Exhibit 10.3

 

JPMORGAN CHASE BANK, N.A.

383 Madison Avenue

New York, New York 10179

  

BANK OF AMERICA, N.A.

BofA SECURITIES, INC.

One Bryant Park

New York, NY 10036

BARCLAYS

745 Seventh Avenue

New York, NY 10019

  

CITIGROUP GLOBAL MARKETS INC.

388 Greenwich Street

New York, NY 10013

GOLDMAN SACHS BANK USA

200 West Street

New York, NY 10282

  

BNP PARIBAS

787 Seventh Avenue

New York, New York 10019

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

Eleven Madison Avenue

New York, New York 10010

  

MIZUHO BANK, LTD.

1251 Avenue of the Americas

New York, NY 10020

MUFG UNION BANK, N.A.

1221 Avenue of the Americas

New York, New York 10020

  

WELLS FARGO BANK, NATIONAL ASSOCIATION

550 S Tryon St.

Charlotte, NC 28202

BANK OF MONTREAL, CHICAGO BRANCH

115 S LaSalle St.

Chicago, IL 60603

  

THE BANK OF NEW YORK MELLON

225 Liberty Street

New York, New York 10286

PERSONAL AND CONFIDENTIAL

May 26, 2020

PG&E Corporation

77 Beale Street

P.O. Box 77000

San Francisco, California 94177

Attention: Margaret K. Becker

PG&E Corporation

RCF Commitment Letter

Ladies and Gentlemen:

Reference is hereby made to (i) the Chapter 11 bankruptcy cases, jointly
administered under lead case number 19-30088 (the “Chapter 11 Cases”), currently
pending before the United States Bankruptcy Court for the Northern District of
California (the “Bankruptcy Court”), in which PG&E Corporation, a

 

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

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

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

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

 

1.

Commitments; Titles and Roles.

(a) (i) Each of JPMorgan, BofA, Barclays, Citi and GS Bank is pleased to confirm
its agreement to act, and you hereby appoint each of JPMorgan, BofA, Barclays,
Citi and GS Bank to act, as a joint lead arranger and joint bookrunner (in such
capacities, the “Arrangers”) in connection with the Facility, (ii) each of BofA,
Barclays, Citi and GS Bank is pleased to confirm its agreement to act, and you
hereby appoint each of BofA, Barclays, Citi and GS Bank to act, as a
co-syndication agent in connection with the Facility and (iii) each of BNP
Paribas (“BNP”), Credit Suisse AG, Cayman Islands Branch (“CS”), Mizuho Bank,
Ltd (“Mizuho”), MUFG Union Bank, N.A. (“MUFG”) and Wells Fargo Bank, National
Association (“Wells Fargo”) is pleased to confirm its agreement to act, and you
hereby appoint each of BNP, CS, Mizuho, MUFG and Wells Fargo to act, as a
co-documentation agent in connection with the Facility, (b) JPMorgan is pleased
to confirm its agreement to act, and you hereby appoint JPMorgan to act, as
administrative agent (the “Administrative Agent”) and as collateral agent (the
“Collateral Agent”) for the Facility; (c) each of JPMorgan, BANA, Barclays,
Citi, GS Bank and each of the other Commitment Parties is pleased to commit, and
hereby commits, on a several and not joint basis, to provide the Borrower a
portion of the aggregate principal amount of the Facility equal to the principal
amount set forth adjacent to its name on Schedule I hereto under the heading
“Commitment” and agrees that it shall execute and deliver a credit agreement in
the form attached as Annex B hereto (the “Credit Agreement”) with such
modifications thereto as may be agreed by the Borrower and each of the
Commitment Parties, in each case, on the terms and subject solely to the
satisfaction or waiver of the conditions contained in (i) Annex A of this
Commitment Letter and (ii) Section 5.1 of the Credit Agreement. It is further
agreed that JPMorgan will appear on the top left (and the Arrangers, other than

 

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JPMorgan, will appear in alphabetical order immediately to the right thereof) of
the cover page of any marketing materials for the Facility and will hold the
roles and responsibilities conventionally understood to be associated with such
name placement. Our fees for our commitment and for services related to the
Facility are set forth in one or more separate fee letters (as amended, restated
or otherwise modified from time to time in accordance with the terms thereof,
collectively, the “Fee Letter”) entered into by you and the relevant Commitment
Parties on or prior to the date hereof. It is agreed that no other agents,
co-agents, arrangers, co-arrangers or bookrunners will be appointed and no other
titles will be awarded in connection with the Facility, and no compensation will
be paid in order to obtain such person’s commitment to participate in the
Facility (other than the compensation expressly contemplated by this Commitment
Letter and the Fee Letter) in connection with the Facility, unless the Arrangers
and you shall so agree.

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

 

2.

Conditions Precedent.

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

 

3.

Indemnification and Related Matters.

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

 

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or omission by you or any of your affiliates and have been brought by an
indemnified person against any other indemnified person (other than any claims
against any Commitment Party in its capacity or in fulfilling its role as an
arranger or agent or any similar role hereunder, except to the extent such acts
or omissions are determined by a court of competent jurisdiction by a final and
non-appealable judgment to have constituted the gross negligence, bad faith or
willful misconduct of such indemnified party in such capacity), and (b) to
reimburse the Commitment Parties and their respective affiliates on demand for
all out-of-pocket expenses (including due diligence expenses, syndication
expenses, travel expenses, and reasonable fees, charges and disbursements of
counsel) incurred in connection with the Facility and any related documentation
(including this Commitment Letter, the Fee Letter and the definitive
documentation relating to the Facility) or the administration, amendment,
modification or waiver thereof. You acknowledge that we may receive a benefit,
including without limitation, a discount, credit or other accommodation, from
any of such counsel based on the fees such counsel may receive on account of
their relationship with us including, without limitation, fees paid pursuant
hereto. None of the indemnified persons or you shall have any liability for any
special, indirect, consequential or punitive damages in connection with
activities related to the Facility or the Transactions; provided that nothing
contained in this sentence shall limit your indemnity and reimbursement
obligations to the extent set forth in this paragraph.

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

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

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

 

4.

Assignments.

This Commitment Letter may not be assigned by you without the prior written
consent of the Commitment Parties, nor by any Commitment Party without your
prior written consent (and any purported assignment without such consent will be
null and void), is intended to be solely for the benefit

 

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of the Commitment Parties and the other parties hereto and, except as set forth
in Section 3 above, is not intended to confer any benefits upon, or create any
rights in favor of, any person other than the parties hereto. Any Commitment
Party may, in consultation with the Borrower, assign its commitments and
agreements hereunder, in whole or in part, to any of its affiliates.
Notwithstanding anything to the contrary in this Section 4, GS Bank may assign
its commitments hereunder to Goldman Sachs Lending Partners LLC (or vice versa)
at any time and such assignment shall relieve GS Bank (or Goldman Sachs Lending
Partners LLC, as applicable) of its commitments.

 

5.

Confidentiality.

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

 

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

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

 

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6.

Absence of Fiduciary Relationship; Affiliates; Etc.

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

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

Each of the Commitment Entities may have economic interests that conflict with
those of the Borrower, its equity holders and/or its affiliates. You agree that
each Commitment Entity will act under this Commitment Letter as an independent
contractor and that nothing in this Commitment Letter, the Fee Letter or
otherwise will be deemed to create an advisory, fiduciary or agency relationship
or fiduciary or other implied duty between the Commitment Entities and the
Borrower, its equity holders or its affiliates. You acknowledge and agree that
the transactions contemplated by this Commitment Letter and the Fee Letter
(including the exercise of rights and remedies hereunder and thereunder) are
arm’s-length commercial transactions between the Commitment Entities, on the one
hand, and the Borrower, on the other, and in connection therewith and with the
process leading thereto, (i) the Commitment Entities have not assumed (A) an
advisory responsibility in favor of the Borrower, its equity holders or its
affiliates with respect to the financing transactions contemplated hereby or
(B) a fiduciary responsibility in favor of the Borrower, its equity holders or
its affiliates with respect to the transactions contemplated hereby, or in each
case, the exercise of rights or remedies with respect thereto or the process
leading thereto (irrespective of whether the Commitment Entities have advised,
are currently advising or will advise the

 

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

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

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

 

7.

Miscellaneous.

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

The provisions set forth under Sections 3, 5 and 6 hereof (in each case other
than any provision therein that expressly terminates upon execution of the
Credit Agreement), this Section 7 and the provisions of the Fee Letter will
remain in full force and effect regardless of whether the Credit Agreement is
executed and delivered; provided that the foregoing provisions in this paragraph
(other than with respect to the provisions set forth in the Fee Letter and under
Sections 5, 6 and this Section 7, which will remain in full force and effect
notwithstanding the expiration or termination of this Commitment Letter or the
Commitment Parties’ respective commitments and agreements hereunder) shall be
superseded in each case, to the extent covered thereby, by the applicable
provisions contained in the Credit Agreement upon execution thereof and
thereafter shall have no further force and effect.

 

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

 

8.

PATRIOT Act Notification.

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

 

9.

Acceptance and Termination.

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

This Commitment Letter may be executed in any number of counterparts, each of
which when executed will be an original, and all of which, when taken together,
will constitute one agreement. The words “execution,” “signed,” “signature,”
“delivery,” and words of like import in or relating to this Commitment Letter
and/or any document to be signed in connection with this Commitment Letter and
the transactions contemplated hereby shall be deemed to include Electronic
Signatures (as defined below), deliveries or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or

 

9

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

enforceability as a manually executed signature, physical delivery thereof or
the use of a paper-based recordkeeping system, as the case may be. As used
herein, “Electronic Signatures” means any electronic symbol or process attached
to, or associated with, any contract or other record and adopted by a person
with the intent to sign, authenticate or accept such contract or record. This
Commitment Letter and the Fee Letter (and the Bank Financing Engagement Letter
dated as of October 4, 2019 among you and certain of the Commitment Parties) are
the only agreements that have been entered into among the parties hereto with
respect to the Facility and set forth the entire understanding of the parties
with respect thereto and supersede any prior written or oral agreements among
the parties hereto with respect to the Facility.

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

 

(i)

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

 

(ii)

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

 

(iii)

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

 

(iv)

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

 

(v)

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

 

(vi)

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

 

  A.

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

 

  B.

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

 

10

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

  C.

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

 

  D.

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

 

  E.

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

 

  F.

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

 

  G.

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

 

  H.

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

 

  1.

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

 

  2.

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

 

11

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

  3.

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

 

  4.

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

 

  I.

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

 

  J.

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

 

  K.

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

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

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

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

“Bridge Commitment Letters” shall mean each of (i) that certain Commitment
Letter dated as of October 4, 2019 among Pacific Gas and Electric Company, as
the borrower, PG&E Corporation and the

 

12

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

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

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

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

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

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

[Remainder of page intentionally left blank]

 

13

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

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

/s/ Jeffrey Miller

  Name: Jeffrey Miller   Title: Executive Director

[Signature Page to RCF Commitment Letter (PG&E)]

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

BofA SECURITIES, INC. By:  

/s/ Patrick Boultinghouse

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

/s/ Dee Dee Farkas

  Name: Dee Dee Farkas   Title: Director

[Signature Page to RCF Commitment Letter (PG&E)]

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

BARCLAYS BANK PLC By:  

/s/ Sydney G. Dennis

  Name: Sydney G. Dennis   Title: Director

[Signature Page to RCF Commitment Letter (PG&E)]

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

CITIGROUP GLOBAL MARKETS INC. By:  

/s/ Rirchard Rivera

  Name: Richard Rivera   Title: Authorized Signatory

[Signature Page to RCF Commitment Letter (PG&E)]

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

GOLDMAN SACHS BANK USA By:  

/s/ Jacob Elder

  Name: Jacob Elder   Title: Authorized Signatory

[Signature Page to RCF Commitment Letter (PG&E)]

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

BNP PARIBAS By:  

/s/ Denis O’Meara

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

/s/ Francis Delaney

  Name: Francis Delaney   Title: Managing Director

[Signature Page to RCF Commitment Letter (PG&E)]

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

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH By:  

/s/ Vipul Dhadda

  Name: Vipul Dhadda   Title: Authorized Signatory By:  

/s/ Brady Bingham

  Name: Brady Bingham   Title: Authorized Signatory

[Signature Page to RCF Commitment Letter (PG&E)]

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

MIZUHO BANK, LTD. By:  

/s/ Edward Sacks

  Name: Edward Sacks   Title: Authorized Signatory

[Signature Page to RCF Commitment Letter (PG&E)]

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

MUFG UNION BANK, N.A. By:  

/s/ Nietzsche Rodricks

  Name: Nietzsche Rodricks   Title: Managing Director

[Signature Page to RCF Commitment Letter (PG&E)]

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

WELLS FARGO BANK, NATIONAL ASSOCIATION By:  

/s/ Gregory R. Gredvig

  Name: Gregory R. Gredvig   Title: Director

[Signature Page to RCF Commitment Letter (PG&E)]

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

BANK OF MONTREAL, CHICAGO BRANCH By:  

/s/ Darren Thomas

  Name: Darren Thomas   Title: Vice President

[Signature Page to RCF Commitment Letter (PG&E)]

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

THE BANK OF NEW YORK MELLON By:  

/s/ Molly H. Ross

  Name: Molly H. Ross   Title: Vice President

[Signature Page to RCF Commitment Letter (PG&E)]

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

ACCEPTED AND AGREED AS OF

THE DATE FIRST WRITTEN ABOVE:

PG&E Corporation    

 

By:  

/s/ Margaret K. Becker

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

[Signature Page to RCF Commitment Letter (PG&E)]

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

Schedule I

Commitments

 

Commitment Party

   Commitment

JPMorgan Chase Bank, N.A.

   $60,615,384.63

Bank of America, N.A.

   $55,564,102.56

Barclays Bank PLC

   $55,564,102.56

Citibank, N.A.

   $52,500,000.00

Citicorp North America, Inc.

   $3,064,102.56

Goldman Sachs Bank USA

   $55,564,102.56

BNP Paribas

   $38,389,743.59

Credit Suisse AG, Cayman Islands Branch

   $38,389,743.59

Mizuho Bank, Ltd.

   $38,389,743.59

MUFG Union Bank, N.A.

   $38,389,743.59

Wells Fargo Bank, National Association

   $38,389,743.59

Bank of Montreal, Chicago Branch

   $17,679,487.18

The Bank of New York Mellon

   $7,500,000.00   

 

   $500,000,000.00   

 

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

ANNEX A

Conditions1

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

 

  (a)

the following conditions:

 

  (i)

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

 

  (ii)

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

 

  (iii)

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

 

  (b)

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

 

  (i)

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

 

  (ii)

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

 

  (iii)

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

 

1

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

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

  (iv)

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

 

  (v)

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

 

  (vi)

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

 

  (vii)

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

 

  (viii)

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

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

ANNEX B

[Attached]

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

$500,000,000

CREDIT AGREEMENT

among

PG&E CORPORATION,

as Borrower,

the Several Lenders from Time to Time Parties Hereto,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

JPMORGAN CHASE BANK, N.A.,

as Collateral Agent,

BOFA SECURITIES, INC.

BARCLAYS BANK PLC,

CITIBANK, N.A.

and GOLDMAN SACHS BANK USA,

as Co-Syndication Agents,

and

BNP PARIBAS,

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

MIZUHO BANK, LTD.,

MUFG UNION BANK, N.A.,

and WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agents

Dated as of [                    ], 2020

 

 

JPMORGAN CHASE BANK, N.A.,

BOFA SECURITIES, INC.,

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

BARCLAYS BANK PLC,

CITIBANK, N.A.

and GOLDMAN SACHS BANK USA

as Joint Lead Arrangers and

Joint Bookrunners

 

2

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

TABLE OF CONTENTS

 

         Page  

SECTION 1.

 

DEFINITIONS

     1

1.1

 

Defined Terms

     1

1.2

 

Other Definitional Provisions and Interpretative Provisions

     30

1.3

 

Divisions

     31

1.4

 

Interest Rates; LIBOR Notification

     31

SECTION 2.

 

AMOUNT AND TERMS OF COMMITMENTS

     32

2.1

 

Commitments

     32

2.2

 

Procedure for Revolving Loan Borrowing

     32

2.3

 

Commitment Increases

     32

2.4

 

[Reserved]

     33

2.5

 

[Reserved]

     34

2.6

 

Commitment Fees, Etc

     34

2.7

 

Termination or Reduction of Commitments; Extension of Termination Date

     35

2.8

 

Optional Prepayments

     36

2.9

 

Conversion and Continuation Options

     37

2.10

 

Limitations on Eurodollar Tranches

     37

2.11

 

Interest Rates and Payment Dates

     38

2.12

 

Computation of Interest and Fees

     38

2.13

 

Inability to Determine Interest Rate

     38

2.14

 

Pro Rata Treatment and Payments; Notes

     40

2.15

 

Change of Law

     41

2.16

 

Taxes

     43

2.17

 

Indemnity

     47

2.18

 

Change of Lending Office

     47

2.19

 

Replacement of Lenders

     47

2.20

 

Defaulting Lenders

     48

2.21

 

Illegality

     49

SECTION 3.

 

[RESERVED]

     49

SECTION 4.

 

REPRESENTATIONS AND WARRANTIES

     49

4.1

 

Financial Condition

     50

4.2

 

No Change

     50

4.3

 

Existence; Compliance with Law

     50

4.4

 

Power; Authorization; Enforceable Obligations

     50

4.5

 

No Legal Bar

     51

4.6

 

Litigation

     51

4.7

 

No Default

     51

4.8

 

Taxes

     51

4.9

 

Federal Regulations

     51

 

i

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

4.10

 

ERISA

     52

4.11

 

Investment Company Act; Other Regulations

     52

4.12

 

Use of Proceeds

     52

4.13

 

Environmental Matters

     53

4.14

 

Regulatory Matters

     53

4.15

 

Sanctions; Anti-Corruption

     53

4.16

 

Affected Financial Institutions

     53

4.17

 

Solvency

     53

4.18

 

Disclosure

     53

4.19

 

Validity of Security Interests

     54

4.20

 

Ownership of Property

     54

4.21

 

Covered Entity

     54

SECTION 5.

 

CONDITIONS PRECEDENT

     54

5.1

 

Conditions to the Effective Date

     54

5.2

 

Conditions to Each Credit Event

     56

SECTION 6.

 

AFFIRMATIVE COVENANTS

     57

6.1

 

Financial Statements

     57

6.2

 

Certificates; Other Information

     58

6.3

 

Payment of Taxes

     58

6.4

 

Maintenance of Existence; Compliance

     59

6.5

 

Maintenance of Property; Insurance

     59

6.6

 

Inspection of Property; Books and Records; Discussions

     59

6.7

 

Notices

     60

6.8

 

Maintenance of Licenses, etc.

     60

6.9

 

Further Assurances

     60

SECTION 7.

 

NEGATIVE COVENANTS

     60

7.1

 

Indebtedness

     60

7.2

 

Financial Covenants

     63

7.3

 

Liens

     63

7.4

 

Sale and Lease Back Transactions

     65

7.5

 

Investments

     65

7.6

 

Fundamental Changes

     66

7.7

 

Dispositions

     67

7.8

 

Change in Nature of Business

     68

7.9

 

Transactions with Affiliates

     68

7.10

 

Burdensome Agreements

     69

7.11

 

Use of Proceeds

     69

7.12

 

Restricted Payments

     69

7.13

 

Swap Agreements

     70

7.14

 

Ownership of PG&E Utility Common Stock

     70

 

ii

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

SECTION 8.

 

EVENTS OF DEFAULT

     70

SECTION 9.

 

THE AGENTS

     72

9.1

 

Appointment and Authority

     73

9.2

 

Delegation of Duties

     73

9.3

 

Exculpatory Provisions

     73

9.4

 

Reliance by Agents

     74

9.5

 

Notice of Default

     74

9.6

 

Non-Reliance on Agents and Other Lenders

     75

9.7

 

Indemnification

     75

9.8

 

Agent in Its Individual Capacity

     75

9.9

 

Successor Agents

     76

9.10

 

Documentation Agents and Syndication Agents

     77

9.11

 

Administrative Agent May File Proofs of Claim

     77

9.12

 

Collateral Matters

     78

9.13

 

Credit Bidding

     78

9.14

 

Intercreditor Agreement; Pledge Agreement

     79

9.15

 

Certain ERISA Matters

     79

SECTION 10.

 

MISCELLANEOUS

     80

10.1

 

Amendments and Waivers

     80

10.2

 

Notices

     82

10.3

 

No Waiver; Cumulative Remedies

     84

10.4

 

Survival of Representations and Warranties

     84

10.5

 

Payment of Expenses and Taxes

     84

10.6

 

Successors and Assigns; Participations and Assignments

     86

10.7

 

Adjustments; Set off

     90

10.8

 

Counterparts; Electronic Execution; Binding Effect

     91

10.9

 

Severability

     91

10.10

 

Integration

     91

10.11

 

GOVERNING LAW

     92

10.12

 

Submission To Jurisdiction; Waivers

     92

10.13

 

Acknowledgments

     92

10.14

 

Confidentiality

     93

10.15

 

WAIVERS OF JURY TRIAL

     93

10.16

 

USA Patriot Act; Beneficial Ownership Regulation

     93

10.17

 

Judicial Reference

     94

10.18

 

No Advisory or Fiduciary Responsibility

     94

10.19

 

Acknowledgement Regarding Any Supported QFCs

     94

10.20

 

Acknowledgement and Consent to Bail-In of Affected Financial Institutions

     95

10.21

 

Release of Liens

     96

 

iii

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

SCHEDULES:

 

1.1

 

Commitments

7.4

 

Sale and Lease Back Transactions

7.9

 

Transactions with Affiliates

7.12

 

Restricted Payments

EXHIBITS:

 

A

 

Form of New Lender Supplement

B

 

Form of Commitment Increase Supplement

C

 

Form of Compliance Certificate

D

 

Form of Closing Certificate

E

 

Form of Assignment and Assumption

F

 

[Reserved]

G

 

Forms of U.S. Tax Compliance Certificates

H

 

Form of Note

I

 

Form of Solvency Certificate

 

iv

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

This CREDIT AGREEMENT (this “Agreement”), dated as of [_______], 2020, among
PG&E CORPORATION, a California corporation (the “Borrower”), the several banks
and other financial institutions or entities from time to time parties to this
Agreement (the “Lenders”) and JPMORGAN CHASE BANK, N.A., as administrative agent
(in such capacity, together with any permitted successor thereto, the
“Administrative Agent”) and JPMORGAN CHASE BANK, N.A., as collateral agent (in
such capacity, together with any permitted successor thereto, the “Collateral
Agent”).

W I T N E S S E T H:

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

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

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

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

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

SECTION 1.    DEFINITIONS

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

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

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

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

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

“Adjusted Borrower Cash”: for any period:

(i)    the amount of unrestricted cash and cash equivalents on the balance sheet
of the Borrower determined in accordance with GAAP on the last day of such
period (other than cash and cash equivalents that are proceeds of Revolving
Loans), minus

(ii)    the difference, if positive, of (A) the aggregate amount of net cash
proceeds received by the Borrower from the issuance or incurrence of any
Indebtedness (other than the incurrence of Indebtedness under this Agreement)
during such period less (B) the aggregate amount of repayments or prepayments of
any Indebtedness (other than repayments or prepayments of Indebtedness under
this Agreement) during such period.

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

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

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

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

“Agents”: the collective reference to the Collateral Agent, the Syndication
Agents, the Documentation Agents and the Administrative Agent.

“Agreement”: as defined in the preamble hereto.

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

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

 

Level

   Rating
S&P/Moody’s/Fitch    Applicable Margin
for
ABR Loans     Applicable Margin
for
Eurodollar Loans  

1

   Higher than BB/Ba2/BB      2.00 %      3.00 % 

2

   BB/Ba2/BB      2.25 %      3.25 % 

3

   BB-/Ba3/BB-      2.50 %      3.50 % 

4

   B+/B1/B+      2.75 %      3.75 % 

5

   B/B2/B      3.00 %      4.00 % 

 

2

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

Level

   Rating
S&P/Moody’s/Fitch    Applicable Margin
for
ABR Loans     Applicable Margin
for
Eurodollar Loans  

6

   Lower than B/B2/B      3.25 %      4.25 % 

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

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

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

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

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

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

 

3

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

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

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

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

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

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

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

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

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

 

4

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

“Benchmark Replacement Conforming Changes”: with respect to any Benchmark
Replacement, any technical, administrative or operational changes (including
changes to the definition of “ABR,” the definition of “Interest Period,” timing
and frequency of determining rates and making payments of interest and other
administrative matters) that the Administrative Agent decides in its reasonable
discretion may be appropriate to reflect the adoption and implementation of such
Benchmark Replacement and to permit the administration thereof by the
Administrative Agent in a manner substantially consistent with market practice
(or, if the Administrative Agent decides that adoption of any portion of such
market practice is not administratively feasible or if the Administrative Agent
determines that no market practice for the administration of the Benchmark
Replacement exists, in such other manner of administration as the Administrative
Agent decides is reasonably necessary in connection with the administration of
this Agreement).

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

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

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

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

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

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

 

5

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

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

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

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

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

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

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

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

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

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

 

6

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

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

“Borrower”: as defined in the preamble hereto.

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

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

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

“Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

“Cash Coverage Ratio”: for any period, the ratio of (a) Adjusted Borrower Cash
as of the last day of such period plus Interest Charges for such period to
(b) Fixed Charges for such period, in each case determined on a Trailing Four
Quarter Basis.

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

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

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

(ii)    at any point during any period of 24 consecutive months, commencing
after the Effective Date, individuals who at the beginning of such 24-month
period were directors of the Borrower, together with any directors whose
election or nomination for election to the board of directors of the Borrower
(whether by the board of directors of the Borrower or any shareholder of the
Borrower) was approved by a majority of the directors who either were directors
of the Borrower at the beginning of such 24-month

 

7

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

period or whose election or nomination for election was so approved, cease to
constitute a majority of the board of directors of the Borrower (it being
understood and agreed that, for the avoidance of doubt, the change of directors
of the Borrower contemplated by the Plan of Reorganization shall not constitute
a Change of Control); or

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

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

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

“Collateral”: as defined in the Pledge Agreement.

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

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

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

 

8

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

Level

   Rating
S&P/Moody’s/Fitch    Commitment Fee Rate  

1

   Higher than BB/
Ba2/BB      0.50 % 

2

   BB/Ba2/BB      0.55 % 

3

   BB-/Ba3/BB-      0.60 % 

4

   B+/B1/B+      0.65 % 

5

   B/B2/B      0.70 % 

6

   Lower than B/B2/B      0.75 % 

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

 

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

“Continuing Lender”: as defined in Section 2.7.

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

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

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

“Covered Entity”: any of the following:

 

  (i)

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

 

  (ii)

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

 

  (iii)

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

“Covered Party”: as defined in Section 10.19.

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

“Credit Event”: as defined in Section 5.2.

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

 

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

“ERISA Event”: (a) any Reportable Event; (b) the failure of the Borrower or any
Commonly Controlled Entity to timely make a required contribution with respect
to any Plan or any Multiemployer Plan; (c) the imposition of a Lien under
Section 430 of the Code or Section 303 of ERISA with respect to any Single
Employer Plan; (d) the failure of the Borrower or any Commonly Controlled Entity
to meet the minimum funding standard under Section 412 or 430 of the Code with
respect to any Plan or the filing of an application for a funding waiver with
respect to any Single Employer Plan; (e) the incurrence by the Borrower or any
Commonly Controlled Entity of any liability under Title IV of ERISA, including
with respect to the termination of any Plan (other than the payment of PBGC
premiums in the ordinary course); (f) (i) the termination of, or the filing or
receipt of a notice of intent to terminate, a Single Employer Plan under
Section 4041 of ERISA, or the treatment of a plan amendment as a termination
under Section 4041 of ERISA, or (ii) (A) the appointment of a trustee to
administer a Single Employer Plan under Section 4042, or (B) the institution by
the PBGC of proceedings to terminate a Single Employer Plan or to have a trustee
appointed to administer a Single Employer Plan, or receipt by the Borrower of
notice from the PBGC thereof, where such proceedings continue unstayed or in
effect for more than 60 days, or such notice is not withdrawn by the PBGC within
60 days following delivery by PBGC; (g) the incurrence by the Borrower or any
Commonly Controlled Entity of any liability with respect to the complete
withdrawal or partial withdrawal under Title IV of ERISA from any Multiemployer
Plan; (h) the receipt by the Borrower or any Commonly Controlled Entity of any
notice from a Multiemployer Plan concerning the imposition of Withdrawal
Liability; (i) receipt of notification by Borrower or any Commonly Controlled
Entity from a Multiemployer Plan that such Multiemployer Plan is in endangered
or critical status (within the meaning of Section 305 of ERISA) or in
Insolvency; (j) the incurrence by the Borrower or any Commonly Controlled Entity
of any liability pursuant to Section 4063 or 4064 of ERISA or a substantial
cessation of operations with respect to a Plan within the meaning of

 

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Section 4062(e) of ERISA; (k) the posting of a bond or security under
Section 436(f) of the Code with respect to any Plan; or (l) the Borrower incurs
material tax liability with respect to any Plan (including Sections 4975, 4980B,
4980D, 4980H and 4980I of the Code, as applicable).

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

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

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

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

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

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

 

Eurodollar Base Rate

1.00 - Eurocurrency Reserve Requirements

“Eurodollar Screen Rate”: for any day and time, with respect to any Eurodollar
Loan for any Interest Period, the London interbank offered rate as administered
by ICE Benchmark Administration (or any other Person that takes over the
administration of such rate) for a period equal in length to such Interest
Period as displayed on such day and time on pages LIBOR01 or LIBOR02 of the
Reuters screen that displays such rate (or, in the event such rate does not
appear on a Reuters page or screen, on any successor or substitute page on such
screen that displays such rate, or on the appropriate page of such other
information service that publishes such rate from time to time as selected by
the Administrative Agent in its reasonable discretion); provided that if the
Eurodollar Screen Rate as so determined would be less than zero, such rate shall
be deemed to zero for the purposes of this Agreement.

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

 

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

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

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

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

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

“FCPA”: as defined in Section 4.15.

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

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

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

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

 

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“Fixed Charges”: for any period, the sum of (a) Interest Charges for such
period, and (b) any cash dividends or other distributions paid in cash on any
series of Capital Stock of the Borrower during such period (including, for the
avoidance of doubt, any such cash dividends or distributions to be paid in cash
in reliance upon the calculation of the Cash Coverage Ratio).

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

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

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

“GAAP”: generally accepted accounting principles in the United States as in
effect from time to time, except as noted below. In the event that any “Change
in Accounting Principles” (as defined below) shall occur and such change results
in a change in the method of calculation of financial covenants, standards or
terms in this Agreement, then, upon the request of the Borrower or the Required
Lenders, the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
reflect equitably such Change in Accounting Principles with the desired result
that the criteria for evaluating the Borrower’s financial condition shall be the
same after such Change in Accounting Principles as if such Change in Accounting
Principles had not been made. Until such time as such an amendment shall have
been executed and delivered by the Borrower, the Administrative Agent and the
Required Lenders, all financial covenants, standards and terms in this Agreement
shall continue to be calculated or construed as if such Change in Accounting
Principles had not occurred. “Change in Accounting Principles” refers to
(i) changes in accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion by the Financial Accounting Standards Board
of the American Institute of Certified Public Accountants or any successor
thereto, the SEC or, if applicable, the Public Company Accounting Oversight
Board and (ii) any change in the application of GAAP concurred by the Borrower’s
independent public accountants and disclosed in writing to the Administrative
Agent.

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

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation, including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing person that guarantees any Indebtedness, leases, dividends
or other obligations (the “primary obligations”) of any other third Person (the
“primary obligor”) in any manner, whether directly or indirectly, including any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary

 

17

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obligation or (2) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, (iv) otherwise
to assure or hold harmless the owner of any such primary obligation against loss
in respect thereof or (v) to reimburse or indemnify an issuer of a letter of
credit, surety bond or guarantee issued by such issuer in respect of primary
obligations of a primary obligor other than the Borrower or any Significant
Subsidiary; provided, however, that the term Guarantee Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person’s
reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.

“IBA”: as defined in Section 1.4.

“Indebtedness”: of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than trade
payables, including under energy procurement and transportation contracts,
incurred in the ordinary course of such Person’s business), (c) all obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations of such Person, (f) all obligations
of such Person, contingent or otherwise, as an account party or applicant under
or in respect of acceptances, letters of credit, surety bonds or similar
arrangements (other than reimbursement obligations, which are not due and
payable on such date, in respect of documentary letters of credit issued to
provide for the payment of goods and services in the ordinary course of
business), (g) the liquidation value of all mandatorily redeemable preferred
Capital Stock of such Person, (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (g) above,
(i) all obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not such Person
has assumed or become liable for the payment of such obligation (provided, that
if such Person is not liable for such obligation, the amount of such Person’s
Indebtedness with respect thereto shall be deemed to be the lesser of the stated
amount of such obligation and the value of the property subject to such Lien),
and (j) for the purposes of Sections 7.1 and 8(e) only, all obligations of such
Person in respect of Swap Agreements, provided that Indebtedness as used in this
Agreement shall exclude any Non-Recourse Debt and any obligations under any A/R
Securitization Transaction. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness expressly provide that such
Person is not liable therefor.

 

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“Indemnified Liabilities”: as defined in Section 10.5.

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

“Indemnitee”: as defined in Section 10.5.

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

“Interest Charges”: for any period, (a) all interest, premium payments, debt
discount, fees, charges and related expenses of the Borrower in connection with
borrowed money (including capitalized interest) or in connection with the
deferred purchase price of assets, in each case to the extent treated as
interest in accordance with GAAP, and (b) the portion of rent expense of the
Borrower with respect to such period under capital leases that is treated as
interest in accordance with GAAP.

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

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

 

  (i)

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

 

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  (ii)

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

 

  (iii)

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

 

  (iv)

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

 

  (v)

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

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

“Investment”: as defined in Section 7.5.

“IRS”: the United States Internal Revenue Service.

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

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

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

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

 

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

“Loan Documents”: this Agreement, the Security Documents, any intercreditor
agreement entered into in connection herewith, the Notes and, in each case, any
amendment, waiver, supplement or other modification to any of the foregoing.

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

 

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

“Patriot Act”: as defined in Section 10.16.

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

“Percentage”: as to any Lender at any time, the percentage which such Lender’s
Commitment then constitutes of the Total Commitments or, at any time after the
Commitments shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender’s Revolving Loans then outstanding constitutes
of the aggregate principal amount of the Revolving Loans then outstanding.

“Permitted Cash Equivalents”:

(a)    securities issued by the United States government or any agency or
instrumentality of the United States government having maturities of not more
than two (2) years from the date of acquisition;

(b)    certificates of deposit, time deposits, money market deposits and
Eurodollar time deposits with maturities of two (2) years or less from the date
of acquisition, bankers’ acceptances with maturities of two (2) years or less
and overnight bank deposits, in each case with any domestic commercial bank
having capital and surplus in excess of $500 million;

(c)    repurchase obligations with a term of not more than 180 days for
underlying securities of the types described in clauses (a), (b) and (e) entered
into with any financial institution meeting the qualifications specified in
clause (b) above;

(d)    commercial paper rated at least P-1 by Moody’s or at least A-1 by S&P
and, in each case, maturing within twelve months after the date of acquisition;

(e)    securities issued or fully guaranteed by any state or commonwealth of the
United States or by any political subdivision or taxing authority thereof, and
rated at least Baa3 by Moody’s or BBB- by S&P and, in each case, maturing within
two (2) years after the date of acquisition;

(f)    mutual funds whose investment guidelines restrict 90% of such funds’
investments to those satisfying the provisions of clauses (a) through (e) above;

(g)    money market funds that (i) comply with the criteria set forth in Rule
2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by
S&P and Aaa by Moody’s and (iii) have portfolio assets of least $5,000,000,000;
and

(h)    time deposit accounts, certificates of deposit and money market deposits
in an aggregate face amount not in excess of 1/2 of 1% of the total assets of
the Borrower and its Subsidiaries, on a consolidated basis, as of the end of the
Borrower’s most recently completed fiscal year.

 

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“Permitted Refinancing”: with respect to any Indebtedness (the “Refinanced
Indebtedness”), any extension, refinancing, refunding or replacement thereof
with Indebtedness provided that (i) the amount of such Indebtedness does not
exceed the aggregate principal amount of the Refinanced Indebtedness, plus any
premium, interest, fee or expenses payable in connection therewith, (ii) the
final maturity date of such Indebtedness is no earlier than the maturity date of
the Refinanced Indebtedness, (iii) the weighted average life to maturity of such
Indebtedness is not shorter than the weighted average life to maturity of the
Refinanced Indebtedness, (iv) if the Refinanced Indebtedness was unsecured, then
such Indebtedness must be unsecured and (v) if the Refinanced Indebtedness was
secured, then such Indebtedness shall not be secured by assets that did not
secure the Refinanced Indebtedness and, if the Refinanced Indebtedness was
secured by Collateral, such Indebtedness shall not have a ranking higher in the
Priority Waterfall than the Refinanced Indebtedness had.

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

“PG&E Utility”: as defined in the first recital paragraph.

“PG&E Utility Revolving Credit Agreement”: that certain Credit Agreement dated
as of the Effective Date, among PG&E Utility, the lenders from time to time
party thereto and JPMorgan Chase Bank, N.A., as administrative agent.

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

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

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

“Pledge Agreement”: as defined in Section 5.1(d).

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

“Priority Waterfall”: the provisions of Section 3.02(a) of the Pledge Agreement.

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

 

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

“QFC Credit Support” in Section 10.19.

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

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

“Recipient”: the Administrative Agent or any Lender.

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

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

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

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

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

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

“Required Lenders”: at any time, the holders of more than 50% of the Total
Commitments then in effect or, if the Commitments have been terminated, the
aggregate amount of Revolving Loans then outstanding. The Total Commitments of
any Defaulting Lender shall be disregarded in determining Required Lenders at
any time.

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

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

 

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

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

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

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

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

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

“Sanctions”: as defined in Section 4.15.

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

“Secured Parties”: the Administrative Agent, the Collateral Agent, the Lenders
and each sub-agent appointed pursuant to Section 9.2.

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

“Security Documents”: the Pledge Agreement and any other agreement or document
executed and delivered by the Borrower that grants or purports to grant a Lien
on any assets of the Borrower in favor of the Collateral Agent to secure the
Obligations.

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

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

 

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

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

“Solvent”: with respect to the Borrower and its Subsidiaries, on a consolidated
basis, that as of the date of determination, (i) the fair value of the assets of
the Borrower and its Subsidiaries, on a consolidated basis, at a fair valuation
on a going concern basis, exceeds, on a consolidated basis, their debts and
liabilities, subordinated, contingent or otherwise, (ii) the present fair
saleable value of the property of the Borrower and its Subsidiaries, on a
consolidated and going concern basis, is greater than the amount that will be
required to pay the probable liability, on a consolidated basis, of their debts
and other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured in the ordinary course of
business, (iii) the Borrower and its Subsidiaries, on a consolidated basis, are
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such liabilities become absolute and matured in the ordinary course of
business, (iv) the Borrower and its Subsidiaries are not engaged in businesses,
and are not about to engage in businesses for which they have unreasonably small
capital. For purposes of this definition, the amount of any contingent liability
at any time shall be computed as the amount that, in light of all the facts and
circumstances existing as of the Effective Date, would reasonably be expected to
become an actual and matured liability.

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

“Specified Material Adverse Effect”: any occurrence, fact, change, event,
effect, violation, penalty, inaccuracy or circumstance (whether or not
constituting a breach of a representation, warranty or covenant set forth in the
Plan of Reorganization) that, individually or in the aggregate with any such
other results, occurrences, facts, changes, events, effects, violations,
penalties, inaccuracies, or circumstances, (i) would have or would reasonably be
expected to have a material adverse effect on the business, operations, assets,
liabilities, capitalization, financial performance, financial condition or
results of operations, in each case, of PG&E Utility and the Borrower, taken as
a whole, or (ii) would reasonably be expected to prevent or materially delay the
ability of PG&E Utility and the Borrower to consummate the transactions
contemplated by this Agreement or the Plan of Reorganization or perform their
obligations hereunder or thereunder; provided, however, that none of the
following results, occurrences, facts, changes, events, effects, violations,
penalties, inaccuracies or circumstances shall constitute or be taken into
account in determining whether a Specified Material Adverse Effect has occurred,
is continuing or would reasonably be expected to occur: (A) the filing of the
Chapter 11 cases with respect to the Debtors, (B) results, occurrences, facts,
changes, events, violations, inaccuracies or circumstances affecting (1) the
electric or gas utility businesses in the United States generally or (2) the
economy, credit, financial, capital or commodity markets, in the United States
or elsewhere in the world, including changes in interest rates, monetary policy
or inflation, (C) changes or prospective changes in law (other than any law or
regulation of

 

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California or the United States that is applicable to any electrical utility) or
in GAAP or accounting standards, or any changes or prospective changes in the
interpretation or enforcement of any of the foregoing, (D) any decline in the
market price, or change in trading volume, of any securities of the Debtors,
(E) any failure to meet any internal or public projections, forecasts, guidance,
estimates, milestones, credit ratings, budgets or internal or published
financial or operating predictions of revenue, earnings, cash flow or cash
position, (F) any wildfire occurring after the Petition Date (as defined in the
Plan of Reorganization) and prior to January 1, 2020, and (G) one or more
wildfires, occurring on or after January 1, 2020, that destroys or damages fewer
than 500 dwellings or commercial structures in the aggregate (it being
understood that (I) the exceptions in clauses (D) and (E) shall not prevent or
otherwise affect a determination that the underlying cause of any such change,
decline or failure referred to therein is a Specified Material Adverse Effect,
and (II) a Specified Material Adverse Effect shall include the occurrence of one
or more wildfires on or after January 1, 2020 destroying or damaging at least
500 dwellings or commercial structures within the Borrower’s service area at a
time when the portion of the Borrower’s system at the location of such wildfire
was not successfully de-energized.

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

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

“Supported QFC”: as defined in Section 10.19.

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

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

 

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

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

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

“Testing Condition”: satisfied if any Revolving Loans are outstanding.

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

“Trailing Four Quarter Basis”: determined for the trailing four fiscal quarters
ending on the last day of any fiscal quarter; provided that, if fewer than four
full consecutive fiscal quarters of the Borrower have been completed since the
Effective Date, “Trailing Four Quarter Basis” shall mean, determined for the
full fiscal quarters of the Borrower that have been completed since the
Effective Date with Interest Charges and Fixed Charges annualized on a simple
straight line basis.

“Transferee”: any Assignee or Participant.

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

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

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

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

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

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

 

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

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

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

“Write-Down and Conversion Powers”: (a) with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the applicable Bail-In Legislation for the applicable
EEA Member Country, which write-down and conversion powers are described in the
EU Bail-In Legislation Schedule, and (b) with respect to any UK Resolution
Authority, any powers of such UK Resolution Authority under the applicable
Bail-In Legislation to cancel, reduce, modify or change the form of a liability
of any UK Financial Institution or any contract or instrument under which that
liability arises, to convert all or part of that liability into shares,
securities or obligations of that person or any other person, to provide that
any such contract or instrument is to have effect as if a right had been
exercised under it or to suspend any obligation in respect of that liability or
any of the powers under that Bail-In Legislation that are related to or
ancillary to any of those powers.

1.2    Other Definitional Provisions and Interpretative Provisions.

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

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

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

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

 

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

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

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

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

 

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Section 2.13(b), whether upon the occurrence of a Benchmark Transition Event or
an Early Opt-In Election, and (ii) the implementation of any Benchmark
Replacement Conforming Changes pursuant to Section 2.13(c)), including without
limitation, whether the composition or characteristics of any such alternative,
successor or replacement reference rate will be similar to, or produce the same
value or economic equivalence of, the Eurodollar Base Rate or have the same
volume or liquidity as did the London interbank offered rate prior to its
discontinuance or unavailability.

SECTION 2.    AMOUNT AND TERMS OF COMMITMENTS

2.1    Commitments.

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

(b)    The Borrower shall repay all outstanding Revolving Loans on the
Termination Date.

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

 

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2.3    Commitment Increases.

(a)    In the event that the Borrower wishes to increase the Total Commitments
at any time when no Default or Event of Default has occurred and is continuing
(or shall result of such increase), it shall notify the Administrative Agent in
writing, given not more frequently than once per calendar year, of the amount
(the “Revolving Credit Offered Increase Amount”) of such proposed increase (such
notice, a “Commitment Increase Notice”) which shall be in a minimum amount equal
to $10,000,000 and shall not exceed, in the aggregate for all increases,
$150,000,000. The Borrower shall offer each of the Lenders the opportunity to
provide such Lender’s Percentage of the Revolving Credit Offered Increase
Amount, and if any Lender declines such offer, in whole or in part, the Borrower
may offer such declined amount to (i) other Lenders and/or (ii) other banks,
financial institutions or other entities with the consent of the Administrative
Agent (which consent of the Administrative Agent shall not be unreasonably
withheld, conditioned or delayed). The Commitment Increase Notice shall specify
the Lenders and/or banks, financial institutions or other entities that will be
requested to provide such Revolving Credit Offered Increase Amount. The Borrower
or, if requested by the Borrower, the Administrative Agent will notify such
Lenders, and/or banks, financial institutions or other entities of such offer.

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

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

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

 

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

(e)    Notwithstanding anything to the contrary in this Section 2.3, (i) no
Lender shall have any obligation to increase its Commitment unless it agrees to
do so in its sole discretion and unless the Administrative Agent consents to
such increase (which consent of the Administrative Agent shall not be
unreasonably withheld, conditioned or delayed); provided, that any Lender not
responding to the Commitment Increase Notice within the time period prescribed
therein shall be deemed to have declined to increase its Commitment and (ii) in
no event shall any transaction effected pursuant to this Section 2.3 (A) cause
the Total Commitments to exceed $650,000,000 or (B) occur at a time at which a
Default or an Event of Default has occurred and is continuing.

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

2.4    [Reserved].

2.5    [Reserved].

2.6    Commitment Fees, Etc.

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

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

 

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

(a)    The Borrower shall have the right, upon not less than three Business
Days’ notice to the Administrative Agent, to terminate the Commitments or, from
time to time, to reduce the amount of the Commitments; provided that no such
termination or reduction of Commitments shall be permitted if, after giving
effect thereto and to any prepayments of the Revolving Loans made on the
effective date thereof, aggregate amount of Revolving Loans outstanding would
exceed the Total Commitments. Any such reduction shall be in an amount equal to
$1,000,000, or a whole multiple thereof, and shall reduce permanently the
Commitments then in effect.

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

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

(d)    If any Lender shall determine (or be deemed to have determined) not to
extend the Termination Date as requested by any Extension Notice given by the
Borrower pursuant to this Section, the Commitment of such Non-Extending Lender
shall terminate on the Termination Date without giving any effect to such
proposed extension, and the Borrower shall on such date pay to the
Administrative Agent, for the account of such Non-Extending Lender, the
principal amount of, and accrued interest on, such Non-Extending Lender’s Loans,
together with any

 

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amounts payable to such Lender pursuant to Section 2.17 and any and all fees or
other amounts owing to such Non-Extending Lender under this Agreement; provided
that if the Borrower has replaced such Non-Extending Lender pursuant to
Section 2.7(e) then the provisions of such paragraph shall apply. The Total
Commitments shall be reduced by the amount of the Commitment of such
Non-Extending Lender to the extent the Commitment of such Non-Extending Lender
has not been transferred to one or more Continuing Lenders pursuant to
Section 2.7(e).

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

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

2.8    Optional Prepayments.

(a)    The Borrower may at any time and from time to time prepay the Loans, in
whole or in part, without premium or penalty, upon irrevocable notice delivered
to the Administrative Agent no later than 12:00 Noon, New York City time, three
Business Days prior thereto, in the case of Eurodollar Loans, and no later than
2:00 p.m., New York City time, one Business Day prior thereto, in the case of
ABR Loans, which notice shall specify the date and amount of prepayment and
whether the prepayment is of Eurodollar Loans or ABR Loans; provided, that if a
Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 2.17. Upon receipt

 

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of any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with accrued
interest to such date on the amount prepaid. Partial prepayments of Revolving
Loans which shall be in an aggregate principal amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof. Notwithstanding the foregoing, any
notice of prepayment delivered in connection with any refinancing of all of the
Loans and Commitments with the proceeds of such refinancing or of any other
incurrence of Indebtedness or the occurrence of some other identifiable event or
condition, may be, if expressly so stated to be, contingent upon the
consummation of such refinancing or incurrence or occurrence of such other
identifiable event or condition and may be revoked by the Borrower, subject to
compliance with the obligations under Section 2.17 in connection with any such
revocation, in the event such contingency is not met.

2.9    Conversion and Continuation Options.

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

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

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

 

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2.11    Interest Rates and Payment Dates.

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

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

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

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

2.12    Computation of Interest and Fees.

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

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

2.13    Inability to Determine Interest Rate.

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

(i)    the Administrative Agent shall have determined (which determination shall
be conclusive and binding upon the Borrower absent manifest error) that, by
reason

 

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of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period,
provided that no Benchmark Transition Event shall have occurred at such time; or

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

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

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

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

(d)    The Administrative Agent will promptly notify the Borrower and the
Lenders of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in
Election, as applicable, and its related Benchmark Replacement Date and
Benchmark Transition Start Date, (ii) the implementation of any Benchmark
Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming
Changes and (iv) the commencement or conclusion of any Benchmark

 

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Unavailability Period. Any determination, decision or election that may be made
by the Administrative Agent or Lenders pursuant to this Section 2.13, including
any determination with respect to a tenor, rate or adjustment or of the
occurrence or non-occurrence of an event, circumstance or date and any decision
to take or refrain from taking any action, will be conclusive and binding absent
manifest error and may be made in its or their sole discretion and without
consent from any other party hereto, except, in each case, as expressly required
pursuant to this Section 2.13.

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

2.14    Pro Rata Treatment and Payments; Notes.

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

(b)    Each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Revolving Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving Loans
then held by the Lenders.

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

(d)    Unless the Administrative Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make the amount that
would constitute its share of such borrowing available to the Administrative
Agent, the Administrative Agent may assume that such Lender is making such
amount available to the Administrative Agent, and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower a

 

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

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

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

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

 

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2.15    Change of Law.

(a)    If a Change of Law shall:

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

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

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

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

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

(c)    A certificate as to any additional amounts payable pursuant to this
Section 2.15 submitted by any Lender or any other Recipient to the Borrower
(with a copy to the Administrative Agent) shall constitute prima facie evidence
of such costs or amounts.

 

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Notwithstanding anything to the contrary in this Section 2.15, the Borrower
shall not be required to compensate a Lender or any other Recipient pursuant to
this Section 2.15 for any amounts incurred more than six months prior to the
date that such Lender or such other Recipient notifies the Borrower of such
Lender’s or such other Recipient’s intention to claim compensation therefor;
provided that, if the circumstances giving rise to such claim have a retroactive
effect, then such six-month period shall be extended to include the period of
such retroactive effect not to exceed twelve months. The obligations of the
Borrower pursuant to this Section 2.15 shall survive for 90 days after the
termination of this Agreement and the payment of the Loans and all other amounts
then due and payable hereunder.

2.16    Taxes.

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

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

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

(ii)    Each Lender shall, and does hereby, severally indemnify, and shall make
payment in respect thereof within 10 days after demand therefor, (x) the
Administrative Agent against any Indemnified Taxes attributable to such Lender
(but only to the extent that the Borrower has not already indemnified the
Administrative Agent for such Indemnified Taxes and without limiting the
obligation of the Borrower to do so), (y) the

 

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Administrative Agent against any Taxes attributable to such Lender’s failure to
comply with the provisions of Section 10.6(c) (iii) relating to the maintenance
of a Participant Register and (z) the Administrative Agent against any Excluded
Taxes attributable to such Lender, in each case, that are payable or paid by the
Administrative Agent in connection with any Loan Document, and any reasonable
expenses arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to any Lender by the Administrative Agent shall be conclusive absent manifest
error. Each Lender hereby authorizes the Administrative Agent to set off and
apply any and all amounts at any time owing to such Lender, as the case may be,
under this Agreement or any other Loan Document against any amount due to the
Administrative Agent under this clause (ii).

(d)    Upon request by the Borrower or the Administrative Agent, as the case may
be, after any payment of Taxes by the Borrower or by the Administrative Agent to
a Governmental Authority as provided in this Section 2.16, the Borrower shall
deliver to the Administrative Agent or the Administrative 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 Administrative Agent, as the case
may be.

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

(ii)    Without limiting the generality of the foregoing,

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

 

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(B)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

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

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

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

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

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

 

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(D)    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 Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3) (C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
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 (D), “FATCA” shall include any amendments made to FATCA after the
Effective Date.

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

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

 

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

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

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

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

 

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

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

(b)    [reserved];

(c)    [reserved];

(d)    [reserved]; and

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

If the Borrower and the Administrative Agent reasonably determine in writing
that a Defaulting Lender should no longer be deemed to be a Defaulting Lender,
the Administrative Agent will so notify the parties hereto, whereupon as of the
effective date specified in such notice and subject to any conditions set forth
therein (which may include arrangements with respect to any cash collateral),
that Lender will, to the extent applicable, purchase that portion of outstanding
Loans

 

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of the other Lenders or take such other actions as the Administrative Agent may
determine to be necessary to cause the Loans to be held on a pro rata basis by
the Lenders in accordance with their Percentages, whereupon that Lender will
cease to be a Defaulting Lender; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
the Borrower while that Lender was a Defaulting Lender; and provided, further,
that except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender.

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

SECTION 3.    [RESERVED].

SECTION 4.    REPRESENTATIONS AND WARRANTIES

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

 

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4.1    Financial Condition. (a) The audited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as of December 31, 2019, and the
related consolidated statements of income and cash flows for the fiscal year
ended on such date, reported on by Deloitte & Touche LLP, and (b) the unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
of March 31, 2020, and the related consolidated statements of income and cash
flows for the portion of the fiscal year ended on such date, each delivered to
the Administrative Agent prior to the Effective Date, in each case, (i) were
prepared in accordance with GAAP consistently applied throughout the periods
covered thereby, except as otherwise expressly noted therein, and (ii) present
fairly in all material respects the consolidated financial condition of the
Borrower and its consolidated Subsidiaries as of such date, and its consolidated
income and its consolidated cash flows for the respective fiscal year or portion
of the fiscal year then ended, subject, in the case of the financial statements
referred to in clause (b), to the absence of footnotes and to normal year-end
audit adjustments.

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

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

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

 

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accordance with its terms, except as enforceability may be limited by
(x) applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors’ rights generally, laws of general
application related to the enforceability of securities secured by real estate
and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law) and (y) applicable Requirements of Law
(including the approval of the CPUC) prior to foreclosure or other exercise of
remedies hereunder or under the other Loan Documents.

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

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

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

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

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

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

 

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

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

4.12    Use of Proceeds. The proceeds of the Revolving Loans shall be used to
finance working capital needs, capital expenditures and other general corporate
purposes (other than to redeem, purchase, retire, obtain the surrender of or
otherwise acquire for value Capital Stock of the Borrower) of the Borrower and
its Subsidiaries. No part of the proceeds of any Loans, and no other extensions
of credit hereunder, will be used for “buying” or “carrying” any “margin stock”
within the respective meanings of each of the quoted terms under Regulation U as
now and from time to time hereafter in effect or for any purpose that violates
the provisions of the Regulations of the Board.

 

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

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

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

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

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

4.18    Disclosure.

(a)    All written information relating to the Borrower, its Subsidiaries and
their respective businesses, other than any projections, estimates and other
forward-looking materials and information of a general economic or industry
specific nature, that has been provided by or

 

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on behalf of the Borrower to the Administrative Agent or the Lenders in
connection with the transactions contemplated hereby does not, when taken as a
whole, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein not
materially misleading in light of the circumstances under which such statements
were made (giving effect to all supplements and updates thereto). Any projected
information, estimates, other forward-looking materials and pro forma financial
information that have been made available to any Lenders or the Administrative
Agent prior to the Effective Date in connection with the transactions
contemplated hereby have been prepared in good faith based upon assumptions
believed by the Borrower to be reasonable as of the date such information was
furnished to the Lenders and as of the Effective Date (it being understood that
actual results may vary materially from such projections and pro forma
information and such projections and pro forma information are not a guarantee
of performance).

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

4.19    Validity of Security Interests. The Security Documents will (to the
extent required thereby) create in favor of the Collateral Agent, for the
benefit of the Lenders, a valid and enforceable Lien on and security interest in
the Collateral (subject to any limitations specified therein) and (i) when
financing statements and other filings in appropriate form are filed in the
offices specified in the Pledge Agreement and (ii) upon the taking of possession
or control by the Collateral Agent of such Collateral with respect to which a
security interest may be perfected only by possession or control (which
possession or control shall be given to the Collateral Agent to the extent
possession or control by the Collateral Agent is required by the Pledge
Agreement), the Liens created by the Security Documents shall constitute
perfected Liens on, and security interests in, all right, title and interest of
the Borrower in such Collateral to the extent perfection can be obtained by
filing financing statements or by possession or control, in each case subject to
no Liens other than Liens permitted hereunder.

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

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

SECTION 5.    CONDITIONS PRECEDENT

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

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

 

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

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

(d)    The Administrative Agent shall have received the executed a pledge
agreement (the “Pledge Agreement”), in a form satisfactory to the Administrative
Agent, duly executed by the Borrower, the Administrative Agent, the Collateral
Agent and the other secured representatives named therein, together with:

(i)    a UCC-1 financing statement in form appropriate for filing under the
Uniform Commercial Code of the State of California in order to perfect the first
priority Liens, subject to Liens permitted under Section 7.3, covering the
Collateral as defined and described in the Pledge Agreement;

(i)    certified copies of UCC, tax and judgment lien searches, or equivalent
reports or searches, each of a recent date listing all effective financing
statements, lien notices or comparable documents (together with copies of such
financing statements and documents) that name the Borrower as debtor and that
are filed in those state and county jurisdictions in which the Borrower is
organized or maintains its principal place of business and such other searches
that the Administrative Agent deems necessary or appropriate, none of which
encumber the Collateral covered or intended to be covered by the Security
Documents (other than Liens permitted under Section 7.3 and those Liens to be
discharged as of the Effective Date); and

(ii)    the certificate representing the Capital Stock of PG&E Utility pledged
pursuant to the Pledge Agreement, together with an undated stock or similar
power for such certificate executed in blank by a duly authorized officer of the
Borrower.

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

 

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

(g)    Legal Opinion. The Administrative Agent shall have received the legal
opinion of (i) Hunton Andrews Kurth LLP, counsel to the Borrower, and
(ii) Munger, Tolles & Olson LLP, special California regulatory counsel to the
Borrower, each in a form reasonably satisfactory to the Administrative Agent.

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

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

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

5.2    Conditions to Each Credit Event. The agreement of each Lender to make any
Loan (a “Credit Event”), on any date (other than (except for clause (d)) the
Effective Date) is subject to the satisfaction of the following conditions
precedent:

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

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

 

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

(d)    Request for Credit Event. The Administrative Agent shall have received a
notice of borrowing in accordance with the requirements of Section 2.2.

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

SECTION 6.    AFFIRMATIVE COVENANTS

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

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

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

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

All such financial statements shall (x) be complete and correct in all material
respects and (y) shall be prepared in reasonable detail and in accordance with
GAAP applied (except as approved by such accountants or officer, as the case may
be, and disclosed in reasonable detail therein) consistently throughout the
periods reflected therein and with prior periods, subject, in each case to the
absence of footnotes and to normal year-end audit adjustments. The Borrower

 

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shall be deemed to have delivered the financial statements required to be
delivered pursuant to this Section 6.1 upon the filing of such financial
statements by the Borrower through the SEC’s EDGAR system (or any successor
electronic gathering system that is publicly available free of charge) or the
publication by the Borrower of such financial statements on its website.

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

(a)    within two Business Days after the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating that
such Responsible Officer has obtained no actual knowledge of any Default or
Event of Default except as specified in such certificate and (ii) a Compliance
Certificate, substantially in the form of Exhibit C, containing all information
and calculations reasonably necessary for determining compliance by the Borrower
with the provisions of this Agreement referred to therein as of the last day of
the fiscal quarter or fiscal year of the Borrower, as the case may be;

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

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

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

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

 

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6.4    Maintenance of Existence; Compliance. (a) (i) Preserve, renew and keep in
full force and effect its organizational existence and (ii) take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business, except, in each case, as otherwise
permitted by Section 7.6 and except, in the case of clause (ii) above, to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; (b) comply with all Contractual Obligations except to the extent
that failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect and (c) comply with all Requirements
of Law except for any Requirements of Law being contested in good faith by
appropriate proceedings or except to the extent that failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.

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

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

 

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

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

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

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

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

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

SECTION 7.    NEGATIVE COVENANTS

The Borrower hereby agrees that, so long as the Commitments remain in effect, or
any Loan, or any interest on any Loan or any fee payable to any Lender or the
Administrative Agent hereunder remains outstanding, or any other amount then due
and payable is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall not and shall not permit any of its Significant Subsidiaries
(solely with respect to Sections 7.1, 7.3, 7.4, 7.9 and 7.13) to:

7.1    Indebtedness. Create, incur, assume or permit to exist any Indebtedness,
except for:

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

(b)    Indebtedness of PG&E Utility and any of its Significant Subsidiaries, in
each case, to the extent not prohibited by the PG&E Utility Revolving Credit
Agreement; provided that, no Guarantee Obligations by PG&E Utility or any of its
Significant Subsidiaries, in each

 

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case, with respect to Indebtedness of the Borrower constituting debt for
borrowed money or evidenced by notes, bonds, debentures or other similar
instruments shall be permitted except to the extent provided by a Person that
is, or concurrently with providing such Guarantee Obligations becomes, a
guarantor of the Obligations hereunder on terms and pursuant to documentation
reasonably satisfactory to the Administrative Agent;

(c)    Indebtedness of the Borrower outstanding on the Effective Date in an
aggregate outstanding principal amount not to exceed $4,750,000,000 that is
(i) unsecured, (ii) secured only by Liens on the Collateral that are junior to
the Liens securing the Obligations pursuant to an intercreditor agreement
reasonably satisfactory to the Collateral Agent or (iii) secured by Liens that
rank equally and ratably with the Liens securing the Obligations and that are
subject to the Pledge Agreement, and any Permitted Refinancing thereof;

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

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

(f)    Guarantee Obligations of PG&E Utility and its Significant Subsidiaries
with respect to Indebtedness otherwise permitted to be incurred pursuant to this
Section 7.1; provided that, no such Guarantee Obligations with respect to
Indebtedness of the Borrower constituting debt for borrowed money or evidenced
by notes, bonds, debentures or other similar instruments shall be permitted
except to the extent provided by a Person that is, or concurrently with
providing such Guarantee Obligations becomes, a guarantor of the Obligations
hereunder on terms and pursuant to documentation reasonably satisfactory to the
Administrative Agent;

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

(h)    Indebtedness with respect to Capital Lease Obligations and purchase money
Indebtedness; provided that the aggregate outstanding principal amount of
Indebtedness with respect to Capital Lease Obligations shall not exceed
$10,000,000 at any one time;

(i)    (x) obligations under any Cash Management Agreement and (y) Indebtedness
under any Swap Agreement permitted under Section 7.13;

(j)    Indebtedness arising from any agreement providing for indemnification,
adjustment or purchase price or similar obligations (including contingent
earn-out obligations) incurred in connection with any Disposition or any
purchase of assets or Capital Stock, and

 

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Indebtedness arising from guaranties, letters of credit, bank guaranties, surety
bonds, performance bonds or similar instruments securing the performance of the
Borrower or its Significant Subsidiaries pursuant to any such agreement;

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

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

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

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

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

(p)    unsecured Indebtedness owing to PG&E Utility or to any other Significant
Subsidiary;

(q)    Indebtedness of the Borrower in an aggregate amount not to exceed
$10,000,000 outstanding at any one time; and

(r)    Indebtedness of the Borrower if at the time of and immediately after
giving effect to the incurrence of such Indebtedness, (i) no Default shall have
occurred and be continuing and (ii) the Borrower shall be in pro forma
compliance with the financial covenants set forth in Section 7.2 (whether or not
in effect, and, prior to the first test date thereunder, assuming the level
applicable on such first date applies as of the date of such pro forma test) as
of the last day of the most recently ended fiscal quarter for which financial
statements have been delivered pursuant to Section 6.1 (such compliance to be
determined as though such Indebtedness had been incurred as of the first day of
such fiscal quarter); provided that (x) the final maturity date of such
Indebtedness is no earlier than the latest maturity date of the Loans and
Commitments hereunder, (y) the weighted average life to maturity of such
Indebtedness is not shorter than the remaining weighted average life to maturity
of the Loans and Commitments hereunder and (iii) such Indebtedness is
(A) unsecured, (B) secured only by Liens on the Collateral that are junior to
the Liens securing the Obligations pursuant to an intercreditor agreement
reasonably satisfactory to the Collateral Agent or (C) secured by Liens that
rank equally and ratably with the Lien securing the Obligations pursuant to the
Pledge Agreement.

For the avoidance of doubt, no Indebtedness of the Borrower which is secured by
the Collateral shall have priority equal to or higher than the Obligations under
the Priority Waterfall.

 

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7.2    Financial Covenants.

(a)    Permit the Consolidated Capitalization Ratio on the last day of any
fiscal quarter, from and after the last day of the first fiscal quarter ending
after the Effective Date, to exceed 0.70 to 1.00.

(b)    If the Testing Condition is satisfied as of the last day of any fiscal
quarter commencing with the first full fiscal quarter ended after the Effective
Date, permit the Cash Coverage Ratio on the last day of such fiscal quarter to
be less than (i) prior to the first date on which the Borrower declares any cash
dividend on its common Capital Stock, 1.50 to 1.00 and (ii) thereafter, 1.00 to
1.00.

7.3    Liens. Create, incur, assume or suffer to exist any Lien upon any assets
of the Borrower or any Significant Subsidiary, whether now owned or hereafter
acquired, except:

(a)    Liens securing the Obligations, which pursuant to the Pledge Agreement
shall have priority under the Priority Waterfall;

(b)    Liens for Taxes not yet due or payable or that are being contested in
good faith by appropriate proceedings; provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or the relevant
Significant Subsidiary, as the case may be, in conformity with GAAP;

(c)    carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or
other like Liens arising in the ordinary course of business that are not overdue
for a period of more than 60 days or that are being contested in good faith by
appropriate proceedings;

(d)    pledges or deposits in connection with workers’ compensation, employee
benefits, including Plans, unemployment insurance and other social security
legislation or in connection with compliance with Environmental Law;

(e)    deposits to secure (i) the performance of bids, trade contracts (other
than for borrowed money), leases, statutory and regulatory obligations,
governmental contracts, agreements with utilities, surety and appeal bonds,
performance bonds, and other obligations of a like nature incurred in the
ordinary course of business or (ii) letters of credit, bank guaranties or
similar instruments to support any of the foregoing items;

(f)    easements, rights-of-way, conservation easements, restrictions, minor
defects or irregularities in title and other similar encumbrances imposed by law
or incurred in the ordinary course of business that, in the aggregate, do not
materially interfere with the ordinary conduct of the business of the Borrower
and its Significant Subsidiaries, taken as a whole;

(g)    precautionary or purported Liens evidenced by the filing of UCC financing
statements or similar financing statements under applicable Requirements of Law;

(h)    leases, licenses, subleases or sublicenses granted to others not
interfering in any material respect with the business of the Borrower and its
Significant Subsidiaries, in each case, in the ordinary course of business which
do not secure any Indebtedness;

 

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(i)    Liens on insurance policies and the proceeds thereof securing the
financing of the premiums with respect thereto;

(j)    any interest or title of a lessor under any lease entered into by the
Borrower or any Significant Subsidiary thereof in the ordinary course of
business and covering only the assets so leased;

(k)    (i) Liens on assets securing judgments, awards, attachments and/or
decrees and notices of lis pendens and associated rights relating to litigation
being contested in good faith not constituting an Event of Default hereunder and
(ii) any pledge and/or deposit securing any settlement of litigation;

(l)    Liens in favor of collecting or payor banks having a right of setoff,
revocation, refund or chargeback with respect to money or instruments of the
Borrower on deposit with such bank;

(m)    Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of any asset in the ordinary course of
business and permitted by this Agreement;

(n)    Liens solely on any cash earnest money deposits in connection with any
letter of intent or purchase agreement;

(o)    Liens securing Indebtedness in connection with Capital Lease Obligations
and purchase money Indebtedness permitted under Section 7.1(h); provided that
(i) such Liens shall be created substantially simultaneously with the incurrence
of such Indebtedness or within 180 days after completion of the acquisition,
construction, repair, restoration, replacement, expansion, installation or
improvement (as applicable) of the property subject to such Liens and (ii) such
Liens attach at all times only to the property so financed except (A) for
accessions to the property and the proceeds thereof and (B) that individual
financings of property provided by one lender may be cross collateralized to
other financings of property provided by such lender;

(p)    rights reserved to or vested in others to take or receive any part of, or
royalties related to, the power, gas, oil, coal, lignite or other minerals or
timber generated, developed, manufactured or produced by, or grown on, or
acquired with, any property of the Borrower and its Significant Subsidiaries in
the ordinary course of business;

(q)    Liens upon the production from property of power, gas, oil, coal, lignite
or other minerals or timber, and the by-products and proceeds thereof, to secure
the obligations or pay all or part of the expenses of development of such
property only out of such production or proceeds incurred in the ordinary course
of business;

(r)    Liens arising out of all presently existing and future division and
transfer orders, advance payment agreements, processing contracts, gas
processing plant agreements, operating agreements, gas balancing or deferred
production agreements, pooling, unitization or communitization agreements,
pipeline, gathering or transportation agreements, platform agreements, cycling
agreements, construction agreements, shared facilities agreements, salt water or
other disposal agreements, leases or rental agreements, farm-out and farm-in
agreements,

 

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development agreements, and any and all other contracts or agreements covering,
arising out of, used or useful in connection with or pertaining to the
development, operation, production, sale, use, purchase, exchange, storage,
separation, dehydration, treatment, compression, gathering, transportation,
processing, improvement, marketing, disposal or handling of any property of the
Borrower and its Significant Subsidiaries; provided that such agreements are
entered into in the ordinary course of business;

(s)    Liens on assets of PG&E Utility and any of its Significant Subsidiaries
to the extent not prohibited by the PG&E Utility Revolving Credit Agreement;

(t)    Liens securing Indebtedness permitted pursuant to Sections 7.1(c) and
Section 7.1(i); provided that either (i) such Lien ranks junior to the Lien
securing the Obligations pursuant to an intercreditor agreement reasonably
satisfactory to the Collateral Agent, (ii) such Lien ranks equally and ratably
with the Lien securing the Obligations pursuant to the Pledge Agreement (but in
no event shall any such Lien have priority equal to or higher than the
Obligations under the Priority Waterfall) or (iii) solely with respect to Liens
securing Indebtedness permitted pursuant to Section 7.1(i), such Lien is secured
only by assets that are not Collateral; and

(u)    other Liens securing Indebtedness and other obligations in an aggregate
outstanding amount not to exceed $10,000,000 at any one time.

7.4    Sale and Lease Back Transactions. Enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any property
having fair market value in excess of $10,000,000, real or personal, used or
useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such property or other property that it intends to use for
substantially the same purpose or purposes as the property being sold or
transferred, except for (a) those transactions by PG&E Utility and any of its
Significant Subsidiaries to the extent not prohibited by the PG&E Utility
Revolving Credit Agreement, (b) those transactions described on Schedule 7.4 and
(c) any other sale of any fixed or capital assets that is made for cash
consideration; provided that, in each case, if such sale and leaseback results
in a Capital Lease Obligation, such Capital Lease Obligation is permitted by
Section 7.1 and any Lien made the subject of such Capital Lease Obligation is
permitted by Section 7.3.

7.5    Investments. Purchase, hold or acquire (including pursuant to any merger,
consolidation or amalgamation with a Person immediately prior to such merger,
consolidation or amalgamation) any Capital Stock, evidences of Indebtedness or
other securities of, make or permit to exist any loans or advances to or
guarantees of the obligations of, or make or permit to exist any investment or
any other interest in any other Person or purchase or acquire (in one
transaction or a series of transactions) all or substantially all of the
property and assets or business of another Person or assets constituting a
business unit, line of business or division of such Person (each, an
“Investment”), except:

(a)    Investments in any Subsidiary of the Borrower;

(b)    Swap Agreements permitted under Section 7.13;

(c)    Permitted Cash Equivalents;

 

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(d)    Investments (i) constituting deposits, prepayments and/or other credits
to suppliers, (ii) made in connection with obtaining, maintaining or renewing
client and customer contracts and/or (iii) in the form of advances made to
distributors, suppliers, licensors and licensees, in each case, in the ordinary
course of business or, in the case of clause (iii) to the extent necessary to
maintain the ordinary course of supplies;

(e)    Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business;

(f)    Investments (including Indebtedness and Capital Stock) received (i) in
connection with the bankruptcy or reorganization of any Person, (ii) in
settlement of delinquent obligations of, or other disputes with, customers,
suppliers and other account debtors arising in the ordinary course of business,
(iii) upon foreclosure with respect to any secured Investment or other transfer
of title with respect to any secured Investment and/or (iv) as a result of the
settlement, compromise or resolution of litigation, arbitration or other
disputes;

(g)    Investments consisting of the licensing of intellectual property rights
pursuant to joint marketing arrangements with other Persons entered into in the
ordinary course of business;

(h)    loans and advances not to exceed $25,000,000 in the aggregate outstanding
at any one time to officers, directors, employees and consultants for reasonable
and customary business-related travel, entertainment, relocation and analogous
ordinary business purposes (including employee payroll advances);

(i)    Investments constituting non-cash proceeds of Dispositions of assets to
the extent received in a Disposition permitted by Section 7.7;

(j)    Investments relating to decommission trusts and insurance and
self-insurance organizations or arrangements in the ordinary course of business;

(k)    Investments required to comply with any requirement of a Governmental
Authority or a Requirement of Law; and

(l)    other Investments in an aggregate amount at any time outstanding not to
exceed $100,000,000 if at the time of and immediately after giving effect to
such Investment, (i) no Default shall have occurred and be continuing and
(ii) the Borrower shall be in pro forma compliance with the financial covenants
set forth in Section 7.2 (whether or not in effect, and, prior to the first test
date thereunder, assuming the level applicable on such first date applies as of
the date of such pro forma test) as of the last day of the most recently ended
fiscal quarter for which financial statements have been delivered pursuant to
Section 6.1 (such compliance to be determined as though such Investment had been
consummated as of the first day of such fiscal quarter).

7.6    Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of all or substantially all of its
property or business, except that the Borrower may be merged, consolidated or
amalgamated with another Person or Dispose of all or substantially all of its

 

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property or business so long as, after giving effect to such transaction, (a) no
Default or Event of Default shall have occurred and be continuing, (b) either
(i) the Borrower is the continuing or surviving corporation of such merger,
consolidation or amalgamation or (ii) the continuing or surviving corporation of
such merger, consolidation or amalgamation, if not the Borrower or the
purchaser, (x) shall be an entity organized or existing under the laws of the
United States, any state thereof or the District of Columbia, (y) shall have
assumed all obligations of the Borrower under the Loan Documents pursuant to
arrangements reasonably satisfactory to the Administrative Agent and (z) to the
extent requested by the Administrative Agent or any Lender, shall have promptly
provided to the Administrative Agent or such Lender all documentation and other
information that may be required by the Administrative Agent or such Lender in
order to enable compliance with applicable “know-your-customer” and anti-money
laundering rules and regulations, including information required by the Patriot
Act and the Beneficial Ownership Regulation and (c) the ratings by Moody’s and
S&P of the continuing or surviving corporation’s or purchaser’s senior secured
debt shall be at least the higher of (1) Baa3 from Moody’s and BBB- from S&P and
(2) the ratings by such rating agencies of the Borrower’s senior secured debt in
effect before the earlier of the occurrence or the public announcement of such
event.

7.7    Dispositions. Dispose of (in one transaction or a series of transactions)
any property or Dispose of any Capital Stock of any Subsidiary, except:

(a)    Dispositions of property to a wholly-owned Subsidiary;

(b)    Dispositions of surplus, obsolete or worn out property, or property that
is no longer useful, useable or economically viable in the conduct of the
business;

(c)    Dispositions of inventory in the ordinary course of business;

(d)    Dispositions of property (other than Collateral) having a fair market
value not to exceed $25,000,000 (or the equivalent in any other currency) in the
aggregate during the term of this Agreement;

(e)    Dispositions to the extent that (i) the relevant property subject to such
Disposition is exchanged for, or for credit against the purchase price of,
similar replacement property or (ii) the proceeds of the relevant Disposition
are promptly applied to the purchase price of such replacement property;

(f)    Dispositions of property subject to foreclosure, casualty, eminent domain
or condemnation proceedings (including in lieu thereof or any similar
proceeding);

(g)    [Reserved];

(h)    Dispositions required to comply with any requirement of a Governmental
Authority or a Requirement of Law;

(i)    Dispositions of cash and/or cash equivalents (including Permitted Cash
Equivalents) in the ordinary course of business;

 

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(j)    Dispositions of assets for the purpose of charitable contributions or
similar gifts to the extent such assets are not material to the ability of the
Borrower and its Subsidiaries, taken as a whole, to conduct its business;

(k)    Dispositions permitted pursuant to Section 7.4 or Section 7.6;

(l)    Dispositions of accounts receivable in connection with the collection or
compromise thereof in the ordinary course of business, in an aggregate amount
not to exceed $50,000,000 in any fiscal year;

(m)    any other Disposition of any property in the ordinary course of business;
provided that (i) the consideration for such Disposition shall be at least equal
to the fair market value of such property at the time of such Disposition,
(ii) at least 75% of such consideration shall be in cash and/or cash equivalents
and (iii) the aggregate amount (based upon the fair market value of such
property) of all property sold or otherwise disposed pursuant to all such
Dispositions on and after the Effective Date at the time of and after giving
effect to any such Disposition does not exceed $10,000,000.

7.8    Change in Nature of Business. Notwithstanding any other provisions
hereof, engage at any time in any business or business activity other than any
business or business activity conducted by any of them on the date hereof and
any business or business activity incidental or related thereto, or any business
or business activity that is reasonably similar thereto or a reasonable
extension, development or expansion thereof or ancillary thereto.

7.9    Transactions with Affiliates. Sell or transfer any property or assets to,
or purchase or acquire any property or assets from, or otherwise engage in any
other transaction with any of its Affiliates; provided that this Section 7.9
shall not prohibit:

(a)    any transaction among the Borrower and its Subsidiaries;

(b)    transactions in existence on the Effective Date and set forth on Schedule
7.9;

(c)    transactions otherwise permitted under Section 7.1 (other than
Section 7.1(r)), Section 7.5, Section 7.6, Section 7.7 (other than
Section 7.7(m)) and Section 7.12;

(d)    employment and severance arrangements (including equity incentive plans
and employee benefit plans and arrangements) with their respective officers and
employees in the ordinary course of business;

(e)    payment of customary fees and reasonable out of pocket costs to, and
indemnities for the benefit of, directors, officers and employees in the
ordinary course of business;

(f)    any transaction or series of related transactions with an aggregate value
or payment of $10,000,000 or less; and

 

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(g)    any transaction on terms that are no less favorable to the Borrower or
such Significant Subsidiary than could be obtained at the time in a comparable
arm’s length transaction from a Person who is not an Affiliate.

7.10    Burdensome Agreements. Directly or indirectly, create or otherwise cause
or suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to (a) pay dividends or make other distributions on
its Capital Stock owned by the Borrower or any Subsidiary, or pay any
Indebtedness owed to the Borrower or any Subsidiary (other than customary limits
imposed by corporate law and fraudulent conveyance statutes), (b) make loans or
advances to the Borrower or (c) transfer any of its assets or properties to the
Borrower, except for such encumbrances or restrictions existing by reason of or
under (i) any requirement of a Governmental Authority or a Requirement of Law,
(ii) this Agreement and the other Loan Documents, (iii) customary restrictions
with respect to a Subsidiary pursuant to an agreement that has been entered into
for the sale or disposition of all or substantially all of the Capital Stock of
such Subsidiary and (iv) restrictions binding on any Subsidiary on the date it
becomes a Subsidiary, provided such restrictions were not created in
contemplation of such Person becoming a Subsidiary.

7.11    Use of Proceeds. Use the proceeds of the Loans in any manner other than
as described in Section 4.12.

7.12    Restricted Payments. (a) Declare or pay any dividend or make any other
distribution (by reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, with respect to any Capital Stock of the
Borrower, or (b) directly or indirectly redeem, purchase, retire, obtain the
surrender of or otherwise acquire for value (or permit any Subsidiary to
purchase or acquire) any Capital Stock of the Borrower or set aside any amount
for any such purpose (all of the foregoing, “Restricted Payments”), except:

(i)    the Borrower may make any Restricted Payment required under the Plan of
Reorganization as set forth on Schedule 7.12;

(ii)    the Borrower may pay any dividend or consummate any redemption within 60
days after the date of the declaration thereof or the provision of a redemption
notice with respect thereto, as the case may be, if at the date of such
declaration or notice, the dividend or redemption notice would have complied
with this Section 7.12;

(iii)    the Borrower may declare and make dividend payments or other
distributions payable solely in the common Capital Stock of the Borrower;

(iv)    the Borrower may purchase, redeem or otherwise acquire Capital Stock
issued by it (A) with the proceeds received from the substantially concurrent
issue of new shares of its common Capital Stock or (B) upon the exercise of
stock options or warrants if such Capital Stock represents a portion of the
exercise price of such options or warrants; and

(v)    the Borrower may make any other Restricted Payment or incur any other
obligation (contingent or otherwise) to do so provided that, at the time and
after giving effect thereto, (A) no Default shall have occurred and be
continuing and (B) the Borrower shall be in pro forma compliance with the
financial covenants set forth in Section 7.2 (whether or not in

 

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effect, and, prior to the first test date thereunder, assuming the level
applicable on such first date applies as of the date of such pro forma test) as
of the last day of the most recently ended fiscal quarter for which financial
statements have been delivered pursuant to Section 6.1.

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

7.14    Ownership of PG&E Utility Common Stock. Permit ownership by the
Borrower, at any time, either directly, or indirectly through one or more
Subsidiaries, of less than 100% of the outstanding common stock of PG&E Utility.

SECTION 8.    EVENTS OF DEFAULT

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

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

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

(c)    the Borrower shall default in the observance or performance of any
agreement contained in Section 6.4(a)(i), Section 6.7(a), Section 7 (other than
Section 7.4 and 7.13) of this Agreement; or

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

(e)    the Borrower or any of its Significant Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including any Guarantee
Obligation, but

 

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

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

 

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

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

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

(j)    (i) any Loan Document, at any time after its execution and delivery and
for any reason other than as expressly permitted hereunder or thereunder or
satisfaction in full of all the Obligations, ceases to be in full force and
effect, (ii) the Borrower contests in any manner in writing the validity or
enforceability of any such Loan Document or the validity or perfection of any
Lien on any Collateral purported to be covered by the Pledge Agreement,
(iii) the Borrower denies in writing that it has any or further liability or
obligation under any such Loan Document, or purports in writing to revoke,
terminate or rescind any such Loan Document, (iv) with respect to the Pledge
Agreement, the Collateral Agent shall not have or shall cease to have a valid
and perfected Lien in the Collateral purported to be covered by the Pledge
Agreement with the priority required by the Pledge Agreement.

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents shall immediately become due and payable, and (B) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents to be
due and payable forthwith, whereupon the same shall immediately become due and
payable. Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived by
the Borrower.

 

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SECTION 9.    THE AGENTS

9.1    Appointment and Authority. Each of the Lenders hereby irrevocably
appoints JPMorgan Chase Bank, N.A. to act on its behalf as the Administrative
Agent and as the Collateral Agent hereunder and under the other Loan Documents
and authorizes each Agent to take such actions on its behalf and to exercise
such powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Section 9 are solely for the benefit of the
Agents, the Lenders, and the Borrower shall not have rights as a third-party
beneficiary of any of such provisions (other than with respect to the Borrower’s
rights under Sections 9.9(a) and (b)). It is understood and agreed that the use
of the term “agent” herein or in any other Loan Documents (or any other similar
term) with reference to any Agent is not intended to connote any fiduciary or
other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead such term is used as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
contracting parties.

9.2    Delegation of Duties. The Administrative Agent and Collateral Agent may
each perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document by or through any one or more
sub-agents appointed by it. The Administrative Agent, the Collateral Agent and
any such sub-agent may each perform any and all of its duties and exercise its
rights and powers by or through their respective Related Parties. The
exculpatory provisions of this Section shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent, the Collateral 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 Administrative Agent and the Collateral Agent. Neither the
Administrative Agent nor the Collateral Agent shall be responsible for the
negligence or misconduct of any sub-agents except to the extent that a court of
competent jurisdiction determines in a final and nonappealable judgment that
such Agent acted with gross negligence or willful misconduct in the selection of
such sub-agents.

9.3    Exculpatory Provisions.

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

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

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

 

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

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

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

9.4    Reliance by Agents. The Administrative Agent and the Collateral 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 Administrative
Agent and the Collateral Agent also may rely upon any statement made to it
orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, that by its
terms must be fulfilled to the satisfaction of a Lender, the Administrative
Agent may presume that such condition is satisfactory to such Lender unless the
Administrative Agent shall have received notice to the contrary from such Lender
prior to the making of such Loan. The Administrative Agent and the Collateral
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

9.5    Notice of Default. Neither the Administrative Agent nor the Collateral
Agent shall be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default unless the Administrative Agent or the Collateral
Agent, as applicable, has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”. In the event that the

 

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Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Lenders and the Collateral Agent. The Administrative Agent
and the Collateral Agent shall each take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders (or, if so specified by this Agreement, all Lenders); provided that
unless and until such Agent shall have received such directions, such Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.

9.6    Non-Reliance on Agents and Other Lenders. Each Lender acknowledges that
it has, independently and without reliance upon the Administrative Agent, the
Collateral Agent or any other Lender or any of their Related Parties and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Collateral 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. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent or the Collateral Agent hereunder,
neither the Administrative Agent nor the Collateral Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or any of its
Affiliates that may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys in fact or Affiliates.

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

9.8    Agent in Its Individual Capacity. Each Person serving as an Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not an Agent, and
the terms “Lender” or “Lenders” shall, unless otherwise expressly indicated or
unless the context otherwise requires, include such

 

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Person serving as an Agent hereunder in its individual capacity. Such Person and
its Affiliates may accept deposits from, lend money to, own securities of, act
as the financial advisor or in any other advisory capacity for, and generally
engage in any kind of business with, the Borrower or any Subsidiary or other
Affiliate thereof as if such Person were not an Agent hereunder and without any
duty to account therefor to the Lenders.

9.9    Successor Agents.

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

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

(c)    With effect from the Resignation Effective Date or the Removal Effective
Date (as applicable) (i) the retiring or removed Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents (except
that in the case of any Collateral held by the Collateral Agent on behalf of the
Lenders under any of the Loan

 

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Documents, the retiring or removed Collateral Agent shall continue to hold such
Collateral until such time as a successor Collateral Agent is appointed) and
(ii) except for any indemnity payments or other amounts then owed to the
retiring or removed Administrative Agent or Collateral Agent, all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent or Collateral Agent shall instead be made by or to each
Lender directly, until such time, if any, as the Required Lenders appoint a
successor Administrative Agent or Collateral Agent as provided for above. Upon
the acceptance of a successor’s appointment as Administrative Agent or
Collateral Agent hereunder, such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring or removed
Agent (other than any rights to indemnity payments or other amounts owed to the
retiring or removed Agent as of the Resignation Effective Date or the Removal
Effective Date (as applicable)), and the retiring or removed Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Loan Documents. The fees payable by the Borrower to a successor Agent shall be
the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the retiring or removed Agent’s resignation
or removal hereunder and under the other Loan Documents, the provisions of this
Section and Sections 2.17 and 10.5 shall continue in effect for the benefit of
such retiring or removed Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring or removed Agent was acting as Agent.

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

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

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

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

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

 

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9.12    Collateral Matters.

(a)    Each of the Lenders irrevocably authorize the Collateral Agent, at its
option and in its discretion, to release any Lien on any property granted to or
held by the Collateral Agent under any Loan Document in accordance with the
terms of Section 10.21. Upon request by the Collateral Agent at any time, the
Required Lenders will confirm in writing the Collateral Agent’s authority to
release its Liens in accordance with this Section 9.12.

(b)    Each of the Lenders irrevocably authorize the Collateral Agent and/or the
Administrative Agent, at its option and in its discretion, to enter into any
amendment, amendment and restatement, modification, supplement or waiver of any
Loan Document, or enter into any new agreement or instrument, to effect the
granting, perfection, protection, expansion or enhancement of any security
interest in any Collateral or additional property to become Collateral for the
benefit of the Secured Parties, and to give effect to any intercreditor
agreement reasonably satisfactory to the Collateral Agent or Administrative
Agent associated therewith, or as required by local law to give effect to, or
protect, any security interest for the benefit of the Secured Parties in any
property or so that the security interests therein comply with applicable law or
this Agreement or in each case to otherwise enhance the rights or benefits of
any Lender under any Loan Document.

(c)    The Administrative Agent and/or the Collateral Agent shall not be
responsible for or have a duty to ascertain or inquire into any representation
or warranty regarding the existence, value or collectability of the Collateral,
the existence, priority or perfection of the Collateral Agent’s Lien thereon, or
any certificate prepared by the Borrower in connection therewith, nor shall the
Administrative Agent or the Collateral Agent be responsible or liable to the
Lenders for any failure to monitor or maintain any portion of the Collateral.

9.13    Credit Bidding. The Secured Parties hereby irrevocably authorize each of
the Administrative Agent and the Collateral Agent, at the direction of the
Required Lenders, to credit bid all or any portion of the Obligations (including
by accepting some or all of the Collateral in satisfaction of some or all of the
Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such
manner purchase (either directly or through one or more acquisition vehicles)
all or any portion of the Collateral (a) at any sale thereof conducted under the
provisions of the Bankruptcy Code, including under sections 363, 1123 or 1129 of
the Bankruptcy Code, or any similar laws in any other jurisdictions to which the
Borrower is subject, or (b) at any other sale or foreclosure or acceptance of
collateral in lieu of debt conducted by (or with the consent or at the direction
of) the Administrative Agent or Collateral Agent (whether by judicial action or
otherwise) in accordance with any applicable law. In connection with any such
credit bid and purchase, the Obligations owed to the Secured Parties shall be
entitled to be, and shall be, credit bid by the Administrative Agent at the
direction of the Required Lenders on a ratable basis (with Obligations with
respect to contingent or unliquidated claims receiving contingent interests in
the acquired assets on a ratable basis that would vest upon the liquidation of
such claims in an amount proportional to the liquidated portion of the
contingent claim amount used in allocating the contingent interests) in the
asset or assets so purchased (or in the equity interests or debt instruments of
the acquisition vehicle or vehicles that are used to consummate such purchase).

 

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9.14    Intercreditor Agreement; Pledge Agreement. Each of the Lenders hereby
authorize the Administrative Agent to enter into the Pledge Agreement and any
other intercreditor agreement or arrangement permitted under this Agreement and
the Lenders acknowledge that the Pledge Agreement and any other such
intercreditor agreement shall be binding upon the Lenders. Notwithstanding
anything herein to the contrary, (i) the Liens granted to the Administrative
Agent pursuant to the Security Documents are expressly subject to the Pledge
Agreement and any intercreditor agreement entered into pursuant hereto and
(ii) the exercise of any right or remedy by the Administrative Agent hereunder
or under the Pledge Agreement and any other intercreditor agreement entered into
pursuant hereto is subject to the limitations and provisions of any
intercreditor agreement entered into pursuant hereto. In the event of any
conflict between the terms of the Pledge Agreement or any such intercreditor
agreement and the terms of this Agreement, the terms of the Pledge Agreement or
such intercreditor agreement shall govern.

9.15    Certain ERISA Matters.

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

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

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

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

 

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

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

SECTION 10.    MISCELLANEOUS

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

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

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

 

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

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

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

(vi)    amend, modify or waive the order of payments required by, or the scope
of the Obligations receiving the benefit of or the scope of the proceeds or
other amounts subject to the Priority Waterfall in a manner that by its terms
adversely affects Loans and Obligations that have priority under the Priority
Waterfall without the consent of each Lender holding such adversely affected
Loans and Obligations;

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

(viii)    release all or substantially all of the Collateral (except as
expressly permitted hereunder or under the Security Documents) without the
written consent of all the Lenders.

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

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

If the Required Lenders shall have approved any amendment which requires the
consent of all of the Lenders, the Borrower shall be permitted to replace any
non-consenting Lender with another financial institution, provided that, (i) the
replacement financial institution shall purchase at par, all Loans and other
amounts owing to such replaced Lender on or prior to the date of replacement,
(ii) the Borrower shall be liable to such replaced Lender under Section 2.17 if
any Eurodollar Loan owing to such replaced Lender shall be purchased other than
on the last day of the Interest Period relating thereto (as if such purchase
constituted a prepayment of such Loans), (iii) such replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (iv) the replaced Lender shall be obligated to make

 

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such replacement in accordance with the provisions of Section 10.6 (provided
that the Borrower shall be obligated to pay the registration and processing fee
referred to therein) and (v) any such replacement shall not be deemed to be a
waiver of any rights the Borrower, the Administrative Agent, the Collateral
Agent or any other Lender shall have against the replaced Lender.

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

10.2    Notices.

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

 

Borrower:

  

PG&E Corporation

  

P.O. Box 770000

  

San Francisco, California 94177

  

Attention: Treasurer

  

Telecopy: (415) 973-8968

  

Telephone: (415) 973-8956

with a copy to:

  

PG&E Corporation

  

P.O. Box 770000

  

San Francisco, California 94177

  

Attention: General Counsel

  

Telecopy: (415) 973-5520

Administrative Agent:

  

JPMorgan Chase Bank, N.A.

  

500 Stanton Christiana Road

  

NCC 5, 1st Floor

  

Newark, DE 19713-2107

  

Attention: Mary Crews

 

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Telecopy: (302) 634-5758

  

Telephone: (302) 634-1417

  

Email: mary.crews@jpmorgan.com

Collateral Agent:

  

JPMorgan Chase Bank, N.A.

  

CIB DMO WLO

  

Mail code NY1-C413

  

4 CMC, Brooklyn, NY, 11245-0001

  

United States

  

Email: ib.collateral.services@jpmchase.com

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

(b)    Notices and other communications to the Administrative Agent or the
Lenders hereunder may be delivered or furnished by electronic communications
pursuant to procedures approved by the Administrative Agent; provided that the
foregoing shall not apply to notices pursuant to Section 2 unless otherwise
agreed by the Administrative Agent and each Lender. The Administrative Agent or
the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.

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

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

(ii)    The Platform is provided “as is” and “as available.” The Agent Parties
(as defined below) do not warrant the adequacy of the Platform and expressly
disclaim liability for errors or omissions in the Communications. No warranty of
any kind, express, implied or statutory, including, without limitation, any
warranty of merchantability, fitness for a particular purpose, non-infringement
of third-party rights or freedom from viruses or other code defects, is made by
any Agent Party in connection with the Communications or the Platform. In no
event shall the Administrative Agent or

 

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any of its Related Parties (collectively, the “Agent Parties”) have any
liability to the Borrower, any Lender or any other Person or entity for damages
of any kind, including, without limitation, direct or indirect, special,
incidental or consequential damages, losses or expenses (whether in tort,
contract or otherwise) arising out of the Borrower’s or the Administrative
Agent’s transmission of Communications through the Platform, except to the
extent such liability resulted from the gross negligence or willful misconduct
of the Administrative Agent or any of its Related Parties as determined by a
court of competent jurisdiction in a final non-appealable judgment.
“Communications” means, collectively, any notice, demand, communication,
information, document or other material provided by or on behalf of the Borrower
pursuant to any Loan Document or the transactions contemplated therein which is
distributed to the Administrative Agent or any Lender by means of electronic
communications pursuant to this Section, including through the Platform.

10.3    No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent, the Collateral Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

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

10.5    Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent, the Collateral Agent the Lenders for all
their respective reasonable out of pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and thereby,
including the reasonable fees and disbursements of only one joint counsel and
one joint special California counsel and, if necessary, one joint local counsel
in each other relevant jurisdiction to the Administrative Agent and the Lenders
(and in the case of an actual or perceived conflict of interest, one additional
counsel for each applicable jurisdiction to each group of similarly situated
affected persons) and filing and recording fees and expenses, with statements
with respect to the foregoing to be submitted to the Borrower prior to the
Effective Date (in the case of amounts to be paid on the Effective Date) and
from time to time thereafter on a quarterly basis or such other periodic basis
as the Administrative Agent shall deem appropriate, (b) to pay or reimburse each
Lender, the Collateral Agent and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of its
rights under this Agreement, the other Loan Documents and any such other
documents, including the reasonable fees and disbursements of only one joint
counsel, one joint special California counsel and, if necessary, one local
counsel in each other relevant jurisdiction to the Administrative Agent and the
Lenders (and in the case of an actual or perceived conflict of interest, one
additional counsel for each

 

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applicable jurisdiction to each group of similarly situated affected persons),
and (c) to pay, indemnify, and hold each Lender, the Collateral Agent, the
Administrative Agent and their respective Affiliates and their respective
officers, directors, employees and agents (each, an “Indemnitee”) harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever whether brought by the Borrower or any other Person,
with respect to the execution, delivery, enforcement and performance of, or
arising out of or in connection with, this Agreement, the other Loan Documents
and any such other documents, including any of the foregoing relating to the use
of proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law directly or indirectly relating to the Borrower,
its Significant Subsidiaries or any of the facilities and properties owned,
leased or operated by the Borrower or its Significant Subsidiaries and the
reasonable, documented and invoiced fees and expenses of one joint counsel and
one joint special California counsel and, if necessary, one joint local counsel
in each other relevant jurisdiction to the applicable Indemnitee (and in the
case of an actual or perceived conflict of interest, one additional counsel for
each applicable jurisdiction to each group of similarly situated affected
persons), in connection with claims, actions or proceedings by any Indemnitee
against the Borrower under any Loan Document (all the foregoing in this clause
(c), collectively, the “Indemnified Liabilities”), provided, that the Borrower
shall have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities resulted from, as
determined in a final non-appealable judgment by a court of competent
jurisdiction, (x) the gross negligence, bad faith or willful misconduct of such
Indemnitee or its Affiliates, (y) the material breach of such Indemnitee’s
funding obligations hereunder or (z) a dispute amongst one or more Lenders not
arising from the Borrower’s breach of its obligations under the Loan Documents
(other than a dispute involving a claim against an Indemnitee for its acts or
omissions in its capacity as an arranger, bookrunner, agent or similar role in
respect of the Loan Agreement, except, to the extent such acts or omissions are
determined by a court of competent jurisdiction by a final and non-appealable
judgment to have constituted the gross negligence, bad faith or willful
misconduct of such Indemnitee in such capacity). Without limiting the foregoing,
and to the extent permitted by applicable law, the Borrower agrees not to assert
and to cause its Significant Subsidiaries not to assert, and hereby waives and
agrees to cause its Significant Subsidiaries to waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section 10.5 shall be payable not later than 30 days after written
demand therefor, subject to the Borrower’s receipt of reasonably detailed
invoices. Statements payable by the Borrower pursuant to this Section 10.5 shall
be submitted to Treasurer (Telephone No. (415) 817-8199/(415) 267-7000)
(Telecopy No. (415) 267-7265/7268), at the address of the Borrower set forth in
Section 10.2(a) with a copy to Chief Counsel, Corporate (Telephone No. (415)
817-8200) (Telecopy No. (415) 817-8225), at the address of the Borrower set
forth in Section 10.2(a), or to such other Person or address as may be hereafter
designated by the Borrower in a written notice to the Administrative Agent. The
agreements in this Section 10.5 shall survive for two years after repayment of
the Loans and all other amounts payable hereunder. This Section 10.5 shall not
apply with respect to Taxes, other than Taxes that represent claims, damages,
losses, liabilities, costs or expenses arising from non-Tax claims.

 

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10.6    Successors and Assigns; Participations and Assignments.

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

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

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

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

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

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

 

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

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

In connection with any assignment of rights and obligations of any Defaulting
Lender hereunder, no such assignment shall be effective unless and until, in
addition to the other conditions thereto set forth herein, the parties to the
assignment shall make such additional payments to the Administrative Agent in an
aggregate amount sufficient, upon distribution thereof as appropriate (which may
be outright payment, purchases by the Assignee of participations or
sub-participations, or other compensating actions, including funding, with the
consent of the Borrower and the Administrative Agent, the applicable pro rata
share of Loans previously requested but not funded by the Defaulting Lender, to
each of which the applicable Assignee and assignor hereby irrevocably consent),
to (x) pay and satisfy in full all payment liabilities then owed by such
Defaulting Lender to the Administrative Agent or any Lender hereunder (and
interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro
rata share of all Loans in accordance with its Percentage. Notwithstanding the
foregoing, in the event that any assignment of rights and obligations of any
Defaulting Lender hereunder shall become effective under applicable law without
compliance with the provisions of this paragraph, then the Assignee of such
interest shall be deemed to be a Defaulting Lender for all purposes of this
Agreement until such compliance occurs.

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

(iv)    The Administrative Agent, acting for this purpose as a non-fiduciary
agent of the Borrower (and such agency being solely to establish that the
relevant obligation is

 

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

(v)    Upon its receipt of a duly completed Assignment and Assumption executed
by an assigning Lender and an Assignee, the Assignee’s completed administrative
questionnaire (unless the Assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

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

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

 

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

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

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

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

 

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

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

10.7    Adjustments; Set off.

(a)    Except to the extent that this Agreement expressly provides for payments
to be allocated to a particular Lender, if any Lender (a “Benefitted Lender”)
shall receive any payment of all or part of the Obligations owing to it
hereunder, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender hereunder, such Benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender hereunder, or shall
provide such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.

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

 

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

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

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

 

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

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

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

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

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

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

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

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

10.13    Acknowledgments. The Borrower hereby acknowledges that:

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

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

 

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

10.14    Confidentiality. Each of the Administrative Agent, the Collateral Agent
and each Lender agrees to keep confidential in accordance with such party’s
customary practices (and in any event in compliance with applicable law
regarding material non-public information) all non-public information provided
to it by the Borrower, the Administrative Agent, the Collateral Agent or any
Lender pursuant to or in connection with this Agreement that is designated by
the provider thereof as confidential; provided that nothing herein shall prevent
the Administrative Agent or any Lender from disclosing any such information
(a) to the Administrative Agent, the Collateral Agent, any other Lender or any
Affiliate thereof, (b) subject to an agreement to comply with the provisions of
this Section or substantially equivalent provisions, to any actual or
prospective Transferee, any direct or indirect counterparty to any Swap
Agreement (or any professional advisor to such counterparty) or any credit
insurance providers, (c) to its employees, directors, agents, attorneys, service
providers, accountants and other professional advisors or those of any of its
Affiliates (as long as such attorneys, service providers, accountants and other
professional advisors are directed to comply with confidentiality requirements
substantially equivalent to this Section), (d) upon the request or demand of any
Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed, (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender’s investment portfolio in connection with ratings issued with
respect to such Lender, (i) in connection with the exercise of any remedy
hereunder or under any other Loan Document, (j) any rating agency in connection
with rating of the Borrower or its Subsidiaries or the credit facilities
provided hereunder or (k) to the extent such information (i) becomes available
to the Administrative Agent, the Collateral Agent, any Lender or any of their
respective Affiliates on a nonconfidential basis from a source other than the
Borrower or its Subsidiaries or (ii) is independently discovered or developed by
a party hereto without utilizing any information received from the Borrower or
its Subsidiaries or violating the terms of this Section 10.14, provided that, in
the case of clauses (d), (e) and (f) of this Section 10.14, with the exception
of disclosure to bank regulatory authorities, the Borrower (to the extent
legally permissible) shall be given prompt prior notice so that it may seek a
protective order or other appropriate remedy.

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

10.16    USA Patriot Act; Beneficial Ownership Regulation. Each Lender hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56

 

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(signed into law October 26, 2001)) (the “Patriot Act”), it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender to identify the Borrower in accordance with the
Patriot Act.

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

10.18    No Advisory or Fiduciary Responsibility. In connection with all aspects
of each transactions contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
the Borrower acknowledges and agrees that: (i) (A) the arranging and other
services regarding this Agreement provided by the Agents, the Arrangers and the
Lenders are arm’s-length commercial transactions between the Borrower, on the
one hand, and the Agents, the Arrangers and the Lenders, on the other hand,
(B) the Borrower has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate, and (C) the Borrower is
capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) each Agent, Arranger and Lender is and has been acting
solely as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for the Borrower or any other Person and (B) none of the Agents,
Arrangers or Lenders has any obligation to the Borrower or any of its Affiliates
with respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Loan Documents; and (iii) the
Agents, the Arrangers and the Lenders and their respective Affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of the Borrower and its Affiliates, and none of the Agents, Arrangers or
Lenders has any obligation to disclose any of such interests to the Borrower or
its Affiliates. To the fullest extent permitted by law, the Borrower hereby
waives and releases any claims that it may have against the Agents, the
Arrangers and the Lenders with respect to any breach or alleged breach of agency
or fiduciary duty in connection with any aspect of any transaction contemplated
hereby other than a breach of the confidentiality provisions set forth in
Section 10.14.

10.19    Acknowledgement Regarding Any Supported QFCs.

(a)    To the extent that the Loan Documents provide support, through a
guarantee or otherwise, for Swap Agreements or any other agreement or instrument
that is a QFC (such support “QFC Credit Support” and each such QFC a “Supported
QFC”), the parties acknowledge and agree as follows with respect to the
resolution power of the Federal Deposit Insurance

 

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Corporation under the Federal Deposit Insurance Act and Title II of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the
regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in
respect of such Supported QFC and QFC Credit Support (with the provisions below
applicable notwithstanding that the Loan Documents and any Supported QFC may in
fact be stated to be governed by the laws of the State of New York and/or of the
United States or any other state of the United States):

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

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

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

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

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

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

 

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

10.21    Release of Liens.

(a)    Upon the termination of the Commitments and the payment in full in cash
of the Obligations (other than contingent Obligations not yet due and payable),
the Collateral shall be automatically released from any Liens created by the
Security Documents.

(b)    The following Collateral shall be automatically released from the Liens
created by the Security Documents without delivery of any instrument or
performance of any act by any Person:

(i)    upon a Disposition of Collateral permitted hereunder or any other Loan
Document to a Person other than the Borrower or its Subsidiaries, such
Collateral; or

(ii)    upon the approval in writing by the Required Lenders of the release of
the Liens on any Collateral not constituting all or substantially all of the
Collateral, such Collateral.

(c)    In connection with the termination or release of Collateral from the
Liens created by the Security Documents, the Collateral Agent shall (i) execute
and deliver to the Borrower at the Borrower’s expense, all documents that the
Borrower shall reasonably request to evidence such termination or release and
(ii) return to the Borrower, any possessory Collateral that is in the possession
of the Collateral Agent and is the subject of such release (provided that, upon
request by the Collateral Agent, the Borrower shall deliver to the Collateral
Agent a certificate of a Responsible Officer certifying that such transaction
has been or was consummated in compliance with the Loan Documents).

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

 

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

 

PG&E CORPORATION By:  

 

  Name:   Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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JPMORGAN CHASE BANK, N.A.
as Administrative Agent and as a Lender

By:

Name: Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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

JPMORGAN CHASE BANK, N.A.
as Collateral Agent

By:

Name: Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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

BANK OF AMERICA, N.A.
as a Lender By:  

 

  Name:   Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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

BARCLAYS BANK PLC
as a Lender By:  

 

  Name:   Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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

CITIBANK, N.A.
as a Lender By:  

 

  Name:   Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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

GOLDMAN SACHS BANK USA
as a Lender By:  

 

  Name:   Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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

BNP PARIBAS
as a Lender By:  

 

  Name:   Title: By:  

 

  Name:   Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH as a Lender By:  

                                                               
                      

  Name:   Title: By:  

 

  Name:   Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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

MIZUHO BANK, LTD.
as a Lender By:  

 

  Name:   Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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

MUFG UNION BANK, N.A.
as a Lender By:  

 

  Name:   Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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

WELLS FARGO BANK, NATIONAL ASSOCIATION as a Lender By:  

                                                               
                  

  Name:   Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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

BANK OF MONTREAL, CHICAGO BRANCH
as a Lender By:  

 

  Name:   Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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

THE BANK OF NEW YORK MELLON
as a Lender By:  

 

  Name:   Title:

 

Signature Page to Credit Agreement

PG&E Corporation

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Schedule 1.1

Commitments

[To come.]

 

[Schedules to Corp Revolver Credit Agreement]

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

Schedule 7.4

Sale and Lease Back Transactions

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

 

[Schedules to Corp Revolver Credit Agreement]

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

Schedule 7.9

Transactions with Affiliates

 

1.

Continuing Services Agreement, dated as of October 15, 1999, by and between PG&E
Corporation Support Services, Inc. and PG&E Utility

 

2.

Continuing Services Agreement, dated as of July 27, 2010, by and between Pacific
Energy Capital IV, LLC and PG&E Utility

 

3.

Continuing Services Agreement, dated as of March 1, 2011, by and between PCG
Capital, Inc. and PG&E Utility

 

4.

Continuing Services Agreement, dated as of April 18, 2007, by and between PG&E
Corporation Support Services II, Inc. and PG&E Utility

 

5.

Continuing Services Agreement, dated as of February 23, 2009, by and between
PG&E Utility and Eureka Energy Company

 

6.

Continuing Services Agreement, dated as of March 28, 2008, by and among PG&E
Utility and those affiliated companies named on Appendix A thereto

 

7.

Organization and Management Agreement, dated as of January 9, 1961, by and among
Standard Pacific Gas Line Incorporated, Standard Oil Company of California, and
PG&E Utility

 

8.

Promissory Note, dated January 1, 1996, by and between Eureka Energy Company and
PG&E Utility

 

9.

Promissory Note, dated December 9, 1998, by and between Pacific Energy Fuels
Company and PG&E Utility

 

10.

Promissory Note, dated November 15, 2005, by and between Eureka Energy Company
and PG&E Utility

 

11.

Promissory Note, dated February 26, 1992, by and between Standard Pacific Gas
Line Incorporated and PG&E Utility

 

12.

Lease, dated as of September 17, 1966, by and between Luigi Marre Land and
Cattle Company and San Luis Obispo Bay Properties, Inc., as assigned pursuant to
the Sublease, dated as of September 17, 1966, by and between San Luis Obispo Bay
Properties, Inc. and PG&E Utility

 

[Schedules to Corp Revolver Credit Agreement]

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

Schedule 7.12

Restricted Payments

To the extent that any fees, discounts or premiums constituting Restricted
Payments under the Agreement are required to be paid by the Borrower in
connection with any purchase, redemption or other acquisition of Capital Stock
or other Qualifying Equity (as defined in the Commitment Letter) issued to
consummate the transactions required under the Plan of Reorganization, all such
fees, discounts or premiums are permitted.

 

[Schedules to Corp Revolver Credit Agreement]