Exhibit 10.1

 

EXECUTION COPY

 

U.S. $500,000,000

FIVE-YEAR CREDIT AGREEMENT

Dated as of April 9, 2013

 

among

 

ARIZONA PUBLIC SERVICE COMPANY,

as Borrower,

 

THE LENDERS PARTY HERETO,

 

BARCLAYS BANK PLC,

as Agent and Issuing Bank,

 

THE ROYAL BANK OF SCOTLAND plc

as Syndication Agent,

 

THE ROYAL BANK OF SCOTLAND plc,

BANK OF AMERICA, N.A.,

JPMORGAN CHASE BANK, N.A.

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Issuing Banks,

 

BANK OF AMERICA, N.A.,

JPMORGAN CHASE BANK, N.A.

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agents,

 

BARCLAYS BANK PLC

RBS SECURITIES INC.

J.P. MORGAN SECURITIES LLC

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

and

WELLS FARGO SECURITIES, LLC,

as Joint Lead Arrangers and Joint Book Runners

 

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TABLE OF CONTENTS

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.01

Certain Defined Terms

1

Section 1.02

Other Interpretive Provisions

20

Section 1.03

Accounting Terms

21

Section 1.04

Rounding

21

Section 1.05

Times of Day

21

 

 

 

ARTICLE II

 

AMOUNTS AND TERMS OF THE ADVANCES AND

LETTERS OF CREDIT

 

Section 2.01

The Revolving Advances and Letters of Credit

21

Section 2.02

Making the Revolving Advances

22

Section 2.03

Letters of Credit

24

Section 2.03A

Swingline Advances

31

Section 2.04

Fees

33

Section 2.05

Optional Termination or Reduction of the Commitments

34

Section 2.06

Repayment of Advances

35

Section 2.07

Interest on Advances

35

Section 2.08

Interest Rate Determination

37

Section 2.09

Optional Conversion of Revolving Advances

37

Section 2.10

Prepayments of Advances

38

Section 2.11

Increased Costs

39

Section 2.12

Illegality

40

Section 2.13

Payments and Computations

41

Section 2.14

Taxes

42

Section 2.15

Sharing of Payments, Etc.

46

Section 2.16

Evidence of Debt

46

Section 2.17

Use of Proceeds

47

Section 2.18

Increase in the Aggregate Revolving Credit Commitments

47

Section 2.19

Affected Lenders

49

Section 2.20

Replacement of Lenders

51

 

 

 

ARTICLE III

 

CONDITIONS PRECEDENT

 

Section 3.01

Conditions Precedent to Effectiveness

52

 

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Section 3.02

Conditions Precedent to Each Credit Extension and Commitment Increase

53

Section 3.03

Determinations Under Section 3.01

54

 

 

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

Section 4.01

Representations and Warranties of the Borrower

54

 

 

 

ARTICLE V

 

COVENANTS OF THE BORROWER

 

Section 5.01

Affirmative Covenants

58

Section 5.02

Negative Covenants

61

Section 5.03

Financial Covenant

63

 

 

 

ARTICLE VI

 

EVENTS OF DEFAULT

 

Section 6.01

Events of Default

63

Section 6.02

Actions in Respect of Letters of Credit upon Default

66

 

 

 

ARTICLE VII

 

THE AGENT

 

Section 7.01

Appointment and Authority

66

Section 7.02

Rights as a Lender

67

Section 7.03

Exculpatory Provisions

67

Section 7.04

Reliance by Agent

68

Section 7.05

Delegation of Duties

68

Section 7.06

Resignation of Agent

68

Section 7.07

Non-Reliance on Agent and Other Lenders

69

Section 7.08

No Other Duties, Etc.

69

Section 7.09

Issuing Banks

69

 

 

 

ARTICLE VIII

 

MISCELLANEOUS

 

Section 8.01

Amendments, Etc.

69

Section 8.02

Notices, Etc.

71

Section 8.03

No Waiver; Cumulative Remedies; Enforcement

72

Section 8.04

Costs and Expenses; Indemnity; Damage Waiver

73

Section 8.05

Right of Set-off

75

 

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Section 8.06

Binding Effect

75

Section 8.07

Successors and Assigns

76

Section 8.08

Confidentiality

79

Section 8.09

Governing Law

80

Section 8.10

Counterparts; Integration; Effectiveness

80

Section 8.11

Jurisdiction, Etc.

80

Section 8.12

Payments Set Aside

81

Section 8.13

Patriot Act

81

Section 8.14

Waiver of Jury Trial

81

Section 8.15

No Advisory or Fiduciary Responsibility

81

Section 8.16

Survival of Representations and Warranties

82

Section 8.17

Severability

82

 

 

 

 

 

 

Schedules

 

Schedule 1.01 Commitments and Ratable Shares

Schedule 4.01(j) Subsidiaries

Schedule 4.01(k) Existing Indebtedness

Schedule 8.02 Certain Address for Notices

 

Exhibits

 

Exhibit A Form of Note

Exhibit B Form of Notice of Borrowing

Exhibit C Form of Assignment and Assumption

 

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FIVE-YEAR CREDIT AGREEMENT

 

Dated as of April 9, 2013

 

ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation (the “Borrower”), the
banks, financial institutions and other institutional lenders (the “Initial
Lenders”) and initial issuing banks (the “Initial Issuing Banks”) listed on the
signature pages hereof, the other Lenders (as hereinafter defined), BARCLAYS
BANK PLC, as Agent for the Lenders (as hereinafter defined), THE ROYAL BANK OF
SCOTLAND plc, as Syndication Agent and BANK OF AMERICA, N.A., JPMORGAN CHASE
BANK, N.A. and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Co-Documentation
Agents, agree as follows:

 

The Borrower has requested that the Lenders provide a revolving credit facility
for the purposes set forth herein, and the Lenders are willing to do so on the
terms and conditions set forth herein.

 

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

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.01                             Certain Defined Terms.  As used in this
Agreement, the following terms shall have the following meanings:

 

“2013 Order” means Decision No. 73659, dated February 6, 2013, of the Arizona
Corporation Commission.

 

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

 

“Advance” means a Revolving Advance or a Swingline Advance.

 

“Affected Lender” means any Lender, as reasonably determined by the Agent or if
the Agent is the Affected Lender, by the Required Lenders, that (a) has failed
to (i) fund all or any portion of any Revolving Advance within three
(3) Business Days of the date such Revolving Advances were required to be funded
hereunder unless such Lender notifies the Agent and the Borrower in writing that
such failure is the result of such Lender’s determination that one or more
conditions precedent to funding (each of which conditions precedent, together
with any applicable default, shall be specifically identified in writing) has
not been satisfied, or (ii) pay to the Agent, any Issuing Bank, the Swingline
Lender, if any, or any other Lender any other amount required to be paid by it
hereunder (including in respect of its participation in Letters of Credit and
funding obligations in respect of Swingline Advances) within three (3) Business
Days of the date when due, (b) has notified the Borrower, the Agent, any Issuing
Bank or any Lender in writing of its intention not to fund any Revolving Advance
or any of its other funding obligations under this Agreement, (c) has failed,
within three Business Days after written request by the Agent, or if the Agent
is the Affected Lender, by the Required Lenders, to confirm that it will

 

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comply with the terms of this Agreement relating to its obligations to fund
prospective Revolving Advances and other funding obligations under this
Agreement or (d) shall (or whose parent company shall) generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or shall have had any proceeding instituted by or against such Lender
(or its parent company) seeking to adjudicate it as bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or custodian for it or for
any substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of 30 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of an order
for relief against, or the appointment of a receiver, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or custodian for, it or for any
substantial part of its property) shall occur, or shall take (or whose parent
company shall take) any corporate action to authorize any of the actions set
forth above in this subsection (e), provided that a Lender shall not be deemed
to be an Affected Lender solely by virtue of the ownership or acquisition of any
equity interest in any Lender or any Person that directly or indirectly controls
such Lender by a Governmental Authority or an instrumentality thereof.

 

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person.  For purposes of this
definition, the term “control” (including the terms “controlling”, “controlled
by” and “under common control with”) of a Person means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by
contract or otherwise.

 

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

 

“Agent’s Account” means the account of the Agent designated on Schedule 8.02
under the heading “Agent’s Account” or such other account as the Agent may
designate to the Lenders and the Borrower from time to time.

 

“Agent’s Office” means the Agent’s address and, as appropriate, the Agent’s
Account, or such other address or account as the Agent may from time to time
notify the Borrower and the Lenders.

 

“Applicable Lending Office” means, with respect to each Lender, such Lender’s
Domestic Lending Office in the case of a Base Rate Advance and such Lender’s
Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

 

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“Applicable Rate” means, from time to time, the following percentages per annum
determined by reference to the Public Debt Rating as set forth below:

 

Public Debt Rating
S&P/Moody’s

 

Eurodollar Rate
Advances

 

Base Rate
Advances

 

Commitment Fee

Level 1

> A/A2

 

1.000%

 

0.000%

 

0.100%

Level 2

< Level 1 but > A-/A3

 

1.125%

 

0.125%

 

0.125%

Level 3

< Level 2 but >

BBB+/Baa1

 

1.250%

 

0.250%

 

0.175%

Level 4

< Level 3 but >

BBB/Baa2

 

1.500%

 

0.500%

 

0.225%

Level 5

< Level 4 but >

BBB-/Baa3

 

1.750%

 

0.750%

 

0.275%

Level 6

< Level 5

 

2.000%

 

1.000%

 

0.350%

 

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

 

“Arrangers” means, collectively, Barclays, RBS Securities Inc., Wells Fargo
Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and J.P.
Morgan Securities LLC.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee, and accepted by the Agent, in substantially the
form of Exhibit C hereto.

 

“Assuming Lender” has the meaning specified in Section 2.18(d).

 

“Assumption Agreement” has the meaning specified in Section 2.18(d)(ii).

 

“Authorized Officer” means the chairman of the board, chief executive officer,
chief operating officer, chief financial officer, chief accounting officer,
president, any vice president, treasurer, controller or any assistant treasurer
of the Borrower.

 

“Available Amount” of any Letter of Credit means, at any time, the maximum
amount available to be drawn under such Letter of Credit at such time (assuming
compliance at such time with all conditions to drawing).

 

“Barclays” means Barclays Bank PLC.

 

“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of:

 

(a)                                 the rate of interest in effect for such day
as publicly announced from time to time by the Agent as its “prime rate”;

 

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(b)                                 the Federal Funds Rate plus 0.50%; and

 

(c)                                  an amount equal to (i) the Eurodollar Rate
for a one month Interest Period on such day (or if such day is not a Business
Day, the immediately preceding Business Day) plus (ii) 1%.

 

“Prime rate” means the rate of interest in effect for such day as publicly
announced from time to time by the Agent as its “prime rate.”  The “prime rate”
is a rate set by the Agent based upon various factors including the Agent’s
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate.  Any change in the “prime rate” announced by the
Agent shall take effect at the opening of business on the day specified in the
public announcement of such change.

 

“Base Rate Advance” means a Revolving Advance that bears interest as provided in
Section 2.07(a)(i).

 

“Borrower” has the meaning given to such term in the introductory paragraph
hereof.

 

“Borrower Information” has the meaning specified in Section 8.08.

 

“Borrowing” means (a) a borrowing consisting of simultaneous Revolving Advances
of the same Type made by each of the Lenders pursuant to Section 2.01(a) or
(b) Swingline Advances.

 

“Business Day” means a day of the year on which banks are not required or
authorized by Law to close in New York City or Phoenix, Arizona and, if the
applicable Business Day relates to any Advance in which interest is calculated
by reference to the Eurodollar Rate, on which dealings are carried on in the
London interbank market.

 

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

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following:  (a) the adoption of any Law, (b) any change in any Law or in
the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority;
provided, however, that notwithstanding anything herein to the contrary, (i) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines, requirements and directives thereunder, issued in connection
therewith or in implementation thereof, and (ii) all requests, rules,
guidelines, requirements and directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory

 

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authorities, in each case pursuant to Basel III, shall in each case be deemed a
“Change in Law” regardless of the date enacted, adopted, issued or implemented.

 

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

 

“Commitment Date” has the meaning specified in Section 2.18(b).

 

“Commitment Increase” has the meaning specified in Section 2.18(a).

 

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

 

“Consolidated Indebtedness” means, at any date, the Indebtedness of the Borrower
and its Consolidated Subsidiaries determined on a Consolidated basis as of such
date; provided, however, that so long as the creditors of the VIE Lessor Trusts
have no recourse to the assets of the Borrower, “Consolidated Indebtedness”
shall not include any Indebtedness or other obligations of the VIE Lessor
Trusts.

 

“Consolidated Net Worth” means, at any date, the sum as of such date of (a) the
par value (or value stated on the books of the Borrower) of all classes of
capital stock of the Borrower and its Subsidiaries, excluding the Borrower’s
capital stock owned by the Borrower and/or its Subsidiaries, plus (or minus in
the case of a surplus deficit) (b) the amount of the Consolidated surplus,
whether capital or earned, of the Borrower, determined in accordance with GAAP
as of the end of the most recent calendar month (excluding the effect on the
Borrower’s accumulated other comprehensive income/loss of the ongoing
application of Accounting Standards Codification Topic 815).

 

“Consolidated Subsidiary” means, at any date, any Subsidiary or other entity the
accounts of which would be Consolidated with those of the Borrower on its
Consolidated financial statements if such financial statements were prepared as
of such date; provided that in no event will Consolidated Subsidiaries include
the VIE Lessor Trusts.

 

“Controlled Affiliate” has the meaning specified in Section 4.01(n).

 

“Convert”, “Conversion” and “Converted” each refers to a conversion of Revolving
Advances of one Type into Revolving Advances of the other Type pursuant to
Section 2.08, Section 2.09 or Section 2.12.

 

“Credit Extension” means each of the following: (a) a Borrowing and (b) the
issuance of a Letter of Credit.

 

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

 

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“Default” means any Event of Default or any event that would constitute an Event
of Default but for the requirement that notice be given or time elapse or both.

 

“Dollars” or “$” means dollars of the United States of America.

 

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

 

“Effective Date” has the meaning specified in Section 3.01.

 

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 8.07(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 8.07(b)(iii)).

 

“Environmental Action” means any action, suit, demand, demand letter, claim,
notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, Environmental Permit or Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment and relating to any Environmental Law, including, without
limitation, (a) by any Governmental Authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any Governmental
Authority or any third party for damages, contribution, indemnification, cost
recovery, compensation or injunctive relief.

 

“Environmental Law” means any federal, state, local or foreign statute, law,
ordinance, rule, regulation, code, order, judgment, decree or judicial or agency
interpretation, policy or guidance relating to pollution or protection of the
environment, natural resources or, to the extent relating to exposure to
Hazardous Materials, human health or safety, including, without limitation,
those relating to the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Materials.

 

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

 

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

 

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

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment

 

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as a termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

 

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

 

“Eurodollar Rate” means:

 

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

 

(b)                                 for any interest rate calculation with
respect to a Base Rate Advance, the rate per annum equal to (i) BBA LIBOR, at
approximately 11:00 a.m., London time, two Business Days prior to the date of
determination (provided that if such day is not a Business Day in London, the
next preceding Business Day in London) for Dollar deposits being delivered in
the London interbank market for a term of one month commencing that day or
(ii) if such published rate is not available at such time for any reason, the
rate determined by the Agent to be the rate at which deposits in Dollars for
delivery on the date of determination in same day funds in the approximate
amount of the Base Rate Advance being made, continued or converted by the Agent
and with a term equal to one month would be offered by the Agent’s London Branch
to major banks in the London interbank Eurodollar market at their request at the
date and time of determination.

 

“Eurodollar Rate Advance” means a Revolving Advance that bears interest at a
rate based on the Eurodollar Rate (other than a Base Rate Advance bearing
interest at a rate based on the Eurodollar Rate).

 

“Events of Default” has the meaning specified in Section 6.01.

 

“Excluded Taxes” means, with respect to the Agent, any Lender, any Issuing Bank
or any other recipient of any payment to be made by or on account of any
obligation of the Borrower

 

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hereunder, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes),
by the United States of America or the jurisdiction (or any political
subdivision thereof) under the Laws of which such recipient is organized or does
business or in which its principal office is located or, in the case of any
Lender, in which its Applicable Lending Office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located, (c) any backup
withholding tax that is required by the Internal Revenue Code to be withheld
from amounts payable to a Lender that has failed to comply with clause (A) of
Section 2.14(e)(ii), (d) in the case of a Foreign Lender (other than as agreed
to between any assignee and the Borrower pursuant to a request by the Borrower
under Section 2.20), any United States of America withholding tax that (i) is
required to be imposed on amounts payable to such Foreign Lender pursuant to the
Laws in force at the time such Foreign Lender becomes a party hereto (or
designates a new Applicable Lending Office) or (ii) is attributable to such
Foreign Lender’s failure or inability (other than as a result of a Change in
Law) to comply with clause (B) of Section 2.14(e)(ii), except to the extent that
such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new Applicable Lending Office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.14(a)(i) or (ii) and (v) any United States withholding tax
imposed by FATCA.

 

“Executive Order” has the meaning specified in Section 4.01(p).

 

“Existing Credit Agreement” means that certain Four-Year Credit Agreement, dated
as of February 14, 2011 by and among the Borrower, the Lenders from time to time
party thereto and the Agent.

 

“FATCA” means Section 1471 through 1474 of the Internal Revenue Code, as of the
date of this Agreement (or any amended or successor version that is
substantively comparable and not materially more onerous to comply with), any
current or future regulations or official interpretations thereof and any
agreement entered into pursuant to Section 1471(b)(1) of the Internal Revenue
Code.

 

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

 

“Fee Letters” means (a) each of the following letters to the Borrower dated
March 12, 2013:  (i) the letter from Barclays and RBS Securities Inc., (ii) the
letter from Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Wells Fargo Bank, National Association, Wells Fargo Securities,
LLC, JPMorgan Chase Bank, N.A. and J.P. Morgan

 

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Securities LLC, and (iii) the agent fee letter from Barclays, as Agent, each
relating to certain fees payable by the Borrower to such parties in respect of
the transactions contemplated by this Agreement and (b) any letter between the
Borrower and any Issuing Bank other than an Initial Issuing Bank relating to
certain fees payable to such Issuing Bank in its capacity as such, each as
amended, modified, restated or supplemented from time to time.

 

“Foreign Lender” means any Lender that is organized under the Laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes
(including such a Lender when acting in the capacity of an Issuing Bank or a
Swingline Lender).  For purposes of this definition, the United States of
America, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.

 

“Four Corners Acquisition” means the acquisition by the Borrower from Southern
California Edison Company (“SCE”) of SCE’s interests in Units 4 and 5 of the
Four Corners Power Plant near Farmington, New Mexico, pursuant to the Purchase
and Sale Agreement, dated as of November 8, 2010, by and between SCE and the
Borrower.

 

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

 

“GAAP” has the meaning specified in Section 1.03.

 

“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank) and any group or body charged with setting financial
accounting or regulatory capital rules or standards (including, without
limitation, the Financial Accounting Standards Board, the Bank for International
Settlements or the Basel Committee on Banking Supervision or any successor or
similar authority to any of the foregoing).

 

“Guarantee” means as to any Person, any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Indebtedness of any other
Person or in any manner providing for the payment of any Indebtedness of any
other Person or otherwise protecting the holder of such Indebtedness against
loss (whether by virtue of partnership arrangements, agreements to keep well, to
purchase assets, goods, securities or services, or to take-or-pay or otherwise),
provided that the term “Guarantee” shall not include endorsements for collection
or deposit in the ordinary course of business.  The term “Guarantee” used as a
verb has a corresponding meaning.

 

“Hazardous Materials” means (a) petroleum and petroleum products, byproducts or
breakdown products, radioactive materials, asbestos-containing materials,
polychlorinated biphenyls and radon gas and (b) any other chemicals, materials
or substances designated, classified or regulated as hazardous or toxic or as a
pollutant or contaminant under any Environmental Law.

 

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“Hedge Agreement” means any interest rate swap, cap or collar agreement,
interest rate future or option contract, currency swap agreement, currency
future or option contract, commodity future or option contract, commodity
forward contract or other similar agreement.

 

“Increase Date” has the meaning specified in Section 2.18(a).

 

“Increasing Lender” has the meaning specified in Section 2.18(b).

 

“Indebtedness” means as to any Person at any date (without duplication):
(a) indebtedness created, issued, incurred or assumed by such Person for
borrowed money or evidenced by bonds, debentures, notes or similar instruments;
(b) all obligations of such Person to pay the deferred purchase price of
property or services, excluding, however, trade accounts payable (other than for
borrowed money) arising in, and accrued expenses incurred in, the ordinary
course of business of such Person so long as such trade accounts payable are
paid within 180 days (unless subject to a good faith dispute) of the date
incurred; (c) all Indebtedness secured by a lien on any asset of such Person, to
the extent such Indebtedness has been assumed by, or is a recourse obligation
of, such Person; (d) all Guarantees by such Person; (e) all Capital Lease
Obligations of such Person; and (f) the amount of all reimbursement obligations
of such Person (whether contingent or otherwise) in respect of letters of
credit, bankers’ acceptances, surety or other bonds and similar instruments in
support of Indebtedness.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Initial Issuing Banks” has the meaning given to such term in the introductory
paragraph hereof.

 

“Initial Lenders” has the meaning given to such term in the introductory
paragraph hereof.

 

“Interest Period” means, for each Eurodollar Rate Advance comprising part of the
same Borrowing, the period commencing on the date such Eurodollar Rate Advance
is disbursed or the date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance and ending on the last day of the period selected by the
Borrower pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below.  The duration of each such Interest Period shall be one,
two, three or six months, as the Borrower may, upon notice received by the Agent
not later than 12:00 noon on the third Business Day prior to the first day of
such Interest Period, select; provided, however, that:

 

(a)                                 the Borrower may not select any Interest
Period that ends after the Termination Date;

 

(b)                                 Interest Periods commencing on the same date
for Eurodollar Rate Advances comprising part of the same Borrowing shall be of
the same duration;

 

(c)                                  whenever the last day of any Interest
Period would otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to

 

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occur on the next succeeding Business Day, provided, however, that, if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and

 

(d)                                 whenever the first day of any Interest
Period occurs on a day of an initial calendar month for which there is no
numerically corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months in such
Interest Period, such Interest Period shall end on the last Business Day of such
succeeding calendar month.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.

 

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

 

“Issuing Bank” means the Initial Issuing Banks or any other Lender approved by
the Borrower that may agree to issue Letters of Credit pursuant to an Assignment
and Assumption or other agreement in form satisfactory to the Borrower and the
Agent, so long as such Lender expressly agrees to perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as an Issuing Bank and notifies the Agent of its
Applicable Lending Office (which information shall be recorded by the Agent in
the Register), for so long as such Initial Issuing Bank or Lender, as the case
may be, shall have a Letter of Credit Commitment.

 

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Ratable Share.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made nor
refinanced as a Base Rate Advance.

 

“L/C Cash Deposit Account” means an interest bearing cash deposit account to be
established and maintained by the Agent, over which the Agent shall have sole
dominion and control, upon terms as may be satisfactory to the Agent.

 

“L/C Obligations” means, as at any date of determination, the aggregate
Available Amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.  For all purposes of this
Agreement, if on any date of determination a Letter of Credit has expired by its
terms but any amount may still be drawn thereunder by reason of the operation of
Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding”
in the amount so remaining available to be drawn.

 

“L/C Related Documents” means with respect to any Letter of Credit, the Letter
of Credit Application, and any other document, agreement and instrument entered
into by any Issuing Bank and the Borrower or in favor of any Issuing Bank and
relating to such Letter of Credit.

 

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“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority.

 

“Lenders” means the Initial Lenders, each Issuing Bank, the Swingline Lender, if
any, each Assuming Lender that shall become a party hereto pursuant to
Section 2.18 and each Person that shall become a party hereto pursuant to
Section 8.07.

 

“Letter of Credit” has the meaning specified in Section 2.01(b).

 

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by any Issuing Bank.

 

“Letter of Credit Commitment” means, with respect to each Issuing Bank, the
obligation of such Issuing Bank to issue Letters of Credit for the account of
the Borrower from time to time in an aggregate amount equal to (a) for each of
the Initial Issuing Banks, $75,000,000 and (b) for any other Issuing Bank, as
separately agreed to by such Issuing Bank and the Borrower.  The Letter of
Credit Commitment is part of, and not in addition to, the Revolving Credit
Commitments.

 

“Letter of Credit Expiration Date” means the day that is five Business Days
prior to the Termination Date.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or otherwise), charge or other
security interest or preferential arrangement that has the practical effect of
creating a security interest, including, without limitation, the lien or
retained security title of a conditional vendor and any easement, right of way
or other encumbrance on title to real property, and any capital lease having
substantially the same economic effect as any of the foregoing.

 

“Loan Documents” mean this Agreement, each Note, each L/C Related Document and
the Fee Letters.

 

“Material Adverse Effect” means a material adverse effect on (a) the financial
condition, operations, business or property of the Borrower and its Subsidiaries
taken as a whole, (b) the rights and remedies of the Agent or any Lender under
this Agreement or any Note or (c) the ability of the Borrower to perform its
obligations under this Agreement or any Note.

 

“Material Subsidiary” means, at any time, a Subsidiary of the Borrower which as
of such time meets the definition of a “significant subsidiary” included as of
the date hereof in Regulation S-X of the Securities and Exchange Commission or
whose assets at such time exceed 10% of the assets of the Borrower and the
Subsidiaries (on a consolidated basis).

 

“Money Market Rate” means (a) the Federal Funds Rate plus (b) the Applicable
Rate for Eurodollar Rate Advances.

 

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“Money Market Rate Advance” means a Swingline Advance that bears interest at a
rate based on the Money Market Rate.

 

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

 

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

 

“Note” means a promissory note of the Borrower payable to the order of any
Lender, delivered pursuant to a request made under Section 2.16 in substantially
the form of Exhibit A hereto.

 

“Notice of Borrowing” has the meaning specified in Section 2.02(a).

 

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, the Borrower arising under any Loan Document or
otherwise with respect to any Revolving Advance, Swingline Advance or Letter of
Credit, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue under any Loan Document after the
commencement by or against the Borrower of any proceeding under any Debtor
Relief Laws naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding.

 

“OFAC” means Office of Foreign Assets Control of the United States Department of
the Treasury.

 

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

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

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

 

“Permitted Lien” of the Borrower or any Material Subsidiary means any of the
following:

 

(i)                                     Liens for taxes, assessments or other
governmental charges or levies not at the time delinquent or thereafter payable
without penalty or being contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been made;

 

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(ii)                                  Liens imposed by or arising by operation
of law, such as Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business, including, without
limitation, landlord’s liens arising under Arizona Law under leases entered into
by the Borrower in the 1986 sale and leaseback transactions with respect to
PVNGS Unit 2 and securing the payment of rent under such leases, in each case,
for sums not overdue for a period of more than 30 days or being contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been made;

 

(iii)                               Liens incurred in the ordinary course of
business in connection with worker’s compensation, unemployment insurance or
other forms of governmental insurance or benefits or other similar statutory
obligations;

 

(iv)                              Liens to secure obligations on surety or
appeal bonds;

 

(v)                                 Liens on cash deposits in the nature of a
right of setoff, banker’s lien, counterclaim or netting of cash amounts owed
arising in the ordinary course of business on deposit accounts, commodity
accounts or securities accounts;

 

(vi)                              easements, restrictions, reservations,
licenses, covenants, and other defects of title that are not, in the aggregate,
materially adverse to the use of such property for the purpose for which it is
used;

 

(vii)                           Liens securing claims against or other
obligations of any Person other than the Borrower or any Subsidiary of the
Borrower neither assumed nor guaranteed by the Borrower or any Subsidiary of the
Borrower nor on which the Borrower or any Subsidiary of the Borrower customarily
pays interest, existing upon real estate or rights in or relating to real estate
acquired by the Borrower or any Subsidiary of the Borrower for use in the
operation of the business of the Borrower or any Subsidiary of the Borrower,
including, without limitation, for the generation, transmission or distribution
of electric energy, transportation, telephonic, telegraphic, radio, wireless or
other electronic communication or any other purpose;

 

(viii)                        rights reserved to or vested in and Liens on
assets arising out of obligations or duties to any municipality or public
authority with respect to any right, power, franchise, grant, license or permit,
or by any provision of Law;

 

(ix)                              rights reserved to or vested in others to take
or receive any part of the power pursuant to firm power commitment contracts,
purchased power contracts, tolling agreements and similar agreements, coal, gas,
oil or other minerals, timber or other products generated, developed,
manufactured or produced by, or grown on, or acquired with, any property of the
Borrower;

 

(x)                                 rights reserved to or vested in any
municipality or public authority to control or regulate any property of the
Borrower, or to use such property in a manner that does not materially impair
the use of such property for the purposes for which it is held by the Borrower;

 

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(xi)                              security interests granted in favor of the
lessors in the Borrower’s Decommissioning Trust Agreement (PVNGS Unit 2) dated
as of January 31, 1992 (such agreement, as amended or otherwise modified from
time to time, being the “Unit 2 Trust Agreement”) entered into in connection
with the PVNGS Unit 2 sale leaseback transaction to secure the Borrower’s
obligations in respect of the decommissioning of PVNGS Unit 2 or related
facilities;

 

(xii)                           Liens that may exist with respect to the Unit 2
Trust Agreement (other than as described in paragraph (xi) above) or with
respect to either of the Borrower’s Decommissioning Trust Agreement (PVNGS Unit
1) or Decommissioning Trust Agreement (PVNGS Unit 3), each dated as of July 1,
1991, as amended or otherwise modified from time to time, relating to the
Borrower’s obligation to set aside funds for the decommissioning and retirement
from service of such Units;

 

(xiii)                        pledges of pollution control bonds and related
rights to secure the Borrower’s reimbursement obligations in respect of letters
of credit, bond insurance, and other credit or liquidity enhancements supporting
pollution control bond transactions, provided that such pollution control bonds
are not secured by any other assets of the Borrower or any Material Subsidiary;

 

(xiv)                       rights and interests of Persons other than the
Borrower or any Material Subsidiary (including, without limitation, acquisition
rights), related obligations of the Borrower or any Material Subsidiary and
restrictions on it or its property arising out of contracts, agreements and
other instruments to which the Borrower or any Material Subsidiary is a party
that relate to the common ownership or joint use of property or other use of
property for the benefit of one or more third parties or that allow a third
party to purchase property of the Borrower or any Material Subsidiary and all
Liens on the interests of Persons other than the Borrower or any Material
Subsidiary in such property;

 

(xv)                          transfers of operational or other control of
facilities to a regional transmission organization or other similar body and
Liens on such facilities to cover expenses, fees and other costs of such an
organization or body;

 

(xvi)                       Liens established on specified bank accounts of the
Borrower to secure the Borrower’s reimbursement obligations in respect of
letters of credit supporting commercial paper issued by the Borrower and similar
arrangements for collateral security with respect to refinancings or
replacements of the same;

 

(xvii)                    rights of transmission users or any regional
transmission organizations or similar entities in transmission facilities;

 

(xviii)                 Liens on property of the Borrower sold in a transaction
permitted by Section 5.02(a) to another Person pursuant to a conditional sales
agreement where the Borrower retains title;

 

(xix)                       Liens created under this Agreement;

 

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(xx)                          Liens on cash or cash equivalents not to exceed
$200,000,000 (A) deposited in margin accounts with or on behalf of futures
contract brokers or paid over to other contract counterparties or (B) pledged or
deposited as collateral to a contract counterparty to secure obligations with
respect to (1) contracts (other than for Indebtedness) for commercial and
trading activities in the ordinary course of business for the purchase,
transmission, distribution, sale, storage, lease or hedge of any energy or
energy related commodity or (2) Hedge Agreements;

 

(xxi)                       Liens granted on cash or cash equivalents to defease
Indebtedness of the Borrower or any of its Subsidiaries;

 

(xxii)                    Liens granted on cash or cash equivalents constituting
proceeds from any sale or disposition of assets that is not prohibited by
Section 5.02(c) deposited in escrow accounts or otherwise withheld or set aside
to secure obligations of the Borrower or any Subsidiary providing for
indemnification, adjustment of purchase price or any similar obligations, in
each case, in an amount not to exceed the amount of gross proceeds received by
the Borrower or any Subsidiary in connection with such sale or disposition;

 

(xxiii)                 Liens, deposits and similar arrangements to secure the
performance of bids, tenders or contracts (other than contracts for borrowed
money), public or statutory obligations, performance bonds and other obligations
of a like nature incurred in the ordinary course of business by the Borrower or
any of its Subsidiaries;

 

(xxiv)                rights of lessees arising under leases entered into by the
Borrower or any of its Subsidiaries as lessor, in the ordinary course of
business;

 

(xxv)                   any Liens on or reservations with respect to
governmental and other licenses, permits, franchises, consents and allowances;

 

(xxvi)                Liens on property which is the subject of a Capital Lease
Obligation designating the Borrower or any of its Subsidiaries as lessee and all
right, title and interest of the Borrower or any of its Subsidiaries in and to
such property and in, to and under such lease agreement, whether or not such
lease agreement is intended as a security;

 

(xxvii)             licenses of intellectual property entered into in the
ordinary course of business;

 

(xxviii)          Liens solely on any cash earnest money deposits made by the
Borrower or any of its Subsidiaries in connection with any letter of intent or
purchase agreement permitted hereunder;

 

(xxix)                deposits or funds established for the removal from service
of operating facilities and coal mines and related facilities or other similar
facilities used in connection therewith; and

 

(xxx)                   Liens on cash deposits used to secure letters of credit
under defaulting lender provisions in credit or reimbursement facilities;

 

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provided, however, that no Lien in favor of the PBGC shall, in any event, be a
Permitted Lien.

 

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture,
limited liability company or other entity, or a government or any political
subdivision or agency thereof.

 

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

 

“Prohibited Person” means any Person (a) listed in the Annex to the Executive
Order or identified pursuant to Section 1 of the Executive Order; (b) that is
owned or controlled by, or acting for or on behalf of, any Person listed in the
Annex to the Executive Order or identified pursuant to the provisions of
Section 1 of the Executive Order; (c) with whom a Lender is prohibited from
dealing or otherwise engaging in any transaction by any terrorism or
anti-laundering law, including the Executive Order; (d) who commits, threatens,
conspires to commit, or support “terrorism” as defined in the Executive Order;
(e) who is named as a “Specially designated national or blocked person” on the
most current list published by the OFAC at its official website, at
http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf or any replacement
website or other replacement official publication of such list; or (f) who is
owned or controlled by a Person listed above in clause (c) or (e).

 

“Public Debt Rating” means, as of any date, the rating that has been most
recently announced by either S&P or Moody’s, as the case may be, for any class
of non-credit enhanced long-term senior unsecured debt issued by the Borrower
or, if any such rating agency shall have issued more than one such rating, the
lowest such rating issued by such rating agency.  For purposes of the foregoing,
(a) if only one of S&P and Moody’s shall have in effect a Public Debt Rating,
the Applicable Rate shall be determined by reference to the available rating;
(b) except as set forth in the proviso at the end of this definition, if neither
S&P nor Moody’s shall have in effect a Public Debt Rating, the Applicable Rate
will be set in accordance with Level 6 under the definition of “Applicable
Rate”; (c) if the ratings established by S&P and Moody’s shall fall within
different levels, the Applicable Rate shall be based upon the higher rating
unless such ratings differ by two or more levels, in which case the applicable
level will be deemed to be one level below the higher of such levels;  and
(d) if any rating established by S&P or Moody’s shall be changed (other than as
a result of a change in the basis on which ratings are established), such change
shall be effective as of the date on which such change is first announced
publicly by the rating agency making such change; provided that if the Public
Debt Rating system of S&P or Moody’s shall change, or if either such rating
agency shall cease to be in the business of rating corporate debt obligations,
the Borrower and the Lenders shall negotiate in good faith to amend the
definition of “Applicable Rate” to reflect such changed rating system or the
unavailability of ratings from such rating agency and, pending the effectiveness
of any such amendment, the Applicable Rate will be set in accordance with the
level most recently in effect under the definition of “Applicable Rate” prior to
such change or cessation.

 

“PVNGS” means the Palo Verde Nuclear Generating Station.

 

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“PWCC” means Pinnacle West Capital Corporation, an Arizona corporation.

 

“Ratable Share” of any amount means, with respect to any Lender at any time but
subject to the provisions of Section 2.19, the product of such amount times a
fraction the numerator of which is the amount of such Lender’s Revolving Credit
Commitment at such time (or, if the Revolving Credit Commitments shall have been
terminated pursuant to Section 2.05 or 6.01, such Lender’s Revolving Credit
Commitment as in effect immediately prior to such termination) and the
denominator of which is the aggregate amount of all Revolving Credit Commitments
at such time (or, if the Revolving Credit Commitments shall have been terminated
pursuant to Section 2.05 or 6.01, the aggregate amount of all Revolving Credit
Commitments as in effect immediately prior to such termination).

 

“Register” has the meaning specified in Section 8.07(c).

 

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

 

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30-day notice period has been waived
under the final regulations issued under Section 4043, as in effect as of the
date of this Agreement (the “Section 4043 Regulations”).  Any changes made to
the Section 4043 Regulations that become effective after the Effective Date
shall have no impact on the definition of Reportable Event as used herein unless
otherwise amended by the Borrower and the Required Lenders.

 

“Required Lenders” means, at any time, but subject to Section 2.19, Lenders
holding in the aggregate more than 50% of (a) the Revolving Credit Commitments
or (b) if the Revolving Credit Commitments have been terminated, the Total
Outstandings.

 

“Revolving Advance” means an advance by a Lender to the Borrower as part of a
Borrowing, including a Base Rate Advance made pursuant to Section 2.03(c), but
excluding any L/C Advance made as part of an L/C Borrowing and any Swingline
Advance, and refers to a Base Rate Advance or a Eurodollar Rate Advance (each of
which shall be a Type of Revolving Advance).

 

“Revolving Credit Commitment” means, as to any Lender, its obligation to
(a) make Revolving Advances to the Borrower pursuant to Section 2.01 and
2.03(c), (b) purchase participations in L/C Obligations and (c) make Revolving
Advances pursuant to Section 2.03A(c) for the purpose of repaying Swingline
Advances, in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Lender’s name on Schedule 1.01 under
the column “Revolving Credit Commitment” or if such Lender has become a Lender
hereunder pursuant to an Assumption Agreement or if such Lender has entered into
any Assignment and Assumption, the amount set forth for such Lender in the
Register, in each case as such amount may be reduced pursuant to Section 2.05 or
increased pursuant to Section 2.18.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.

 

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“Sale Leaseback Obligation Bonds” means PVNGS II Funding Corp.’s (a) 8.00%
Secured Lease Obligation Bonds, Series 1993, due 2015; (b) any other bonds
issued by or on behalf of the Borrower in connection with a sale/leaseback
transaction; and (c) any refinancing or refunding of the obligations specified
in subclauses (a) and (b) above.

 

“SEC Reports” means the Borrower’s (i) Form 10-K Report for the year ended
December 31, 2012 and (ii) Form 8-K Reports filed on March 11, 2013 and
March 21, 2013.

 

“Subsequent Order” means any decision, order or ruling of the Arizona
Corporation Commission issued after the Effective Date relating to the
incurrence or maintenance of Indebtedness by the Borrower and that amends,
supersedes or otherwise modifies the 2013 Order or any successor decision, order
or ruling.

 

“Subsidiary” of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more than 50%
of (a) the issued and outstanding Voting Stock, (b) the interest in the capital
or profits of such limited liability company, partnership or joint venture or
(c) the beneficial interest in such trust or estate, is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person’s other Subsidiaries;
provided that in no event will Subsidiaries include the VIE Lessor Trusts.

 

“Swingline Advance” means an advance made by the Swingline Lender, if any, to
the Borrower pursuant to Section 2.03A.

 

“Swingline Eurodollar Rate Advance” means a Swingline Advance that bears
interest at a rate equivalent to (a) clause (b) under the definition of
Eurodollar Rate, plus (b) the Applicable Rate for Eurodollar Rate Advances.

 

“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Advances outstanding at such time.  The Swingline Exposure of any
Lender shall be its Ratable Share of the total Swingline Exposure at such time.

 

“Swingline Lender” means, upon notice to the Agent by such Lender and the
Borrower, any Lender approved by the Borrower and the Agent from time to time
that may agree to fund Swingline Advances.

 

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

 

“Termination Date” means the earlier of (a) April 9, 2018 and (b) the date of
termination in whole of the Commitments pursuant to Section 2.05 or 6.01.

 

“Total Outstandings” means the sum of (a) the aggregate principal amount of all
Revolving Advances plus (b) all L/C Obligations outstanding plus (c) the
aggregate Swingline Exposure.

 

“Type” means a Base Rate Advance or a Eurodollar Rate Advance.

 

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“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

 

“Unissued Letter of Credit Commitment” means, with respect to any Issuing Bank,
the obligation of such Issuing Bank to issue Letters of Credit for the account
of the Borrower in an amount equal to the excess of (a) the amount of its Letter
of Credit Commitment over (b) the aggregate Available Amount of all Letters of
Credit issued by such Issuing Bank.

 

“Unused Commitment” means, with respect to each Lender at any time, (a) such
Lender’s Revolving Credit Commitment at such time minus (b) the sum of (i) the
aggregate principal amount of all Revolving Advances made by such Lender (in its
capacity as a Lender) and outstanding at such time and (ii) such Lender’s
Ratable Share of the aggregate L/C Obligations and, other than for the purposes
of calculation of the commitment fees, such Lender’s Ratable Share of the
aggregate Swingline Exposure outstanding at such time.

 

“USA PATRIOT Act” has the meaning specified in Section 8.13.

 

“VIE Lessor Trusts” means the three (3) separate variable-interest entity lessor
trusts that purchased from, and leased back to, the Borrower certain interests
in the PVNGS Unit 2 and related common facilities, as described in Note 9 of
Notes to Condensed Consolidated Financial Statements in the Borrower’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2010.

 

“Voting Stock” means capital stock issued by a corporation, or equivalent
interests in any other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the right so to
vote has been suspended by the happening of such a contingency.

 

Section 1.02                             Other Interpretive Provisions.  With
reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:

 

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

 

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law or regulation shall, unless otherwise specified, refer to such law or
regulation as amended, modified or supplemented from time to time, and (vi) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

 

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

 

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

 

Section 1.03                             Accounting Terms.  Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Borrower’s
independent public accountants) with the most recent audited Consolidated
financial statements of the Borrower delivered to the Agent (“GAAP”).  If at any
time any change in GAAP or in the interpretation thereof would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Required Lenders shall so request, the
Agent, the Lenders and the Borrower shall negotiate in good faith to amend such
ratio or requirement to preserve the original intent thereof in light of such
change in GAAP or in the interpretation thereof (subject to the approval of the
Required Lenders); provided that, unless and until so amended, such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein.

 

Section 1.04                             Rounding.  Any financial ratios
required to be maintained by the Borrower pursuant to this Agreement shall be
calculated by dividing the appropriate component by the other component,
carrying the result to one place more than the number of places by which such
ratio is expressed herein and rounding the result up or down to the nearest
number (with a rounding-up if there is no nearest number).

 

Section 1.05                             Times of Day.  Unless otherwise
specified, all references herein to times of day shall be references to Eastern
time (daylight or standard, as applicable).

 

ARTICLE II

 

AMOUNTS AND TERMS OF THE ADVANCES AND
LETTERS OF CREDIT

 

Section 2.01                             The Revolving Advances and Letters of
Credit.

 

(a)                                 The Revolving Advances.  Each Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
Revolving Advances in Dollars to the Borrower from time to time on any Business
Day during the period from the Effective Date until the Termination Date in an
amount not to exceed such Lender’s Unused Commitment.  Each

 

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Borrowing (other than a Swingline Advance) shall be in an aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and shall
consist of Revolving Advances of the same Type made on the same day by the
Lenders ratably according to their respective Revolving Credit Commitments. 
Within the limits of each Lender’s Revolving Credit Commitment, and subject to
the other terms and conditions hereof, the Borrower may borrow under this
Section 2.01(a), prepay pursuant to Section 2.10 and reborrow under this
Section 2.01(a).  Any Swingline Advance shall be made and repaid in accordance
with the procedures set forth in Section 2.03A.

 

(b)                                 Letters of Credit.  Each Issuing Bank
agrees, on the terms and conditions hereinafter set forth, in reliance upon the
agreements of the other Lenders set forth in this Agreement, to issue standby
letters of credit (each a “Letter of Credit”) for the account of the Borrower
from time to time on any Business Day during the period from the Effective Date
until 30 days before the Termination Date in an aggregate Available Amount for
all Letters of Credit issued by each Issuing Bank not to exceed at any time such
Issuing Bank’s Letter of Credit Commitment, provided that after giving effect to
the issuance of any Letter of Credit, (i) the Total Outstandings shall not
exceed the aggregate Revolving Credit Commitments and (ii) each Lender’s Ratable
Share of the Total Outstandings shall not exceed such Lender’s Revolving Credit
Commitment.  No Letter of Credit shall have an expiration date (including all
rights of the Borrower or the beneficiary to require renewal) later than the
Letter of Credit Expiration Date.  Within the limits referred to above, the
Borrower may from time to time request the issuance of Letters of Credit under
this Section 2.01(b).  The terms “issue”, “issued”, “issuance” and all similar
terms, when applied to a Letter of Credit, shall include any renewal, extension
or amendment thereof.

 

Section 2.02                             Making the Revolving Advances.

 

(a)                                 Except as otherwise provided in
Section 2.03(c), each Borrowing (other than a Swingline Advance) shall be made
on notice, given not later than (x) 12:00 noon on the third Business Day prior
to the date of the proposed Borrowing in the case of a Borrowing consisting of
Eurodollar Rate Advances or (y) 12:00 noon on the date of the proposed Borrowing
in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to
the Agent, which shall give to each Lender prompt notice thereof by facsimile. 
Each such notice of a Borrowing (a “Notice of Borrowing”) shall be in writing or
by facsimile in substantially the form of Exhibit B hereto, specifying therein
the requested (i) date of such Borrowing, (ii) Type of Revolving Advances
comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in
the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest
Period for each such Revolving Advance.  Each Lender shall, in the case of a
Borrowing consisting of Base Rate Advances, before 2:00 p.m. on the date of such
Borrowing, and in the case of a Borrowing consisting of Eurodollar Rate
Advances, before 11:00 a.m. on date of such Borrowing, make available for the
account of its Applicable Lending Office to the Agent at the Agent’s Account, in
same day funds, such Lender’s Ratable Share of such Borrowing.  After the
Agent’s receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Agent will make such funds available to the
Borrower at the Agent’s address referred to in Section 8.02 or as requested by
the Borrower in the applicable Notice of Borrowing.

 

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(b)                                 Anything in subsection (a) above to the
contrary notwithstanding, (i) the Borrower may not select Eurodollar Rate
Advances for any Borrowing if the aggregate amount of such Borrowing is less
than $5,000,000 or if the obligation of the Lenders to make Eurodollar Rate
Advances shall then be suspended pursuant to Section 2.08 or 2.12 and (ii) at no
time shall there be more than fifteen different Interest Periods outstanding for
Eurodollar Rate Advances.

 

(c)                                  Each Notice of Borrowing shall be
irrevocable and binding on the Borrower.  In the case of any Borrowing that the
related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower shall indemnify each Lender against any loss, cost or
expense reasonably incurred by such Lender as a result of any failure to fulfill
on or before the date specified in such Notice of Borrowing for such Borrowing
the applicable conditions set forth in Article III, including, without
limitation, any loss (excluding loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Revolving Advance to be made by such Lender
as part of such Borrowing when such Revolving Advance, as a result of such
failure, is not made on such date.

 

(d)                                 Unless the Agent shall have received notice
from a Lender prior to the time of the applicable Borrowing that such Lender
will not make available to the Agent such Lender’s Ratable Share of such
Borrowing, the Agent may assume that such Lender has made such portion available
to the Agent on the date of such Borrowing in accordance with subsection (a) of
this Section 2.02 and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount.  If and to the
extent that such Lender shall not have so made such Ratable Share available to
the Agent, such Lender and the Borrower severally agree to repay to the Agent
within one Business Day after demand for such Lender and within three Business
Days after demand for the Borrower such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, the interest rate applicable at the time to Revolving
Advances comprising such Borrowing and (ii) in the case of such Lender, the
Federal Funds Rate.  If the Borrower and such Lender shall pay such interest to
the Agent for the same or an overlapping period, the Agent shall promptly remit
to the Borrower the amount of such interest paid by the Borrower for such
period.  If such Lender shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Lender’s Revolving Advance as part of
such Borrowing for purposes of this Agreement.

 

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

 

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Section 2.03                             Letters of Credit.

 

(a)                                 General.

 

(i)                                     No Issuing Bank shall issue any Letter
of Credit, if the expiry date of such requested Letter of Credit would occur
after the Letter of Credit Expiration Date, unless all the Lenders have approved
such expiry date.

 

(ii)                                  No Issuing Bank shall be under any
obligation to issue any Letter of Credit if:

 

(A)                               any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain such Issuing Bank from issuing such Letter of Credit, or any Law
applicable to such Issuing Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over
such Issuing Bank shall prohibit, or request that such Issuing Bank refrain
from, the issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon such Issuing Bank with respect to such Letter of
Credit any restriction, reserve or capital and liquidity requirement (for which
such Issuing Bank is not otherwise compensated hereunder) not in effect on the
Effective Date, or shall impose upon such Issuing Bank any unreimbursed loss,
cost or expense which was not applicable on the Effective Date and which, in
each such case, such Issuing Bank in good faith deems material to it;

 

(B)                               except as otherwise agreed by the Borrower and
such Issuing Bank, such Letter of Credit is in an initial stated amount less
than $100,000;

 

(C)                               such Letter of Credit is to be denominated in
a currency other than Dollars;

 

(D)                               such Letter of Credit contains any provisions
for automatic reinstatement of the stated amount after any drawing thereunder;

 

(E)                                subject to Section 2.03(b)(iii), the expiry
date of such requested Letter of Credit would occur more than twelve months
after the date of issuance or last extension; or

 

(F)                                 any Lender is at such time an Affected
Lender hereunder, unless the applicable Issuing Bank is satisfied that the
related exposure will be 100% covered by the Commitments of the non-Affected
Lenders or, if not so covered, until such Issuing Bank has entered into
arrangements satisfactory to it in its sole discretion with the Borrower or such
Affected Lender to eliminate such Issuing Bank’s risk with respect to such
Affected Lender, and participating interests in any such newly issued Letter of
Credit shall be allocated among non-Affected Lenders in a manner consistent with
Section 2.19(c)(i) (and Affected Lenders shall not participate therein).

 

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(iii)                               No Issuing Bank shall amend any Letter of
Credit if such Issuing Bank would not be permitted at such time to issue such
Letter of Credit in its amended form under the terms hereof.

 

(iv)                              No Issuing Bank shall be under any obligation
to amend any Letter of Credit if (A) such Issuing Bank would have no obligation
at such time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept the
proposed amendment to such Letter of Credit.

 

(b)                                 Procedures for Issuance and Amendment of
Letters of Credit; Auto-Extension Letters of Credit.

 

(i)                                     Each Letter of Credit shall be issued or
amended, as the case may be, upon the request of the Borrower delivered to the
applicable Issuing Bank (with a copy to the Agent) in the form of a Letter of
Credit Application appropriately completed and signed by an Authorized Officer
of the Borrower, together with agreed-upon draft language for such Letter of
Credit reasonably acceptable to the applicable Issuing Bank.  Such Letter of
Credit Application must be received by such Issuing Bank and the Agent not later
than 11:00 a.m. at least two Business Days (or such later date and time as the
Agent and such Issuing Bank may agree in a particular instance in their sole
discretion) prior to the proposed issuance date or date of amendment, as the
case may be.  In the case of a request for an initial issuance of a Letter of
Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the applicable Issuing Bank: (A) the proposed issuance date of
the requested Letter of Credit (which shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; (G) the purpose
and nature of the requested Letter of Credit; and (H) such other matters as such
Issuing Bank may require.  In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit Application shall specify in
form and detail satisfactory to the applicable Issuing Bank (A) the Letter of
Credit to be amended; (B) the proposed date of amendment thereof (which shall be
a Business Day); (C) the nature of the proposed amendment; and (D) such other
matters as such Issuing Bank may require.  Additionally, the Borrower shall
furnish to the applicable Issuing Bank and the Agent such other documents and
information pertaining to such requested Letter of Credit issuance or amendment,
including any L/C Related Documents, as the applicable Issuing Bank or the Agent
may require.  In the event and to the extent that the provisions of any Letter
of Credit Application or other L/C Related Document shall conflict with this
Agreement, the provisions of this Agreement shall govern.  Without limitation of
the immediately preceding sentence, to the extent that any such Letter of Credit
Application or other L/C Related Document shall impose any additional conditions
on the maintenance of a Letter of Credit, any additional default provisions,
collateral requirements or other obligations of the Borrower to any Issuing
Bank, other than as stated in this Agreement, such additional conditions,
provisions, requirements or other obligations shall not have effect so long as
this Agreement shall be in effect, except to the extent as expressly agreed to
by the Borrower and such Issuing Bank.

 

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(ii)                                  Promptly after receipt of any Letter of
Credit Application, the applicable Issuing Bank will confirm with the Agent (by
telephone or in writing) that the Agent has received a copy of such Letter of
Credit Application from the Borrower and, if not, such Issuing Bank will provide
the Agent with a copy thereof.  Unless the applicable Issuing Bank has received
written notice from the Required Lenders, the Agent or the Borrower, at least
one Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions contained in
Article III shall not then be satisfied, then, subject to the terms and
conditions hereof and any applicable Letter of Credit Application, such Issuing
Bank shall, on the requested date, issue a Letter of Credit for the account of
the Borrower or enter into the applicable amendment, as the case may be, in each
case in accordance with such Issuing Bank’s usual and customary business
practices.  Immediately upon the issuance of each Letter of Credit, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from such Issuing Bank a risk participation in such Letter of Credit in
an amount equal to the product of such Lender’s Ratable Share times the amount
of such Letter of Credit.

 

(iii)                               If the Borrower so requests in any
applicable Letter of Credit Application, the applicable Issuing Bank may, in its
sole and absolute discretion, agree to issue a Letter of Credit that has
automatic extension provisions (each, an “Auto-Extension Letter of Credit”);
provided that any such Auto-Extension Letter of Credit must permit such Issuing
Bank to prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the “Non-Extension
Notice Date”) in each such twelve-month period to be agreed upon at the time
such Letter of Credit is issued.  Unless otherwise directed by the applicable
Issuing Bank, the Borrower shall not be required to make a specific request to
the applicable Issuing Bank for any such extension.  Once an Auto-Extension
Letter of Credit has been issued, the Lenders shall be deemed to have authorized
(but may not require) the applicable Issuing Bank to permit the extension of
such Letter of Credit at any time to an expiry date not later than the Letter of
Credit Expiration Date; provided, however, that the applicable Issuing Bank
shall not permit any such extension (or may issue a Notice of Non-Extension) if
(A) such Issuing Bank has determined that it would not be permitted at such time
to issue such Letter of Credit in its revised form (as extended) by reason of
the provisions of clause (i) of Section 2.03(a) (or would have no obligation to
issue such Letter of Credit by reason of the provisions of clause (ii) of
Section 2.03(a)), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is seven Business Days before the
Non-Extension Notice Date (1) from the Agent that the Required Lenders have
elected not to permit such extension pursuant to Section 6.02 or (2) from the
Agent, the Required Lenders or the Borrower that one or more of the applicable
conditions specified in Section 3.02 is not then satisfied, and in each such
case directing such Issuing Bank not to permit such extension.

 

(iv)                              Promptly after its delivery of any Letter of
Credit or any amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the applicable Issuing Bank will also
deliver to the Borrower and the Agent a true and complete copy of such Letter of
Credit or amendment.

 

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(c)                                  Drawings and Reimbursements; Funding of
Participations.

 

(i)                                     Subject to the provisions below, not
later than 2:30 p.m. on the date (the “Honor Date”) that any Issuing Bank makes
any payment on a drawing on any Letter of Credit, if the Borrower shall have
received notice of such payment prior to 11:30 a.m. on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 2:30 p.m. on the next Business Day, the Borrower shall
reimburse such Issuing Bank through the Agent in an amount equal to the amount
of such drawing together with interest thereon.  If the Borrower fails to so
reimburse such Issuing Bank by such time, unless the Borrower shall have advised
the Agent that it does not meet the conditions specified in either clause (B) or
(C) below, the Agent shall promptly notify each Lender of the Honor Date, the
amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount
of such Lender’s Ratable Share thereof.  In such event, the Borrower shall be
deemed to have requested a Base Rate Advance to be disbursed on the Honor Date
in an amount equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section 2.01(a) or the delivery of a Notice of Borrowing
but subject to (A) the amount of the aggregate Unused Commitments, (B) no Event
of Default having occurred and be continuing, or resulting therefrom, and
(C) the conditions specified in Sections 3.02(c) and (d) being satisfied on and
as of the date of the applicable Base Rate Advance and, to the extent so
financed, the Borrower’s obligation to satisfy the reimbursement obligation
created by such payment by the Issuing Bank on the Honor Date shall be
discharged and replaced by the resulting Base Rate Advance.  Any notice given by
any Issuing Bank or the Agent pursuant to this Section 2.03(c)(i) may be given
by telephone if immediately confirmed in writing; provided that the lack of such
an immediate confirmation shall not affect the conclusiveness or binding effect
of such notice.

 

(ii)                                  Each Lender shall upon any notice pursuant
to Section 2.03(c)(i) make funds available to the Agent for the account of the
applicable Issuing Bank at the Agent’s Office in an amount equal to its Ratable
Share of the Unreimbursed Amount not later than 4:00 p.m. on the Business Day
specified in such notice by the Agent, whereupon, subject to the provisions of
Section 2.03(c)(iii), each Lender that so makes funds available shall be deemed
to have made a Base Rate Advance to the Borrower in such amount.  The Agent
shall remit the funds so received to the applicable Issuing Bank.

 

(iii)                               With respect to any Unreimbursed Amount that
is not fully refinanced by a Base Rate Advance because any of the conditions set
forth in clauses (A), (B) or (C) of Section 2.03(c)(i) cannot be satisfied or
for any other reason, then not later than 2:30 p.m. on the next Business Day
after the day notice of the drawing is given to the Borrower, in the case of a
failure to meet any such condition, or in any other case, after notice of the
event resulting in the outstanding Unreimbursed Amount, the Borrower shall
reimburse such Issuing Bank through the Agent in an amount equal to the amount
of such outstanding Unreimbursed Amount with interest thereon.  If the Borrower
fails to so reimburse such Issuing Bank by such time, the Borrower shall be
deemed to have incurred from the applicable Issuing Bank an L/C Borrowing in the
amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing
shall be due and payable on demand (together with interest) and shall bear
interest at the Base Rate in

 

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effect from time to time plus the Applicable Rate for Base Rate Advances in
effect from time to time plus 2% per annum.  In such event, each Lender’s
payment to the Agent for the account of the applicable Issuing Bank pursuant to
Section 2.03(c)(ii) shall be deemed payment in respect of its participation in
such L/C Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section 2.03.

 

(iv)                              Until each Lender funds its Base Rate Advance
or L/C Advance pursuant to this Section 2.03(c) to reimburse the applicable
Issuing Bank for any amount drawn under any Letter of Credit, interest in
respect of such Lender’s Ratable Share of such amount shall be solely for the
account of the applicable Issuing Bank.

 

(v)                                 Each Lender’s obligation to make Base Rate
Advances or L/C Advances to reimburse the applicable Issuing Bank for amounts
drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against such Issuing Bank, the Borrower or any other Person
for any reason whatsoever; (B) the occurrence or continuance of a Default, or
(C) any other occurrence, event or condition, whether or not similar to any of
the foregoing; provided, however, that each Lender’s obligation to make Base
Rate Advances pursuant to this Section 2.03(c) is subject to the conditions set
forth in Section 2.03(c)(i).  No such making of an L/C Advance shall relieve or
otherwise impair the obligation of the Borrower to reimburse the applicable
Issuing Bank for the amount of any payment made by such Issuing Bank under any
Letter of Credit, together with interest as provided herein.

 

(vi)                              If any Lender fails to make available to the
Agent for the account of the applicable Issuing Bank any amount required to be
paid by such Lender pursuant to the foregoing provisions of this
Section 2.03(c) by the time specified in Section 2.03(c)(ii), such Issuing Bank
shall be entitled to recover from such Lender (acting through the Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to such Issuing Bank at a rate per annum equal to the greater of the Federal
Funds Rate and a rate determined by such Issuing Bank in accordance with banking
industry rules on interbank compensation, plus any administrative, processing or
similar fees customarily charged by such Issuing Bank in connection with the
foregoing.  If such Lender pays such amount (with interest and fees as
aforesaid), the amount so paid shall constitute such Lender’s Base Rate Advance
included in the relevant Borrowing or L/C Advance in respect of the relevant L/C
Borrowing, as the case may be.  A certificate of the applicable Issuing Bank
submitted to any Lender (through the Agent) with respect to any amounts owing
under this clause (vi) shall be conclusive absent manifest error.

 

(d)                                 Repayment of Participations.

 

(i)                                     At any time after the applicable Issuing
Bank has made a payment under any Letter of Credit and has received from any
Lender such Lender’s L/C Advance in respect of such payment in accordance with
Section 2.03(c), if the Agent receives for the

 

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account of such Issuing Bank any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from the Borrower or otherwise,
including proceeds of Cash Collateral (as defined in Section 2.03(h)) applied
thereto by the Agent), the Agent will distribute to such Lender its Ratable
Share thereof in the same funds as those received by the Agent.

 

(ii)                                  If any payment received by the Agent for
the account of the applicable Issuing Bank pursuant to Section 2.03(c)(i) is
required to be returned under any of the circumstances described in Section 8.12
(including pursuant to any settlement entered into by such Issuing Bank in its
discretion), each Lender shall pay to the Agent for the account of such Issuing
Bank its Ratable Share thereof on demand of the Agent, plus interest thereon
from the date of such demand to the date such amount is returned by such Lender,
at a rate per annum equal to the Federal Funds Rate from time to time in
effect.  The obligations of the Lenders under this clause shall survive the
payment in full of the Obligations and the termination of this Agreement.

 

(e)                                  Failure to Make Revolving Advances.  The
failure of any Lender to make the Revolving Advance to be made by it on the date
specified in Section 2.03(c) or any L/C Advance shall not relieve any other
Lender of its obligation hereunder to make its Revolving Advance or L/C Advance,
as the case may be, to be made by such other Lender on such date.

 

(f)                                   Obligations Absolute.  The obligation of
the Borrower to reimburse the applicable Issuing Bank for each drawing under
each Letter of Credit and to repay each L/C Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following:

 

(i)                                     any lack of validity or enforceability
of such Letter of Credit, this Agreement, or any other Loan Document;

 

(ii)                                  the existence of any claim, counterclaim,
setoff, defense or other right that the Borrower may have at any time against
any beneficiary or any transferee of such Letter of Credit (or any Person for
whom any such beneficiary or any such transferee may be acting), any Issuing
Bank or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any agreement or
instrument relating thereto, or any unrelated transaction;

 

(iii)                               any draft, demand, certificate or other
document presented under such 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; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under such Letter of Credit;

 

(iv)                              any payment by the applicable Issuing Bank
under such Letter of Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of Credit; or any payment
made by the applicable Issuing Bank under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other

 

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representative of or successor to any beneficiary or any transferee of such
Letter of Credit, including any arising in connection with any proceeding under
any Debtor Relief Law; or

 

(v)                                 any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower.

 

provided, however, that nothing in this Section 2.03(f) shall limit the rights
of the Borrower under Section 2.03(g).

 

The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity that is
known to the Borrower in connection with any draw under such Letter of Credit of
which the Borrower has reasonable notice, the Borrower will immediately notify
the applicable Issuing Bank.  To the extent allowed by applicable Law, Borrower
shall be conclusively deemed to have waived any such claim against the
applicable Issuing Bank and its correspondents unless such notice is given as
aforesaid.  Nothing herein shall require the Borrower to make any determination
as to whether the drawing is in accordance with the requirements of the Letter
of Credit, provided that the Borrower may waive any discrepancies in the drawing
on any such Letter of Credit.

 

(g)                                  Role of Issuing Bank.  Each Lender and the
Borrower agree that, in paying any drawing under a Letter of Credit, the
applicable Issuing Bank shall not have any responsibility to obtain any document
(other than any sight draft, certificates and documents expressly required by
the Letter of Credit) or to ascertain or inquire as to the validity or accuracy
of any such document or the authority of the Person executing or delivering any
such document.  None of the applicable Issuing Bank, the Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of
such Issuing Bank shall be liable to any Lender for (i) any action taken or
omitted in connection herewith at the request or with the approval of the
Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted
in the absence of gross negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or L/C Related Document.  The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at Law or under any other agreement.  None of the applicable Issuing
Bank, the Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of such Issuing Bank shall be liable or responsible for
any of the matters described in clauses (i) through (v) of Section 2.03(f);
provided, however, that anything in such clauses to the contrary
notwithstanding, the Borrower may have a claim against the applicable Issuing
Bank, and such Issuing Bank may be liable to the Borrower, to the extent, but
only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Borrower which the Borrower proves were caused by such
Issuing Bank’s willful misconduct or gross negligence or such Issuing Bank’s
willful failure to pay under any Letter of Credit after the presentation to it
by the beneficiary of a sight draft and certificate(s) strictly complying with
the terms and conditions of a Letter of Credit.  In furtherance and not in

 

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limitation of the foregoing, the applicable Issuing Bank may accept documents
that appear on its face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary, and such
Issuing Bank shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.

 

(h)                                 Cash Collateral.  Upon the request of the
Agent or the applicable Issuing Bank, if, as of the Letter of Credit Expiration
Date, any L/C Obligation for any reason remains outstanding, the Borrower shall,
in each case, immediately Cash Collateralize the then outstanding L/C
Obligations.  Section 6.02 sets forth certain additional requirements to deliver
Cash Collateral hereunder.  For purposes of this Section 2.03,
Section 2.10(b)(ii), Section 2.19(c) (ii), (iv) and (v) and Section 6.02, “Cash
Collateralize” means to pledge and deposit with or deliver to the Agent, for the
benefit of the Issuing Banks and the Lenders, as collateral for the L/C
Obligations, cash or deposit account balances pursuant to documentation in form
and substance satisfactory to the Agent and each Issuing Bank (which documents
are hereby consented to by the Lenders) in an amount equal to 100% of the amount
of the L/C Obligations as of such date plus any accrued and unpaid interest and
fees thereon.  Derivatives of such term have corresponding meanings.  The
Borrower hereby grants to the Agent, for the benefit of the Issuing Banks and
the Lenders, a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing.  Cash Collateral shall be
maintained in blocked, non-interest bearing deposit accounts with the Agent.

 

(i)                                     Letter of Credit Reports.  Each Issuing
Bank shall furnish (A) to the Agent on the first Business Day of each month a
written report summarizing issuance and expiration dates of Letters of Credit
issued by such Issuing Bank during the preceding month and drawings during such
month under all such Letters of Credit and (B) to the Agent on the first
Business Day of each calendar quarter a written report setting forth the average
daily aggregate Available Amount during the preceding calendar quarter of all
Letters of Credit issued by such Issuing Bank.

 

(j)                                    Interim Interest.  Except as provided in
Section 2.03(c)(ii) with respect to Unreimbursed Amounts refinanced as Base Rate
Advances and Section 2.03(c)(iii) with respect to L/C Borrowings, unless the
Borrower shall reimburse each payment by an Issuing Bank pursuant to a Letter of
Credit in full on the Honor Date, the Unreimbursed Amount thereof shall bear
interest, for each day from and including the Honor Date to but excluding the
date that the Borrower reimburses such Issuing Bank for the Unreimbursed Amount
in full, at the rate per annum equal to (i) the Base Rate in effect from time to
time plus the Applicable Rate for Base Rate Advances in effect from time to
time, to but excluding the next Business Day after the Honor Date and (ii) from
and including the next Business Day after the Honor Date, the Base Rate in
effect from time to time plus the Applicable Rate for Base Rate Advances in
effect from time to time plus 2% per annum.

 

Section 2.03A                    Swingline Advances.

 

(a)                                 Amount of Swingline Advances.  Subject to
the terms and conditions set forth herein, the Swingline Lender will make
Swingline Advances in Dollars to the Borrower from time to time during the
period from the Effective Date until the Termination Date, in an

 

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aggregate principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of all outstanding Swingline Advances
exceeding $50,000,000 (or such lesser amount as agreed between the Borrower and
the Swingline Lender) or (ii) the Total Outstandings exceeding the aggregate
Revolving Credit Commitment.  Each Swingline Advance shall be in an aggregate
amount of $500,000 or an integral multiple of $100,000 in excess thereof or such
greater amounts as agreed between the Borrower and the Swingline Lender.  Within
the foregoing limits and subject to the terms and conditions set forth herein,
the Borrower may borrow, prepay and reborrow Swingline Advances.  The Swingline
Lender shall be under no obligation to make a Swingline Advance if any Lender is
at such time an Affected Lender hereunder, unless the Swingline Lender is
satisfied that the related exposure will be 100% covered by the Commitments of
the non-Affected Lenders or, if not so covered, until the Swingline Lender has
entered into arrangements satisfactory to it in its sole discretion with the
Borrower or such Affected Lender to eliminate the Swingline Lender’s risk with
respect to such Affected Lender, and participating interests in any such newly
made Swingline Advance shall be allocated among non-Affected Lenders in a manner
consistent with Section 2.19(c)(i) (and Affected Lenders shall not participate
therein).

 

(b)                                 Borrowing Notice and Making of Swingline
Advances.  To request a Swingline Advance, the Borrower shall notify the
Swingline Lender and the Agent of such request by telephone (confirmed by
facsimile), not later than 2:00 p.m. (or such later time as the Swingline Lender
may determine in its sole discretion), on the day of such Swingline Advance. 
Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Advance. 
The Swingline Lender shall promptly notify the Borrower and the Agent (and the
Agent shall promptly notify each Lender) and the Swingline Lender shall make
each Swingline Advance available to the Borrower by 2:30 p.m. (or such later
time as may be agreed by the Swingline Lender and the Borrower) on the requested
date of such Swingline Advance in a manner agreed upon by the Borrower and the
Swingline Lender.  Each Swingline Advance shall bear interest at the Base Rate,
or, at the option of the Borrower and subject to prior agreement between the
Borrower and the Swingline Lender, shall be a Swingline Eurodollar Rate Advance
or a Money Market Rate Advance.

 

(c)                                  Repayment of Swingline Advances.  Each
Swingline Advance shall be paid in full by the Borrower on the earlier of (x) on
or before the fourteenth (14th) Business Day after the date such Swingline
Advance was made by the Swingline Lender or (y) the Termination Date.  A
Swingline Advance may not be repaid with the proceeds from another Swingline
Advance.  In addition, the Swingline Lender (i) may at any time in its sole
discretion with respect to any outstanding Swingline Advance, or (ii) shall, on
the fourteenth (14th) Business Day after the date any Swingline Advance is made
and which has not been otherwise repaid, require each Lender (including the
Swingline Lender) to make a Revolving Advance in the amount of such Lender’s
Ratable Share of such Swingline Advance (including, without limitation, any
interest accrued and unpaid thereon), for the purpose of repaying such Swingline
Advance.  Not later than 2:00 p.m. on the date of any notice received pursuant
to this Section 2.03A(c), each Lender shall make available to the Agent its
required Revolving Advance, in immediately available funds in the same manner as
provided in Section 2.02(a) with respect to Revolving Advances made by such
Lender.  Revolving Advances made pursuant to this Section 2.03A(c) shall
initially be Base Rate Advances and thereafter may be continued as Base Rate
Advances or converted into Eurodollar Rate Advances in the manner provided in
Section 2.09 and subject to the other conditions and

 

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limitations set forth in this Article II.  Each Lender’s obligation to make
Revolving Advances pursuant to this Section 2.03A(c)  to repay Swingline
Advances shall be unconditional, continuing, irrevocable and absolute and shall
not be affected by any circumstances, including, without limitation, (a) any
set-off, counterclaim, recoupment, defense or other right which such Lender may
have against the Agent, the Swingline Lender or any other Person, (b) the
occurrence or continuance of a Default or an Event of Default, (c) any adverse
change in the condition (financial or otherwise) of the Borrower, or (d) any
other circumstance, happening or event whatsoever.  In the event that any Lender
fails to make payment to the Agent of any amount due under this
Section 2.03A(c), the Agent shall be entitled to receive, retain and apply
against such obligation the principal and interest otherwise payable to such
Lender hereunder until the Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied.  In addition to the foregoing, if for
any reason any Lender fails to make payment to the Agent of any amount due under
this Section 2.03A(c), such Lender shall be deemed, at the option of the Agent,
to have unconditionally and irrevocably purchased from the Swingline Lender
without recourse or warranty, an undivided interest and participation in the
applicable Swingline Advance in the amount of such Revolving Advance, and such
interest and participation may be recovered from such Lender together with
interest thereon at the Federal Funds Rate for each day during the period
commencing on the date of demand and ending on the date such amount is received.

 

(d)                                 Swingline Advances Reports.  The Swingline
Lender shall furnish to the Agent on each Business Day a written report
summarizing outstanding Swingline Advances made by the Swingline Lender and the
due date for the repayment of such Swingline Advances; provided that if no
Swingline Advances are outstanding, no such report shall be required to be
delivered.

 

(e)                                  Successor Swingline Lender.  Subject to the
appointment and acceptance of a successor Swingline Lender as provided in this
paragraph, the Borrower may, upon not less than ten (10) Business Days prior
notice to the Agent and the Lenders, replace the existing Swingline Lender with
the consent of the Agent (which consent shall not unreasonably be withheld). 
Upon the acceptance of its appointment as Swingline Lender hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the replaced Swingline Lender, and the
replaced Swingline Lender shall be discharged from its duties and obligations
hereunder.  The fees payable by the Borrower to a successor Swingline Lender
shall be as agreed between the Borrower and such successor.  After the Swingline
Lender’s replacement hereunder, the provisions of this Article and Section 8.04
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 Swingline Lender.

 

Section 2.04                             Fees.

 

(a)                                 Commitment Fee.  The Borrower agrees to pay
to the Agent for the account of each Lender a commitment fee on such Lender’s
Unused Commitment (provided that, for the avoidance of doubt, and without
duplication, such Lender’s Unused Commitment shall be calculated exclusive of
such Lender’s Swingline Exposure and, if such Lender is the Swingline Lender,
without giving effect to the Swingline Advances, and in no event shall the
aggregate of such commitment fees exceed an amount calculated based on the
product of (a) the aggregate Revolving Credit Commitments minus the aggregate
principal amount of all Revolving

 

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Advances and aggregate L/C Obligations and (b) the Applicable Rate for
commitment fees) from the Effective Date in the case of each Initial Lender and
from the effective date specified in the Assumption Agreement or in the
Assignment and Assumption pursuant to which it became a Lender in the case of
each other Lender until the Termination Date at a rate per annum equal to the
Applicable Rate for commitment fees in effect from time to time, payable in
arrears quarterly on the last day of each March, June, September and December,
commencing June 30, 2013, and on the Termination Date, provided that no
commitment fee shall accrue with respect to the Unused Commitment of an Affected
Lender so long as such Lender shall be an Affected Lender.

 

(b)                                 Letter of Credit Fees.

 

(i)                                     The Borrower shall pay to the Agent for
the account of each Lender a commission on such Lender’s Ratable Share of the
average daily aggregate Available Amount of all Letters of Credit outstanding
from time to time at a rate per annum equal to the Applicable Rate for
Eurodollar Rate Advances in effect from time to time, during such calendar
quarter, payable in arrears quarterly on the last day of each March, June,
September and December, commencing with the quarter ended June 30, 2013, and on
the Termination Date; provided that the Applicable Rate for Eurodollar Rate
Advances shall be 2% above such Applicable Rate in effect upon the occurrence
and during the continuation of an Event of Default if the Borrower is required
to pay default interest pursuant to Section 2.07(b).

 

(ii)                                  The Borrower shall pay to each Issuing
Bank, for its own account, a fronting fee with respect to each Letter of Credit
issued by such Issuing Bank, payable in the amounts and at the times specified
in the applicable Fee Letter between the Borrower and such Issuing Bank, and
such other commissions, issuance fees, transfer fees and other fees and charges
in connection with the issuance or administration of each Letter of Credit as
the Borrower and such Issuing Bank shall agree promptly following receipt of an
invoice therefor.

 

(c)                                  Agent’s Fees.  The Borrower shall pay to
the Agent for its own account such fees as are agreed between the Borrower and
the Agent pursuant to the Fee Letter between the Borrower and the Agent.

 

Section 2.05                             Optional Termination or Reduction of
the Commitments.

 

(a)                                 The Borrower shall have the right, upon at
least three Business Days’ notice to the Agent, to terminate in whole or
permanently reduce ratably in part the Unused Commitments or the Unissued Letter
of Credit Commitments, provided that each partial reduction shall be in the
aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in excess
thereof.

 

(b)                                 So long as no Default or Event of Default
shall be continuing, the Borrower shall have the right, at any time, upon at
least ten Business Days’ notice to an Affected Lender (with a copy to the
Agent), to terminate in whole such Lender’s Revolving Credit Commitment and, if
applicable, its Letter of Credit Commitment, without affecting the Commitments
of any other Lender.  Such termination shall be effective, (x) with respect to
such Lender’s Unused Commitment, on the date set forth in such notice, provided,
however, that such date shall be no

 

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earlier than ten Business Days after receipt of such notice and (y) with respect
to each Revolving Advance outstanding to such Lender, in the case of Base Rate
Advances, on the date set forth in such notice and, in the case of Eurodollar
Rate Advances, on the last day of the then current Interest Period relating to
such Revolving Advance.  Upon termination of a Lender’s Commitments under this
Section 2.05(b), the Borrower will pay or cause to be paid all principal of, and
interest accrued to the date of such payment on, Revolving Advances (and if such
Lender is the Swingline Lender, the Swingline Advances) owing to such Lender
and, subject to Section 2.19, pay any accrued commitment fees or Letter of
Credit fees payable to such Lender pursuant to the provisions of Section 2.04,
and all other amounts payable to such Lender hereunder (including, but not
limited to, any increased costs or other amounts owing under Section 2.11 and
any indemnification for Taxes under Section 2.14); and, if such Lender is an
Issuing Bank, shall pay to such Issuing Bank for deposit in an escrow account an
amount equal to the Available Amount of all Letters of Credit issued by such
Issuing Bank, whereupon all Letters of Credit issued by such Issuing Bank shall
be deemed to have been issued outside of this Agreement on a bilateral basis and
shall cease for all purposes to constitute a Letter of Credit issued under this
Agreement, and upon such payments, except as otherwise provided below, the
obligations of such Lender hereunder shall, by the provisions hereof, be
released and discharged; provided, however, that (i) such Lender’s rights under
Sections 2.11, 2.14 and 8.04, and, in the case of an Issuing Bank,
Section 8.04(c), and its obligations under Section 8.04 and 8.08, in each case
in accordance with the terms thereof, shall survive such release and discharge
as to matters occurring prior to such date and (ii) such escrow agreement shall
be in a form reasonably agreed to by the Borrower and such Issuing Bank, but in
no event shall either the Borrower or such Issuing Bank require any waivers,
covenants, events of default or other provisions that are more restrictive than
or inconsistent with the provisions of this Agreement.  Subject to Section 2.18,
the aggregate amount of the Commitments of the Lenders once reduced pursuant to
this Section 2.05(b) may not be reinstated.  The termination of the Commitments
of an Affected Lender pursuant to this Section 2.05(b) will not be deemed to be
a waiver of any right that the Borrower, the Agent, any Issuing Bank, the
Swingline Lender or any other Lender may have against the Affected Lender that
arose prior to the date of such termination.  Upon any such termination, the
Ratable Share of each remaining Lender will be revised.

 

Section 2.06                             Repayment of Advances.  The Borrower
shall repay to the Agent for the ratable account of the Lenders on the
Termination Date the aggregate principal amount of the Revolving Advances made
by such Lender and then outstanding.  The Borrower shall repay Swingline
Advances in accordance with Section 2.03A(c).

 

Section 2.07                             Interest on Advances.

 

(a)                                 Scheduled Interest.  The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to each Lender
(including the Swingline Lender) from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:

 

(i)                                     Base Rate Advances.  During such periods
as such Revolving Advance is a Base Rate Advance, a rate per annum equal at all
times to the sum of (x) the Base Rate in effect from time to time plus (y) the
Applicable Rate for Base Rate Advances in effect from time to time, payable in
arrears quarterly on the last day of each March, June,

 

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September and December during such periods and on the date such Base Rate
Advance shall be Converted or paid in full.

 

(ii)                                  Eurodollar Rate Advances.  During such
periods as such Revolving Advance is a Eurodollar Rate Advance, a rate per annum
equal at all times during each Interest Period for such Revolving Advance to the
sum of (x) the Eurodollar Rate for such Interest Period for such Revolving
Advance plus (y) the Applicable Rate for Eurodollar Rate Advances in effect from
time to time, payable in arrears on the last day of such Interest Period and, if
such Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day of such
Interest Period and on the date such Eurodollar Rate Advance shall be Converted
or paid in full.

 

(iii)                               Swingline Advances.  During such period as
such Swingline Advance remains outstanding, the Base Rate or, as agreed to by
the Swingline Lender and the Borrower, the Money Market Rate or the Eurodollar
Rate, payable on the date such Swingline Advance is required to be repaid.

 

(b)                                 Default Interest.  Upon the occurrence and
during the continuance of an Event of Default under Section 6.01(a), the Agent
may, and upon the request of the Required Lenders shall, require the Borrower to
pay interest (“Default Interest”) on (i) the unpaid principal amount of each
Advance owing to each Lender, payable in arrears on the dates referred to in
clause (a)(i), (a)(ii) or (a)(iii) above, at a rate per annum equal at all times
to 2% per annum above the rate per annum required to be paid on such Advance
pursuant to clause (a)(i), (a)(ii) or (a)(iii) above and (ii) to the fullest
extent permitted by Law, the amount of any interest, fee or other amount payable
hereunder that is not paid when due, from the date such amount shall be due
until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid on Base Rate
Advances pursuant to clause (a)(i) above, provided, however, that following
acceleration of the Advances pursuant to Section 6.01, Default Interest shall
accrue and be payable hereunder whether or not previously required by the Agent.

 

(c)                                  Interest Rate Limitation.  Nothing
contained in this Agreement or in any other Loan Document shall be deemed to
establish or require the payment of interest to any Lender at a rate in excess
of the maximum rate permitted by applicable Law.  If the amount of interest
payable for the account of any Lender on any interest payment date would exceed
the maximum amount permitted by applicable Law to be charged by such Lender, the
amount of interest payable for its account on such interest payment date shall
be automatically reduced to such maximum permissible amount.  In the event of
any such reduction affecting any Lender, if from time to time thereafter the
amount of interest payable for the account of such Lender on any interest
payment date would be less than the maximum amount permitted by applicable Law
to be charged by such Lender, then the amount of interest payable for its
account on such subsequent interest payment date shall be automatically
increased to such maximum permissible amount, provided that at no time shall the
aggregate amount by which interest paid for the account of any Lender has been
increased pursuant to this sentence exceed the aggregate amount by which
interest paid for its account has theretofore been reduced pursuant to the
previous sentence.

 

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Section 2.08                             Interest Rate Determination.

 

(a)         The Agent shall give prompt notice to the Borrower and the Lenders
of the applicable interest rate determined by the Agent for purposes of
Section 2.07(a).

 

(b)         If the Required Lenders determine that for any reason in connection
with any request for a Eurodollar Rate Advance or a Conversion to or
continuation thereof that (a) Dollar deposits are not being offered to banks in
the London interbank eurodollar market for the applicable amount and Interest
Period of such Eurodollar Rate Advance, (b) adequate and reasonable means do not
exist for determining the Eurodollar Rate for any requested Interest Period with
respect to a proposed Eurodollar Rate Advance, or (c) the Eurodollar Rate for
any requested Interest Period with respect to a proposed Eurodollar Rate Advance
does not adequately and fairly reflect the cost to such Lenders of funding such
Revolving Advance, the Agent will promptly so notify the Borrower and each
Lender, whereupon each Eurodollar Rate Advance will automatically on the last
day of the then existing Interest Period therefor Convert into a Base Rate
Advance.  Thereafter, the obligation of the Lenders to make or maintain
Eurodollar Rate Advances shall be suspended until the Agent (upon the
instruction of the Required Lenders) revokes such notice.  Upon receipt of such
notice, the Borrower may revoke any pending request for a Borrowing of,
Conversion to or continuation of Eurodollar Rate Advances or, failing that, will
be deemed to have Converted such request into a request for a Base Rate Advance
in the amount specified therein.

 

(c)          If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of “Interest Period” in Section 1.01, the Agent will
forthwith so notify the Borrower and the Lenders and such Revolving Advances
will automatically, on the last day of the then existing Interest Period
therefor, Convert into Base Rate Advances.

 

(d)         On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $5,000,000, such Revolving Advances
shall automatically Convert into Base Rate Advances.

 

(e)          Upon the occurrence and during the continuance of any Event of
Default,

 

(i)                                     with respect to Eurodollar Rate
Advances, each such Revolving Advance will automatically, on the last day of the
then existing Interest Period therefor, Convert into a Base Rate Advance (or if
such Revolving Advance is then a Base Rate Advance, will continue as a Base Rate
Advance); and

 

(ii)                                  the obligation of the Lenders to make
Eurodollar Rate Advances or to Convert Revolving Advances into Eurodollar Rate
Advances shall be suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.

 

Section 2.09                             Optional Conversion of Revolving
Advances.  The Borrower may on any Business Day, upon notice given to the Agent
not later than 12:00 noon on the third Business Day prior to the date of the
proposed Conversion and subject to the provisions of Sections 2.08

 

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and 2.12, Convert all Revolving Advances of one Type comprising the same
Borrowing into Revolving Advances of the other Type; provided, however, that
(a) any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be
made only on the last day of an Interest Period for such Eurodollar Rate
Advances, (b) any Conversion of Base Rate Advances into Eurodollar Rate Advances
shall be in an amount not less than the minimum amount specified in
Section 2.02(b), (c) no Conversion of any Revolving Advances shall result in
more separate Borrowings than permitted under Section 2.02(b) and (d) no
Swingline Advances may be converted.  Each such notice of a Conversion shall,
within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Revolving Advances to be Converted, and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for each such Revolving Advance.  Each notice of Conversion
shall be irrevocable and binding on the Borrower.

 

Section 2.10                             Prepayments of Advances.

 

(a)         Optional.  At any time and from time to time, the Borrower shall
have the right to prepay any Advance, in whole or in part, without premium or
penalty (except as provided in clause (y) below), upon notice at least two
Business Days’ prior to the date of such prepayment, in the case of Eurodollar
Rate Advances, and not later than 11:00 a.m. on the date of such prepayment in
the case of Base Rate Advances and Swingline Advances, to the Agent (and, in the
case of prepayment a Swingline Advance, the Swingline Lender) specifying the
proposed date of such prepayment and the aggregate principal amount and Type of
the Advance to be prepaid (and, in the case of Eurodollar Rate Advances, the
Interest Period of the Borrowing pursuant to which made); provided, however,
that (x) each partial prepayment shall be in an aggregate principal amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof, and shall be
accompanied by accrued interest to the date of prepayment on the principal
amount prepaid, and (y) in the event of any such prepayment of a Eurodollar Rate
Advance, the Borrower shall be obligated to reimburse the Lenders in respect
thereof pursuant to Section 8.04(e).

 

(b)         Mandatory.

 

(i)                                     The Borrower shall prepay the aggregate
principal amount of the Advances, together with accrued interest to the date of
prepayment on the principal amount prepaid, without requirement of demand
therefor, or shall pay or prepay any other Indebtedness then outstanding at any
time, when and to the extent required to comply with applicable Laws of any
Governmental Authority, including the 2013 Order and/or any Subsequent Order, or
applicable resolutions of the Board of Directors of the Borrower.

 

(ii)                                  If for any reason the Total Outstandings
at any time exceed the aggregate Revolving Credit Commitments then in effect,
the Borrower shall, within one Business Day after notice thereof, prepay
Advances and/or Cash Collateralize the L/C Obligations in an aggregate amount
equal to such excess; provided, however, that the Borrower shall not be required
to Cash Collateralize the L/C Obligations pursuant to this
Section 2.10(b) unless, after the prepayment in full of the Advances, the Total
Outstandings exceed the aggregate Revolving Credit Commitments then in effect.

 

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Section 2.11                             Increased Costs.

 

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

 

(i)                                     impose, modify or deem applicable any
reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any reserve requirement
contemplated by Section 2.11(e)) or any Issuing Bank; or

 

(ii)                                  impose on any Lender or any Issuing Bank
or the London interbank market any other condition, cost or expense affecting
this Agreement or Eurodollar Rate Advances 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 of making or maintaining any Eurodollar Rate Advance (or of maintaining
its obligation to make any such Revolving Advance), or to increase the cost to
such Lender or such Issuing Bank of participating in, issuing or maintaining any
Letter of Credit (or of maintaining its obligation to participate in or to issue
any Letter of Credit), or to reduce the amount of any sum received or receivable
by such Lender or such Issuing Bank hereunder (whether of principal, interest or
any other amount) then, upon request of such Lender or such Issuing Bank, the
Borrower will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.

 

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

 

(c)          Certificates for Reimbursement.  A certificate of a Lender or an
Issuing Bank setting forth the amount or amounts necessary to compensate such
Lender or such Issuing Bank or its holding company, as the case may be, as
specified in subsection (a) or (b) of this Section and delivered to the Borrower
shall be conclusive and binding upon all parties absent manifest error.  The
Borrower shall pay such Lender or such Issuing Bank, as the case may be, the
amount shown as due on any such certificate within 30 days after receipt
thereof.

 

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(d)         Delay in Requests.  Failure or delay on the part of any Lender or
any Issuing Bank to demand compensation pursuant to the foregoing provisions of
this Section shall not constitute a waiver of such Lender’s or such Issuing
Bank’s right to demand such compensation, provided that the Borrower shall not
be required to compensate a Lender or an Issuing Bank pursuant to the foregoing
provisions of this Section for any increased costs incurred or reductions
suffered more than three months prior to the date that such Lender or such
Issuing Bank, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or such
Issuing Bank’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the three-month period referred to above shall be extended to include the
period of retroactive effect thereof).

 

(e)          Reserves on Eurodollar Rate Advances.  The Borrower shall pay to
each Lender, as long as such Lender shall be required to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency funds
or deposits (currently known as “Eurocurrency liabilities”), additional interest
on the unpaid principal amount of each Eurodollar Rate Advance equal to the
actual costs of such reserves allocated to such Revolving Advance by such Lender
(as determined by such Lender in good faith, which determination shall be
conclusive absent manifest error), which shall be due and payable on each date
on which interest is payable on such Eurodollar Rate Advance, provided the
Borrower shall have received at least 30 days’ prior notice (with a copy to the
Agent) of such additional interest from such Lender.  If a Lender fails to give
notice 30 days prior to the relevant interest payment date, such additional
interest shall be due and payable 30 days from receipt of such notice.

 

Section 2.12                             Illegality.  If any Lender shall have
determined in good faith that the introduction of or any change in any
applicable Law or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance with any guideline or request from any such Governmental
Authority (whether or not having the force of law), for any Lender or its
Applicable Lending Office to make, maintain or fund Eurodollar Rate Advances, or
to determine or charge interest rates based upon the Eurodollar Rate, or any
Governmental Authority has imposed material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrower through
the Agent, any obligation of such Lender to make or continue Eurodollar Rate
Advances or to convert Base Rate Advances to Eurodollar Rate Advances shall be
suspended until such Lender notifies the Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.  Upon receipt
of such notice, the Borrower shall, upon demand from such Lender (with a copy to
the Agent), prepay or, if applicable, convert all Eurodollar Rate Advances of
such Lender to Base Rate Advances, either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate
Advances to such day, or immediately, if such Lender may not lawfully continue
to maintain such Eurodollar Rate Advances.  Upon any such prepayment or
conversion, the Borrower shall also pay accrued interest on the amount so
prepaid or converted.

 

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Section 2.13                             Payments and Computations.

 

(a)         All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.  The
Borrower shall make each payment hereunder not later than 1:00 p.m. on the day
when due in U.S. dollars to the Agent at the Agent’s Account in same day funds. 
The Agent will promptly thereafter cause to be distributed like funds relating
to the payment of principal, interest, fees or commissions ratably (other than
amounts payable pursuant to Section 2.05(b), 2.11, 2.12, 2.14, 2.20 or 8.04(e))
to the Lenders for the account of their respective Applicable Lending Offices,
and like funds relating to the payment of any other amount payable to any Lender
to such Lender for the account of its Applicable Lending Office, in each case to
be applied in accordance with the terms of this Agreement.  Upon any Assuming
Lender becoming a Lender hereunder as a result of a Commitment Increase pursuant
to Section 2.18, and upon the Agent’s receipt of such Lender’s Assumption
Agreement and recording of the information contained therein in the Register,
from and after the applicable Increase Date, the Agent shall make all payments
hereunder and under any Notes issued in connection therewith in respect of the
interest assumed thereby to the Assuming Lender.  Upon its acceptance of an
Assignment and Assumption and recording of the information contained therein in
the Register pursuant to Section 8.07(c), from and after the effective date
specified in such Assignment and Assumption, the Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Assumption
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.

 

(b)         All computations of interest based on (i) the Prime rate (as defined
in the definition of “Base Rate” in Section 1.01) shall be made by the Agent on
the basis of a year of 365 or 366 days, as the case may be and (ii) the Federal
Funds Rate, the Eurodollar Rate and of fees and Letter of Credit commissions
shall be made by the Agent on the basis of a year of 360 days, in each case for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest, fees or commissions are
payable.  Interest on Swingline Advances shall be calculated on the basis of a
year of 360 days or such other basis agreed to by the Swingline Lender and the
Borrower, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest is
payable.  Each determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.

 

(c)          Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest, fees or commissions, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.

 

(d)         Unless the Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed

 

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to each Lender on such due date an amount equal to the amount then due such
Lender.  If and to the extent the Borrower shall not have so made such payment
in full to the Agent, each Lender shall repay to the Agent forthwith on demand
such amount distributed to such Lender together with interest thereon, for each
day from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Agent, at the Federal Funds Rate.

 

Section 2.14                             Taxes.

 

(a)         Payments Free of Taxes; Obligation to Withhold; Payments on Account
of Taxes.

 

(i)                                     Any and all payments by or on account of
any obligation of the Borrower hereunder or under any other Loan Document shall
to the extent permitted by applicable Laws be made free and clear of and without
reduction or withholding for any Taxes.  If, however, applicable Laws require
the Borrower or the Agent to withhold or deduct any Tax, such Tax shall be
withheld or deducted in accordance with such Laws as determined by the Borrower
or the Agent, as the case may be, upon the basis of the information and
documentation to be delivered pursuant to subsection (e) below.

 

(ii)                                  If the Borrower or the Agent shall be
required by the Internal Revenue Code to withhold or deduct any Taxes, including
both United States of America Federal backup withholding and withholding taxes,
from any payment, then (A) the Agent shall withhold or make such deductions as
are determined by the Agent to be required based upon the information and
documentation it has received pursuant to subsection (e) below, (B) the Agent
shall timely pay the full amount withheld or deducted to the relevant
Governmental Authority in accordance with the Internal Revenue Code, and (C) to
the extent that the withholding or deduction is made on account of Indemnified
Taxes or Other Taxes, the sum payable by the Borrower shall be increased as
necessary so that after any required withholding or the making of all required
deductions (including deductions applicable to additional sums payable under
this Section) the Agent, Lender or Issuing Bank, as the case may be, receives an
amount equal to the sum it would have received had no such withholding or
deduction been made.

 

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

 

(c)          Tax Indemnifications.

 

(i)                                     Without limiting the provisions of
subsection (a) or (b) above, the Borrower shall, and does hereby, indemnify the
Agent, each Lender and each Issuing Bank, and shall make payment in respect
thereof within 30 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
withheld or deducted by the Borrower or the Agent or paid by the Agent, such
Lender or such Issuing Bank, as the case may be, and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by

 

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the relevant Governmental Authority.  The Borrower shall also, and does hereby,
indemnify the Agent, and shall make payment in respect thereof within 10 days
after demand therefor, for any amount which a Lender or an Issuing Bank for any
reason fails to pay indefeasibly to the Agent as required by clause (ii) of this
subsection.  A certificate as to the amount of any such payment or liability
delivered to the Borrower by a Lender or an Issuing Bank (with a copy to the
Agent), or by the Agent on its own behalf or on behalf of a Lender or an Issuing
Bank, shall be conclusive absent manifest error.

 

(ii)                                  Without limiting the provisions of
subsection (a) or (b) above, each Lender and each Issuing Bank shall, and does
hereby, indemnify the Borrower and the Agent, and shall make payment in respect
thereof within 30 days after demand therefor, against any and all Taxes and any
and all related losses, claims, liabilities, penalties, interest and expenses
(including the fees, charges and disbursements of any counsel for the Borrower
or the Agent) incurred by or asserted against the Borrower or the Agent by any
Governmental Authority as a result of the failure by such Lender or such Issuing
Bank, as the case may be, to deliver, or as a result of the inaccuracy,
inadequacy or deficiency of, any documentation required to be delivered by such
Lender or such Issuing Bank, as the case may be, to the Borrower or the Agent
pursuant to subsection (e).  Each Lender and each Issuing Bank hereby authorizes
the Agent to set off and apply any and all amounts at any time owing to such
Lender or such Issuing Bank, as the case may be, under this Agreement or any
other Loan Document against any amount due to the Agent under this clause (ii). 
The agreements in this clause (ii) shall survive the resignation and/or
replacement of the Agent, any assignment of rights by, or the replacement of, a
Lender or an Issuing Bank, the termination of the Commitments and the repayment,
satisfaction or discharge of all other Obligations.

 

(d)         Evidence of Payments.  Upon request by the Borrower or the Agent, as
the case may be, after any payment of Taxes by the Borrower or by the Agent to a
Governmental Authority as provided in this 2.14, the Borrower shall deliver to
the Agent or the Agent shall deliver to the Borrower, as the case may be, the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of any return required by Laws to report such
payment or other evidence of such payment reasonably satisfactory to the
Borrower or the Agent, as the case may be.

 

(e)          Status of Lenders; Tax Documentation.

 

(i)                                     Each Lender shall deliver to the
Borrower and to the Agent, at the time or times prescribed by applicable Laws or
when reasonably requested by the Borrower or the Agent, such properly completed
and executed documentation prescribed by applicable Laws or by the taxing
authorities of any jurisdiction and such other reasonably requested information
as will permit the Borrower or the Agent, as the case may be, to determine
(A) whether or not payments made hereunder or under any other Loan Document are
subject to Taxes, (B) if applicable, the required rate of withholding or
deduction, and (C) such Lender’s entitlement to any available exemption from, or
reduction of, applicable Taxes in respect of all payments to be made to such
Lender by the Borrower pursuant to this Agreement or otherwise to establish such
Lender’s status for withholding tax purposes in the applicable jurisdiction.

 

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(ii)                                  Without limiting the generality of the
foregoing, if the Borrower is resident for tax purposes in the United States of
America,

 

(A)                                                                                                      
any Lender that is a “United States person” within the meaning of
Section 7701(a)(30) of the Internal Revenue Code shall deliver to the Borrower
and the Agent executed originals of Internal Revenue Service Form W-9 or such
other documentation or information prescribed by applicable Laws or reasonably
requested by the Borrower or the Agent as will enable the Borrower or the Agent,
as the case may be, to determine whether or not such Lender is subject to backup
withholding or information reporting requirements; and

 

(B)                                                                                                      
each Foreign Lender that is entitled under the Internal Revenue Code or any
applicable treaty to an exemption from or reduction of withholding tax with
respect to payments hereunder or under any other Loan Document shall deliver to
the Borrower and the Agent (in such number of copies as shall be requested by
the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the request
of the Borrower or the Agent, but only if such Foreign Lender is legally
entitled to do so), whichever of the following is applicable:

 

(1)                                                                                                        
executed originals of Internal Revenue Service Form W-8BEN claiming eligibility
for benefits of an income tax treaty to which the United States of America is a
party,

 

(2)                                                                                                        
executed originals of Internal Revenue Service Form W-8ECI,

 

(3)                                                                                                        
executed originals of Internal Revenue Service Form W-8IMY and all required
supporting documentation,

 

(4)                                                                                                        
in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Internal Revenue Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a “bank” within
the meaning of section 881(c)(3)(A) of the Internal Revenue Code, (B) a “10
percent shareholder” of the Borrower within the meaning of section
881(c)(3)(B) of the Internal Revenue Code, or (C) a “controlled foreign
corporation” described in section 881(c)(3)(C) of the Internal Revenue Code and
(y) executed originals of  Internal Revenue Service Form W-8BEN, or

 

(5)                                                                                                        
executed originals of any other form prescribed by applicable Laws as a basis
for claiming exemption from or a reduction in United States of America Federal
withholding tax together with such supplementary documentation as may be
prescribed by applicable Laws to permit the Borrower or the Agent to determine
the withholding or deduction required to be made.

 

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(iii)                               Each Lender shall promptly (A) notify the
Borrower and the Agent of any change in circumstances which would modify or
render invalid any claimed exemption or reduction, and (B) take such steps as
shall not be materially disadvantageous to it, in the reasonable judgment of
such Lender, and as may be reasonably necessary (including the re-designation of
its Applicable Lending Office) to avoid any requirement of applicable Laws of
any jurisdiction that the Borrower or the Agent make any withholding or
deduction for taxes from amounts payable to such Lender.

 

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

 

(f)           Treatment of Certain Refunds.  Unless required by applicable Laws,
at no time shall the Agent have any obligation to file for or otherwise pursue
on behalf of a Lender or an Issuing Bank, or have any obligation to pay to any
Lender or any Issuing Bank, any refund of Taxes withheld or deducted from funds
paid for the account of such Lender or such Issuing Bank, as the case may be. 
If the Agent, any Lender or any Issuing Bank determines, in its sole discretion,
that it has received a refund of any Taxes or Other Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section, it shall pay to the Borrower an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this Section with respect to
the Taxes or Other Taxes giving rise to such refund), net of all reasonable
out-of-pocket expenses incurred by the Agent, such Lender or such Issuing Bank,
as the case may be, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund), provided that the
Borrower, upon the request of the Agent, such Lender or such Issuing Bank,
agrees to repay the amount paid over to the Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the
Agent, such Lender or such Issuing Bank in the event the Agent, such Lender or
such Issuing Bank is required to repay such refund to such Governmental
Authority.  This subsection shall not be construed to require the Agent, any
Lender or any Issuing Bank to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to the Borrower or
any other Person.

 

(g)          Payments.  Failure or delay on the part of the Agent, any Lender or
any Issuing Bank to demand compensation pursuant to the foregoing provisions of
this Section 2.14 shall not constitute a waiver of the Agent’s, such Lender’s or
such Issuing Bank’s right to demand such

 

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compensation, provided that the Borrower shall not be required to compensate the
Agent, a Lender or an Issuing Bank pursuant to the foregoing provisions of this
Section 2.14 for any Indemnified Taxes or Other Taxes imposed or asserted by the
relevant Governmental Authority more than three months prior to the date that
the Agent, such Lender or such Issuing Bank, as the case may be, claims
compensation with respect thereto (except that, if a Change in Law giving rise
to such Indemnified Taxes or Other Taxes is retroactive, then the three-month
period referred to above shall be extended to include the period of retroactive
effect thereof).

 

(h)         Each of the Agent, any Issuing Bank or any Lender agrees to
cooperate with any reasonable request made by the Borrower in respect of a claim
of a refund in respect of Indemnified Taxes as to which it has been indemnified
by the Borrower or with respect to which the Borrower has paid additional
amounts pursuant to this Section 2.14 if (i) the Borrower has agreed in writing
to pay all of the Agent’s or such Issuing Bank’s or such Lender’s reasonable
out-of-pocket costs and expenses relating to such claim, (ii) the Agent or such
Issuing Bank or such Lender determines, in its good faith judgment, that it
would not be disadvantaged, unduly burdened or prejudiced as a result of such
claim and (iii) the Borrower furnishes, upon request of the Agent, or such
Issuing Bank or such Lender, an opinion of tax counsel (such opinion, which can
be reasoned, and such counsel to be reasonably acceptable to such Lender, or
such Issuing Bank or the Agent) that the Borrower is likely to receive a refund
or credit.

 

Section 2.15                             Sharing of Payments, Etc.  If any
Lender shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) on account of the Advances or
L/C Advances owing to it (other than pursuant to Section 2.05(b), 2.11, 2.12,
2.14, 2.20 or 8.04(e) or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Advances or
participations in Letters of Credit to any assignee or participant, other than
to the Borrower or any Subsidiary thereof if permitted hereby (as to which the
provisions of this Section 2.15 shall apply) in excess of its Ratable Share of
payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders (for cash at face value) such
participations in the Advances owing to them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender’s Ratable Share (according to the proportion of (i) the amount of
such Lender’s required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered.  The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.15 may, to the fullest extent permitted by Law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.

 

Section 2.16                             Evidence of Debt.

 

(a)         Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Advance owing to such Lender from time to time, including
the amounts of principal and interest

 

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payable and paid to such Lender from time to time hereunder in respect of
Advances.  The Borrower agrees that upon notice by any Lender (including the
Swingline Lender) to the Borrower (with a copy of such notice to the Agent) to
the effect that a Note is required or appropriate in order for such Lender to
evidence (whether for purposes of pledge, enforcement or otherwise) the Advances
owing to, or to be made by, such Lender, the Borrower shall promptly execute and
deliver to such Lender a Note payable to the order of such Lender in a principal
amount up to the Revolving Credit Commitment of such Lender.

 

(b)         The Register maintained by the Agent pursuant to
Section 8.07(c) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date
and amount of each Borrowing made hereunder, the Type of Advances comprising
such Borrowing and, if appropriate, the Interest Period applicable thereto,
(ii) the terms of each Assumption Agreement and each Assignment and Assumption
delivered to and accepted by it, (iii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iv) the amount of any sum received by the Agent from the Borrower
hereunder and each Lender’s share thereof.

 

(c)          Entries made in good faith by the Agent in the Register pursuant to
subsection (b) above, and by each Lender in its account or accounts pursuant to
subsection (a) above, shall be prima facie evidence of the amount of principal
and interest due and payable or to become due and payable from the Borrower to,
in the case of the Register, each Lender and, in the case of such account or
accounts, such Lender, under this Agreement, absent manifest error; provided,
however, that the failure of the Agent or such Lender to make an entry, or any
finding that an entry is incorrect, in the Register or such account or accounts
shall not limit or otherwise affect the obligations of the Borrower under this
Agreement.

 

Section 2.17                             Use of Proceeds.  The proceeds of the
Advances and issuances of Letters of Credit shall be available (and the Borrower
agrees that it shall use such proceeds) solely to refinance Indebtedness of the
Borrower from time to time and for other general corporate purposes of the
Borrower, subject to such restrictions that are imposed in the 2013 Order and/or
any Subsequent Order.

 

Section 2.18                             Increase in the Aggregate Revolving
Credit Commitments.

 

(a)         The Borrower may, at any time prior to the Termination Date, by
notice to the Agent, request that the aggregate amount of the Revolving Credit
Commitments be increased by an amount of $10,000,000 or an integral multiple
thereof (each a “Commitment Increase”) to be effective as of a date that is at
least 90 days prior to the Termination Date (the “Increase Date”) as specified
in the related notice to the Agent; provided, however that (i) in no event shall
the aggregate amount of the Revolving Credit Commitments at any time exceed
$700,000,000 or the aggregate amount of Commitment Increases exceed $200,000,000
and (ii) on the date of any request by the Borrower for a Commitment Increase
and on the related Increase Date, the applicable conditions set forth in this
Section 2.18 shall be satisfied.

 

(b)         The Agent shall promptly notify the Lenders of a request by the
Borrower for a Commitment Increase, which notice shall include (i) the proposed
amount of such requested Commitment Increase, (ii) the proposed Increase Date
and (iii) the date by which Lenders

 

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wishing to participate in the Commitment Increase must commit to an increase in
the amount of their respective Revolving Credit Commitments (the “Commitment
Date”).  Each Lender that is willing to participate in such requested Commitment
Increase (each an “Increasing Lender”) shall, in its sole discretion, give
written notice to the Agent on or prior to the Commitment Date of the amount by
which it is willing to increase its Revolving Credit Commitment.  If the Lenders
notify the Agent that they are willing to increase the amount of their
respective Revolving Credit Commitments by an aggregate amount that exceeds the
amount of the requested Commitment Increase, the requested Commitment Increase
shall be allocated among the Lenders willing to participate therein in such
amounts as are agreed between the Borrower and the Agent.  Each Increasing
Lender shall be subject to such applicable consents as may be required under
Section 8.07(b)(iii) (including, but not limited to, the consent of each Issuing
Bank and the Swingline Lender).

 

(c)          Promptly following each Commitment Date, the Agent shall notify the
Borrower as to the amount, if any, by which the Lenders are willing to
participate in the requested Commitment Increase.  If the aggregate amount by
which the Lenders are willing to participate in any requested Commitment
Increase on any such Commitment Date is less than the requested Commitment
Increase, then the Borrower may extend offers to one or more Eligible Assignees
to participate in any portion of the requested Commitment Increase that has not
been committed to by the Lenders as of the applicable Commitment Date; provided,
however, that the Revolving Credit Commitment of each such Eligible Assignee
shall be in an amount of not less than $10,000,000.

 

(d)         On each Increase Date, each Eligible Assignee that accepts an offer
to participate in a requested Commitment Increase in accordance with
Section 2.18(c) (each such Eligible Assignee, an “Assuming Lender”) shall become
a Lender party to this Agreement as of such Increase Date and the Revolving
Credit Commitment of each Increasing Lender for such requested Commitment
Increase shall be so increased by the amount by which the Increasing Lender
agreed to increase its Revolving Credit Commitment (or by the amount allocated
to such Lender pursuant to the next to last sentence of Section 2.18(b)) as of
such Increase Date; provided, however, that the Agent shall have received on or
before such Increase Date the following, each dated such date:

 

(i)                                     (A) certified copies of resolutions of
the Board of Directors of the Borrower approving the Commitment Increase and the
corresponding modifications to this Agreement, (B) an opinion of counsel for the
Borrower (which may be in-house counsel), in form and substance reasonably
acceptable to the Required Lenders and (C) a certificate from a duly authorized
officer of the Borrower, stating that the conditions set forth in
Section 3.02(a) and (b) are satisfied;

 

(ii)                                  an assumption agreement from each Assuming
Lender, if any, in form and substance satisfactory to the Borrower and the Agent
(each an “Assumption Agreement”), duly executed by such Assuming Lender, the
Agent, the Borrower and each other Person required to consent thereto, as
applicable under Section 8.07(b)(iii); and

 

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(iii)                               confirmation from each Increasing Lender of
the increase in the amount of its Revolving Credit Commitment in a writing
satisfactory to the Borrower and the Agent.

 

On each Increase Date, upon fulfillment of the conditions set forth in the
immediately preceding sentence of this Section 2.18(d), the Agent shall notify
the Lenders (including, without limitation, each Assuming Lender) and the
Borrower, on or before 1:00 p.m., by telecopier, of the occurrence of the
Commitment Increase to be effected on such Increase Date and shall record in the
Register the relevant information with respect to each Increasing Lender and
each Assuming Lender on such date.  Each Increasing Lender and each Assuming
Lender shall, before 2:00 p.m. on the Increase Date, make available for the
account of its Applicable Lending Office to the Agent at the Agent’s Account, in
same day funds, in the case of such Assuming Lender, an amount equal to such
Assuming Lender’s Ratable Share of the Borrowings then outstanding (calculated
based on its Revolving Credit Commitment as a percentage of the aggregate
Revolving Credit Commitments outstanding after giving effect to the relevant
Commitment Increase) and, in the case of such Increasing Lender, an amount equal
to the excess of (i) such Increasing Lender’s Ratable Share of the Borrowings
then outstanding (calculated based on its Revolving Credit Commitment as a
percentage of the aggregate Revolving Credit Commitments outstanding after
giving effect to the relevant Commitment Increase) over (ii) such Increasing
Lender’s Ratable Share of the Borrowings then outstanding (calculated based on
its Revolving Credit Commitment (without giving effect to the relevant
Commitment Increase) as a percentage of the aggregate Revolving Credit
Commitments (without giving effect to the relevant Commitment Increase).  After
the Agent’s receipt of such funds from each such Increasing Lender and each such
Assuming Lender, the Agent will promptly thereafter cause to be distributed like
funds to the other Lenders for the account of their respective Applicable
Lending Offices in an amount to each other Lender such that the aggregate amount
of the outstanding Advances owing to each Lender after giving effect to such
distribution equals such Lender’s Ratable Share of the Borrowings then
outstanding (calculated based on its Revolving Credit Commitment as a percentage
of the aggregate Revolving Credit Commitments outstanding after giving effect to
the relevant Commitment Increase).

 

Section 2.19                             Affected Lenders.  Notwithstanding any
provision of this Agreement to the contrary, if any Lender becomes an Affected
Lender, then the following provisions shall apply for so long as such Lender is
an Affected Lender:

 

(a)         fees shall cease to accrue on the Unused Commitment of such Affected
Lender pursuant to Section 2.04(a);

 

(b)         the Revolving Credit Commitment and Advances of such Affected Lender
shall not be included in determining whether the Required Lenders have taken or
may take any action hereunder (including any consent to any amendment or waiver
pursuant to Section 8.01), other than any waiver, amendment or modification
requiring the consent of all Lenders or of each Lender affected;

 

(c)          if (x) there shall be any Available Amount under any outstanding
Letter of Credit or (y) any Swingline Exposure shall exist during any time a
Lender is an Affected Lender, then:

 

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(i)                                     so long as no Default or Event of
Default has occurred and is continuing, all or any part of the Available Amount
of all such Letters of Credit and Swingline Exposure shall be reallocated among
the non-Affected Lenders in accordance with their respective Ratable Shares
(disregarding any Affected Lender’s Revolving Credit Commitment) but only to the
extent that with respect to each non-Affected Lender the sum of (A) the
aggregate principal amount of all Revolving Advances made by such non-Affected
Lender (in its capacity as a Lender) and outstanding at such time plus (B) such
non-Affected Lender’s Ratable Share (after giving effect to the reallocation
contemplated in this Section 2.19(c)(i)) of the outstanding L/C Obligations plus
(C) such non-Affected Lender’s Ratable Share (after giving effect to the
reallocation contemplated in this Section 2.19(c)(i)) of the outstanding
Swingline Exposure, does not exceed such non-Affected Lender’s Revolving Credit
Commitment;

 

(ii)                                  if the reallocation described in clause
(i) above cannot, or can only partially, be effected, the Borrower shall within
one (1) Business Day following notice by the Agent (x) first, prepay such
unallocable Swingline Exposure and (y) second, Cash Collateralize for the
benefit of the applicable Issuing Bank only the Borrower’s obligations
corresponding to such Affected Lender’s Ratable Share of the Available Amount of
outstanding Letters of Credit (after giving effect to any partial reallocation
pursuant to clause (i) above) (the “Affected Lender Share”) in accordance with
the procedures set forth in Section 2.03(h) for so long as such there shall be
any Available Amount of outstanding Letters of Credit;

 

(iii)                               if the Ratable Share of the Available Amount
of outstanding Letters of Credit and the Swingline Exposure of the non-Affected
Lenders is reallocated pursuant to this Section 2.19(c), then the fees payable
to the Lenders pursuant to Section 2.04(a) and Section 2.04(b) shall be adjusted
in accordance with such non-Affected Lenders’ Ratable Shares;

 

(iv)                              if any Affected Lender Share is not
reallocated pursuant to clause (i) above and if the Borrower fails to Cash
Collateralize any portion of such Affected Lender Share pursuant to clause
(ii) above, then, without prejudice to any rights or remedies of any Issuing
Bank or any Lender hereunder, the fee payable under Section 2.04(b) with respect
to such Affected Lender Share shall be payable to the Issuing Bank until such
Affected Lender Share is reallocated; and

 

(v)                                 if the Borrower Cash Collateralizes any
portion of any Affected Lender Share pursuant to clause (ii) above, the Borrower
shall not be required to pay any fees to such Affected Lender pursuant to
Section 2.04(b)(i) or the applicable Issuing Bank pursuant to
Section 2.04(b)(ii) (solely with respect to any fronting fee) with respect to
such Affected Lender’s Affected Lender Share during the period such Affected
Lender’s Affected Lender Share is Cash Collateralized;

 

(d)         to the extent the Agent receives any payments or other amounts for
the account of an Affected Lender under this Agreement, such Affected Lender
shall be deemed to have requested that the Agent use such payment or other
amount to fulfill such Affected Lender’s previously unsatisfied obligations to
fund a Revolving Advance under Section 2.03(c) or Section

 

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2.03A(c) or L/C Advance or any other unfunded payment obligation of such
Affected Lender under this Agreement; and

 

(e)          for the avoidance of doubt, the Borrower, each Issuing Bank, the
Swingline Lender, the Agent and each other Lender shall retain and reserve its
other rights and remedies respecting each Affected Lender.

 

In the event that the Agent, the Borrower, the Swingline Lender and the Issuing
Banks each agrees that an Affected Lender has adequately remedied all matters
that caused such Lender to be an Affected Lender, then the Ratable Shares of the
Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving
Credit Commitment and on such date such Lender shall purchase at par such of the
Revolving Advances of the other Lenders as the Agent shall determine may be
necessary in order for such Lender to hold such Revolving Advances in accordance
with its Ratable Share.  In addition, at such time as the Affected Lender is
replaced by another Lender pursuant to Section 2.20, the Ratable Shares of the
Lenders will be readjusted to reflect the inclusion of the replacing Lender’s
Commitment in accordance with Section 2.20.  In either such case, this
Section 2.19 will no longer apply.

 

Section 2.20                             Replacement of Lenders.  If any Lender
requests compensation under Section 2.11, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.14, or if any Lender is an Affected
Lender, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 8.07), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to one or more
assignees that shall assume such obligations (which any such assignee may be
another Lender, if a Lender accepts such assignment), provided that:

 

(a)         the Borrower shall have paid to the Agent the assignment fee
specified in Section 8.07(b);

 

(b)         such Lender shall have received payment of an amount equal to the
outstanding principal of its Revolving Advances and L/C Advances, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder and
under the other Loan Documents (including any amounts under Section 8.04(e))
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts);

 

(c)          in the case of any such assignment resulting from a claim for
compensation under Section 2.11 or payments required to be made pursuant to
Section 2.14, such assignment will result in a reduction in such compensation or
payments thereafter; and

 

(d)         such assignment does not conflict with applicable Laws.

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

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ARTICLE III

 

CONDITIONS PRECEDENT

 

Section 3.01          Conditions Precedent to Effectiveness.  This Agreement
shall become effective on and as of the first date (the “Effective Date”) on
which the following conditions precedent have been satisfied:

 

(a)   The Lenders shall have been given such access to the management, records,
books of account, contracts and properties of the Borrower and its Subsidiaries
as they shall have requested.

 

(b)   The Borrower shall have paid all accrued fees and agreed expenses of the
Agent, the Arrangers and the Lenders and the reasonable accrued fees and
expenses of counsel to the Agent that have been invoiced at least one Business
Day prior to the Effective Date.

 

(c)   On the Effective Date, the following statements shall be true and the
Agent shall have received a certificate signed by a duly authorized officer of
the Borrower, dated the Effective Date, stating that:

 

(i)            The representations and warranties contained in Section 4.01 are
true and correct on and as of the Effective Date, and

 

(ii)           No event has occurred and is continuing that constitutes a
Default.

 

(d)   The Agent shall have received on or before the Effective Date the
following, each dated such day, in form and substance satisfactory to the Agent
and the Lenders:

 

(i)            Receipt by the Agent of executed counterparts of this Agreement
properly executed by a duly authorized officer of the Borrower and by each
Lender.

 

(ii)           The Notes, payable to the order of the Lenders to the extent
requested by any Lender pursuant to Section 2.16.

 

(iii)          The articles of incorporation of the Borrower certified to be
true and complete as of a recent date by the appropriate governmental authority
of the state or other jurisdiction of its incorporation and certified by a
secretary, assistant secretary or associate secretary of the Borrower to be true
and correct as of the Effective Date.

 

(iv)          The bylaws of the Borrower certified by a secretary, assistant
secretary or associate secretary of the Borrower to be true and correct as of
the Effective Date.

 

(v)           Certified copies of the resolutions of the Board of Directors of
the Borrower approving this Agreement and the Notes, and of all documents
evidencing other necessary corporate action and governmental approvals, if any,
with respect to this Agreement and the Notes.

 

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(vi)          A certificate of the secretary, assistant secretary or associate
secretary of the Borrower certifying the names and true signatures of the
officers of the Borrower authorized to sign this Agreement and the Notes and the
other documents to be delivered hereunder.

 

(vii)         A certificate as of a recent date from the Borrower’s state of
incorporation evidencing that the Borrower is in good standing in its state of
organization or formation.

 

(viii)        A favorable opinion of counsel for the Borrower, in form and
substance reasonably acceptable to the Lenders.

 

(ix)          A favorable opinion of Sidley Austin LLP, counsel for the Agent,
in form and substance reasonably acceptable to the Lenders.

 

(e)   Concurrently with or before the Effective Date, (i) all principal,
interest and other amounts outstanding under the Borrower’s Existing Credit
Agreement shall be repaid and satisfied in full, (ii) all commitments to extend
credit under the Existing Credit Agreement shall be terminated and (iii) any
letters of credit outstanding under the Existing Credit Agreement shall have
been terminated, canceled, transferred or replaced; and the Agent shall have
received evidence of the foregoing satisfactory to it, including an escrow
agreement or payoff letter executed by the lenders or the agent under the
Existing Credit Agreement if applicable.

 

Section 3.02          Conditions Precedent to Each Credit Extension and
Commitment Increase.  The obligation of each Lender to make an Advance (other
than an L/C Advance or an Advance made pursuant to Section 2.03(c) or
Section 2.03A(c)) on the occasion of each Borrowing, the obligation of each
Issuing Bank to issue a Letter of Credit, and each Commitment Increase shall be
subject to the conditions precedent that the Effective Date shall have occurred
and on the date of such Borrowing or such issuance (as the case may be), or the
applicable Increase Date, the following statements shall be true (and each of
the giving of the applicable Notice of Borrowing or request for issuance and the
acceptance by the Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
or date of such issuance such statements are true):the representations and
warranties contained in Section 4.01 (other than Section 4.01(k), and in the
case of a Borrowing or issuance of a Letter of Credit, Section 4.01(e)(ii) and
4.01(f)(ii)) are correct on and as of such date, before and after giving effect
to such Borrowing or issuance of a Letter of Credit, or such Commitment Increase
and to the application of the proceeds therefrom, as though made on and as of
such date;

 

(b)   no event has occurred and is continuing, or would result from such
Borrowing or issuance of a Letter of Credit, or such Commitment Increase or from
the application of the proceeds therefrom, that constitutes a Default;

 

(c)   all required regulatory authorizations including the 2013 Order and/or any
Subsequent Order in respect of such Credit Extension have been obtained and are
in full force and effect and, before and after giving effect to such Borrowing
or such issuance of a Letter of Credit and to the application of the proceeds
therefrom, the Borrower is in compliance with the provisions of the applicable
order; and

 

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(d)   before and after giving effect to such Credit Extension and to the
application of the proceeds therefrom, as though made on and as of such date,
the Indebtedness of the Borrower does not exceed that permitted by
(i) applicable resolutions of the Board of Directors of the Borrower,
(ii) applicable Arizona Law, or (iii) the 2013 Order or any Subsequent Order,
whichever is in force and effect at such time.

 

Each request for Credit Extension (which shall not include a Conversion or a
continuation of Eurodollar Rate Advances) submitted by the Borrower shall be
deemed to be a representation and warranty that the conditions specified in
Sections 3.02(a) through (d) have been satisfied on and as of the date of the
applicable Credit Extension.

 

Section 3.03          Determinations Under Section 3.01.  For purposes of
determining compliance with the conditions specified in Section 3.01 and the
satisfaction of each Lender with respect to letters delivered to it from the
Borrower as set forth in Sections 4.01(a), 4.01(e) and 4.01(f), each Lender that
has signed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Lenders unless an officer of the Agent responsible for the transactions
contemplated by this Agreement shall have received notice from such Lender prior
to the date that the Borrower designates as the proposed Effective Date,
specifying its objection thereto.  The Agent shall promptly notify the Lenders
and the Borrower of the occurrence of the Effective Date.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

Section 4.01          Representations and Warranties of the Borrower.  The
Borrower represents and warrants as follows:

 

(a)   Each of the Borrower and each Material Subsidiary:  (i) is a corporation
or other entity duly organized and validly existing under the Laws of the
jurisdiction of its incorporation or organization; (ii) has all requisite
corporate or if the Material Subsidiary is not a corporation, other comparable
power necessary to own its assets and carry on its business as presently
conducted; (iii) has all governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as presently
conducted, if the failure to have any such license, authorization, consent or
approval is reasonably likely to have a Material Adverse Effect and except as
disclosed to the Agent in the SEC Reports or by means of a letter from the
Borrower to the Lenders (such letter, if any, to be delivered to the Agent for
prompt distribution to the Lenders) delivered prior to the execution and
delivery of this Agreement (which, in each case, shall be satisfactory to each
Lender in its sole discretion) and except that (A) the Borrower from time to
time may make minor extensions of its lines, plants, services or systems prior
to the time a related franchise, certificate of convenience and necessity,
license or permit is procured, (B) from time to time communities served by the
Borrower may become incorporated and considerable time may elapse before such a
franchise is procured, (C) certain such franchises may have expired prior to the
renegotiation thereof, (D) certain minor defects and exceptions may exist which,
individually and in the aggregate, are not material and (E) certain franchises,
certificates, licenses and permits may not be specific as to their geographical
scope); and (iv) is

 

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qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where failure so
to qualify is reasonably likely to have a Material Adverse Effect.

 

(b)   The execution, delivery and performance by the Borrower of this Agreement
and the other Loan Documents, and the consummation of the transactions
contemplated hereby and thereby, are within the Borrower’s corporate powers,
have been duly authorized by all necessary corporate action, and do not or did
not (i) contravene the Borrower’s articles of incorporation or by-laws,
(ii) contravene any Law (including without limitation the 2013 Order and/or any
Subsequent Order), decree, writ, injunction or determination of any Governmental
Authority, in each case applicable to or binding upon the Borrower or any of its
properties, (iii) contravene any contractual restriction binding on or affecting
the Borrower or (iv) cause the creation or imposition of any Lien upon the
assets of the Borrower or any Material Subsidiary, except for Liens created
under this Agreement and except where such contravention or creation or
imposition of such Lien is not reasonably likely to have a Material Adverse
Effect.

 

(c)   No authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority is required for the due execution,
delivery and performance by the Borrower of this Agreement or the Notes to be
delivered by it, except for the 2013 Order or any Subsequent Order, which has
been duly obtained and is in full force and effect, and any notices or
compliance filings required therein.

 

(d)   This Agreement has been, and each of the other Loan Documents upon
execution and delivery will have been, duly executed and delivered by the
Borrower.  This Agreement is, and each of the other Loan Documents upon
execution and delivery will be, the legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with their respective
terms, subject, however, to the application by a court of general principles of
equity and to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting creditors’ rights
generally.

 

(e)   (i) The Consolidated balance sheet of the Borrower as of December 31,
2012, and the related Consolidated statements of income and cash flows of the
Borrower for the fiscal year then ended, accompanied by an opinion thereon of
Deloitte & Touche LLP, independent registered public accountants fairly present
in all material respects the Consolidated financial condition of the Borrower as
at such dates and the Consolidated results of the operations of the Borrower for
the periods ended on such dates, all in accordance with GAAP (except as
disclosed therein).  (ii) Except as disclosed to the Agent in the SEC Reports or
by means of a letter from the Borrower to the Lenders (such letter, if any, to
be delivered to the Agent for prompt distribution to the Lenders) delivered
prior to the execution and delivery of this Agreement (which, in each case,
shall be satisfactory to each Lender in its sole discretion), since December 31,
2012, there has been no Material Adverse Effect.

 

(f)    There is no pending or, to the knowledge of an Authorized Officer of the
Borrower, threatened action, suit, investigation, litigation or proceeding,
including, without limitation, any Environmental Action, affecting the Borrower
or any of its Subsidiaries before any court, governmental agency or arbitrator
that (i) purports to affect the legality, validity or enforceability of this
Agreement or any other Loan Document or the consummation of the

 

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transactions contemplated hereby or (ii) would be reasonably likely to have a
Material Adverse Effect (except as disclosed to the Agent in the SEC Reports or
by means of a letter from the Borrower to the Lenders (such letter, if any, to
be delivered to the Agent for prompt distribution to the Lenders) delivered
prior to the execution and delivery of this Agreement (which, in each case,
shall be satisfactory to each Lender in its sole discretion)) and there has been
no adverse change in the status, or financial effect on the Borrower or any of
its Subsidiaries, of such disclosed litigation that would be reasonably likely
to have a Material Adverse Effect.

 

(g)   No proceeds of any Advance will be used to acquire any equity security not
issued by the Borrower of a class that is registered pursuant to Section 12 of
the Securities Exchange Act of 1934.

 

(h)   The Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U issued by the Board of Governors of the Federal Reserve System), and no
proceeds of any Advance will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock, in any case in violation of Regulation U.  After application of the
proceeds of any Advance, not more than 25% of the value of the assets subject to
any restriction under this Agreement on the right to sell, pledge, transfer, or
otherwise dispose of such assets is represented by margin stock.

 

(i)    The Borrower and its Subsidiaries have filed all United States of America
Federal income tax returns and all other material tax returns which are required
to be filed by them and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Borrower or any of its Subsidiaries,
except to the extent that (i) such taxes are being contested in good faith and
by appropriate proceedings and that appropriate reserves for the payment thereof
have been maintained by the Borrower and its Subsidiaries in accordance with
GAAP or (ii) the failure to make such filings or such payments is not reasonably
likely to have a Material Adverse Effect.  The charges, accruals and reserves on
the books of the Borrower and its Material Subsidiaries as set forth in the most
recent financial statements of the Borrower delivered to the Agent pursuant to
Section 4.01(e) or Section 5.01(h)(i) or (ii) hereof in respect of taxes and
other governmental charges are, in the opinion of the Borrower, adequate.

 

(j)    Set forth on Schedule 4.01(j) hereto (as such schedule may be modified
from time to time by the Borrower by written notice to the Agent) is a complete
and accurate list of all the Subsidiaries of the Borrower and, as of the
Effective Date, no such Subsidiary of the Borrower is a Material Subsidiary.

 

(k)   Set forth on Schedule 4.01(k) hereto is a complete and accurate list
identifying any Indebtedness of the Borrower outstanding in a principal amount
equal to or exceeding $5,000,000 and which is not described in the financial
statements referred to in Section 4.01(e).

 

(l)    The Borrower is not an “investment company”, or a company “controlled” by
an “investment company”, within the meaning of the Investment Company Act of
1940, as amended.

 

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(m)  No report, certificate or other written information furnished by the
Borrower or any of its Subsidiaries to any Agent or any Lender in connection
with the transactions contemplated hereby and the negotiation of this Agreement
or delivered hereunder or any other Loan Document (as modified or supplemented
by other information so furnished) at the time so furnished, when taken together
as a whole with all such written information so furnished, contains an untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except as would not reasonably be expected
to result in a Material Adverse Effect; provided that with respect to any
projected financial information, forecasts, estimates or forward-looking
information, the Borrower represents only that such information and materials
have been prepared in good faith on the basis of assumptions believed to be
reasonable at the time of preparation of such forecasts, and no representation
or warranty is made as to the actual attainability of any such projections,
forecasts, estimates or forward-looking information.

 

(n)   Neither the Borrower nor any of its Subsidiaries or, to the knowledge of
the Borrower, any of their respective Affiliates over which any of the foregoing
exercises management control (each, a “Controlled Affiliate”) is a Prohibited
Person, and the Borrower, its Subsidiaries and, to the knowledge of the
Borrower, such Controlled Affiliates are in compliance with all applicable
orders, rules and regulations of OFAC.

 

(o)   Neither the Borrower nor any of its Subsidiaries or, to the knowledge of
the Borrower, any of their respective Controlled Affiliates:  (i) is targeted by
United States or multilateral economic or trade sanctions currently in force;
(ii) is owned or controlled by, or acts on behalf of, any Person that is
targeted by United States or multilateral economic or trade sanctions currently
in force; or (iii) is named, identified or described on any list of Persons with
whom United States Persons may not conduct business, including any such blocked
persons list, designated nationals list, denied persons list, entity list,
debarred party list, unverified list, sanctions list or other such lists
published or maintained by the United States, including OFAC, the United States
Department of Commerce or the United States Department of State.

 

(p)   None of the Borrower’s or its Subsidiaries’ assets constitute property of,
or are beneficially owned, directly or indirectly, by any Person targeted by
economic or trade sanctions under United States law, including but not limited
to, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq.,
The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq. (the “Trading With the
Enemy Act”), any of the foreign assets control regulations of the Treasury (31
C.F.R., Subtitle B, Chapter V, as amended) (the “Foreign Assets Control
Regulations”) or any enabling legislation or regulations promulgated thereunder
or executive order relating thereto (which includes, without limitation,
(i) Executive Order No. 13224, effective as of September 24, 2001, and relating
to Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the
“Executive Order”) and (ii) the USA PATRIOT Act), if the result of such
ownership would be that any Credit Extension made by any Lender would be in
violation of law (“Embargoed Person”); (a) no Embargoed Person has any interest
of any nature whatsoever in the Borrower if the result of such interest would be
that any Credit Extension would be in violation of law; (b) the Borrower has not
engaged in business with Embargoed Persons if the result of such business would
be that any Credit Extension made by any Lender would be in violation of law;
and (c) neither the Borrower nor any Controlled Affiliate (i) is or will become
a

 

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“blocked person” as described in the Executive Order, the Trading With the Enemy
Act or the Foreign Assets Control Regulations or (ii) to the knowledge of the
Borrower, engages in any dealings or transactions, or be otherwise associated,
with any such “blocked person”.  For purposes of determining whether or not a
representation is true under this Section 4.01(p), the Borrower shall not be
required to make any investigation into (i) the ownership of publicly traded
stock or other publicly traded securities or (ii) the beneficial ownership of
any collective investment fund.

 

ARTICLE V

 

COVENANTS OF THE BORROWER

 

Section 5.01          Affirmative Covenants.  So long as any Advance shall
remain unpaid, any Letter of Credit shall remain outstanding or any Lender shall
have any Commitment hereunder, the Borrower shall:

 

(a)   Compliance with Laws, Etc.  (i) Comply, and cause each of its Material
Subsidiaries to comply, in all material respects, with all applicable Laws of
Governmental Authorities, such compliance to include, without limitation,
compliance with ERISA and Environmental Laws, unless the failure to so comply is
not reasonably likely to have a Material Adverse Effect and (ii) comply at all
times with the 2013 Order, any Subsequent Order, Arizona Revised Statutes,
Section 40-302 and all similar or comparable Laws, orders, decrees, writs,
injunctions or determinations of any Governmental Authority relating to the
incurrence or maintenance of Indebtedness by the Borrower, unless the failure to
so comply is not reasonably likely to have a Material Adverse Effect.

 

(b)   Payment of Taxes, Etc.  Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, all
taxes, assessments and governmental charges or levies imposed upon it or upon
its property; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such tax, assessment,
charge or levy (i) that is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained in
accordance with GAAP or (ii) if the failure to pay such tax, assessment, charge
or levy is not reasonably likely to have a Material Adverse Effect.

 

(c)   Maintenance of Insurance.  Maintain, and cause each of its Material
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Subsidiary operates;
provided, however, that the Borrower and its Subsidiaries may self-insure to the
same extent as other companies engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower or such Subsidiary
operates and to the extent consistent with prudent business practice.

 

(d)   Preservation of Corporate Existence, Etc.  Preserve and maintain, and
cause each of its Material Subsidiaries to preserve and maintain, its corporate
existence, rights (charter and statutory) and franchises (other than
“franchises” as described in Arizona Revised Statutes,

 

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Section 40-283 or any successor provision) reasonably necessary in the normal
conduct of its business, if the failure to maintain such rights or privileges is
reasonably likely to have a Material Adverse Effect, and use its commercially
reasonable efforts to preserve and maintain such franchises reasonably necessary
in the normal conduct of its business, except that (i) the Borrower from time to
time may make minor extensions of its lines, plants, services or systems prior
to the time a related franchise, certificate of convenience and necessity,
license or permit is procured, (ii) from time to time communities served by the
Borrower may become incorporated and considerable time may elapse before such a
franchise is procured, (iii) certain such franchises may have expired prior to
the renegotiation thereof, (iv) certain minor defects and  exceptions may exist
which, individually and in the aggregate, are not material and (v) certain
franchises, certificates, licenses and permits may not be specific as to their
geographical scope; provided, however, that the Borrower and its Subsidiaries
may consummate any merger or consolidation permitted under Section 5.02(b).

 

(e)   Visitation Rights.  At any reasonable time and from time to time, permit
and cause each of its Subsidiaries to permit the Agent or any of the Lenders or
any agents or representatives thereof, to examine and make copies of and
abstracts from the records and books of account of, and visit the properties of,
the Borrower and any of its Subsidiaries, and to discuss the affairs, finances
and accounts of the Borrower and any of its Subsidiaries with any of their
officers or directors; provided, however, that the Borrower and its Subsidiaries
reserve the right to restrict access to any of its properties in accordance with
reasonably adopted procedures relating to safety and security; and provided
further that the costs and expenses incurred by such Lender or agents or
representatives in connection with any such examinations, copies, abstracts,
visits or discussions shall be, upon the occurrence and during the continuation
of a Default, for the account of the Borrower and, in all other circumstances,
for the account of such Lender.

 

(f)    Keeping of Books.  Keep, and cause each of its Material Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of the
Borrower and each such Subsidiary in a manner that permits the preparation of
financial statements in accordance with GAAP.

 

(g)   Maintenance of Properties, Etc.  Keep, and cause each Material Subsidiary
to keep, all property useful and necessary in its business in good working order
and condition (ordinary wear and tear excepted), if the failure to do so is
reasonably likely to have a Material Adverse Effect, it being understood that
this covenant relates only to the working order and condition of such properties
and shall not be construed as a covenant not to dispose of properties.

 

(h)   Reporting Requirements.  Furnish to the Agent:

 

(i)            as soon as available and in any event within 50 days after the
end of each of the first three fiscal quarters of each fiscal year of the
Borrower, (A) for each such fiscal quarter of the Borrower, Consolidated
statements of income and cash flows of the Borrower for such fiscal quarter and
the related Consolidated balance sheet of the Borrower as of the end of such
fiscal quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding fiscal quarter in (or, in the case of the balance
sheet, as of the end of) the preceding fiscal year and (B) for the period
commencing at the end of the previous fiscal year and ending with the end of
such fiscal

 

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quarter, Consolidated statements of income and cash flows of the Borrower for
such period setting forth in each case in comparative form the corresponding
figures for the corresponding period in the preceding fiscal year; provided that
so long as the Borrower remains subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended, the Borrower may provide, in
satisfaction of the requirements of this first sentence of this
Section 5.01(h)(i), its report on Form 10-Q for such fiscal quarter.  Each set
of financial statements provided under this Section 5.01(h)(i) shall be
accompanied by a certificate of an Authorized Officer, which certificate shall
state that said Consolidated financial statements fairly present in all material
respects the Consolidated financial condition and results of operations and cash
flows of the Borrower in accordance with GAAP (except as disclosed therein), as
at the end of, and for, such period (subject to normal year-end audit
adjustments) and shall set forth reasonably detailed calculations demonstrating
compliance with Section 5.03;

 

(ii)           as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, audited Consolidated statements of
income and cash flows of the Borrower for such year and the related Consolidated
balance sheet of the Borrower as at the end of such year, setting forth in each
case in comparative form the corresponding figures for the preceding fiscal
year; provided that, so long as the Borrower remains subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended, the Borrower
may provide, in satisfaction of the requirements of this first sentence of this
Section 5.01(h)(ii), its report on Form 10-K for such fiscal year.  Each set of
financial statements provided pursuant to this Section 5.01(h)(ii) shall be
accompanied by (A) an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state that said
Consolidated financial statements fairly present in all material respects the
Consolidated financial condition and results of operations of the Borrower as at
the end of, and for, such fiscal year, in accordance with GAAP (except as
disclosed therein) and (B) a certificate of an Authorized Officer, which
certificate shall set forth reasonably detailed calculations demonstrating
compliance with Section 5.03;

 

(iii)          as soon as possible and in any event within five days after any
Authorized Officer of the Borrower knows of the occurrence of each Default
continuing on the date of such statement, a statement of an Authorized Officer
of the Borrower setting forth details of such Default and the action that the
Borrower has taken and proposes to take with respect thereto;

 

(iv)          promptly after the sending or filing thereof, copies of all
reports and registration statements (other than exhibits thereto and
registration statements on Form S-8 or its equivalent) that the Borrower or any
Subsidiary files with the Securities and Exchange Commission;

 

(v)           promptly after an Authorized Officer becomes aware of the
commencement thereof, notice of all actions and proceedings before any court,
governmental agency or arbitrator affecting the Borrower or any of its
Subsidiaries of the type described in Section 4.01(f), except with respect to
any matter referred to in Section

 

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4.01(f)(ii), to the extent disclosed in a report on Form 8-K, Form 10-Q or
Form 10-K of the Borrower;

 

(vi)          promptly after (A) any amendment or modification of the 2013
Order, (B) any amendment or modification of Arizona Revised Statutes,
Section 40-302, or the promulgation, amendment or modification of any successor
or similar statute, or (C) the promulgation, amendment or modification of any
Subsequent Order by the Arizona Corporation Commission or any successor thereto,
in any case if such amendment, modification or promulgation could affect the
validity or enforceability of the indebtedness of the Borrower pursuant to this
Agreement, a copy thereof;

 

(vii)         promptly after an Authorized Officer becomes aware of the
occurrence thereof, notice of any change by Moody’s or S&P of their respective
Public Debt Rating or of the cessation (or subsequent commencement) by Moody’s
or S&P of publication of their respective Public Debt Rating;

 

(viii)        promptly after the occurrence of any ERISA Event, together with
(x) a written statement of an Authorized Officer of the Borrower specifying the
details of such ERISA Event and the action that the Borrower has taken and
proposes to take with respect thereto, (y) a copy of any notice with respect to
such ERISA Event that may be required to be filed with the PBGC and (z) a copy
of any notice delivered by the PBGC to the Borrower or an ERISA Affiliate with
respect to such ERISA Event; and

 

(ix)          such other information respecting the Borrower or any of its
Subsidiaries as any Lender through the Agent may from time to time reasonably
request.

 

Information required to be delivered pursuant to Sections 5.01(h)(i), (ii) and
(iv) above shall be deemed to have been delivered on the date on which the
Borrower provides notice to the Agent that such information has been posted on
the Borrower’s parent’s website on the Internet at www.pinnaclewest.com, at
sec.gov/edaux/searches.htm or at another website identified in such notice and
accessible by the Lenders without charge; provided that (i) such notice may be
included in a certificate delivered pursuant to Section 5.01(h)(i) or (ii) and
(ii) the Borrower shall deliver paper copies of the information referred to in
Section 5.01(h)(i), (ii), and (iv) to any Lender which requests such delivery.

 

(i)    Change in Nature of Business.  Conduct the same general type of business
conducted on the date hereof.

 

Section 5.02          Negative Covenants.  So long as any Advance shall remain
unpaid, any Letter of Credit shall remain outstanding or any Lender shall have
any Commitment hereunder, the Borrower shall not:

 

(a)   Liens, Etc.  Create or suffer to exist, or permit any of its Material
Subsidiaries to create or suffer to exist, any Lien on or with respect to any of
its properties, whether now owned or hereafter acquired, or assign, or permit
any of its Material Subsidiaries to assign, any right to receive income, other
than:

 

(i)            Permitted Liens;

 

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(ii)           Liens upon or in, or conditional sales agreements or other title
retention agreements with respect to, any real or personal property acquired or
held by the Borrower or any Subsidiary in the ordinary course of business to
secure the purchase price of such property, or the construction of or
improvements to such property, or to secure Indebtedness incurred solely for the
purpose of financing the acquisition, construction or improvement of such
property to be subject to such Liens (including any Liens placed on such
property within 180 days after the latest of the acquisition, completion of
construction or improvement of such property), or Liens existing on such
property at the time of its acquisition (other than any such Liens created in
contemplation of such acquisition that were not incurred to finance the
acquisition of such property) or extensions, renewals, refundings or
replacements of any of the foregoing for the same or a lesser amount, provided,
however, that no such Lien shall extend to or cover any properties of any
character other than the property being acquired, constructed or improved and
proceeds, improvements and replacements thereof and no such extension, renewal,
refunding or replacement shall extend to or cover any properties not theretofore
subject to the Lien being extended, renewed, refunded or replaced;

 

(iii)          assignments of the right to receive income, and Liens on
property, of a Person existing at the time such Person is merged into or
consolidated with the Borrower or any Subsidiary of the Borrower or becomes a
Subsidiary of the Borrower;

 

(iv)          Liens with respect to the leases and related documents entered
into by the Borrower in connection with PVNGS Unit 2 and Liens with respect to
the leased interests and related rights if the Borrower reacquires ownership in
any of those interests or acquires any of the equity or owner participants’
interests in the trusts that hold title to such leased interests, whether or not
it also directly assumes the Sale Leaseback Obligation Bonds, and Liens on the
Borrower’s interests in the trusts that hold title to such leased interests and
related rights in the event that the Borrower acquires any of the equity or
owner participants’ interests in such trusts pursuant to a “special transfer”
under the Borrower’s existing PVNGS Unit 2 sale and leaseback transactions and
any Liens resulting or deemed to have resulted if the PVNGS Unit 2 leases are
required to be accounted for as capital leases in accordance with GAAP;

 

(v)           other assignments of the right to receive income and Liens
securing Indebtedness or claims in an aggregate principal amount not to exceed
20% of the Borrower’s total assets as stated on the most recent balance sheet of
the Borrower provided pursuant to Section 4.01(e)(i) or 5.01(h)(ii) hereof at
any time outstanding; and

 

(vi)          the replacement, extension or renewal of any Lien permitted by
clause (iii) or (iv) above upon or in the same property theretofore subject
thereto or the replacement, extension or renewal (without increase in the amount
or change in any direct or contingent obligor) of the Indebtedness secured
thereby.

 

(b)   Mergers, Etc.  Merge or consolidate with or into any Person, or permit any
of its Material Subsidiaries to do so, except that (i) any Material Subsidiary
of the Borrower may merge or consolidate with or into any other Material
Subsidiary of the Borrower, (ii) any Subsidiary of the Borrower may merge into
the Borrower or any Material Subsidiary of the

 

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Borrower and (iii) the Borrower or any Material Subsidiary may merge with any
other Person so long as the Borrower or such Material Subsidiary is the
surviving corporation, provided, in each case, that no Default shall have
occurred and be continuing at the time of such proposed transaction or would
result therefrom.

 

(c)   Sales, Etc. of Assets.  Sell, lease, transfer or otherwise dispose of, or
permit any of its Material Subsidiaries to sell, lease, transfer or otherwise
dispose of, any assets, or grant any option or other right to purchase, lease or
otherwise acquire any assets to any Person other than the Borrower or any
Subsidiary of the Borrower, except (i) dispositions in the ordinary course of
business, including, without limitation, sales or other dispositions of
electricity and related and ancillary services, other commodities, emissions
credits and similar mechanisms for reducing pollution, and damaged, obsolete,
worn out or surplus property no longer required or useful in the business or
operations of the Borrower or any of its Subsidiaries, (ii) sale or other
disposition of patents, copyrights, trademarks or other intellectual property
that are, in the Borrower’s reasonable judgment, no longer economically
practicable to maintain or necessary in the conduct of the business of the
Borrower or its Subsidiaries and any license or sublicense of intellectual
property that does not interfere with the business of the Borrower or any
Material Subsidiary, (iii) in a transaction authorized by subsection (b) of this
Section, (iv) individual dispositions occurring in the ordinary course of
business which involve assets with a book value not exceeding $5,000,000,
(v) sales, leases, transfers or dispositions of assets during the term of this
Agreement having an aggregate book value not to exceed 30% of the total of all
assets properly appearing on the most recent balance sheet of the Borrower
provided pursuant to Section 4.01(e)(i) or 5.01(h)(ii) hereof, (vi) at any time
following the consummation of the Four Corners Acquisition and the closure by
the Borrower of Units 1, 2 and 3 of the Four Corners Power Plant near
Farmington, New Mexico, as described in the SEC Reports, disposition of all or
any portion of the Borrower’s interests in such Units 1, 2 and 3, and (vii) any
Lien permitted under Section 5.02(a).

 

Section 5.03          Financial Covenant.  So long as any Advance shall remain
unpaid, any Letter of Credit shall remain outstanding or any Lender shall have
any Commitment hereunder, the Borrower will maintain a ratio of (a) Consolidated
Indebtedness to (b) the sum of Consolidated Indebtedness plus Consolidated Net
Worth of not greater than 0.65 to 1.0.

 

ARTICLE VI

 

EVENTS OF DEFAULT

 

Section 6.01          Events of Default.  If any of the following events
(“Events of Default”) shall occur and be continuing:

 

(a)   The Borrower shall fail to pay when due (i) any principal of any Advance,
(ii) any drawing under any Letter of Credit, or (iii) any interest on any
Advance or any other fees or other amounts payable under this Agreement or any
other Loan Documents, and (in the case of this clause (iii) only), such failure
shall continue for a period of three Business Days; or

 

(b)   Any representation or warranty made by the Borrower herein or by the
Borrower (or any of its officers) in any certificate or other document delivered
in connection with this

 

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Agreement or any other Loan Document shall prove to have been incorrect in any
material respect when made or deemed made or furnished; or

 

(c)   (i) The Borrower shall fail to perform or observe any term, covenant or
agreement contained in Section 5.01(d) (as to the corporate existence of the
Borrower), (h)(iii) or (h)(vi), 5.02 or 5.03, or (ii) the Borrower shall fail to
perform or observe any other term, covenant or agreement contained in
Section 5.01(e) if such failure shall remain unremedied for 15 days after
written notice thereof shall have been given to the Borrower by the Agent or any
Lender or (iii) the Borrower shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement or any other Loan Document on
its part to be performed or observed if such failure shall remain unremedied for
30 days after written notice thereof shall have been given to the Borrower by
the Agent or any Lender; or

 

(d)   (i) The Borrower or any of its Material Subsidiaries shall fail to pay
(A) any principal of or premium or interest on any Indebtedness that is
outstanding in a principal amount of at least $35,000,000 in the aggregate (but
excluding Indebtedness outstanding hereunder), or (B) an amount, or post
collateral as contractually required in an amount, of at least $35,000,000 in
respect of any Hedge Agreement, of the Borrower or such Material Subsidiary (as
the case may be), in each case, when the same becomes due and payable (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise),
and such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Indebtedness or Hedge
Agreement; or (ii) any event of default shall exist under any agreement or
instrument relating to any such Indebtedness and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such event is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness; or

 

(e)   The Borrower or any of its Material Subsidiaries shall fail to pay any
principal of or premium or interest in respect of any operating lease in respect
of which the payment obligations of the Borrower have a present value of at
least $35,000,000, when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified in
such operating lease, if the effect of such failure is to terminate, or to
permit the termination of, such operating lease; or

 

(f)    The Borrower or any of its Material Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
any of its Material Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any
Debtor Relief Law, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 60 days, or any
of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall

 

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occur; or the Borrower or any of its Material Subsidiaries shall take any
corporate action to authorize any of the actions set forth above in this
subsection (f); or

 

(g)   Judgments or orders for the payment of money that exceeds any applicable
insurance coverage (the insurer of which shall be rated at least “A” by A.M.
Best Company) by more than $35,000,000 in the aggregate shall be rendered
against the Borrower or any Material Subsidiary and such judgments or orders
shall continue unsatisfied or unstayed for a period of 45 days; or

 

(h)   (i) any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit
plan of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934), directly or indirectly, of 30% or more of the
equity securities of PWCC entitled to vote for members of the board of directors
of PWCC; or (ii) during any period of 24 consecutive months, a majority of the
members of the board of directors of PWCC cease (other than due to death or
disability) to be composed of individuals (A) who were members of that board on
the first day of such period, (B) whose election or nomination to that board was
approved by individuals referred to in clause (A) above constituting at the time
of such election or nomination at least a majority of that board or (C) whose
election or nomination to that board was approved by individuals referred to in
clauses (A) and (B) above constituting at the time of such election or
nomination at least a majority of that board; or (iii) PWCC shall cease for any
reason to own, directly or indirectly, 80% of the Voting Stock of the Borrower;
or

 

(i)    (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer
Plan which has resulted or could reasonably be expected to result in liability
of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan
or the PBGC in an aggregate amount in excess of $35,000,000, or (ii) the
Borrower or any ERISA Affiliate fails to pay when due, after the expiration of
any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in
an aggregate amount in excess of $35,000,000;

 

then, and in any such event, the Agent shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, (i) declare the
obligation of each Lender to make Advances (other than L/C Advances) and of the
Issuing Banks to issue Letters of Credit to be terminated, whereupon the same
shall forthwith terminate, (ii) declare the Advances, all interest thereon and
all other amounts payable under this Agreement to be forthwith due and payable,
whereupon the Advances, all such interest and all such amounts shall become and
be forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided, however, that in the event of an actual or deemed entry of an order
for relief with respect to the Borrower under the Bankruptcy Code of the United
States of America, (A) the obligation of each Lender to make Advances (other
than L/C Advances) and of the Issuing Banks to issue Letters of Credit shall
automatically be terminated and (B) the Advances, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind,

 

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all of which are hereby expressly waived by the Borrower and (iii) exercise all
rights and remedies available to it under this Agreement, the other Loan
Documents and applicable Law.

 

Section 6.02          Actions in Respect of Letters of Credit upon Default.  If
any Event of Default shall have occurred and be continuing, the Agent may with
the consent, or shall at the request, of the Required Lenders, irrespective of
whether it is taking any of the actions described in Section 6.01 or otherwise,
(a) make demand upon the Borrower to, and forthwith upon such demand the
Borrower will Cash Collateralize the aggregate Available Amount of all Letters
of Credit then outstanding (whether or not any beneficiary under any Letter of
Credit shall have drawn or be entitled at such time to draw thereunder) or
(b) make such other arrangements in respect of the outstanding Letters of Credit
as shall be acceptable to the Required Lenders, provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to the
Borrower under the Bankruptcy Code of the United States of America, the Borrower
will Cash Collateralize the aggregate Available Amount of all Letters of Credit
then outstanding, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.  If at any time
the Agent determines that any funds held in the L/C Cash Deposit Account are
subject to any right or interest of any Person other than the Agent, the Issuing
Banks and the Lenders or that the total amount of such funds is less than the
aggregate Available Amount of all Letters of Credit, the Borrower will,
forthwith upon demand by the Agent, pay to the Agent, as additional funds to be
deposited and held in the L/C Cash Deposit Account, an amount equal to the
excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the L/C Cash Deposit Account that are free and clear
of any such right and interest.  Upon the drawing of any Letter of Credit, to
the extent funds are on deposit in the L/C Cash Deposit Account, such funds
shall be applied to reimburse the Issuing Banks to the extent permitted by
applicable Law, or each Lender to the extent such Lender has funded a Revolving
Advance in respect of such Letter of Credit.  The Borrower hereby grants to the
Agent, for the benefit of the Issuing Banks and the Lenders, a Lien upon and
security interest in the L/C Cash Deposit Account and all amounts held therein
from time to time as security for the L/C Obligations, and for application to
the Borrower’s reimbursement obligations as and when the same shall arise.  The
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account.  After all such Letters of Credit shall have
expired or been fully drawn upon and all other obligations of the Borrower
hereunder and under the other Loan Documents shall have been paid in full, the
balance, if any, in such L/C Cash Deposit Account shall be promptly returned to
the Borrower.

 

ARTICLE VII

 

THE AGENT

 

Section 7.01          Appointment and Authority.  Each of the Lenders (for
purposes of this Article, references to the Lenders shall also mean the Issuing
Banks) hereby irrevocably appoints Barclays to act on its behalf as the Agent
hereunder and under the other Loan Documents and authorizes the Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Agent by the terms hereof or thereof, together with such actions and powers as
are reasonably incidental thereto.  Except as set forth in Section 7.06, the
provisions of this Article are solely for the benefit of the Agent and the
Lenders, and neither the Borrower nor any of its Affiliates shall have rights as
a third party beneficiary of any of such provisions.

 

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Section 7.02          Rights as a Lender.  The Person serving as the Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the Agent and
the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or
unless the context otherwise requires, include the Person serving as the Agent
hereunder in its individual capacity.  Such Person and its Affiliates may accept
deposits from, lend money to, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with the
Borrower or any Subsidiary or other Affiliate thereof as if such Person were not
the Agent hereunder and without any duty to account therefor to the Lenders.

 

Section 7.03          Exculpatory Provisions.  The Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents.  Without limiting the generality of the foregoing, the Agent:

 

(a)           shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;

 

(b)           shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the Agent is
required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein), provided that the Agent shall not be required to take any action that,
in its opinion or the opinion of its counsel, may expose the Agent to liability
or that is contrary to any Loan Document or applicable Law; and

 

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

 

The Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Agent shall believe
in good faith shall be necessary, under the circumstances as provided in
Section 6.01 and 8.01) or (ii) in the absence of its own gross negligence or
willful misconduct.  The Agent shall be deemed not to have knowledge of any
Default unless and until notice describing such Default is given to the Agent by
the Borrower or a Lender.

 

The Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
this Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document or (v) the satisfaction of any condition
set forth in Article III or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Agent.

 

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Section 7.04          Reliance by Agent.  The Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person.  The Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper Person, and shall not incur any liability for relying thereon.  In
determining compliance with any condition hereunder to the making of any
Advance, or the issuance of a Letter of Credit, that by its terms must be
fulfilled to the satisfaction of a Lender or an Issuing Bank, the Agent may
presume that such condition is satisfactory to such Lender or such Issuing Bank
unless the Agent shall have received notice to the contrary from such Lender or
such Issuing Bank prior to the making of such Advance or the issuance of such
Letter of Credit.  The Agent may consult with legal counsel (who may be counsel
for the Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in good faith in
accordance with the advice of any such counsel, accountants or experts.

 

Section 7.05          Delegation of Duties.  The Agent may perform any and all
of its duties and exercise its rights and powers hereunder or under any other
Loan Document by or through any one or more sub-agents appointed by the Agent. 
The Agent and any such sub-agent may perform any and all of its duties and
exercise its rights and powers by or through their respective Related Parties. 
The exculpatory provisions of this Article shall apply to any such sub-agent and
to the Related Parties of the Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.

 

Section 7.06          Resignation of Agent.  The Agent may at any time give
notice of its resignation to the Lenders and the Borrower.  Upon receipt of any
such notice of resignation, the Required Lenders shall have the right, with the
consent of the Borrower so long as no Event of Default has occurred and is
continuing, to appoint a successor, which shall be a bank with an office in the
United States of America, or an Affiliate of any such bank with an office in the
United States of America.  If no such successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 45 days
after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent meeting the
qualifications set forth above; provided that if the Agent shall notify the
Borrower and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents (except
that in the case of any collateral security held by the Agent on behalf of the
Lenders under any of the Loan Documents, the retiring Agent shall continue to
hold such collateral security until such time as a successor Agent is appointed)
and (2) all payments, communications and determinations provided to be made by,
to or through the Agent shall instead be made by or to each Lender directly,
until such time as the Required Lenders appoint a successor Agent as provided
for above in this Section.  Upon the acceptance of a successor’s appointment as
Agent hereunder, such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring (or retired) Agent,
and the retiring Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this Section).  The fees

 

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payable by the Borrower to a successor Agent shall be as agreed between the
Borrower and such successor.  After the retiring Agent’s resignation hereunder
and under the other Loan Documents, the provisions of this Article and
Section 8.04 shall continue in effect for the benefit of such retiring Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Agent was acting
as Agent.

 

Section 7.07          Non-Reliance on Agent and Other Lenders.  Each Lender
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender or
any of their Related Parties and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or
thereunder.

 

Section 7.08          No Other Duties, Etc.  Anything herein to the contrary
notwithstanding, none of the Arrangers, Syndication Agents, Documentation Agents
or other agents listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as the Agent or a Lender hereunder.

 

Section 7.09          Issuing Banks.  Each Issuing Bank shall act on behalf of
the Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith, and each Issuing Bank shall have all of the benefits and
immunities provided in this Article VII (other than Section 7.02) to the same
extent as such provisions apply to the Agent.

 

ARTICLE VIII

 

MISCELLANEOUS

 

Section 8.01          Amendments, Etc.  No amendment or waiver of any provision
of this Agreement or any other Loan Document, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall

 

(a)   unless agreed to by each Lender directly affected thereby, (i) reduce or
forgive the principal amount of any Advance or the Borrower’s obligations to
reimburse any drawing on a Letter of Credit, reduce the rate of or forgive any
interest thereon (provided that only the consent of the Required Lenders shall
be required to waive the applicability of any post-default increase in interest
rates), or reduce or forgive any fees hereunder (other than fees payable to the
Agent, the Arrangers, any Issuing Bank or the Swingline Lender, if any, for
their own respective accounts), (ii) extend the final scheduled maturity date or
any other scheduled date for the payment of any principal of or interest on any
Advance, extend the time of payment of any obligation of the Borrower to
reimburse any drawing on any Letter of Credit or any interest

 

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thereon, extend the expiry date of any Letter of Credit beyond the Letter of
Credit Expiration Date, or extend the time of payment of any fees hereunder
(other than fees payable to the Agent, the Arrangers, any Issuing Bank or the
Swingline Lender, if any, for their own respective accounts), or (iii) increase
any Revolving Credit Commitment of any such Lender over the amount thereof in
effect or extend the maturity thereof (it being understood that a waiver of any
condition precedent set forth in Section 3.02 or of any Default, if agreed to by
the Required Lenders or all Lenders (as may be required hereunder with respect
to such waiver), shall not constitute such an increase);

 

(b)   unless agreed to by all of the Lenders, (i) reduce the percentage of the
aggregate Revolving Credit Commitments or of the aggregate unpaid principal
amount of the Advances, or the number or percentage of Lenders, that shall be
required for the Lenders or any of them to take or approve, or direct the Agent
to take, any action hereunder or under any other Loan Document (including as set
forth in the definition of “Required Lenders”), (ii) change any other provision
of this Agreement or any of the other Loan Documents requiring, by its terms,
the consent or approval of all the Lenders for such amendment, modification,
waiver, discharge, termination or consent, or (iii) change or waive any
provision of Section 2.15, any other provision of this Agreement or any other
Loan Document requiring pro rata treatment of any Lenders, or this Section 8.01
or Section 2.19(b); and

 

(c)   unless agreed to by the Issuing Banks, the Swingline Lender, if any, or
the Agent in addition to the Lenders required as provided hereinabove to take
such action, affect the respective rights or obligations of the Issuing Banks,
the Swingline Lender, if any, or the Agent, as applicable, hereunder or under
any of the other Loan Documents.

 

(d)   Notwithstanding the foregoing, this Agreement may be amended (or amended
and restated) pursuant to an increase in the Revolving Credit Commitment
pursuant to Section 2.18 with only the consents prescribed by such Section.

 

(e)   If, in connection with any proposed amendment, waiver or consent 
requiring the consent of “each Lender” or “each Lender directly affected
thereby,” the consent of the Required Lenders is obtained, but the consent of
other necessary Lenders is not obtained (any such Lender whose consent is
necessary but not obtained being referred to herein as a “Non-Consenting
Lender”), then the Borrower may elect to replace a Non-Consenting Lender as a
Lender party to this Agreement, provided that, concurrently with such
replacement, (i) another bank or other entity which is reasonably satisfactory
to the Borrower, each Issuing Bank and the Agent shall agree, as of such date,
to purchase for cash the Advances and other Obligations due to the
Non-Consenting Lender pursuant to an Assignment and Assumption and to become a
Lender for all purposes under this Agreement and to assume all obligations of
the Non-Consenting Lender to be terminated as of such date and to comply with
the requirements of clause (b) of Section 8.07, and (ii) the Borrower shall pay
to such Non-Consenting Lender in same day funds on the day of such replacement
(1) all interest, fees and other amounts then accrued but unpaid to such
Non-Consenting Lender by the Borrower hereunder to and including the date of
termination, including without limitation payments due to such Non-Consenting
Lender under Sections 2.11 and 2.14, and (2) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 8.04(e) had the Advances of such Non-Consenting Lender been
prepaid on such date rather than sold to the replacement Lender.

 

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Section 8.02          Notices, Etc.

 

(a)   All notices and other communications provided for hereunder shall be
either (x) in writing (including facsimile communication) and mailed, faxed or
delivered or (y) as and to the extent set forth in Sections 8.02(b) and (c) and
in the proviso to this Section 8.02(a), if to the Borrower, at the address
specified on Schedule 8.02; if to any Lender, at its Domestic Lending Office; if
to the Agent, at the address specified on Schedule 8.02; if to the Swingline
Lender, at the address specified by the Swingline Lender to the Borrower and the
Agent, and if to any Issuing Bank, at the address specified on Schedule 8.02 or,
as to the Borrower or the Agent, at such other address as shall be designated by
such party in a written notice to the other parties and, as to each other party,
at such other address as shall be designated by such party in a written notice
to the Borrower and the Agent.  All such notices and communications shall, when
mailed or faxed, be effective when deposited in the mails or faxed,
respectively, except that notices and communications to the Agent pursuant to
Article II, III or VII shall not be effective until received by the Agent. 
Delivery by facsimile of an executed counterpart of any amendment or waiver of
any provision of this Agreement or the Notes or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.  Notices delivered through electronic
communications to the extent provided in subsection (b) below, shall be
effective as provided in such subsection (b).  Upon request of the Borrower, the
Agent will provide to the Borrower (i) copies of each Administrative
Questionnaire or (ii) the address of each Lender.

 

(b)   Notices and other communications to the Lenders, the Agent and the Issuing
Banks hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Agent and agreed to by the Borrower, provided that the foregoing
shall not apply to notices to any Lender or the Issuing Banks pursuant to
Article II if such Lender or the Issuing Banks, as applicable, has notified the
Agent and the Borrower that it is incapable of receiving notices under such
Article by electronic communication.  The Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications.  Unless the Agent and the Borrower otherwise agree, (i) notices
and other communications sent to an e-mail address shall be deemed received upon
the sender’s receipt of an acknowledgement from the intended recipient (such as
by the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

 

(c)   The Borrower agrees that the Agent may make materials delivered to the
Agent pursuant to Sections 5.01(h)(i), (ii) and (iv), as well as any other
written information, documents, instruments and other material relating to the
Borrower or any of its Subsidiaries and relating to this Agreement, the Notes or
the transactions contemplated hereby, or any other materials or matters relating
to this Agreement, the Notes or any of the transactions contemplated hereby

 

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(collectively, the “Communications”) available to the Lenders by posting such
notices on Intralinks or a substantially similar electronic system (the
“Platform”).  The Borrower acknowledges that (i) the distribution of material
through an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution, (ii) the
Platform is provided “as is” and “as available” and (iii) neither the Agent nor
any of its Affiliates warrants the accuracy, adequacy or completeness of the
Communications or the Platform and each expressly disclaims liability for errors
or omissions in the Communications or the Platform.  No warranty of any kind,
express, implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by the Agent
or any of its Affiliates in connection with the Platform.

 

(d)   Each Lender agrees that notice to it (as provided in the next sentence) (a
“Notice”) specifying that any Communications have been posted to the Platform
shall constitute effective delivery of such information, documents or other
materials to such Lender for purposes of this Agreement; provided that if
requested by any Lender the Agent shall deliver a copy of the Communications to
such Lender by e-mail, facsimile or mail.  Each Lender agrees (i) to notify the
Agent in writing of such Lender’s e-mail address to which a Notice may be sent
by electronic transmission (including by electronic communication) on or before
the date such Lender becomes a party to this Agreement (and from time to time
thereafter to ensure that the Agent has on record an effective e-mail address
for such Lender) and (ii) that any Notice may be sent to such e-mail address.

 

(e)   The Borrower hereby acknowledges that certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”).  The Borrower hereby agrees that (w) all Communications that
are to be made available to Public Lenders shall be clearly and conspicuously
marked “PUBLIC” which shall mean that the word “PUBLIC” shall appear prominently
on the first page thereof; (x) by marking Communications “PUBLIC,” the Borrower
shall be deemed to have authorized the Agent, the Arranger and the Lenders to
treat such Communications as not containing any material non-public information
with respect to the Borrower or its securities for purposes of United States of
America federal and state securities laws; (y) all Communications marked
“PUBLIC” are permitted to be made available through a portion of the Platform
designated as “Public Investor;” and (z) the Agent and the Arranger shall be
entitled to treat any Communications that are not marked “PUBLIC” as being
suitable only for posting on a portion of the Platform not marked as “Public
Investor.” Notwithstanding the foregoing, the Borrower shall be under no
obligation to mark any Communications “PUBLIC.” Notwithstanding anything to the
contrary herein, the Borrower and the Agent need not provide to any Public
Lender any information, notice, or other document hereunder that is not public
information, including without limitation, the Notice of Borrowing and any
notice of Default.

 

Section 8.03          No Waiver; Cumulative Remedies; Enforcement.  No failure
by any Lender, any Issuing Bank or the Agent to exercise, and no delay by any
such Person in exercising, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or

 

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privilege.  The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by Law.

 

Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against the Borrower shall be vested exclusively in, and
all actions and proceedings at Law in connection with such enforcement shall be
instituted and maintained exclusively by, the Agent in accordance with
Article VI for the benefit of all the Lenders and the Issuing Banks; provided,
however, that the foregoing shall not prohibit (a) the Agent from exercising on
its own behalf the rights and remedies that inure to its benefit (solely in its
capacity as Agent) hereunder and under the other Loan Documents, (b) any Issuing
Bank from exercising the rights and remedies that inure to its benefit (solely
in its capacity as an Issuing Bank) hereunder and under the other Loan
Documents, (c) any Lender from exercising setoff rights in accordance with
Section 8.05 (subject to the terms of Section 2.15), or (d) any Lender from
filing proofs of claim or appearing and filing pleadings on its own behalf
during the pendency of a proceeding relative to the Borrower under any Debtor
Relief Law; and provided, further, that if at any time there is no Person acting
as Agent hereunder and under the other Loan Documents, then (i) the Required
Lenders shall have the rights otherwise ascribed to the Agent pursuant to
Article VI and (ii) in addition to the matters set forth in clauses (b), (c) and
(d) of the preceding proviso and subject to Section 2.15, any Lender may, with
the consent of the Required Lenders, enforce any rights and remedies available
to it and as authorized by the Required Lenders.

 

Section 8.04          Costs and Expenses; Indemnity; Damage Waiver.

 

(a)   The Borrower agrees to pay on demand all costs and expenses of the Agent
in connection with the administration, modification and amendment of this
Agreement, the Notes and the other Loan Documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel for
the Agent with respect thereto and with respect to advising the Agent as to its
rights and responsibilities under this Agreement.  The Borrower further agrees
to pay on demand all costs and expenses of the Agent and the Lenders, if any
(including, without limitation, reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Agreement, the Notes and the other Loan Documents to be
delivered hereunder, including, without limitation, reasonable fees and expenses
of counsel for the Agent and each Lender in connection with the enforcement of
rights under this Section 8.04(a).

 

(b)   The Borrower agrees to indemnify and hold harmless the Agent (and any
sub-agent thereof), each Lender, and each Related Party of any of the foregoing
(each, an “Indemnified Party”) from and against any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith,
whether based on contract, tort or any other theory,) (i) the Notes, this
Agreement, any of the transactions contemplated herein or the actual or proposed
use of the proceeds of any Advance or Letter of Credit (including any refusal by
any Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with

 

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the terms of such Letter of Credit), or (ii) the actual or alleged presence of
Hazardous Materials on any property of the Borrower or any of its Subsidiaries
or any Environmental Action relating in any way to the Borrower or any of its
Subsidiaries, provided that such indemnity shall not, as to any Indemnified
Party, be available to the extent (a) such fees and expenses are expressly
stated in this Agreement to be payable by the Indemnified Party, included
expenses payable under Section 2.14, Section 5.01(e) and Section 8.07(b) or
(b) such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s gross negligence, willful misconduct or material
breach of its obligations under this Agreement, in which case any fees and
expenses previously paid or advanced by the Borrower to such Indemnified Party
in respect of such indemnified obligation will be returned by such Indemnified
Party.  In the case of an investigation, litigation or other proceeding to which
the indemnity in this Section 8.04(b) applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by the
Borrower, its directors, equityholders or creditors or an Indemnified Party or
any other Person, whether or not any Indemnified Party is otherwise a party
thereto, and whether or not the transactions contemplated hereby are
consummated, provided that if the Borrower and such Indemnified Party are
adverse parties in any such litigation or proceeding, and the Borrower prevails
in a final, non-appealable judgment by a court of competent jurisdiction, any
fees or expenses previously paid or advanced by the Borrower to such Indemnified
Party pursuant to this Section 8.04(b) will be returned by such Indemnified
Party.

 

(c)   To the extent that the Borrower for any reason fails to indefeasibly pay
any amount required under subsection (a) or (b) of this Section to be paid by it
to the Agent (or any sub-agent thereof), any Issuing Bank or any Related Party
of any of the foregoing (and without limiting its obligation to do so), each
Lender severally agrees to pay to the Agent (or any such sub-agent), such
Issuing Bank or such Related Party, as the case may be, such Lender’s Ratable
Share (determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Agent (or
any such sub-agent) or such Issuing Bank in its capacity as such, or against any
Related Party of any of the foregoing acting for the Agent (or any such
sub-agent) or such Issuing Bank in connection with such capacity.

 

(d)   Without limiting the rights of indemnification set forth in this Agreement
with respect to liabilities asserted by third parties, each party hereto also
agrees not to assert any claim for special, indirect, consequential or punitive
damages against the other parties hereto, or any Related Person any party
hereto, on any theory of liability, arising out of or otherwise relating to the
Notes, this Agreement, any of the transactions contemplated herein or the actual
or proposed use of the proceeds of the Advances or the Letters of Credit.  No
Indemnified Party shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
(including Intralinks, SyndTrak or similar systems) in connection with this
Agreement or the other Loan Documents, provided that such indemnity shall not,
as to any Indemnified Party, be available to the extent such damages are found
in a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful misconduct.

 

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(e)   If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made by the Borrower to or for the account of a Lender other than on
the last day of the Interest Period for such Revolving Advance, as a result of a
payment or Conversion pursuant to Section 2.08(d) or (e), 2.10 or 2.12,
acceleration of the maturity of the Revolving Advances pursuant to Section 6.01
or for any other reason, or by an Eligible Assignee to a Lender other than on
the last day of the Interest Period for such Revolving Advance upon an
assignment of rights and obligations under this Agreement pursuant to
Section 8.07 as a result of a demand by the Borrower pursuant to
Section 8.07(a), the Borrower shall, upon demand by such Lender (with a copy of
such demand to the Agent), pay to the Agent for the account of such Lender any
amounts required to compensate such Lender for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment or Conversion,
including, without limitation, any loss (excluding loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such
Revolving Advance.

 

(f)    Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in Sections
2.11, 2.14 and 8.04 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under the Notes.

 

Section 8.05          Right of Set-off.  Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Advances due and payable pursuant to the provisions of Section 6.01,
each Lender, each Issuing Bank and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
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, such Issuing Bank or any such Affiliate to or for the
credit or the account of the Borrower against any and all of the obligations of
the Borrower now or hereafter existing under this Agreement or any other Loan
Document to such Lender or Issuing Bank, whether or not such Lender or Issuing
Bank shall have made any demand under this Agreement or such Note and although
such obligations may be contingent or unmatured or are owed to a branch or
office of such Lender or such Issuing Bank different from the branch or office
holding such deposit or obligated on such indebtedness.  Each Lender and each
Issuing Bank agrees promptly to notify the Borrower after any such set-off and
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application.  The rights of each Lender and each
Issuing Bank under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Lender may
have.

 

Section 8.06          Binding Effect.  Except as provided in Section 3.01, this
Agreement shall become effective when it shall have been executed by the
Borrower and the Agent and when the Agent shall have been notified by each
Initial Lender that such Initial Lender has executed it and thereafter shall be
binding upon and inure to the benefit of the Borrower, the Agent and each Lender
and their respective successors and assigns, except that the Borrower shall not
have the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.

 

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Section 8.07          Successors and Assigns.

 

(a)   The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Agent and each Lender (and any purported assignment or transfer without such
consent shall be null and void) and no Lender may assign or otherwise transfer
any of its rights or obligations hereunder except (i) to an assignee in
accordance with the provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of this
Section, or (iii) by way of pledge or assignment of a security interest subject
to the restrictions of subsection (f) of this Section.  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the Related Parties of
each of the Agent, the Issuing Banks and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

 

(b)   Any Lender may at any time assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Revolving Credit Commitment, Swingline Exposure and the Revolving
Advances (including for purposes of this subsection (b), participations in L/C
Obligations) at the time owing to it); provided that any such assignment shall
be subject to the following conditions:

 

(i)            Minimum Amounts.

 

(A)          in the case of an assignment of the entire remaining amount of the
assigning Lender’s Revolving Credit Commitment and the Revolving Advances at the
time owing to it or in the case of an assignment to a Lender, no minimum amount
need be assigned; and

 

(B)          in any case not described in subsection (b)(i)(A) of this Section,
the aggregate amount of the Revolving Credit Commitment (which for this purpose
includes Revolving Advances outstanding thereunder) or, if the Revolving Credit
Commitment is not then in effect, the principal outstanding balance of the
Revolving Advances of the assigning Lender subject to each such assignment,
determined as of the date the Assignment and Assumption with respect to which
such assignment is delivered to the Agent or, if “Trade Date” is specified in
the Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000 unless each of the Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower otherwise consents (each such consent
not to be unreasonably withheld or delayed).

 

(ii)           Proportionate Amounts.  Each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Revolving Advances, L/C
Obligations, Swingline Exposure or the Revolving Credit Commitment assigned, and
each such

 

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assignment shall be of a constant, and not a varying, percentage of all rights
and obligations under this Agreement;

 

(iii)          Required Consents.  No consent shall be required for any
assignment except to the extent required by subsection (b)(i)(B) of this
Section and, in addition:

 

(A)          the consent of the Borrower (such consent not to be unreasonably
withheld or delayed; provided that the Borrower shall be deemed to have
consented to any such assignment unless it shall object thereto by written
notice to the Agent within ten (10) Business Days after having received notice
thereof) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund;

 

(B)          the consent of the Agent (such consent not to be unreasonably
withheld or delayed) shall be required if such assignment is to a Person that is
not a Lender, an Affiliate of a Lender or an Approved Fund with respect to such
Lender;

 

(C)          the consent of each Issuing Bank (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment that
increases the obligation of the assignee to participate in exposure under one or
more Letters of Credit (whether or not then outstanding); and

 

(D)          the consent of the Swingline Lender, if any, (such consent not to
be unreasonably withheld or delayed) shall be required for any assignment that
increases the obligation of the assignee to participate in exposure under
Swingline Advances (whether or not then outstanding).

 

(iv)          Assignment and Assumption.  The parties to each assignment shall
execute and deliver to the Agent an Assignment and Assumption, together with a
processing and recordation fee in the amount of $3,500; provided, however, that
no such fee shall be payable in the case of an assignment made at the request of
the Borrower to an existing Lender.  The assignee, if it is not a Lender, shall
deliver to the Agent an Administrative Questionnaire.

 

(v)           No Assignment to Borrower.  No such assignment shall be made to
the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

(vi)          No Assignment to Natural Persons.  No such assignment shall be
made to a natural person.

 

Subject to acceptance and recording thereof by the Agent pursuant to subsection
(c) of this Section and notice thereof to the Borrower, from and after the
effective date specified in each Assignment and Assumption, the assignee
thereunder shall be a party to this Agreement and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released
from its

 

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obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 2.11, 2.14 and 8.04 with respect to
facts and circumstances occurring prior to the effective date of such
assignment.  Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

 

(c)   Register.  The Agent shall maintain at the Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Revolving Credit Commitments of,
and principal amounts of the Advances and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in
the Register shall be conclusive, absent manifest error, and the Borrower, the
Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary.  The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.

 

(d)   Participations.  Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Agent, sell participations to any Person (other
than a natural person or the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Revolving Credit Commitment, Swingline Exposure and/or the Revolving
Advances (including such Lender’s participations in L/C Obligations) owing to
it); provided that (i) such Lender’s obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the Borrower, the
Agent, the Lenders and the Issuing Banks shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and (iv) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of this Agreement or any Note, or any consent to any departure by the
Borrower therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, any Obligations or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, any Obligations or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation.

 

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification addressing the matters set forth
in clause (iv) above to the extent subject to such participation.  Subject to
subsection (e) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 2.11, 2.14 and 8.04(e) to the same
extent as if it were a Lender and had acquired its interest by

 

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assignment pursuant to subsection (b) of this Section.  To the extent permitted
by Law, each Participant also shall be entitled to the benefits of Section 8.05
as though it were a Lender, provided such Participant agrees to be subject to
Section 2.15 as though it were a Lender.

 

(e)   Limitations upon Participant Rights.  A Participant shall not be entitled
to receive any greater payment under Section 2.11 or 2.14 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent.  A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.14 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.14(e) as though it were a Lender.

 

(f)    Certain Pledges.  Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank or other
central banking authority; provided that no such pledge or assignment shall
release such Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.

 

(g)   Resignation as an Issuing Bank after Assignment.  Notwithstanding anything
to the contrary contained herein, if at any time any Issuing Bank assigns all of
its Revolving Credit Commitment and Revolving Advances pursuant to subsection
(b) above, such Issuing Bank may, upon 30 days’ notice to the Borrower and the
Lenders, resign as an Issuing Bank.  If any Issuing Bank resigns, it shall
retain all the rights, powers, privileges and duties of an Issuing Bank
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as an Issuing Bank and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Advances
or fund risk participations in Unreimbursed Amounts pursuant to
Section 2.03(c)).

 

(h)   The words “execution,” “signed,” “signature,” and words of like import in
any Assignment and Assumption shall be deemed to include electronic signatures
or the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any applicable Law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state Laws based on the Uniform
Electronic Transactions Act.

 

Section 8.08          Confidentiality.  Neither the Agent nor any Lender may
disclose to any Person any confidential, proprietary or non-public information
of the Borrower furnished to the Agent or the Lenders by the Borrower (such
information being referred to collectively herein as the “Borrower
Information”), except that each of the Agent and each of the Lenders may
disclose Borrower Information (i) to its and its affiliates’ employees,
officers, directors, agents and advisors having a need to know in connection
with this Agreement (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such Borrower
Information and instructed to keep such Borrower Information confidential on

 

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substantially the same terms as provided herein), (ii) to the extent requested
by any regulatory authority, (iii) to the extent required by applicable Laws or
regulations or by any subpoena or similar legal process, (iv) to any other party
to this Agreement, (v) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (vi) subject to an agreement containing provisions
substantially the same as those of this Section 8.08, (A) to any assignee or
participant or prospective assignee or participant, (B) any direct, indirect,
actual or prospective counterparty (and its advisor) to any swap, derivative or
securitization transaction related to the obligations under this Agreement and
(C)  to any credit insurance provider relating to the Borrower and its
Obligations, (vii) to the extent such Borrower Information (A) is or becomes
generally available to the public on a non-confidential basis other than as a
result of a breach of this Section 8.08 by the Agent or such Lender or their
Related Parties, or (B) is or becomes available to the Agent or such Lender on a
nonconfidential basis from a source other than the Borrower (provided that the
source of such information was not known by the recipient after inquiry to be
bound by a confidentiality agreement with or other contractual, legal or
fiduciary obligation of confidentiality to the Borrower or any other Person with
respect to such information) and (viii) with the consent of the Borrower.  The
obligations under this Section 8.08 shall survive for two calendar years after
the date of the termination of this Agreement.

 

Section 8.09          Governing Law.  This Agreement and the Notes shall be
governed by, and construed in accordance with, the Laws of the State of New York
(including Sections 5-1401 and 5-1402 of the General Obligations Law but
otherwise without regard to conflict of law principles).

 

Section 8.10          Counterparts; Integration; Effectiveness.  This Agreement
may be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.  Except
as provided in Section 3.01, this Agreement shall become effective when it shall
have been executed by the Agent and when the Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto.  Delivery of an executed counterpart of a signature
page of this Agreement by telecopy or other electronic imaging means shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

Section 8.11          Jurisdiction, Etc.

 

(a)   Each of the parties hereto hereby submits to the exclusive jurisdiction of
any New York State court or federal court of the United States of America
sitting in the Borough of Manhattan 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 Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by Law, in such federal court. 
Except to the extent expressly set forth in the preceding sentence, nothing in
this Agreement shall affect any

 

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right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or the Notes in the courts of any jurisdiction.

 

(b)   Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that 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 Notes 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.

 

Section 8.12          Payments Set Aside.  To the extent that any payment by or
on behalf of the Borrower is made to the Agent, any Issuing Bank or any Lender,
or the Agent, any Issuing Bank or any Lender exercises its right of setoff, and
such payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Agent, such Issuing
Bank or such Lender in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any proceeding under any Debtor Relief Law
or otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender and each Issuing Bank severally agrees to pay
to the Agent upon demand its applicable share (without duplication) of any
amount so recovered from or repaid by the Agent, plus interest thereon from the
date of such demand to the date such payment is made at a rate per annum equal
to the Federal Funds Rate from time to time in effect.  The obligations of the
Lenders and the Issuing Banks under clause (b) of the preceding sentence shall
survive the payment in full of the Obligations and the termination of this
Agreement.

 

Section 8.13          Patriot Act.  Each Lender hereby notifies the Borrower
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “USA PATRIOT Act”), it is
required to obtain, verify and record information that identifies each borrower,
guarantor or grantor (the “Loan Parties”), which information includes the name
and address of each Loan Party and other information that will allow such Lender
to identify such Loan Party in accordance with the USA PATRIOT Act.  The
Borrower shall provide, to the extent commercially reasonable, such information
and take such actions as are reasonably requested by the Agent or any Lender in
order to assist the Agent and such Lender in maintaining compliance with the USA
PATRIOT Act.

 

Section 8.14          Waiver of Jury Trial.  EACH OF THE BORROWER, THE AGENT AND
THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN
DOCUMENT OR THE ACTIONS OF THE BORROWER, THE AGENT OR ANY LENDER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 

Section 8.15          No Advisory or Fiduciary Responsibility.  In connection
with all aspects of each transaction contemplated hereby, the Borrower
acknowledges and agrees that: (i) the credit facilities provided for hereunder
and any related arranging or other services in connection

 

81

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therewith (including in connection with any amendment, waiver or other
modification hereof or of any other Loan Document) are an arm’s-length
commercial transaction between the Borrower, on the one hand, and the Agent,
each of the Lenders and each of the Arrangers, on the other hand, and the
Borrower is capable of evaluating and understanding and understands and accepts
the terms, risks and conditions of the transactions contemplated hereby and by
the other Loan Documents (including any amendment, waiver or other modification
hereof or thereof); (ii) in connection with the process leading to such
transaction, each of the Agent, the Lenders and the Arrangers is and has been
acting solely as a principal and is not the financial advisor, agent or
fiduciary, for the Borrower or any of its Affiliates, stockholders, creditors or
employees or any other Person; (iii) neither the Agent nor any Lender or
Arranger has assumed or will assume an advisory, agency or fiduciary
responsibility in favor of the Borrower with respect to any of the transactions
contemplated hereby or the process leading thereto, including with respect to
any amendment, waiver or other modification hereof or of any other Loan Document
(irrespective of whether the Agent or any Lender or Arranger has advised or is
currently advising the Borrower or any of its Affiliates on other matters) and
neither the Agent nor any Lender or Arranger has any obligation to the Borrower
with respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Loan Documents; (iv) the Agent, each
of the Lenders  and the Arrangers and their respective Affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of the Borrower and its Affiliates, and neither the Agent nor any Lender or
Arranger has any obligation to disclose any of such interests by virtue of any
advisory, agency or fiduciary relationship; and (v) the Agent and each Lender
and Arranger have not provided and will not provide any legal, accounting,
regulatory or tax advice with respect to any of the transactions contemplated
hereby (including any amendment, waiver or other modification hereof or of any
other Loan Document) and the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate.  The
Borrower hereby waives and releases, to the fullest extent permitted by Law, any
claims that it may have against the Agent and each Lender and Arranger with
respect to any breach or alleged breach of agency or fiduciary duty in
connection with the Loan Documents.

 

Section 8.16          Survival of Representations and Warranties.  All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof.  Such
representations and warranties have been or will be relied upon by the Agent and
each Lender, regardless of any investigation made by the Agent or any Lender or
on their behalf, and shall continue in full force and effect as long as any
Advance or any other Obligation hereunder shall remain unpaid or unsatisfied or
any Letter of Credit shall remain outstanding.

 

Section 8.17          Severability.  If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions.  The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

82

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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

83

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

 

 

ARIZONA PUBLIC SERVICE COMPANY

 

 

 

By

/s/ Lee R. Nickloy

 

 

 

 

 

 

Name:

Lee R. Nickloy

 

 

Title:

Vice President and Treasurer

 

84

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ADMINISTRATIVE AGENT:

BARCLAYS BANK, PLC, as Agent, Issuing Bank

 

and Lender

 

 

 

By

/s/ Ann E. Sutton

 

 

 

 

 

 

Name:

Ann E. Sutton

 

 

Title:

Director

 

85

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

 

LENDERS:

THE ROYAL BANK OF SCOTLAND plc, as a Lender and as an Issuing Bank

 

 

 

 

 

 

By

/s/ Tyler J. McCarthy

 

 

 

 

 

 

Name:

Tyler J. McCarthy

 

 

Title:

Director

 

 

 

WELLS FARGO BANK, NATIONAL

 

ASSOCIATION, as a Lender and as an Issuing Bank

 

 

 

 

 

By

/s/ Yann Blindert

 

 

 

 

 

 

Name:

Yann Blindert

 

 

Title:

Director

 

 

 

JPMORGAN CHASE BANK, N.A., as a Lender and as an Issuing Bank

 

 

 

 

 

By

/s/ Nancy R. Barwig

 

 

 

 

 

 

Name:

Nancy R. Barwig

 

 

Title:

Credit Executive

 

 

 

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

 

 

 

 

 

By

/s/ William Merritt

 

 

 

 

 

 

Name:

William Merritt

 

 

Title:

Vice President

 

 

 

 

 

BNP PARIBAS, as a Lender

 

 

 

 

 

By

/s/ Francis DeLaney

 

 

 

 

 

 

Name:

Francis DeLaney

 

 

Title:

Managing Director

 

86

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

 

 

By

/s/ Pasquale Perraglia

 

 

 

 

 

 

Name:

Pasquale Perraglia

 

 

Title:

Director

 

 

 

 

 

THE BANK OF NEW YORK MELLON, as a Lender

 

 

 

 

 

By

/s/ Mark W. Rogers

 

 

 

 

 

 

Name:

Mark W. Rogers

 

 

Title:

Vice President

 

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender

 

 

 

 

 

By

/s/ Kevin Buddhdew

 

 

 

 

 

 

Name:

Kevin Buddhdew

 

 

Title:

Vice President

 

 

 

By

/s/ Sanja Gazahi

 

 

 

 

 

 

Name:

Sanja Gazahi

 

 

Title:

Associate

 

 

 

CITIBANK, N.A., as a Lender

 

 

 

By

/s/ Amit Vasani

 

 

 

 

 

 

Name:

Amit Vasani

 

 

Title:

Vice President

 

 

 

DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender

 

 

 

By

/s/ Virginia Cosenza

 

 

 

 

 

 

Name:

Virginia Cosenza

 

 

Title:

Vice President

 

87

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

 

 

By

/s/ Ming K. Chu

 

 

 

 

 

 

Name:

Ming K. Chu

 

 

Title:

Vice President

 

 

 

 

 

KEYBANK NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

By

/s/ Kevin D. Smith

 

 

 

 

 

Name:

Kevin D. Smith

 

 

Title:

Senior Vice President

 

 

 

UNION BANK, N.A., as a Lender

 

 

 

 

 

 

By

/s/ Efrain Soto

 

 

 

 

 

Name:

Efrain Soto

 

 

Title:

Vice President

 

 

 

THE BANK OF NOVA SCOTIA, as a Lender

 

 

 

 

 

By

/s/ Thane Rattew

 

 

 

 

 

Name:

Thane Rattew

 

 

Title:

Managing Director

 

 

 

SUNTRUST BANK, as a Lender

 

 

 

 

 

By

/s/ Andrew Johnson

 

 

 

 

 

Name:

Andrew Johnson

 

 

Title:

Director

 

 

 

UBS LOAN FINANCE LLC, as a Lender

 

 

 

 

 

By

/s/ Lana Gifas

 

 

 

 

 

Name:

Lana Gifas

 

 

Title:

Director

 

88

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

 

 

By

/s/ Joselin Fernandes

 

 

 

 

 

Name:

Joselin Fernandes

 

 

Title:

Associate Director

 

 

 

U.S. BANK NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

By

/s/ Holland H. Williams

 

 

 

 

 

Name:

Holland H. Williams

 

 

Title:

AVP & Portfolio Manager

 

 

 

CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY, as a Lender

 

 

 

 

 

By

/s/ Gordon Eadon

 

 

 

 

 

Name:

Gordon Eadon

 

 

Title:

Authorized Signatory

 

 

 

By

/s/ Robert Casey

 

 

 

 

 

Name:

Robert Casey

 

 

Title:

Authorized Signatory

 

 

 

COBANK, ACB, as a Lender

 

 

 

 

 

By

/s/ John Kemper

 

 

 

 

 

Name:

John Kemper

 

 

Title:

Vice President

 

 

 

 

 

THE NORTHERN TRUST COMPANY, as a Lender

 

 

 

 

 

By

/s/ John Lascody

 

 

 

 

 

 

Name:

John Lascody

 

 

Title:

Vice President

 

89

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

 

 

BRANCH BANKING & TRUST COMPANY, as a Lender

 

 

 

 

 

By

/s/ Sarah Bryson

 

 

 

 

 

 

Name:

Sarah Bryson

 

 

Title:

Vice President

 

 

 

 

 

PNC BANK, NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

By

/s/ Philip K. Liebscher

 

 

 

 

 

 

Name:

Philip K. Liebscher

 

 

Title:

Senior Vice President

 

 

 

TD BANK, N.A., as a Lender

 

 

 

 

 

By

/s/ David Perlman

 

 

 

 

 

 

Name:

David Perlman

 

 

Title:

Senior Vice President

 

90

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SCHEDULE 1.01

COMMITMENTS AND RATABLE SHARES

 

Bank

 

Revolving Credit
Commitment

 

Ratable Share

 

Barclays Bank PLC

 

$

32,500,000.00

 

6.50

%

The Royal Bank of Scotland plc

 

$

32,500,000.00

 

6.50

%

Wells Fargo Bank, National Association

 

$

32,500,000.00

 

6.50

%

JPMorgan Chase Bank, N.A.

 

$

32,500,000.00

 

6.50

%

Bank of America, N.A.

 

$

32,500,000.00

 

6.50

%

Credit Suisse AG, Cayman Islands Branch

 

$

22,500,000.00

 

4.50

%

The Bank of New York Mellon

 

$

22,500,000.00

 

4.50

%

BNP Paribas

 

$

22,500,000.00

 

4.50

%

Citibank, N.A.

 

$

22,500,000.00

 

4.50

%

Deutsche Bank AG New York Branch

 

$

22,500,000.00

 

4.50

%

KeyBank National Association

 

$

22,500,000.00

 

4.50

%

Union Bank, N.A.

 

$

22,500,000.00

 

4.50

%

The Bank of Nova Scotia

 

$

22,500,000.00

 

4.50

%

SunTrust Bank

 

$

22,500,000.00

 

4.50

%

UBS Loan Finance LLC

 

$

22,500,000.00

 

4.50

%

U.S. Bank National Association

 

$

22,500,000.00

 

4.50

%

Canadian Imperial Bank of Commerce, New York Agency

 

$

15,000,000.00

 

3.00

%

CoBank, ACB

 

$

15,000,000.00

 

3.00

%

The Northern Trust Company

 

$

15,000,000.00

 

3.00

%

Branch Banking & Trust Company

 

$

15,000,000.00

 

3.00

%

PNC Bank, National Association

 

$

15,000,000.00

 

3.00

%

TD Bank, N.A.

 

$

15,000,000.00

 

3.00

%

TOTAL

 

$

500,000,000.00

 

100.00

%

 

91

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

 

SCHEDULE 4.01(j)

SUBSIDIARIES(1)

 

Bixco, Inc.

Axiom Power Solutions, Inc.

PWE Newco, Inc.

 

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

(1)  The Borrower’s three nuclear decommissioning trusts relating to PVNGS may
also be deemed to be subsidiaries under a literal reading of the definition.

 

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

 

SCHEDULE 4.01(k)

EXISTING INDEBTEDNESS

 

$100,000,000 aggregate principal amount of the Borrower’s 4.50% Notes due 2042
pursuant to an Underwriting Agreement, dated March 19, 2013, among the Borrower
and the underwriters named therein, and the Indenture, dated as of January 15,
1998, as amended and supplemented including as amended and supplemented by the
Thirteenth Supplemental Indenture thereto.

 

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

 

SCHEDULE 8.02

CERTAIN ADDRESSES FOR NOTICES

 

BORROWER:

 

Arizona Public Service Company

400 North 5th Street

Mail Station 9040

Phoenix, AZ 85004

Attention: Treasurer

Telephone:                                   (602) 250-3300

Telecopier:                                    (602) 250-3902

Electronic                                          lee.nickloy@pinnaclewest.com

 

AGENT:

 

Agent’s Office

(for payments and Requests for Credit Extensions):

Barclays Bank PLC

1301 6th Avenue

New York, NY 10019

Attention: Omer Khan

Telephone: (212) 320-6864

Email: omer.khan@barclays.com / xrausloanops5@barclays.com

 

with copies to:

 

Barclays Bank PLC

745 Seventh Avenue

New York, NY 10019

Attention: Alicia Borys / Kruthi Raj

Facsimile: (212) 526-5115

Telephone: (212) 526-4291 / (212) 526-3713

Email: Alicia.borys@barclays.com / Kruthi.raj@barclays.com

 

Agent’s Account/Barclays Bank Agency Service Wiring Information

 

Barclays Bank PLC

New York, New York

ABA: 026002574

 

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

 

Account Number: 050-01910-4

Account Name: Clad Control Account

Ref: Arizona Public Service

 

Other Notices as Agent:

 

Barclays Bank PLC

745 Seventh Avenue

New York, NY 10019

Attention: Alicia Borys / Kruthi Raj

Facsimile: (212) 526-5115

Telephone: 212) 526-4291 / (212) 526-3713

Email: Alicia.borys@barclays.com / Kruthi.raj@barclays.com

 

ISSUING BANKS:

 

Barclays Bank PLC

 

Barclays Bank PLC

200 Park Avenue

New York, NY 10166

Attn. Letters of Credit / Dawn Townsend

Facsimile (212) 412-5011

Telephone (201) 499-2081

Email xraletterofcredit@barclays.com

 

The Royal Bank of Scotland plc

 

The Royal Bank of Scotland plc

600 Washington Boulevard

Stamford, CT 06901

Attention: Richard Emmich

Facsimile: (203) 873-3569

Telephone: (203) 897-7619

Email: richard.emmich@rbs.com

 

and

 

Attention: Marchette Major

Facsimile: (203) 873-3569

Telephone: (203) 897-7638

Email: marchette.major@rbs.com

 

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

 

Wells Fargo Bank, National Association

 

Wells Fargo Bank, National Association

Corporate Banking - Utility and Power Group

1300 SW 5th Avenue, 7th Floor

Mail Code: MAC P6101-076

Portland, OR 97201

Attention:  Yann Blindert

Telephone:  (503) 886-2215

Facsimile:  (503) 886-2211

E-mail:  yann.blindert@wellsfargo.com

 

JPMorgan Chase Bank, N.A.

 

JPMorgan Chase Bank, N.A.

10 South Dearborn, 9th Floor

Mail Code: IL1-0090

Chicago, IL 60603

Attention:  Nancy R. Barwig

Telephone:  (312) 732-1838

Facsimile:  (312) 732-1762

E-mail: nancy.r.barwig@jpmorgan.com

With a cc to: jpm.standbylc.ccb@jpmorgan.com

 

Bank of America, N.A.

 

Bank of America, N.A.

100 N. Tryon Street

Charlotte, NC 28255-0001

Attention:  William A. Merritt, III

Telephone:  (980) 386-9762

Facsimile:  (980) 683-6339

E-mail: william.merritt@baml.com

 

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

 

EXHIBIT A — FORM OF

PROMISSORY NOTE

 

                    , 20  

 

FOR VALUE RECEIVED, the undersigned, ARIZONA PUBLIC SERVICE COMPANY, an Arizona
corporation (the “Borrower”), hereby promises to pay to the order of
               or its registered assigns (the “Lender”), in accordance with the
provisions of the Credit Agreement (as hereinafter defined), the principal
amount of each Advance from time to time made by the Lender to the Borrower
pursuant to the Five-Year Credit Agreement dated as of April 9, 2013 among the
Borrower, the Lender and certain other lenders parties thereto, Barclays Bank
PLC, as Agent for the Lender and such other lenders, and the issuing banks and
other agents party thereto (as amended or modified from time to time, the
“Credit Agreement”; the terms defined therein being used herein as therein
defined) outstanding on such date.

 

The Borrower promises to pay interest on the unpaid principal amount of each
Advance from the date of such Advance until such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in the
Credit Agreement.

 

Both principal and interest are payable in lawful money of the United States of
America to the Agent for the account of the Lender in same day funds at the
address and account specified on Schedule 8.02.  Each Advance owing to the
Lender by the Borrower pursuant to the Credit Agreement, and all payments made
on account of principal thereof, shall be recorded by the Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto which is part of this
Promissory Note.

 

This Promissory Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement.  The Credit Agreement, among other things,
(i) provides for the making of Advances by the Lender to the Borrower from time
to time in an aggregate amount not to exceed at any time the Lender’s Unused
Commitment, the indebtedness of the Borrower resulting from each such Advance
being evidenced by this Promissory Note and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

 

 

ARIZONA PUBLIC SERVICE COMPANY

 

 

 

By

 

 

 

Name:

 

 

 

Title:

 

 

A-1

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

 

ADVANCES AND PAYMENTS OF PRINCIPAL

 

Date

 

Amount of
Advance

 

Amount of
Principal Paid
or Prepaid

 

Unpaid Principal
Balance

 

Notation
Made By

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A-2

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

 

EXHIBIT B — FORM OF NOTICE OF

BORROWING

 

Barclays Bank PLC, as Agent

for the Lenders parties

to the Credit Agreement

referred to below

 

Attention:  Bank Loan Syndications Department

 

[Date]

 

Ladies and Gentlemen:

 

The undersigned, Arizona Public Service Company, refers to the Five-Year Credit
Agreement, dated as of April 9, 2013 (as amended or modified from time to time,
the “Credit Agreement”, the terms defined therein being used herein as therein
defined), among the undersigned, certain Lenders parties thereto, Barclays Bank
PLC, as Agent for said Lenders and the Issuing Banks and other agents party
thereto, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of
the Credit Agreement that the undersigned hereby requests a Borrowing under the
Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the “Proposed Borrowing”) as required by
Section 2.02(a) of the Credit Agreement:

 

(i)                                     The Business Day of the Proposed
Borrowing is                         , 20      .

(ii)                                  The Type of Revolving Advances comprising
the Proposed Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].

(iii)                               The aggregate amount of the Proposed
Borrowing is $                          .

[(iv)                          The initial Interest Period for each Eurodollar
Rate Advance made as part of the Proposed Borrowing is       month[s].]

 

The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing:

 

(A)                               the representations and warranties contained
in Section 4.01 (other than Sections 4.01(k), 4.01(e)(ii) and 4.01(f)(ii)) of
the Credit Agreement are correct, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as though made on
and as of such date;

 

(B)                               no event has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds therefrom, that constitutes a Default;

 

(C)                               all required regulatory authorizations
including the 2013 Order and/or any Subsequent Order in respect of the Proposed
Borrowing have been obtained and are in full force and effect and, before and
after giving effect to the Proposed Borrowing and to the application of

 

B-1

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

 

the proceeds therefrom, the Borrower is in compliance with the provisions of the
applicable order; and

 

(D)                               before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as though made on
and as of such date, the Indebtedness of the Borrower does not exceed that
permitted by (i) applicable resolutions of the Board of Directors of the
Borrower, (ii) applicable Arizona Laws, or (iii) the 2013 Order or any
Subsequent Order, whichever is in force and effect at such time.

 

 

Very truly yours,

 

 

 

ARIZONA PUBLIC SERVICE COMPANY

 

 

 

By

 

 

 

Name:

 

 

 

Title:

 

 

B-2

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

 

EXHIBIT C — FORM OF

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”).  Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee.  Annex 1 attached hereto (the “Standard Terms and Conditions”) is
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date referred to below
(i) all of the Assignor’s rights and obligations in its capacity as a Lender
under the Credit Agreement and any other documents or instruments delivered
pursuant thereto to the extent related to the amount and percentage interest
identified below of all of such outstanding rights and obligations of the
Assignor under the respective facilities identified below (including without
limitation any letters of credit, guarantees, and swingline loans included in
such facilities) and (ii) to the extent permitted to be assigned under
applicable Law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at Law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as, the “Assigned Interest”).  Each such sale
and assignment is without recourse to the Assignor and, except as expressly
provided in this Assignment and Assumption, without representation or warranty
by the Assignor.  Assignee shall deliver (if it is not already a Lender) to the
Agent an Administrative Questionnaire.

 

1.

 

Assignor:

 

 

 

 

 

 

 

2.

 

Assignee:

 

 

 

 

 

[and is an Affiliate of [identify Bank](1)]

 

 

 

3.

 

Borrower: Arizona Public Service Company

 

 

 

4.

 

Agent: Barclays Bank PLC, as the administrative agent under the Credit Agreement

 

 

 

5.

 

Credit Agreement: The Five-Year Credit Agreement dated as of April 9, 2013, by
and among the Borrower, the Lenders party thereto, the Agent and the Issuing
Banks and other agents party thereto.

 

 

 

6.

 

Assigned Interest:

 

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(1)  Select as applicable.

 

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Aggregate Amount
of Commitment for
all Lenders

 

Amount of
Commitment
Assigned

 

Percentage
Assigned of
Commitment(2)

 

CUSIP
Number

 

 

 

 

 

 

 

 

 

$

 

 

$

 

 

 

%

 

 

 

[7. Trade Date: ](3)

Effective Date:       , 20      [TO BE INSERTED BY AGENT AND WHICH SHALL BE THE
EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 

ASSIGNOR

 

[NAME OF ASSIGNOR]

 

 

 

By

 

 

 

Name:

 

 

 

Title:

 

 

 

 

ASSIGNEE

 

[NAME OF ASSIGNEE]

 

 

 

By

 

 

 

Name:

 

 

 

Title:

 

 

[Consented to and](4) Accepted:

 

BARCLAYS BANK PLC, as Agent

 

 

 

By

 

 

Name:

 

 

Title:

 

 

 

 

[Consented to:](5)

 

[BARCLAYS BANK PLC, as Issuing Bank]

 

 

 

By

 

 

Name:

 

 

Title:

 

 

 

 

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(2)  Set forth, to at least 9 decimals, as a percentage of the Commitment of all
Banks thereunder.

(3)  To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

(4)  To be added only if the consent of the Agent is required by the terms of
the Credit Agreement.

(5)  To be added only if the consent of the Borrowers and/or other parties (e.g.
Issuing Bank) is required by the terms of the Credit Agreement.

 

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[THE ROYAL BANK OF SCOTLAND plc, as Issuing Bank]

 

 

By

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

[WELLS FARGO BANK, NATIONAL ASSOCIATION, as Issuing Bank]

 

 

By

 

 

Name:

 

 

Title:

 

 

 

 

[JPMORGAN CHASE BANK, N.A., as Issuing Bank]

 

 

 

By

 

 

Name:

 

 

Title:

 

 

 

 

[BANK OF AMERICA, N.A., as Issuing Bank]

 

 

 

By

 

 

Name:

 

 

Title:

 

 

 

 

ARIZONA PUBLIC SERVICE COMPANY

 

 

 

By

 

 

Name:

 

 

Title:

 

 

 

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ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.                                      Representations and Warranties.

 

1.1                               Assignor.  The Assignor (a) represents and
warrants that (i) it is the legal and beneficial owner of the Assigned Interest,
(ii) the Assigned Interest is free and clear of any lien, encumbrance or other
adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents, (iii) the financial condition of the Borrower,
any of its Subsidiaries or Affiliates or any other Person obligated in respect
of any Loan Document or (iv) the performance or observance by the Borrower of
any of its obligations under any Loan Document.

 

1.2                               Assignee.  The Assignee (a) represents and
warrants that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all the requirements to be an Eligible Assignee
under Section 8.07 of the Credit Agreement (subject to such consents, if any, as
may be required under Section 8.07 of the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest,
shall have the obligations of a Lender thereunder, (iv) it is sophisticated with
respect to decisions to acquire assets of the type represented by the Assigned
Interest and either it, or the Person exercising discretion in making its
decision to acquire the Assigned Interest, is experienced in acquiring assets of
such type, (v) it has received a copy of the Credit Agreement, and has received
or has been accorded the opportunity to receive copies of the most recent
financial statements referred to in Section 4.01(e) or delivered pursuant to
Section 5.01(h), as applicable, thereof, as applicable, and such other documents
and information as it deems appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest, (vi) it has, independently and without reliance upon the
Agent, the Assignor 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 Assignment and Assumption and to purchase the
Assigned Interest, and (vi) if it is a foreign lender, attached to the
Assignment and Assumption is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Agent, the Assignor 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 the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

 

2.                                      Payments.  From and after the Effective
Date, the Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other

 

C-4

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amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.

 

3.                                      General Provisions.  This Assignment and
Assumption shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns.  This Assignment and
Assumption may be executed in any number of counterparts, which together shall
constitute one instrument.  Delivery of an executed counterpart of a signature
page of this Assignment and Assumption by facsimile shall be effective as
delivery of a manually executed counterpart of this Assignment and Assumption. 
This Assignment and Assumption shall be governed by, and construed in accordance
with, the Law of the State of New York.

 

C-5

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