Exhibit 10.1

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[chase.jpg]

CREDIT AGREEMENT

dated as of

June 1, 2016

between

SAN JOSE WATER COMPANY

and

JPMORGAN CHASE BANK, N.A.

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TABLE OF CONTENTS

ARTICLE I
DEFINITIONS
1

SECTION 1.01.
Defined Terms
1

SECTION 1.02.
Classification of Loans and Borrowings
17

SECTION 1.03.
Terms Generally
17

SECTION 1.04.
Accounting Terms; GAAP
17

ARTICLE II
THE CREDITS
18

SECTION 2.01.
Commitments
18

SECTION 2.02.
Loans and Borrowings
18

SECTION 2.03.
Borrowing Procedures; Requests for Borrowings
18

SECTION 2.04.
Letters of Credit
19

SECTION 2.05.
Funding of Borrowings
21

SECTION 2.06.
Interest Elections
22

SECTION 2.07.
Termination and Reduction of Commitment
23

SECTION 2.08.
Repayment and Amortization of Loans; Evidence of Debt
23

SECTION 2.09.
Prepayment of Loans
24

SECTION 2.10.
Fees
24

SECTION 2.11.
Interest
25

SECTION 2.12.
Alternate Rate of Interest
26

SECTION 2.13.
Increased Costs
26

SECTION 2.14.
Break Funding Payments
27

SECTION 2.15.
Taxes
27

SECTION 2.16.
Payments Generally; Allocation of Proceeds
30

SECTION 2.17.
Indemnity for Returned Payments
31

ARTICLE III
REPRESENTATIONS AND WARRANTIES
31

SECTION 3.01.
Organization; Powers
31

SECTION 3.02.
Authorization; Enforceability
31

SECTION 3.03.
Governmental Approvals; No Conflicts
32

SECTION 3.04.
Financial Condition; No Material Adverse Change
32

SECTION 3.05.
Properties
32

SECTION 3.06.
Litigation and Environmental Matters
32

SECTION 3.07.
Compliance with Laws and Agreements; No Default
33

SECTION 3.08.
Investment Company Status
33

SECTION 3.09.
Taxes
33

SECTION 3.10.
ERISA
33

SECTION 3.11.
Disclosure
34

SECTION 3.12.
Material Agreements
34

SECTION 3.13.
Solvency
34

SECTION 3.14.
Insurance
34

SECTION 3.15.
Capitalization and Subsidiaries
34

SECTION 3.16.
Employment Matters
35

SECTION 3.17.
Federal Reserve Regulations
35

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TABLE OF CONTENTS

SECTION 3.18.
Use of Proceeds
35

SECTION 3.19.
No Burdensome Restrictions
35

SECTION 3.20.
Anti-Corruption Laws and Sanctions
35

ARTICLE IV
CONDITIONS
35

SECTION 4.01.
Effective Date
35

SECTION 4.02.
Each Credit Event
37

ARTICLE V
AFFIRMATIVE COVENANTS
38

SECTION 5.01.
Financial Statements; Other Information
38

SECTION 5.02.
Notices of Material Events
39

SECTION 5.03.
Existence; Conduct of Business
40

SECTION 5.04.
Payment of Obligations
40

SECTION 5.05.
Maintenance of Properties
40

SECTION 5.06.
Books and Records; Inspection Rights
40

SECTION 5.07.
Compliance with Laws and Material Contractual Obligations
40

SECTION 5.08.
Use of Proceeds
41

SECTION 5.09.
Accuracy of Information
41

SECTION 5.10.
Insurance
41

SECTION 5.11.
Material Licenses and Permits
42

SECTION 5.12.
Depository Banks
42

SECTION 5.13.
Further Assurances
42

ARTICLE VI
NEGATIVE COVENANTS
42

SECTION 6.01.
Indebtedness
42

SECTION 6.02.
Liens
44

SECTION 6.03.
Fundamental Changes
45

SECTION 6.04.
Investments, Loans, Advances, Guarantees and Acquisitions
46

SECTION 6.05.
Asset Sales
47

SECTION 6.06.
Sale and Leaseback Transactions
49

SECTION 6.07.
Swap Agreements
49

SECTION 6.08.
Restricted Payments
49

SECTION 6.09.
Transactions with Affiliates
49

SECTION 6.10.
Restrictive Agreements
50

SECTION 6.11.
Amendment of Material Documents
50

SECTION 6.12.
Financial Covenants
50

ARTICLE VII
EVENTS OF DEFAULT
50

ARTICLE VIII
MISCELLANEOUS
53

SECTION 8.01.
Notices
53

SECTION 8.02.
Waivers; Amendments
54

SECTION 8.03.
Expenses; Indemnity; Damage Waiver
55

SECTION 8.04.
Successors and Assigns
56

SECTION 8.05.
Survival
57

SECTION 8.06.
Counterparts; Integration; Effectiveness
57

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TABLE OF CONTENTS

SECTION 8.07.
Severability
58

SECTION 8.08.
Right of Setoff
58

SECTION 8.09.
Governing Law; Jurisdiction; Consent to Service of Process
58

SECTION 8.10.
WAIVER OF JURY TRIAL
59

SECTION 8.11.
Headings
60

SECTION 8.12.
Confidentiality
60

SECTION 8.13.
Nonreliance; Violation of Law
61

SECTION 8.14.
USA PATRIOT Act
61

SECTION 8.15.
Disclosure
61

SECTION 8.16.
Interest Rate Limitation
61

SECTION 8.17.
No Advisory or Fiduciary Responsibility
61

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SCHEDULES:
Schedule 3.06 - Disclosed Matters
Schedule 3.12 - Material Agreements
Schedule 3.15 - Capitalization and Subsidiaries
Schedule 6.01 - Existing Indebtedness
Schedule 6.02 - Existing Liens
Schedule 6.04 - Existing Investments
Schedule 6.10 - Existing Restrictions
EXHIBITS:
Exhibit A - Borrowing Request
Exhibit B - Compliance Certificate

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CREDIT AGREEMENT dated as of June 1, 2016 (as it may be amended or modified from
time to time, this “Agreement”) between SAN JOSE WATER COMPANY, as Borrower, and
JPMORGAN CHASE BANK, N.A., as Lender.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01.    Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, is bearing interest at a rate
determined by reference to the Alternate Base Rate.
“Acquired Indebtedness” means Indebtedness of a Person whose assets or Equity
Interests are acquired by Borrower or any of its Subsidiaries in a Permitted
Acquisition; provided, however, that such Indebtedness (a) is either purchase
money Indebtedness or a Capital Lease Obligation with respect to equipment or
mortgage financing with respect to real property and any Lien related thereto
does not secure any other assets, (b) was in existence prior to the date of such
Permitted Acquisition, and (c) was not incurred in connection with, or in
contemplation of, such Permitted Acquisition.
“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the Effective Date, by which the Borrower (a) acquires
any ongoing business or all or substantially all of the assets of any Person,
whether through purchase of assets, merger or otherwise or (b) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the Equity
Interests of a Person which has ordinary voting power for the election of
directors or other similar management personnel of a Person (other than Equity
Interests having such power only by reason of the happening of a contingency) or
a majority of the outstanding Equity Interests of a Person.
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period or for any ABR Borrowing, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for
such Interest Period multiplied by (b) the Statutory Reserve Rate.
“Affiliate” means, 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 specified Person.
“Alternate Base Rate” means, 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 ½ of 1%, and (c) the Adjusted LIBO Rate for a one-month Interest
Period on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1%, provided that, the Adjusted LIBO Rate for any
day shall be based on the LIBO Rate at approximately 11:00 a.m. London time on
such day, subject to the interest rate floors set forth therein. Any change in
the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the
Adjusted LIBO Rate shall be effective from and including the effective date of
such change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate,
respectively. If the Alternate Base Rate is being

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used as an alternate rate of interest pursuant to Section 2.12 hereof, then the
Alternate Base Rate shall be the greater of clause (a) and (b) above and shall
be determined without reference to clause (c) above.
“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or its Affiliates from time to time
concerning or relating to bribery or corruption.
“Applicable Rate” means, for any day, with respect to any Loan, or with respect
to the commitment fees payable hereunder, as the case may be, the applicable
rate per annum set forth below under the caption “Eurodollar Rate Spread”, “ABR
Rate Spread” or “Commitment Fee Rate,” as the case may be, based upon the Credit
Rating as set forth below:
Pricing Level
Credit Rating
Eurodollar Rate Spread
ABR Rate Spread
Commitment Fee Rate
I
A1/A+
0.70%
-1.80%
0.070%
II
A2/A
0.775%
-1.70%
0.075%
III
A3/A-
0.85%
-1.65%
0.080%
IV
Baa1/BBB+
0.925%
-1.55%
0.085%
V
Baa2/BBB or lower
1.00%
-1.50%
0.090%

“Credit Rating” means, as of any date of determination, the Borrower’s issuer
rating as determined by either S&P or Moody’s (collectively, the “Credit
Ratings”); provided that (a) if the respective Credit Ratings issued by the
foregoing rating agencies differ by one level, then the Pricing Level for the
higher of such Credit Ratings shall apply; (b) if there is a split in Credit
Ratings of more than one level, then the Pricing Level that is one level lower
than the Pricing Level of the higher Credit Rating shall apply; and (c) if the
Borrower does not have any Credit Rating, the highest Pricing Level shall apply.
Initially, the Applicable Rate shall be determined based upon the Credit Rating
specified in the certificate delivered pursuant to Section 4.01(d). Thereafter,
each change in the Applicable Rate resulting from a publicly announced change in
the Credit Rating shall be effective, in the case of an upgrade, during the
period commencing on the date of delivery by the Borrower to the Lender of
notice thereof and ending on the date immediately preceding the effective date
of the next such change and, in the case of a downgrade, during the period
commencing on the date of the public announcement thereof and ending on the date
immediately preceding the effective date of the next such change.
“Approved Fund” has the meaning assigned to such term in Section 8.04(b).
“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitment.
“Bank Products” means any one or more of the following financial products or
accommodations extended to Borrower or any of its Subsidiaries by a Bank Product
Provider: (a) commercial credit cards, (b) commercial credit card processing
services, (c) debit cards, (d) stored value cards, (e) purchase cards

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(including so-called “procurement cards” or “P-cards”), (f) cash management
services, or (g) transactions under Swap Agreements.
“Bank Product Provider” means Lender or any of its Affiliates that provide Bank
Products to Borrower or any of its Subsidiaries.
“Board” means the Board of Governors of the Federal Reserve System of the U.S.
“Borrower” means San Jose Water Company, a California corporation.
“Borrowing” means Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.
“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
“Burdensome Restrictions” means any restriction of the type described in Section
6.10.
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in San Francisco, California are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term “Business Day” shall also exclude any day on which
banks are not open for general business in London.
“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the SEC
thereunder as in effect on the date hereof), of Equity Interests representing
more than 25% of the aggregate ordinary voting power represented by the issued
and outstanding Equity Interests of Holdco; (b) occupation of a majority of the
seats (other than vacant seats) on the board of directors of Holdco by Persons
who were neither (i) nominated by the board of directors of Holdco nor (ii)
appointed by directors so nominated; or (c) Holdco ceases to own 100% of the
voting and non-voting Equity Interests of the Borrower.
“Change in Law” means the occurrence after the date of this Agreement of any of
the following: (a) the adoption or taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) compliance by the Lender (or, for purposes of
Section 2.13(b), by any lending office of the Lender or by the Lender’s holding
company, if any) with any request, guideline, rule, requirement or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement; provided that, notwithstanding anything
herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines, requirements or directives
thereunder or issued in connection therewith or in the implementation thereof,
and (y) all requests, rules, guidelines, requirements or directives promulgated
by the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the

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U.S. or foreign regulatory authorities, in each case pursuant to Basel III,
shall in each case be deemed to be a “Change in Law”, regardless of the date
enacted, adopted, issued or implemented.
“Charges” has the meaning assigned to such term in Section 8.16.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Commitment” means the commitment of the Lender to make revolving Loans and
issue Letters of Credit hereunder, as such commitment may be reduced from time
to time pursuant to Section 2.07. The initial amount of the Lender’s Commitment
is $125,000,000.
“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.
“Consolidated Funded Debt” means, as of any date of measurement, all
Indebtedness as of the date of measurement (other than Indebtedness of the type
described in clauses (h) through (l) of the definition of Indebtedness (other
than with respect to clause (j), guarantees of Indebtedness of others of the
type not described in clauses (h) through (l) of the definition of
Indebtedness)), determined for the Borrower and its Subsidiaries on a
consolidated basis at such date, in accordance with GAAP.
“Consolidated Net Worth” means, as of any date of determination, for the
Borrower and its Subsidiaries on a consolidated basis, consolidated total assets
minus total liabilities.
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.
“Credit Rating” has the meaning set forth in the definition of “Applicable
Rate”.
“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
“Disclosed Matters” means the actions, suits, proceedings and environmental
matters disclosed in Schedule 3.06.
“dollars” or “$” refers to lawful money of the U.S.
“EBIT” means, for any period, (a) Net Income for such period plus (b) without
duplication and to the extent deducted in determining Net Income for such
period, the sum of (i) Interest Expense for such period and (ii) income tax
expense for such period, all calculated for the Borrower and its Subsidiaries on
a consolidated basis.
“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 8.02).
“Electronic Signature” means 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.

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“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, Release or threatened Release of any Hazardous Material or to health
and safety matters.
“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) any violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) any exposure to any Hazardous
Materials, (d) the Release or threatened Release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any of the
foregoing.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under Section
414(m) or (o) of the Code.
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than
an event for which the 30‑day notice period is waived); (b) the failure to
satisfy the “minimum funding standard” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant to
Section 412(c) of the Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by the Borrower or any ERISA Affiliate of any liability under
Title IV of ERISA with respect to the termination of any Plan; (e) the receipt
by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of
any notice relating to an intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan; (f) the incurrence by the Borrower or any
ERISA Affiliate of any liability with respect to the withdrawal or partial
withdrawal of the Borrower or any ERISA Affiliate from any Plan or Multiemployer
Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice,
or the receipt by any Multiemployer Plan from the Borrower or any ERISA
Affiliate of any notice, concerning the imposition upon the Borrower or any
ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent, within the meaning of Title IV of
ERISA.
“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, bear interest at a rate
determined by reference to the Adjusted LIBO Rate.
“Event of Default” has the meaning assigned to such term in Article VII.

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“Excluded Taxes” means any of the following Taxes imposed on or with respect to
the Lender or required to be withheld or deducted from a payment to the Lender:
(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 the
Lender being organized under the laws of, or having its principal office or its
applicable lending office located in, the jurisdiction imposing such Tax (or any
political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S.
federal withholding Taxes imposed on amounts payable to or for the account of
the Lender with respect to an applicable interest in a Loan, Letter of Credit or
Commitment pursuant to a law in effect on the date on which (i) the Lender
acquires such interest in the Loan, Letter of Credit or Commitment or (ii) the
Lender changes its lending office, except in each case to the extent that,
pursuant to Section 2.15, amounts with respect to such Taxes were payable either
to the Lender’s assignor immediately before the Lender acquired the applicable
interest in such Loan, Letter of Credit or Commitment or to the Lender
immediately before it changed its lending office and (c) Taxes attributable to a
Lender’s failure to comply with Section 2.15(g) and (d) any U.S. federal
withholding Taxes imposed under FATCA.
“Exposure” means, at any time, the sum of the aggregate outstanding principal
amount of the Lender’s Loans and its LC Exposure at such time.
“FATCA” means Sections 1471 through 1474 of the Code as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreement entered into
pursuant to Section 1471(b)(1) of the Code.
“Federal Funds Effective Rate” means, 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 the NYFRB shall set forth on its public website
from time to time) and published on the next succeeding Business Day by the
NYFRB as the federal funds effective rate.
“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.
“Financial Statements” has the meaning assigned to such term in Section 5.01.
“Foreign Lender” means a Lender that is not a U.S. Person.
“Funded Debt to Capitalization Ratio” means, at any date, the ratio of (a)
Consolidated Funded Debt for such date to (b) the sum of Consolidated Net Worth
plus Consolidated Funded Debt as of such date.
“Funding Account” has the meaning assigned to such term in Section 4.01(h).
“GAAP” means generally accepted accounting principles in the U.S.
“Governmental Authority” means the government of the U.S., any other nation or
any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

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“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
“Hazardous Materials” means: (a) any substance, material, or waste that is
included within the definitions of “hazardous substances,” “hazardous
materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic
waste,” or words of similar import in any Environmental Law; (b) those
substances listed as hazardous substances by the United States Department of
Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any successor agency) (40
C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or
waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos
or asbestos-containing material, polychlorinated biphenyls, flammable,
explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any
other agricultural chemical.
“Holdco” means SJW Corp., a California corporation (“SJW Corp.”), and, following
the consummation of the reincorporation of SJW Corp. from California by means of
a merger with and into SJW Group, Inc. as described in the proxy statement of
SJW Corp. on Schedule 14A that was filed with the Securities and Exchange
Commission on March 17, 2015, SJW Group, Inc., a Delaware corporation.
“Holdco Credit Agreement” means that certain Credit Agreement dated as of the
date hereof by and between Holdco, SJW Land Company and Lender.
“Holdco Credit Commitments” means the commitments to make loans and extend
credit under the Holdco Credit Agreement.
“Impacted Interest Period” has the meaning assigned to such term in the
definition of “LIBO Rate”.
“Impairment” shall mean, with respect to any Loan Document or governmental
approval or Regulatory Approval, (a) the rescission, early termination,
cancellation, repeal or invalidity thereof, (b) the suspension or injunction
thereof, (c) the inability to satisfy in a timely manner stated conditions to
effectiveness of such Loan Document, governmental approval or Regulatory
Approval in whole or in part or (d) in the case of any governmental approval or
Regulatory Approval only, the amendment, modification or supplementation
thereof. The verb “Impair” shall have a correlative meaning.
“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person in respect of
the deferred purchase price of property or services (excluding accounts payable
not more than 90 days past due incurred in the

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ordinary course of business), (e) all Capital Lease Obligations of such Person,
(f) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit and letters of guaranty, (g) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances,
(h) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (i) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (j) all Guarantees by such Person of
Indebtedness of others, (k) obligations under any liquidated earn-out and (l)
obligations, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Swap
Agreements, and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Swap Agreement 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 provide that such Person is not liable therefor.
“Indemnified Taxes” means (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 the foregoing clause (a), Other Taxes.
“Indemnitee” has the meaning assigned to such term in Section 8.03(b).
“Information” has the meaning assigned to such term in Section 8.12.
“Interest Coverage Ratio” means, for any period, the ratio of (a) EBIT for such
period to (b) Interest Expense for such period.
“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.06.
“Interest Expense” means, with reference to any period, total interest expense
(including that attributable to Capital Lease Obligations) of the Borrower and
its Subsidiaries for such period with respect to all outstanding Indebtedness of
the Borrower and its Subsidiaries (including all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers’
acceptances and net costs under Swap Agreements in respect of interest rates, to
the extent such net costs are allocable to such period in accordance with GAAP),
calculated for the Borrower and its Subsidiaries on a consolidated basis for
such period in accordance with GAAP.
“Interest Payment Date” means (a) with respect to any ABR Loan, the first
Business Day of each calendar quarter and the Maturity Date and (b) with respect
to any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months’ duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period and the Maturity
Date.
“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Eurodollar Borrowing and ending on the
numerically corresponding day in the calendar month that is one, three or
six months thereafter, as the Borrower may elect; provided that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding

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Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (ii) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.
“Interpolated Rate” means, at any time, for any Interest Period, the rate per
annum (rounded upward to four decimal places) determined by the Lender (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
LIBO Screen Rate for the longest period (for which the LIBO Screen Rate is
available) that is shorter than the Impacted Interest Period and (b) the LIBO
Screen Rate for the shortest period (for which the LIBO Screen Rate is
available) that exceeds the Impacted Interest Period, in each case, at such
time.
“IRS” means the United States Internal Revenue Service.
“LC Disbursement” means any payment made by the Lender pursuant to a Letter of
Credit.
“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all Letters of Credit outstanding at such time plus (b) the aggregate amount of
all LC Disbursements relating to Letters of Credit that have not yet been
reimbursed by or on behalf of the Borrower at such time.
“Lender” means JPMorgan Chase Bank, N.A., its successors and assigns.
“Letters of Credit” means the standby letters of credit issued pursuant to this
Agreement, and the term “Letter of Credit” means any one of them or each of them
singularly, as the context may require.
“Letter of Credit Fee Rate” means the Adjusted LIBO Rate plus 0.875%.
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable
Interest Period or for any ABR Borrowing, the London interbank offered rate as
administered by ICE Benchmark Administration (or any other Person that takes
over the administration of such rate for Dollars) for a period equal in length
to such Interest Period as displayed 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 shall be selected by the Lender in
its reasonable discretion (in each case, the “LIBO Screen Rate”) at
approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period; provided that, (x) if the LIBO Screen Rate
shall be less than zero, such rate shall be deemed to be zero for the purposes
of this Agreement and (y) if the LIBO Screen Rate shall not be available at such
time for a period equal in length to such Interest Period (an “Impacted Interest
Period”), then the LIBO Rate shall be the Interpolated Rate at such time,
subject to Section 2.12 in the event that the Lender shall conclude that it
shall not be possible to determine such Interpolated Rate (which conclusion
shall be conclusive and binding absent manifest error); provided further, that,
if any Interpolated Rate shall be less than zero, such rate shall be deemed to
be zero for purposes of this Agreement. Notwithstanding the above, to the extent
that “LIBO Rate” or “Adjusted LIBO Rate” is used in connection with an ABR
Borrowing, such rate shall be determined as modified by the definition of
Alternate Base Rate.

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“LIBO Screen Rate” has the meaning assigned to such term in the definition of
“LIBO Rate”.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
“Loan Documents” means, collectively, this Agreement, each promissory note
issued pursuant to this Agreement, any Letter of Credit application, the fee
letter described in Section 2.10(c), and each other agreement, instrument,
document and certificate identified in Section 4.01 executed and delivered to,
or in favor of, the Lender and including each other consent, assignment,
contract, notice, letter of credit agreement and each other written matter
whether heretofore, now or hereafter executed by or on behalf of the Borrower,
or any employee of the Borrower, and delivered to the Lender in connection with
this Agreement or the transactions contemplated hereby. Any reference in this
Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to this Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.
“Loans” means the Loans made pursuant to Section 2.01.
“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, or condition, financial or otherwise, of the Borrower and
its Subsidiaries taken as a whole, (b) the ability of the Borrower to perform
any of its obligations under the Loan Documents to which it is a party, or
(c) the rights of or benefits available to the Lender under any of the Loan
Documents.
“Material Agreement” means, with respect to any Person, (i) all Material
Indebtedness, (ii) each contract, agreement or other instrument to which such
Person or any of its Subsidiaries is a party involving aggregate consideration
payable by or to such Person or by or to such Subsidiary of $5,000,000 or more
during any consecutive twelve-month period (other than purchase orders in the
ordinary course of the business of such Person or such Subsidiary), and (iii)
all other contracts or agreements, the loss of which would reasonably be
expected to have a Material Adverse Effect.
“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Borrower and its Subsidiaries in an aggregate principal amount
exceeding $5,000,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Borrower or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such time.
“Maturity Date” means the earlier of (a) June 1, 2021 (if the same is a Business
Day, or if not, then the immediately next succeeding Business Day), (b) any
earlier date on which the Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof or (c) the date on which the Holdco Credit
Commitments are terminated (if the same is a Business Day, or, if not, then the
immediately succeeding next Business Day).
“Maximum Rate” has the meaning assigned to such term in Section 8.16.

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“Moody’s” means Moody’s Investors Service, Inc.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
“Net Income” means, for any period, the consolidated net income (or loss)
determined for the Borrower and its Subsidiaries, on a consolidated basis in
accordance with GAAP; provided that there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the Borrower or any Subsidiary, and (b) the
income (or deficit) of any Person (other than a Subsidiary) in which the
Borrower or any Subsidiary has an ownership interest, except to the extent that
any such income is actually received by the Borrower or such Subsidiary in the
form of dividends or similar distributions and (c) the undistributed earnings of
any Subsidiary, to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any contractual obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary.
“NYFRB” means the Federal Reserve Bank of New York.
“NYFRB Rate” means, 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. on such day received to the
Lender from a Federal funds broker of recognized standing selected by it;
provided, further, that if any of the aforesaid rates shall be less than zero,
such rate shall be deemed to be zero for purposes of this Agreement.
“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all LC Exposure, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations and indebtedness (including
interest and fees accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), obligations and liabilities of the Borrower and
its Subsidiaries to the Lender or any indemnified party under the Loan
Documents, individually or collectively, existing on the Effective Date or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Agreement or any of the other Loan Documents or in respect
of any of the Loans made or reimbursement or other obligations incurred or any
of the Letters of Credit or other instruments at any time evidencing any
thereof.
“Other Connection Taxes” means, with respect to the Lender, Taxes imposed as a
result of a present or former connection between the Lender and the jurisdiction
imposing such Taxes (other than a connection arising from the Lender 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, Letter of Credit, or any Loan
Document).
“Other Taxes” means 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

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respect to, any Loan Document, except any such Taxes that are Other Connection
Taxes imposed with respect to an assignment.
“Overnight Bank Funding Rate” means, 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 its public website from time to time)
and published on the next succeeding Business Day by the NYFRB as an overnight
bank funding rate (from and after such date as the NYFRB shall commence to
publish such composite rate).
“Participant” has the meaning assigned to such term in Section 8.04(c).
“Participant Register” has the meaning assigned to such term in Section 8.04(c).
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.
“Permitted Acquisition” means any Acquisition by the Borrower in a transaction
that satisfies each of the following requirements:
(a)such Acquisition is not a hostile or contested acquisition;

(b)the business acquired in connection with such Acquisition is (i) located in
the U.S., (ii) organized under applicable U.S. and state laws, and (iii) not
engaged, directly or indirectly, in any line of business other than the
businesses in which the Borrower is engaged on the Effective Date and any
business activities that are substantially similar, related, or incidental
thereto;

(c)both before and after giving effect to such Acquisition, no Default exists,
will exist, or would result therefrom;

(d)for any Acquisition that involves aggregate consideration of $5,000,000 or
more, as soon as available, but not less than ten days (or such shorter time as
agreed to by the Lender) prior to such Acquisition, the Borrower has provided
the Lender (i) notice of such Acquisition and (ii) upon the reasonable request
of the Lender, a copy of the material business and financial information related
to such Acquisition including pro forma financial statements and statements of
cash flow;

(e)(i) the total consideration of any Acquisition (including all Indebtedness
and liabilities incurred or assumed in connection therewith) does not exceed
$20,000,000, (ii) the aggregate total consideration of Acquisitions (including
all Indebtedness and liabilities incurred or assumed in connection therewith)
(together with any Acquisitions consummated by Holdco and its other
Subsidiaries) in any year does not exceed $20,000,000, and (iii) the aggregate
total consideration for all Acquisitions (including all Indebtedness and
liabilities incurred or assumed in connection therewith) (together with any
Acquisitions consummated by Holdco and its other Subsidiaries) made during the
term of this Agreement shall not exceed $60,000,000;

(f)if such Acquisition is an acquisition of the Equity Interests of a Person,
such Acquisition is structured so that the acquired Person shall become a
wholly-owned Subsidiary of the Borrower pursuant to the terms of this Agreement;

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(g)if such Acquisition is an acquisition of assets, such Acquisition is
structured so that the Borrower shall acquire such assets;

(h)if such Acquisition is an acquisition of Equity Interests, such Acquisition
will not result in any violation of Regulation U;

(i)if such Acquisition involves a merger or a consolidation involving the
Borrower, the Borrower shall be the surviving entity; and

(j)the Borrower shall not, as a result of or in connection with any such
Acquisition, assume or incur any direct or contingent liabilities (whether
relating to environmental, tax, litigation, or other matters) that could
reasonably be expected to have a Material Adverse Effect.

“Permitted Encumbrances” means:
(a)Liens imposed by law for Taxes that are not yet due or are being contested in
compliance with Section 5.04;

(b)carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than thirty (30) days or are
being contested in compliance with Section 5.04;

(c)pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;

(d)deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

(e)judgment Liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII;

(f)easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary; and

(g)the interests of lessors and sublessors under operating leases and licensors
or sub-licensors under license agreements;

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness, except with respect to clause (e) above.
“Permitted Intercompany Advances” means loans made by (a) Borrower to Holdco or
to any Subsidiary of Holdco, (b) Holdco to any Subsidiary of Holdco, or (c) a
Subsidiary of Holdco to Holdco or to any other Subsidiary of Holdco (including
Borrower).
“Permitted Investments” means:

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

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

(c)investments in certificates of deposit, bankers’ acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the U.S. or any state thereof which has a combined capital and surplus and
undivided profits of not less than $500,000,000;

(d)fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above; and

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

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by the Lender as its prime rate in effect at its principal offices in
New York City. Each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
“Projections” has the meaning assigned to such term in Section 5.01(d).
“Refinance Indebtedness” has the meaning assigned to such term in
Section 6.01(f).
“Regulatory Approval” means (a) any authorization, consent, approval, license,
lease, ruling, permit, tariff, rate, certification, waiver, exemption, filing,
variance, claim, order, judgment or decree of, by or with, (b) any required
notice to, (c) any declaration of or with or (d) any registration by or with,
any Governmental Authority.
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, partners, members, trustees,
employees, agents, administrators, managers, representatives and advisors of
such Person and such Person’s Affiliates.

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“Release” means any releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, disposing, or
dumping of any substance into the environment.
“Requirement of Law” means, with respect to any Person, (a) the charter,
articles or certificate of organization or incorporation and bylaws or
operating, management or partnership agreement, or other organizational or
governing documents of such Person and (b) any statute, law (including common
law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment,
injunction or determination of any arbitrator or court or other Governmental
Authority (including Environmental Laws), 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.
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests or any option, warrant or other right to acquire any
such Equity Interests.
“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business.
“Sale and Leaseback Transaction” has the meaning assigned to such term in
Section 6.06.
“Sanctioned Country” means, at any time, a country or territory which is the
subject or target of any Sanctions.
“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State, or by the United Nations Security Council, the European Union or any EU
member state, (b) any Person operating, organized or resident in a Sanctioned
Country or (c) any Person controlled by any such Person.
“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State.
“SEC” means the Securities and Exchange Commission of the U.S.
“SJWTX Credit Agreement” means that certain Credit Agreement dated as of the
date hereof by and between SJWTX, Inc. and Lender.
“Statement” has the meaning assigned to such term in Section 2.16(c).
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentage (including any
marginal, special, emergency or supplemental reserves) established by the Board
to which the Lender is subject with respect to the Adjusted LIBO Rate, for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D of the Board. Eurodollar Loans shall be deemed to

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constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to the Lender under such Regulation D of the Board
or any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
“Subsidiary” means any direct or indirect subsidiary of the Borrower or Holdco,
as the context requires.
“Swap Agreement” means any agreement with respect to any swap, forward, spot,
future, credit default or derivative transaction or any option or similar
agreement involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
“Taxes” means any and 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.
“Transactions” means the execution, delivery and performance by the Borrower of
this Agreement and the other Loan Documents, the borrowing of Loans and other
credit extensions, the use of the proceeds thereof and the issuance of Letters
of Credit hereunder.
“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
“U.S.” means the United States of America.
“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section in Section 2.15(g).
“USA PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

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“Wells Facility” has the meaning assigned to such term in Section 4.01(f).
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02.    Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar
Loan”). Borrowings also may be classified and referred to by Type (e.g., a
“Eurodollar Borrowing”).

SECTION 1.03.    Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “law”
shall be construed as referring to all statutes, rules, regulations, codes and
other laws (including official rulings and interpretations thereunder having the
force of law or with which affected Persons customarily comply) and all
judgments, orders and decrees of all Governmental Authorities. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or modifications set forth herein),
(b) any definition of or reference to any statute, rule or regulation shall be
construed as referring thereto as from time to time amended, supplemented or
otherwise modified (including by succession of comparable successor laws), (c)
any reference herein to any Person shall be construed to include such Person’s
successors and assigns (subject to any restrictions on assignments set forth
herein) and, in the case of any Governmental Authority, any other Governmental
Authority that shall have succeeded to any or all functions thereof, (d) the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (e) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement, (f) any reference in any definition to the
phrase “at any time” or “for any period” shall refer to the same time or period
for all calculations or determinations within such definition, and (g) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

SECTION 1.04.    Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if after
the date hereof there occurs any change in GAAP or in the application thereof on
the operation of any provision hereof and the Borrower notifies the Lender that
the Borrower requests an amendment to any provision hereof to eliminate the
effect of change in GAAP or in the application thereof (or if the Lender
notifies the Borrower that the Lender requests an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given before
or after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such migration or change shall have become effective until such notice
shall have been withdrawn or such provision amended in accordance herewith.
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 (i) without giving effect to
any election under Financial Accounting Standards Board Accounting Standards
Codification

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825-10-25 (or any other Accounting Standards Codification or Financial
Accounting Standard having a similar result or effect) to value any Indebtedness
or other liabilities of the Borrower, Holdco or any Subsidiary of Holdco at
“fair value”, as defined therein and (ii) without giving effect to any treatment
of Indebtedness in respect of convertible debt instruments under Financial
Accounting Standards Board Accounting Standards Codification 470-20 (or any
other Accounting Standards Codification or Financial Accounting Standard having
a similar result or effect) to value any such Indebtedness in a reduced or
bifurcated manner as described therein, and such Indebtedness shall at all times
be valued at the full stated principal amount thereof.

ARTICLE II

THE CREDITS

SECTION 2.01.    Commitments. Subject to the terms and conditions set forth
herein, the Lender agrees to make Loans in dollars to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in the Exposure exceeding the Commitment. Within the foregoing limits
and subject to the terms and conditions set forth herein, the Borrower may
borrow, prepay and reborrow Loans.

SECTION 2.02.    Loans and Borrowings.

(a)Each Loan shall be made as part of a Borrowing consisting of Loans of the
same Type.
(b)Subject to Section 2.12, each Borrowing shall be comprised entirely of ABR
Loans or Eurodollar Loans as the Borrower may request in accordance herewith,
provided that all Borrowings made on the Effective Date must be made as ABR
Borrowings but may be converted into Eurodollar Borrowings in accordance with
Section 2.06. The Lender at its option may make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of the Lender to make such Loan (and
in the case of an Affiliate, the provisions of Sections 2.12, 2.13, 2.14 and
2.15 shall apply to such Affiliate to the same extent as to the Lender);
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accord-ance with the terms of this Agreement.

(c)At the commencement of each Interest Period for any Eurodollar Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $5,000,000. ABR Borrowings may be in any amount.
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of ten Eurodollar
Borrowings outstanding.

(d)Notwithstanding any other provision of this Agreement, the Borrower shall not
be entitled to request, or to elect to convert or continue, any Borrowing if the
Interest Period requested with respect thereto would end after the Maturity
Date.

SECTION 2.03.    Borrowing Procedures; Requests for Borrowings. To request a
Borrowing, the Borrower shall notify the Lender of such request either in
writing (delivered by hand, fax or electronic email) in the form attached hereto
as Exhibit A and signed by the Borrower or by telephone (a) in the case of a
Eurodollar Borrowing, not later than 10:00 a.m., Pacific time, three (3)
Business Days before the date of the proposed Borrowing or (b) in the case of an
ABR Borrowing, not later than noon,

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Pacific time, on the date of the proposed Borrowing; provided that any such
notice of a an ABR Borrowing to finance the reimbursement of an LC Disbursement
as contemplated by Section 2.04(d) may be given not later than 10:00 a.m.,
Pacific time, on the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery, fax or electronic mail to the Lender of a written Borrowing Request in
a form approved by the Lender and signed by the Borrower. Each such telephonic
and written Borrowing Request shall specify the following information in
compliance with Section 2.01:

(i)the aggregate amount of the requested Borrowing, and a breakdown of the
separate wires comprising such Borrowing;

(ii)the date of such Borrowing, which shall be a Business Day;

(iii)whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
and

(iv)in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period.”

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration.
SECTION 2.04.    Letters of Credit.

(a)General. Subject to the terms and conditions set forth herein, the Borrower
may request the issuance of Letters of Credit denominated in dollars as the
applicant thereof for the support of its or its Subsidiaries’ obligations, in a
form reasonably acceptable to the Lender, at any time and from time to time
during the Availability Period. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, the Lender relating to any Letter of
Credit, the terms and conditions of this Agreement shall control. The Borrower
unconditionally and irrevocably agrees that, in connection with any Letter of
Credit issued for the support of any Subsidiary’s obligations as provided in the
first sentence of this paragraph, the Borrower will be fully responsible for the
reimbursement of LC Disbursements in accordance with the terms hereof, the
payment of interest thereon and the payment of fees due under Section 2.10(b) to
the same extent as if it were the sole account party in respect of such Letter
of Credit (the Borrower hereby irrevocably waiving any defenses that might
otherwise be available to it as a guarantor or surety of the obligations of such
Subsidiary that is an account party in respect of any such Letter of Credit).

(b)Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or fax (or transmit by electronic communication, if arrangements for doing so
have been approved by the Lender) to the Lender (reasonably in advance of the
requested date of issuance, amendment, renewal or extension, but in any event no
less than three (3) Business Days) a notice requesting the issuance of a Letter
of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Letter of Credit is to
expire (which shall comply with paragraph (c) of this Section), the

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amount of such Letter of Credit, the name and address of the beneficiary
thereof, and such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit. If requested by the Lender, the Borrower
also shall submit a letter of credit application on the Lender’s standard form
in connection with any request for a Letter of Credit. A Letter of Credit shall
be issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC Exposure shall not exceed $10,000,000 and (ii)
the Exposure shall not exceed the Commitment.

(c)Expiration Date. Each Letter of Credit shall expire (or be subject to
termination or non-renewal by notice from the Lender to the beneficiary thereof)
at or prior to the close of business on the earlier of (i) the date one year
after the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, including, without limitation, any automatic
renewal provision, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date.

(d)Reimbursement. If the Lender shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to
the Lender an amount equal to such LC Disbursement not later than 11:00 a.m.,
Pacific time, on (i) the Business Day that the Borrower receives notice of such
LC Disbursement, if such notice is received prior to 9:00 a.m., Pacific time, on
the day of receipt, or (ii) the Business Day immediately following the day that
the Borrower receives such notice, if such notice is received after 9:00 a.m.,
Pacific time, on the day of receipt; provided that, if such LC Disbursement is
greater than or equal to $3,000,000, the Borrower may, subject to the conditions
to borrowing set forth herein, request in accordance with Section 2.03 or 2.05
that such payment be financed initially with an ABR Borrowing in an equivalent
amount and, to the extent so financed, the Borrower’s obligation to make such
payment shall be discharged and replaced by the resulting ABR Borrowing.

(e)Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements
as provided in paragraph (d) of this Section shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
any (i) lack of validity or enforceability of any Letter of Credit or this
Agreement, or any term or provision therein or herein, (ii) draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or inaccurate in
any respect, (iii) payment by the Lender under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit, or (iv) other event or circumstance whatsoever, whether
or not similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of, or provide a right
of setoff against, the Borrower’s obligations hereunder. Neither the Lender nor
any of its Related Parties, shall have any liability or responsibility by reason
of or in connection with the issuance or transfer of any Letter of Credit, any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Lender; provided that the foregoing shall not be construed to excuse the Lender
from liability to the Borrower to the extent of any direct damages (as opposed
to special, indirect, consequential or punitive damages, claims in respect of
which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by the Lender’s failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of the Lender (as finally determined by a court of competent
jurisdiction),

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the Lender shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Lender may, in its sole discretion, either accept and make payment upon such
documents without responsibility for further investigation, regardless of any
notice or information to the contrary, or refuse to accept and make payment upon
such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.

(f)Disbursement Procedures. The Lender shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit. The Lender shall promptly notify the Borrower by
telephone (confirmed by fax or electronic mail) of such demand for payment and
whether the Lender has made or will make an LC Disbursement thereunder; provided
that any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Lender with respect to any such LC
Disbursement.

(g)Interim Interest. If the Lender shall make any LC Disbursement, then, unless
the Borrower shall reimburse such LC Disbursement in full on the date such LC
Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding
the date that the Borrower reimburses such LC Disbursement, at the rate per
annum then applicable to ABR Loans and such interest shall be due and payable on
the date when such reimbursement is due; provided that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph (d) of this
Section, then Section 2.11(c) shall apply. Interest accrued pursuant to this
paragraph shall be for the account of the Lender.

(h)Cash Collateralization. If any Default shall occur and be continuing, on the
Business Day that the Borrower receives notice from the Lender demanding the
deposit of cash collateral pursuant to this paragraph, the Borrower shall
deposit in an account with the Lender, in the name and for the benefit of the
Lender (the “LC Collateral Account”), an amount in cash equal to 105% of the
amount of the LC Exposure as of such date plus accrued and unpaid interest
thereon; provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Borrower described in clause (h), (i) or
(j) of Article VII. The Borrower also shall deposit cash collateral in
accordance with this paragraph as and to the extent required by Section 2.09(b).
Each such deposit shall be held by the Lender as collateral for the payment and
performance of the Obligations. The Lender shall have exclusive dominion and
control, including the exclusive right of withdrawal, over the LC Collateral
Account and the Borrower hereby grants the Lender a security interest in the LC
Collateral Account and all moneys or other assets on deposit therein or credited
thereto. Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the Lender
and at the Borrower’s risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Lender for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated, be applied to satisfy other Obligations. If the Borrower
is required to provide an amount of cash collateral hereunder as a result of the
occurrence of a Default, such amount (to the extent not applied as aforesaid)
shall be returned to the Borrower within three (3) Business Days after all such
Defaults have been cured or waived as confirmed in writing by the Lender.

(i)LC Exposure Determination. For all purposes of this Agreement, the amount of
a Letter of Credit that, by its terms or the terms of any document related
thereto, provides for one or more automatic increases in the stated amount
thereof shall be deemed to be the maximum stated amount of such

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Letter of Credit after giving effect to all such increases, whether or not such
maximum stated amount is in effect at the time of determination.

SECTION 2.05.    Funding of Borrowings
. The Lender shall make each Loan to be made by it hereunder on the proposed
date thereof available to the Borrower by promptly crediting the amounts in
immediately available funds, to the Funding Account; provided that ABR Loans
made to finance the reimbursement of an LC Disbursement as provided in Section
2.04(d) shall be remitted to the Lender.
SECTION 2.06.    Interest Elections.

(a)Each Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing.
(b)To make an election pursuant to this Section, the Borrower shall notify the
Lender of such election by telephone by the time that a Borrowing Request would
be required under Section 2.03 if the Borrower were requesting a Borrowing of
the Type resulting from such election to be made on the effective date of such
election. Each such telephonic Interest Election Request shall be irrevocable
and shall be confirmed promptly by hand delivery, fax or electronic mail to the
Lender of a written Interest Election Request in a form approved by the Lender
and signed by the Borrower.

(c)Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:

(i)the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (ii) and (iii) below shall
be specified for each resulting Borrowing);

(ii)the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

(iii)whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and

(iv)if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to
be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.
(d)If the Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR

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Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Lender so notifies the Borrower, then, so
long as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.

SECTION 2.07.    Termination and Reduction of Commitment.

(a)Unless previously terminated, the Commitment shall terminate on the Maturity
Date.

(b)The Borrower may at any time terminate the Commitment upon (i) the payment in
full of all outstanding Loans and LC Disbursements, together with accrued and
unpaid interest thereon, (ii) the cancellation and return of all outstanding
Letters of Credit (or alternatively, with respect to each such Letter of Credit,
the furnishing to the Lender of a cash deposit (or at the discretion of the
Lender a backup standby letter of credit satisfactory to the Lender) in an
amount equal to 105% of the LC Exposure as of such date), (iii) the payment in
full of the accrued and unpaid fees, and (iv) the payment in full of all
reimbursable expenses and other Obligations together with accrued and unpaid
interest thereon.

(c)The Borrower may from time to time reduce the Commitment; provided that (i)
each reduction of the Commitment shall be in an amount that is an integral
multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall
not terminate or reduce the Commitment if, after giving effect to any concurrent
prepayment of the Loans in accordance with Section 2.09, the Exposure would
exceed the Commitment.

(d)The Borrower shall notify the Lender of any election to terminate or reduce
the Commitment under paragraphs (b) or (c) of this Section at least three (3)
Business Days prior to the effective date of such termination, specifying such
election and the effective date thereof. Each notice delivered by the Borrower
pursuant to this Section shall be irrevocable; provided that a notice of
termination or reduction of the Commitment delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Lender on or prior to the specified effective date) if such condition is
not satisfied. Any termination or reduction of the Commitment shall be
permanent.

SECTION 2.08.    Repayment and Amortization of Loans; Evidence of Debt.

(a)The Borrower hereby unconditionally promises to pay the Lender the then
unpaid principal amount of each Loan on the Maturity Date.

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

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

(d)The entries made in the accounts maintained pursuant to paragraph (b) or (c)
of this Section shall be prima facie evidence of the existence and amounts of
the obligations recorded therein;

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provided that the failure of the Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.

(e)The Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrower shall prepare, execute and deliver to the
Lender a promissory note payable to the order of the Lender (or, if requested by
the Lender, to the Lender and its registered assigns) and in a form approved by
the Lender. Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 8.04)
be represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).

SECTION 2.09.    Prepayment of Loans.

(a)The Borrower shall have the right at any time and from time to time to prepay
any Borrowing in whole or in part, subject to prior notice in accordance with
paragraph (e) of this Section and, if applicable, payment of any break funding
expenses under Section 2.14.

(b)In the event and on such occasion that the Exposure exceeds the Commitment,
the Borrower shall prepay the Loans and LC Exposure.

(c)The Borrower shall notify the Lender by telephone (confirmed by fax or
electronic mail) of any prepayment under this Section: (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 10:00 a.m., Pacific time,
three (3) Business Days before the date of prepayment, or (ii) in the case of
prepayment of an ABR Borrowing, not later than 10:00 a.m., Pacific time, on the
date of prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; provided that if a notice of prepayment is given in connection with
a conditional notice of termination of the Commitment as contemplated by
Section 2.07, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.07. Each partial prepayment
of any Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02, except as
necessary to apply fully the required amount of a mandatory prepayment. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by (i) accrued interest to
the extent required by Section 2.11 and (ii) break funding payments pursuant to
Section 2.14.

(d)At least one time during each two-year period of this Agreement, the Loans
outstanding shall be reduced to zero for a period of at least 30 consecutive
days.

SECTION 2.10.    Fees.

(a)The Borrower agrees to pay to the Lender a commitment fee, which shall accrue
at the Applicable Rate on the daily amount of the undrawn portion of the
Commitment of the Lender during the period from and including the Effective Date
to but excluding the date on which the Lender’s Commitment terminates; it being
understood that the LC Exposure shall be included in the drawn portion of the
Commitment for purposes of calculating the commitment fee. Accrued commitment
fees shall be payable in arrears on the last day of March, June, September and
December of each year and on the date on which the Commitment terminates,
commencing on the first such date to occur after the date hereof. All commitment
fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).

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(b)The Borrower agrees to pay (i) to the Lender a letter of credit fee with
respect to Letters of Credit, which shall accrue at the Letter of Credit Fee
Rate on the daily amount of the Lender’s LC Exposure during the period from and
including the Effective Date to but excluding the later of the date on which the
Lender’s Commitment terminates and the date on which the Lender ceases to have
any LC Exposure, and (ii) the Lender’s standard fees and commissions with
respect to the issuance, amendment, cancellation, negotiation, transfer,
presentment, renewal or extension of any Letter of Credit or processing of
drawings thereunder. Letter of credit fees accrued through and including the
last day of March, June, September and December of each year shall be payable on
the third Business Day following such last day, commencing on the first such
date to occur after the Effective Date; provided that all such fees shall be
payable on the date on which the Commitment terminates and any such fees
accruing after the date on which the Commitment terminates shall be payable on
demand. Any other fees payable to the Lender pursuant to this paragraph shall be
payable within ten (10) days after demand. All letter of credit fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

(c)The Borrower agrees to pay to the Lender the fees in the amounts set forth in
the fee letter dated as of June 1, 2016 between the Borrower and Lender on the
terms set forth in such fee letter.

(d)All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Lender. Fees paid shall not be refundable under any
circumstances.

SECTION 2.11.    Interest.

(a)The Loans comprising each ABR Borrowing shall bear interest at the Alternate
Base Rate plus the Applicable Rate.

(b)The Loans comprising each Eurodollar Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.

(c)Notwithstanding the foregoing, during the occurrence and continuance of an
Event of Default, the Lender may, at its option, by notice to the Borrower,
declare that (i) all Loans shall bear interest at 2% plus the rate otherwise
applicable to such Loans as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount outstanding hereunder, such amount shall
accrue at 2% plus the rate applicable to such fee or other obligation as
provided hereunder.

(d)Accrued interest on each Loan (for ABR Loans, accrued through the last day of
the prior calendar month) shall be payable in arrears on each Interest Payment
Date for such Loan and, in the case of Loans, upon termination of the
Commitment; provided that (i) interest accrued pursuant to paragraph (c) of this
Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end
of the Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion.

(e)All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case shall
be payable for the actual number of days elapsed (including the first day but
excluding

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the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO
Rate shall be determined by the Lender, and such determination shall be
conclusive absent manifest error.

SECTION 2.12.    Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

(a)the Lender determines (which determination shall be conclusive and binding
absent manifest error) that adequate and reasonable means do not exist for
ascertaining (including, without limitation, by means of an Interpolated Rate)
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest
Period; or

(b)the Lender determines the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period will not adequately and fairly reflect the cost to the
Lender of making or maintaining its Loan included in such Borrowing for such
Interest Period;

then the Lender shall give notice thereof to the Borrower by telephone, fax or
electronic communication as provided in Section 8.01 as promptly as practicable
thereafter and, until the Lender notifies the Borrower that the circumstances
giving rise to such notice no longer exist, (i) any Interest Election Request
that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective and any such
Eurodollar Borrowing shall be repaid on the last day of the then current
Interest Period applicable thereto, and (ii) if any Borrowing Request requests a
Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 2.13.    Increased Costs. (a) If any Change in Law shall:

(i)impose, modify or deem applicable any reserve, special deposit, liquidity or
similar requirement (including any compulsory loan requirement, insurance charge
or other assessment) against assets of, deposits with or for the account of, or
credit extended by, the Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate); or

(ii)impose on the Lender or the London interbank market any other condition,
cost or expense (other than Taxes) affecting this Agreement or Loans made by the
Lender or any Letter of Credit; or

(iii)subject the Lender 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, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to the
Lender of making, continuing, converting into or maintaining any Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to the
Lender of issuing or maintaining any Letter of Credit or to reduce the amount of
any sum received or receivable by the Lender hereunder (whether of principal,
interest or otherwise), then the Borrower will pay to the Lender such additional
amount or amounts as will compensate the Lender for such additional costs
incurred or reduction suffered.
(b)If the Lender determines that any Change in Law regarding capital or
liquidity requirements has or would have the effect of reducing the rate of
return on the Lender’s capital or on the capital of the Lender’s holding company
as a consequence of this Agreement, the Commitment of or the

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Loans made by Letters of Credit issued by the Lender to a level below that which
the Lender or the Lender’s holding company could have achieved but for such
Change in Law (taking into consideration the Lender’s policies and the policies
of the Lender’s holding company with respect to capital adequacy and liquidity),
then from time to time the Borrower will pay to the Lender such additional
amount or amounts as will compensate the Lender or the Lender’s holding company
for any such reduction suffered.

(c)A certificate of the Lender setting forth the amount or amounts necessary to
compensate the Lender or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay the Lender the
amount shown as due on any such certificate within ten (10) days after receipt
thereof.

(d)Failure or delay on the part of the Lender to demand compensation pursuant to
this Section shall not constitute a waiver of the Lender’s right to demand such
compensation; provided that the Borrower shall not be required to compensate the
Lender pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that the Lender notifies the Borrower of
the Change in Law giving rise to such increased costs or reductions and of the
Lender’s intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 270-day period referred to above shall be extended to include the
period of retroactive effect thereof.

SECTION 2.14.    Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default or as a
result of any prepayment pursuant to Section 2.09), (b) the conversion of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, or (c) the failure to borrow, convert, continue or prepay any
Eurodollar Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.07(c) and is
revoked in accordance therewith), then, in any such event, the Borrower shall
compensate the Lender for the loss, cost and expense attributable to such event.
In the case of a Eurodollar Loan, such loss, cost or expense to the Lender shall
be deemed to include an amount determined by the Lender to be the excess, if
any, of (i) the amount of interest which would have accrued on the principal
amount of such Eurodollar Loan had such event not occurred, at the Adjusted LIBO
Rate that would have been applicable to such Eurodollar Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Eurodollar Loan), over
(ii) the amount of interest which would accrue on such principal amount for such
period at the interest rate which the Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of the Lender
setting forth any amount or amounts that the Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay the Lender the amount
shown as due on any such certificate within ten (10) days after receipt thereof.

SECTION 2.15.    Taxes.

(a)Withholding Taxes; Gross-Up; Payments Free of Taxes. 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 law. If any applicable law (as determined in the good faith
discretion of an applicable withholding agent) requires the deduction or
withholding of any Tax from any such payment by a withholding agent, then the
applicable withholding agent shall be

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entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the Borrower shall be increased as necessary so that after such deduction or
withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section 2.15), the Lender receives an
amount equal to the sum it would have received had no such deduction or
withholding been made.

(b)Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the
relevant Governmental Authority in accordance with applicable law, or at the
option of the Lender, timely reimburse it for, Other Taxes.

(c)Evidence of Payment. As soon as practicable after any payment of Taxes by the
Borrower to a Governmental Authority pursuant to this Section 2.15, the Borrower
shall deliver to the Lender the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment, or other evidence of such payment reasonably
satisfactory to the Lender.

(d)Indemnification by the Borrower. The Borrower shall indemnify the Lender,
within ten (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) payable or paid by the
Lender or required to be withheld or deducted from a payment to the Lender 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 the Lender shall be conclusive absent
manifest error.

(e)Treatment of Certain Refunds. If the Lender determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.15 (including by
the payment of additional amounts pursuant to this Section 2.15), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section 2.15 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
of the Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund). Such indemnifying party,
upon the request of the Lender, shall repay to the Lender the amount paid to the
Lender (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) in the event the Lender is required to repay such refund
to such Governmental Authority. Notwithstanding anything to the contrary in this
paragraph (e), in no event will the Lender be required to pay any amount to any
indemnifying party pursuant to this paragraph (e), the payment of which would
place the Lender in a less favorable net after-Tax position than the Lender
would have been in if the Tax subject to indemnification and giving rise to such
refund had not been deducted, withheld or otherwise imposed and the
indemnification payments or additional amounts giving rise to such refund had
never been paid. This paragraph (e) shall not be construed to require the Lender
to make available its Tax returns (or any other information relating to its
Taxes that it deems confidential) to the indemnifying party or any other Person.

(f)Survival. Each party’s obligations under this Section 2.15 shall survive the
resignation or replacement of the Lender or any assignment of rights by, or the
replacement of, the Lender, the termination of the Commitment and the repayment,
satisfaction or discharge of all obligations under any Loan Document.

(g)Status of Lenders.

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(i)Any Lender that is entitled to an exemption from or reduction of U.S. federal
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower, at the time or times reasonably requested by the
Borrower, such properly completed and executed documentation reasonably
requested by the Borrower 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, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Borrower as will
enable the Borrower 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
Section 2.15(g)(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, in the event that the
Borrower is a U.S. Borrower,

(A)any Lender that is a U.S. Person shall deliver to the Borrower 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), executed
copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal
backup withholding tax;

(B)any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower (in such number of copies as shall be requested by the
Borrower) 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), whichever of the following is applicable:

(1) 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 IRS
Form W-8BEN-E, or applicable successor form, 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 IRS Form W-8BEN-E, or applicable successor
form, 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;
(2) executed copies of IRS Form W-8ECI;
(3) 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 in the
form as reasonably determined by the Borrower 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

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Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form
W-8BEN, or IRS Form W-8BEN-E, or applicable successor form; or
(4) 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 IRS Form
W-8BEN-E, or applicable successor form, a U.S. Tax Compliance Certificate in the
form as reasonably determined by the Borrower, 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 in the form as
reasonably determined by the Borrower, 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 (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), 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 to
determine the withholding or deduction required to be made; and

(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 at the time or times prescribed by law and at such
time or times reasonably requested by the Borrower 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 as
may be necessary for the Borrower to comply with its 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 date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower in writing of its legal
inability to do so.
(h)Defined Terms. For purposes of this Section 2.15, the term “applicable law”
includes FATCA.

SECTION 2.16.    Payments Generally; Allocation of Proceeds.

(a)The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Sections 2.13, 2.14 or 2.15, or otherwise) prior to
2:00 p.m., Pacific time, on the date when due, in immediately available funds,
without set‑off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Lender, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Lender at its offices at 10

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South Dearborn Street, Chicago, IL 60603. If any payment hereunder shall be due
on a day that is not a Business Day, the date for payment shall be extended to
the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder shall be made in dollars.

(b)At the election of the Lender, all payments of principal, interest, LC
Disbursements, fees, premiums, reimbursable expenses (including, without
limitation, all reimbursement for fees, costs and expenses pursuant to Section
8.03), and other sums payable under the Loan Documents, may be paid from the
proceeds of Borrowings made hereunder, whether made following a request by the
Borrower pursuant to Section 2.03 or a deemed request as provided in this
Section or may be deducted from any deposit account of the Borrower maintained
with the Lender. The Borrower hereby irrevocably authorizes the Lender to make a
Borrowing for the purpose of paying each payment of principal, interest and fees
as it becomes due hereunder or any other amount due under the Loan Documents and
agrees that all such amounts charged shall constitute Loans, and that all such
Borrowings shall be deemed to have been requested pursuant to Section 2.03.

(c)The Lender may from time to time provide the Borrower with account statements
or invoices with respect to any of the Obligations (the “Statements”). The
Lender is under no duty or obligation to provide Statements, which, if provided,
will be solely for the Borrower’s convenience. Statements may contain estimates
of the amounts owed during the relevant billing period, whether of principal,
interest, fees or other Obligations. If the Borrower pays the full amount
indicated on a Statement on or before the due date indicated on such Statement,
the Borrower shall not be in default of payment with respect to the billing
period indicated on such Statement; provided, that acceptance by the Lender of
any payment that is less than the total amount actually due at that time
(including but not limited to any past due amounts) shall not constitute a
waiver of the Lender’s right to receive payment in full at another time.

SECTION 2.17.    Indemnity for Returned Payments. If after receipt of any
payment which is applied to the payment of all or any part of the Obligations
(including a payment effected through exercise of a right of setoff), the Lender
is for any reason compelled to surrender such payment or proceeds to any Person
because such payment or application of proceeds is invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
impermissible setoff, or a diversion of trust funds, or for any other reason
(including pursuant to any settlement entered into by the Lender in its
discretion), then the Obligations or part thereof intended to be satisfied shall
be revived and continued and this Agreement shall continue in full force as if
such payment or proceeds had not been received by the Lender. The provisions of
this Section 2.17 shall be and remain effective notwithstanding any contrary
action which may have been taken by the Lender in reliance upon such payment or
application of proceeds. The provisions of this Section 2.17 shall survive the
termination of this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lender that (and where applicable,
agrees):
SECTION 3.01.    Organization; Powers. The Borrower and each Subsidiary is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse

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Effect, is qualified to do business in, and is in good standing in, every
juris-diction where such qualification is required.

SECTION 3.02.    Authorization; Enforceability. The Transactions are within the
Borrower’s organizational powers and have been duly authorized by all necessary
organizational actions and, if required, actions by equity holders. Each Loan
Document has been duly executed and delivered by the Borrower and constitutes a
legal, valid and binding obligation of the Borrower, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.

SECTION 3.03.    Governmental Approvals; No Conflicts. The Transactions (a) do
not require Regulatory Approval or any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect, (b) will not
violate any Requirement of Law applicable to the Borrower or any Subsidiary, (c)
will not violate or result in a default under any Material Agreement binding
upon the Borrower or any Subsidiary or the assets of the Borrower or any
Subsidiary, or give rise to a right thereunder to require any payment to be made
by the Borrower or any Subsidiary, and (d) will not result in the creation or
imposition of any Lien on any asset of the Borrower or any Subsidiary.

SECTION 3.04.    Financial Condition; No Material Adverse Change.

(a)The Borrower has heretofore furnished to the Lender the consolidated balance
sheet and statements of income, stockholders equity and cash flows of Holdco (i)
as of and for the fiscal year ended 2015, reported on by KPMG, independent
public accountants, (ii) as of and for the fiscal quarter and the portion of the
fiscal year ended March 31, 2016, certified by a Financial Officer. The Borrower
has heretofore furnished to the Lender the consolidating balance sheet and
statements of income, stockholders equity and cash flows of Holdco as of and for
the fiscal year ended 2015 and as of and for the fiscal quarter and the portion
of the fiscal year ended March 31, 2016, in each case, certified by a Financial
Officer. Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of Holdco and its
consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP, subject to normal year‑end audit adjustments all of which, when taken
as a whole, would not be materially adverse and the absence of footnotes in the
case of the statements referred to in clause (ii) above.

(b)No event, change or condition has occurred that has had, or could reasonably
be expected to have, a Material Adverse Effect, since December 31, 2015.

SECTION 3.05.    Properties.

(a)Each material lease and sublease of Borrower and each of its Subsidiaries is
valid and enforceable in accordance with its terms and is in full force and
effect, and no default by any party to any such lease or sublease exists. The
Borrower and each of its Subsidiaries have good and indefeasible title to, or
valid leasehold interests in, all of their real and personal property that is
necessary to conduct their business, and such property is free of all Liens
other than those permitted by Section 6.02.

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(b)The Borrower and each Subsidiary owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property necessary to its
business as currently conducted, and the use thereof by the Borrower and each
Subsidiary does not infringe in any material respect upon the rights of any
other Person, and, other than with respect to software licenses, the Borrower’s
and each Subsidiary’s rights thereto are not subject to any licensing agreement
or similar arrangement.

SECTION 3.06.    Litigation and Environmental Matters.

(a)There are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any Subsidiary (i) as to which
there is a reasonable possi-bility of an adverse determination and that, if
adversely deter-mined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters set forth on Schedule 3.06) or (ii) that involve any Loan Document or
the Transactions.

(b)Except for the Disclosed Matters, (i) neither the Borrower nor any Subsidiary
has received notice of any claim with respect to any Environmental Liability or
knows of any basis for any Environmental Liability that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and (ii) and except with respect to any other matters that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither the Borrower nor any Subsidiary (A) has failed to comply with
any Environmental Law or to obtain, maintain or comply with any permit, license
or other approval required under any Environmental Law (B) has become subject to
any Environmental Liability, (C) has received notice of any claim with respect
to any Environmental Liability or (D) knows of any basis for any Environmental
Liability.

(c)Since the date of this Agreement, there has been no change in the status of
the Disclosed Matters that, individually or in the aggregate, has resulted in,
or materially increased the likelihood of, a Material Adverse Effect.

SECTION 3.07.    Compliance with Laws and Agreements; No Default. Except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, the Borrower and each
Subsidiary is in compliance with (i) all Requirements of Law applicable to it or
its property and (ii) all indentures, agreements and other instruments binding
upon it or its property. No Default has occurred and is continuing.

SECTION 3.08.    Investment Company Status. Neither the Borrower nor any
Subsidiary is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.

SECTION 3.09.    Taxes. The Borrower and each Subsidiary has timely filed or
caused to be filed all Tax returns and reports required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate proceedings and
for which the Borrower or such Subsidiary, as applicable, has set aside on its
books adequate reserves or (b) to the extent that the failure to do so could not
be expected to result in a Material Adverse Effect. No tax liens have been filed
and no claims are being asserted with respect to any such taxes.

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SECTION 3.10.    ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. No Plan is, or is reasonably expected to
become, an “at-risk” plan within the meaning of Section 430 of the Code or
Section 303 of ERISA.

SECTION 3.11.    Disclosure. The Borrower has disclosed to the Lender all
agreements, instruments and corporate or other restrictions to which the
Borrower or any Subsidiary is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information furnished by or on behalf of the Borrower or any Subsidiary
to the Lender in connection with the negotiation of this Agreement or any other
Loan Document (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, the Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time delivered and, if such projected financial information
was delivered prior to the Effective Date, as of the Effective Date.

SECTION 3.12.    Material Agreements. All Material Agreements to which the
Borrower or any Subsidiary is a party or is bound as of the date of this
Agreement are listed on Schedule 3.12. Neither the Borrower nor any Subsidiary
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Material Agreement to
which it is a party.

SECTION 3.13.    Solvency. (a) Immediately after the consummation of the
Transactions to occur on the Effective Date, (i) the fair value of the assets of
the Borrower, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (ii) the present fair saleable value of
the property of the Borrower will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) the Borrower will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) Borrower will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted after
the Effective Date.

(b)    The Borrower does not intend to, nor will it permit any Subsidiary to,
and the Borrower does not believe that it or any Subsidiary will, incur debts
beyond its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by it or any such Subsidiary and
the timing of the amounts of cash to be payable on or in respect of its
Indebtedness or the Indebtedness of any such Subsidiary.
SECTION 3.14.    Insurance. As of the Effective Date, all premiums in respect of
the Borrower’s and its Subsidiaries’ insurance have been paid. The Borrower
believes that the insurance maintained by or on behalf of the Borrower and its
Subsidiaries is adequate and is customary for companies engaged in the same or
similar businesses operating in the same or similar locations.

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SECTION 3.15.    Capitalization and Subsidiaries. As of the Effective Date,
Schedule 3.15 sets forth (a) a correct and complete list of the name and
relationship to the Borrower of each Subsidiary, (b) a true and complete listing
of each class of each of the Borrower’s authorized Equity Interests, of which
all of such issued Equity Interests are validly issued, outstanding, fully paid
and non-assessable, and owned beneficially and of record by the Persons
identified on Schedule 3.15, and (c) the type of entity of the Borrower and each
Subsidiary. All of the issued and outstanding Equity Interests owned by the
Borrower have been (to the extent such concepts are relevant with respect to
such ownership interests) duly authorized and issued and are fully paid and
non-assessable.

SECTION 3.16.    Employment Matters. As of the Effective Date, there are no
strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending
or, to the knowledge of the Borrower, threatened. The hours worked by and
payments made to employees of the Borrower and its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable federal,
state, local or foreign law dealing with such matters. All payments due from the
Borrower or any Subsidiary, or for which any claim may be made against the
Borrower or any Subsidiary, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of the Borrower or such Subsidiary.

SECTION 3.17.    Federal Reserve Regulations. No part of the proceeds of any
Loan or Letter of Credit has been used or will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations T, U and X.

SECTION 3.18.    Use of Proceeds. The proceeds of the Loans have been used and
will be used, whether directly or indirectly as set forth in Section 5.08.

SECTION 3.19.    No Burdensome Restrictions. The Borrower is not subject to any
Burdensome Restrictions except Burdensome Restrictions permitted under Section
6.10.

SECTION 3.20.    Anti-Corruption Laws and Sanctions. The Borrower has
implemented and maintains in effect policies and procedures designed to ensure
compliance by the Borrower, its Subsidiaries and their respective directors,
officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions, and the Borrower, its Subsidiaries and their respective officers and
employees and to the knowledge of the Borrower its directors and agents, are in
compliance with Anti-Corruption Laws and applicable Sanctions in all material
respects. None of (a) the Borrower, any Subsidiary or any of their respective
directors, officers or employees, or (b) to the knowledge of any the Borrower or
Subsidiary, any agent of the Borrower or any Subsidiary that will act in any
capacity in connection with or benefit from the credit facility established
hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of
proceeds, Transaction or other transaction contemplated by this Agreement or the
other Loan Documents will violate Anti-Corruption Laws or applicable Sanctions.

ARTICLE IV

CONDITIONS

SECTION 4.01.    Effective Date. The obligations of the Lender to make the
initial Loans and to issue the initial Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 8.02):

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(a)Credit Agreement and Loan Documents. The Lender (or its counsel) shall have
received (i) from each party hereto either (A) a counterpart of this Agreement
signed on behalf of such party or (B) written evidence satisfactory to the
Lender (which may include fax or other electronic transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement and (ii) duly executed copies of the Loan Documents and such
other certificates, documents, instruments and agreements as the Lender shall
reasonably request in connection with the transactions contemplated by this
Agreement and the other Loan Documents.

(b)Financial Statements and Projections. The Lender shall have received (i)
audited consolidated financial statements of Holdco for the 2015 fiscal year,
(ii) unaudited interim consolidated financial statements of Holdco for each
fiscal quarter ended after the date of the latest applicable financial
statements delivered pursuant to clause (i) of this paragraph as to which such
financial statements are available, and such financial statements shall not, in
the reasonable judgment of the Lender, reflect any material adverse change in
the consolidated financial condition of Holdco, as reflected in the audited,
consolidated financial statements described in clause (i) of this paragraph and
(iii) satisfactory Projections through December 31, 2016.

(c)Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates. The Lender shall have received (i) a certificate of the Borrower,
dated the Effective Date and executed by its Secretary or Assistant Secretary,
which shall (A) certify the resolutions of its Board of Directors, members or
other body authorizing the execution, delivery and performance of the Loan
Documents to which it is a party, (B) identify by name and title and bear the
signatures of the officers of the Borrower authorized to sign the Loan Documents
to which it is a party and its Financial Officers, and (C) contain appropriate
attachments, including the charter, articles or certificate of organization or
incorporation of the Borrower certified by the relevant authority of the
jurisdiction of organization of the Borrower and a true and correct copy of its
bylaws or operating, management or partnership agreement, or other
organizational or governing documents, and (ii) a long form good standing
certificate for the Borrower from its jurisdiction of organization.

(d)No Default Certificate. The Lender shall have received a certificate, signed
by a Financial Officer of the Borrower, dated as of the Effective Date (i)
stating that no Default has occurred and is continuing, (ii) stating that the
representations and warranties contained in the Loan Documents are true and
correct as of such date, (iii) certifying as to the Borrower’s current Credit
Rating, and (iv) certifying as to any other factual matters as may be reasonably
requested by the Lender.

(e)Fees. The Lender shall have received all fees required to be paid, and all
expenses required to be reimbursed for which invoices have been presented
(including the reasonable fees and expenses of legal counsel), on or before the
Effective Date. All such amounts will be paid with proceeds of Loans made on the
Effective Date and will be reflected in the funding instructions given by the
Borrower to the Lender on or before the Effective Date.

(f)Lien Searches. The Lender shall have received the results of a recent lien
search in the jurisdiction of organization of the Borrower and each jurisdiction
where assets of the Borrower are located, and such search shall reveal no Liens
on any of the assets of the Borrower except for liens permitted by Section 6.02
or discharged on or prior to the Effective Date pursuant to a pay-off letter or
other documentation satisfactory to the Lender.

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(g)Commitment Reduction. The Lender shall have received satisfactory evidence
that the commitments and outstandings under the Borrower’s existing credit
facility with Wells Fargo Bank, N.A. (the “Wells Facility”) has been permanently
reduced to an amount not greater than $3,200,000 effective as of the Effective
Date.

(h)Funding Account. The Lender shall have received a notice setting forth the
deposit account of the Borrower (the “Funding Account”) to which the Lender is
authorized by the Borrower to transfer the proceeds of any Borrowings requested
or authorized pursuant to this Agreement.

(i)Solvency. The Lender shall have received a solvency certificate signed by a
Financial Officer dated the Effective Date in form and substance reasonably
satisfactory to the Lender.

(j)Insurance. The Lender shall have received evidence of insurance coverage in
form, scope, and substance reasonably satisfactory to the Lender and otherwise
in compliance with the terms of Section 5.10 of this Agreement.

(k) Letter of Credit Application. The Lender shall have received a properly
completed letter of credit application (whether standalone or pursuant to a
master agreement, as applicable) if the issuance of a Letter of Credit will be
required on the Effective Date.

(l)Legal Due Diligence. The Lender and its counsel shall have completed all
legal due diligence, the results of which shall be satisfactory to Lender in its
sole discretion.

(m) USA PATRIOT Act, Etc. The Lender shall have received all documentation and
other information required by bank regulatory authorities under applicable “know
your customer” and anti-money laundering rules and regulations, including USA
PATRIOT Act, and a properly completed and signed IRS Form W-8 or W-9, as
applicable, for the Borrower.

(n)Other Documents. The Lender shall have received such other documents as the
Lender or its counsel may have reasonably requested.

The Lender shall notify the Borrower of the Effective Date, and such notice
shall be conclusive and binding.
SECTION 4.02.    Each Credit Event. The obligation of the Lender to make a Loan
on the occasion of any Borrowing, and to issue, amend, renew or extend any
Letter of Credit, is subject to the satisfaction of the following conditions:

(a)The representations and warranties of the Borrower set forth in the Loan
Documents shall be true and correct in all material respects with the same
effect as though made on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects only as of such specified date, and that
any representation or warranty which is subject to any materiality qualifier
shall be required to be true and correct in all respects).

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(b)At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

(c)No event shall have occurred and no condition shall exist which has or could
be reasonably expected to have a Material Adverse Effect.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b)
and (c) of this Section.

ARTICLE V

AFFIRMATIVE COVENANTS

Until the Commitment shall have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated, in each case
without any pending draw, and all LC Disbursements shall have been reimbursed,
the Borrower covenants and agrees with the Lender that:
SECTION 5.01.    Financial Statements; Other Information. The Borrower will
furnish to the Lender:

(a)within 100 days after the end of each fiscal year of Holdco, (i) its audited
consolidated balance sheet and related income statement, stockholders’ equity
and cash flows, as of the end of and for such year, setting forth in each case
in comparative form the figures for the previous fiscal year, all reported on by
independent public accountants of recognized national standing (without a “going
concern” or like qualification, commentary or exception, and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of Holdco and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, accompanied by any management letter prepared by said accountants and
(ii) its unaudited consolidating balance sheet and related income statement,
stockholders’ equity and cash flows, all certified by a Financial Officer to the
effect that such consolidating financial statements present fairly in all
material respects the financial condition and results of operations of Holdco
and its consolidated Subsidiaries in accordance with GAAP consistently applied.

(b)within 60 days after the end of each of the first three fiscal quarters of
Holdco, its consolidated and consolidating balance sheet and related income
statement, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of such fiscal year, setting forth
in each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by a Financial Officer as presenting fairly in all
material respects the financial condition and results of operations of Holdco
and its consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;

(c)concurrently with any delivery of financial statements under clause (a) or
(b)  above (collectively or individually, as the context requires, the
“Financial Statements”), a certificate of a Financial Officer in substantially
the form of Exhibit B (i) certifying, in the case of the Financial Statements
delivered under clause (b)  above, as presenting fairly in all material respects
the financial condition and results of

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operations of Holdco and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes, (ii) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto,
(iii) setting forth reasonably detailed calculations demonstrating compliance
with Section 6.12 and (iv) stating whether any change in GAAP or in the
application thereof has occurred since the date of the audited financial
statements referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the Financial Statements accompanying
such certificate;

(d)as soon as available, but in any event no later than 100 days after the end
of each fiscal year of Holdco, a copy of the plan and forecast (including a
projected consolidated and consolidating balance sheet, income statement and
cash flow statement) of the Borrower and its Subsidiaries for each month of the
upcoming fiscal year (the “Projections”) in form reasonably satisfactory to the
Lender;

(e)promptly after the same become publicly available, copies of all periodic and
other material reports, proxy statements and other materials filed by Holdco,
the Borrower or any Subsidiary with the SEC, or any Governmental Authority
succeeding to any or all of the functions of the SEC, or with any national
securities exchange, or distributed by the Borrower to its share-holders
generally, as the case may be;
(f)promptly following any request therefor, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of this Agreement, as the Lender may
reasonably request;

(g)promptly thereafter, any announcement by S&P of any change or possible change
in a Credit Rating or any announcement by Moody’s or S&P of a new Credit Rating;
and

(h)promptly after any request therefor by the Lender, copies of (i) any
documents described in Section 101(k)(1) of ERISA that the Borrower or any ERISA
Affiliate may request with respect to any Multiemployer Plan and (ii) any
notices described in Section 101(l)(1) of ERISA that the Borrower or any ERISA
Affiliate may request with respect to any Multiemployer Plan; provided that if
the Borrower or any ERISA Affiliate has not requested such documents or notices
from the administrator or sponsor of the applicable Multiemployer Plan, the
Borrower or the applicable ERISA Affiliate shall promptly make a request for
such documents and notices from such administrator or sponsor and shall provide
copies of such documents and notices promptly after receipt thereof.

Documents required to be delivered pursuant to Section 5.01 may be delivered by
electronic mail and documents required to be delivered pursuant to Sections
5.01(e) and (h) shall be deemed to have been delivered if Borrower has timely
filed such items with the SEC on the SEC’s Electronic Data Gathering, Analysis
and Retrieval System or any successor SEC electronic filing system for such
purposes.
SECTION 5.02.    Notices of Material Events. The Borrower will furnish to the
Lender prompt (but in any event within any time period that may be specified
below) written notice of the following:

(a)the occurrence of any Default;

(b)receipt of any notice of any investigation by a Governmental Authority or any
litigation or proceeding commenced or threatened against the Borrower or any
Subsidiary that (i) seeks

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damages in excess of $5,000,000, (ii) seeks injunctive relief, (iii) is asserted
or instituted against any Plan, its fiduciaries or its assets, (iv) alleges
criminal misconduct by the Borrower or any Subsidiary, (v) alleges the violation
of, or seeks to impose remedies under any Environmental Law or related
Requirement of Law, or seeks to impose Environmental Liability, in each case
where such violation, remedy or liability could reasonably be expected to result
in a Material Adverse Effect, or (vi) asserts liability on the part of the
Borrower or any Subsidiary in excess of $5,000,000 in respect of any tax, fee,
assessment, or other governmental charge;

(c)the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$5,000,000; and

(d)any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03.    Existence; Conduct of Business. The Borrower will, and will
cause each Subsidiary to, (a) do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, qualifications, licenses, permits, franchises, governmental
authorizations, intellectual property rights, licenses and permits material to
the conduct of its business, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted; provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03 and (b) carry on and conduct its
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted.

SECTION 5.04.    Payment of Obligations. The Borrower will, and will cause each
Subsidiary to, pay or discharge all Material Indebtedness and all other material
liabilities and obligations, including Taxes, before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropri-ate proceedings, (b) the Borrower has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect; provided,
however, that the Borrower will, and will cause each Subsidiary to, remit all
Taxes to appropriate Governmental Authorities as and when claimed to be due,
notwithstanding the foregoing exceptions.

SECTION 5.05.    Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, keep and maintain all property material to the conduct of
its business in good working order and condition, ordinary wear and tear
excepted.

SECTION 5.06.    Books and Records; Inspection Rights. The Borrower will, and
will cause each Subsidiary to, (a) keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities and (b) permit any representatives
designated by the Lender (including employees of the Lender or any consultants,
accountants, lawyers, and agents retained by the Lender), upon reasonable prior
notice, to visit and inspect its properties, conduct at the Borrower’s premises
inspections of the Borrower’s and its Subsidiaries’ books

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and records, including examining and making extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably
requested.

SECTION 5.07.    Compliance with Laws and Material Contractual Obligations.

(a)The Borrower will, and will cause each Subsidiary to, (i) comply with each
Requirement of Law applicable to it or its property (including, without
limitation, Environmental Laws) and (ii) perform in all material respects its
obligations under the Material Agreements to which it is a party. The Borrower
will maintain in effect and enforce policies and procedures designed to ensure
compliance by the Borrower, its Subsidiaries and their respective directors,
officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions.

(b)Except as provided in clause (c) below, the Borrower and each Subsidiary
shall not petition, request or take any legal or administrative action that
seeks to amend, supplement or modify any Regulatory Approval in any material
respect unless such amendment, supplement or modification could not reasonably
be expected to result in a Material Adverse Effect. The Borrower shall promptly
upon receipt by it or any Subsidiary or upon publication furnish to the Lender a
copy (certified by an Authorized Officer of the Borrower) of each amendment,
supplement or modification to any such Regulatory Approval.

(c)If any Impairment shall occur of any Regulatory Approval which could
reasonably be expected to result in a Material Adverse Effect, then the Borrower
shall or shall cause such Subsidiary to either (i) promptly and diligently apply
for and use commercially reasonable efforts to obtain a replacement Regulatory
Approval on terms and conditions that are in all material respects the same as
those of such Impaired Regulatory Approval or (ii) take such lawful action as
shall be necessary to prevent such Impairment from becoming final and
non-appealable or otherwise irrevocable, to postpone the effectiveness of such
Impairment and to cause such Impairment to be revoked or amended or modified so
as to eliminate the reasonable possibility of such Material Adverse Effect.

SECTION 5.08.    Use of Proceeds.

(a)Credit will be used only for refinancing existing debt, working capital and
general corporate purposes. No part of the proceeds of any Loan and no Letter of
Credit will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board, including
Regulations T, U and X.

(b)The Borrower will not request any Borrowing or Letter of Credit, and the
Borrower shall not use, and shall procure that its Subsidiaries and its or their
respective directors, officers, employees and agents shall not use, the proceeds
of any Borrowing or Letter of Credit (a) in furtherance of an offer, payment,
promise to pay, or authorization of the payment or giving of money, or anything
else of value, to any Person in violation of any Anti-Corruption Laws, (b) for
the purpose of funding, financing or facilitating any activities, business or
transaction of or with any Sanctioned Person, or in any Sanctioned Country, or
(c) in any manner that would result in the violation of any Sanctions applicable
to any party hereto.

SECTION 5.09.    Accuracy of Information. The Borrower will ensure that any
information, including financial statements or other documents, furnished to the
Lender in connection with this Agreement or any other Loan Document or any
amendment or modification hereof or thereof or waiver

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hereunder or thereunder contains no material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and the
furnishing of such information shall be deemed to be a representation and
warranty by the Borrower on the date thereof as to the matters specified in this
Section 5.09; provided that, with respect to the Projections, the Borrower will
cause the Projections to be prepared in good faith based upon assumptions
believed to be reasonable at the time.

SECTION 5.10.    Insurance. The Borrower will, and will cause each Subsidiary
to, maintain with financially sound and reputable carriers having a financial
strength rating of at least A- by A.M. Best Company insurance in such amounts
(with no greater risk retention) and against such risks (including, without
limitation, loss or damage by fire; theft, burglary, pilferage, larceny,
embezzlement, and other criminal activities; business interruption; and general
liability) and such other hazards, as is customarily maintained by companies of
established repute engaged in the same or similar businesses operating in the
same or similar locations. The Borrower will furnish to the Lender information
in reasonable detail as to the insurance so maintained.

SECTION 5.11.    Material Licenses and Permits. The Borrower and its
Subsidiaries shall maintain each license, permit or franchise issued by a
Governmental Authority necessary for the conduct of its business except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.

SECTION 5.12.    Depository Banks. From and after December 31, 2016, the
Borrower and each Subsidiary will maintain the Lender as its principal
depository bank, including for the maintenance of operating, administrative,
cash management, collection activity, and other deposit accounts for the conduct
of its business.

SECTION 5.13.    Further Assurances. Without limiting the foregoing, the
Borrower will, and will cause each Subsidiary to, execute and deliver, or cause
to be executed and delivered, to the Lender such documents, agreements and
instruments, and will take or cause to be taken such further actions, which may
be required by any Requirement of Law or which the Lender may, from time to
time, reasonably request to carry out the terms and conditions of this Agreement
and the other Loan Documents, all at the expense of the Borrower.

ARTICLE VI

NEGATIVE COVENANTS

Until the Commitment shall have expired or been terminated and the principal of
and interest on each Loan and all fees, expenses and other amounts payable under
any Loan Document shall have been paid in full and all Letters of Credit shall
have expired or terminated, in each case without any pending draw, and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lender that:
SECTION 6.01.    Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, assume or suffer to exist any Indebtedness,
except:

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(a)the Obligations hereunder and any other Indebtedness incurred by the Borrower
or any Subsidiary that is owing to the Lender;

(b)Indebtedness existing on the date hereof and set forth in Schedule 6.01 and
any extensions, renewals, refinancings and replacements of any such Indebtedness
in accordance with clause (f) hereof;
(c)unsecured Indebtedness consisting of Permitted Intercompany Advances;

(d)Guarantees by the Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Borrower or any other Subsidiary, provided
that the Indebtedness so Guaranteed is permitted by this Section 6.01;

(e)Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets (whether
or not constituting purchase money Indebtedness), including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition of
any such assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of any such Indebtedness in
accordance with clause (f) below; provided that (i) such Indebtedness is
incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (e) together with any Refinance
Indebtedness in respect thereof permitted by clause (f) below, shall not exceed
$10,000,000 at any time outstanding;

(f)Indebtedness which represents extensions, renewals, refinancing or
replacements (such Indebtedness being so extended, renewed, refinanced or
replaced being referred to herein as the “Refinance Indebtedness”) of any of the
Indebtedness described in clauses (b) and (e), (i) and (q) hereof (such
Indebtedness being referred to herein as the “Original Indebtedness”); provided
that (i) such Refinance Indebtedness does not increase the principal amount or
interest rate of the Original Indebtedness, (ii) any Liens securing such
Refinance Indebtedness are not extended to any additional property of the
Borrower or any Subsidiary, (iii) neither the Borrower nor any Subsidiary that
is not originally obligated with respect to repayment of such Original
Indebtedness is required to become obligated with respect to such Refinance
Indebtedness, (iv) such Refinance Indebtedness does not result in a shortening
of the average weighted maturity of such Original Indebtedness, (v) the terms of
such Refinance Indebtedness are not less favorable to the obligor thereunder
than the original terms of such Original Indebtedness and (vi) if such Original
Indebtedness was subordinated in right of payment to the Obligations, then the
terms and conditions of such Refinance Indebtedness must include subordination
terms and conditions that are at least as favorable to the Lender as those that
were applicable to such Original Indebtedness;

(g)Indebtedness owed to any Person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business;

(h)Indebtedness of the Borrower in respect of performance bonds, bid bonds,
appeal bonds, surety bonds and similar obligations, in each case provided in the
ordinary course of business;

(i)issuances of unsecured Indebtedness; provided that (i) the maturity of such
Indebtedness must be at least six months after the Maturity Date; (ii) no
Default shall have occurred both before and after giving effect to such
Indebtedness; (iii) the Borrower and its Subsidiaries are in pro forma

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compliance with each covenant set forth in Section 6.12 for the fiscal quarter
then last ended for which financial statements have been delivered to Lender (as
though such new issuance of Indebtedness was incurred as of the last day of such
fiscal quarter); and (iv) the aggregate amount of Indebtedness incurred pursuant
to this clause (i) (together with all such Indebtedness incurred under Section
6.01(i) of the Holdco Credit Agreement and under Section 6.01(i) of the SJWTX
Credit Agreement) shall not exceed $400,000,000;

(j)endorsement of instruments or other payment items for deposit;

(k)the incurrence by Borrower or its Subsidiaries of Indebtedness under Swap
Agreements that are incurred for the bona fide purpose of hedging the interest
rate, commodity, or foreign currency risks associated with Borrower’s and its
Subsidiaries’ operations and not for speculative purposes;

(l)Indebtedness incurred in respect of Bank Products other than pursuant to Swap
Agreements;

(m) Indebtedness owed to any Person providing property, casualty, liability, or
other insurance to Borrower or any of its Subsidiaries, so long as the amount of
such Indebtedness is not in excess of the amount of the unpaid cost of, and
shall be incurred only to defer the cost of, such insurance for the year in
which such Indebtedness is incurred and such Indebtedness is outstanding only
during such year;

(n)unsecured Indebtedness of Borrower or any of its Subsidiaries that is
incurred on the date of the consummation of a Permitted Acquisition solely for
the purpose of consummating such Permitted Acquisition so long as (i) no Event
of Default has occurred and is continuing or would immediately thereafter result
therefrom, and (ii) such unsecured Indebtedness is not incurred for working
capital purposes (in each case of the foregoing, solely to the extent that,
together with all other Indebtedness and liabilities incurred or assumed in
connection with such Permitted Acquisition, the amount of such Indebtedness
would not violate clause (e) of the definition of Permitted Acquisition);

(o)contingent liabilities in respect of any indemnification obligation,
adjustment of purchase price, non-compete, or similar obligations of Borrower or
any of its Subsidiaries incurred in connection with the consummation of one or
more Permitted Acquisitions (in each case of the foregoing, solely to the extent
that, together with all other Indebtedness and liabilities incurred or assumed
in connection with such Permitted Acquisition, the amount of such Indebtedness
would not violate clause (e) of the definition of Permitted Acquisition);

(p)Acquired Indebtedness (solely to the extent that, together with all other
Indebtedness and liabilities incurred or assumed in connection with such
Permitted Acquisition, the amount of such Indebtedness would not violate clause
(e) of the definition of Permitted Acquisition);

(q)Indebtedness secured by real property of the Borrower in an aggregate amount
not to exceed $50,000,000 at any time outstanding; and

(r)other unsecured Indebtedness in an aggregate principal amount not exceeding
$5,000,000 at any time outstanding.

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SECTION 6.02.    Liens. The Borrower will not, nor will it permit any Subsidiary
to, create, incur, assume or permit to exist any Lien on any property or asset
now owned or hereafter acquired by it, or assign or sell any income or revenues
or rights in respect of any thereof, except:

(a)Permitted Encumbrances;

(b)any Lien on any property or asset of the Borrower or any Subsidiary existing
on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien
shall not apply to any other property or asset of the Borrower or any Subsidiary
and (ii) such Lien shall secure only those obligations which it secures on the
date hereof and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;

(c)Liens on fixed or capital assets acquired, constructed or improved by the
Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness
permitted by clause (e) of Section 6.01, (ii) such Liens and the Indebtedness
secured thereby are incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed 100% of the cost of acquiring, constructing or
improving such fixed or capital assets and (iv) such Liens shall not apply to
any other property or assets of the Borrower or any Subsidiary;

(d)any Lien existing on any property or asset prior to the acquisition thereof
by the Borrower or any Subsidiary or existing on any property or asset of any
Person that becomes a Subsidiary after the date hereof prior to the time such
Person became a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisi-tion or such Person becoming
party to this Agreement, as the case may be, (ii) such Lien shall not apply to
any other property or assets of the Borrower and (iii) such Lien shall secure
only those obligations which it secures on the date of such acquisition or the
date such Person becomes party to this Agreement, as the case may be, and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;

(e)Liens of a collecting bank arising in the ordinary course of business under
Section 4‑208 of the Uniform Commercial Code in effect in the relevant
jurisdiction covering only the items being collected upon and rights of setoff
or bankers’ liens upon deposits of cash in favor of banks or other depository
institutions, solely to the extent incurred in connection with the maintenance
of such deposit accounts or securities accounts in the ordinary course of
business;

(f)Liens granted in the ordinary course of business on the unearned portion of
insurance premiums securing the financing of insurance premiums;

(g)Liens solely on any cash earnest money deposits made by Borrower or any of
its Subsidiaries in connection with any letter of intent or purchase agreement
with respect to a Permitted Acquisition;

(h)Liens (i) assumed by Borrower or its Subsidiaries in connection with a
Permitted Acquisition that secures Acquired Indebtedness permitted under Section
6.01(e) or (p) and (ii) Liens securing Indebtedness permitted under Section
6.01(q);

(i)Liens granted by a Subsidiary in favor of the Borrower in respect of
Indebtedness owed by such Subsidiary;

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(j)Liens that are replacements of any of the Liens otherwise permitted under
this Section 6.02 to the extent that the original Indebtedness is replaced with
Refinance Indebtedness and so long as the replacement Liens only encumber those
assets that secured the original Indebtedness; and

(k)additional Liens so long as the principal amount of Indebtedness and other
obligations and liabilities secured thereby does not exceed $5,000,000 in the
aggregate at any time outstanding.

SECTION 6.03.    Fundamental Changes.

(a)The Borrower will not, nor will it permit any Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Event of Default shall
have occurred and be continuing, (i) any Subsidiary of the Borrower may merge
into the Borrower in a transaction in which the Borrower is the surviving
entity, (ii) any Subsidiary may merge into another Subsidiary and (iii) any
Subsidiary may liquidate or dissolve if the Borrower determines in good faith
that such liquidation or dissolution is in the best interests of the Borrower
and is not materially disadvantageous to the Lender; provided that any such
merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by Section
6.04.

(b)The Borrower will not, nor will it permit any Subsidiary to, engage in any
business other than businesses of the type conducted by the Borrower and its
Subsidiaries on the date hereof and businesses reasonably related thereto.

(c)The Borrower will not, nor will it permit any Subsidiary to change its fiscal
year or any fiscal quarter from the basis in effect on the Effective Date.

(d)The Borrower will not change the accounting basis upon which its financial
statements are prepared.

SECTION 6.04.    Investments, Loans, Advances, Guarantees and Acquisitions. The
Borrower will not, nor will it permit any Subsidiary to, purchase, hold or
acquire (including pursuant to any merger with any Person that was not a wholly
owned Subsidiary prior to such merger) any Equity Interests, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit (whether through purchase of assets, merger
or otherwise), except:

(a)Permitted Investments;

(b)investments in existence on the date hereof and described in Schedule 6.04;

(c)loans or advances made by the Borrower to its employees on an arms-length
basis in the ordinary course of business consistent with past practices for
travel and entertainment expenses, relocation costs and similar purposes up to a
maximum of $500,000 to any employee and up to a maximum of $2,000,000 in the
aggregate at any one time outstanding;

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(d)investments in the form of Swap Agreements permitted by Section 6.07;

(e)investments of any Person existing at the time such Person becomes a
Subsidiary of the Borrower or consolidates or merges with the Borrower or any
Subsidiary (including in connection with a Permitted Acquisition), so long as
such investments were not made in contemplation of such Person becoming a
Subsidiary or of such merger;

(f)investments received in connection with the disposition of assets permitted
by Section 6.05;

(g)investments constituting deposits described in clauses (c) and (d) of the
definition of the term “Permitted Encumbrances”;

(h)Permitted Intercompany Advances;

(i)advances made in connection with purchases of goods or services in the
ordinary course of business consistent with past practices;

(j)investments, Equity Interests and other securities received in settlement of
amounts due to Borrower or any of its Subsidiaries effected in the ordinary
course of business or owing to Borrower or any of its Subsidiaries as a result
of bankruptcy or insolvency proceedings involving an account debtor or upon the
foreclosure or enforcement of any Lien in favor of Borrower or its Subsidiaries;

(k)deposits of cash made in the ordinary course of business to secure
performance of operating leases;

(l)investments in the form of capital contributions and the acquisition of
Equity Interests made by Borrower in any wholly-owned Subsidiary;

(m)any other loans, advances and investments not otherwise permitted hereunder,
provided that such loans, advances and investments made pursuant to this clause
shall not exceed an aggregate amount of $5,000,000 at any time outstanding;

(n)the acquisition or issuance of Equity Interests for purposes of funding or
contributing to retirement, pension and other benefit plans maintained by the
Borrower (including the Borrower’s Executive Supplemental Retirement Plan, Cash
Balance Executive Supplemental Retirement Plan and Special Deferral Election
Plan); and

(o)Permitted Acquisitions.

SECTION 6.05.    Asset Sales. The Borrower will not, nor will it permit any
Subsidiary to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will the Borrower permit any
Subsidiary to issue any additional Equity Interest in such Subsidiary (other
than to the Borrower or another Subsidiary in compliance with Section 6.04),
except:

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(a)sales, transfers and dispositions of (i) inventory in the ordinary course of
business, (ii) used, obsolete, worn out or surplus equipment or property in the
ordinary course of business or (iii) equipment or other property no longer used
or useful to Borrower or any Subsidiary;

(b)sales, transfers and dispositions of assets to the Borrower or any
Subsidiary, provided that any such sales, transfers or dispositions involving a
Subsidiary shall be made in compliance with Section 6.09;

(c)sales, transfers and dispositions of accounts (excluding sales or
dispositions in a factoring arrangement) in connection with the compromise,
settlement or collection thereof;

(d)sales, transfers and dispositions of Permitted Investments;

(e)any sale, lease or transfer constituting an easement, license, zoning
restriction, rights-of-way or similar encumbrance on real property imposed by
law or arising in the ordinary course of business that does not materially
detract from the value of the affected property or interfere with the ordinary
conduct of the business of the Borrower or any Subsidiary;

(f)the use or transfer of money or cash equivalents in a manner that is not
prohibited by the terms of the Agreement or the other Loan Documents;

(g)the granting of Liens as permitted under Section 6.02;

(h)the sale or issuance of Equity Interests of Borrower to Holdco or any
Subsidiary to Borrower;

(i)dispositions of assets acquired by Borrower and its Subsidiaries pursuant to
a Permitted Acquisition consummated within 12 months of the date of the proposed
disposition (the “Subject Permitted Acquisition”) so long as (i) the
consideration received for the assets to be so disposed is at least equal to the
fair market value thereof, (ii) the assets to be so disposed are not necessary
or economically desirable in connection with the business of Borrower and its
Subsidiaries, and (iii) the assets to be so disposed are readily identifiable as
assets acquired pursuant to the Subject Permitted Acquisition;

(j)the dispositions of Equity Interests held in or for the benefit of
retirement, pension and other benefit plans maintained by Borrower (including
the Borrower’s Executive Supplemental Retirement Plan, Cash Balance Executive
Supplemental Retirement Plan and Special Deferral Election Plan);

(k)sales or other transfers of assets between the Borrower and SJW Land Company
at prices and on terms and conditions not less favorable to the Borrower than
could be obtained on an arm’s-length basis from unrelated third parties;

(l)sales, transfers and dispositions permitted under Section 6.04 and Section
6.08;

(m)dispositions resulting from any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of the Borrower or any Subsidiary;

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(n)leases and subleases of real property in the ordinary course of business; and

(o)sales, transfers and other dispositions of assets (other than Equity
Interests in a Subsidiary unless all Equity Interests in such Subsidiary are
sold) that are not permitted by any other clause of this Section, provided that
the aggregate book value of all assets sold, transferred or otherwise disposed
of in reliance upon this paragraph (o) (together with the aggregate book value
of all assets sold, transferred or otherwise disposed of in reliance on similar
exceptions in the Holdco Credit Agreement and the SJWTX Credit Agreement) shall
not exceed 10% of the book value of the total assets of Holdco and its
Subsidiaries during any fiscal quarter of the Borrower or 25% of the book value
of Holdco’s and its Subsidiaries’ total assets from and after the Effective Date
(measured, in each case, as of the end of the fiscal quarter then last ended);

provided that all sales, transfers, leases and other dispositions permitted
under this Section 6.05 (other than those permitted by paragraphs (b), (d) and
(f) above) shall be made for fair value and for at least 75% cash consideration.
SECTION 6.06.    Sale and Leaseback Transactions. The Borrower will not, nor
will it permit any Subsidiary to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred (a “Sale and Leaseback Transaction”).

SECTION 6.07.    Swap Agreements. The Borrower will not, nor will it permit any
Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered
into to hedge or mitigate risks to which the Borrower or any Subsidiary has
actual exposure (other than those in respect of Equity Interests of the Borrower
or any Subsidiary), and (b) Swap Agreements entered into in order to effectively
cap, collar or exchange interest rates (from floating to fixed rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of the Borrower or any Subsidiary.
SECTION 6.08.    Restricted Payments. The Borrower will not, nor will it permit
any Subsidiary to, declare or make, or agree to declare or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except (i) the Borrower may declare and pay dividends with
respect to its common stock payable solely in additional shares of its common
stock, and, with respect to its preferred stock, payable solely in additional
shares of such preferred stock or in shares of its common stock, (ii)
Subsidiaries may declare and pay dividends ratably with respect to their Equity
Interests, and (iii) the Borrower may (A) declare or pay cash dividends to
Holdco in amounts sufficient to allow Holdco (x) to discharge any Federal, state
and local income tax liability arising from the operations of the Borrower and
its Subsidiaries, and (y) to pay corporate overhead and administrative expenses
reasonably allocable to the operations of the Borrower and its Subsidiaries, and
(B) so long as no Event of Default exists before or immediately after giving
effect thereto, (x) declare or pay cash dividends to Holdco, and (y) purchase,
redeem or otherwise acquire Equity Interests issued by Holdco.

SECTION 6.09.    Transactions with Affiliates. The Borrower will not, nor will
it permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions that (i) are in the ordinary course of business and
(ii) are at prices and

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on terms and conditions not less favorable to the Borrower or such Subsidiary
than could be obtained on an arm’s-length basis from unrelated third parties,
(b)  any Indebtedness permitted under Section 6.01(c), (c) any Restricted
Payment permitted by Section 6.08, (d) loans or advances to employees permitted
under Section 6.04(c), (e) asset sales or other transfers permitted under
Section 6.05(k), (f) investments permitted under Section 6.04(l), (g) the
payment of reasonable fees to directors of the Borrower or any Subsidiary who
are not employees of the Borrower or any Subsidiary, and compensation and
employee benefit arrangements paid to, and indemnities provided for the benefit
of, directors, officers or employees of the Borrower or its Subsidiaries in the
ordinary course of business, (h) any issuances of securities or other payments,
awards or grants in cash, securities or otherwise pursuant to, or the funding
of, employment agreements, stock options and stock ownership plans approved by
the Borrower’s board of directors and (i) any contribution to the capital of
Holdco or any purchase of Equity Interests of Holdco.

SECTION 6.10.    Restrictive Agreements. The Borrower will not, nor will it
permit any Subsidiary to, directly or indirectly enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon the ability of any Subsidiary to pay dividends or other
distributions with respect to any Equity Interests or to make or repay loans or
advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of
the Borrower or any other Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by any Requirement of Law or by any
Loan Document, (ii) the foregoing shall not apply to restrictions and conditions
existing on the date hereof identified on Schedule 6.10 (but shall apply to any
extension or renewal of, or any amendment or modification expanding the scope
of, any such restriction or condition), (iii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, and (iv) restrictions or conditions on the ability of any
Subsidiary to create, incur or permit to pay dividends or distributions that
exist under the Note Agreement for Borrower’s Series J Notes (the “Senior Note
Restriction”) or any other agreement now existing or hereafter entered into
under which Borrower has issued, or may hereafter issue, debt securities that
includes any such restriction that are not more restrictive than the Senior Note
Restriction.

SECTION 6.11.    Amendment of Material Documents. The Borrower will not, nor
will it permit any Subsidiary to, amend, modify or waive any of its rights under
its charter, articles or certificate of organization or incorporation and bylaws
or operating, management or partnership agreement, or other organizational or
governing documents, to the extent any such amendment, modification or waiver
would be adverse to the Lender.

SECTION 6.12.    Financial Covenants.
  
(a)Funded Debt to Capitalization Ratio. The Borrower will not permit the Funded
Debt to Capitalization Ratio, at any time, to be greater than 66⅔%.

(b)Interest Coverage Ratio. For each fiscal quarter ending after the Effective
Date (commencing with the fiscal quarter ending June 30, 2016), the Borrower
will not permit the Interest Coverage Ratio, for any period of four consecutive
fiscal quarters ending on the last day of each such fiscal quarter, to be less
than 1.75:1.00.

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ARTICLE VII

EVENTS OF DEFAULT

If any of the following events (“Events of Default”) shall occur:
(a)the Borrower shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;

(b)the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement or any other Loan Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three (3) Business Days;

(c)any representation or warranty made or deemed made by or on behalf of the
Borrower or any Subsidiary in or in connection with this Agreement or any other
Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, shall prove to have been materially incorrect when made
or deemed made;

(d)the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02(a), 5.03 (with respect to the Borrower’s
existence), 5.08 or 5.11 or in Article VI;

(e)the Borrower shall fail to observe or perform any covenant, condition or
agree-ment contained in this Agreement or any other Loan Document (other than
those specified in clause (a), (b) or (d) of this Article VII), and such failure
shall continue unremedied for a period of (i) 15 days after the earlier of the
Borrower’s knowledge of such breach or notice thereof from the Lender if such
breach relates to terms or provisions of Section 5.01, 5.02 (other than Section
5.02(a)), 5.03 through 5.07, or 5.10 of this Agreement or (ii) 30 days after the
earlier of the Borrower’s knowledge of such breach or notice thereof from the
Lender if such breach relates to terms or provisions of any other Section of
this Agreement or of any other Loan Document;

(f)the Borrower or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;

(g)any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness to the extent such sale or transfer is
permitted by the terms of Section 6.05;

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(h)an involuntary proceeding shall be commenced or an involuntary petition shall
be filed seeking (i) liquidation, reorganization or other relief in respect of
the Borrower or any Subsidiary or its debts, or of a substantial part of its
assets, under any federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Borrower or any Subsidiary or for a substantial part of its assets, and, in any
such case, such proceeding or petition shall continue undismissed for sixty
(60) days or an order or decree approving or ordering any of the foregoing shall
be entered;

(i)the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under
any federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (h) of this Article, (iii) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar offi-cial
for the Borrower or Subsidiary or for a substantial part of its assets,
(iv) file an answer admit-ting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) take any action for the purpose of effecting any of the
foregoing;

(j)the Borrower or any Subsidiary shall become unable, admit in writing its
inability, or publicly declare its intention not to, or fail generally, to pay
its debts as they become due;
 
(k)one or more judgments for the payment of money in an aggregate amount in
excess of $5,000,000 shall be rendered against the Borrower, any Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
thirty (30) consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Borrower or any Subsidiary to enforce any such
judgment or the Borrower or any Subsidiary shall fail within thirty (30) days to
discharge one or more non-monetary judgments or orders which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect,
which judgments or orders, in any such case, are not stayed on appeal and being
appropriately contested in good faith by proper proceedings diligently pursued;

(l)an ERISA Event shall have occurred that, in the opinion of the Lender, when
taken together with all other ERISA Events that have occurred, could reasonably
be expected to result in a Material Adverse Effect;

(m)a Change in Control shall occur;

(n)any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or the Borrower
shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction that evidences its assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms);

(o)the Borrower, Holdco or any Subsidiary of Holdco shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Indebtedness owed to the Lender that exceeds $25,000, when and as the
same shall become due and payable;

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(p)any event or condition occurs that results in any Indebtedness of the
Borrower, Holdco, or any Subsidiary of Holdco owed to the Lender becoming due
prior to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the Lender to cause such
Indebtedness to become due, or to require the prepayment, repurchase, redemption
or defeasance thereof, prior to its scheduled maturity;

(q)the aggregate amount of (i) the Exposure plus (ii) all amounts outstanding
(or committed) under the Wells Facility including the aggregate undrawn amount
of all letters of credit and outstanding letter of credit disbursements exceeds
$145,000,000 at any time; or

(r)the aggregate amount outstanding (or committed) under the Wells Facility,
including the aggregate undrawn amount of all letters of credit and outstanding
letter of credit disbursements exceeds $3,200,000;

then, and in every such event (other than an event with respect to the Borrower
described in clause (h), (i) or (j) of this Article), and at any time thereafter
during the continuance of such event, the Lender may, by notice to the Borrower,
take either or both of the following actions, at the same or different
times:  (i) terminate the Commitment, whereupon the Commitment shall terminate
immediately, and (ii) declare the Loans then out-standing to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), whereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, in each case without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and in the case of any event with respect to the
Borrower described in clause (h), (i) or (j) of this Article, the Commitment
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, in each
case without present-ment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower. Upon the occurrence and during the
continuance of an Event of Default, the Lender may increase the rate of interest
applicable to the Loans and other Obligations as set forth in this Agreement and
exercise any rights and remedies provided to the Lender under the Loan Documents
or at law or equity.

ARTICLE VIII

MISCELLANEIOUS

SECTION 8.01.    Notices.
(a)Except in the case of notices and other communications expressly permitted to
be given by telephone (and subject to paragraph (b) below), all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by fax, as follows:

(i)if to the Borrower at:

San Jose Water Company
110 West Taylor St.

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San Jose, CA 95110
Attention: Chief Financial Officer
Fax No: (408) 279-7934
With a copy to:
San Jose Water Company
110 West Taylor St.
San Jose, CA 95110
Attention: Suzy Papazian, General Counsel

(ii)if to JPMorgan Chase Bank, N.A. at:

JPMorgan Chase Bank, N.A
560 Mission Street, 4th Floor
San Francisco, CA 94105
Attention: Jeffery A. DeRosa

All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received, (ii) sent by fax shall be deemed to have been given when
sent, provided that if not given during normal business hours for the recipient,
such notice or communication shall be deemed to have been given at the opening
of business on the next Business Day of the recipient, or (iii) delivered
through electronic communication to the extent provided in paragraph (b) below
shall be effective as provided in such paragraph.
(b)Notices and other communications to the Lender hereunder may be delivered or
furnished by electronic communications (including e-mail and internet or
intranet websites) pursuant to procedures approved by the Lender; provided that
the foregoing shall not apply to notices pursuant to Article II unless otherwise
agreed by the Lender. Each of the Lender 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. All such
notices and other communications (i) sent to an e-mail address shall be deemed
received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if not given
during the normal business hours of the recipient, such notice or communication
shall be deemed to have been given at the opening of business on the next
Business Day for the recipient, and (ii) 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, e-mail 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 of the
recipient.

(c)Any party hereto may change its address, facsimile number or e-mail address
for notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.

SECTION 8.02.    Waivers; Amendments.

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(a)No failure or delay by the Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Lender hereunder and under any other Loan Document are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent to
any departure by the Borrower therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then such
waiver or consent shall be effec-tive only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Lender may have had notice or
knowledge of such Default at the time.

(b)Neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except (i) in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Lender or (ii) in the case of any other Loan Document, pursuant
to an agreement or agreements in writing entered into by the Lender and the
Borrower.

SECTION 8.03.    Expenses; Indemnity; Damage Waiver.
(a)The Borrower shall pay all (i) reasonable and documented out‑of‑pocket
expenses incurred by the Lender and its Affiliates, including the reasonable
fees, charges and disbursements of counsel for the Lender (whether outside
counsel or the allocated costs of its internal legal department), in connection
with the credit facilities provided for herein, the preparation and
administration of the Loan Documents and any amendments, modifications or
waivers of the provi-sions of the Loan Documents (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii)
reasonable and documented out-of-pocket and documented expenses incurred by the
Lender in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) out-of-pocket
and documented expenses incurred by the Lender, including the fees, charges and
disbursements of any counsel for the Lender (whether outside counsel or the
allocated costs of its internal legal department), in connection with the
enforcement, collection or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the
Loans made or Letters of Credit issued hereunder, including all such
out-of‑pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit. The foregoing fees,
costs and expenses may be charged to the Borrower as Loans or to another deposit
account, all as described in Section 2.16(c).

(b)The Borrower shall indemnify the Lender, and each Related Party of the Lender
(each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, penalties,
incremental taxes, liabilities and related expenses, including the fees, charges
and disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of the Loan Documents or any agreement or
instrument contemplated thereby, the performance by the parties hereto of their
respective obligations thereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the
use of the proceeds therefrom (including any refusal by the Lender to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or Release of Hazardous
Materials on or from any property owned or operated by the Borrower or a
Subsidiary, or any Environmental Liability related in any way to the Borrower or
Subsidiary, (iv) the failure of the Borrower to deliver to the Lender the
required receipts or other required documentary evidence

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with respect to a payment made by the Borrower for Taxes pursuant to Section
2.15, or (v) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, penalties, liabilities or related
expenses are deter-mined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee. This Section 8.03(b) shall not apply with respect
to Taxes other than any Taxes that represent losses, claims or damages arising
from any non-Tax claim.

(c)To the extent permitted by applicable law, the Borrower shall not assert, and
the Borrower hereby waives, any claim against any Indemnitee, (i) for any
damages arising from the use by others of information or other materials
obtained through telecommunications, electronic or other information
transmission systems (including the Internet), or (ii) on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document, or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof; provided that, nothing in this paragraph (c)
shall relieve the Borrower of any obligation it may have to indemnify an
Indemnitee against special, indirect, consequential or punitive damages asserted
against such Indemnitee by a third party.

(d)All amounts due under this Section shall be payable not later than 30 days
after written demand therefor.

SECTION 8.04.    Successors and Assigns.

(a)The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Lender that issues any Letter
of Credit), except that the Borrower may not assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of the
Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of the Lender that issues any Letter of Credit), Participants (to the
extent provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of the Lender) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

(b)(i) The Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of the Borrower, provided that
the Borrower shall be deemed to have consented to any such assignment unless it
shall object thereto by written notice to the Lender within five (5) Business
Days after having received notice thereof, and provided further that no consent
of the Borrower shall be required for an assignment to an Affiliate of the
Lender, an Approved Fund or, if an Event of Default has occurred and is
continuing, any other assignee;

For the purposes of this Section 8.04(b), the term “Approved Fund” has the
following meaning:
“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its

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business and that is administered or managed by (a) the Lender, (b) an Affiliate
of the Lender or (c) an entity or an Affiliate of an entity that administers or
manages the Lender.
(c)The Lender may, without the consent of the Borrower, sell participations to
one or more banks or other entities (a “Participant”) in all or a portion of the
Lender’s rights and obligations under this Agreement (including all or a portion
of its Commitment and Letters of Credit and the Loans owing to it); provided
that (i) the Lender’s obligations under this Agreement shall remain unchanged;
(ii) the Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations; and (iii) the Borrower shall continue to
deal solely and directly with the Lender in connection with the Lender’s rights
and obligations under this Agreement. The Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 (subject to
the requirements and limitations therein) to the same extent as if it were the
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section; provided that such Participant shall not be entitled to receive
any greater payment under Section 2.13 or 2.15, with respect to any
participation, than its participating Lender would have been entitled to
receive, except to the extent such entitlement to receive a greater payment
results from a Change in Law that occurs after the Participant acquired the
applicable participation.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 8.08 as though it were the Lender. If the Lender shall sell
a participation, it shall, acting solely for this purpose as an 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 this Agreement or
any other Loan Document (the “Participant Register”); provided that the Lender
shall have no 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 Commitment, Loans, Letters of Credit or its
other obligations under any Loan Document) to any Person except to the extent
that such disclosure is necessary to establish that such Commitment, Loan,
Letter of Credit or other obligation is in registered form under Section
5f.103-1(c) of the U.S. Treasury Regulations. The entries in the Participant
Register shall be conclusive absent manifest error, and the 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.
(d)The 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 the Lender,
including without limitation any pledge or assignment to secure obligations to a
Federal Reserve Bank, 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 the Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for the Lender as a party
hereto.

SECTION 8.05.    Survival. All covenants, agreements, representations and
warranties made by the Borrower in the Loan Documents and in the certificates or
other instruments delivered in connection with or pursuant to this Agreement or
any other Loan Document shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstand-ing and unpaid or any Letter of Credit
is outstanding and so long as the Commitment has not expired or terminated. The
provisions of Sections 2.13, 2.14, 2.15 and Section 8.03 shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or

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termination of the Letters of Credit and the Commitment or the termination of
this Agreement or any other Loan Document or any provision hereof or thereof.

SECTION 8.06.    Counterparts; Integration; Effectiveness.

(a)This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Lender constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Lender and when the Lender
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.

(b)Delivery of an executed counterpart of a signature page of this Agreement by
fax, emailed pdf. or any other electronic means that reproduces an image of the
actual executed signature page shall be effective as delivery of a manually
executed counterpart of this Agreement. 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 or thereby shall be deemed to include Electronic Signatures, 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.

SECTION 8.07.    Severability. Any provision of any Loan Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

SECTION 8.08.    Right of Setoff. If an Event of Default shall have occurred and
be continuing, the Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by the Lender
or any Affiliate to or for the credit or the account of the Borrower against any
of and all the Obligations, irrespective of whether or not the Lender shall have
made any demand under the Loan Documents and although such obligations may be
unmatured. The rights of the Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which the Lender may
have.

SECTION 8.09.    Governing Law; Jurisdiction; Consent to Service of Process.

(a)The Loan Documents (other than those containing a contrary express choice of
law provision) shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of California, but
giving effect to federal laws applicable to national banks.
 

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(b)The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any U.S. federal or California
State court sitting in the State of California in any action or proceeding
arising out of or relating to any Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such state court or, to the extent
permitted by law, in such federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the 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.

(c)The Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
here-after have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Loan Document in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

(d)Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 8.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

SECTION 8.10    WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OR OTHER AGENT (INCLUDING ANY
ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

IN THE EVENT ANY LEGAL PROCEEDING IS FILED IN A COURT OF THE STATE OF CALIFORNIA
(THE “COURT”) BY OR AGAINST THE BORROWER OR THE LENDER IN CONNECTION WITH ANY
CONTROVERSY, DISPUTE OR CLAIM DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY) (EACH, A “CLAIM”) AND THE WAIVER SET FORTH
IN THE PRECEDING PARAGRAPH IS NOT ENFORCEABLE IN SUCH ACTION OR PROCEEDING, THE
BORROWER AND THE LENDERS (BY ITS ACCEPTANCE HEREOF) AGREE AS FOLLOWS:
WITH THE EXCEPTION OF THE MATTERS SPECIFIED IN PARAGRAPH (2) BELOW, ANY CLAIM
WILL BE DETERMINED BY A GENERAL REFERENCE PROCEEDING IN ACCORDANCE WITH THE
PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.2,
INCLUDING ANY REVISION OR REPLACEMENT OF SUCH STATUTES OR

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RULES HEREAFTER ENACTED. THE BORROWER AND THE LENDERS INTEND THIS GENERAL
REFERENCE AGREEMENT TO BE SPECIFICALLY ENFORCEABLE IN ACCORDANCE WITH CALIFORNIA
CODE OF CIVIL PROCEDURE SECTION 638, INCLUDING ANY REVISION OR REPLACEMENT OF
SUCH STATUTE OR RULE HEREAFTER ENACTED. EXCEPT AS OTHERWISE PROVIDED IN THIS AND
THE OTHER RELATED DOCUMENTS, VENUE FOR THE REFERENCE PROCEEDING WILL BE IN THE
STATE OR FEDERAL COURT IN THE COUNTY OR DISTRICT WHERE VENUE IS OTHERWISE
APPROPRIATE UNDER APPLICABLE LAW.

THE FOLLOWING MATTERS SHALL NOT BE SUBJECT TO A GENERAL REFERENCE PROCEEDING:
(A) NON-JUDICIAL FORECLOSURE OF ANY SECURITY INTERESTS IN REAL OR PERSONAL
PROPERTY; (B) EXERCISE OF SELF-HELP REMEDIES (INCLUDING, WITHOUT LIMITATION,
SET-OFF); (C) APPOINTMENT OF A RECEIVER; AND (D) TEMPORARY, PROVISIONAL OR
ANCILLARY REMEDIES (INCLUDING, WITHOUT LIMITATION, WRITS OF ATTACHMENT, WRITS OF
POSSESSION, TEMPORARY RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS). THIS
DOCUMENT DOES NOT LIMIT THE RIGHT OF THE BORROWER OR THE LENDER TO EXERCISE OR
OPPOSE ANY OF THE RIGHTS AND REMEDIES DESCRIBED IN CLAUSES (A) - (D) AND ANY
SUCH EXERCISE OR OPPOSITION DOES NOT WAIVE THE RIGHT OF THE BORROWER OR THE
LENDER TO A REFERENCE PROCEEDING PURSUANT TO THIS DOCUMENT.

UPON THE WRITTEN REQUEST OF THE BORROWER OR THE LENDER, THE BORROWER AND THE
LENDER SHALL SELECT A SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR JUSTICE.
IF THE BORROWER AND THE LENDER DO NOT AGREE UPON A REFEREE WITHIN TEN DAYS OF
SUCH WRITTEN REQUEST THEN THE BORROWER OR THE LENDER MAY REQUEST THE COURT TO
APPOINT A REFEREE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 640(B),
INCLUDING ANY REVISION OR REPLACEMENT OF SUCH STATUTE OR RULE HEREAFTER ENACTED.

ALL PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT FOR TRIAL,
SHALL BE CONDUCTED WITHOUT A COURT REPORTER, EXCEPT WHEN THE BORROWER OR THE
LENDER SO REQUESTS, A COURT REPORTER WILL BE USED AND THE REFEREE WILL BE
PROVIDED A COURTESY COPY OF THE TRANSCRIPT. THE PARTY MAKING SUCH REQUEST SHALL
HAVE THE OBLIGATION TO ARRANGE FOR AND PAY COSTS OF THE COURT REPORTER, PROVIDED
THAT SUCH COSTS, ALONG WITH THE REFEREE’S FEES, SHALL ULTIMATELY BE BORNE BY THE
PARTY WHO DOES NOT PREVAIL, AS DETERMINED BY THE REFEREE.
    
THE REFEREE MAY REQUIRE ONE OR MORE PREHEARING CONFERENCES. THE BORROWER AND THE
LENDER SHALL BE ENTITLED TO DISCOVERY, AND THE REFEREE SHALL OVERSEE DISCOVERY
IN ACCORDANCE WITH THE RULES OF DISCOVERY, AND MAY ENFORCE ALL DISCOVERY ORDERS
IN THE SAME MANNER AS ANY TRIAL COURT JUDGE IN PROCEEDINGS AT LAW IN THE STATE
OF CALIFORNIA. THE REFEREE SHALL APPLY THE RULES OF EVIDENCE APPLICABLE TO
PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA AND SHALL DETERMINE ALL ISSUES IN
ACCORDANCE WITH APPLICABLE STATE AND FEDERAL LAW. THE REFEREE SHALL BE EMPOWERED
TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF AND RULE ON ANY MOTION WHICH WOULD BE
AUTHORIZED IN A TRIAL, INCLUDING, WITHOUT LIMITATION, MOTIONS FOR DEFAULT
JUDGMENT OR SUMMARY JUDGMENT. THE REFEREE SHALL REPORT THE REFEREE’S DECISION,
WHICH REPORT SHALL ALSO INCLUDE FINDINGS OF FACT AND CONCLUSIONS OF LAW.

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THE BORROWER AND THE LENDER RECOGNIZE AND AGREE THAT ALL CLAIMS RESOLVED IN A
GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL BE DECIDED BY A REFEREE AND
NOT BY A JURY.

SECTION 8.11.    Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 8.12.    Confidentiality. The Lender agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers, employees
and agents, including accountants, legal counsel and other advisors (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), (b) to the extent requested by any regulatory
authority (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by any
Requirement of Law or by any subpoena or similar legal process, (d) to any other
party to this Agreement, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (x) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (y) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the Lender on a
non-confidential basis from a source other than the Borrower. For the purposes
of this Section, “Information” means all information received from the Borrower
relating to the Borrower or its business, other than any such information that
is available to the Lender on a non-confidential basis prior to disclosure by
the Borrower; provided that, in the case of information received from the
Borrower after the date hereof, such information is clearly identified at the
time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

SECTION 8.13.    Nonreliance; Violation of Law. The Lender hereby represents
that it is not relying on or looking to any margin stock (as defined in
Regulation U of the Board) for the repayment of the Borrowings provided for
herein. Anything contained in this Agreement to the contrary notwithstanding,
the Lender shall not be obligated to extend credit to the Borrower in violation
of any Requirement of Law.

SECTION 8.14.    USA PATRIOT Act. The Lender is subject to the requirements of
the USA PATRIOT Act and hereby notifies the Borrower that pursuant to the
requirements of the USA 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 the Lender to
identify the Borrower in accordance with the USA PATRIOT Act.

SECTION 8.15.    Disclosure. The Borrower hereby acknowledges and agrees that
the Lender and/or its Affiliates from time to time may hold investments in, make
other loans to or have other relationships with, the Borrower and its
Affiliates.

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SECTION 8.16.    Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under appli-cable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to the Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by the Lender.

SECTION 8.17.    No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction 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 Lender are arm’s-length
commercial transactions between the Borrower and its Affiliates, on the one
hand, and the Lender and its Affiliates, 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) the Lender and
each of its Affiliates 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
of its Affiliates, or any other Person and (B) neither the Lender nor any of its
Affiliates has any obligation to the Borrower or any of its Affiliates with
respect to the transactions contemplated hereby except, in the case of the
Lender, those obligations expressly set forth herein and in the other Loan
Documents; and (iii) the Lender and its Affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Borrower and its Affiliates, and neither the Lender nor any of its Affiliates
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 Lender and its Affiliates
with respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated hereby.
[Signature Page Follows]

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

By: /s/ James P. Lynch    
Name: James P. Lynch
Title: Chief Financial Officer and Treasurer

JPMORGAN CHASE BANK, N.A.

By: /s/ Jeff DeRosa
Name: Jeff DeRosa
Title: Senior Vice President

Signature Page to San Jose Water Company Credit Agreement
720377643 16508845