the Administrative Agent
and the Trustee or El Paso, as the case may be, of such demand for payment and
whether the Issuing Bank has made or will make an L/C Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall not
relieve the Trustee or El Paso, as the case may be, of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such L/C
Disbursement. The Administrative Agent shall promptly give each Lender notice
thereof.

(h) Interim Interest. If the Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit, then, unless the Trustee or El Paso, as the case
may be, shall reimburse such L/C Disbursement in full on such date, the unpaid
amount thereof shall bear interest for the account of the Issuing Bank, for each
day from and including the date of such L/C Disbursement, to but excluding the
earlier of the date of payment by the Trustee or El Paso, as the case may be, or
the date on which the Issuing Bank is reimbursed by the Lenders pursuant to
Section 2.02(f), at the rate per annum that would apply to such amount if such
amount were an ABR Loan.

 

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(i) Resignation or Removal of the Issuing Bank. The Issuing Bank may resign at
any time by giving 180 days’ prior written notice to the Administrative Agent,
the Lenders and the Borrowers, and may be removed at any time by the Borrowers
by notice to the Issuing Bank, the Administrative Agent and the Lenders. Subject
to the next succeeding paragraph, upon the acceptance of any appointment as the
Issuing Bank hereunder by a Lender that shall agree to serve as successor
Issuing Bank, such successor shall succeed to and become vested with all the
interests, rights and obligations of the retiring Issuing Bank and the retiring
Issuing Bank shall be discharged from its obligations to issue additional
Letters of Credit hereunder. At the time such removal or resignation shall
become effective, the Borrowers shall pay all accrued and unpaid fees pursuant
to Section 2.05(c)(ii). The acceptance of any appointment as the Issuing Bank
hereunder by a successor Lender shall be evidenced by an agreement entered into
by such successor, in a form satisfactory to the Borrowers and the
Administrative Agent, and, from and after the effective date of such agreement,
(i) such successor Lender shall have all the rights and obligations of the
previous Issuing Bank under this Agreement and the other Loan Documents and
(ii) references herein and in the other Loan Documents to the term “Issuing
Bank” shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require. After the resignation or removal of the Issuing Bank hereunder, the
retiring Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement and the other
Loan Documents with respect to Letters of Credit issued by it prior to such
resignation or removal, but shall not be required to issue additional Letters of
Credit.

(j) Cash Collateralization. If any Event of Default shall occur and be
continuing or the Trust Termination Date shall occur, the Trustee or El Paso, as
the case may be, shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders thereof and of the amount to be
deposited, deposit in an account with the Administrative Agent, for the benefit
of the Lenders, an amount in cash equal to the Trustee L/C Exposure or the
El Paso L/C Exposure, as the case may be, as of such date. Such deposit shall be
held by the Administrative Agent as collateral for the payment and performance
of the Obligations. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits in Permitted
Investments, which investments shall be made at the option and sole discretion
of the Administrative Agent, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in
such account shall (i) automatically be transferred to the Administrative Agent
and be applied by the Administrative Agent to reimburse the Issuing Bank for L/C
Disbursements for which it has not been reimbursed, (ii) be held for the
satisfaction of the reimbursement obligations of the Trustee or El Paso, as the
case may be, for the Trustee L/C Exposure or the El Paso L/C Exposure, as the
case may be, at such time and (iii) if the maturity of the Loans has been
accelerated, be transferred to the Administrative Agent and be applied to
satisfy the Obligations (of both the Trustee and El Paso). If the Trustee or
El Paso, as the case may be, is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, (x) such amount
(to the extent not applied as aforesaid) shall be returned to the Trustee or
El Paso, as the case may be, within three

 

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Business Days after all Events of Default have been cured or waived and (y) at
any time that the amount of such cash collateral exceeds the Trustee L/C
Exposure or El Paso L/C Exposure, as the case may be, the amount of such excess
shall be promptly returned to the Trustee or El Paso, as the case may be.

SECTION 2.21. Increase of Commitments. (a) El Paso may, by written notice to the
Administrative Agent, request that the Total Commitment be increased by an
aggregate amount not to exceed the Incremental Facility Amount at such time.
Upon the receipt of such request by the Administrative Agent, the Administrative
Agent shall deliver a copy thereof to each Lender. Such notice shall set forth
the amount of the requested increase (which shall be in minimum increments of
$1,000,000 and a minimum amount of $10,000,000 or equal to the remaining
Incremental Facility Amount), whether all or any portion of the requested
increase is to be made available to the Trustee and the date on which such
increase is requested to become effective (which shall be not less than 10 days
nor more than 60 days after the date of such notice and which, in any event,
must be on or prior to the Maturity Date), and shall offer each Lender the
opportunity to increase its Commitment by its Applicable Percentage of the
proposed increased amount. Each Lender shall, by notice to El Paso and the
Administrative Agent given not more than 10 days after the date of the
Administrative Agent’s notice, either agree to increase its Commitment by all or
a portion of the offered amount (each Lender so agreeing being an “Increasing
Lender”) or decline to increase its Commitment (and any Lender that does not
deliver such a notice within such period of 10 days shall be deemed to have
declined to increase its Commitment) (each Lender so declining or being deemed
to have declined being a “Non-Increasing Lender”). In the event that, on the
10th day after the Administrative Agent shall have delivered a notice pursuant
to the second sentence of this paragraph, the Increasing Lenders shall have
agreed pursuant to the preceding sentence to increase their Commitments by an
aggregate amount less than the increase requested by El Paso, El Paso may
arrange for one or more banks or other entities (any such bank or other entity
being called an “Augmenting Lender”), which may include any Lender, to extend
Commitments or increase their existing Commitments in an aggregate amount equal
to the unsubscribed amount; provided, however, that each Augmenting Lender shall
be subject to the prior written approval of the Administrative Agent and the
Issuing Bank (which approvals shall not be unreasonably withheld or delayed),
and the Borrowers and each Augmenting Lender shall execute all such
documentation as the Administrative Agent shall reasonably specify to evidence
its Commitment and/or its status as a Lender hereunder. Any such increase may be
made in an amount that is less than the increase requested by El Paso if El Paso
is unable to arrange for, or chooses not to arrange for, Augmenting Lenders.

(b) Each of the parties hereto hereby agrees that the Administrative Agent may
take any and all actions as may be reasonably necessary to ensure that, after
giving effect to any increase pursuant to this Section 2.21, the outstanding
Loans (if any) are held by the Lenders in accordance with their new Applicable
Percentages. This may be accomplished at the discretion of the Administrative
Agent, following consultation with El Paso, (i) by requiring the outstanding
Loans to be prepaid with the proceeds of a new Borrowing, (ii) by permitting the
Borrowings outstanding at the time of any increase in the Total Commitment
pursuant to this Section 2.21 to remain outstanding until the last

 

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day of the respective Interest Periods therefor, even though the Lenders would
hold the Loans comprising such borrowings other than in accordance with their
new Applicable Percentage or (iii) by any combination of the foregoing. Any
prepayment described in this paragraph (b) shall be subject to Section 2.14, but
shall otherwise be without premium or penalty.

(c) Notwithstanding the foregoing, no increase in the Total Commitment shall
become effective under this Section 2.21 unless, (i) on the date of such
increase, the conditions set forth in paragraphs (b) and (c) of Section 4.01
shall be satisfied and the Administrative Agent shall have received a
certificate to that effect dated such date and executed by a Financial Officer
of El Paso and (ii) if requested, the Administrative Agent shall have received
legal opinions and board resolutions consistent with those delivered on the
Closing Date under paragraphs (a), (b) and (c) of Section 4.02

ARTICLE III

Representations and Warranties

Each of El Paso and, subject to Section 10.19, the Trustee represents and
warrants to the Administrative Agent, the Issuing Bank and each of the Lenders
that as of the Closing Date and thereafter on each date as required by
Section 4.01(b):

SECTION 3.01. Organization; Powers. (a) El Paso and each of the Subsidiaries
(i) is duly organized, validly existing and in good standing under the laws of
the state of its organization, (ii) has all requisite power and authority to own
its property and assets and to carry on its business as now conducted and as
proposed to be conducted, (iii) is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required, except
where the failure so to qualify could not reasonably be expected to result in a
Material Adverse Effect, and (iv) has the corporate power and authority to
execute, deliver and perform its obligations under each of the Loan Documents to
which it is or will be a party and each other agreement or instrument
contemplated hereby to which it is or will be a party and to borrow hereunder.

(b) JPMorgan is a national banking association duly incorporated, validly
existing and in good standing under the laws of the United States of America,
and in its capacity as Trustee, (i) has all requisite power and authority to own
its property and assets and to carry on its business as now conducted and as
proposed to be conducted and (ii) has all requisite power and authority to
execute, deliver and perform its obligations under each of the Loan Documents
and each other agreement or instrument contemplated hereby to which it is or
will be a party and to borrow hereunder.

SECTION 3.02. Authorization. (a) The execution, delivery and performance by it
and each of its Subsidiaries (as applicable) of each of the Loan Documents, the
Trust Agreement and the Purchase Contract to which it is or will be a party and
(b) the Borrowings by it hereunder, the request for the issuance of Letters of
Credit and the use by it of the proceeds of the Loans and the Letters of Credit

 

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(collectively, the “Transactions”), (x) have been duly authorized by all
requisite corporate, trust and, if required, stockholder action and (y) will not
(i) violate (A) any provision of law, statute, rule or regulation, or of the
articles of incorporation or other constitutive documents or by-laws of El Paso
or any of its Subsidiaries or of the Trust Agreement, as applicable, (B) any
order of any Governmental Authority or (C) any provision of any indenture,
agreement or other instrument to which it is a party or by which it or any of
its property is or may be bound, (ii) be in conflict with, result in a breach of
or constitute (alone or with notice or lapse of time or both) a default under,
or give rise to any right to accelerate or to require the prepayment, repurchase
or redemption of any obligation under any such indenture, agreement or other
instrument or (iii) result in the creation or imposition of any Lien upon or
with respect to any property or assets now owned or hereafter acquired by it.

SECTION 3.03. Enforceability. Each of the Loan Documents has been duly executed
and delivered by it and constitutes its legal, valid and binding obligation
enforceable against it in accordance with such document’s terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

SECTION 3.04. Governmental Approvals. Except as set forth on Schedule 3.04,
(i) no action, consent or approval of, registration or filing with or any other
action by, any Governmental Authority is or will be required in connection with
the Transactions, except for such as have been made or obtained, are in full
force and effect and are not subject to any appeal or stay and (ii) no action,
consent or approval of, registration or filing with or any other action by any
Governmental Authority relating to the Securities Act, the Securities Exchange
Act, the Trust Indenture Act, the Federal Power Act, the Atomic Energy Act, the
Nuclear Waste Act, the Public Utility Holding Company Act of 1935, the New
Mexico Public Utility Act, the Texas Public Utility Regulatory Act, the Arizona
Public Utility Act, energy or nuclear matters, public utilities, the
environment, health and safety is or will be required in connection with the
participation by the Administrative Agent or any Lender in any of the
transactions contemplated by this Agreement or the other Loan Documents, except
as have been made or obtained, are in full force and effect and shall not be
subject to any appeal or stay.

SECTION 3.05. Financial Statements. El Paso has heretofore furnished to the
Lenders its consolidated balance sheets and related statements of operations,
shareholders’ equity and cash flows (a) as of and for the fiscal year ended
December 31, 2005, audited by and accompanied by the opinion of KPMG LLP,
independent public accountants. Such financial statements present fairly the
financial condition and results of operations and cash flows of El Paso and its
consolidated Subsidiaries as of such dates and for such periods. Such balance
sheets and the notes thereto disclose all material liabilities, direct or
contingent, of El Paso and its consolidated Subsidiaries as of the dates
thereof. Such financial statements were prepared in accordance with GAAP applied
on a consistent basis (except as approved by such accountants or officer, as the
case may be, and disclosed therein).

 

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SECTION 3.06. No Material Adverse Change. There has been no material adverse
change in the business, assets, operations, prospects, condition, financial or
otherwise, or material agreements of El Paso and the Subsidiaries, taken as a
whole, since December 31, 2005.

SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of El Paso
and the Subsidiaries has good and marketable title to, or valid leasehold
interests in, all its material properties and assets, except for minor defects
in title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties and assets for their intended
purposes. All such material properties and assets are free and clear of Liens,
other than Liens expressly permitted by Section 6.02.

(b) Each of El Paso and the Subsidiaries has complied with all obligations under
all material leases to which it is a party and all such leases are in full force
and effect. Each of El Paso and the Subsidiaries enjoys peaceful and undisturbed
possession under all such material leases.

SECTION 3.08. Subsidiaries. As of the Closing Date, El Paso has no Subsidiaries
other than MiraSol Energy Services, Inc., an Inactive Subsidiary.

SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth on
Schedule 3.09, there are no actions, suits or proceedings at law or in equity or
by or before any Governmental Authority now pending or, to its knowledge,
threatened against or affecting it or, in the case of El Paso, the Subsidiaries
or any business, property or rights of any such person (i) that involve any Loan
Document or the Transactions or (ii) that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.

(b) Except as set forth on Schedule 3.09, neither it nor, in the case of
El Paso, any of the Subsidiaries or any of their respective material properties
or assets is in violation of, nor will the continued operation of their material
properties and assets as currently conducted violate, any law, rule or
regulation, or is in default with respect to any judgment, writ, injunction,
decree or order of any Governmental Authority, where such violation or default
could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.10. Agreements. (a) Neither it nor, in the case of El Paso, any of the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect.

(b) Neither it nor, in the case of El Paso, any of the Subsidiaries is in
default in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected to
result in a Material Adverse Effect.

 

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SECTION 3.11. Federal Reserve Regulations. (a) Neither it nor, in the case of
El Paso, any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.

(b) No part of the proceeds of any Loan made to it or any Letter of Credit
issued for its benefit will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, for any purpose that entails a
violation of, or that is inconsistent with, the provisions of the Regulations of
the Board, including Regulation T, U or X.

SECTION 3.12. Investment Company Act. Neither it nor, in the case of El Paso,
any of the Subsidiaries is an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940.

SECTION 3.13. Use of Proceeds. It will use the proceeds of the Loans and will
request the issuance of Letters of Credit only for the purposes specified in the
preamble to this Agreement.

SECTION 3.14. Tax Returns. Each of El Paso and the Subsidiaries has filed or
caused to be filed all Federal, state, local and foreign tax returns or
materials required to have been filed by it and has paid or caused to be paid
all taxes due and payable by it and all assessments received by it, except taxes
that are being contested in good faith by appropriate proceedings and for which
El Paso or such Subsidiary, as applicable, shall have set aside on its books
adequate reserves.

SECTION 3.15. No Material Misstatements. The Confidential Information
Memorandum, taken as a whole, does not contain any material misstatement of fact
or omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading; provided
that to the extent any part of such information was based upon or constitutes a
forecast or projection, El Paso represents only that it acted in good faith and
utilized reasonable assumptions and due care in the preparation of such
information.

SECTION 3.16. Employee Benefit Plans. El Paso and its ERISA Affiliates are in
compliance in all material respects with the applicable provisions of ERISA and
the Code and the regulations and published interpretations thereunder. No ERISA
Event has occurred or is reasonably expected to occur that, when taken together
with all other such ERISA Events, could reasonably be expected to result in a
Material Adverse Effect. Schedule B to the most recent annual report filed with
the United States Internal Revenue Service with respect to each Plan is complete
and accurate. Since the date of the Schedule B in effect on the Closing Date,
there has been no material adverse change in the funded status of any Plan. None
of El Paso or any of its ERISA Affiliates has incurred any liability as a result
of a Plan termination which remains outstanding which would subject El Paso or
any of its ERISA Affiliates to a liability in excess of $5,000,000.

 

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SECTION 3.17. Environmental Matters. Except as set forth in Schedule 3.17:

(a) The properties owned or operated by El Paso and the Subsidiaries (the
“Properties”) do not contain any Hazardous Materials in amounts or
concentrations which (i) constitute or constituted a violation of, or (ii) could
reasonably be expected to give rise to liability under, Environmental Laws,
which violations and liabilities, in the aggregate, could reasonably be expected
to result in a Material Adverse Effect;

(b) All Environmental Permits have been obtained and are in effect with respect
to the Properties and operations of El Paso and the Subsidiaries, and the
Properties and all operations of El Paso and the Subsidiaries are in compliance
with all Environmental Laws and all necessary Environmental Permits, except to
the extent that such non-compliance or failure to obtain any necessary permits,
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect;

(c) There have been no Releases or threatened Releases at, from, under or
proximate to the Properties or otherwise in connection with the operations of
El Paso or the Subsidiaries, which Releases or threatened Releases, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;

(d) None of El Paso and the Subsidiaries has received any notice of an
Environmental Claim in connection with the Properties or the operations of
El Paso or the Subsidiaries or with regard to any person whose liabilities for
environmental matters El Paso or any Subsidiary has retained or assumed, in
whole or in part, contractually, by operation of law or otherwise, which, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
nor do El Paso or the Subsidiaries have reason to believe that any such notice
will be received or is being threatened; and

(e) Hazardous Materials have not been transported from the Properties, nor have
Hazardous Materials been generated, treated, stored or disposed of at, on or
under any of the Properties in a manner that could reasonably be expected to
give rise to liability under any Environmental Law which could reasonably be
expected to result in a Material Adverse Effect, nor have El Paso or the
Subsidiaries retained or assumed any liability, contractually, by operation of
law or otherwise, with respect to the generation, treatment, storage or disposal
of Hazardous Materials, which transportation, generation, treatment, storage or
disposal, or retained or assumed liabilities, in the aggregate, could result in
a Material Adverse Effect.

SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and correct
description of all insurance maintained by El Paso as of the Closing Date. Such
insurance is in full force and effect and all premiums have been duly paid.
El Paso and the Subsidiaries have insurance in such amounts and covering such
risks and liabilities as are in accordance with normal industry practice.

SECTION 3.19. Labor Matters. As of the Closing Date, there are no strikes,
lockouts or slowdowns against El Paso or the Subsidiaries pending or, to the

 

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knowledge of El Paso, threatened. The hours worked by and payments made to
employees of El Paso and the Subsidiaries have not been in violation of the Fair
Labor Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters, except where any such violation could not reasonably
be expected to result in a Material Adverse Effect. All payments due from
El Paso or any Subsidiary, or for which any claim may be made against El Paso or
any Subsidiary, on account of wages and employee health and welfare insurance
and other benefits, have been paid in the ordinary course of business or accrued
as a liability on the books of El Paso or such Subsidiary. The consummation of
the Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which El Paso is bound.

SECTION 3.20. Solvency. As of the Closing Date, (a) the fair value of the assets
of El Paso, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of El Paso will be greater than the amount that will be required to
pay the probable liability of its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) El Paso will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) El Paso will not have unreasonably small capital
with which to conduct the business in which it is engaged as such business is
now conducted and is proposed to be conducted following the Closing Date.

ARTICLE IV

Conditions of Lending

The obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder are subject to the satisfaction of the following
conditions:

SECTION 4.01. All Credit Events. On the date of each Borrowing and on the date
of each issuance, amendment, renewal or extension of a Letter of Credit (each
such event being called a “Credit Event”):

(a) The Administrative Agent shall have received a notice of such Borrowing as
required by Section 2.03 (or such notice shall have been deemed given in
accordance with Section 2.03) or, in the case of the issuance, amendment,
renewal or extension of a Letter of Credit, the Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance,
amendment, renewal or extension of such Letter of Credit as required by
Section 2.20(b).

(b) Except in the case of a Borrowing that does not increase the aggregate
principal amount of Loans outstanding of any Lender, the representations and
warranties set forth herein (other than, with respect to a Borrowing the
proceeds of which are used solely to refinance maturing commercial paper, the
representations and warranties set forth in Sections 3.06 and 3.09) and in the
other Loan Documents shall be true and

 

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correct in all material respects on and as of the date of such Credit Event with
the same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.

(c) Each Borrower shall be in compliance with all the terms and provisions set
forth herein and in each other Loan Document on its part to be observed or
performed, and at the time of and immediately after such Credit Event, no Event
of Default or Default shall have occurred and be continuing.

Each Credit Event shall be deemed to constitute a representation and warranty by
each Borrower on the date of such Credit Event as to the matters specified in
paragraphs (b) (except as aforesaid) and (c) of this Section 4.01.

SECTION 4.02. Closing Date. On the Closing Date:

(a) The Administrative Agent shall have received, on behalf of itself, the
Lenders, the Documentation Agent, the Syndication Agent and the Issuing Bank, a
favorable written opinion of (i) Davis Polk & Wardwell, counsel for El Paso,
substantially to the effect set forth in Exhibit E-1, (ii) Ainsa Hutson, LLP,
counsel for the Trustee, substantially to the effect set forth in Exhibit E-2,
(iii) Dewey Ballantine, LLP, Federal regulatory counsel for the Borrowers,
substantially to the effect set forth in Exhibit E-3, (iv) each local regulatory
counsel listed on Schedule 4.02(a), substantially to the effect set forth in
Exhibit E-4 and (v) the General Counsel of El Paso, substantially to the effect
set forth in Exhibit E-5, in each case (A) dated the Closing Date, (B) addressed
to the Issuing Bank, the Administrative Agent and the Lenders and (C) covering
such other matters relating to the Loan Documents and the Transactions as the
Administrative Agent shall reasonably request, and the Borrowers hereby request
such counsel to deliver such opinions.

(b) The Administrative Agent shall have received (i) a certificate of the
Secretary or Assistant Secretary of El Paso dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
certificate or articles of incorporation of El Paso filed with the Secretary of
State of Texas on or prior to the Closing Date and as in effect on the Closing
Date, (B) that attached thereto is a true and complete copy of the by-laws of
El Paso as in effect on the Closing Date and at all times since a date prior to
the date of the resolutions described in clause (C) below, (C) that attached
thereto is a true and complete copy of resolutions duly adopted by the Board of
Directors of El Paso authorizing the execution, delivery and performance of the
Loan Documents to which El Paso is or is to be a party and the borrowings
hereunder, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect, (D) that the Trust Agreement has not
been modified, rescinded or amended and is in full force and effect, (E) as to
the incumbency and specimen signature of each officer executing this Agreement
or any other document delivered in connection herewith on behalf of El Paso;
(ii) a certificate of another officer of El Paso as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (i) above; (iii) a certificate of the Secretary
or Assistant Secretary of JPMorgan dated the Closing Date and certifying as to
the incumbency and specimen signature of

 

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each officer executing this Agreement or any other document delivered in
connection herewith on behalf of the Trustee; (iv) a certificate of another
officer of the Trustee as to the incumbency and specimen signature of the
Secretary or Assistant Secretary executing the certificate pursuant to
clause (iii) above; and (v) such other documents as the Lenders, the Issuing
Bank or the Administrative Agent may reasonably request.

(c) The Administrative Agent shall have received a certificate, dated the
Closing Date and signed by a Financial Officer of El Paso, confirming compliance
with the conditions precedent set forth in paragraphs (b) and (c) of
Section 4.01.

(d) (i) The loans and other amounts outstanding or payable under the Existing
Credit Agreement shall have been paid in full and (ii) the Administrative Agent
shall have received all Fees and other amounts due and payable on or prior to
the Closing Date, including, to the extent invoiced, reimbursement or payment of
all out-of-pocket expenses required to be reimbursed or paid by the Borrowers
hereunder or under any other Loan Document.

(e) All requisite Governmental Authorities shall have approved or consented to
the Transactions to the extent required (and such approvals shall be in full
force and effect) and there shall be no action, actual or threatened, before any
Governmental Authority or arbitrator that (a) has a reasonable likelihood of
restraining, preventing or imposing burdensome conditions on the Transactions or
(b) could reasonably be expected to result in a Material Adverse Effect.

(f) (i) El Paso and its Subsidiaries shall have outstanding no Indebtedness for
borrowed money or preferred stock other than (A) Indebtedness of El Paso’s
Subsidiaries permitted pursuant to Section 6.01, (B) Indebtedness created
hereunder, (C) the Senior Unsecured Notes and (D) the Existing Indebtedness and
(ii) the Trustee shall have outstanding no Indebtedness or other obligations
(contingent or otherwise) other than (A) any Loans made or Letters of Credit
issued hereunder and (B) obligations under the Purchase Contract and contractual
obligations incidental thereto.

(g) The Lenders shall have received, to the extent requested, all documentation
and other information required by regulatory authorities under applicable “know
your customer” and anti-money laundering rules and regulations, including the
USA Patriot Act.

ARTICLE V

Affirmative Covenants

Each of El Paso and, subject to Section 10.19, the Trustee covenants and agrees
with each Lender that so long as this Agreement shall remain in effect and until
the Commitments have been terminated and the principal of and interest on each
Loan, all Fees and all other expenses or amounts payable under any Loan Document
shall have been paid in full and all Letters of Credit have been canceled or
have expired and all

 

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amounts drawn thereunder have been reimbursed in full (or sufficient cash
collateral has been deposited with the Administrative Agent in an amount equal
to the then outstanding L/C Exposure), unless the Required Lenders shall
otherwise consent in writing, each of the Borrowers will, and El Paso will cause
each of the Subsidiaries to:

SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its
legal existence.

(b) Do or cause to be done all things necessary to obtain, preserve, renew,
extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated; comply
in all material respects with all applicable laws, rules, regulations and
decrees and orders of any Governmental Authority, whether now in effect or
hereafter enacted; and at all times maintain and preserve all property material
to the conduct of such business and keep such property in good repair, working
order and condition and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times; except in each case where the failure to do so
could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.02. Insurance. With respect to El Paso, keep its insurable properties
and the insurable properties of the Trustee adequately insured at all times by
financially sound and reputable insurers; maintain such other insurance, to such
extent and against such risks, including nuclear hazard, fire and other risks
insured against by extended coverage, as is customary with companies in the same
or similar businesses operating in the same or similar locations, including
public liability insurance (including against nuclear energy hazards to the full
limit of liability under Federal law) against claims for personal injury or
death or property damage occurring upon, in, about or in connection with the use
of any properties owned, occupied or controlled by it; and maintain such other
insurance as may be required by law.

SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and other obligations
promptly and in accordance with their terms and pay and discharge promptly when
due all taxes, assessments and governmental charges or levies imposed upon it or
upon its income or profits or in respect of its property, before the same shall
become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise that, if unpaid, might give rise to a Lien
upon such properties or any part thereof; provided, however, that such payment
and discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the applicable Borrower
shall have set aside on its books adequate reserves with respect thereto in
accordance with GAAP and such contest operates to suspend collection of the
contested obligation, tax, assessment or charge and enforcement of a Lien.

 

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SECTION 5.04. Financial Statements, Reports, etc. Furnish to the Administrative
Agent and each Lender:

(a) with respect to El Paso, within 120 days after the end of each fiscal year,
its consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows showing its financial condition as of the
close of such fiscal year and the results of its operations during such year,
all audited by KPMG LLP or other independent public accountants of recognized
national standing and accompanied by an opinion of such accountants (which shall
not be qualified in any material respect) to the effect that such consolidated
financial statements fairly present its financial condition and results of
operations in accordance with GAAP consistently applied;

(b) with respect to El Paso, within 60 days after the end of each of the first
three fiscal quarters of each fiscal year, its consolidated balance sheet and
related statements of operations, stockholders’ equity, and cash flows showing
its financial condition as of the close of such fiscal quarter and the results
of its operations during such fiscal quarter and the then elapsed portion of the
fiscal year, all certified by one of its Financial Officers, as fairly
presenting its financial condition and results of operations on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments;

(c) with respect to El Paso, concurrently with any delivery of financial
statements under sub-paragraph (a) or (b) above, a certificate of a Financial
Officer certifying that no Event of Default or Default has occurred or, if such
an Event of Default or Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto;

(d) with respect to El Paso, promptly after the same become publicly available,
copies of all periodic and other reports, definitive proxy statements filed by
it or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed to its
shareholders;

(e) with respect to the Trustee, concurrently with the delivery thereof to
El Paso, copies of its periodic trust reports;

(f) with respect to El Paso, promptly after El Paso shall have received notice
thereof, notice of any actual or proposed change in the debt rating of the Index
Debt, or any notice that El Paso or any Index Debt shall be placed on
“CreditWatch” or “WatchList” or any similar list maintained by either Rating
Agency, in each case with negative implications;

(g) promptly after the request by any Lender, all documentation and other
information that 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 USA Patriot Act; and

 

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(h) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of such Borrower or any
Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.

SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative Agent
prompt written notice of the following:

(a) any Event of Default or Default, specifying the nature and extent thereof
and the corrective action (if any) taken or proposed to be taken with respect
thereto;

(b) the filing or commencement of any action, suit or proceeding, whether at law
or in equity or by or before any Governmental Authority, against it or, in the
case of El Paso, any Subsidiary that, if adversely determined, could reasonably
be expected to result in a Material Adverse Effect; and

(c) any development that has resulted in, or could reasonably be expected to
result in, a Material Adverse Effect.

SECTION 5.06. Employee Benefits. With respect to El Paso, (a) comply in all
material respects with the applicable provisions of ERISA and the Code and
(b) furnish to the Administrative Agent (i) as soon as possible after, and in
any event within 10 days after any Responsible Officer of El Paso or any ERISA
Affiliate knows or has reason to know that, any ERISA Event has occurred that,
alone or together with any other ERISA Event could reasonably be expected to
result in liability of El Paso in an aggregate amount exceeding $5,000,000 or
requiring payments exceeding $1,000,000 in any year, a statement of a Financial
Officer of El Paso setting forth details as to such ERISA Event and the action,
if any, that El Paso proposes to take with respect thereto.

SECTION 5.07. Maintaining Records; Access to Properties and Inspections. Keep
proper books of record and account in which full, true and correct entries in
conformity with GAAP and all requirements of law are made of all dealings and
transactions in relation to its business and activities. Each Borrower will, and
El Paso will cause each Subsidiary to, permit any representatives designated by
the Administrative Agent or any Lender to visit and inspect the financial
records and the properties of such Borrower or such Subsidiary upon reasonable
notice and at reasonable times and as often as reasonably requested and to make
extracts from and copies of such financial records, and permit any
representatives designated by the Administrative Agent or any Lender to discuss
the affairs, finances and condition of such Borrower or such Subsidiary with the
officers thereof and independent accountants therefor.

SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans made to it and
request the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.

SECTION 5.09. Compliance with Environmental Laws. With respect to El Paso,
comply, and use commercially reasonable efforts to cause all lessees and other

 

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persons occupying its Properties to comply, in all material respects with all
Environmental Laws and Environmental Permits applicable to its operations and
Properties; obtain and renew all material Environmental Permits necessary for
its operations and Properties; and conduct any Remedial Action in substantial
compliance with Environmental Laws.

SECTION 5.10. Further Assurances. El Paso shall cause any Domestic Subsidiary
(other than Finsub) with consolidated total assets at any time equal to or
greater than 10% of El Paso’s consolidated total assets at such time to execute
a guarantee of all the El Paso Obligations pursuant to a Subsidiary Guarantee
Agreement. In furtherance of the foregoing, El Paso shall give prompt notice to
the Administrative Agent of the creation, acquisition or existence of any such
Subsidiary.

SECTION 5.11. Maintenance of Ratings. Use commercially reasonable efforts to
cause at all times Applicable Ratings to be in effect.

ARTICLE VI

Negative Covenants

Each of El Paso and, subject to Section 10.19, the Trustee covenants and agrees
with each Lender that, so long as this Agreement shall remain in effect and
until the Commitments have been terminated and the principal of and interest on
each Loan, all Fees and all other expenses or amounts payable under any Loan
Document have been paid in full and all Letters of Credit have been canceled or
have expired and all amounts drawn thereunder have been reimbursed in full (or
sufficient cash collateral has been deposited with the Administrative Agent in
an amount equal to the then outstanding L/C Exposure), unless the Required
Lenders shall otherwise consent in writing:

SECTION 6.01. Subsidiary Indebtedness. El Paso will not permit any Subsidiary
that is not a Subsidiary Guarantor to incur, create, assume or permit to exist
(collectively, “incur”) any Indebtedness, except:

(a) Indebtedness of any such Subsidiary owed to El Paso or any Subsidiary
Guarantor;

(b) Indebtedness of Finsub incurred pursuant to the Receivables Program
Documents in an aggregate principal amount not in excess of $75,000,000
outstanding at any time; and

(c) Indebtedness of Subsidiaries not otherwise permitted by the foregoing
paragraphs of this Section 6.01; provided that the aggregate principal amount of
all Indebtedness of all such Subsidiaries outstanding under this paragraph (c)
and Indebtedness secured by Liens permitted by Section 6.02(o) shall not exceed
15% of Total Consolidated Capital.

 

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SECTION 6.02. Liens. Neither Borrower will, nor will El Paso permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or assets (including stock or other securities of any person, including any
Subsidiary) now owned or hereafter acquired by it or on any income or revenues
or rights in respect of any thereof, except:

(a) Liens on property or assets of El Paso existing on the date hereof and set
forth in Schedule 6.02; provided that such Liens shall secure only those
obligations which they secure on the date hereof;

(b) Liens to secure the Obligations;

(c) any Lien existing on any Operating Property prior to the acquisition thereof
by El Paso or any Subsidiary to secure Indebtedness assumed by El Paso or any
Subsidiary; provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition and (ii) such Lien does not apply to any other
property or assets of either Borrower or any Subsidiary;

(d) Liens for taxes or assessments by any Governmental Authority not yet due or
which are being contested in compliance with Section 5.03;

(e) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
landlords’, licensors’ or other like Liens arising in the ordinary course of
business and securing obligations that are not due and payable or which are
being contested in compliance with Section 5.03;

(f) pledges and deposits made in the ordinary course of El Paso’s business in
compliance with workmen’s compensation, unemployment insurance and other social
security laws or regulations;

(g) deposits by El Paso to secure the performance of bids, trade contracts
(other than for Indebtedness), leases (other than Capital Lease Obligations),
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;

(h) zoning restrictions, easements, rights-of-way, restrictions on use of real
property or permit or license requirements and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount and do not materially detract from the value of the
property subject thereto or interfere with the ordinary conduct of the
businesses of the Borrowers or any Subsidiary;

(i) Liens to secure Indebtedness incurred by El Paso in connection with the
acquisition or lease by El Paso in the ordinary course of business, after the
date hereof, of furniture, fixtures, equipment and other assets not owned by El
Paso on the date hereof; provided that (i) such Indebtedness shall not be
secured by any Operating Property of El Paso other than the Operating Property
with respect to which such Indebtedness is incurred and (ii) the Lien securing
such Indebtedness shall be created within 90 days of the incurrence of such
Indebtedness;

 

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(j) the Lien of the Mortgage Indenture to secure First Mortgage Bonds in an
aggregate principal amount not to exceed $400,000,000 issued to repurchase,
repay or otherwise refinance the Indebtedness of El Paso under the Senior
Unsecured Notes;

(k) Liens to secure Indebtedness of any person existing at the time such person
is merged into or consolidated with, or such person disposes of all or
substantially all its properties (or those of a division) to, El Paso;

(l) Liens to secure Indebtedness incurred by El Paso to acquire, construct,
develop or substantially repair, alter or improve Operating Property or to
provide funds for any such purpose or for reimbursement of funds previously
expended for any such purpose; provided that such Indebtedness is incurred
contemporaneously with, or within 24 months after, such acquisition or the
completion of construction, development or substantial repair, alteration or
improvement;

(m) Liens to secure, directly or indirectly, El Paso’s obligations with respect
to debt issued by any Governmental Authority, including debt represented by
securities issued by any such Governmental Authority (or providers of credit
enhancement with respect to such securities), including, without limitation, El
Paso’s obligations with respect to industrial development, pollution control or
similar revenue bonds incurred for the purpose of financing all or any part of
the purchase price or the cost of substantially repairing or altering,
constructing, developing or substantially improving El Paso’s Operating
Property;

(n) Liens on the property of Finsub incurred pursuant to the Receivables Program
Documents and Liens in favor of Finsub granted by El Paso with respect to
Receivables purportedly sold to Finsub by El Paso pursuant to the Receivables
Program;

(o) the Lien in favor of the Mortgage Indenture Trustee created by the Mortgage
Indenture and securing the payment of its fees and expenses;

(p) one or more attachments or other similar Liens on assets of El Paso arising
in connection with court proceedings (i) in an aggregate principal amount not in
excess of $10,000,000 (so long as El Paso has set aside adequate reserves
therefor) or (ii) the execution of which has been stayed or which has been
appealed and secured, if necessary, by an appeal bond; provided that in each
case no Event of Default shall result therefrom;

(q) any Lien arising by operation of law on the assets of El Paso in favor of
any Governmental Authority with respect to any franchise, grant, license, permit
or contract; and

(r) Liens that are not otherwise permitted by any of the foregoing paragraphs of
this Section 6.02; provided that, at the time that any such Lien is granted (and
after giving effect thereto), the aggregate outstanding principal amount of all
Indebtedness outstanding under Section 6.01(c) and Indebtedness secured by Liens
permitted by this Section 6.02(r) shall not exceed 15% of Total Consolidated
Capital.

 

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SECTION 6.03. Sale and Lease-Back Transactions. Neither Borrower will, nor will
El Paso permit any Subsidiary to, enter into any arrangement, directly or
indirectly, with any person whereby it shall sell or transfer any property, 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 which it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred (a “Sale Lease-Back Transaction”), except for Sale
Lease-Back Transactions of real property and tangible personal property with an
aggregate fair market value not to exceed $25,000,000 at any time.

SECTION 6.04. Investments, Loans and Advances. Neither Borrower will, nor will
El Paso permit any Subsidiary to, purchase, hold or acquire any capital stock,
evidences of indebtedness or other securities of, make or permit to exist any
loans or advances to, or make or permit to exist any investment or any other
interest in, any other person in excess of $5,000,000 at any time outstanding
(without giving effect to any write-offs or write-downs thereof), except:

(a) investments by El Paso in the capital stock of each Subsidiary; provided
however, that the aggregate cumulative amount of El Paso’s investments in, and
loans and advances to, such Subsidiaries that are not Loan Parties shall not
exceed $20,000,000;

(b) Permitted Investments;

(c) Investments of El Paso existing on the Closing Date and set forth on
Schedule 6.04;

(d) Investments received in connection with the bankruptcy or reorganization of
customers and suppliers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers arising in the ordinary course of
business;

(e) Investments in intercompany loans between and among El Paso and any
Subsidiary Guarantor; and

(f) Investments made in connection with and to facilitate the Receivables
Program.

SECTION 6.05. Mergers, Consolidations and Sales of Assets and Acquisitions.
Neither Borrower will, nor will El Paso permit any Subsidiary to, merge into or
consolidate with any other person, or permit any other person to merge into or
consolidate with it, or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or any substantial part of its
assets (whether now owned or hereafter acquired) or any capital stock of any
Subsidiary, or purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any other
person except that (a) the Trustee may purchase and sell Nuclear Fuel in
accordance with the provisions of the Purchase Contract, (b) El Paso and Finsub
may sell Receivables pursuant to the Receivables Program and (c) El Paso may
sell or

 

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contribute transmission assets to the extent that FERC orders such assets to be
sold in connection with joining a Regional Transmission Organization.

SECTION 6.06. Transactions with Affiliates. Neither Borrower will, nor will
El Paso permit any Subsidiary to, sell or transfer any property or assets to, or
purchase or acquire any property or assets from, or otherwise engage in any
other transactions with, any of its Affiliates (other than its Wholly Owned
Subsidiaries), except that (a) El Paso or any Subsidiary may engage in any of
the foregoing transactions in the ordinary course of business at prices and on
terms and conditions not less favorable to El Paso or such Subsidiary than could
be obtained on an arm’s-length basis from unrelated third parties and
(b) El Paso and Finsub may sell Receivables pursuant to the Receivables Program.

SECTION 6.07. Businesses of Borrowers and Subsidiaries. Neither Borrower will,
nor will El Paso permit any Subsidiary to, engage at any time in any business or
business activity other than (a) with respect to El Paso and the Subsidiaries,
the business conducted by them on the Closing Date and business activities
reasonably incidental thereto, including in the case of Finsub the activities
contemplated in the Receivables Program, and (b) with respect to the Trustee,
purchasing, holding title to, making payments with respect to and selling
Nuclear Fuel pursuant to, and on the terms set forth in, the Trust Agreement and
the Purchase Contract.

SECTION 6.08. Other Agreements. (a) Neither Borrower will, nor will El Paso
permit any Subsidiary to, permit any waiver, supplement, modification,
amendment, termination or release of (i) the Trust Agreement or the Purchase
Contract or (ii) the Receivables Program Documents, in each case to the extent
that any such waiver, supplement, modification, amendment, termination or
release would be adverse to the Lenders in any material respect.

SECTION 6.09. Debt to Capitalization Ratio. El Paso will not permit the ratio of
(i) Total Consolidated Debt to (ii) Total Consolidated Capital as of the last
day of any fiscal quarter to be in excess of 0.65 to 1.00.

SECTION 6.10. Fiscal Year. Neither Borrower will, nor will El Paso permit any
Subsidiary to, change the end of its fiscal year from December 31 to any other
date.

ARTICLE VII

Events of Default

In case of the happening of any of the following events (“Events of Default”):

(a) any representation or warranty made or deemed made in or in connection with
any Loan Document or the borrowings or issuances of Letters of Credit hereunder,
or any representation, warranty, statement or information contained in any

 

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report, certificate, financial statement or other instrument furnished pursuant
to any Loan Document, shall prove to have been false or misleading in any
material respect when so made, deemed made or furnished;

(b) default shall be made in the payment of any principal of any Loan or the
reimbursement with respect to any L/C Disbursement when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;

(c) default shall be made in the payment of any interest on any Loan or any Fee
or L/C Disbursement or any other amount (other than an amount referred to in
(b) above) due under any Loan Document, when and as the same shall become due
and payable, and such default shall continue unremedied for a period of five
Business Days;

(d) default in any material manner shall be made in the due observance or
performance by either Borrower or any Subsidiary of any covenant, condition or
agreement contained in Section 5.01(a), 5.05 or 5.08 or in Article VI;

(e) default shall be made in the due observance or performance by either
Borrower or any Subsidiary of any covenant, condition or agreement contained in
any Loan Document (other than those specified in (b), (c) or (d) above) and such
default shall continue unremedied for a period of 30 days after notice thereof
from the Administrative Agent or any Lender to the Borrowers;

(f) either Borrower or any Subsidiary shall (i) fail to pay any principal or
interest, regardless of amount, due in respect of any Indebtedness in a
principal amount in excess of $10,000,000, when and as the same shall become due
and payable, or (ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or instrument evidencing or
governing any such Indebtedness if the effect of any failure referred to in this
clause (ii) is to cause, or to permit the holder or holders of such Indebtedness
or a trustee on its or their behalf (with or without the giving of notice, the
lapse of time or both) to cause, such Indebtedness to become due prior to its
stated maturity;

(g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of either Borrower or any Subsidiary (other than an Inactive Subsidiary)
or of a substantial part of the property or assets of either Borrower or any
such Subsidiary, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for either
Borrower or any Subsidiary (other than an Inactive Subsidiary) or for a
substantial part of the property or assets of either Borrower or any such
Subsidiary or (iii) the winding-up or liquidation of either Borrower or any
Subsidiary (other than an Inactive Subsidiary); and such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;

 

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(h) either Borrower or any Subsidiary (other than an Inactive Subsidiary) shall
(i) voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or the filing of any
petition described in (g) above, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for either Borrower or any such Subsidiary or for a substantial part of the
property or assets of either Borrower or any such Subsidiary, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors,
(vi) become unable, admit in writing its inability or fail generally to pay its
debts as they become due or (vii) take any action for the purpose of effecting
any of the foregoing;

(i) one or more judgments for the payment of money in an aggregate amount in
excess of $10,000,000 shall be rendered against either Borrower or any
Subsidiary and the same shall remain undischarged for a period of 30 consecutive
days during which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to levy upon assets or properties of
either Borrower or any Subsidiary to enforce any such judgment;

(j) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other such ERISA Events, could reasonably
be expected to result in liability of El Paso and its ERISA Affiliates in an
aggregate amount exceeding $10,000,000 or requires payments exceeding $5,000,000
in any year;

(k) there shall have occurred a Change in Control;

(l) a Purchase Contract Default shall have occurred and be continuing;

then, and in every such event (other than an event with respect to either
Borrower described in paragraph (g) or (h) above), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrowers, take either
or both of the following actions, at the same or different times: (i) terminate
forthwith the Commitments and (ii) declare the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities of each Borrower accrued
hereunder and under any other Loan Document, shall become forthwith due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by each Borrower, anything contained
herein or in any other Loan Document to the contrary notwithstanding; and in any
event with respect to either Borrower described in paragraph (g) or (h) above,
the Commitments shall automatically terminate and the principal of the Loans
then outstanding, together with accrued interest thereon and any unpaid accrued
Fees and all other liabilities of each Borrower accrued hereunder and under any
other Loan

 

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Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by each Borrower, anything contained herein or in any other
Loan Document to the contrary notwithstanding.

ARTICLE VIII

The Administrative Agent

In order to expedite the transactions contemplated by this Agreement, JPMorgan
is hereby appointed to act as Administrative Agent on behalf of the Lenders and
the Issuing Bank. Each of the Lenders and each assignee of any such Lender
hereby irrevocably authorizes the Administrative Agent to take such actions on
behalf of such Lender or assignee or the Issuing Bank and to exercise such
powers as are specifically delegated to the Administrative Agent by the terms
and provisions hereof and of the other Loan Documents, together with such
actions and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders and the Issuing Bank,
without hereby limiting any implied authority, (a) to receive on behalf of the
Lenders and the Issuing Bank all payments of principal of and interest on the
Loans, all payments in respect of L/C Disbursements and all other amounts due to
the Lenders hereunder, and promptly to distribute to each Lender or the Issuing
Bank its proper share of each payment so received; (b) to give notice on behalf
of each of the Lenders to the Borrowers of any Event of Default specified in
this Agreement of which the Administrative Agent has actual knowledge acquired
in connection with its agency hereunder; and (c) to distribute to each Lender
copies of all notices, financial statements and other materials delivered by
either Borrower pursuant to this Agreement or the other Loan Documents as
received by the Administrative Agent.

Neither the Administrative Agent nor any of its directors, officers, employees
or agents shall be liable as such for any action taken or omitted by any of them
except for its or his own gross negligence or willful misconduct, or be
responsible for any statement, warranty or representation herein or the contents
of any document delivered in connection herewith, or be required to ascertain or
to make any inquiry concerning the performance or observance by each Borrower or
any other Loan Party of any of the terms, conditions, covenants or agreements
contained in any Loan Document. The Administrative Agent shall not be
responsible to the Lenders for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement, any other Loan Document, or
any other document, instrument or agreement. The Administrative Agent shall in
all cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Lenders and, except as
otherwise specifically provided herein, such instructions and any action or
inaction pursuant thereto shall be binding on all the Lenders. The
Administrative Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by the proper person or
persons. Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall have any responsibility to either Borrower on account
of the

 

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failure of or delay in performance or breach by any Lender or the Issuing Bank
of any of its obligations hereunder or to any Lender or the Issuing Bank on
account of the failure of or delay in performance or breach by any other Lender
or the Issuing Bank or either Borrower of any of their respective obligations
hereunder or under any other Loan Document or in connection herewith or
therewith. The Administrative Agent may execute any and all duties hereunder by
or through agents or employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters arising hereunder and
shall not be liable for any action taken or suffered in good faith by it in
accordance with the advice of such counsel.

The Lenders hereby acknowledge that (a) the Administrative Agent shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing and (b) the Administrative Agent shall
not be under any duty to take any discretionary action permitted to be taken by
it pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders.

Subject to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by notifying the
Lenders and the Borrowers. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor reasonably satisfactory to Borrower. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent which shall be a
bank with an office in New York, New York, having a combined capital and surplus
of at least $500,000,000 or an Affiliate of any such bank. Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 10.05 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.

With respect to the Loans made by it hereunder, each Administrative Agent in its
individual capacity and not as Administrative Agent shall have the same rights
and powers as any other Lender and may exercise the same as though it were not
an Administrative Agent, and the Administrative Agent and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of business
with either Borrower or any Subsidiary or other Affiliates thereof as if it were
not an Administrative Agent.

Each Lender agrees (a) to reimburse the Administrative Agent, on demand, in the
amount of its Applicable Percentage of any expenses incurred for the benefit of
the Lenders by the Administrative Agent, including counsel fees and compensation
of agents and employees paid for services rendered on behalf of the Lenders,
that shall not have been reimbursed by the Borrowers and (b) to indemnify and
hold harmless the Administrative Agent and any of its directors, officers,
employees or agents, on demand,

 

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in the amount of such pro rata share, from and against any and all liabilities,
taxes, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by or asserted against it in its capacity as Administrative
Agent or any of them in any way relating to or arising out of this Agreement or
any other Loan Document or any action taken or omitted by it or any of them
under this Agreement or any other Loan Document, to the extent the same shall
not have been reimbursed by the Borrowers, provided that no Lender shall be
liable to the Administrative Agent or any such other indemnified person for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are determined by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the Administrative Agent or any of its directors,
officers, employees or agents.

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender 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 or any other Loan Document, any
related agreement or any document furnished hereunder or thereunder.

ARTICLE IX

Guarantee

As a result of the arrangements contemplated by the Trust Agreement and the
Purchase Contract for the financing by the Trustee of Nuclear Fuel, El Paso
acknowledges that it will derive substantial benefit from the commitments of the
Lenders to make Loans to the Trustee and the commitment of the Issuing Bank to
issue Letters of Credit for the account of the Trustee. To induce the Lenders to
make the Loans and the Issuing Bank to issue Letters of Credit and to enter into
this Agreement, El Paso agrees with each Lender, the Issuing Bank and the
Administrative Agent (each such person, together with its successors and
assigns, a “Guaranteed Party”) as follows:

SECTION 9.01. Guarantee. El Paso unconditionally guarantees, as a primary
obligor and not merely as a surety, (a) the due and punctual payment of (i) the
principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans made to the Trustee, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each
payment required to be made by the Trustee under this Agreement in respect of
any Letter of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to provide cash
collateral and (iii) all other monetary obligations, including fees, costs,

 

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expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Trustee to the
Guaranteed Parties under this Agreement and the other Loan Documents and (b) the
due and punctual performance of all covenants, agreements, obligations and
liabilities of the Trustee under or pursuant to this Agreement and the other
Loan Documents (all the monetary and other obligations referred to in the
preceding clauses (a) and (b) being collectively called the “Trust
Obligations”). El Paso further agrees that the Trust Obligations may be extended
or renewed, in whole or in part, without notice to or further assent from it,
and that it will remain bound upon its guarantee notwithstanding any extension
or renewal of any Trust Obligation.

SECTION 9.02. Obligations Not Waived. To the fullest extent permitted by
applicable law, El Paso waives presentment to, demand of payment from and
protest to the Trustee of any of the Trust Obligations, and also waives notice
of acceptance of its guarantee and notice of protest for nonpayment. To the
fullest extent permitted by applicable law, the obligations of El Paso hereunder
shall not be affected by (a) the failure of the Administrative Agent or any
other Guaranteed Party to assert any claim or demand or to enforce or exercise
any right or remedy against the Trustee or (b) any rescission, waiver, amendment
or modification of, or any release from any of the terms or provisions of this
Agreement, any other Loan Document, any Guarantee or any other agreement,
including with respect to any other guarantor of the Obligations.

SECTION 9.03. Security. El Paso authorizes the Administrative Agent and each of
the other Guaranteed Parties to (a) take and hold security for the payment of
this guarantee and the Trust Obligations and exchange, enforce, waive and
release any such security, (b) apply such security and direct the order or
manner of sale thereof as they in their sole discretion may determine and
(c) release or substitute any one or more endorsees, other guarantors or other
obligors.

SECTION 9.04. Guarantee of Payment. El Paso further agrees that its guarantee
constitutes a guarantee of payment when due and not of collection, and waives
any right to require that any resort be had by the Administrative Agent or any
other Guaranteed Party to any of the security held for payment of the Trust
Obligations or to any balance of any deposit account or credit on the books of
the Administrative Agent or any other Guaranteed Party in favor of the Trustee
or any other person.

SECTION 9.05. No Discharge or Diminishment of Guarantee. The obligations of
El Paso hereunder shall not be subject to any reduction, limitation, impairment
or termination for any reason (other than the payment in full in cash of the
Trust Obligations), including any claim of waiver, release, surrender,
alteration or compromise of any of the Trust Obligations, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Trust Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of El Paso hereunder shall not be discharged or
impaired or otherwise affected by the failure of the Administrative Agent or any
other

 

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Guaranteed Party to assert any claim or demand or to enforce any remedy under
this Agreement, any other Loan Document or any other agreement, by any waiver or
modification of any provision of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Trust Obligations, or by any
other act or omission that may or might in any manner or to any extent vary the
risk of El Paso or that would otherwise operate as a discharge of El Paso as a
matter of law or equity (other than the payment in full in cash of all the Trust
Obligations).

SECTION 9.06. Defenses of the Trustee Waived. To the fullest extent permitted by
applicable law, El Paso waives any defense based on or arising out of any
defense of the Trustee or the unenforceability of the Trust Obligations or any
part thereof from any cause, or the cessation from any cause of the liability of
the Trustee, other than the payment in full in cash of the Trust Obligations.
The Administrative Agent and the other Guaranteed Parties may, at their
election, foreclose on any security held by one or more of them by one or more
judicial or nonjudicial sales, accept an assignment of any such security in lieu
of foreclosure, compromise or adjust any part of the Trust Obligations, make any
other accommodation with the Trustee or any other guarantor or exercise any
other right or remedy available to them against the Trustee or any other
guarantor, without affecting or impairing in any way the liability of El Paso
hereunder except to the extent the Trust Obligations have been fully, finally
paid in cash. To the fullest extent permitted by applicable law, El Paso waives
any defense arising out of any such election even though such election operates,
pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of El Paso against the
Trustee or any other guarantor, as the case may be, or any security.

SECTION 9.07. Agreement to Pay; Subrogation. In furtherance of the foregoing and
not in limitation of any other right that the Administrative Agent or any other
Guaranteed Party has at law or in equity against El Paso by virtue hereof, upon
the failure of the Trustee to pay any Trust Obligation when and as the same
shall become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, El Paso hereby promises to and will forthwith pay, or
cause to be paid, to the Administrative Agent or such other Guaranteed Party as
designated thereby in cash the amount of such unpaid Trust Obligations. Upon
payment by El Paso of any sums to the Administrative Agent or any Guaranteed
Party as provided above, all rights of El Paso against the Trustee arising as a
result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subordinate and junior in right
of payment to the prior payment in full in cash of all the Trust Obligations. In
addition, any indebtedness of the Trustee now or hereafter held by El Paso is
hereby subordinated in right of payment to the prior payment in full of the
Trust Obligations. If any amount shall erroneously be paid to El Paso on account
of (i) such subrogation, contribution, reimbursement, indemnity or similar right
or (ii) any such indebtedness of the Trustee, such amount shall be held in trust
for the benefit of the Guaranteed Parties and shall forthwith be paid to the
Administrative Agent to be credited against the payment of the Trust
Obligations, whether matured or unmatured, in accordance with the terms of the
Loan Documents.

 

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SECTION 9.08. Information. El Paso assumes all responsibility for being and
keeping itself informed of the Trustee’s financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Trust
Obligations and the nature, scope and extent of the risks that El Paso assumes
and incurs hereunder, and agrees that none of the Administrative Agent or the
other Guaranteed Parties will have any duty to advise El Paso of information
known to it or any of them regarding such circumstances or risks.

SECTION 9.09. Termination. The guarantee made hereunder (a) shall terminate when
all the Trust Obligations have been indefeasibly paid in full and the Lenders
have no further commitment to lend to the Trustee under this Agreement, the
Trustee L/C Exposure has been reduced to zero and the Issuing Bank has no
further obligation to issue Letters of Credit under this Agreement and (b) shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Trust Obligation is rescinded or must
otherwise be restored by any Guaranteed Party or El Paso upon the bankruptcy or
reorganization of the Trustee, El Paso or otherwise.

ARTICLE X

Miscellaneous

SECTION 10.01. Notices. Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:

(a) if to either Borrower, to it in care of El Paso Electric Company, Stanton
Tower, 100 N. Stanton, El Paso, Texas 79901, Attention of: Stephen P. Busser,
Treasurer (Telecopy No. (915) 521 4729);

(b) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., Loan and
Agency Services Group, 1111 Fannin, 10th Floor, Houston, TX 77002, Attention
of: Maria Arredondo (Telecopy No. (713) 750 2358), with a copy to JPMorgan Chase
Bank, N.A., at 201 E. Main, 3rd Floor, El Paso, TX 79901, Attention of: Paul S.
Condie (Telecopy No. (915) 546 6575); and

(c) if to a Lender, to it at its address (or telecopy number) set forth on
Schedule 2.01 or in the Assignment and Acceptance pursuant to which such Lender
shall have become a party hereto.

All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this

 

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Section 10.01 or in accordance with the latest unrevoked direction from such
party given in accordance with this Section 10.01.

SECTION 10.02. Survival of Agreement. All covenants, agreements, representations
and warranties made by each Borrower herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied
upon by the Lenders and the Issuing Bank and shall survive the making by the
Lenders of the Loans and the issuance of Letters of Credit by the Issuing Bank,
regardless of any investigation made by the Lenders or the Issuing Bank or on
their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any Fee or any other amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid or any Letter of Credit is outstanding (for which sufficient cash
collateral has not been deposited with the Administrative Agent) and so long as
the Commitments have not been terminated. The provisions of Sections 2.12
(except as expressly limited therein), 2.14, 2.18 and 10.05 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the expiration
of any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, any Lender or the Issuing
Bank.

SECTION 10.03. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrowers and the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto.

SECTION 10.04. Successors and Assigns. (a) Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of each Borrower, the Administrative Agent, the
Issuing Bank or the Lenders that are contained in this Agreement shall bind and
inure to the benefit of their respective successors and assigns.

(b) Each Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate of a Lender, (x) El Paso must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld) and (y) the amount
of the Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 (or, if less, the entire remaining amount of such Lender’s
Commitment), provided further that during the continuation of an Event of
Default, the consent of El Paso shall not be required for such assignment,
(ii) all assignments shall require the prior written consent of the
Administrative Agent and the Issuing Bank (which consents

 

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shall not be unreasonably withheld), (iii) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Lender’s rights and
obligations under this Agreement, (iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, and (v) the assignee,
if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire. Upon acceptance and recording pursuant to
paragraph (e) of this Section 10.04, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof, (A) the assignee thereunder shall be
a party hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this Agreement
and (B) the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an 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 2.12 (except as expressly
limited therein), 2.14, 2.18 and 10.05, as well as to any Fees accrued for its
account and not yet paid).

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that its
Commitment, and the outstanding balance of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance, (ii) except as set forth in (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrowers or the performance or
observance by either Borrower of any of its obligations under this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the most recent financial statements referred to in Section 3.05 or delivered
pursuant to Section 5.04 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in

 

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accordance with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.

(d) The Administrative Agent, acting for this purpose as an agent of the
Borrowers, shall maintain at one of its offices in The City of New York a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive and the Borrowers, the Administrative Agent, the Issuing Bank and the
Lenders may treat each person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by each Borrower, the Issuing Bank and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.

(e) Upon its receipt of a duly completed Assignment and Acceptance executed by
an assigning Lender and an assignee, an Administrative Questionnaire completed
in respect of the assignee (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b)
above and, if required, the written consent of each Borrower, the Issuing Bank
and the Administrative Agent to such assignment, the Administrative Agent shall
(i) accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Lenders and
the Issuing Bank. No assignment shall be effective unless it has been recorded
in the Register as provided in this paragraph (e).

(f) Each Lender may without the consent of the Borrowers, the Issuing Bank or
the Administrative Agent sell participation interests to one or more banks or
other entities in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it); provided, however, that (i) such Lender’s obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the
participating banks or other entities shall be entitled to the benefit of the
cost protection provisions contained in Sections 2.12, 2.14 and 2.18 to the same
extent as if they were Lenders, provided, however, the right of each holder of a
participation to receive payment under such sections shall be limited to the
lesser of (a) the amounts actually incurred by such holder for which payment is
provided under said sections and (b) the amounts that would have been payable
under said sections by the applicable Borrower to the Lender granting the
participation to such holder had such participation not been granted, and
(iv) the Borrowers, the Administrative Agent, the Issuing Bank and the Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrowers relating to
the Loans or L/C Disbursements and to approve any amendment, modification or
waiver of any provision of this Agreement (other than amendments, modifications
or waivers decreasing any fees payable hereunder or the amount of principal of
or the rate at which interest is payable on the Loans, extending any scheduled
principal payment date

 

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or date fixed for the payment of interest on the Loans or increasing or
extending the Commitments).

(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 10.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers; provided that, prior to any such disclosure of
information designated by the Borrowers as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to
Section 10.16.

(h) Any Lender may at any time assign all or any portion of its rights under
this Agreement to a Federal Reserve Bank to secure extensions of credit by such
Federal Reserve Bank to such Lender; provided that no such assignment shall
release a Lender from any of its obligations hereunder or substitute any such
Bank for such Lender as a party hereto. In order to facilitate such an
assignment to a Federal Reserve Bank, each Borrower shall, at the request of the
assigning Lender, duly execute and deliver to the assigning Lender a promissory
note or notes evidencing the Loans made to such Borrower by the assigning Lender
hereunder.

(i) Neither Borrower shall assign or delegate any of its rights or duties
hereunder without the prior written consent of the Administrative Agent, the
Issuing Bank and each Lender, and any attempted assignment without such consent
shall be null and void.

(j) In the event that S&P, Moody’s and Thompson’s BankWatch (or InsuranceWatch
Ratings Service, in the case of Lenders that are insurance companies (or Best’s
Insurance Reports, if such insurance company is not rated by Insurance Watch
Ratings Service)) shall, after the date that any Lender becomes a Lender,
downgrade the long-term certificate of deposit ratings of such Lender, and the
resulting ratings shall be below BBB-, Baa3 and C (or BB, in the case of a
Lender that is an insurance company (or B, in the case of an insurance company
not rated by InsuranceWatch Ratings Service)), then the Issuing Bank shall have
the right, but not the obligation, at its own expense, upon notice to such
Lender and the Administrative Agent, to replace (or to request the Borrowers to
use their reasonable efforts to replace) such Lender with an assignee (in
accordance with and subject to the restrictions contained in paragraph (b)
above), and such Lender hereby agrees to transfer and assign without recourse
(in accordance with and subject to the restrictions contained in paragraph (b)
above) all its interests, rights and obligations in respect of its Commitment to
such assignee; provided, however, that (i) no such assignment shall conflict
with any law, rule and regulation or order of any Governmental Authority and
(ii) the Issuing Bank or such assignee, as the case may be, shall pay to such
Lender in immediately available funds on the date of such assignment the
principal of and interest accrued to the date of payment on the Loans made by
such Lender hereunder and all other amounts accrued for such Lender’s account or
owed to it hereunder.

 

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SECTION 10.05. Expenses; Indemnity. (a) Each Borrower jointly and severally
agrees to pay all reasonable out-of-pocket expenses incurred by the
Administrative Agent and the Issuing Bank in connection with the syndication of
the credit facilities provided for herein and the preparation and administration
of this Agreement and the other Loan Documents or in connection with any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions hereby or thereby contemplated shall be
consummated) or incurred by the Administrative Agent or any Lender in connection
with the enforcement or protection of its rights in connection with this
Agreement and the other Loan Documents or in connection with the Loans made or
Letters of Credit issued hereunder, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Moore LLP, counsel for the Administrative
Agent, and, in connection with any such enforcement or protection, the
reasonable fees, charges and disbursements of any other counsel for the
Administrative Agent or any Lender.

(b) Each Borrower jointly and severally agrees to indemnify the Administrative
Agent, each Lender and the Issuing Bank, each Affiliate of any of the foregoing
persons and each of their respective directors, officers, employees and agents
(each such person being called an “Indemnitee”) against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees, charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
contemplated thereby, (ii) the use of the proceeds of the Loans or issuance of
Letters of Credit, (iii) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnitee is a party
thereto, (iv) any actual or alleged presence or Release of Hazardous Materials
on any property owned or operated by either Borrower or any Subsidiary, or any
Environmental Claim related in any way to either Borrower or any Subsidiary or
(v) any strict liability or liability without fault or other liability of an
owner or vendor relating in any way to the Nuclear Fuel, whether arising out of
statute, judicial decision or otherwise; provided that such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnitee.

(c) The provisions of this Section 10.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Administrative Agent, any Lender or the Issuing Bank. All amounts due
under this Section 10.05 shall be payable on written demand therefor.

 

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SECTION 10.06. Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Lender is hereby authorized at any time and from time to
time, to the extent not prohibited by applicable law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender to or for
the credit or the account of either Borrower against any of and all the
Obligations now or hereafter existing under this Agreement and the other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured. The rights of each Lender under this
Section 10.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.

SECTION 10.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN LETTERS OF CREDIT) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES
DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED,
THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS MOST RECENTLY PUBLISHED
AND IN EFFECT, ON THE DATE SUCH LETTER OF CREDIT WAS ISSUED, BY THE
INTERNATIONAL CHAMBER OF COMMERCE (THE “UNIFORM CUSTOMS”) AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.

SECTION 10.08. Waivers; Amendment. (a) No failure or delay of the Administrative
Agent, any Lender or the Issuing Bank in exercising any power or right hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by either Borrower therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice or demand on the Borrowers in any case shall entitle
either Borrower to any other or further notice or demand in similar or other
circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Borrowers and the Required Lenders; provided, however, that no such
agreement shall (i) decrease the principal amount of, or extend the maturity of
or any scheduled principal payment date or date for the payment of any interest
on any Loan or

 

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any date for reimbursement of an L/C Disbursement, or waive or excuse any such
payment or any part thereof, or decrease the rate of interest on any Loan or L/C
Disbursement, without the prior written consent of each Lender directly
adversely affected thereby, (ii) increase or extend the Commitment of any Lender
without the prior written consent of such Lender, (iii) decrease the Commitment
Fees or L/C Participation Fees of any Lender, or extend the date of payment of
such fees, without the prior written consent of such Lender or (iv) amend or
modify the pro rata sharing requirements of Section 2.15, the provisions of this
Section 10.08 or Section 10.04(i), the definition of the term “Required
Lenders”, release El Paso from its guarantee hereunder or release any Subsidiary
from any guarantee of the El Paso Obligations, without the prior written consent
of each Lender; provided further, however, that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent or
the Issuing Bank hereunder or under any other Loan Document without the prior
written consent of the Administrative Agent or the Issuing Bank, respectively.

SECTION 10.09. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan or L/C
Disbursement, together with all fees, charges and other amounts which are
treated as interest on such Loan or L/C Disbursement under applicable law
(collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum
Rate”) which may be contracted for, charged, taken, received or reserved by the
Lender holding such Loan or the Issuing Bank in accordance with applicable law,
the rate of interest payable in respect of such Loan or L/C Disbursement
hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan or L/C Disbursement but
were not payable as a result of the operation of this Section 10.09 shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or L/C Disbursements or periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender; provided that at any time Texas law shall
establish the Maximum Rate, the Maximum Rate shall be the “weekly ceiling”
(formerly known as the indicated (weekly) rate ceiling in Article 1.04,
Subtitle 1, Title 79, of the Revised Civil Statutes of Texas, as amended)
described in and computed in accordance with Chapter 303 of the Texas Finance
Code, as amended; provided further that, to the extent permitted by such
Article, the Administrative Agent may from time to time by notice to the
Borrower revise the election of such interest rate ceiling as such ceiling
affects then current or future balances of the Loans.

SECTION 10.10. Entire Agreement. THIS AGREEMENT, THE FEE LETTER AND THE OTHER
LOAN DOCUMENTS CONSTITUTE THE ENTIRE CONTRACT BETWEEN THE PARTIES RELATIVE TO
THE SUBJECT MATTER HEREOF. ANY OTHER PREVIOUS AGREEMENT AMONG THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF IS SUPERSEDED BY THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS. NOTHING IN THIS AGREEMENT OR IN THE OTHER LOAN DOCUMENTS,
EXPRESSED OR IMPLIED, IS INTENDED TO CONFER UPON

 

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ANY PARTY OTHER THAN THE PARTIES HERETO AND THERETO ANY RIGHTS, REMEDIES,
OBLIGATIONS OR LIABILITIES UNDER OR BY REASON OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS.

SECTION 10.11. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.11.

SECTION 10.12. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

SECTION 10.13. Counterparts. This Agreement may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 10.03.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.

SECTION 10.14. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 10.15. Jurisdiction; Consent to Service of Process. (a) Each Borrower
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan

 

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Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent, the Issuing Bank
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or the other Loan Documents against either Borrower or its
respective properties in the courts of any jurisdiction.

(b) Each Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the other Loan Documents in any New York
State or Federal court. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 10.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

SECTION 10.16. Confidentiality. The Administrative Agent, the Issuing Bank and
each of the Lenders agrees to keep confidential (and to use its best efforts to
cause its respective agents and representatives to keep confidential) the
Information (as defined below) and all copies thereof, extracts therefrom and
analyses or other materials based thereon, except that the Administrative Agent,
the Issuing Bank or any Lender shall be permitted to disclose Information (a) to
such of its respective officers, directors, employees, agents, affiliates and
representatives as need to know such Information, (b) to the extent requested by
any regulatory authority, (c) to the extent otherwise required by applicable
laws and regulations or by any subpoena or similar legal process, (d) in
connection with any suit, action or proceeding relating to the enforcement of
its rights hereunder or under the other Loan Documents, (e) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 10.16 or (ii) becomes available to the Administrative Agent, the
Issuing Bank or any Lender on a nonconfidential basis from a source other than
the Borrowers, or (f) to the extent permitted by Section 10.04(g). For the
purposes of this Section 10.16, “Information” shall mean all financial
statements, certificates, reports, agreements and information (including all
analyses, compilations and studies prepared by the Administrative Agent, the
Issuing Bank or any Lender based on any of the foregoing) that are received from
the Borrowers and related to the Borrowers, any shareholder of El Paso or any
employee, customer or supplier of either Borrower, other than any of the
foregoing that were available to the Administrative Agent, the Issuing Bank or
any Lender on a nonconfidential basis prior to its disclosure thereto by either
Borrower, and which are in the case of Information provided after the date
hereof, clearly identified at the time of

 

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delivery as confidential. The provisions of this Section 10.16 shall remain
operative and in full force and effect regardless of the expiration and term of
this Agreement.

SECTION 10.17. Texas Revolving Credit Statute. If, notwithstanding the
provisions of Section 10.07, Texas law shall be applied by any Governmental
Authority to this Agreement, the other Loan Documents or the obligations of
either Borrower hereunder or thereunder, each Borrower hereby agrees that the
provisions of Chapter 346 of the Texas Finance Code, as amended (formerly found
in Chapter 15 of Subtitle 3, Title 79, of the Revised Civil Statutes of Texas,
1925, as amended), shall not govern or in any manner apply to its obligations
hereunder or thereunder.

SECTION 10.18. No Recourse; Multiple Capacities. (a) Wherever in this Agreement
or the other Loan Documents JPMorgan has undertaken any obligations in its
capacity as Trustee, it has done so solely in such capacity and not in its
individual capacity. JPMorgan shall not be liable for the obligations or
liabilities of the Trustee hereunder or under any other Loan Document, except to
the extent such obligations or liabilities result from JPMorgan’s gross
negligence or willful misconduct.

(b) Each party to this Agreement (i) acknowledges that Section 6.1 of the Trust
Agreement imposes limitations on the liability of JPMorgan in its capacity as
Trustee, (ii) acknowledges that JPMorgan, in addition to acting in its capacity
as Trustee, will be party to the Loan Documents in various other capacities,
including in its capacity as Administrative Agent, Issuing Bank and a Lender,
(iii) hereby consents to JPMorgan’s acting in such capacities and (iv) hereby
waives any claim of fiduciary duty or conflict of interest arising out of or
relating to JPMorgan’s serving in such other capacities.

SECTION 10.19. Limited Representations, Warranties and Covenants of Trustee.
With respect to representations and warranties contained in Article III, the
affirmative covenants contained in Article V and the negative covenants
contained in Article VI, it is understood and agreed that (a) the Trustee has
made no independent inquiry as to (i) the assets placed in trust into the
Rio Grande Resources Trust II or (ii) any facts concerning El Paso and the
Subsidiaries or as to the status or condition of any of their assets or any
disclosures made by them and (b) the Trustee’s representations, warranties and
covenants are limited to itself and those matters within its control. The
Trustee has no actual knowledge of any facts that would indicate that any such
representations or warranties by El Paso or the Subsidiaries are untrue.

SECTION 10.20. USA Patriot Act Notice. Each Lender and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies the Borrowers that
pursuant to the requirements of the USA Patriot Act, it is required to obtain,
verify and record information that identifies the Borrowers, which information
includes the name and address of the Borrowers and other information that will
allow such Lender or the Administrative Agent, as applicable, to identify the
Borrowers in accordance with the USA Patriot Act.

 

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

 

EL PASO ELECTRIC COMPANY, by  

/s/ Steven P. Busser

Name:   Steven P. Busser Title:   VP-Reg, Affairs & Treasurer

 

JPMORGAN CHASE BANK, N.A., not in its individual capacity, but solely in its
capacity as Trustee, by  

 

Name:   Title:  

 

JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent and Issuing
Bank, by  

 

Name:   Title:  

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

 

EL PASO ELECTRIC COMPANY, by  

 

Name:   Title:  

 

JPMORGAN CHASE BANK, N.A., not in its individual capacity, but solely in its
capacity as Trustee, by  

/s/ Cary W. Gilliam

Name:   CARY W. GILLIAM Title:   VICE PRESIDENT

 

JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent and Issuing
Bank, by  

 

Name:   Title:  

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

 

EL PASO ELECTRIC COMPANY, by  

 

Name:   Title:  

 

JPMORGAN CHASE BANK, N.A., not in its individual capacity, but solely in its
capacity as Trustee,

by

 

 

Name:

 

Title:

 

 

JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent and Issuing
Bank, by  

/s/ Paul S. Condie

Name:   Paul S. Condie Title:   SVP

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UNION BANK OF CALIFORNIA, N.A., as Syndication Agent, by  

/s/ Dennis G. Blank

Name:   Dennis G. Blank Title:   Vice President

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SIGNATURE PAGE TO THE

EL PASO ELECTRIC COMPANY

CREDIT AGREEMENT

Bank of Communications, New York Branch

as Lender,

by  

/s/ Shelley He

Name:   Shelley He Title:   Deputy General Manager

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SIGNATURE PAGE TO THE

EL PASO ELECTRIC COMPANY

CREDIT AGREEMENT

BANK HAPOALIM B.M.,

as Lender,

by  

/s/ James P. Surless

Name:   JAMES P. SURLESS Title:   VICE PRESIDENT

 

by  

/s/ Charles Mclaughlin

Name:   CHARLES MCLAUGHLIN Title:   SENIOR VICE PRESIDENT

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SIGNATURE PAGE TO THE

EL PASO ELECTRIC COMPANY

CREDIT AGREEMENT

The Bank of New York.,

as Lender,

by  

/s/ Craig J. Anderson

Name:   Craig J. Anderson Title:   Vice President

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SIGNATURE PAGE TO THE

EL PASO ELECTRIC COMPANY

CREDIT AGREEMENT

CITICORP NORTH AMERICA,INC..,

as Lender

By  

/s/ Stuart J. Glen

Name:   Stuart J. Glen Title:   Director

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SIGNATURE PAGE TO THE

EL PASO ELECTRIC COMPANY

CREDIT AGREEMENT

UNION BANK OF CALIFORNIA, N.A..,

as Lender,

by  

/s/ Dennis G. Blank

Name:   Dennis G. Blank Title:   Vice President

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SIGNATURE PAGE TO THE

EL PASO ELECTRIC COMPANY

CREDIT AGREEMENT

US Bank national association,

as Lender,

By  

/s/ Kevin S. McFadden

Name:   Kevin S. McFadden Title:   Vice President 612-303-3755